10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2002 Commission File No. 000-29089

Antigenics Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State of Incorporation) 06-1562417
(I.R.S. Employer Identification Number)

630 Fifth Avenue, Suite 2100, New York, New York, 10111
(Address of Principal Executive Offices)

(212) 332-4774
(Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES        X                 NO           

Number of shares outstanding of the registrant’s Common Stock as of August 9, 2002: 33,076,855 shares

TABLE OF CONTENTS

	PART I — FINANCIAL INFORMATION
	Item 1 – Unaudited Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3 – Quantitative and Qualitative Disclosures About Market Risk
	PART II — OTHER INFORMATION
	Item 1 – Legal Proceedings
	Item 4 – Submission of Matters to a Vote of Security Holders
	Item 5 – Other Information
	Item 6– Exhibits and Reports on Form 8-K
SIGNATURES
EX-10.1 SUBLEASE AGREEMENT

Antigenics Inc.

Quarterly Period Ended June 30, 2002

Table of Contents

	Page
PART I – FINANCIAL INFORMATION
Item 1 – Unaudited Consolidated Financial Statements:
Consolidated Balance Sheets (unaudited)              December 31, 2001 and June 30, 2002	1
Consolidated Statements of Operations (unaudited)              For the Three and Six Months ended June 30, 2001 and 2002	2
Consolidated Statements of Cash Flows (unaudited)              For the Six Months ended June 30, 2001 and 2002	3
Notes To Unaudited Consolidated Financial Statements	4
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	13
PART II – OTHER INFORMATION
Item 1 — Legal Proceedings	13
Item 4 – Submission of Matters to a Vote of Security Holders	14
Item 5 – Other Information	15
Item 6(a) – Exhibits	15
Item 6(b) – Current Reports on Form 8-K	15
Signatures	16

PART I — FINANCIAL INFORMATION

Item 1 – Unaudited Consolidated Financial Statements

ANTIGENICS INC. AND SUBSIDIARIES
Consolidated Balance Sheets

						JUNE 30,
			DECEMBER 31,			2002
			2001			(Unaudited)
		Assets
Cash and cash equivalents			$	60,867,508			55,918,684
Short term investments				—			28,477,687
Accounts receivable				487,382			558,458
Inventories				1,372,229			1,724,164
Deferred offering costs				128,334			50,000
Prepaid expenses				641,326			871,335
Other assets				490,371			791,952
		Total current assets		63,987,150			88,392,280
Plant and equipment, net of accumulated amortization and depreciation of $5,769,278 and $7,573,807 at December 31, 2001 and June 30, 2002, respectively				13,934,154			14,211,939
Goodwill, net of accumulated amortization of $334,825 and $518,992 at December 31, 2001 and June 30, 2002, respectively				2,755,870			3,081,703
Other intangibles, net of accumulated amortization of $1,078,610 and $1,432,364 at December 31, 2001 and June 30, 2002, respectively				10,503,963			9,640,205
Other assets				2,365,292			2,494,074
		Total assets	$	93,546,429			117,820,201
		Liabilities and Stockholders’ Equity
Accounts payable			$	2,948,417			1,190,232
Accrued liabilities				7,357,434			6,678,387
Current portion, long-term debt				5,901,816			2,110,782
		Total current liabilities		16,207,667			9,979,401
Long-term debt				194,407			—
Long-term liabilities				1,219,237			1,146,154
Commitments and contingencies
Stockholders’ Equity:
	Preferred stock, par value $0.01 per share; 25,000,000 shares authorized; no shares issued and outstanding			—			—
	Common stock, par value $0.01 per share; 100,000,000 shares authorized; 29,014,616 and 33,076,855 shares issued and outstanding at December 31, 2001 and June 30, 2002, respectively			290,145			330,768
	Additional paid-in capital			234,238,809			290,855,965
	Accumulated other comprehensive loss			(187,706	)		(307,588	)
	Deferred compensation			(529,547	)		(304,669	)
	Accumulated deficit			(157,886,583	)		(183,879,830	)
Total stockholders’ equity				75,925,118			106,694,646
Total liabilities and stockholders’ equity			$	93,546,429			117,820,201

See accompanying notes to unaudited consolidated financial statements.

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ANTIGENICS INC. AND SUBSIDIARIES

Consolidated Statements of Operations
For the three and six months ended June 30, 2001 and 2002
(unaudited)

				Three months ended June 30,						Six months ended June 30,
				2001			2002			2001			2002
Revenue:
	Product sales			$	675,176			693,331			988,984			1,370,165
	Research and development				603,290			85,401			1,172,970			266,788
			Total revenue		1,278,466			778,732			2,161,954			1,636,953
Expenses:
	Cost of sales				(355,066	)		(370,568	)		(580,598	)		(661,396	)
	Research and development				(6,457,835	)		(9,957,046	)		(12,625,764	)		(18,127,714	)
	General and administrative				(3,706,940	)		(4,880,507	)		(6,655,600	)		(9,433,250	)
		Operating loss			(9,241,375	)		(14,429,389	)		(17,700,008	)		(26,585,407	)
Other income/(expense):
	Interest income				959,308			459,101			2,273,288			888,537
	Interest expense				(142,954	)		(134,162	)		(305,261	)		(296,377	)
		Net loss		$	(8,425,021	)		(14,104,450	)		(15,731,981	)		(25,993,247	)
Net loss per share, basic and diluted				$	(0.31	)	$	(0.43	)	$	(0.57	)	$	(0.79	)
Weighted average number of shares outstanding, basic and diluted					27,414,478			33,066,340			27,378,180			32,725,014

See accompanying notes to unaudited consolidated financial statements.

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ANTIGENICS INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows
For the six months ended June 30, 2001 and 2002
(unaudited)

				June 30,
				2001			2002
Cash flows from operating activities:
	Net loss			$	(15,731,981	)		(25,993,247	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization			1,895,742			2,342,454
		Stock options			889,782			348,756
	Changes in operating assets and liabilities:
		Other assets			(15,804	)		(141,065	)
		Prepaid expenses			(34,116	)		(230,009	)
		Inventories			(982,801	)		(351,935	)
		Accounts receivable			(588,370	)		(71,076	)
		Accounts payable			(213,388	)		(1,758,185	)
		Accrued liabilities			(718,925	)		(790,496	)
		Due to/from related party, net			(3,229	)		—
		Net cash used in operating activities			(15,503,090	)		(26,644,803	)
Cash flows from investing activities:
	Purchases of plant and equipment				(1,114,871	)		(2,082,314	)
	Investments				(225,000	)		(300,000	)
	Deferred acquisition costs				(292,421	)		—
	Purchases of marketable securities				—			(28,548,500	)
	Proceeds from sale of marketable securities				2,996,750			—
		Net cash provided by (used in) investing activities			1,364,458			(30,930,814	)
Cash flows from financing activities:
	Net proceeds from sale of equity				—			56,139,334
	Employee stock purchase plan				115,696			89,904
	Deferred offering costs				—			(50,000	)
	Proceeds from exercise of stock options and warrants				549,452			432,996
	Payments of long-term debt				(1,046,780	)		(3,985,441	)
		Net cash (used in) provided by financing activities			(381,632	)		52,626,793
Net decrease in cash and cash equivalents					(14,520,264	)		(4,948,824	)
Cash and cash equivalents at beginning of period					96,142,726			60,867,508
Cash and cash equivalents at end of period				$	81,622,462			55,918,684
	Supplemental cash flow information:
			Cash paid for interest	$	305,261			390,886

See accompanying notes to unaudited consolidated financial statements.

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ANTIGENICS INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Antigenics Inc. and subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Article 10 of Regulation S-X and include the accounts of Antigenics Inc. and its wholly-owned subsidiaries. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All significant intercompany balances have been eliminated. Operating results for the three and six-month periods ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended December 31, 2001 included in our annual report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 28, 2002.

On July 12, 2001, we completed our acquisition of Aronex Pharmaceuticals, Inc., a biopharmaceutical company engaged in the identification and development of proprietary innovative medicines to treat infectious diseases and cancers. The acquisition was structured as a merger of a wholly-owned subsidiary of Antigenics with and into Aronex Pharmaceuticals pursuant to an Agreement and Plan of Merger among Antigenics, Nasa Merger Corp. and Aronex Pharmaceuticals dated as of April 23, 2001. The merger was a tax-free reorganization and is being accounted for as a purchase in accordance with Statement of Financial Accounting Standards (SFAS) Statement No. 141, “Business Combinations.” The results of operations and cash flows of Aronex Pharmaceuticals have been included in our consolidated financial statements prospectively as of the closing of the merger. For further information, refer to the footnotes to our consolidated financial statements for the year ended December 31, 2001 included in our annual report on Form 10-K.

NOTE B — PUBLIC OFFERING

In January 2002, pursuant to an effective registration statement with the SEC, we sold 4,000,000 shares of our common stock, $0.01 par value, at $15.00 per share. We received net proceeds of approximately $56,000,000.

NOTE C — EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net loss by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net loss by the weighted average common shares outstanding plus the dilutive effect of outstanding stock options, and stock warrants. Because we report a net loss, diluted earnings per share is the same as basic earnings per share because the effect of outstanding stock options and stock warrants to weighted average shares outstanding would reduce the net loss per share. Therefore, outstanding stock options and stock warrants are not included in the calculation.

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     NOTE D – INVENTORY

     Inventories consist of the following at:

	December 31, 2001		June 30, 2002
Finished Goods	$	1,058,000		1,559,000
Work-in-process		236,000		62,000
Raw materials & supplies		78,000		103,000
	$	1,372,000		1,724,000

NOTE E – COMMITMENTS AND CONTINGENCIES

On May 18, 2000, we committed $3,000,000 to become a limited partner in a limited partnership which will invest principally in companies that apply genomic technologies and information in their offerings of products and services or that are engaged in research and development involving genomic technologies. Capital contributions to the limited partnership are made as authorized by the general partner. As of June 30, 2002, we have invested $1,125,000,and have included this amount in non-current other assets. This investment is accounted for under the cost method as our ownership is approximately 2%. In order to assess whether or not there has been an other than temporary decline in the value of this investment, we analyze several factors including: (i) the carrying value of the limited partnership’s investments in its portfolio companies, (ii) how recently the investments in the portfolio companies have been made, (iii) the post-financing valuations of those investments, (iv) the level of un-invested capital held by the limited partnership and (v) the overall trend in venture capital valuations. Based on this analysis, as of June 30, 2002, we have determined an other than temporary decline has occurred and have adjusted this investment by approximately $24,000. The general partner of the limited partnership is AGTC Partners, L.P. and NewcoGen Group Inc. is the general partner of AGTC Partners, L.P. Noubar Afeyan, Ph.D., who is one of our directors, is the Chairman and Senior Managing Director and CEO of Flagship Ventures, an entrepreneurship and venture capital firm comprised of a family of related funds including NewcoGen Group Inc. and AGTC. In addition, Garo H. Armen, Ph.D., our chief executive officer and one of our directors, is a director of NewcoGen Group Inc.

Product revenues consist of sales of our feline leukemia vaccine to our marketing partner Virbac, S.A., a French company that has exclusive worldwide rights to market the product. The agreement with Virbac, S.A. was up for renewal in July 2002. Both parties have agreed to extend this license agreement through August 2002 to complete the renewal negotiation. If this agreement is not renewed we may not generate further revenues from the sale of this product, the only product we currently sell.

A Notice of Arbitration was filed in the International Chamber of Commerce Arbitration by DeLaval AB to resolve disputes between the parties concerning certain milestone payments under a License Agreement. The License Agreement at issue related to technology for the development of a vaccine against bovine mastitis. As of July 12, 2002, the parties have reached an agreement that resolves these proceedings to the satisfaction of all parties concerned. The amount of the settlement was covered by existing accruals for the amounts being disputed.

In February 2001 we filed a complaint against 8 Cabot Road Inc. and 12 Cabot Road Inc. for breach of contract and against Susan F. Brand for breach of fiduciary duty for failure to return a $350,000 deposit held in escrow in connection with a purchase and sale agreement for property to expand our Woburn facility. The defendants have filed an answer denying our allegations and have asserted a counterclaim that we are improperly seeking a return of our deposit. We have answered the counterclaim denying the defendants’ allegations. The parties have concluded discovery and have discussed the possibility of mediation. A trial date has been set for October 28, 2002. The deposit is included in other current assets in the accompanying consolidated balance sheets at December 31, 2001 and June 30, 2002.

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Antigenics, our Chairman and Chief Executive Officer Garo Armen, and two investment banking firms that served as underwriters in our initial public offering have been named as defendants in a civil class action lawsuit filed on November 5, 2001 in the Federal District Court for the Southern District of New York on behalf of a class of purchasers of our stock between February 3, 2000 and December 6, 2000. Virtually identical complaints were filed against 300 other issuers, their underwriters, and their directors and officers. These cases have been coordinated under the caption In re Initial Public Offering Securities Litigation, Civ. No. 21 MC 92 (SAS), by order dated August 9, 2001. The suit against Antigenics and Dr. Armen alleges that the brokerage arms of the investment banking firms charged secret excessive commissions to certain of their customers in return for allocations of our stock in the offering. The suit also alleges that shares of our stock were allocated to certain of the investment banking firms’ customers based upon an agreement by such customers to purchase additional shares of our stock in the secondary market. The complaint alleges that Antigenics is liable under Section 11 of the Securities Act of 1933, as amended (the Securities Act), and Dr. Armen is liable under Sections 11 and 15 of the Securities Act because our registration statement did not disclose these alleged practices. On April 19, 2002, the plaintiffs in this action filed an amended class action complaint, which contains new allegations. Again, virtually identical amended complaints were filed in the other 300 initial public offering cases. In addition to the claims in the earlier complaint, the amended complaint alleges that Antigenics and Dr. Armen violated Section 10(b) of the Securities Exchange Act and SEC Rule 10(b)-5 by making false and misleading statements and/or omissions in order to inflate our stock price and conceal the investment banking firms’ alleged secret arrangements. The amended complaint further alleges that Dr. Armen, as a “control person” of Antigenics, violated Section 20 of the Securities Exchange Act. On July 15, 2002, Antigenics and Dr. Armen joined the Issuer Defendants’ Motion to Dismiss the Consolidated Amended Complaints. By order of the Court, this motion set forth all “common issues,” i.e., all grounds for dismissal common to all or a significant number of Issuer Defendants. All individual defenses are preserved and may be asserted in subsequent motions after the common issues are resolved. No date has yet been set for the hearing on the Issuer Defendant’s Motion to Dismiss. Antigenics intends to defend against these claims vigorously.

NOTE F – BUSINESS COMBINATIONS, GOODWILL AND INTANGIBLE ASSETS

We adopted the specified provisions of SFAS No. 141, “Business Combinations,” beginning July 1, 2001 and adopted the remaining provisions of SFAS No. 141 and all the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” effective January 1, 2002. SFAS No. 141 requires upon adoption of SFAS No. 142 that we evaluate our existing intangible assets and goodwill that were acquired in prior purchase business combinations, and that we make any necessary reclassifications in order to conform with the new criteria in SFAS No. 141 for recognition apart from goodwill. As a result, intangibles previously classified as assembled workforce with a carrying value of $326,000 at January 1, 2002 did not meet the criteria for recognition apart from goodwill under SFAS No. 141 and were reclassified to goodwill. SFAS No. 142 provides that goodwill should not be amortized but should instead be tested for impairment annually. In accordance with SFAS No. 142, we completed our transitional goodwill impairment test effective as of January 1, 2002 and determined there was no impairment loss to be recognized. The annual goodwill impairment test will be performed in the fourth quarter of each fiscal year. This testing requires comparison of carrying values to fair value. Based on additional analysis, we believe that the assigned estimated useful life of 10 years for the core and developed technologies remains appropriate.

Net loss, and basic and diluted net loss per share for the three and six months ended June 30, 2001, adjusted to exclude amounts no longer amortized are as follows:

		Three Months ended			Six Months Ended
		June 30, 2001			June 30, 2001
Net loss, as reported		$	(8,425,000	)		(15,732,000	)
Goodwill and assembled workforce amortization			117,000			234,000
Pro forma net loss		$	(8,308,000	)		(15,498,000	)
Basic and diluted net loss per share:
	As reported	$	(0.31	)		(0.57	)
	Pro forma		(0.30	)		(0.57	)

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Intangible assets at June 30, 2002 represent acquired core and developed technology. Amortization of these intangible assets for the six months ended June 30, 2002 was $538,000. Amortization expense of these intangible assets for 2002 to 2006 is estimated to be approximately $1,076,000 per year.

NOTE G – IMPAIRMENT OF LONG-LIVED ASSETS

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 requires that long-lived assets, exclusive of goodwill and indefinite life intangibles, be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future undiscounted net cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We adopted SFAS No. 144 on January 1, 2002. The adoption of SFAS No. 144 had no impact on our consolidated financial statements because the impairment assessment under SFAS No. 144 is largely unchanged from SFAS No. 121. The provisions of this statement for assets held for sale or other disposal generally are required to be applied prospectively after the adoption date to newly initiated disposal activities and, therefore, will depend on future actions initiated by management.

NOTE H – SUBSEQUENT EVENT

Effective July 19, 2002 we have subleased part of our Framingham laboratory and office space and we have leased related leasehold improvements and equipment under agreements which expire December 31, 2006 with an option to extend until September 2010. We are entitled to receive rental income of approximately $156,000 in 2002; $758,000 in 2003; $768,000 in 2004; $778,000 in 2005 and $799,000 in 2006. Under the terms of our original lease, we are obligated to pay our landlord approximately 7% of our rental income.

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW

We are currently developing treatments for cancers, serious infectious diseases, and autoimmune and degenerative disorders using our proprietary technologies that program the immune system and improve the quality of life. Since our inception in March 1994, our activities have primarily been associated with the development of our heat shock protein technology and our lead therapeutic vaccine, Oncophage. Our business activities have included, product research and development, intellectual property prosecution, establishing manufacturing capabilities, manufacturing therapeutic vaccines for clinical trials, regulatory and clinical affairs, and integration of our acquisitions.

During the third quarter ended September 30, 2001, we completed our merger with Aronex Pharmaceuticals, Inc. The stock acquisition, accounted for using the purchase method of accounting, resulted in the issuance of approximately 1.5 million shares of our common stock based on an exchange ratio of 0.0594 per share of our common stock for each outstanding share of Aronex Pharmaceuticals common stock. Through this merger we acquired Aroplatin and ATRA–IV, which are unique liposomal cancer drug candidates that increase the distribution and metabolism of drugs in a patient’s

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body. These two products fit our long-term goal of creating novel therapies for serious diseases that represent advanced alternatives to conventional cancer treatments.

We have incurred significant losses since our inception. To date, we have generated product sales revenues from one product. Our revenues from this product were $675,000 and $693,000 for the three months ended June 30, 2001 and 2002, respectively. During the three months ended June 30, 2001 and 2002, we also had revenues of $603,000 and $85,000, respectively, consisting of shipments of QS-21 to our research partners and additionally in 2001, grant payments earned and milestone payments received. As of June 30, 2002, we had an accumulated deficit of approximately $183,880,000 inclusive of non-cash charges of $60,396,000 for acquired in-process research and development and $14,088,000 related to grants of stock options, warrants and common stock. We do not expect to generate significant revenues until the fourth quarter of 2004 and thus, we expect to continue to incur net losses as we continue our clinical trials, apply for regulatory approvals, build a sales force and marketing department, continue development of our technology and expand our operations. We continue to be dependent on equity and debt financings to fund our business activities.

FORWARD-LOOKING STATEMENTS

Our expectations regarding future financial results are forward-looking statements and our actual financial results may differ materially depending on many factors, including:

• the progress of Oncophage and our other product candidates through the clinical development and regulatory process;

• the advancement of other product candidates into preclinical and clinical trials;

• our investment in manufacturing process development and in manufacturing capacity for Oncophage and other product candidates;

• development of a sales and marketing staff and initial sales activities if Oncophage is approved for commercialization;

• the progress of our other research and development efforts;

• the integration of our prior acquisitions and any future acquisitions; and

• the other factors set forth in Exhibit 99.1 to our annual report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2002.

HISTORICAL RESULTS OF OPERATIONS

Three Months Ended June 30, 2002 Compared To The Three Months Ended June 30, 2001

Revenue: We generated $675,000 and $693,000 of product revenue during the three months ended June 30, 2001 and 2002, respectively. We had $603,000 and $85,000 of research and development revenue during the three months ended June 30, 2001 and 2002, respectively. Product revenues consist of sales of our feline leukemia vaccine to our marketing partner Virbac, S.A., a French company that has exclusive worldwide rights to market the product. The agreement with Virbac, S.A. was up for renewal in July 2002. Both parties have agreed to extend this license agreement through August 2002 to complete the renewal negotiation. If this agreement is not renewed we may not generate further revenues from the sale of this product, the only product we currently sell. Revenues from research and development activities consist of shipments of our adjuvant QS-21 to be used in clinical trials by our partners and additionally in 2001, grant payments earned and milestone payments received.

Cost of Sales: Cost of sales, which is related entirely to product revenue, was $355,000 and $371,000 for the three months ended June 30, 2001 and 2002, respectively. For the three months ended June 30, 2001 and 2002, cost of sales was 53% and 54%, respectively, of product sales.

Research and Development: Research and development expense increased 54% to $9,957,000 for the three months ended June 30, 2002 from $6,458,000 for the three months ended June 30, 2001. The increase was primarily due to the costs associated with our Oncophage clinical trials that increased $2,454,000 for the three months ended June 30, 2002 particularly due to the advancement of our Phase III clinical trial in kidney cancer. The Aronex Pharmaceuticals

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acquisition resulted in increased research costs of $599,000 for the three months ended June 30, 2002. Other ongoing development activities were $577,000 higher than in 2001. These increases are partially offset by a decrease in the non-cash charge for options granted and earned by outside advisors, directors and employees to $165,000 for the three months ended June 30, 2002 from $296,000 for the three months ended June 30, 2001. Research and development expenses consist primarily of compensation for employees and outside advisors conducting research and development work, funding paid to institutions, including the University of Connecticut where we sponsor research, costs associated with the operation of our manufacturing and laboratory facilities, funding paid to support our clinical trials, expenses related to grant revenue recognized, and the cost of clinical materials shipped to our research partners.

General and Administrative: General and administrative expenses increased 32% to $4,881,000 for the three months ended June 30, 2002 from $3,707,000 for the three months ended June 30, 2001. The increase was primarily due to the growth in the number of employees to support our expanded business operations which increased costs by $616,000, and increased legal fees of $208,000 for the three months ended June 30, 2002 over the same period in 2001. The Aronex Pharmaceuticals acquisition resulted in increased general and administrative costs of $260,000 for the three months ended June 30, 2002. Other increases in our general and administrative expenses were $201,000 higher for the three months ended June 30, 2002 than for the same period in 2001. These increases are partially offset by a decrease in the non-cash charge for options granted and earned by outside advisors, directors and employees to $32,000 for the three months ended June 30, 2002 from $143,000 for the three months ended June 30, 2001. General and administrative expenses consist primarily of personnel compensation, office expenses and professional fees.

Interest expense: Interest expense remained consistent for the three months ended June 30, 2002 compared to the same period in 2001 as the additional interest expense related to the borrowings assumed in the Aronex Pharmaceuticals acquisition was offset by the decreasing interest expense related to the historical debt.

Interest Income: Interest income decreased 52% to $459,000 for the three months ended June 30, 2002 from $959,000 for the same period in 2001. This decrease is attributable to lower interest rates offset by a slightly higher average cash balance during the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. Our average interest rate decreased from approximately 4.3% for the three months ended June 30, 2001, to approximately 2.0% for the three months ended June 30, 2002.

Six Months Ended June 30, 2002 Compared To The Six Months Ended June 30, 2001

Revenue: We generated $989,000 and $1,370,000 of product revenue during the six months ended June 30, 2001 and 2002, respectively. We had $1,173,000 and $267,000 of research and development revenue during the six months ended June 30, 2001 and 2002, respectively. Product revenues consist of sales of our feline leukemia vaccine to our marketing partner Virbac, S.A., a French company that has exclusive worldwide rights to market the product. The agreement with Virbac, S.A. was up for renewal in July 2002. Both parties have agreed to extend this license agreement through August 2002 to complete the renewal negotiation. If this agreement is not renewed we may not generate further revenues from the sale of this product, the only product we currently sell. Revenues from research and development activities consist of shipments of our adjuvant QS-21 to be used in clinical trials by our partners, research grants earned and in 2001, milestone payments earned.

Cost of Sales: Cost of sales, which is related entirely to product revenue, was $581,000 and $661,000 for the six months ended June 30, 2001 and 2002, respectively. For the six months ended June 30, 2001 and 2002, cost of sales was 59% and 48%, respectively, of product sales. Cost of sales in 2001 partially represented the cost of inventory acquired in our merger with Aquila Biopharmaceuticals that was adjusted to its fair value as a result of the application of purchase accounting rules.

Research and Development: Research and development expense increased 44% to $18,128,000 for the six months ended June 30, 2002 from $12,626,000 for the six months ended June 30, 2001. The increase was primarily due to the costs associated with our Oncophage clinical trials that increased $4,102,000 for the six months ended June 30, 2002 particularly due to the advancement of our Phase III clinical trial in kidney cancer. The Aronex Pharmaceuticals acquisition resulted in increased research costs of $1,015,000 for the six months ended June 30, 2002. Other ongoing

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development activities were $715,000 higher than in 2001. These increases are partially offset by a decrease in the non-cash charge for options granted and earned by outside advisors, directors and employees to $262,000 for the six months ended June 30, 2002 from $592,000 for the six months ended June 30, 2001. Research and development expenses consist primarily of compensation for employees and outside advisors conducting research and development work, funding paid to institutions, including the University of Connecticut where we sponsor research, costs associated with the operation of our manufacturing and laboratory facilities, funding paid to support our clinical trials, expenses related to grant revenue recognized, and the cost of clinical materials shipped to our research partners.

General and Administrative: General and administrative expenses increased 42% to $9,433,000 for the six months ended June 30, 2002 from $6,656,000 for the six months ended June 30, 2001. The increase was due to the growth in the number of employees to support our expanded business operations which increased costs by $1,336,000, increased legal fees of $653,000, and other increases in our general and administrative expenses, which were $567,000 higher for the six months ended June 30, 2002 than the same period in 2001. The Aronex Pharmaceuticals acquisition resulted in increased general and administrative costs of $432,000 for the six months ended June 30, 2002. These increases are partially offset by a decrease in the non-cash charge for options granted and earned by outside advisors, directors and employees to $87,000 for the six months ended June 30, 2002 from $298,000 for the six months ended June 30, 2001. General and administrative expenses consist primarily of personnel compensation, office expenses and professional fees.

Interest expense: Interest expense remained consistent for the six months ended June 30, 2002 compared to the same period in 2001 as the additional interest expense related to the borrowings assumed in the Aronex Pharmaceuticals acquisition was partially offset by the decreasing interest expense related to the historical debt.

Interest Income: Interest income decreased 61% to $889,000 for the six months ended June 30, 2002 from $2,273,000 for the same period in 2001. This decrease is attributable to lower interest rates offset by a slightly higher average cash balance during the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. Our average interest rate decreased from approximately 5.1% for the six months ended June 30, 2001, to approximately 1.9% for the six months ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

We have incurred annual operating losses since inception, and, as of June 30, 2002, we have incurred an accumulated deficit of $183,880,000 inclusive of non-cash charges of $60,396,000 for acquired in-process research and development and $14,088,000 related to grants of stock options, warrants and common stock. Since our inception, we have financed our operations primarily through the sale of equity, interest income earned on cash and cash equivalent balances and debt provided through a credit line secured by some of our manufacturing and laboratory assets. From our inception through June 30, 2002, we raised aggregate net proceeds of $203,529,000 through the sale of equity and the exercise of stock options and warrants, and borrowed $3,481,000 under our $5,000,000 credit facility. We also assumed term loan agreements and a convertible note payable with a combined outstanding balance, at the respective merger dates, of $6,159,000 in connection with the acquisitions of Aquila Biopharmaceuticals and Aronex Pharmaceuticals. In November 2001, we filed a Form S-3 shelf registration statement with the Securities and Exchange Commission for the registration and potential issuance of up to $100 million of our securities. In January 2002, we sold 4,000,000 shares of our common stock for net proceeds of approximately $56,000,000. We intend to use the proceeds of this sale to fund additional clinical trials of our lead product and for clinical trials and preclinical studies for our other product candidates; for expansion of our manufacturing capabilities; for potential licenses and other acquisitions of complementary technologies and products; and for working capital and other general corporate purposes. We expect that we will be able to fund our capital expenditures and growing operations with our current working capital into the fourth quarter of 2003. Please see the “Forward-Looking Statements” section and the factors highlighted in that section that may cause actual results to differ materially from the forward-looking statements made herein. In order to fund our needs subsequently, we may be required to raise money in the capital markets, through arrangements with corporate partners, or from other sources. Our ability to successfully enter into any arrangements is uncertain and, if funds are not available, we may be required to revise our planned clinical trials and other development activities and capital requirements. As a result, we expect to

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attempt to raise additional funds substantially in advance of depleting our current funds; however, there are no assurances that we will be able to raise funds or raise amounts sufficient to meet the long term needs of the business.

Our future cash requirements include, but are not limited to, supporting our clinical trial efforts and continuing our other research and development programs, including increased expenses associated with the development of the technologies and products acquired as a result of our acquisitions. Since inception we have entered into various agreements with institutions to conduct and monitor our current clinical studies. Under these agreements, subject to the enrollment of patients and performance by the institution of certain services, we have estimated our payments to be approximately $29,000,000 over the term of the studies. Through June 30, 2002, approximately $6,300,000 have been expensed as research and development expenses in the consolidated statements of operations. The timing of our expense recognition and future payments related to these agreements are subject to the enrollment of patients and performance by the institution of certain services. In addition, we have entered into sponsored research agreements related to our products that require payments of approximately $2,800,000, of which $1,500,000 has been paid through June 30, 2002. Significant additional expenditures will be required as we complete our clinical trials, apply for regulatory approvals, continue development of our technologies, and expand our operations and bring our products to market. Part of our strategy is to develop and commercialize some of our products by continuing our existing collaborative arrangements and by entering into new collaborations. As a result of collaborative agreements, we do not, and will not, completely control the nature, timing or cost of bringing those products to market. We have entered into license agreements that call for milestone and royalty payments by our corporate partners, which may or may not be achieved. Satisfying long-term liquidity needs will require the successful commercialization of Oncophage or other products and may require additional capital as discussed above.

Our cash, cash equivalents and marketable securities at June 30, 2002 were $84,396,000, an increase of $23,529,000 from December 31, 2001. During the six months ended June 30, 2002, we used cash primarily to finance operations, including our Oncophage clinical trials. Net cash used in operating activities for the six months ended June 30, 2001 and 2002 was $15,503,000 and $26,695,000, respectively. The increase resulted from the increase in the activity of our Oncophage clinical trials, on-going development activity, development of acquired technologies and the general expansion of our research and administrative operations. As we develop our technologies and further our clinical trials we expect to increase our spending. Our future ability to generate cash from operations will depend on achieving regulatory approval of our products, market acceptance of such products, achieving benchmarks as defined in existing collaborative agreements, and our ability to enter into new collaborations. We expect to first generate revenues from our lead product Oncophage during the fourth quarter of 2004. Please see the “Forward-Looking Statements” section and the factors highlighted in that section that may cause actual results to differ materially from the forward-looking statements made herein.

Net cash provided by investing activities was $1,364,000 for the six months ended June 30, 2001 as compared to net cash used in investing activities for the six months ended June 30, 2002 of $30,931,000 . Included in our investing activities for the six months ended June 30, 2002, is the investment of $28,549,000 of our funds raised in January 2002 in marketable securities. For the six months ended June 30, 2002, we invested $2,082,000 for the purchase of equipment and an additional $300,000 was contributed to a limited partnership. Our remaining commitment to this limited partnership on June 30, 2002 is $1,875,000 with contributions made as authorized by the general partner. We anticipate additional capital expenditures ranging from $1,400,000 to $3,400,000 for the remainder of 2002, to expand and enhance our current facilities.

Net cash used in financing activities was $382,000 for the six months ended June 30, 2001 as compared to net cash provided by financing activities of $52,627,000 for the six months ended June 30, 2002 . Since inception, our primary source of financing has been from equity sales. During the six months ended June 30, 2001 and 2002, sales of equity and exercises of stock options and warrants totaled approximately $665,000 and $56,662,000, respectively. At June 30, 2002, we had outstanding $2,111,000 under our credit facilities, which were used to finance the construction of our manufacturing and laboratory facilities and to purchase related equipment. Loans that were drawn down on the credit facilities are secured by specific assets, including leasehold improvements, which they finance. During the second quarter ended June 30, 2002, $2,500,000 outstanding under a convertible note payable matured and was paid. In addition, we made other debt payments of $1,485,000. Our future minimum payments on non-cancelable leases, before any sublease

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income are in 2002-$1,790,000; in 2003-$3,209,000; in 2004 — $2,324,000; in 2005 — $2,324,000; in 2006 — $2,344,000 and thereafter — $4,490,000. Effective July 19, 2002 we have sublet part of our Framingham manufacturing, laboratory and office space and we have leased related leasehold improvements and equipment under agreements which expire December 31, 2006 with an option to extend until September 2010. We are entitled to receive rental income of approximately $156,000 in 2002; $758,000 in 2003; $768,000 in 2004; $778,000 in 2005 and $799,000 in 2006. Under the terms of our original lease, we are obligated to pay our landlord approximately 7 % of our rental income.

We are currently involved in certain legal proceedings as detailed in Note E to our June 30, 2002 unaudited consolidated financial statements. We do not believe these proceedings will have a material adverse effect on our consolidated financial position, liquidity or our results of operations.

OTHER

Critical Accounting Policies and Use of Estimates

The Securities and Exchange Commission recently issued disclosure guidance for “critical accounting policies.” The SEC defines “critical accounting policies” as those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

The following listing is not intended to be a comprehensive list of all of our accounting policies. Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included in our annual report on Form 10-K as filed with the SEC in March 2002. In many cases, the accounting treatment of a particular transaction is dictated by generally accepted accounting principles, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting an available alternative would not produce a materially different result.

We have identified the following as our critical accounting policies: research and development, investments, revenue recognition, and option accounting.

Research and development expenses include the costs associated with our internal research and development activities including, salaries and benefits, occupancy costs, clinical manufacturing costs, and related administrative costs, and research and development conducted for us by outside advisors, such as sponsored university-based research partners, and clinical study partners. In addition, research and development expenses include expenses related to grant revenue and the cost of clinical trial materials shipped to our research partners. Research and development costs are expensed as incurred and were $12,626,000, and $18,128,000 for the six months ended June 30, 2001 and 2002, respectively.

We classify investments in marketable securities at the time of purchase. At June 30, 2002, all marketable securities were classified as available-for-sale and as such, changes in the fair value of the available-for-sale securities are reported as a separate component of accumulated other comprehensive income until realized. If we were to classify future investments as trading securities rather than available-for-sale, our financial results would be subject to greater volatility.

Investments of less than 20% of the voting control of companies or other entities over whose operating and financial policies we do not have the power to exercise significant influence, are accounted for by the cost method. Pursuant to this method, we currently account for our investment in a limited partnership under the cost method and, as of June 30, 2002, we have included in non-current other assets on the consolidated balance sheet, $1,125,000 of our total commitment to this partnership of $3,000,000. The general partner of the limited partnership determines the timing of our additional contributions. Our investment represents an approximate ownership of 2%. We continue to assess the realizability of this investment. In order to assess whether or not there has been an other than temporary decline in the value of this investment, we analyze several factors including: (i) the carrying value of the limited partnership’s investments in its portfolio companies, (ii) how recently the investments in the portfolio companies had been made, (iii) the post-financing valuations of those investments, (iv) the level of un-invested capital held by the limited partnership, and (v) the overall trend in venture capital valuations. Based on this analysis, as of June 30, 2002, we

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have determined an other than temporary decline has occurred and have adjusted this investment by approximately $24,000.

Revenue from product sales is recognized at the time of product shipment. Revenues for services under research and development grants and contracts are recognized as the services are performed, milestones are achieved, or clinical trial materials are provided.

We account for options granted to employees and directors in accordance with Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such, compensation expense is recorded on fixed stock option grants only if the current fair value of the underlying stock exceeds the exercise price of the option at the date of grant and it is recognized on a straight-line basis over the vesting period. We account for stock options granted to non-employees on a fair-value basis in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation” and Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” As a result, the non-cash charge to operations for non-employee options with vesting or other performance criteria is affected each reporting period by changes in the fair value of our common stock. As required, we also provide pro forma net loss and pro forma net loss per common share disclosures for employee and director stock option grants as if the fair-value-based method defined in SFAS No. 123 had been applied (see Note 10 to our consolidated financial statements included in our annual report on Form 10-K).

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to fluctuations in interest rates as we seek debt financing to make capital expenditures. We do not employ specific strategies, such as the use of derivative instruments or hedging, to manage our interest rate exposures. Since the fiscal year ended December 31, 2001, there has been no change with respect to our interest rate exposures or our approach toward those exposures. Further, we do not expect our market risk exposures to change in the near term.

In addition, we have cash equivalents and marketable securities at June 30, 2002, which are exposed to the impact of interest rate changes and our interest income fluctuates as our interest rate changes. Due to the short-term nature of our investments in money market funds, government backed securities, short-term municipals, and corporate bonds, our carrying value approximates the fair value of these investments at December 31, 2001 and June 30, 2002.

PART II — OTHER INFORMATION

Item 1 – Legal Proceedings

As previously disclosed in our Form 10-Q for the quarterly period ended March 31, 2002 filed May 10, 2002, a Notice of Arbitration was filed in the International Chamber of Commerce Arbitration by DeLaval AB to resolve disputes between the parties concerning certain milestone payments under a License Agreement. The License Agreement at issue related

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to technology for the development of a vaccine against bovine mastitis. As of July 12, 2002 the parties reached an agreement that resolves these proceedings to the satisfaction of all parties concerned.

As previously disclosed in our Form 10-Q for the quarterly period ended March 31, 2002 filed May 10, 2002, Antigenics, our Chairman and Chief Executive Officer Garo Armen, and two investment banking firms that served as underwriters in our initial public offering have been named as defendants in a civil class action lawsuit filed on November 5, 2001 in the Federal District Court for the Southern District of New York on behalf of a class of purchasers of our stock between February 3, 2000 and December 6, 2000. Virtually identical complaints were filed against 300 other issuers, their underwriters, and their directors and officers. These cases have been coordinated under the caption In re Initial Public Offering Securities Litigation, Civ. No.21 MC 92 (SAS), by order dated August 9, 2001. The suit against Antigenics and Dr. Armen alleges that the brokerage arms of the investment banking firms charged secret excessive commissions to certain of their customers in return for allocations of our stock in the offering. The suit also alleges that shares of our stock were allocated to certain of the investment banking firms’ customers based upon an agreement by such customers to purchase additional shares of our stock in the secondary market. The complaint alleges that Antigenics is liable under Section 11 of the Securities Act of 1933, as amended (the Securities Act), and Dr. Armen is liable under Sections 11 and 15 of the Securities Act because our registration statement did not disclose these alleged practices. On April 19, 2002, the plaintiffs in this action filed an amended class action complaint, which contains new allegations. Again, virtually identical amended complaints were filed in the other 300 initial public offering cases. In addition to the claims in the earlier complaint, the amended complaint alleges that Antigenics and Dr. Armen violated Section 10(b) of the Securities Exchange Act and SEC Rule 10(b)-5 by making false and misleading statements and/or omissions in order to inflate our stock price and conceal the investment banking firms’ alleged secret arrangements. The amended complaint further alleges that Dr. Armen, as a “control person” of Antigenics, violated Section 20 of the Securities Exchange Act. On July 15, 2002, Antigenics and Dr. Armen joined the Issuer Defendants’ Motion to Dismiss the Consolidated Amended Complaints. By order of the Court, this motion set forth all “common issues,” i.e., all grounds for dismissal common to all or a significant number of Issuer Defendants. All individual defenses are preserved and may be asserted in subsequent motions after the common issues are resolved. No date has yet been set for the hearing on the Issuer Defendant’s Motion to Dismiss. Antigenics intends to defend against these claims vigorously.

Item 4 – Submission of Matters to a Vote of Security Holders

At the Annual Meeting of Shareholders held on May 22, 2002, Antigenics’s shareholders voted as follows:

          To elect the following nominees to the Board of Directors:

Nominee	Total Vote "FOR"		Total Vote Withheld
Dr. Garo H. Armen		29,619,708		438,235
Mr. Tom Dechaene		29,619,708		438,235

Both received a plurality of the votes cast by the stockholders entitled to vote thereon and, therefore, Dr. Armen and Mr. Dechaene were re-elected to the Board of Directors for a term of three years. In addition, the terms in office of Dr. Noubar Afeyan, Gamil G. de Chadarevian, Sanford M. Litvack, Dr. Pramod Srivastava, Martin Taylor and Dr. Samuel Waksal continued after the meeting. Dr. Samuel Waksal resigned from the Board of Directors effective June 10, 2002.

To amend our certificate of incorporation to increase the authorized preferred stock from 1,000,000 to 25,000,000, increasing the total authorized capital stock from 101,000,000 to 125,000,000

Total Vote “FOR”	Total Vote “AGAINST”		Total Vote “ABSTAIN”		Total Broker Non-Vote
18,042,364		3,246,548		2,047,823		6,721,208

To amend our certificate of incorporation to provide that the number of directors that shall constitute the whole board shall be fixed by a resolution of the board of directors but in no event shall be less than one

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or more than fifteen.

Total Vote "FOR"	Total Vote "AGAINST"		Total Vote "ABSTAIN"
29,620,578		407,358		30,007

Item 5 – Other Information

     On July 8, 2002 Dr. Garo Armen, our Chairman and CEO was named as Chairman of the Board of Directors and Chairman of the Executive Committee of Elan Corporation, plc, a biopharmaceutical company headquartered in Ireland and the U.S. Dr. Armen will continue his duties as Chairman and CEO of Antigenics.

Item 6 – Exhibits and Reports on Form 8-K

     (a)  Exhibits

10.1 Sublease Agreement between Antigenics Inc., a Massachusetts corporation (formerly Aquila Biopharmaceuticals, Inc.) and wholly-owned subsidiary of Antigenics Inc. and GTC Biotherapeutics, Inc. dated July 16, 2002.

     (b)  Current Reports on Form 8-K

     On June 10, 2002, we filed a Current Report on Form 8-K, pursuant to which we filed our amended and restated certificate of incorporation, which we filed with the Secretary of State of Delaware on June 7, 2002, and our amended and restated by-laws.

     On June 12, 2002, we filed a Current Report on Form 8-K, pursuant to which we filed notice of the resignation of a board member effective June 10, 2002.

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Antigenics Inc.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ANTIGENICS INC.
Date: August 12, 2002	/s/ Garo H. Armen Garo H. Armen Chief Executive Officer (Principal Accounting Officer)

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Exhibit Index

10.1 Sublease Agreement between Antigenics Inc., a Massachusetts corporation (formerly Aquila Biopharmaceuticals, Inc.) and wholly owned subsidiary of Antigenics Inc. and GTC Biotherapeutics, Inc. dated July 16, 2002. Filed herewith.

17 EX-10.1 3 b43659anexv10w1.txt EX-10.1 SUBLEASE AGREEMENT 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: 1 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 2 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 3 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. 4 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 5 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 6 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 7 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 8 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; 9 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. 10 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 11 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 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 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 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 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 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 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 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 EXHIBIT A (SUBLEASE PREMISES) SKETCH PLAN Utility Equipment Area - Tertiary Space - First Floor [FIRST FLOOR PLAN] 20 Secondary/Tertiary Space Segregation on Second Floor Hatched Area is Secondary Space Open Area is Tertiary Space [SECOND FLOOR PLAN] 21 Primary Space - Third Floor [THIRD FLOOR PLAN] 22 EXHIBIT B (ANNUAL FIXED RENT AND ADDITIONAL RENT) 23 ANTIGENICS, INC. SUBLEASE AGREEMENT - EXHIBIT B UPDATED: JULY 8, 2002

SQ. FT. TOTAL SQ. FT. - UTILITIES ALLOC. ------ OFFICE LAB ------ ------ 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

JUL-AUG SEP-OCT NOV-DEC JAN-DEC JAN-DEC JAN-DEC MONTHLY SUB-LEASE PAYMENTS 2002 2002 2002 2003 2004 2005 ---------- ---------- ---------- ---------- ---------- ---------- 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 ---------- ---------- ---------- ---------- ---------- ----------

JAN-AUG SEP-DEC JAN-DEC JAN-DEC JAN-DEC JAN-SEP MONTHLY SUB-LEASE PAYMENTS 2006 2006 2007 2008 2009 2010 ---------- ---------- ----------- ----------- ----------- ----------- 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 ---------- ---------- ----------- ----------- ----------- -----------

- ------------------- (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 EXHIBIT C ANTIGENIC LEASEHOLD LEASE 25 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 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 (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 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 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 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 (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 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 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 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 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 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 Exhibit A LEASEHOLD LEASE AGREEMENT (EQUIPMENT AND FIXED EQUIPMENT) 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 13 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 14 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 15 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 16 EXHIBIT B LEASEHOLD LEASE AGREEMENT BREAKDOWN OF EQUIPMENT BY ROOM UPDATED: JULY 10, 2002 MANUFACTURING AREAS - SECOND FLOOR

SPACE ROOM EQUIPMENT TAG NUMBER SERIAL NUMBER VENDOR - ----- ---- --------- ---------- ------------- ------ 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

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

PRIMARY SPACE ------------- Total Res & Admin Spending 3RD FLOOR -------- --------- 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 ===========

SECONDARY SPACE ---------------------------- Total Research E-Prise Space Spending 2ND FLOOR 2ND FLOOR -------- --------- --------- 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 ===========

18

TERTIARY SPACE -------------- Total Manufacturing Manufacturing Facilities Spending QS-21 Fel-V Mech Room -------- ----- ----- --------- 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

19 EXHIBIT D PRIME LESSOR CONSENT 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 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 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 SUBTENANT: GTC Biotherapeutics, Inc. By: /s/ John B. Green --------------------------------- Its: Senior Vice President --------------------------------- hereunto duly authorized 4 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 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 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 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 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 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 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 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 EXHIBIT E Form of Letter of Credit 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 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 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 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 10-Q 5 b43659ane10vqxpdfy.pdf ANTIGENICS INC. 10-Q COURTESY COPY begin 644 b43659ane10vqxpdfy.pdf M)5!$1BTQ+C(-)>+CS],-"CF4@.3,-+TEN9F\@-S8@,"!2(`TO M4F]O="`W."`P(%(@#2]0XX6>,1S';9>Z\"U=TE,]*_#`BZ!+;KSL7AUFHBLB+RWC:17V:UF9 M4RAGU+FBZ=Q4PZ4*?5M5>92]2E2]$Z6`%D4P,'1T-"`3%AT=$!83F.O2`>*S M92`X+$"R@4D)S!:$D,8@:18@BU$"IH"!T=@"1#$#";"H()!!7"`!@14#T\7O M0)H'B`7!(D4,O(P.#"QSU`1NL\D**?`]2NACRFU-#.R:$-)PL_0"4`5`@`$` M)4.*;`UE;F1S=')E86T-96YD;V)J#3DR(#`@;V)J#3,R."`-96YD;V)J#3"!;(#`@,"`V,3(@-SDR(%T@#2]2;W1A M=&4@,"`-/CX@#65N9&]B:@TX,"`P(&]B:@T\/"`-+U!R;V-3970@6R`O4$1& M("]497AT(%T@#2]&;VYT(#P\("]&,B`X,B`P(%(@+T8V(#@Q(#`@4B`^/B`- M+T5X=$=3=&%T92`\/"`O1U,Q(#@V(#`@4B`^/B`-/CX@#65N9&]B:@TX,2`P M(&]B:@T\/"`-+U1Y<&4@+T9O;G0@#2]3=6)T>7!E("]4>7!E,2`-+T9IF5R M;R]!+T,O;VYE+W,O1"]A+W1W;R]T+TF5R;R]-+VXO;VYE+T$O:R]/+W1W7`UO+VTO<75O=&5R:6=H="]1+W@O=&AR M964O;R]P87)E;FQE9G0O4B]+*0TO1F]N=$9I;&4S(#DP(#`@4B`-/CX@#65N M9&]B:@TX-2`P(&]B:@T\/"`O3&5N9W1H(#(R-3,@/CX@#7-T65R($ED96YT:69I8V%T:6]N($YU;6)E&-H86YG92!!8W0@;V8@,3DS-"!D=7)I;F<@=&AE('!R96-E M9&EN9R`Q,B!M;VYT:',@7"AO@A1Q'II(UPIG"_<+[(A?10?$T\6[QRU'A MH^Z;^YLWF[\9[3;ZW.CW%AJ+FY:6GE;G7(ZM4G*6,D8PQ27!HJ MO4"Y4[NI'NM3]'@ZF7YL$VESRG:%[24[PFZ[W6M[7_MN9AR3S3R7Q ML%?VASY")FPMSDB)VLA(\Q5D)1U<'3$'[B>*7TAQ[0G>CH@2UE5&/JR%1>1".S M3Y'U.*_*Q4-@V0]3@/AU04$85QQ)UU>&K9OMB;A9RXQMWS2T@O\PIX2?Z5"A M)C)8-4<6D'B@.(FCWJ<>2$HIWBA#YE.0PZ2)7>$7@.X%QS><:7YI5N&N`^S. 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EX-10.1

                                                                    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:


                                                                               1

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


                                                                               2

      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


                                                                               3

            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.


                                                                               4

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


                                                                               5

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


                                                                               6

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


                                                                               7

                        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


                                                                               8

                        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;


                                                                               9

                  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.


                                                                              10

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


                                                                              11

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

         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

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

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

         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

                  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

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

         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

                                    EXHIBIT A

                               (SUBLEASE PREMISES)

                                   SKETCH PLAN

              Utility Equipment Area - Tertiary Space - First Floor

[FIRST FLOOR PLAN]


                                                                              20

              Secondary/Tertiary Space Segregation on Second Floor

                         Hatched Area is Secondary Space

                           Open Area is Tertiary Space

[SECOND FLOOR PLAN]


                                                                              21

                           Primary Space - Third Floor

[THIRD FLOOR PLAN]


                                                                              22

                                    EXHIBIT B
                     (ANNUAL FIXED RENT AND ADDITIONAL RENT)


                                                                              23

ANTIGENICS, INC.
SUBLEASE AGREEMENT - EXHIBIT B
UPDATED:  JULY 8, 2002



                                      SQ. FT. TOTAL                       SQ. FT. - UTILITIES ALLOC.
                                         ------                             OFFICE            LAB
                                                                            ------          ------
                                                                                   
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




                                   JUL-AUG      SEP-OCT     NOV-DEC     JAN-DEC     JAN-DEC     JAN-DEC
MONTHLY SUB-LEASE PAYMENTS           2002        2002        2002        2003         2004        2005
                                 ----------   ----------  ----------  ----------  ----------  ----------
                                                                            
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
                                 ----------   ----------  ----------  ----------  ----------  ----------




                                    JAN-AUG     SEP-DEC     JAN-DEC     JAN-DEC     JAN-DEC     JAN-SEP
MONTHLY SUB-LEASE PAYMENTS           2006        2006        2007        2008         2009        2010
                                  ----------  ----------  ----------- ----------- ----------- -----------
                                                                            
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
                                  ----------  ----------  ----------- ----------- ----------- -----------


- -------------------
(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

                                    EXHIBIT C
                            ANTIGENIC LEASEHOLD LEASE


                                                                              25

                           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

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

         (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

                           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

                           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

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

         (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

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

         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

                                    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

         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

                                        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

                                    Exhibit A

                            LEASEHOLD LEASE AGREEMENT
                         (EQUIPMENT AND FIXED EQUIPMENT)

                                                                                        
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






                                                                              13

                                                                                        
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




                                                                              14

                                                                                        
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




                                                                              15

                                 
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




                                                                              16

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


MANUFACTURING AREAS - SECOND FLOOR



SPACE                              ROOM   EQUIPMENT                              TAG NUMBER           SERIAL NUMBER    VENDOR
- -----                              ----   ---------                              ----------           -------------    ------

                                                                                                       
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



                                                                              17

                                    EXHIBIT C
                            LEASEHOLD LEASE AGREEMENT
                            DEPRECIATION CALCULATIONS
                             UPDATED: JULY 10, 2002




                                                            PRIMARY SPACE
                                                            -------------
                                             Total          Res & Admin
                                            Spending         3RD FLOOR
                                            --------         ---------
                                                      
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
                                                            ===========





                                                                   SECONDARY SPACE
                                                             ----------------------------
                                              Total           Research      E-Prise Space
                                            Spending         2ND FLOOR        2ND FLOOR
                                            --------         ---------        ---------
                                                                    
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
                                                                             ===========



                                                                              18



                                                                            TERTIARY SPACE
                                                                            --------------
                                              Total        Manufacturing    Manufacturing      Facilities
                                            Spending           QS-21            Fel-V          Mech Room
                                            --------           -----            -----          ---------
                                                                                   
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



                                                                              19

                                    EXHIBIT D
                              PRIME LESSOR CONSENT

                               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

         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

                  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

                                    SUBTENANT:
                            GTC Biotherapeutics, Inc.


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

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


                                                                               4

                    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

                  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

                  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

                  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

                  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

                  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

         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

                  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

                                    EXHIBIT E
                            Form of Letter of Credit

                                                             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

                                                             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

                                                             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

                                   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