VALUE LINE INC (Form: 10-Q, Received: 03/11/2016 17:31:54)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2016

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________________ to __________________________________

Commission File Number: 0-11306

	VALUE LINE, INC.
(Exact name of registrant as specified in its charter)

	New York				13-3139843
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

	485 Lexington Avenue, New York, New York				10017-2630
(Address of principal executive offices)				(Zip Code)

(212) 907-1500

(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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)”. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

	Class		Outstanding at March 10, 2016

Common stock, $0.10 par value		9,766,268 Shares

VALUE LINE INC.

TABLE OF CONTENTS

		Page No.
	PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Condensed Financial Statements

	Consolidated Condensed Balance Sheets as of January 31, 2016 and April 30, 2015	3

	Consolidated Condensed Statements of Income for the three and nine months ended January 31, 2016 and January 31, 2015	4

	Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended January 31, 2016 and January 31, 2015	5

	Consolidated Condensed Statements of Cash Flows for the nine months ended January 31, 2016 and January 31, 2015	6

	Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2016	7

	Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2015	8

	Notes to Consolidated Condensed Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 5.	Other Information	33
Item 6.	Exhibits	34

	Signatures	35

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Balance Sheets

(in thousands, except share amounts)

	January 31,			April 30,
	2016			2015
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents (including short term investments of $9,641 and $5,272, respectively)	$	10,351		$	5,874
Securities available-for-sale		4,550			9,632
Accounts receivable, net of allowance for doubtful accounts of $24 and $28, respectively		1,349			1,409
Prepaid and refundable income taxes		117			114
Prepaid expenses and other current assets		1,181			1,460
Deferred income taxes		375			356
Total current assets		17,923			18,845

Long term assets:
Investment in EAM Trust		58,079			58,048
Property and equipment, net		3,509			3,690
Capitalized software and other intangible assets, net		6,190			6,838
Total long term assets		67,778			68,576

Total assets	$	85,701		$	87,421

Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	2,044		$	1,787
Accrued salaries		954			1,219
Dividends payable		1,563			1,472
Accrued taxes on income		255			226
Unearned revenue		19,390			21,510
Total current liabilities		24,206			26,214

Long term liabilities:
Unearned revenue		4,943			4,537
Deferred charges		17			167
Deferred income taxes		21,528			22,064
Total long term liabilities		26,488			26,768
Total liabilities		50,694			52,982

Shareholders' Equity:
Common stock, $0.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares		1,000			1,000
Additional paid-in capital		991			991
Retained earnings		35,917			34,587
Treasury stock, at cost (231,957 and 190,504 shares, respectively)		(2,853	)		(2,244	)
Accumulated other comprehensive income, net of tax		(48	)		105
Total shareholders' equity		35,007			34,439

Total liabilities and shareholders' equity	$	85,701		$	87,421

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Consolidated Condensed Statements of Income

(in thousands, except share & per share amounts)

(unaudited)

	For the Three Months Ended				For the Nine Months Ended
	January 31,				January 31,
	2016		2015		2016		2015

Revenues:
Investment periodicals and related publications	$	7,977	$	8,203	$	24,200	$	25,023
Copyright data fees		622		660		1,868		2,171
Total revenues		8,599		8,863		26,068		27,194

Expenses:
Advertising and promotion		1,036		963		2,768		3,316
Salaries and employee benefits		3,882		3,992		11,586		11,946
Production and distribution		2,003		1,859		6,033		5,258
Office and administration		1,121		1,198		3,339		3,715
Total expenses		8,042		8,012		23,726		24,235
Income from operations		557		851		2,342		2,959

Revenues and profits interests in EAM Trust		1,919		2,024		5,901		5,995
Income from securities transactions, net		133		96		215		203
Income before income taxes		2,609		2,971		8,458		9,157
Income tax provision		696		794		2,434		2,962
Net income	$	1,913	$	2,177	$	6,024	$	6,195

Earnings per share, basic & fully diluted	$	0.20	$	0.22	$	0.62	$	0.63

Weighted average number of common shares		9,770,280		9,813,371		9,787,208		9,813,973

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Consolidated Condensed Statements of Comprehensive Income

(in thousands)

(unaudited)

	For the Three Months Ended						For the Nine Months Ended
	January 31,						January 31,
	2016			2015			2016			2015

Net income	$	1,913		$	2,177		$	6,024		$	6,195

Other comprehensive income (loss), net of tax:
Change in unrealized gains on securities, net of taxes		(127	)		(16	)		(153	)		(33	)
Other comprehensive income (loss)		(127	)		(16	)		(153	)		(33	)
Comprehensive income	$	1,786		$	2,161		$	5,871		$	6,162

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Consolidated Condensed Statements of Cash Flows

(in thousands)

(unaudited)

	For the Nine Months Ended
	January 31,
	2016			2015
Cash flows from operating activities:
Net income	$	6,024		$	6,195
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,202			1,904
Non-voting revenues interest in EAM Trust		(5,546	)		(5,498	)
Non-voting profits interest in EAM Trust		(355	)		(497	)
Realized loss on sales of equity securities		15
Deferred rent		(150	)		(150	)
Deferred income taxes		(671	)		133
Other		(45	)		(45	)
Changes in operating assets and liabilities:
Unearned revenue		(1,714	)		(272	)
Reserve for settlement		(5	)		(54	)
Accounts payable & accrued expenses		262			(253	)
Accrued salaries		(265	)		(198	)
Accrued taxes on income		229			(44	)
Prepaid and refundable income taxes		(3	)		81
Prepaid expenses and other current assets		279			209
Accounts receivable		60			(84	)
Total adjustments		(5,707	)		(4,768	)
Net cash provided by operating activities		317			1,427

Cash flows from investing activities:
Purchases of securities classified as available-for-sale		(3,959	)		(57	)
Proceeds from sales of securities classified as available-for-sale		8,789			57
Distributions received from EAM Trust		5,915			5,824
Acquisition of property and equipment		(36	)		(99	)
Expenditures for capitalized software		(1,337	)		(1,802	)
Net cash provided by investing activities		9,372			3,923

Cash flows from financing activities:
Purchase of treasury stock at cost		(609	)		(71	)
Dividends paid		(4,603	)		(4,416	)
Net cash used in financing activities		(5,212	)		(4,487	)
Net change in cash and cash equivalents		4,477			863
Cash and cash equivalents at beginning of year		5,874			5,788
Cash and cash equivalents at end of period	$	10,351		$	6,651

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Nine Months Ended January 31, 2016

(in thousands, except share amounts)

(unaudited)

	Common stock				Additional paid-in		Treasury Stock						Retained			Accumulated Other Comprehensive
	Shares		Amount		capital		Shares			Amount			earnings			income/(loss)			Total
Balance at April 30, 2015		10,000,000	$	1,000	$	991		(190,504	)	$	(2,244	)	$	34,587		$	105		$	34,439

Net income														6,024						6,024
Change in unrealized gains on securities, net of taxes																	(153	)		(153	)
Purchase of treasury stock								(41,453	)		(609	)								(609	)
Dividends declared														(4,694	)					(4,694	)
Balance at January 31, 2016		10,000,000	$	1,000	$	991		(231,957	)	$	(2,853	)	$	35,917		$	(48	)	$	35,007

Dividends declared per share were $0.16 for each of the three months ending July 31, 2015, October 31, 2015 and January 31, 2016.

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Nine Months Ended January 31, 2015

(in thousands, except share amounts)

(unaudited)

	Common stock				Additional paid-in		Treasury Stock						Retained			Accumulated Other Comprehensive
	Shares		Amount		capital		Shares			Amount			earnings			income/(loss)			Total
Balance at April 30, 2014		10,000,000	$	1,000	$	991		(182,071	)	$	(2,122	)	$	33,183		$	246		$	33,298

Net income														6,195						6,195
Change in unrealized gains on securities, net of taxes																	(33	)		(33	)
Purchase of treasury stock								(5,061	)		(71	)								(71	)
Dividends declared														(4,416	)					(4,416	)
Balance at January 31, 2015		10,000,000	$	1,000	$	991		(187,132	)	$	(2,193	)	$	34,962		$	213		$	34,973

Dividends declared per share were $0.15 for each of the three months ending July 31, 2014, October 31, 2014 and January 31, 2015.

The accompanying notes are an integral part of these consolidated condensed financial statements.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

Note 1 - Organization and Summary of Significant Accounting Policies:

Value Line, Inc. ("Value Line" or "VLI", and collectively with its subsidiaries, the “Company”) is incorporated in the State of New York. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. The Company's primary business is producing investment periodicals and related publications and making available copyright data including certain Value Line trademarks and Value Line Proprietary Ranking System information to third parties under written agreements for use in third party managed and marketed investment products. The Company maintains a significant investment in the Eulav Asset Management LLC ("EAM") from which it received non-voting revenues interest and a non-voting profits interests. EAM was established to provide investment management services to the Value Line Mutual Funds ("Value Line Funds" or the "Funds"). Pursuant to the EAM Declaration of Trust, the Company granted EAM the right to use the Value Line name for all existing Value Line Funds and agreed to supply the Value Line proprietary Ranking System information to EAM without charge or expense.

The Consolidated Condensed Balance Sheets as of January 31, 2016 and April 30, 2015, which have been derived from the unaudited interim Consolidated Condensed Financial Statements and the audited Consolidated Financial Statements, respectively, were prepared following the interim reporting requirements of the Securities and Exchange Commission (“SEC”). In the opinion of management, the accompanying Unaudited Interim Consolidated Condensed Financial Statements contain all adjustments (consisting of normal recurring accruals except as noted below) considered necessary for a fair presentation. This report should be read in conjunction with the audited financial statements and footnotes contained in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2015 filed with the SEC on July 22, 2015 (the “Form 10-K”). Results of operations covered by this report may not be indicative of the results of operations for the entire year.

Use of Estimates:

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates.

Principles of Consolidation:

The Company follows the guidance in the Financial Accounting Standards Board's ("FASB") Topic 810 “Consolidation” to determine if it should consolidate its investment in a variable interest entity ("VIE"). A VIE is a legal entity in which either (i) equity investors do not have sufficient equity investment at risk to enable the entity to finance its activities independently or (ii) the equity holders at risk lack the obligation to absorb losses, the right to receive residual returns or the right to make decisions about the entity’s activities that most significantly affect the entity's economic performance. A holder of a variable interest in a VIE is required to consolidate the entity if it is determined that it has a controlling financial interest in the VIE and is therefore the primary beneficiary. The determination of a controlling financial interest in a VIE is based on a qualitative assessment to identify the variable interest holder, if any, that has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) either the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The accounting guidance requires the Company to perform an ongoing assessment of whether the Company is the primary beneficiary of a VIE and the Company has determined it is not the primary beneficiary of a VIE (see Note 3).

In accordance with FASB's Topic 810, the assets, liabilities, and results of operations of subsidiaries in which the Company has a controlling interest have been consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation. On December 23, 2010, the Company completed the deconsolidation of the investment management related affiliates (the "Restructuring Transaction") in accordance with FASB's Topic 810. As part of the Restructuring Transaction, the Company received a significant non-voting revenues interest (excluding distribution revenues) and a significant non-voting profits interest in the new entity, EULAV Asset Management, a Delaware statutory trust (“EAM” or “EAM Trust”). The Company relied on the guidance in FASB's ASC Topics 323 and 810 in its determination not to consolidate its investment in EAM and to account for such investment under the equity method of accounting. The Company reports the amount it receives for its non-voting revenues and non-voting profits interests as a separate line item below operating income in the Consolidated Condensed Statements of Income.

Revenue Recognition:

Depending upon the product, subscriptions to Value Line periodicals and related publications are available in print or digitally, via internet access. The length of a subscription varies by product and offer received by the subscriber. Generally, subscriptions are offered as annual subscriptions. Subscription revenues, net of discounts, are recognized ratably on a straight line basis when the product is served to the client over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheets are shown as unearned revenue within current and long term liabilities.

Copyright data revenues are derived from providing certain Value Line trademarks and Value Line Proprietary Ranking System information to third parties under written agreements for use in selecting securities for third party marketed products, including unit investment trusts and exchange traded funds ("ETFs"). The Company earns asset-based copyright data fees as specified in the individual agreements. Revenue is recognized monthly over the term of the agreement and, because it is asset-based, will fluctuate as the market value of the underlying portfolio increases or decreases in value.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

Investment in Unconsolidated Entities:

The Company accounts for its investment in its unconsolidated entity, EAM, using the equity method of accounting in accordance with FASB’s ASC 323. The equity method is an appropriate means of recognizing increases or decreases measured by GAAP in the economic resources underlying the investments. Under the equity method, an investor recognizes its share of the earnings or losses of an investee in the periods for which they are reported by the investee in its financial statements rather than in the period in which an investee declares a dividend or distribution. An investor adjusts the carrying amount of an investment for its share of the earnings or losses recognized by the investee.

The Company’s “interests” in EAM, the investment adviser to and the sole member of the distributor of the Value Line Funds, consist of a "non-voting revenues interest" and a "non-voting profits interest" in EAM as defined in the EAM Trust Agreement. The non-voting revenues interest entitles the Company to receive a range of 41% to 55%, based on the amount of EAM’s adjusted gross revenues, excluding ES's distribution revenues (“Revenues Interest”). The non-voting profits interest entitles the Company to receive 50% of EAM's profits, subject to certain limited adjustments as defined in the EAM Trust Agreement (“Profits Interest”). 100% of the Revenues Interest and not less than 90% of the Profits Interest are to be distributed each quarter to all interest holders of EAM, including Value Line. Subsequent to the Restructuring Date, the Company's Revenues Interest in EAM excludes participation in the service and distribution fees of EAM's subsidiary ES. The Company reflects its non-voting revenues and non-voting profits interests in EAM as non-operating income under the equity method of accounting subsequent to the Restructuring Transaction. Although the Company does not have control over the operating and financial policies of EAM, pursuant to the EAM Trust Agreement, the Company has a contractual right to receive its share of EAM's revenues and profits.

Valuation of Securities:

The Company's securities classified as cash equivalents and available-for-sale consist of shares of money market funds that invest primarily in short-term U.S. Government securities and investments in equity securities including Exchange traded funds ("ETFs") and are valued in accordance with the requirements of the Fair Value Measurements Topic of the FASB's ASC 820. The securities classified as available-for-sale reflected in the Consolidated Condensed Balance Sheets are valued at market and unrealized gains and losses, net of applicable taxes, are reported as a separate component of shareholders' equity. Realized gains and losses on sales of the securities classified as available-for-sale are recorded in earnings as of the trade date and are determined on the identified cost method.

The Company classifies its securities available-for-sale as current assets to properly reflect its liquidity and to recognize the fact that it has liquid assets available-for-sale should the need arise.

Market valuations of securities listed on a securities exchange and ETF shares are based on the closing sales prices on the last business day of each month. Cash equivalents consist of investments in money market funds that invest primarily in U.S. Government securities valued in accordance with rule 2a-7 under the 1940 Securities and Exchange Act.

The Fair Value Measurements Topic of FASB's ASC 820 defines fair value as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. The Fair Value Measurements Topic established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the information that market participants would use in pricing the asset or liability, including assumptions about risk. Examples of risks include those inherent in a particular valuation technique used to measure fair value such as the risk inherent in the inputs to the valuation technique. Inputs are classified as observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)

The following summarizes the levels of fair value measurements of the Company’s investments:

	As of January 31, 2016
($ in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents	$	9,641	$	-	$	-	$	9,641
Securities available-for-sale		4,550		-		-		4,550
	$	14,191	$	-	$	-	$	14,191

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

	As of April 30, 2015
($ in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents	$	5,272	$	-	$	-	$	5,272
Securities available-for-sale		9,632		-		-		9,632
	$	14,904	$	-	$	-	$	14,904

The Company had no other financial instruments such as futures, forwards and swap contracts. For the periods ended January 31, 2016 and April 30, 2015, there were no Level 2 nor Level 3 investments. The Company does not have any liabilities subject to fair value measurement.

Advertising expenses:

The Company expenses advertising costs as incurred.

Income Taxes:

The Company computes its income tax provision in accordance with the Income Tax Topic of the FASB's ASC. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the Consolidated Condensed Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of particular assets and liabilities, using tax rates currently in effect for the years in which the differences are expected to reverse.

The Income Tax Topic of the FASB's ASC establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. As of January 31, 2016, management has reviewed the tax positions for the years still subject to tax audit under the statute of limitations, evaluated the implications, and determined that there is no material impact to the Company's financial statements.

Earnings per share:

Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. The Company does not have any potentially dilutive common shares from outstanding stock options, warrants, restricted stock, or restricted stock units.

Cash and Cash Equivalents:

For purposes of the Consolidated Condensed Statements of Cash Flows, the Company considers all cash held at banks and short term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of January 31, 2016 and April 30, 2015, cash equivalents included $9,641,000 and $5,272,000, respectively, for amounts invested in money market mutual funds that invest in short term U.S. government securities.

Note 2 - Investments:

Securities Available-for-Sale:

Investments held by the Company are classified as securities available-for-sale in accordance with FASB's ASC 320, Investments - Debt and Equity Securities. All of the Company's securities classified as available-for-sale are readily marketable and have a maturity of twelve months or less and are included as current assets on the Consolidated Condensed Balance Sheets.

Equity Securities:

Equity securities classified as available-for-sale on the Consolidated Condensed Balance Sheets, consist of ETFs held for dividend yield that attempt to replicate the performance of certain equity indexes and ETFs that hold preferred shares primarily of financial institutions.

As of January 31, 2016 and April 30, 2015, the aggregate cost of the equity securities classified as available-for-sale, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), PowerShares Financial Preferred ETF (PGF), small, mid and large cap high dividend yielding ETFs, and conservative equity ETFs (VLSM, VLML, VLLV), was $4,625,000 and $9,470,000, respectively, and the fair value was $4,550,000 and $9,632,000, respectively.

Proceeds from sales of equity securities classified as available-for-sale during the nine months ended January 31, 2016 were $8,789,000 and the related capital losses of $15,000 were reclassified from Accumulated Other Comprehensive Income in the Consolidated Condensed Balance Sheet to the Consolidated Condensed Statement of Income. During the second quarter ended January 31, 2016, the Company made a decision to sell the dividend paying ETF and non dividend paying inverse ETF positions. The liquidated portfolio of investments generated an annual dividend return averaging 3% annually during the years it was held. The increase in gross unrealized losses on equity securities classified as available-for-sale of $237,000, net of deferred taxes of $84,000 was included in Shareholders' Equity at January 31, 2016. The decrease in gross unrealized gains on equity securities classified as available-for-sale of $51,000, net of deferred taxes of $18,000 was included in Shareholders' Equity at January 31, 2015. Proceeds from sales of equity securities during the nine months ended January 31, 2015 amounted to $57,000.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

The changes in the value of equity securities investments are recorded in Other Comprehensive Income in the Consolidated Condensed Financial Statements. Realized gains and losses are recorded as of the trade date in the Consolidated Condensed Statements of Income when securities are sold, mature or are redeemed. As of January 31, 2016, accumulated other comprehensive income included net unrealized losses of $74,000, net of deferred taxes of $26,000. As of April 30, 2015, accumulated other comprehensive income included net unrealized gains of $162,000, net of deferred taxes of $57,000.

The carrying value and fair value of securities available-for-sale at January 31, 2016 were as follows:

($ in thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value

ETFs - equities		4,625		122		(197	)		4,550
	$	4,625	$	122	$	(197	)	$	4,550

The carrying value and fair value of securities available-for-sale at April 30, 2015 were as follows:

($ in thousands)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Common stocks	$	101	$	74	$	-		$	175
ETFs - equities		3,903		1,508		-			5,411
Inverse ETFs - equities		5,466		-		(1,420	)		4,046
	$	9,470	$	1,582	$	(1,420	)	$	9,632

Income from Securities Transactions:

Income from securities transactions was comprised of the following:

	Three Months Ended January 31,						Nine Months Ended January 31,
($ in thousands)	2016			2015			2016			2015
Dividend income	$	31		$	42		$	111		$	119
Interest income		-			-			-			3
Capital gain distributions		105			57			105			57
Realized capital loss		-			-			(15	)		-
Other		(3	)		(3	)		14			24
Total income from securities transactions, net	$	133		$	96		$	215		$	203

Investment in Unconsolidated Entities:

Equity Method Investment:

As of January 31, 2016 and April 30, 2015, the Company's investment in EAM Trust, on the Consolidated Condensed Balance Sheets was $58,079,000 and $58,048,000, respectively.

The value of VLI’s investment in EAM at January 31, 2016 and April 30, 2015 reflects the fair value of contributed capital of $55,805,000 at inception which included $5,820,000 of cash and liquid securities in excess of working capital requirements contributed to EAM’s capital account by VLI, plus VLI's share of non-voting revenues and non-voting profits from EAM less distributions, made quarterly to VLI by EAM, during the period subsequent to its initial investment through the dates of the Consolidated Condensed Balance Sheets.

It is anticipated that EAM will have sufficient liquidity and earn enough profit to conduct its current and future operations so the management of EAM will not need additional funding.

The Company monitors its Investment in EAM Trust for impairment to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. Impairment indicators include, but are not limited to the following: (a) a significant deterioration in the earnings performance, asset quality, or business prospects of the investee, (b) a significant adverse change in the regulatory, economic, or technological environment of the investee, (c) a significant adverse change in the general market condition of the industry in which the investee operates, or (d) factors that raise significant concerns about the investee’s ability to continue as a going concern such as negative cash flows, working capital deficiencies, or noncompliance with statutory capital and regulatory requirements. EAM did not record any impairment losses for its assets during the fiscal years 2016 or 2015.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

The components of EAM’s investment management operations, provided to the Company by EAM, were as follows:

	Three Months Ended January 31,					Nine Months Ended January 31,
($ in thousands) (unaudited)	2016			2015		2016			2015
Investment management fees earned from the Value Line Funds, net of fee waivers	$	3,656		$	3,792	$	11,147		$	11,269
12b-1 fees and other fees, net of fee waivers	$	1,440		$	1,385	$	4,278		$	4,094
Other income (loss)	$	(57	)	$	4	$	(84	)	$	13
Investment management fee waivers (1)	$	48		$	57	$	143		$	147
12b-1 fee waivers (1)	$	235		$	378	$	848		$	1,147
Value Line’s non-voting revenues interest	$	1,825		$	1,862	$	5,546		$	5,498
EAM's net income (2)	$	188		$	324	$	710		$	994

(1) During fiscal 2016 investment management fee waivers primarily related to the Value Line Core Bond Fund and the 12b-1 fee waivers related to four of the Value Line Mutual Funds. During fiscal 2015 investment management fee waivers primarily related to the Value Line Core Bond Fund and the 12b-1 fee waivers related to six of the Value Line Mutual Funds.

(2) Represents EAM's net income, after giving effect to Value Line’s non-voting revenues interest, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

	January 31,			April 30,
($ in thousands)	2016			2015
	(unaudited)
EAM's total assets	$	60,259		$	60,159
EAM's total liabilities (1)		(3,039	)		(3,104	)
EAM's total equity	$	57,220		$	57,055

(1) At January 31, 2016 and April 30, 2015, EAM's total liabilities included a payable to VLI for its accrued non-voting revenues, interest and the 90% distributable share of its non-voting profits interest of $1,901,000 and $1,951,000, respectively.

Note 3 - Variable Interest Entity

The Company retained a non-voting revenues interest and a 50% non-voting profits interest in EAM, which was formed, as a result of the Restructuring Transaction on December 23, 2010, to carry on the asset management and mutual fund distribution businesses formerly conducted by the Company. EAM is considered to be a VIE. The Company makes its determination for consolidation of EAM as a VIE based on a qualitative assessment of the purpose and design of EAM, the terms and characteristics of the variable interests in EAM, and the risks EAM is designed to originate and pass through to holders of variable interests. Other than EAM, the Company does not have an interest in any other VIEs.

The Company has determined that it does not have a controlling financial interest in EAM because it does not have the power to direct the activities of EAM that most significantly impact its economic performance. Value Line does not hold any voting stock of EAM and it does not have any involvement in the day-to-day activities or operations of EAM. Although the EAM Trust Agreement provides Value Line with certain consent rights and contains certain restrictive covenants related to the activities of EAM, these are considered to be protective rights and therefore Value Line does not maintain control over EAM.

In addition, although EAM is expected to be profitable, there is a risk that it could operate at a loss. While all of the profit interest shareholders in EAM are subject to variability based on EAM’s operations risk, Value Line’s non-voting revenues interest in EAM is a preferred interest in the revenues of EAM, rather than a profits interest in EAM, and Value Line accordingly believes it is subject to proportionately less risk than other holders of the profits interests.

The Company has not provided any explicit or implicit financial or other support to EAM other than what was contractually agreed to in the EAM Trust Agreement. Value Line has no obligation to fund EAM in the future and, as a result, has no exposure to loss beyond its initial investment and any undistributed revenues and profits interests retained in EAM. The following table presents the total assets of EAM, the maximum exposure to loss due to involvement with EAM, as well as the value of the assets and liabilities the Company has recorded on its Consolidated Condensed Balance Sheets for its interest in EAM.

			Value Line
($ in thousands)	VIE Assets		Investment in EAM Trust (1)		Liabilities		Maximum Exposure to Loss
As of January 31, 2016 (unaudited)	$	60,259	$	58,079	$	-	$	58,079
As of April 30, 2015	$	60,159	$	58,048	$	-	$	58,048

(1) Reported within Long Term Assets on the Consolidated Condensed Balance Sheets.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

Note 4 - Supplementary Cash Flow Information:

	Nine Months Ended January 31,
($ in thousands)	2016		2015
State and local income tax payments	$	183	$	299
Federal income tax payments to the Parent	$	2,695	$	2,560

Note 5 - Employees' Profit Sharing and Savings Plan:

Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general, this is a qualified, contributory plan which provides for a discretionary annual Company contribution which is determined by a formula based on the salaries of eligible employees and the amount of consolidated net operating income as defined in the Plan. For the nine months ended January 31, 2016 and January 31, 2015, the estimated profit sharing plan contributions, which are included as expenses in salaries and employee benefits in the Consolidated Condensed Statements of Income, were $322,000 and $300,000, respectively.

Note 6 - Comprehensive Income:

The FASB's ASC Comprehensive Income topic requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that otherwise would not be recognized in the calculation of net income.

Beginning in fiscal 2013, the Company adopted the provisions of Accounting Standards Update 2011-05 to reflect comprehensive income in two statements which include the components of net income and total net income in the first statement, immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income and a total for comprehensive income.

As of January 31, 2016 and January 31, 2015, the Company held equity securities consisting primarily of ETFs with high relative dividend yields that are classified as securities available-for-sale on the Consolidated Condensed Balance Sheets. The change in valuation of these securities, net of deferred income taxes, has been recorded in accumulated other comprehensive income in the Company's Consolidated Condensed Balance Sheets.

The components of comprehensive income included in the Consolidated Condensed Statements of Income and Changes in Shareholders' Equity for the nine months ended January 31, 2016 are as follows:

($ in thousands)	Amount Before Tax			Tax Benefit			Amount Net of Tax
Change in unrealized losses on securities	$	(147	)	$	52		$	(95	)
Less: Gains realized in net income	$	(105	)	$	37		$	(68	)
Add: Losses realized in net income	$	15		$	(5	)	$	10
	$	(237	)	$	84		$	(153	)

The components of comprehensive income included in the Consolidated Condensed Statements of Income and Changes in Shareholders' Equity for the nine months ended January 31, 2015 are as follows:

($ in thousands)	Amount Before Tax			Tax Benefit			Amount Net of Tax
Change in unrealized gains on securities	$	6		$	(2	)	$	4
Less: Gains realized in net income	$	(57	)	$	20		$	(37	)
	$	(51	)	$	18		$	(33	)

Note 7 - Related Party Transactions:

Investment Management (overview):

The Company has substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. Accordingly, the Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and will receive ongoing payments in respect of its non-voting revenues and non-voting profits interests.

Total assets in the Value Line Funds managed and/or distributed by EAM at January 31, 2016, were $2.14 billion, 6.6% below total assets of $2.30 billion in the Value Line Funds managed and/or distributed by EAM at January 31, 2015.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement. Value Line’s percent share of EAM’s revenues calculated each fiscal quarter was 50.05%, 50.16% and 50.14% during the first, second and third quarters of fiscal 2016, respectively, and 49.18%, 49.63% and 49.80% during the first, second and third quarters of fiscal 2015, respectively.

EAM Trust - VLI's non-voting revenues and non-voting profits interests:

The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business. EAM currently has no separately managed account clients. The Company recorded income from its non-voting revenues interest and its non-voting profits interest in EAM as follows:

	Three Months Ended January 31,				Nine Months Ended January 31,
($ in thousands)	2016		2015		2016		2015
Non-voting revenues interest in EAM	$	1,825	$	1,862	$	5,546	$	5,498
Non-voting profits interest in EAM		94		162		355		497
	$	1,919	$	2,024	$	5,901	$	5,995

Transactions with Parent:

During the nine months ended January 31, 2016 and January 31, 2015, the Company was reimbursed $96,000 and $104,000, respectively, for payments it made on behalf of and for services the Company provided to the Parent. There were no receivables from affiliates including receivables from the Parent on the Consolidated Condensed Balance Sheets at January 31, 2016 and April 30, 2015.

The Company is a party to a tax-sharing arrangement with the Parent which allocates the tax liabilities of the two Companies between them. The Company made federal tax payments of $2,695,000 and $2,560,000 to the Parent during the nine months ended January 31, 2016 and January 31, 2015, respectively.

From time to time, the Parent has purchased additional shares of common stock of the Company in the market when and as the Parent has determined it to be appropriate. The Parent may make additional purchases of common stock of the Company from time to time in the future. As of January 31, 2016, the Parent owned 88.39% of the outstanding shares of common stock of the Company.

Note 8 - Federal, State and Local Income Taxes:

In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following:

	Three Months Ended January 31,						Nine Months Ended January 31,
($ in thousands)	2016			2015			2016			2015
Current tax expense:
Federal	$	906		$	716		$	2,916		$	2,668
State and local		62			9			189			161
Current tax expense		968			725			3,105			2,829
Deferred tax expense (benefit):
Federal		(271	)		198			(449	)		198
State and local		(1	)		(129	)		(222	)		(65	)
Deferred tax expense (benefit):		(272	)		69			(671	)		133
Income tax provision	$	696		$	794		$	2,434		$	2,962

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's deferred tax asset and deferred tax liability are as follows:

	January 31,		April 30,
($ in thousands)	2016		2015
Federal tax benefit (liability):
Unrealized gains on securities available-for-sale	$	26	$	(57	)
Operating lease deferred obligation		70		70
Deferred professional fees		76		34
Deferred charges		173		263
Total federal tax benefit		345		310

State and local tax benefits:
Other		30		46
Total state and local tax benefits		30		46
Deferred tax asset, short term	$	375	$	356

	January 31,			April 30,
($ in thousands)	2016			2015
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	17,716		$	17,679
Deferred non-cash post-employment compensation		(619	)		(619	)
Depreciation and amortization		2,229			2,435
Other		332			401
Total federal tax liability		19,658			19,896

State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		1,735			1,970
Deferred non-cash post-employment compensation		(61	)		(69	)
Depreciation and amortization		218			271
Other		(22	)		(4	)
Total state and local tax liabilities		1,870			2,168
Deferred tax liability, long term	$	21,528		$	22,064

At the end of each interim reporting period, the Company estimates the effective income tax rate to apply for the full fiscal year. The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the nine months ended January 31, 2016 and January 31, 2015 were 28.78% and 32.35%, respectively. The Company's annual effective tax rate will change due to a number of factors including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company's geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings and settlements with tax authorities. The fluctuation in the effective income tax rate during fiscal 2016 is primarily attributable to the affect from the scheduled reduction in the allocation factors on the state and local current and deferred tax liability (primarily associated with the gain on deconsolidation of EAM), favorable settlement of certain tax audits, dividend exclusion and an increase in the domestic production tax credits.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	Nine Months Ended January 31,
	2016			2015
U.S. statutory federal tax rate		35.00	%		35.00	%
Increase (decrease) in tax rate from:
State and local income taxes, net of federal income tax benefit		-1.38	%		0.09	%
Effect of dividends received deductions		-0.70	%		-0.36	%
Domestic production tax credit		-0.54	%		-0.62	%
Write-off of goodwill		-			-1.85	%
Settlement of tax audits		-3.60	%		-
Other, net		-			0.09	%
Effective income tax rate		28.78	%		32.35	%

The Company believes that, as of January 31, 2016, there were no material uncertain tax positions that would require disclosure under GAAP.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability as if it filed a separate return.

The Company's federal income tax returns (included in the Parent's consolidated returns) and state and city tax returns for fiscal years 2014, 2013, and 2012, are subject to examination by the tax authorities, generally for six years after they were filed with the tax authorities. The Company has favorably concluded certain tax audits during the third quarter of fiscal 2016 that have provided the recognition of tax benefits resulting from a favorable outcome. The Company’s tax returns for the fiscal years ended April 30, 2013 and 2012 are being examined by New York City (NYC). The Company does not expect the audit examinations to have a material effect on its financial statements.

Note 9 - Property and Equipment:

Property and equipment are carried at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the remaining terms of the leases. For income tax purposes, depreciation of furniture and equipment is computed using accelerated methods and buildings and leasehold improvements are depreciated over prescribed extended tax lives. Property and equipment, net, on the Consolidated Condensed Balance Sheets was comprised of the following:

	January 31,			April 30,
($ in thousands)	2016			2015
Land	$	726		$	726
Building and leasehold improvements		5,037			5,037
Furniture and equipment		4,121			4,084
		9,884			9,847
Accumulated depreciation and amortization		(6,375	)		(6,157	)
Total property and equipment, net	$	3,509		$	3,690

Note 10 - Accounting for the Costs of Computer Software Developed for Internal Use:

The Company has adopted the provisions of the Statement of Position 98-1 (SOP 98-1), "Accounting for the Costs of Computer Software Developed for Internal Use". SOP 98-1 requires companies to capitalize as long-lived assets many of the costs associated with developing or obtaining software for internal use and amortize those costs over the software's estimated useful life in a systematic and rational manner.

The Company capitalized $1,337,000 and $1,802,000 related to the development of software for internal use for the nine months ended January 31, 2016 and 2015, respectively. Capitalized software includes $975,000 and $1,195,000 of internal costs to develop software and $362,000 and $607,000 of third party programmers' costs for the nine months ended January 31, 2016, and January 31, 2015, respectively. Such costs are capitalized and amortized over the expected useful life of the asset which is 5 years. Total amortization expenses for the nine months ended January 31, 2016 and January 31, 2015, were $1,985,000 and $1,683,000, respectively.

Note 11 - Treasury Stock and Repurchase Program:

On September 19, 2012, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of shares of the Company’s common stock up to an aggregate purchase price of $3,000,000. The repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block purchases or otherwise. The repurchase program may be suspended or discontinued at any time at the Company’s discretion and has no set expiration date.

Treasury stock, at cost, consists of the following:

(in thousands except for shares and cost per share)	Shares		Total Average Cost Assigned		Average Cost per Share		Aggregate Purchase Price Remaining Under the Program
Balance as of April 30, 2015 (1)(2)		190,504	$	2,244	$	11.78	$	2,146
Purchases effected in open market during the quarters ended:
July 31, 2015 (2)		12,237	$	166	$	13.58	$	1,980
October 31, 2015 (2)		25,098	$	382	$	15.23	$	1,598
January 31, 2016 (2)		4,118	$	61	$	14.74	$	1,537
Balance as of January 31, 2016		231,957	$	2,853	$	12.30	$	1,537

(1) Includes 85,219 shares with a total average cost of $1,036,000 that were acquired during the former repurchase program, which was authorized in January 2011 and expired in January 2012; 18,400 shares were acquired prior to the repurchase program authorized in January 2011.

(2) Were acquired during the $3 million repurchase program authorized in September 2012.

Value Line, Inc.

Notes to Consolidated Condensed Financial Statements

January 31, 2016

(Unaudited)

Note 12 - Lease Commitments:

On February 7, 2013, the Company and Citibank, N.A. (the “Sublandlord”) entered into a sublease agreement, pursuant to which Value Line has leased approximately 44,493 square feet of office space located on the ninth floor at 485 Lexington Ave., New York, NY (“Building” or “Premises”) beginning on July 1, 2013 and ending on February 27, 2017 ("Sublease"). On August 16, 2013, the Company moved to the Building which became its new corporate office facility. Base rent under the Sublease is $1,468,269 per annum, subject to customary concessions in the Company’s favor and pass-through of certain increases in operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $489,423, which is to be partially returned over the course of the sublease term with the remainder returnable at the end of the lease. In March 2015 the Company received from sublandlord $122,355 that represented a partial return of the security deposit. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The Sublease terms have provided for a significant decrease in the Company’s annual rental expenses as compared to the space previously occupied. The Company recorded a deferred charge on its Consolidated Condensed Balance Sheets to reflect the excess of annual rental expense over cash payments since inception of the lease due to free rent for the first nine months of the sublease.

The total amount of the base rent payments is being charged to expense on the straight-line method over the term of the lease.

Future minimum payments, exclusive of potential increases in real estate taxes and operating cost escalations, under operating leases for space, with remaining terms of one year or more, are as follows:

Fiscal Years Ended April 30,	($ in thousands)
2017			1,417
2018			199
2019			204
2020			211
2021			217
2022 and thereafter			691
		$	2,939

For the nine months ended January 31, 2016 and 2015, rental expense was $951,000 for both years.

On February 29, 2016, the Company's subsidiary Value Line Distribution Center ("VLDC") and Seagis Property Group LP (the "Landlord") entered into a lease agreement, pursuant to which VLDC will lease approximately 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ ("Building" or "Premises") beginning on or about May 1, 2016 and ending on April 30, 2024 ("Lease"). Base rent under the Lease will be $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal 2017 and will gradually increase to $237,218 in fiscal 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the Lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Information

This report contains statements that are predictive in nature, depend upon or refer to future events or conditions (including certain projections and business trends) accompanied by such phrases as “believe”, “estimate”, “expect”, “anticipate”, “will”, “intend” and other similar or negative expressions, that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended. Actual results for Value Line, Inc. (“Value Line” or “the Company”) may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the following:

	·	locating suitable office space before expiration of the Company’s current lease term;
	·	maintaining revenue from subscriptions for the Company’s digital and print published products;

changes in market and economic conditions, including global financial issues;

protection of intellectual property rights;

dependence on non-voting revenues and non-voting profits interests in EULAV Asset Management, a Delaware statutory trust (“EAM” or “EAM Trust”), which serves as the investment advisor to the Value Line Funds and engages in related distribution, marketing and administrative services;

fluctuations in EAM’s assets under management due to broadly based changes in the values of equity and debt securities, redemptions by investors and other factors, and the effect these changes may have on the valuation of EAM’s intangible assets;

dependence on key personnel;

competition in the fields of publishing, copyright data and investment management;

the impact of government regulation on the Company’s and EAM’s businesses;

availability of free or low cost investment data through discount brokers or generally over the internet;

terrorist attacks, cyber attacks and natural disasters;

other risks and uncertainties, including but not limited to the risks described in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended April 30, 2015 and in Part II, Item 1A of this Quarterly Report on Form 10-Q for the period ended January 31, 2016; and other risks and uncertainties arising from time to time.

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors which may involve external factors over which we may have no control or changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at our discretion, could also have material adverse effects on future results. Except as otherwise required to be disclosed in periodic reports required to be filed by public companies with the SEC pursuant to the SEC's rules, we have no duty to update these statements, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, current plans, anticipated actions, and future financial conditions and results may differ from those expressed in any forward-looking information contained herein.

In this report, “Value Line,” “we,” “us,” “our” refers to Value Line, Inc. and the “Company” refers to Value Line and its subsidiaries unless the context otherwise requires.

Executive Summary of the Business

The Company's core business is producing investment periodicals and their underlying research and making available copyright data, including certain proprietary Ranking System and other proprietary information, to third parties under written agreements for use in third-party managed and marketed investment products and for other purposes. Value Line markets under well-known brands including Value Line ® , the Value Line logo®, The Value Line Investment Survey ® , Smart Research, Smarter Investing™ and The Most Trusted Name in Investment Research ® . The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. Since December 23, 2010, EULAV Asset Management Trust (“EAM”) provides the investment management services to the Value Line Funds, institutional and individual accounts and provides distribution, marketing, and administrative services to the Value Line® Mutual Funds ("Value Line Funds"). Value Line holds substantial non-voting revenues and non-voting profits interests in EAM.

The Company’s target audiences within the investment research field are individual investors, colleges, libraries, and investment management professionals. Individuals come to Value Line for complete research in one package. Institutional licensees consist of corporations, financial professionals, colleges, and municipal libraries. Libraries and universities offer the Company’s detailed research to their patrons and students. Investment management professionals use the research and historical information in their day-to-day businesses. The Company has a dedicated department that solicits institutional subscriptions.

Payments received for new and renewal subscriptions and the value of receivables for amounts billed to retail and institutional customers are recorded as unearned revenue until the order is fulfilled. As the orders are fulfilled, the Company recognizes revenue in equal installments over the life of the particular subscription. Accordingly, the subscription fees to be earned by fulfilling subscriptions after the date of a particular balance sheet are shown on that balance sheet as unearned revenue within current and long term liabilities.

The investment periodicals and related publications (retail and institutional) and fees from copyright data including the proprietary Ranking System information and other proprietary information consolidate into one segment called Publishing.

Asset Management and Mutual Fund Distribution Businesses

The business of EAM is managed by its trustees each owning 20% of the voting profits interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement. Value Line’s percent share of EAM’s revenues calculated each fiscal quarter was 50.05%, 50.16% and 50.14% during the first, second and third quarters of fiscal 2016, respectively, and 49.18%, 49.63% and 49.80% during the first, second and third quarters of fiscal 2015, respectively.

Pursuant to the EAM Declaration of Trust, the Company granted EAM the right to use the Value Line name for all existing Value Line Funds and agreed to supply the Value Line proprietary Ranking System information to EAM without charge or expense.

Business Environment

The nation's economy slowed during the fourth quarter of 2016, with the U.S. gross domestic product increasing by 1.0%. The first quarter is likely to exhibit modest growth with a still contracting manufacturing sector, and a decline in capital spending in the energy sector, offset by some strength in the housing and construction areas.

However, the opening period of this year should bring some gradual improvement, underpinned by a strengthening employment backdrop, further resilience in housing, increases in consumer spending, and some emerging stability on the manufacturing front. However, a weak export market, excessive inventories, and a plunge in energy-sector capital spending all figure to cap the likely pickup in growth, limiting the presumptive GDP increase to just over 2% in the first quarter.

Thereafter, some working down of those inventories, further strength on the housing and consumer spending sides (aided by the better employment situation), and a less-ominous outlook in the energy markets, as prices start to stabilize and gradually edge higher, should help generate growth that is well above 2%, even, perhaps, approaching 3% as the year concludes. Such a prospect would likely enable the Federal Reserve to pursue slightly tighter monetary policies later in 2016.

Meanwhile, the global outlook is still unsettled, with slowing business growth in China, continuing economic and debt-related ills across parts of Europe, and periodic crises in the Middle East headlining the ills off shore. To date, the U.S. economy has remained quite well insulated from these global headwinds. Assuming the ailing commodities markets are now stabilizing, our economy's resilience should continue. Against this benign domestic backdrop, the U.S. stock market is continuing to largely hold its own.

Results of Operations for the Three and Nine Months Ended January 31, 2016 and January 31, 2015

The following table illustrates the Company’s key components of revenues and expenses.

($ in thousands, except earnings	Three Months Ended January 31,							Nine Months Ended January 31,
per share)	2016		2015		Change			2016		2015		Change
Income from operations	$	557	$	851		-34.5	%	$	2,342	$	2,959		-20.9	%
Revenues and profits interests from EAM Trust	$	1,919	$	2,024		-5.2	%	$	5,901	$	5,995		-1.6	%
Income from operations plus non-voting revenues and non-voting profits interests from EAM Trust	$	2,476	$	2,875		-13.9	%	$	8,243	$	8,954		-7.9	%
Operating expenses	$	8,042	$	8,012		0.4	%	$	23,726	$	24,235		-2.1	%
Income from securities transactions, net	$	133	$	96		38.5	%	$	215	$	203		5.9	%
Income before income taxes	$	2,609	$	2,971		-12.2	%	$	8,458	$	9,157		-7.6	%
Net income	$	1,913	$	2,177		-12.1	%	$	6,024	$	6,195		-2.8	%
Earnings per share	$	0.20	$	0.22		-9.1	%	$	0.62	$	0.63		-1.6	%

During the nine months ended January 31, 2016, the Company’s net income of $6,024,000, or $0.62 per share, was $171,000 or 2.8% below net income of $6,195,000, or $0.63 per share, for the nine months ended January 31, 2015. During the nine months ended January 31, 2016 there were 9,787,208 average common shares outstanding as compared to 9,813,973 average common shares outstanding during the nine months ended January 31, 2015. During the three months ended January 31, 2016, the Company’s net income of $1,913,000, or $0.20 per share, was below net income of $2,177,000, or $0.22 per share, for the three months ended January 31, 2015. Income from operations of $2,342,000 for the nine months ended January 31, 2016 which included additional depreciation and amortization expense of $298,000 was $617,000 below income from operations of $2,959,000 for the nine months ended January 31, 2015.

Total operating revenues

	Three Months Ended January 31,							Nine Months Ended January 31,
($ in thousands)	2016		2015		Change			2016		2015		Change
Investment periodicals and related publications:
Print	$	3,842	$	4,118		-6.7	%	$	11,979	$	12,809		-6.5	%
Digital		4,135		4,085		1.2	%		12,221		12,214		0.1	%
Total investment periodicals and related publications		7,977		8,203		-2.8	%		24,200		25,023		-3.3	%
Copyright data fees		622		660		-5.8	%		1,868		2,171		-14.0	%
Total publishing revenues	$	8,599	$	8,863		-3.0	%	$	26,068	$	27,194		-4.1	%

During the nine months ended January 31, 2016 total publishing revenues from investment periodicals and related publications excluding copyright data fees were $24,200,000, which is 3.3% below the total publishing revenues excluding copyright data fees of $25,023,000 during the nine months ended January 31, 2015.

Within investment periodicals and related publications, subscription sales orders are derived from print and digital products. The following chart illustrates the changes in the sales associated with print and digital subscriptions.

Sources of subscription sales

	Three Months Ended January 31,												Nine Months Ended January 31,
	2016						2015						2016						2015
	Print			Digital			Print			Digital			Print			Digital			Print			Digital
New Sales		11.0	%		28.4	%		12.2	%		28.4	%		11.2	%		27.2	%		12.2	%		28.0	%
Conversion and Renewal Sales		89.0	%		71.6	%		87.8	%		71.6	%		88.8	%		72.8	%		87.8	%		72.0	%
Total Gross Sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

During the nine months ended January 31, 2016 new sales of print and digital publications decreased as a percent of the total gross print and digital sales as a result of less aggressive promotion to first-time customers at introductory prices. Conversion and renewal sales orders increased over the prior fiscal year outpacing the decrease in new sales orders as a result of increased efforts by our in-house Retail and Institutional Sales departments.

	As of January 31,		As of April 30,		As of January 31,		Change
($ in thousands)	2016		2015		2015		Jan-16 vs. Apr-15			Jan-16 vs. Jan-15
Unearned subscription revenue (current and long term liabilities)	$	24,333	$	26,047	$	24,852		-6.6	%		-2.1	%

Unearned subscription revenue as of January 31, 2016 is 2.1% below January 31, 2015 and is 6.6% below April 30, 2015. The decline from April 30, 2015, reflects both curtailed advertising for order generation and the fact that April 30 ^th is the usual annual peak. Further, a certain amount of variation is to be expected due to the volume of new orders and timing of renewal orders, direct mail campaigns and large Institutional Sales orders.

Investment periodicals and related publications revenues

Investment periodicals and related publications revenues decreased $823,000, or 3.3%, for the nine months ended January 31, 2016, as compared to the prior fiscal year. The Company continued its efforts to attract new subscribers through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. Total product line circulation at January 31, 2016 was 4.4% above total product line circulation at January 31, 2015, continuing a positive stance of increased subscriber count at overall lower average prices of approximately 3%. The Company has been successful in growing revenues from digitally-delivered investment periodicals within the institutional market. Institutional Sales generated total sales orders of $9,747,000 for the nine months ended January 31, 2016 which were $429,000 or 4.6%, above comparable total sales orders of $9,318,000, for the nine months ended January 31, 2015. This growth continues a positive trend for Institutional Sales. We have also benefited from “converting” some customers from retail to the more robust professional priced services.

Digital publications revenues during the nine months ended January 31, 2016 were slightly above the prior fiscal year. Revenues from institutional digital publications increased $549,000 with circulation increasing by 4.4% for the nine months ended January 31, 2016, as compared to the prior fiscal year. Digital publications revenues from retail subscribers decreased $542,000 with circulation decreasing by 3.5% for the nine months ended January 31, 2016, as compared to the prior fiscal year.

Print publication revenues decreased $830,000 or 6.5% for the nine months ended January 31, 2016 as compared to the prior fiscal year. Revenues from institutional print publications increased 5.0% while print publications revenues from retail subscribers decreased 8.0% for the nine months ended January 31, 2016, as compared to the prior fiscal year. Total print circulation at January 31, 2016 was 7.8% above total print circulation at January 31, including a large increase in the introductory lower-priced Value Line 600 print product. The VL 600 was utilized during fiscal 2016 and the latter part of 2015 as a retail lead-generation product. Revenue from expiring full-price subscriptions has not been matched by the initial revenue from new promotional retail orders.

The Company has marketed The Value Line 600 and digital Investor 600 services as “starter” products to familiarize new customers with our services at attractive prices. The Company seeks to expand familiarity with our brand through this means, exposing our offerings to new customers who heretofore may not have been familiar with our services. Our goal is to introduce these investors to Value Line and ultimately to attract many to additional, premium-priced services targeted at their specific needs for investment research on various classes of equities including funds and ETF’s. Such a step-up strategy may be seen in the faster-than-expected acceptance of The Value Line 900 service, featuring an expanded mix of established and newer/smaller companies, by a number of new-to-the-Company Investor 600 and The Value Line 600 subscribers. Moreover, by growing our active customer base, the retail sales team and marketing staff have thousands more subscribers to whom to offer our more sophisticated services. The brand exposure philosophy is additionally reinforced by our highly selective efforts to join forces with other well respected financial industry participants through our copyright data and other distribution efforts under our Institutional Services umbrella.

The Company has relied more on its personnel selling efforts in both the institutional segment and retail retention and sales, as the ability to obtain orders profitably through traditional direct marketing plateaus. The majority of the Company’s subscribers have traditionally been individual investors who generally receive printed publications via U.S. Mail on a weekly basis. Individual investors interested in digitally-delivered investment information have access to both free and subscription equity research from many sources. Continuing factors that have contributed to the decline in the retail digital investment periodicals and related publications revenues include competition in the form of free or low cost investment research on the Internet and research provided by brokerage firms at no direct cost to their clients. Further, there appears to be a relative decline in individuals’ interest in holding specific stocks as compared with ETFs, mutual funds and participation in retirement plans. In order to address competition the Company has emphasized its lower-priced “starter” levels of service. Also many of the professional subscribers to the Company’s digital and print retail products have been successfully converted to a higher priced Institutional product, with the peak impact of such movement probably behind us. The Company offers quality publications on mutual funds, but they have achieved only modest market share.

Value Line serves primarily individual and professional investors in stocks who pay, primarily on annual subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere. The ongoing goal of adding new subscribers has led us to experiment with varying terms for our reliable, proprietary research including a period of intensive promotion of “starter” services and publications.

Copyright data fees

The Value Line proprietary Ranking System information (the “Ranking System”), a component of the Company’s flagship product, The Value Line Investment Survey , is also utilized in the Company’s copyright data business. The Ranking System is made available to EAM for specific uses without charge. The Ranking System is designed to be predictive over a six to twelve month period. For the six month periods ended January 31, 2016, the combined Ranking System “Rank 1 & 2” stocks’ decrease of 8.5% was better than the Russell 2000 index decrease of 14.8%. For the twelve month period ended January 31, 2016, the combined Ranking System “Rank 1 & 2” stocks decrease of 4.4% was much narrower than the Russell 2000 index decrease of 13.8% during the comparable period.

During the nine months ended January 31, 2016, copyright data fees of $1,868,000 were 14.0% below the prior fiscal year. As of January 31, 2016, total third party sponsored assets were attributable to four contracts for copyright data representing $1.3 billion in various products, as compared to five contracts for copyright data representing $2.2 billion in assets at January 31, 2015. The value of assets managed by third party sponsors was affected by reassigning assets in their portfolios to a management approach independent of Value Line’s copyright data program effective April 2015. Another copyright data client indicated they intended to reassign assets in their portfolios to a different management approach effective April 2016.

The Company believes this part of the business is dependent upon the desire of third parties to use the Value Line trademarks and proprietary research for their products, on competition and on fluctuations in segments of the equity markets. Management is actively pursuing potential channels for the copyright data products, including Ranking System-based concepts as well as other proprietary quantitative models.

Investment management fees and services – (unconsolidated)

The Company has a substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. The Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and will receive ongoing payments in respect of its non-voting revenues and non-voting profits interests.

Total assets in the Value Line Funds managed and/or distributed by EAM at January 31, 2016, were $2.14 billion, which is $151 million, or 6.6%, below total assets of $2.30 billion in the Value Line Funds managed and/or distributed by EAM at January 31, 2015, reflecting the net redemptions all but two of the Value Line Funds have experienced over the past twelve months ended January 31, 2016. For perspective, during that period a broad market correction took 9.9% off the Russell 2000 index.

The largest decline of $75 million is in the Guardian channel. Shares of Value Line Strategic Asset Management Trust (“SAM”) and Value Line Centurion Fund (“Centurion”) are within certain variable annuity and variable life insurance contracts issued by The Guardian Insurance & Annuity Company, Inc. (“GIAC”); new contracts of this type are no longer sold. The two funds consequently continue to experience net redemptions. Starting January 2015, the Value Line VIP Equity Advantage Fund was added to the Guardian Pro Series Variable Annuities. The fund is an open end fund that invests primarily in a basket of closed-end funds.

Value Line Mutual Funds

	As of January 31,
($ in millions)	2016		2015		Change
Variable annuity assets ("GIAC")	$	388	$	463		-16.2	%
All other open end equity and hybrid fund assets		1,614		1,676		-3.7	%
Total equity and hybrid funds		2,002		2,139		-6.4	%
Fixed income funds		142		156		-9.0	%
Total EAM managed net assets*	$	2,144	$	2,295		-6.6	%

* At January 31, 2015, $48 million of total assets were held in the Daily Income Fund managed by Reich & Tang Asset Management LLC which was liquidated on July 29, 2015. In fiscal 2016 the Value Line Fund shareholders were provided a money market fund alternative investment website managed by Federated Government Obligations Fund.

EAM partnered with Worthington Capital Management, a $2 billion Memphis based investment adviser, to create and launch the Worthington Value Line Equity Advantage Fund which started in February 2015. The fund is similar to VIP Equity Advantage Fund offered by Guardian.

EAM has successfully broadened distribution; for example in calendar 2015 more than 500 financial advisers purchased Value Line Funds’ shares for their clients for the first time.

Starting July 2015 the Core Bond Fund was modified to no longer waive 12b-1 fees, but to cap the overall fund’s expense ratio. Starting August 2015 12b-1 fee waivers were removed on the Asset Allocation Fund, and also a portion of the 12b-1 waivers were removed on the SAM and Centurion Funds.

In November 2015 four funds: the Small Cap Opportunities Fund, the Large Companies Focused Fund, the Asset Allocation Fund, and the Income and Growth Fund launched a new Institutional Class of shares. With the creation of such “Ishares” EAM has the opportunity to place the Value Line Mutual Funds on distribution platforms that offer exclusively those funds shares that have eliminated all 12b-1 fees from their fee structure. The Small Cap Opportunities Fund and the Mid Cap Focused Fund were named “Category Kings” in The Wall Street Journal.

EAM Trust - Results of operations before distribution to interest holders

The overall results of EAM’s investment management operations during the nine months ended January 31, 2016, before interest holder distributions, include total investment management fees earned from the Value Line Funds of $11,147,000, 12b-1 fees and other fees of $4,278,000 and a loss of $84,000 which is mark to market for the seed capital relating to the new fund launches and the institutional shares. For the same period, total investment management fee waivers were $143,000 and 12b-1 fee waivers for four Value Line Funds were $848,000. Removing management fee waivers on Asset Allocation Fund and the Core Bond Fund resulted in $30,000 in increased management fees per month. During the nine months ended January 31, 2016, EAM's net income was $710,000 after giving effect to Value Line’s non-voting revenues interest of $5,546,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest. During the nine months ended January 31, 2016 EAM compensation and benefits expenses increased $172,000 above the prior fiscal year primarily due to the addition of an equity analyst in March 2015 and an increase in incentive compensation and the cost of benefits year over year. The equity analyst provides coverage and support to the equity funds.

The overall results of EAM’s investment management operations during the nine months ended January 31, 2015, before interest holder distributions, include total investment management fees earned from the Value Line Funds of $11,269,000, 12b-1 fees and other fees of $4,094,000 and other income of $13,000. For the same period, total investment management fee waivers primarily for the Value Line Core Bond Fund were $147,000 and 12b-1 fee waivers for six Value Line Funds were $1,147,000. During the nine months ended January 31, 2015, EAM's net income was $994,000 after giving effect to Value Line’s non-voting revenues interest of $5,498,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

As of January 31, 2016, four of the Value Line Funds have all or a portion of the 12b-1 fees being waived, and one fund has partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company no longer receives or shares in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.

The Value Line equity and hybrid funds assets represent 75.3%, variable annuity funds issued by GIAC represent 18.1%, and fixed income fund assets represent 6.6%, respectively, of total fund assets under management (“AUM”) as of January 31, 2016. At January 31, 2016, equity, hybrid and GIAC variable annuities AUM decreased by 6.4% and fixed income AUM decreased by 9.0% as compared to the prior fiscal year.

As of January 31, 2016, four of the six Value Line equity mutual funds, excluding SAM and Centurion, held an overall four or five star rating by Morningstar, Inc. The largest distribution channel for the Value Line Funds remains the fund supermarket platforms such as Charles Schwab & Co., Inc., Fidelity, Pershing, Mass Mutual and E-Trade.

Additionally, as of January 31, 2016, six of the eight equity and hybrid funds are in the top quartile of their respective peer groups for the one year period and four of the eight funds are in the top quartile for the three year period according to Lipper. At this time last year, four of the eight equity and hybrid funds are in the top quartile of their peer groups for one year while three of the eight are in the top quartile for the three year period.

Overall, the Value Line equity funds continue to be recognized for both their strong long-run performance and lower-risk profile. The Value Line Small Cap Opportunities Fund is recognized on a select list at Lincoln Financial. As of June 30, 2015 Fidelity has added the Value Line Small Cap Opportunities Fund as a Fidelity Fund Pick. As of September 30, 2015 the Value Line Asset Allocation Fund is in the top quartile of its category for 1, 3, 5, and 10 year periods according to Lipper.

EAM - The Company’s non-voting revenues and non-voting profits interests

The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter.

The Company recorded income from its non-voting revenues interest and its non-voting profits interest in EAM as follows:

	Three Months Ended January 31,							Nine Months Ended January 31,
($ in thousands)	2016		2015		Change			2016		2015		Change
Non-voting revenues interest	$	1,825	$	1,862		-2.0	%	$	5,546	$	5,498		0.9	%
Non-voting profits interest		94		162		-42.0	%		355		497		-28.6	%
	$	1,919	$	2,024		-5.2	%	$	5,901	$	5,995		-1.6	%

During the nine months ended January 31, 2016 and January 31, 2015, the Company recorded revenues of $5,901,000 and $5,995,000, respectively, consisting of $5,546,000 and $5,498,000, from its non-voting revenues interest in EAM and $355,000 and $497,000, from its non-voting profits interest in EAM without incurring any directly related expenses.

Operating expenses

	Three Months Ended January 31,							Nine Months Ended January 31,
($ in thousands)	2016		2015		Change			2016		2015		Change
Advertising and promotion	$	1,036	$	963		7.6	%	$	2,768	$	3,316		-16.5	%
Salaries and employee benefits		3,882		3,992		-2.8	%		11,586		11,946		-3.0	%
Production and distribution		2,003		1,859		7.7	%		6,033		5,258		14.7	%
Office and administration		1,121		1,198		-6.4	%		3,339		3,715		-10.1	%
Total expenses	$	8,042	$	8,012		0.4	%	$	23,726	$	24,235		-2.1	%

Expenses within the Company are categorized into advertising and promotion, salaries and benefits, production and distribution, office and administration.

Operating expenses of $23,726,000 for the nine months ended January 31, 2016 decreased $509,000, or 2.1%, as compared to the nine months ended January 31, 2015. For the three months ended January 31, 2016 operating expenses were slightly above the third quarter of the prior fiscal year.

Advertising and promotion

Advertising and promotion expenses during the three months ended January 31, 2016 increased $73,000 or 7.6%, as compared to the third quarter last fiscal year primarily due to a $94,000 increase in sales commissions. Advertising and promotion expenses of $2,768,000 during the nine months ended January 31, 2016 decreased $548,000 or 16.5%, as compared to the prior fiscal year. The decreases in direct mail expenses of $65,000 for the three months and $834,000 for the nine months ended January 31, 2016, are mainly attributable to a reduction in the number of pieces mailed to prospects for The Value Line Investment Survey and The Value Line 600 , as compared to the prior fiscal year partially offset by an increase in direct marketing for Value Line Select and Value Line Select: Dividend Income & Growth in fiscal 2016. There were three direct mail campaigns for The Value Line Investment Survey during the nine months ended January 31, 2016 as compared to seven direct mail campaigns in the prior fiscal year. The Company also negotiated savings related to third party inbound telemarketing services and eliminated third party product support, bringing the operation in house, resulting in a $136,000 reduction in expenses. During the nine months ended January 31, 2016 sales commissions increased $396,000 and were associated with a $1,831,000 increase in retail sales orders and a $429,000 increase in Institutional sales orders as compared to the prior fiscal year. Commissions vary based on the type of customer, size of sale, and whether a sale is new or renewal.

Salaries and employee benefits

Salaries and employee benefits during the three months ended January 31, 2016 decreased $110,000 or 2.8% due to a $185,000 decrease in the capitalization of internal salaries and benefits expenses as compared to the third quarter last fiscal year. Salaries and employee benefits of $11,586,000 during the nine months ended January 31, 2016 were $360,000 or 3.0% below the prior fiscal year’s primarily as a result of a decrease in salary and benefits in Institutional Sales, Accounting, Advertising and Value Line Distribution Center and a restructuring of the incentive compensation program. The capitalization of internal salaries and benefits expenses of $975,000 for digital project development decreased $220,000 during the nine months ended January 31, 2016, as compared to the prior fiscal year.

Production and distribution

Production and distribution expenses during the three months ended January 31, 2016 increased $144,000 or 7.7% as compared to the third quarter last fiscal year primarily due to increases in amortization of internally developed software costs and third party expenses for hosting the Company’s digital version of our equity based product offerings. Production and distribution expenses of $6,033,000 during the nine months ended January 31, 2016 increased $775,000 or 14.7% as compared to the prior fiscal year. During the nine months ended January 31, 2016, an increase of $302,000 was attributable to additional amortization of internally developed software costs for the upgrade of our fulfillment system, single sign on, concurrent user program logic, product and website development and new service oriented production architecture. Third party expenses for production and hosting the Company’s digital version of our equity based product offerings, which began during the first quarter of fiscal 2015, increased $520,000 including $163,000 of overlapping costs as the Company transitioned to equity data provided by an alternative vendor effective January 1, 2016.

Office and administration

The Company’s move to new headquarters in the third quarter of fiscal 2014 resulted in a significant decrease in the Company’s annual rental expenses for the New York City office facility under the sublease terms for the new office space between Value Line, Inc. and Citibank, with the office move also responsible in part for a decline in maintenance, taxes and utilities for our New York City headquarters.

Office and administration expenses during the three months ended January 31, 2016 decreased $77,000 or 6.4%, as compared to the third quarter last fiscal year primarily due to a decrease in hosting fees. Total office and administration expenses of $3,339,000, during the nine months ended January 31, 2016 decreased $376,000 or 10.1% as compared to the prior fiscal year. For the nine months ended January 31, 2016, office and administration expenses included a decrease of $370,000 in hosting fees that resulted from changing the third party vendor hosting the Company’s disaster recovery site. Another decrease of $106,000 related to decreases in utilities, insurance expenses and Directors’ fees.

Income from Securities Transactions, net

During the nine months ended January 31, 2016 and January 31, 2015 the Company’s income from securities transactions, net, was $215,000 and $203,000, respectively. In fiscal 2016 income from securities transactions, net, included capital gain distribution from ETFs of $105,000 which compares to capital gain distribution from ETFs of $57,000 in fiscal 2015. During the nine months ended January 31, 2016 sales of equity securities resulted in a $15,000 loss. There were no sales, or gains or losses from sales, of equity securities during the nine months ended January 31, 2015.

Lease Commitments

On February 29, 2016, the Company's subsidiary Value Line Distribution Center (“VLDC”) and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC will lease approximately 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (‘Building” or “Premises”) beginning on or about May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease will be $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal 2017 and will gradually increase to $237,218 in fiscal 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the Lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises.

The summaries of the Lease do not purport to be complete and are qualified in their entirety by reference to the Lease, which is attached as an exhibit to this report on Form 10-Q for the quarter ending January 31, 2016.

Effective income tax rate

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the nine months ended January 31, 2016 and January 31, 2015 were 28.78% and 35.30%, respectively. The Company's annual effective tax rate will change due to a number of factors including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company's geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings and settlements with tax authorities. The fluctuation in the effective income tax rate during fiscal 2016 is primarily attributable to the effect from the scheduled reduction in the allocation factors on the state and local current and deferred tax liability (primarily associated with the gain on deconsolidation of EAM), favorable settlement of certain tax audits, dividend exclusion and an increase in the domestic production tax credits.

Liquidity and Capital Resources

The Company had negative working capital, defined as current assets less current liabilities, of $6,283,000 and $7,369,000 as of January 31, 2016 and April 30, 2015, respectively. These amounts include short term unearned revenue of $19,390,000 and $21,510,000 reflected in total current liabilities at January 31, 2016 and April 30, 2015, respectively. Cash and short term securities were $14,901,000 and $15,506,000 as of January 31, 2016 and April 30, 2015, respectively.

The Company’s cash and cash equivalents include $9,641,000 and $5,272,000 at January 31, 2016 and April 30, 2015, respectively, invested primarily in Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Securities and Exchange Act and invest primarily in short term U.S. government securities.

Cash from operating activities

The Company had cash inflows from operating activities of $317,000 during the nine months ended January 31, 2016 compared to cash inflows from operations of $1,427,000 during the nine months ended January 31, 2015. The decrease in cash inflows from fiscal 2015 to fiscal 2016 was primarily attributable to a decrease in unearned income from prepaid subscription orders.

Cash from investing activities

The Company’s cash inflows from investing activities of $9,372,000 during the nine months ended January 31, 2016, compared to cash inflows from investing activities of $3,923,000 for the nine months ended January 31, 2015. Cash inflows for the nine months ended January 31, 2016, were higher primarily due to the Company’s decision to sell certain dividend paying ETFs and all non-dividend paying inverse ETF positions, a slight increase in receipts from the Company’s non-voting revenues and non-voting profits interest distributions from EAM Trust and lower expenditures for capitalized software and property and equipment.

Cash from financing activities

During the nine months ended January 31, 2016, the Company’s cash outflows from financing activities were $5,212,000 and compared to cash outflows from financing activities of $4,487,000 for the nine months ended January 31, 2015. Cash outflows for financing activities included $609,000 and $71,000 for the repurchase of 41,453 and 5,061 shares of the Company’s common stock under the September 19, 2012 board approved common stock repurchase program, during fiscal years 2016 and 2015, respectively. Quarterly dividend payments of $0.15 per share in the first quarter and $0.16 per share in the second and third quarters of fiscal 2016 aggregated $4,603,000 as compared to $4,416,000 aggregated quarterly dividend payments of $0.15 per share in the prior fiscal year.

On July 16, 2015, the Board of Directors of Value Line declared an increase in quarterly dividend to $0.16 per share. At January 31, 2016 there were 9,787,208 common shares outstanding as compared to 9,812,868 common shares outstanding at January 31, 2015. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.

Management believes that the Company’s cash and other liquid asset resources used in its business together with the future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months. Management does not anticipate making any borrowings during the next twelve months. As of January 31, 2016, retained earnings and liquid assets were approximately $36 million and $15 million, respectively.

Seasonality

Our publishing revenues are comprised of subscriptions which are generally annual subscriptions, paid in advance. Our cash flows from operating activities are minimally seasonal in nature, primarily due to the timing of customer payments made for orders and subscription renewals.

Off-balance sheet arrangements

We are not a party to any off-balance sheet arrangements, other than operating leases entered into in the ordinary course of business.

Recent Accounting Pronouncements

None.

Critical Accounting Estimates and Policies

The Company prepares its Consolidated Condensed Financial Statements in accordance with accepted accounting principles as in effect in the United States (U.S. “GAAP”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent, and the Company evaluates its estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies reflect the significant judgments and estimates used in the preparation of its Consolidated Condensed Financial Statements.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market Risk Disclosures

The Company’s Consolidated Condensed Balance Sheets include a substantial amount of assets whose fair values are subject to market risks. The Company’s market risks are primarily associated with interest rates and equity price risk. The following sections address the significant market risks associated with the Company’s investment activities.

Interest Rate Risk

At January 31, 2016, the Company did not have investments in securities with fixed maturities and therefore did not have any interest rate risk.

Equity Price Risk

The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the issuer, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.

The Company’s equity investment strategy has been to acquire equity securities across a diverse industry group. The portfolio consists primarily of ETFs and select common stock holdings of blue chip companies with a concentration on large capitalization companies with high relative dividend yields. In order to maintain liquidity in these securities, the Company’s policy has been to invest in and hold in its portfolio, no more than 5% of the approximate average daily trading volume in any one issue. Additionally, the Company may purchase and hold non-leveraged ETFs whose performance inversely corresponds to the market value changes of investments in other ETF securities held in the equity portfolio for dividend yield.

As of January 31, 2016 and April 30, 2015, the aggregate cost of the equity securities classified as available-for-sale, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), PowerShares Financial Preferred ETF (PGF), small, mid and large cap high dividend ETFs, and conservative equity ETFs (VLSM, VLML, VLLV) was $4,625,000 and $9,470,000, respectively, and the fair value was $4,550,000 and $9,632,000, respectively.

Equity Securities					Estimated Fair Value after		Hypothetical Percentage Increase (Decrease) in
				Hypothetical	Hypothetical		Shareholders’
($ in thousands)		Fair Value		Price Change	Change in Prices		Equity
As of January 31, 2016	Total Equity Securities	$	4,550	30% increase	$	5,915		2.53	%
				30% decrease	$	3,185		-2.53	%

Equity Securities					Estimated Fair Value after		Hypothetical Percentage Increase (Decrease) in
				Hypothetical	Hypothetical		Shareholders’
($ in thousands)		Fair Value		Price Change	Change in Prices		Equity
As of April 30, 2015	Equity Securities and ETFs held	$	5,583	30% increase	$	7,258		3.16	%
	for dividend yield			30% decrease	$	3,908		-3.16	%
As of April 30, 2015	Inverse ETF	$	4,049	30% increase	$	2,834		-2.29	%
	Holdings			30% decrease	$	5,264		2.29	%
As of April 30, 2015	Total	$	9,632	30% increase	$	10,092		0.87	%
				30% decrease	$	9,172		-0.87	%

Item 4. CONTROLS AND PROCEDURES

(a)

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

The Company’s management has evaluated, with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)

The registrant’s Principal Executive Officer and Principal Financial Officer have determined that there have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A – Risk Factors in the Company’s Annual Report on Form 10-K for the year ended April 30, 2015 filed with the SEC on July 22, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c)

Purchases of Equity Securities by the Company

The following table provides information with respect to all repurchases of common stock made by or on behalf of the Company during the fiscal quarter ended January 31, 2016. All purchases listed below were made in the open market at prevailing market prices.

	ISSUER PURCHASES OF EQUITY SECURITIES
	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs

November 1 - 30, 2015		1,718	$	15.51		1,718	$	1,571,000

December 1 - 31, 2015		-		-		-		1,571,000

January 1 - 31, 2016		2,400	$	14.19		2,400		1,537,000
Total		4,118	$	14.74		4,118	$	1,537,000

All shares represent shares repurchased pursuant to authorization of the Board of Directors. On September 19, 2012, the Company’s Board of Directors authorized the repurchase of shares of the Company’s common stock, at such times and prices as management determined to be advisable, up to an aggregate purchase price of $3,000,000.

Item 5. Other Information

None.

Item 6. Exhibits

10.1

Agreement of Lease, dated as of February 29, 2016, between the Company’s subsidiary, VLDC and SPG 205 Chubb Ave., Lyndhurst, NJ *

31.1

Certificate of Principal Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certificate of Principal Financial Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Joint Principal Executive Officer/Principal Financial Officer Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

VALUE LINE, INC.

Signatures

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

		Value Line, Inc.
		(Registrant)

		By:	/s/ Howard A. Brecher
			Howard A. Brecher
			Chief Executive Officer
			(Principal Executive Officer)

		By:	/s/ Stephen R. Anastasio
			Stephen R. Anastasio
			Vice President & Treasurer
			(Principal Financial Officer)

Date: March 11, 2016

Exhibit 10.1

IlS2810.vI4AGREEMENT OF LEASE (NET LEASE) AGREEMENT OF LEASE (the "Lease") made as of the 29th, day of February, 2016 (the "Effective Date"), between SPG 205 CHUBB LLC, a Delaware limited liability company (the "Landlord"), and VALUE LINE DISTRIBUTION CENTER INC., a New Jersey corporation (the "Tenant"), Landlord and Tenant agree as follows: 1. Reference Data and Definitions. The following sets forth some of the basic lease information and definitions used in this Lease: 1.1 "Additional Rent" shall mean all sums (exclusive of Base Rent) payable by Tenant to Landlord under this Lease. 1.2 "Base Rent" shall mean the annual Base Rent payable by Tenant to Landlord during the Term. The Base Rent for the initial Term of this Lease shall be as follows: Period (months) Annual Base Rent Monthly Base Rent 1-12 $192,880.00 $16,073.33 13-24 $198,666.40 $16,555.53 25-36 $204,626.39 $17,052.20 37-48 $210,765.18 . $]7,563.77 49-60 $217,088.14 $18,090.68 61-72 $223,600.78 $18,633.40 73-84 $230,308.81 $19.192.40 85-96 $237,218.07 $19,768.17 1.3 ''Broker'' shall mean, collectively, Chaus Realty LLC and CBRE, Inc. 1.4 "Building" shall mean the building commonly known as 205 Chubb Avenue, Lyndhurst, New Jersey, and identified as the "Building" on the Site Plan. 1.5 "Buildings" shall mean the Building and any other buildings owned by Landlord (or an affiliate of Landlord) and depicted in the Site Plan that are a part of the Property. 1.6 "Citation" shall have the meaning set forth in Section 7.3.2.

1.7 "Citation Remedy" shall have the meaning set forth in Section 7.3 .2. 1.8 "Commencement Date" shall mean the Substantial Completion Date (as hereinafter defined). 1.9 "Common Areas" shall mean the roadways. parking areas and landscaped areas on the Property. and the entrances. accessways and other areas located on the Property intended for the common use of all tenants of the Property and their invitees. 1.10 "Early Access Conditions" shall have the meaning set forth in Section 4.2. 1.11 "Early Occupancy Date" shall mean the date on which Landlord delivers early access of the Premises to Tenant. 1.12 "Expiration Date" shall have the meaning set forth in Section 4. 1.13 "HV AC" shall have the meaning set forth in Section 9.2. 1.14 "BY AC Maintenance Contract" shall have the meaning set forth in Section 92. 1.15 ''HV AC System" shall have the meaning set forth in Section 9.2. 1.16 "Insurance Costs" shall mean the cost of fire, extended coverage, boiler, sprinkler, apparatus, general comprehensive liability, property damage, rent, earthquake and other insurance as Landlord carries with respect to the Property, including the amounts of any deductible payment for such insurance incurred by Landlord in connection with any claim thereunder 1.17 "Landlord's Address": c/o Seagis Property Group LP 100 Front Street, Suite 350 West Conshohocken, Pennsylvania 19428 Attn: Charles C. Lee 1.18 "Landlord Repair Work" shall have the meaning set forth in Section 9.4. 1.19 "Landlord's Work" shall mean those improvements described on Exhibit G and to be performed by Landlord at Landlord's sole cost and expense and not included in Operating Expenses. 1.20 "Lease Interest Rate" shall mean 300 basis points in excess of the Prime Rate in effect from time to time. 1.21 "Operating Expenses" shall have the meaning set forth in Section 6.1. 1.22 "Permitted Use" shall mean only use for warehousing, distribution, ancillary office and administrative uses, and any lawful use ancillary thereto, but subject in all events to Section 7. 1.23 "Premises" shall mean the approximately 24,110 square foot area contained in the Building as depicted on the Site Plan. -2-

1.24 "Prepaid Rent" shall mean an amount equal to $23,065.23 paid by Tenant to Landlord concurrently with the execution and delivery of this Lease and representing one month of Base Rent and estimated Additional Rent, owing from Tenant to Landlord. 1.25 "Prime Rate" shall mean the rate of interest published from time to time by the Wall Street Journal as the prime rate or, if such rate is discontinued, such comparable rate as Landlord reasonably designates by notice to Tenant. 1.26 "Property" shall mean the Buildings together with the parcels of land and all appurtenances thereto on which the Buildings are located as depicted on the Site Plan, together with all other improvements which may hereafter be constructed on such parcels of land 1.27 "Real Estate Taxes" shall mean all real estate taxes and assessments, general or special, ordinary or extraordinary, foreseen or unforeseen assessed or imposed upon the Property. If, due to a future change in the method of taxation, any tax shall be levied or imposed in substitution, in whole or in part, for (or in lieu of) any tax or addition to or increase in any tax which would otherwise be included within the definition of Real Estate Taxes, then such other tax shall be deemed to be included within Real Estate Taxes. 1.28 "Rent" shall mean Additional Rent and Base Rent, collective1y. 1.29 Intentionally omitted. 1.30 "Rules and Regulations" shall mean the rules and regulations established by Landlord concerning the use of the Buildings and the Common Areas as well as the general conduct of operations by tenants of the Property, as the same may be modified by Landlord from time to time. A current copy of the Rules and Regulations are attached hereto as Exhibit E. 1.31 "Security Deposit" sha1l mean $32,146.66 as Exhibit A. 1.32 "Site Plan" shall mean the site plan depicting the Property annexed to this Lease 1.33 "Substantial Completion" and "Substantially Complete" shall each mean, with respect to the Premises, the date when (I) the construction of the Landlord's Work is substantially completed, excepting only "punch list items" (as that term is commonly used in the construction industry) that will not materially interfere with Tenant's use of the Premises; or (ii) a temporary or permanent certificate of occupancy has been issued for the Premises. By way of example only, "punch list items" include, without limitation, a gouge in a wall caused by the completion of the Landlord's Work, etc. 1.34 "Substantial Completion Date" shall mean the sooner of: (i) the date upon which Substantial Completion of the Landlord's Work occurs, (if) the date upon which Substantial Completion of the Landlord's Work would have occurred but for delays in Substantial Completion resulting from Tenant Delays, or (iii) May 1, 2016. Notwithstanding anything to the contrary contained herein, if the Substantial Completion Date extends later than May I, 2016, and such delay is not resulting from Tenant Delays or Force Majeure (as hereinafter defined), Rent shall proportionately abate on a per diem basis commencing on May 1, 2016 and ending on the sooner of (a) the date upon which Substantial Completion of the Landlord's Work occurs, or (b) the date upon which Substantial Completion of the - 3- 1152810.v14

Landlord's Work would have occurred but for delays in Substantial Completion resulting from Tenant Delays. 1.35 "Tenant Improvements" shall have the meaning set forth in Section 3.2. 1.36 "Tenant Delays" shall mean delays in the design, construction or Substantial Completion of the Landlord's Work by or on behalf of Landlord caused or to the extent contributed to by Tenant or any of the Tenant Parties. 1.37 "Tenant Necessitated Repair" shall have the meaning set forth in Section 7.3.2. 1.38 "Tenant Repair Item" shall have the meaning set forth in Section 7.3.2. 1.39 ''Tenant Parties" shall mean any and all agents. employees, representatives. contractors, subcontractors or invitees of Tenant. 1.40 "Tenant's Address" shall mean the Premises. with copies to: Value Line Inc. Legal Department 485 Lexington Avenue, 9th Floor New York, NY 10017 (212)907-1620 1.41 "Tenant's Proportionate Share" shall mean the percentage calculated by dividing the number of square feet of space contained in the Premises by the total number of square feet of space contained in the Property, it being understood that such percentage shall be subject to adjustment from time to time during the Term in the event (a) there are any increases or decreases in the square footage of the Premises (whether due to errors in the determination of the square footage of the Premises or due to mutually agreed upon reductions or expansions in the square footage of the Premises) or (b) there are any increases or decreases in the square footage of the Property (whether due to errors in the determination of the square footage of the Property or due to the addition or removal (due to a sale. transfer, casualty, condemnation, etc. of any of the Buildings) in the square footage of the Property). As of the date hereof, there are 24,110 square feet of space in the Premises and 148,351 square feet of space in the Property, and, consequently, Tenant's Proportionate Share is 16.25%. 1.42 "Term" shall mean the period commencing on the Commencement Date and terminating ninety-six (96) months thereafter. 1.43 "TI Allowance" shall have the meaning set forth in Section 3.2. 1.44 "Total Monthly Gross Rent Payment" shall have the meaning set forth in Section 5.1. For the first (1 ~ full calendar month of the Term, the Total Monthly Gross Rent Payment (which is subject to the terms and conditions of Section 5.1 below) shall be $23,065.23, which consists of (a) $16,073.33 in Base Rent, and (b) $6,991.90 as an estimate for Tenant's Proportionate Share of (1) Real Estate Taxes, (2) Operating Expenses, and (3) Insurance Costs. 1.45 "Warranty Period" shall have the meaning set forth in Section 3 .1. Il!l2810.v14

2. Demise of Premises: Landlord's Representations; Parking Areas. 2.1 Subject to the terms of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises and grants to Tenant, so long as this Lease remains in effect, the nonexclusive right to use the Common Areas for their intended purposes in common with all others entitled to use them. Tenant shall be entitled to use the Common Areas in the same manner and fashion as other tenants of the Building on a non-discriminatory basis. Subject to the terms and conditions of this Lease, Tenant and the Tenant Parties shall be entitled to use, on a non-exclusive first-come first-served basis, thirty-seven (37) automobile parking spaces located on the Property; provided, however, that in no event shall Tenant and the Tenant Parties be entitled to use in excess of such number of parking spaces. All truck parking by Tenant and the Tenant Parties shall be located in the truck court against the Premises or at Tenant's dock positions. Neither Tenant nor the Tenant Parties shall with their vehicles block parking areas or hinder normal traffic flow within the Property. Violation of this Section 2.1 by Tenant or the Tenant Parties shall constitute a default under Section 18.1 of this Lease, subject to all applicable notice and cure periods contained therein. Landlord reserves the right to control the method and manner of parking (including, without limitation, the right to prohibit or limit the use of specific parking spaces or areas); Landlord shall be responsible for enforcing Tenant's rights hereunder. Landlord reserves the right, at any time and from time to time. without the consent of or liability to Tenant to (i) make alterations or additions to the Property and the Common Areas, (ii) close to the general public all or any portion of the Premises or the Property to the extent and for the period necessary to avoid any dedication to the public, and (iii) change the arrangement, character, use or location of entrances or passageways, doors and doorways, corridors, elevators, stairs, landscaping, toilets, mechanical, plumbing, electrical or other operating systems or any other portions of the Common Areas or other parts of the Premises or the Property provided such alterations or additions do not materially and adversely affect the use of the Common Areas by Tenant. 2.2 Landlord hereby represents and warrants that, to Landlord's actual knowledge as of the date hereof, (i) Landlord is the fee simple title owner of the Premises, (ii) Landlord is a duly formed limited liability company organized and in good standing under the laws of the State of Delaware, (iii) Landlord is authorized to conduct business in the State of New Jersey, (iv) Landlord has full power and authority to enter into this Lease, and (v) this Lease is a binding and valid obligation of Landlord, subject to and enforceable in accordance with its terms. 2.3 Landlord hereby represents and warrants that, to Landlord's actual knowledge as of the date hereof, and except as otherwise disclosed in that certain Preliminary Assessment/Phase I Environmental Site Assessment Report dated July 23, 2012 prepared by TRC Environmental Corporation ( the "Report"), Landlord has received no written notification from any governmental authority having jurisdiction over the Property notifying Landlord that the Property is not in compliance with Environmental Statutes (as hereinafter defined) that remains uncured. Landlord, to Landlord's actual knowledge as of the date hereof, further represents and acknowledges that no disclosure in the Report, except AOC S (Historic Fill Material) is applicable to the Premises and that Tenant is not an any way responsible at any time to investigate, remediate, or submit any Environmental Clearance for any matter disclosed in the Report, including but not limited to AOC 7 ( disposal of unlabeled steel drums). and spill file 94-3-25-1259-55 (55 gallon diesel spill), the responsibility for any investigation, remediation and procurement of applicable Environmental Clearance or ISRA Clearance being the sole and exclusive responsibility of the Landlord. To Landlord's actual knowledge, Fabian Couture Group International and Lectorum Inc., the current tenants of the Building leasing those certain premises adjacent to the Premises, are not ISRA applicable. For purposes herein, the phrase "Landlord's actual knowledge" shall mean, and be limited to, the actual current knowledge of Chris Williams, without ~5- 1lS2810.vI4

any duty to investigate and provided that in no event shall such individual have any personal liability hereunder. Chris Williams is the Vice President, Operations, New Jersey Portfolio at Landlord and is familiar with the present use and operation of the Property. 3. Possession. 3.1 Delivery of Possession. Landlord shall, at Landlord's sole cost and expense, furnish all of the design, material, labor and equipment required to perform the Landlord's Work. Landlord shall construct the Landlord's Work in a good and workmanlike manner, and in accordance with all applicable statutes, ordinances and building codes, governmental rules. regulations and orders relating to construction of the Landlord' s Work (but not matters arising because of any tenant build out work or specific to the particular business Tenant seeks to engage in the Premises or directly resulting from the negligence or willful misconduct of any Tenant Party). Tenant agrees that Tenant is familiar with the condition of the Premises, and Tenant hereby accepts the foregoing on an AS-IS," "WHERE-IS" basis as of the Commencement Date except (i) for Landlord's obligation to Substantially Complete the Landlord's Work, (ii) with respect to the Warranty Work during the Warranty Period, and (iii) to the extent of Landlord's repair and maintenance obligations hereunder, if any. Tenant acknowledges that Landlord has not made any representation as to the condition of the foregoing or the suitability of the foregoing for Tenant's intended use, except as may be herein expressly set forth. 3.2 Tenant Improvements. Tenant will be required to install certain Alterations to the Premises to prepare the Premises for Tenant's occupancy and business operations, which Alterations are set forth in the plans and specifications attached hereto as Exhibit H and shall be deemed approved by the Landlord (the "Tenant Improvements"). Landlord shall contribute up to a maximum amount of $50,000.00 (the "TI Allowance") towards the costs of the Tenant Improvements, which such payment shall be made by Landlord to Tenant within 30 days following (a) completion of such Tenant Improvements, (b) Landlord's receipt of Tenant's invoice substantiating the costs related thereto. (c) Landlord's receipt of final lien waivers from all contractors and subcontractors who did work on such Tenant Improvements; and (d) Landlord's receipt of a copy of the final permit approved by the applicable governing authority to the extent required for such Tenant Improvements. All costs of the Tenant Improvements in excess of the TI Allowance shall be the sole responsibility of Tenant. The Tenant Improvements hereunder shall be deemed Alterations for purposes of the Lease, and, therefore, shall be governed by Section 8 of the Lease. In no event will any portion of the 11 Allowance be used to pay for moving or storage expenses or furniture, racking, equipment, cabling, telephone systems or any other item of personal property unless such items are permanently affixed to the Premises. 3.3 Warranty Period Landlord hereby covenants and agrees that for the period commencing on the Commencement Date and expiring on the day immediately prior to the twelve (12) month anniversary of the Commencement Date (the "Warranty Period"). the Building Systems (as hereinafter defined) serving the Premises and the Landlord's Work (collectively, the "Warranty Work") shall be in good working order and condition. At any time prior to the expiration of the Warranty Period, Tenant shall have the right to notify Landlord, in writing (8 ''Warranty Notice"), of any deficiencies in the Warranty Work, which deficiencies shall be promptly repaired or replaced by Landlord, at Landlord's sole cost and expense; provided, however. that if any such deficiencies are as a result of the negligence or misconduct of Tenant or any Tenant Parties or the misuse of the Premises or the Property by Tenant or any Tenant Parties. Tenant shall reimburse Landlord for all reasonable costs incurred by Landlord to remedy such deficiencies upon demand as Additional Rent. From and after the expiration of the - 6 ~ ,d::6 11S2810.v14

Warranty Period, repairs and replacements to the Warranty Work shall be governed by Section 9 (except for any repairs that are necessary as set forth in a Warranty Notice delivered to Landlord prior to the expiration of the Warranty Period). 4. Tenn. 4.1 Initial Term. The Term of this Lease shall commence on the Commencement Date. Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Premises to Tenant on the Commencement Date. Tenant's obligation to pay Base Rent and Additional Rent shall commence on the Commencement Date. Tenant has deposited the Prepaid Rent with Landlord as of the date of this Lease and Landlord shall apply such Prepaid Rent against the Base Rent and estimated Additional Rent first owing from Tenant to Landlord hereunder. From and after the Commencement Date and throughout the Term, Tenant shall pay annual Base Rent in the amount and in the monthly installments required by Section 1.2. For purposes of confirming the Commencement Date, the expiration date of the Term (the "Expiration Date"), the acceptance of the Premises by Tenant and the other matters set forth therein, Landlord may, but sail not be obligated to, deliver to Tenant a Lease Commencement Certificate in the form attached hereto as Exhibit D. IT Tenant confirms in writing its agreement with the terms of the Lease Commencement Certificate or fails to respond thereto within five (5) business days of Tenant's receipt thereof, Tenant shall be conclusively deemed to have agreed to and accepted the matters set forth therein. 4.2 Tenant's Access. From and after the Early Occupancy Date, provided that (i) the Premises is vacant and prepared for occupancy as determined in Landlord's sole discretion, and (ii) Tenant has satisfied the Early Access Conditions (as hereinafter defined), Landlord shall provide Tenant with access to the Premises for purposes of performing space preparation and the Tenant Improvements. The performance of space preparation and Tenant Improvements pursuant to this Section 3.2 shall be subject to the conditions that all of Tenant and any Tenant Parties shall work in harmony and not interfere with Landlord and its agents and contractors in doing its work in, to, or on the Landlord's Work. If at any time such entry or occupancy shall cause or create an imminent likelihood of such disharmony or interference, Landlord, in Landlord's reasonable discretion, shall have the right to suspend such access upon twenty-four (24) hours' written notice to Tenant until such time as Tenant, at Tenant's sole cost, has remedied such disharmony or interference. Tenant shall perform any space preparation and Tenant Improvements in the Premises in accordance with, and subject to the limitations contained in Section 8 applicable to Alterations. Tenant further agrees that Landlord shall not be liable in any way for any injury or death to any person or persons, loss or damage to any of Tenant's property on the Premises or loss or damage to property placed thereon prior to the Commencement Date, the same being at Tenant's sole risk. Any early access shall also be subject to (A) Tenant :first providing to Landlord the certificates of insurance required under Section 14 below, and (8) Tenant's payment to Landlord of any amounts (e.g., the Security Deposit required under Section 5.3) required to be paid by Tenant to Landlord simultaneously with the execution and delivery of this Lease (the conditions described in clauses (A) - (B) are collectively referred to herein as the "Early Access Conditions"). Tenant agrees that any such entry into and occupancy of the Premises shall be deemed to be under all of the terms, covenants, conditions and provisions of the Lease, except as to the covenant to pay Base Rent and Tenant's Proportionate Share of the Real Estate Taxes, Insurance Costs and Operating Expenses. In the event any accrued Tenant Delays cause Landlord to pay or incur costs or expenses in connection with the design, construction and Substantial Completion of the Landlord's Work in excess of the costs or expenses that would otherwise have been paid or incurred by Landlord, Tenant shall pay any such reasonable out-of-pocket excess costs and expenses to Landlord, as Additional Rent, within ten (10) days after Landlord submits invoices for any such excess costs or expenses. -7-llS2810.vI4

4.3 Renewal Term. Provided Tenant is not in default or breach under the Lease at the time the option to renew described below (the "Renewal Option") is exercised or at the commencement of the Renewal Term (as hereinafter defined), Tenant shall have one (1) option to extend the Term of the Lease for a period of five (5) years (the "Renewal Term"), commencing on the first day following the last day of the initial Term and upon the same terms and conditions as are contained in the Lease, except as hereinafter provided. If Tenant timely and properly exercises the Renewal Option, monthly Base Rent for the Renewal Term shall be as follows: Renewal Term (Months) Monthly Base Rent 1 - 12 $20,36122 13-24 $20,972.05 25-36 $21,601.22 37-48 $22,249.25 49-60 $22,916.73 Tenant shall have no further or additional right to extend the Term of the Lease. Landlord shall have no obligation to make any improvements, decorations, repairs, alterations or additions to the Premises as a condition to Tenant's obligation to pay monthly Base Rent, Additional Rent and any and all other amounts owing under the Lease for the Renewal Term. The Renewal Option shall be exercised, if at all, by written notice to Landlord given no later than six (6) months prior to the last day of the initial Tenn. If Tenant fails to timely exercise the Renewal Option, Tenant shall conclusively be deemed to have waived the Renewal Option and the Lease shall terminate on the last day of the initial Term. In the event of any assignment or sublease by Tenant (whether in accordance with the terms of the Lease or otherwise), the Renewal Option shall automatically be null and void, unless Landlord first provides its written consent otherwise, which consent may not be unreasonably withheld 5. Base Rent Total Monthly Gross Rent 5.1 Payment. Base Rent shall be payable by Tenant in equal monthly installments on or before the first day of each calendar month, in advance. If the Commencement Date occurs on a day other than the first day of a calendar month, the Rent due for the first calendar month of the Term shall be prorated on a per diem basis and paid to Landlord on the Commencement Date, and the Term will be extended to terminate on the last day of the calendar month in which the ninety-sixth (9Sh)-month anniversary of the Commencement Date occurs. All payments of Base Rent and Additional Rent shall be made without prior demand and, except as otherwise expressly provided in this Lease, without offset, deduction or counterclaim of any kind, in lawful money of the United States of America. Such payments shall be made to Landlord (i) at c/o at NAI DiLeo - Bram & Company, 1315 Stelton Road, Piscataway, New Jersey 08854, or at such other place as Landlord shall designate from time to time, or (ii) by electronic wire transfer or ACH payment, as provided by Landlord. Checks should be made payable to Landlord. Tenant's agreements to lease the Premises and pay Base Rent, Additional Rent and all other sums payable under this Lease are independent of any other covenant, agreement or term of this Lease. Landlord and Tenant acknowledge and agree that the ''Total Monthly Gross Rent Payment" shall mean the monthly Rent payment payable by Tenant to Landlord on or before the first day of each calendar month, in advance, which Total Monthly Gross Rent Payment consists of (a) Base Rent, and (b) an estimate for Tenant's Proportionate Share of (1) Real Estate Taxes, (2) Operating Expenses, and (3) - 8-llS2810.v14

llS2810.v14 Insurance Costs, it being understood that (i) the Total Monthly Gross Rent Payment does not account for any other Additional Rent that may accrue or become due hereunder during a given calendar month of the Term (and therefore may not represent the total "Rent" that Tenant owes for such month), and (ii) the portion of the Total Monthly Gross Rent Payment described in clause (b) is only an estimate and is subject to the terms of Section 6 below. 5.2 Late Charges. If Tenant fails to pay any Base Rent or Additional Rent within five (5) business days after notice from Landlord of a delinquency, interest shall accrue on such unpaid amount at the Lease Interest Rate until paid in full. In addition, such unpaid amounts will be subject to a late payment charge equal to five percent (5%) of the unpaid amounts if Tenant does not pay such delinquent amounts to Landlord within five (5) business days after the due date of such Rent. Such late payment charge has been agreed upon by Landlord and Tenant, after negotiation, as a reasonable estimate of the additional administrative costs and detriment that will be incurred by Landlord as a result of any such failure by Tenant, the actual costs thereof being extremely difficult if not impossible to determine, 5.3 Security Deposit. Tenant agrees to deposit the Security Deposit with Landlord on the date hereof. The Security Deposit shall be retained by Landlord as security for the faithful performance and observance by Tenant of its obligations under this Lease, it being expressly agreed that the Security Deposit is not an advance rental deposit or a measure of Landlord's damages. Except as may otherwise be required by applicable Jaw, (a) Tenant shall not be entitled to any interest on the Security Deposit, (b) Landlord shall not be obligated to hold the Security Deposit in trust or in a separate account, and (c) Landlord shall have the right to commingle the Security Deposit with its other funds. If Tenant defaults under this Lease and such default continued uncured after notice and expiration of any applicable cure period, without limiting any other right or remedy of Landlord, Landlord may also apply the whole or any part of the Security Deposit to the extent required for the payment of any Rent or other sums payable under this Lease as to which Tenant is in default or on account of any sum which Landlord has incurred, including those sums not yet paid by Landlord. but which Landlord can evidence by written invoice, by reason of Tenant's default. If any portion of the Security Deposit is applied by Landlord for any such purpose, Tenant shall, within ten (10) days after demand is made by Landlord, restore the Security Deposit to its original amount. If Tenant shall fully and faithfully comply with all of the covenants and conditions of this Lease, the Security Deposit shall be returned to Tenant after the expiration date of the Term and the surrender of the Premises to Landlord. In no event shall the Security Deposit be applied to the last monthly installment of Base Rent or Additional Rent due prior to the expiration date (or earlier termination ) of the Term. In the event of a sale of the Premises, Landlord shall have the right to transfer the Security Deposit to the purchaser, whereupon Landlord shall be released by Tenant from all liability for the return of the Security Deposit and Tenant shall look solely to the new landlord for its return, provided that the new owner acknowledges in writing that it has assumed the obligations of Landlord under the Lease including without limitation any and all obligations in regard to the Security Deposit. 6. Additional Rent for Operating Expenses and Real Estate Taxes. 6.1 Definitions. "Operating Expenses" shall mean the costs and expenses paid or incurred by Landlord in connection with the management, operation, maintenance and repair of the Property including, without limitation: (a) the cost of electricity, gas, sewer service. and other systems and utilities serving Common Areas, and the cost of supplies and equipment and maintenance and service contracts in connection therewith, and the cost of water service to the Property (excluding however any costs to install separate meters or service to any space in the building other than the Premises, including any vacant space); (b) the cost of repairs, replacements, maintenance and cleaning, including, without limitation, the cost of security. janitorial and other service agreements and trash removal with respect to - 9-

Common Areas and the Property and all; (c) excluding any such costs during the Warranty Period, and subject to Tenant's repair and maintenance obligations hereunder, the cost of the repair and maintenance of all structural elements. roof and exterior walls of the Building and the Building Systems servicing the entire Building, including Landlord Repair Work (as hereinafter defined) (d) the cost of all repairs and maintenance associated with the landscaped areas, surface parking areas and truck courts of the Property. including, without limitation, snow removal and the cost of associated roof maintenance in connection with the Property; (e) an annual management fee in an amount not to exceed three (3%) percent of the gross annual rent paid under all of the leases for the Building ; (f) excluding any such costs during the Warranty Period and subject to Section 9.4, the cost of any capital improvement made to the Property after the date of this Lease that materially reduce. or that ate designed to materially reduce, Operating Expenses (amortized in accordance with generally accepted accounting principles), together with interest on the unamortized balance(s) at the rate reasonably determined by Landlord; (g) the cost of any capital improvements made to the Property after the date of this Lease that ate required under any governmental law or regulation (and not triggered solely by the use and occupancy of any other tenant in the Building) that was not applicable to the Property at the date of this Lease (amortized in accordance with generally accepted accounting principles), together with interest on the unamortized balance(s) at the rate reasonably determined by Landlord; and (i) reasonable fees, costs and disbursements incurred in connection with proceedings to contest, determine, or reduce Operating Expenses or Real Estate Taxes. "Operating Expenses" shall not include: (i) leasing commissions. accountants' or attorneys' fees, costs and disbursements and other expenses incurred in connection with proposals, negotiations, or disputes with tenants or other occupants or prospective tenants or other occupants, or associated with the enforcement of any leases or the defense of Landlord's title to or interest in the Property or any part thereof; (ii) except as specifically provided in this Lease with regard to amortization of capital improvement costs, interest on debt or amortization payments on any mortgages or deeds of trust or any other borrowings of Landlord; (iii) except as expressly permitted in this Lease with regard to capital expenditures, any other expense that under generally accepted accounting principles and practices would not be considered a maintenance or operating expense; (iv) salaries, benefits or other compensation paid to leasing agents, promotional directors, officers, directors and executives of Landlord above the rank of Building managers, or to any persons not involved in the day-to-day operations or management of the Property (except for out-of-pocket expenses of such persons related to the Property); (v) all contributions to any organizations, whether political or charitable; (vi) interest or penalties for late payments; (vii) costs reimbursed by insurance; (viii) ground lease rental or depreciation; (ix) costs associated with any Common Areas which are the sole responsibility of another tenant to maintain, excluding Tenant Necessitated Repairs; (x) any costs incurred solely and directly as a result of any violation by Landlord of any law or the terms of any ground lease or mortgage; (xi) any costs, including permit, license and inspection costs, incurred with respect to the installation of other tenants' or other occupants' improvements in the Building or incurred in renovating or otherwise improving. decorating. painting or redecorating vacant space for other tenants or other occupants of the Building; (xii) any expenses solely and directly resulting from the negligence or willful misconduct of Landlord, its agents, employees and contractors or other tenants and their agents, employees and contractors; (xiii) marketing costs, including without limitation leasing commissions, attorneys' fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases, and/or assignments, space planning costs and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants in the Building or in connection with any mortgage, financing, refinancing or sale of the Building; (xiv) any costs or expenses in connection with services or other benefits which are offered only to Tenant for which Tenant is charged directly; (xv) any costs solely and directly arising from the Landlord's release of Hazardous Substances in or about the Premises or the Building in violation of applicable law including, without limitation, hazardous - 10- 1l52810.vI4

6.2 Payment of Real Estate Taxes. Commencing on the Commencement Date, Tenant shall pay to Landlord, 88 Additional Rent. on or before the first day of each month, in advance, during each calendar year, one-twelfth (1I12~ of Tenant's Proportionate Share of Real Estate Taxes, in an amount reasonably estimated by Landlord in good faith. Landlord shall have the right to reasonably revise such estimate from time to time. Within one hundred twenty (120) days or a reasonable time after the expiration of each calendar year, Landlord shall furnish Tenant with a statement ("Landlord's Tax Statement') setting forth in reasonable detail the actual amount of Real Estate Taxes for such calendar year and the total estimated amount of Tenant's Proportionate Share of Real Estate Taxes actually paid by Tenant during such calendar year. If the actual amount of Tenant's Proportionate Share of Real Estate Taxes due for such year differs from the estimated amount of Ten ant's Proportionate Share of Real Estate Taxes actually paid by Tenant for such year, then, if Tenant owes any amounts to Landlord, such amounts shall be paid by Tenant (whether or not this Lease bas terminated) within thirty (30) days after receipt of Landlord's Tax Statement, and if Landlord owes any amounts to Tenant, such amounts shall be credited against the next installments of Base Rent and Additional Rent due from Tenant (or if the Lease has terminated for any reason other than Tenant's default, paid to Tenant within thirty (30) days after delivery of Landlord's Tax Statement). 6.3 Payment of Operating Expenses. Commencing on the Commencement Date, Tenant shall pay to Landlord, 88 Additional Rent, on or before the :first day of each month, in advance, during each calendar year. one-twelfth (1I12~ of Tenant's Proportionate Share of Operating Expenses for the Property, in an amount reasonably estimated by Landlord in good faith. Landlord shall have the right to reasonably revise such estimate from time to time. Within one hundred twenty (120) days or a reasonable time after the expiration of each calendar year, Landlord shall furnish Tenant with 8 statement ("Landlord's Operating Expense Statement"), setting forth in reasonable detail the actual amount of Operating Expenses for the Property owing for such calendar year and the total estimated amount of Tenant's Proportionate Share of Operating Expenses actually paid by Tenant during such calendar year. If the actual amount of Tenant's Proportionate Share of Operating Expense due for such year differs from the estimated amount of Tenant's Proportionate Share of Operating Expenses actually paid by Tenant for such year, then, if Tenant owes any amounts to Landlord, such amounts shall be paid by Tenant (whether or not this Lease has terminated) within thirty (30) days after receipt of Landlord's Operating Expense Statement, and if Landlord owes any amounts to Tenant, such amounts shall be credited against the next installments of Base Rent and Additional Rent due from Tenant (or if the Lease has terminated for any reason other than Tenant's default, paid to Tenant within thirty (30) days after delivery of Landlord's Operating Expense Statement). If at any time during any calendar year during which Operating Expenses are determined for the Property less than all of the Property is occupied or is occupied pursuant to leases providing free rental periods, those Operating Expenses which are variable according to the occupancy level of the Property shall be grossed up to reflect the amount of such Operating Expenses which would be incurred if the Property were fully occupied for purposes of determining Tenant's Proportionate Share of Operating Expenses. substances in the ground water or soil; and (xvii) any costs related to Landlord's general overhead which is not related to the Building. 6.4 Payment of Insurance Costs. Commencing on the Commencement Date, Tenant shall pay to Landlord, as Additional Rent, on or before the first day of each month, in advance, during each calendar year, one-twelfth (1/l2~ of Tenant's Proportionate Share of Insurance Costs for the Property, in an amount reasonably estimated by Landlord in good faith based on the premium for the previous calendar year. Landlord shall have the right to reasonably revise such estimate from. time to time. Within one hundred twenty (120) days or a reasonable time after the expiration of each calendar year, Landlord 11S2810.v14- 12-

shall furnish Tenant with a statement ("Landlord's Insurance Statement"), setting forth in reasonable detail the actual amount of Insurance Costs for the Property owing for such calendar year and the total estimated amount of Tenant's Proportionate Share of Insurance Costs actually paid by Tenant during such calendar year. If the actual amount of Tenant's Proportionate Share of Insurance Costs due for such year differs from the estimated amount of Tenant's Proportionate Share of Insurance Costs actually paid by Tenant for such year, then, if Tenant owes any amounts to Landlord, such amounts shall be paid by Tenant (whether or not this Lease has terminated) within thirty (30) days after receipt of Landlord's Insurance Statement, and if Landlord owes any amounts to Tenant, such amounts shall be credited against the next installments of Base Rent and Additional Rent due from Tenant (or if the Lease has terminated for any reason other than Tenant's default, paid to Tenant within thirty (30) days after delivery of Landlord's Insurance Statement). Without limitation of the foregoing, Tenant shall, as Additional Rent, pay Tenant's Proportionate Share of all insurance deductibles paid by Landlord with respect to the Property within thirty (30) days after the presentation of invoices therefor. 6.5 Allocation of Certain Operating Expenses. Real Estate Taxes and Insurance Costs. Landlord and Tenant acknowledge and agree that, in accordance with the terms and conditions of this Lease, Tenant pays to Landlord Tenant's Proportionate Share (which Tenant's Proportionate Share is, in accordance with Section 1.31 above, based on the total square footage of the Property) of (i) Operating Expenses, (ii) Real Estate Taxes, and (iii) Insurance Costs. 6.6 Controllable Operating Expenses. Commencing with calendar year 2017 and each calendar year during the Term thereafter, it is understood and agreed that for purposes of calculating Tenant's Proportionate Share of Operating Expenses in any calendar year during the Term, the maximum amount of Controllable Operating Expenses (as hereinafter defined) included in Operating Expenses for any calendar year from and after 2017 during the Term shall be limited to the actual amount of Controllable Operating Expenses paid or incurred by Landlord on account of or in calendar year 2016, increased on a cumulative, compounding basis at three percent (3%) per annum through the applicable calendar year. Tenant shall remain fully liable in each year for the whole amount of Tenant's Proportionate Share of Operating Expenses which are not Controllable Operating Expenses. By way of example only, if the Controllable Operating Expenses for calendar year 2016 (annualized) are $0.58 per square foot of the Premises, the Controllable Operating Expenses for calendar year 2017 shall not exceed $0.60 per square foot of the Premises and the Controllable Operating Expenses for calendar year 2018 shall not exceed $0.63 per square foot, etc. In the event that the cap applies to limit Tenant's Proportionate Share of Operating Expenses attributable to Controllable Operating Expenses for any calendar year, the excluded amount ("Excluded Amount") shall be carried forward to succeeding calendar years and recaptured by Landlord so long as the foregoing limit on the increase in the portion of Operating Expenses attributable to Controllable Operating Expenses is not exceeded in any such succeeding year such that amounts that could not be included in Operating Expenses during such prior years may be re-captured by Landlord. By way of example only, if the Controllable Operating Expenses for calendar year 2016 (annualized) are $0.58 per square foot, and (a) the Controllable Operating Expenses for calendar year 2017 are $0.65 per square foot, Tenant shall only be responsible for Controllable Operating Expenses of $0.60 per square foot in calendar year 2017, but Landlord shall be entitled to recover the Excluded Amount of $0.05 per square foot during the Term of the Lease if the Controllable Operating Expenses for any calendar year during the Term of the Lease is lower than the cap on Controllable Operating Expenses for such year, and (b) if the Controllable Operating Expenses for calendar year 2018 are $0.60 per square foot per annum, Landlord will be allowed to carry over the Excluded Amount from calendar year 2017 and bill it to the Tenant in 2018 so long as Tenant's responsibility for Controllable Operating Expenses in calendar year 2018 does not exceed $0.63 per square foot. For purposes herein, the term "Controllable Operating Expenses" shall mean only (i) the cost 11S2810.v14of repairs, replacements, maintenance and cleaning, including, without limitation, the cost of janitorial and other service agreements, and trash removal with respect to Common Areas; (ii) the cost of all repairs and maintenance associated with the landscaped areas, surface parking areas and truck courts of the Property, the cost of associated roof maintenance in connection with the Property; and (iii) fees, charges and other costs, including, without limitation, consulting fees, attorneys' fees and accounting fees of a11 contractors engaged by Landlord in connection with the operation, maintenance or repair of the Property; provided, however, snow removal costs shall not constitute a Controllable Operating Expense. 6.7 Tenant Audits. Landlord shall keep reasonably detailed records of all Operating Expenses, Real Estate Taxes and Insurance costs for a period of at least seven (7) years, subject to the duration of Landlord's ownership of the Property. Not more frequently than once in every 12-month period and after at least twenty (20) days' prior written notice to Landlord, Tenant together with any representative of Tenant shall be permitted to audit the records of the Operating Expenses, Real Estate Taxes and Insurance Costs. If Tenant exercises its audit rights as provided above, Tenant shall conduct any inspection at a reasonable time and in a manner so as not to unduly disrupt the conduct of Landlord's business. Any such inspection by Tenant shall be for the sole purpose of verifying the Operating Expenses, Real Estate Taxes and/or Insurance Costs. Tenant shall hold any information obtained during any such inspection in confidence, except that Tenant shall be permitted to disclose such information to its attorneys and advisors, provided Tenant informs such parties of the confidential nature of such information and uses good faith and diligent efforts to cause such parties to maintain such information as confidential. Any shortfall or excess revealed and verified by Tenant's audit shall be paid to the applicable party within thirty (30) days after that party is notified of the shortfall or excess to the extent such overage or shortfall has not previously been adjusted pursuant to this Lease. 7. Use; Compliance With Law. 7.1 Permitted Use. The Premises shall be used only for the Permitted Use and for no other purpose. Tenant acknowledges that it has reviewed the Standard Industrial Classification Manual prepared by the Office of Management and Budget of the U.S. (or, if applicable, the US NAICS Manual) and that the S.I.C. (or, if applicable, NAICS) number for the operations to be conducted at the Premises is 561910. Tenant shall advise Landlord in the event its S.I.C. (or, if applicable, NAICS) number should change. 7.2 No Nuisance. Tenant shall not allow, suffer or permit the Premises or any use thereof to constitute a nuisance. 7.3 Compliance with Laws. 7.3.1 Tenant, at Tenant's expense, shall comply with and cause all of Tenant's contractors. agents, servants, employees. invitees and licensees (the "Tenant Parties") to comply with all applicable laws, ordinances, rules and regulations of governmental authorities applicable to the Premises or the use or occupancy thereof (collectively, "Laws"). Without limiting the generality of the foregoing, Tenant shall comply with the requirements of (a) the Occupational Safety and Health Act (and all regulations promulgated thereunder), and (b) subject to the terms and conditions of Section 7.3.2 below, the Americans with Disabilities Act (and all regulations promulgated thereunder), as the same may be amended from time to time. The foregoing obligation of Tenant shall not however permit Tenant to make. without Landlord's prior written approval, any alterations to the Premises which otherwise would - 13 - 115281O.v14

- 14- require Landlord's approval under this Lease, and Tenant shall comp1y with all of the requirements of this Lease in making any such alterations. 7.3.2 Notwithstanding the foregoing Section 7.3.1, Landlord agrees that if Landlord receives a written notice from a governmental authority ("Citation") notifying Landlord that the Premises are not in compliance with any Laws as of the Commencement Date. and the violation giving rise to the Citation was in existence as of the Commencement Date, Landlord shall cause any repairs. replacements or improvements to be made to the Premises, so as to remedy the matter set forth in the Citation ("Citation Remedy"). The costs and expenses incurred by Landlord to perform any Citation Remedy pursuant to the preceding sentence shall be (x) the sole responsibility of Tenant if the matter set forth in the Citation is as a result of (1) Tenant's particular use of the Premises (as opposed to warehouse use in general); (2) any Tenant Necessitated Repairs (as hereinafter defined); or (3) Alterations or work performed by or at the request of Tenant (items (1) through (3) collectively, "Tenant Repair hems"); or (y) the sole responsibility of Landlord except as otherwise set forth in clause (x) above, and no cost or expense incurred by Landlord to perform. any work pursuant to this sentence shall be deemed an Operating Expense. If Landlord receives a Citation notifying Landlord that the Premises are not in compliance with any Laws as of any date after the Commencement Date. and the violation giving rise to the Citation first came into existence following the Commencement Date, (A) Tenant shall perform the Citation Remedy at its sole cost and expense if such Citation Remedy is any of the Tenant Repair hems, or (B) Landlord shall perform the Citation Remedy if such Citation Remedy is not any of the Tenant Repair Items, provided that any costs or expenses incurred by Landlord to perform any work pursuant to this sentence shall be deemed an Operating Expense. Notwithstanding anything herein to the contrary. before performing any Citation Remedy required hereunder, Landlord shall have the right to appeal or dispute such Citation so long as such appeal or dispute does not unreasonab1y affect Tenant's ability to operate in the Premises. For purposes herein; a "Tenant Necessitated Repair" shall mean any work, maintenance, repairs or replacements that are required as a result of the negligence or misconduct of Tenant or any of the Tenant Parties, or Tenant's failure to repair and maintain the Premises or the misuse of the Premises or the Property by Tenant or the Tenant Parties. 7.4 Hazardous Substances. 7.4.1 Definitions. "Hazardous Substance" shall mean any hazardous or toxic substance, material or waste which is or becomes regulated by any local, state or federal governmental authority having jurisdiction. The term ''Hazardous Substance" includes, without limitation. any material or substance which is (i) designated as a "hazardous substance" pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317). (ii) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), (iii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601), (iv) petroleum, (v) designated as a "hazardous substance" by the New Jersey Department of Environmental Protection ("NJDEP”) pursuant to the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq. ("ISRA"), New Jersey Spil1 Compensation and Control Act, N J.S.A 58:10·23: 11 et seq., or the New Jersey Site Remediation and Reform Act, N.J.S.A. 58:1OC-l et seq. ("SRRA"), (vi) asbestos or asbestos-containing materials. (vii) polychlorinated biphenyls and (viii) petroleum products. 7.4.2 Compliance with Law. Tenant shall conduct, and cause to be conducted, all operations and activity at the Premises in compliance with, and in all other respects shall comply with, all applicable present and future federal, state, municipal and other governmental statutes. ordinances, regulations, orders, directives and other requirements, and all present and future requirements of common llS2810.v14

- 15- law, concerning the protection of public health, safety or the environment (collectively "Environmental Statutes"). 7.4.3 Permits. Tenant, in a timely manner, shall, to the extent required due to Tenant's use of the Premises or arising out of Tenant's actions at the Property, obtain and maintain in full force and effect all permits, licenses and approvals, and shall make and file all notifications and registrations as required by Environmental Statutes. Tenant shall at all times comply with the terms and conditions of any such permits, licenses, approvals, notifications and registrations. 7.4.4 Documents. Tenant shall provide to Landlord copies of the following pertaining to the Premises or Tenant's use thereof, promptly after each shall have been submitted, prepared or received by Tenant: (A) all applications and associated materials submitted to any governmental agency relating to any Environmental Statute; (B) all notifications, registrations, reports and other documents, and supporting information, prepared, submitted or maintained in connection with any Environmental Statute or otherwise relating to Hazardous Substances; (C) all permits, licenses, approvals, and amendments or modifications thereof, obtained under any Environmental Statute; and (0) any correspondence, notice of violation, summons, order, complaint, or other document received by Tenant pertaining to compliance with or liability under any Environmental Statute. 7.4.5 Operations. Tenant shall not cause in. on or under, or suffer or permit to occur in, on or under. the Premises any generation, use, manufacturing, refining, transportation, emission, release, treatment, storage, disposal, presence or handling of Hazardous Substances, except that limited quantities of Hazardous Substances may be used, handled or stored on the Premises, provided such is incident to and reasonably necessary for the maintenance of the Premises or Tenant's operations for the Permitted Use and is in compliance with all Environmental Statutes and other applicable governmental requirements. Should a release, spill, discharge or leak of any Hazardous Substance in violation of any Environmental Statute occur at the Premises or the Property as the result of the acts or omissions of Tenant and/or any of the Tenant Parties ( a "Tenant Release") • Tenant shall promptly investigate and immediately contain, remove and dispose of, off the Premises. such Hazardous Substances and any material that was impacted by the Tenant Release, and remedy and mitigate all threats to human health or the environment relating to such Tenant Release. When conducting any such measures, Tenant shall comply with all Environmental Statutes related to the Tenant Release. In the event that a Tenant Release, prior to the expiration or earlier termination of the Lease, Tenant shall deliver to Landlord 8 Response Action Outcome ("RAO'') from a Licensed Site Remediation Professional ("LSRP") as such terms are defined under SRRA or such or an equivalent written determination by an LSRP or NJDEP as would be accepted by the NJDEP (the "Environmental Clearance") in regard to any such Release. In the event Environmental Clearance for any such Tenant Release is not delivered to the Landlord prior to the expiration or earlier termination of the Lease, upon the expiration or earlier termination of the Lease, Landlord shall have the option either to consider the Lease as having ended or to treat Tenant as a holdover tenant in possession of the Premises; provided, however, if Tenant provides to Landlord evidence that it is using its good faith efforts to obtain and deliver the Environmental Clearance, Landlord shall provide to Tenant a period extending from the expiration or earlier termination of the Lease through the date which is sixty (60) days after such expiration or earlier termination of the lease (the "Environmental Clearance Extension Period") to deliver the Environmental Clearance. IT Tenant fails to deliver the Environmental Clearance prior to the expiration of the Environmental Clearance Extension Period, Landlord shall have the option either to consider the Lease as having ended or to treat Tenant as a holdover tenant in possession of the Premises. Any Environmental Clearance for the Premises shall not include the use of any Engineering or Institutional Controls as defined by Environmental Statutes, without the prior written approval of the Landlord and shall be conducted to the unrestricted use remediation llS2BIO.v14

- 16- standards unless otherwise approved in writing by the Landlord in its sole discretion. If Landlord considers the Lease as having ended, then Tenant shall nevertheless be obligated to promptly obtain and deliver to Landlord the Environmental Clearance for such Tenant Release and otherwise comply with all Environmental Statutes related to the Tenant Release. 7.4.6 Inspection. Upon not less than one (1) business days' prior telephonic or written notice (except in case of an emergency in which event Landlord shall provide such telephonic or written notice as Landlord is able to under the circumstances), and provided that Landlord shall use commercially reasonable efforts to minimize interference with the business operations of Tenant, Tenant agrees to permit Landlord and its authorized representatives to enter, inspect and assess the Premises at reasonable times for the purpose of determining Tenant's compliance with the provisions of this Section. Such inspections and assessments may include obtaining samples and performing tests of soil, surface water, groundwater or other media. 7.4.7 Tanks. Tenant shall not install or cause the installation of any above ground or underground storage tank at the Premises without Landlord's prior written consent. 7.5 ISRA. 7.5.1 The business operations which Tenant shall conduct at the Premises shall not constitute the operation of an Industrial Establishment as defined in ISRA, or, if it is or at any time shall become such an Industrial Establishment Tenant will comply with all ISRA requirements applicable to Tenant's operations and at the time of closing, terminating or transferring such operations. 7.5.2 No earlier than twenty (20) days prior to the end of the Term of this Lease and no later than the last day of the Term of this Lease, Tenant shall deliver an executed and completed letter in the form attached as Exhibit F (the "ISRA Letter"). Failure to timely deliver the ISRA Letter within five (5) business days of its receipt of Landlord's notice of such failure shall be deemed an event of default 7.5.3 In the event that the business activities and operations conducted by the Tenant during the term of the Lease trigger ISRA applicability, (a "Tenant Trigger") prior to the expiration or earlier termination of the Lease, Tenant shall comply with ISRA and deliver to Landlord (the "ISRA Clearance evidencing Tenant's ISRA compliance. In the event of a Tenant Trigger, and ISRA Clearance for the Tenant Trigger is not delivered to the Landlord prior to the expiration or earlier termination of the Lease; then upon the expiration or earlier termination of the Lease, Landlord shall have the option either to consider the Lease as having ended or to treat Tenant as a hold-over tenant in possession of the Premises; provided, however, if Tenant provides to Landlord evidence that it is using its good fa.i1h efforts to obtain and deliver the ISRA Clearance, Landlord shall provide to Tenant a period extending from the expiration or earlier termination of the Lease through the date which is sixty (60) days after such expiration or earlier termination of the lease (the" ISRA Clearance Extension Period") to deliver the ISRA Clearance. If Tenant fails to deliver the ISRA Clearance prior to the expiration of the ISRA Clearance Extension Period, Landlord shall have the option either to consider the Lease as having ended or to treat Tenant as a hold-over tenant in possession of the Premises. Any ISRA Clearance for the Premises shall not include the use of any Engineering or Institutional Controls as defined by Environmental Statutes, wi1hout the prior written approval of the Landlord and shall be conducted to the unrestricted use remediation standards approved by the Landlord in its sole discretion. If Landlord considers the Lease as having ended, then Tenant shall nevertheless be obligated to promptly obtain and deliver to Landlord the ISRA Clearance and otherwise fulfill all of the obligations of Tenant. Tenant l1S281O.v14

shall, at no cost to Landlord, cooperate with Landlord by supplying any information or signing any documentation that that may be requested by Landlord, and otherwise assisting Landlord with respect to the compliance with ISRA by Landlord, in the event that Landlord triggers ISRA by its actions. 7.6 Excluded Matters. Notwithstanding anything to the contrary contained herein, Tenant shall not be in any way responsible, at any time, to investigate, remediate, or submit an Environmental Clearance for any matter disclosed in the Report, including, but not limited to, AOC 5 (Historic Fill Material), AOC 7 (disposal of unlabeled steel drums), and spill file 94-3-25-1259-55 (50 gallon diesel spill), or any other Release in, at or below the Premises or the Property not caused by Tenant or the Tenant Parties during the Term (the "Excluded Matters"). The Landlord, at its sole cost and expense, shall have sole and exclusive responsibility for the Excluded Matters, and the procurement of an applicable Environmental Clearance or ISRA Clearance, except to the extent that Tenant or any of the Tenant Parties aggravate or exacerbate any Excluded Matter, in which case Tenant, at its sole cost and expense, shall have the sole responsibility for such Excluded Matter. In the event that Tenant has addressed all of its obligations to achieve an applicable Environmental Clearance or ISRA Clearance, and applicable Environmental Clearance or ISRA Clearance cannot be issued to Tenant as a result of an Excluded Matter, Tenant shall be deemed to have satisfied its obligations under this Section 7. 7.7 Hold Over. If Landlord is entitled to treat Tenant as a hold-over tenant in possession of the Premises under Section 7.4.5 or 7.5.3, then Tenant shall pay, monthly to Landlord, double the Base Rent and Additional Rent which Tenant would otherwise have paid under the Lease, until such time as Tenant delivers to Landlord the Environmental Clearance and otherwise fulfills its obligations to Landlord under Sections 7.4.5 and/or 7.5.3, and during the holdover period, all of the terms of this Lease shall remain in full force and effect. 7.8 Common Areas. 7.8.1 Tenant shall have the non-exclusive right to use the Common Areas in common with other persons approved by Landlord during the Term, subject to reasonable rules and regulations uniformly established by Landlord and the provisions of this Lease. 7.8.2 Landlord reserves the right, at any time and from time to time, without the consent of or liability to Tenant to (i) make alterations or additions to the Property and the Common Areas, to change, add to, eliminate or reduce the extent, size, shape, number or configuration of any aspect of the Property and Common Areas provided such alterations or additions do not materially and adversely affect the use of the Common Areas by Tenant, (ii) close to the general public all or any portion of the Premises or the Property to the extent and for the period necessary to avoid any dedication to the public, (iii) effect any repairs or further construction, (iv) change the arrangement, character, use or location of entrances or passageways, doors and doorways, corridors. elevators, stairs, landscaping, toilets, mechanical, plumbing, electrical or other operating systems or any other portions of the Common Areas or other parts of the Premises or the Property provided such alterations or additions do not materially and adversely affect the use of the Common Areas by Tenant, and (v) change the name, number or designation by which the Property is commonly known; provided, however, Landlord shall use reasonable efforts to limit any disruption of Tenant's use of the Premises in connection with Landlord's actions undertaken pursuant to this Section.- 17- llS2810.v14

- 18- 8. Alterations and Tenant's Property. 8.1 Alterations Defined. Tenant shall not make or suffer or allow to be made any alterations, additions or improvements in or to the Premises (collectively, "Alterations") without first obtaining Landlord's written consent based on detailed plans and specifications submitted by Tenant; provided Landlord's consent will not be required if (a) the proposed Alterations will not affect the structure or the mechanical, electrical, HV AC, plumbing or life safety systems of the Building (collectively, "Building Systems") and (b) the total cost to acquire and install the proposed Alterations will be no more than (i) $5,000.00 in anyone instance and (ii) $10,000.00 in the aggregate during any calendar year. In all other instances where Landlord's consent is so required, such consent shall not be unreasonably withheld. In all events, Tenant shall notify Landlord prior to commencing Alterations other than de minimis Alterations, and Landlord shall have the right at Landlord's election, to supervise the Alterations work. Tenant agrees that all such work (regardless of whether Landlord's consent is required) shall be done at Tenant's sole cost and expense, in accordance with the plans and specifications approved by Landlord and in a good and workmanlike manner, that the structural integrity of the Building shall not be impaired. and that no liens shall attach to all or any part of the Premises, the Building, or the Property by reason thereof. In addition to the foregoing, Tenant agrees to pay to Landlord, as Additional Rent, Landlord's reasonable costs and expenses paid or incurred in connection with Landlord's review of plans and specifications and Landlord's project supervision relating to Tenant's design and installation of Alterations at the Premises. Tenant shall obtain, at its sole expense, all permits required for such work. Notwithstanding anything in the foregoing to the contrary, and subject to the terms and conditions of Section 9.3, Landlord hereby approves those Alterations proposed by Tenant and set forth in the plans and specifications attached hereto as Exhibit H. 8.2 Removal of Property. Except as hereinafter provided, all Alterations shall become the property of Landlord and shall be surrendered to Landlord upon the expiration or earlier termination of this Lease. However (i) movable equipment, trade fixtures, personal property, furniture, or any other items that can be removed without material harm to the Premises or Property will remain Tenant's property; and (ii) any racks to be installed by Tenant (collectively, "Tenant Owned Property") shall not become the property of Landlord All Tenant Owned Property shall be removed from the Premises at Tenant's sole cost and expense at the expiration or sooner termination of this Lease. When granting consent for any Alterations that require Landlord's consent, Landlord shall indicate whether it will require the removal of those Alterations at the expiration or earlier termination of the Lease. Prior to making any Alterations not requiring Landlord's consent, Tenant may request that Landlord notify Tenant whether Landlord requires Tenant to remove that Alteration prior to expiration or earlier termination of the Lease. Tenant shall remove those Alterations that Landlord requested be removed under the prior two sentences at the expiration or earlier termination of the Lease. Tenant shall repair at its sole cost and expense all damage caused to the Premises or the Building by removal of any Alterations or Tenant Owned Property. Landlord may remove any Tenant Owned Property or Alterations that Tenant is required but fails to remove at the expiration or earlier termination of the Lease and Tenant shall pay to Landlord the reasonable cost of removal. Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease. 8.3 Signage. Tenant shall be permitted to erect signage on the exterior of the Premises, subject to the following terms and condition. The plans and specifications, size and location of such signage shall be subject to Landlord's prior written consent, which shall not be unreasonably denied. All such signage must comply with applicable laws, ordinances, rules and regulations, and the requirements of any declaration of protective covenants or comparable instrument binding upon the Property. All signage shall be removed by Tenant at its sole cost on or prior to the expiration or sooner termination of ] 152810.v14

- 19- the Lease and Tenant shall repair all damage to the Premises or the Property resulting from its removal. Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease. Notwithstanding anything in the foregoing to the contrary and subject to the terms and conditions of Section 9.3, Landlord hereby approves the signage proposed by Tenant and set forth in the plans and specifications attached hereto as Exhibit I. 9. Repairs and Other Work. 9.1 Tenant's Obligations. Subject to the Warranty Period, Tenant shall maintain in good, clean and sanitary order and condition the Premises (any signage of Tenant) and every non-structural part thereof: including without limiting the generality of the foregoing, all plumbing, sprinklers, HV AC, electrical. lighting facilities and equipment located within the Premises, fixtures, interior walls, ceilings, decking, floors, windows, doors and plate glass located within the Premises, and signs (except Landlord's signs, if any) located on the Premises. Tenant will not overload the electrical wiring serving the Premises or within the Premises, and will install at its expense, subject to the provisions of this Lease, any additional electrical wiring which may be required in connection with Tenant's apparatus. Tenant will repair, at its expense, any damage to the Premises, or to the Property, arising out of Tenant's use or occupancy thereof including damage caused by bringing into the Premises any property for Tenant's use or by the installation or removal of such property, all regardless of fault, or by whom such damage shall be caused, unless caused by Landlord, its agents, employees, or contractors. 9.2 HVAC Maintenance Contract. In addition to Tenant's other obligations under this Section 9 and elsewhere under this Section 9 and elsewhere under this Lease, Tenant shall also maintain, in full force and effect throughout the Term. a preventative maintenance and service contract with a reputable service provider for maintenance of the heating, ventilating. and air conditioning ("IN AC") system(s) solely serving the Premises (the ''HV AC Maintenance Contract"; the HV AC system(s) solely serving the Premises is (are collectively) referred to herein as the "HV AC System"}. The terms and provisions of any such HV AC Maintenance Contract shall require that the service provider provide maintenance on a quarterly basis and maintain the HV AC System in accordance with the manufacturer's recommendations and otherwise in accordance with normal, customary and reasonable practices in the geographic area in which the Premises are located and for HV AC systems comparable to the HV AC System. Within thirty (30) days following the Commencement Date, Tenant shall procure and deliver to Landlord the HV AC Maintenance Contract. Thereafter, Tenant shall provide to Landlord a copy of renewals or replacements of such HV AC Maintenance Contract no later than thirty (30) days prior to the then-applicable expiry date of the existing HV AC Maintenance Contract. H Tenant fails to timely deliver to Landlord the HV AC Maintenance Contract (or any applicable renewal or replacement thereof), then Landlord shall have the right to contract directly for the periodic maintenance of the HV AC System and to charge the cost thereof back to Tenant as Additional Rent. 9.3 Conditions Applicable to Repairs and Other Work. All repairs, replacements and reconstruction (including, without limitation, all Alterations) made by or on behalf of Tenant shall be made and performed: (a) at Tenant's cost and expense and at such time and in such manner as Landlord may reasonably designate, (b) by contractors or mechanics reasonably approved by Landlord. (c) at least equal in quality of materials and workmanship to the original work or installation, (d) in accordance with such reasonable requirements as Landlord may impose with respect to insurance to be obtained by Tenant in connection with the proposed work, (e) in accordance with all applicable laws and regulations of governmental authorities having jurisdiction over the Premises, and (f) Tenant shall provide Landlord with as built drawings of such Alterations. 1IS2810.v14

- 20-9.4 Landlord's Obligations. Landlord shall be responsible for the performance of (i) all repair and maintenance of all structural elements, roof and exterior walls of the Building ("Landlord Repair Work"); and (ii) any necessary replacement of all structural elements, roof and exterior walls of the Building, except to the extent such replacement is part of any Alterations or is a Tenant Repair Item. Without limitation of the foregoing, if any of the foregoing work is required as a result of the negligence or misconduct of Tenant or any Tenant Parties or the misuse of the Premises or the Property by Tenant or the Tenant Parties, Tenant shall reimburse Landlord for all reasonable costs incurred by Landlord for such work upon demand as Additional Rent. Landlord shall also be responsible for the performance of snow removal, landscaping and repairs and maintenance of the exterior parking areas, sidewalks and truck courts at the Property provided that the cost of such activities shall be reimbursable as Operating Expenses. 10. Liens. Tenant shall keep the Premises and the Property free from any liens arising out of any work performed or material furnished to or for the Premises by or for Tenant. If Tenant shall not, within thirty (30) days following notice of the imposition of any such lien, cause same to be released of record by payment or posting of a bond satisfactory to Landlord, Landlord, in addition to all other remedies provided under this Lease and by law, shall have the right (but not the obligation) to cause the lien to be released by such means as Landlord shall deem proper, including. without limitation, payment of the claim giving rise to such lien. All such sums reasonably paid by Landlord and all expenses incurred by it in connection therewith shall be considered Additional Rent and shall be payable by Tenant within ten (10) days after receipt of written demand. 11. Subordination. This Lease shall be subject and subordinate at all times to (a) all ground leases or underlying leases that may now exist or hereafter be executed affecting the Property or any portion thereof, (b) the lien of any mortgage, deed of trust or other security instrument that may now exist or hereafter be executed in any amount for which the Property or any portion thereof, any ground leases or underlying leases. or Landlord's interest or estate therein is specified as security, and (c) al1 modifications, renewals, supplements, consolidations and replacements thereof. If any ground lease or underlying lease terminates for any reason or any mortgage, deed of trust or other security instrument is foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant, notwithstanding any subordination, shall attorn to and become the tenant of the successor in interest to Landlord at the option of such successor in interest; provided, however, that so long as Tenant shall not be in default in the performance of its obligations under this Lease. neither this Lease nor Tenant's right to remain in exclusive possession of the Premises shall be affected or disturbed. The provisions of this Section shall be self-operative and no further instrument shall be required to effect the provisions of this Section. Within ten (10) days following request by Landlord, Tenant agrees to execute any documents reasonably required to effectuate the foregoing subordination including any reasonable and customary Subordination, Non-Disturbance and Attornment Agreement submitted by Landlord to Tenant, which documents may contain such other terms as any mortgagee or prospective mortgagee may reasonably require, or to make this Lease prior to the lien of any mortgage, deed of trust or underlying lease, as the case may be. 12. Inability to Perform, If, by reason of acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or any other cause or event beyond Landlord' s reasonable control (collectively. "Force Majeure"), Landlord is unable to perform or make or is delayed in performing or making any installations, decorations, repairs, alterations, additions or improvements required to be performed or made under this Lease, no such inability or delay shall impose any liability upon Landlord or provide the Tenant with any right to offset, deduction or abatement of rent by reason of inconvenience or annoyance to Tenant, or otherwise. IIS2810.v14

- 21 - 13. Destruction. 13.1 Right to Terminate. If any fire, flood, windstorm or other casualty causes all or any material portion of the Premises to be damaged, Tenant shall immediately notify Landlord in writing. If such damage causes all or any material portion of the Premises to be untenantable by Tenant and, in the reasonable opinion of Landlord and Tenant, such damage cannot be repaired within six (6) months after the date of the event causing such damage (under a normal construction schedule not requiring the payment of overtime or premium), Tenant may terminate this Lease by delivery of written notice to Landlord within thirty (30) days after the date on which Landlord's opinion is delivered to Tenant Upon termination, Rent shall be apportioned as of the date of the casualty. If (i) the cost to repair damage to or destruction of the Building exceeds 50% of the replacement cost of the Building or any of the other Buildings, or (ii) if the Premises or any other portion of the Property is damaged by a casualty not of the type covered by the insurance required to be carried under Section 14.4, or (iii) such damage cannot be repaired within six (6) months after the casualty (under a normal construction schedule not requiring the payment of overtime or premium), Landlord may terminate this Lease by delivery of written notice to Tenant within one hundred twenty (120) days after the date of the casualty. Upon termination, Rent shall be apportioned as of the date of the casualty and all prepaid Rent shall be repaid to Tenant (less the amount necessary to cure any monetary default of Tenant under this Lease existing as of the date of termination). 13.2 Extent of Repair Obligations. If this Lease is not terminated Landlord shall restore the structure of the Building and all improvements (except those constructed or installed by Tenant, if any, and the Tenant Owned Property) in the Premises at the date possession of the Premises was delivered to Tenant, and Tenant shall repair all other portions of the Premises (including, without limitation, Alterations and Tenant Owned Property). All such repairs shall be performed in a good and workmanlike manner, with due diligence, and shall restore the items repaired to substantially the same usefulness and construction as existed immediately before the casualty. All work by Tenant shall be performed in accordance with the requirements of Section 9.3 above. In the event of any termination of this Lease, the proceeds from any insurance paid by reason of damage to or destruction of the Property or any portion thereof, or any other element, component or property insured by Landlord (exclusive of proceeds for damage to Tenant Owned Property), shall belong to and be paid to Landlord. If a casualty renders all or part of the Premises untenantable, Rent shall proportionately abate commencing on the date of the casualty and ending when the Premises are delivered to Tenant with Landlord's restoration obligation substantially complete and the Premises are habitable and usable by Tenant for the Permitted Use. The extent of the abatement shall be based upon the portion of the Premises rendered untenantable, inaccessible or unfit for use in a reasonable business manner for the purposes stated in this Lease. 13.3 Mutual Waiver of Subrogation. Notwithstanding anything to the contrary in this Lease, Landlord and Tenant mutually waive their respective rights of recovery against each other and each other's officers, directors, constituent partners, agents and employees. to the extent any loss is or would be covered by fire, extended coverage, and other property insurance policies required to be carried under this Lease or otherwise carried by the waiving party, and the rights of the insurance carriers of such policy or policies to be subrogated to the rights of the insured under the applicable policy. Each party shall cause its insurance policy to be endorsed to evidence compliance with such waiver. 14. Insurance. 14.1 Insurance on Tenant's Property. Tenant shall procure at its cost and expense and keep in effect during the Term insurance coverage for all risks of physical loss or damage IIS2810.v14

insuring the full replacement value of Alterations, Tenant's trade fixtures, furnishings, equipment, plate glass, signs and all other items of Tenant Owned Property and other personal property of Tenant. Landlord shall not be liable for any damage or damages of any nature whatsoever to persons or property or Alterations of Tenant caused by explosion, fire, theft or breakage, vandalism, falling plaster, by sprinkler, drainage or plumbing systems, or air conditioning equipment, by the interruption of any public utility or service, by steam, gas. electricity, water, rain or other substances leaking, issuing or flowing into any part of the Premises, by natural occurrence, acts of the public enemy, riot, strike, i:nsurrection, war, court order, requisition or order of governmental body or authority, or by anything done or omitted to be done by any tenant, occupant or person in the Building, it being agreed that Tenant shall be responsible for obtaining appropriate insurance to protect its interests. All proceeds of such insurance on Tenant Owned Property shall be payable to Tenant or Tenant's mortgagee, if applicable. 14.2 Tenant's Liability Insurance. Tenant shall procure at its cost and expense and maintain throughout the Term comprehensive commercial genera1liability insurance applicable to the Premises with a minimum combined single limit of liability of Two Million Dollars ($2,000,000) and $5,000,000 annual aggregate, statutory worker's compensation insurance, and employer's liability insurance with a Five Hundred Thousand Dollar ($500,000) minimum limit covering all of Tenant's employees. Such liability insurance shall include, without limitation, products and completed operations liability insurance, fire and legal liability insurance, and such other coverage as Landlord may reasonably require from time to time. At Landlord's request Tenant shall increase such insurance coverage to a level that is commercially reasonably required by Landlord 14.3 Form of Tenant Policies. Tenant's insurance shall be issued by companies authorized to do business in the State of New Jersey. Tenant shall have the right to provide insurance coverage pursuant to blanket policies obtained by Tenant if the blanket policies expressly afford coverage required by this Section 14. All insurance policies required to be carried by Tenant under this Lease (except for worker's compensation insurance) shall (i) name Landlord, and any other parties designated by Landlord as additional insureds, (ii) as to liability coverages, be written on an "occurrence" basis, (iii) provide that Landlord shall receive thirty (30) days' notice from the insurer before any cancellation or change in coverage; and (iv) contain a provision that no act or omission of Tenant shall affect or limit the obligation of the insurer to pay the amount of any loss sustained. Each such policy shall contain a provision that such policy and the coverage evidenced thereby shall be primary and non-contributing with respect to any policies carried by Landlord. TENANT SHALL DELIVER REASONABLY SATISFACTORY EVIDENCE OF SUCH INSURANCE TO LANDLORD CONCURRENTLY WITH THE EXECUTION AND DELIVERY OF THIS LEASE, AND THEREAFTER AT LEAST THIRTY (30) DAYS BEFORE THE EXPIRATION DATES OF EXPIRING POLICIES. At Landlord's request, Tenant shall deliver to Landlord copies of such policies. Tenant, at Tenant's expense, shall comply with, and shall cause all occupants of the Premises to comply with, all applicable customary rules, orders, regulations or requirements of any board of fire underwriters or other similar body. 14.4 Landlord's Insurance. Landlord will purchase and maintain a standard policy of "all risk" special form property insurance with customary exclusions covering the Building for the full replacement cost of the Building and rent loss insurance. Landlord will also purchase and maintain broad form commercial general liability insurance with a minimum combined single limit of liability of at least Two Million Dollars ($2,000,000), written by companies authorized to do business in the State of New Jersey. All costs of insurance carried by Landlord and referred to in this Section or otherwise will constitute Insurance Costs. LANDLORD SHALL DELIVER REASONABLY SATISFACTORY EVIDENCE OF SUCH INSURANCE TO TENANT CONCURRENTLY WITH THE - 22- Il52810.v14

- 23-COMMENCMENT DATE, AND THEREAFTER WITHIN THIRTY (30) DAYS AFTER TENANT'S WRITfEN REQUEST. 14.5 Form of Landlord Policies. Landlord's insurance shall be issued by companies authorized to do business in the State of New Jersey. 15. Eminent Domain. 15.1 Effect of Taking. If all of the Premises is condemned or taken in any permanent manner before or during the Term for any public or quasi-public use, or any permanent transfer of the Premises is made in avoidance of an exercise of the power of eminent domain (each of which events shall be referred to as a "taking"), this Lease shall automatically terminate as of tile date of the vesting of title as a result of such taking. If a part of the Premises is so taken, this Lease shall automatically terminate as to the portion of the Premises so taken as of the date of the vesting of title as a result of such taking. If such portion of the Property is taken as to render the balance of the Premises unusable by Tenant for the Permitted Use, as reasonably determined by Tenant and Landlord, this Lease may be terminated by Landlord or Tenant, as of the date of the vesting of title as a result of such taking, by written notice to the other party given within sixty (60) days following notice to Landlord of the date on which said vesting will occur. If this Lease is not terminated as a result of any taking, or if all or any portion of the Premises is taken for a limited period of time before or during the Term, Landlord shall restore the Building to an architecturally whole unit; provided, however, that Landlord shall not be obligated to expend on such restoration more than the amount of condemnation proceeds actually received by Landlord and Landlord shall not be obligated to restore any temporary taking. In the event of a partial taking that does not result in a termination of this Lease as to the entire Premises, or in the event of any temporary taking, Base Rent and Additional Rent shall be equitably adjusted in relation to the portions of the Premises and Building taken or rendered unusable by such taking. 15.2 Award. Landlord shall be entitled to the entire award for any taking, including, without limitation, any award made for the value of the leasehold estate created by this Lease. No award for any partial or entire taking shall be apportioned, and Tenant hereby assigns to Landlord any award that may be made in any taking, together with any and all rights of Tenant now or hereafter arising in or to such award or any part thereof provided, however, that nothing contained herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord any separate award made to Tenant for its relocation expenses, the taking of personal property and fixtures belonging to Tenant, the unamortized value of improvements made by Tenant or the interruption of Tenant's business. 16 Assignment: Subleasing. 16.1 Consent Required. Neither Tenant nor any sublessee or assignee of Tenant, directly or indirectly, voluntarily or by operation of law, shall sell, assign, encumber, pledge or otherwise transfer or hypothecate all or any part of the Premises or Tenant's leasehold estate hereunder (each such act is referred to as an "Assignment"), or sublet the Premises or any portion thereof or permit the Premises to be occupied by anyone other than Tenant (each such act is referred to as a "Sublease"), without Landlord's prior written consent in each instance. In the case of any proposed Sublease or Assignment, Landlord's consent shall not be unreasonably withheld or delayed. Any Assignment or Sublease that is not in compliance with this Section 16 shall be void and. at the option of Landlord, shall constitute a material default by Tenant under this Lease. The acceptance of Rent by Landlord from a lJ~81O.v14

- 24- proposed assignee, sublessee or occupant of the Premises shall not constitute consent to such Assignment or Sublease by Landlord. The right to such amounts is expressly reserved from the grant of Tenant's leasehold estate for the benefit of Landlord. Any request by Tenant for Landlord's consent to a specific Assignment or Sublease (8 "Transfer Request") shall include (a) the name of the proposed assignee, sublessee or occupant, (b) the nature of the proposed assignee's sublessee's or occupant's business to be carried on in the Premises, (c) a copy of the proposed Assignment or Sublease. and (d) such financial information (in the event of an Assignment) and such other information as Landlord may reasonably request concerning the proposed assignee, sublessee or occupant or its business. Landlord shall respond in writing, stating the reasons for any disapproval, within fifteen (15) business days after receipt of all information reasonably necessary to evaluate the proposed Assignment or Sublease. No consent by Landlord to any Assignment or Sublease by Tenant, and no specification in this Lease of a right of Tenant's to make any Assignment or Sublease, shall relieve Tenant of any obligation to be performed by Tenant under this Lease, whether arising before or after (a) the Assignment or Sublease or (b) any extension of the Term. The consent by Landlord to any Assignment or Sublease shall not relieve Tenant or any successor of Tenant from the obligation to obtain Landlord's express written consent to any other Assignment or Sublease. Tenant shall pay to Landlord, as Additional Rent, Landlord's reasonable costs and expenses incurred in connection with Landlord's review of any proposed Sublease or Assignment. Any sale or other transfer, including without limitation by consolidation. merger or reorganization, of a majority of the voting stock of Tenant or any beneficial interest therein. if Tenant is a corporation, or any sale or other transfer of a majority of the general partnersbip or membership interests in Tenant or any beneficial interest therein, if Tenant is a partnership or limited liability company, shall be an Assignment for purposes of this Lease. Tenant agrees that, as a condition of any such consent by Landlord, Landlord may require that one-half (1/2) of the net consideration to Tenant which is attributable to this Lease in connection with any Assignment or Sublease be payable to Landlord as Additional Rent, and the right to such amounts is expressly reserved from the grant of Tenant's leasehold estate for the benefit of Landlord; provided, however, the forgoing sentence shall not apply to a Permitted Transfer under Section 16.4. 16.2 Assumption of Obligations. Each assignee or other transferee of Tenant's interest under this Lease, other than Landlord, shall assume all obligations of Tenant under this Lease and shall be and remain liable jointly and severally with Tenant for the payment of Base Rent and Additional Rent, and for the performance of all the terms, covenants, conditions and agreements contained in this Lease which are to be performed by Tenant. Each sublessee of all or any portion of the Premises shall agree in writing for the benefit of Landlord (a) to comply with and agree to the provisions of this Lease, and (b) that such sublease (and all further subleases of any portion of the Premises) shall terminate upon any termination of this Lease, regardless of whether or not such termination is voluntary. 16.3 Right to Recapture. In the event Landlord receives a Transfer Request, Landlord shall have the right, to be exercised by giving written notice to Tenant within fifteen (15) business days after receipt of such Transfer Request, to recapture the space described in the Transfer Request and such recapture notice, if given, shall terminate this Lease with respect to the space therein described as of the date stated in the Transfer Request. If the Transfer Request covers all of the space hereby demised, and if Landlord gives its recapture notice with respect thereto, the Term of this Lease shall expire on the date stated in Tenant's notice as the effective date of the Assignment or Sublease as fully and completely as if that date had been herein definitely fixed for the expiration of the Term. If, however, this Lease is terminated pursuant to the foregoing with respect to less than the entire Premises. Base Rent and Tenant's Proportionate Share shall be adjusted on the basis of the number of rentable square feet retained by Tenant, and this Lease as so amended shall continue thereafter in full force and effect. This provision shall not apply to a Permitted Transfer under Section 16.4. 11S2810.v14llSUlO.v14

llSUlO.v14 16.4 Permitted Transfers. Notwithstanding the foregoing, provided that (i) Tenant is not in default under this Lease, and (ii) no such transaction is undertaken with the intent of circumventing Tenant's liability under this Lease, Tenant may (a) assign this Lease to any affiliate or subsidiary of Tenant or in connection with a merger or other consolidation of Tenant; (b) assign this Lease in connection with the sale of all or substantially all of Tenant's assets; and (c) may sublease all or some portion of the Premises to an affiliate or subsidiary of Tenant without Landlord's consent, provided: (1) Tenant shall remain liable hereunder for a period through and including the date which is one (1) year following the date of such assignment; (2) Tenant provides reasonable prior written notice to Landlord of such Assignment or Sublease; (3) after such transaction is effected, the tangible net worth of the transferee (excluding goodwill) is equal to or greater than the tangible net worth of Tenant as of the date of this Lease; and (4) Landlord shall have received an executed copy of all documentation effecting such transfer on or before its effective date. 17. Utilities and Services, 17.1 Utilities. To the extent practica1 in Landlord's judgment, Landlord shall cause all utilities to be separately metered or submetered to the Premises in which case Tenant shall pay all utilities consumed directly to the applicable utility company. Tenant shall pay to Landlord, as Additional Rent, Tenant's Proportionate Share of all electric, gas, water and sewer utilities consumed at the Property that are not separately metered or submetered. Tenant shall contract separately for the provision, at Tenant's sole cost, of janitorial service and trash removal for the Premises and Landlord will have no obligation to provide any such services to the Premises 17.2 Involuntazy Cessation of Services. Landlord reserves the right, without any liability to Tenant and without affecting Tenant's covenants and obligations hereunder, to stop service of any or all of the HV AC, electric, sanitary, and other systems serving the Premises, or to stop any other services required by Landlord under this Lease, whenever and for so long as may be necessary by reason of (i) accidents, emergencies, strikes, or the making of repairs or changes which Landlord, in good faith. deems necessary or (ii) any other cause beyond Landlord's reasonable control. No such interruption of service shall be deemed an eviction or disturbance of Tenant's use and possession of the Premises or any part thereof, or render Landlord liable to Tenant for damages, or relieve Tenant from performance ofTenant's obligations under this Lease, including, but not limited to, the obligation to pay Rent; provided, however, that if any interruption of services persists for a period in excess of three (3) consecutive business days Tenant shall, as Tenant's sole remedy, be entitled to a proportionate abatement of Rent to the extent, if any, of any actual loss of use of the Premises by Tenant. 18. Default. 18.1 Events of Default by Tenant. The failure to perform or honor any covenant, condition or other obligation of Tenant or the failure of any representation made by Tenant under this Lease shall constitute a default by Tenant upon expiration of the applicable grace period, if any. Tenant shall have a period of five (5) days from the date it receives written notice from Landlord that any payment of Rent is due within which to cure any default in the payment of Rent. Except as otherwise provided in Section 19, Tenant shall have a period often (ten) days from the date of written notice from Landlord within which to cure any other default under this Lease; provided, however, that with respect to any default (other than a default which can be cured by the payment of money) that cannot reasonably be cured within ten (10) days, the default shall not be deemed to be uncured if Tenant commences to cure within ten (10) days from Landlord's notice. continues to prosecute diligently the curing of such default and actually cures such default within thirty (30) days after Landlord's notice. Notwithstanding anything - 2S-

- 26- contained in this Section 18.1~ Landlord shall not be obligated to provide Tenant with notice of substantially similar defaults more than two (2) times in any twelve (l2) month period. 18.2 Remedies. Upon the occurrence of a default by Tenant that is not cured by Tenant within the applicable grace periods specified in Section 18.1, Landlord shall have all of the following rights and remedies in addition to all other rights and remedies available to Landlord at law or in equity: 18.2.1 The right to tenninate Tenant's right to possession of the Premises and to recover (i) all Rent which shall have accrued and remain unpaid through the date of termination; plus monthly rent continuing for the balance of the Term. plus (iii) any other amount necessary to compensate Landlord for all reasonable costs incurred by Landlord caused by Tenant's failure to perform its obligations under this Lease (including, without limitation, reasonable attorneys' and accountents' fees, costs of alterations of the Premises, interest costs and brokers' fees incurred upon any reletting of the Premises). Landlord shall use commercially reasonable efforts to re-let the Premises. 18.2.2 The right to continue the Lease in effect after Tenant's breach and recover Rent as it becomes due. Acts of maintenance or preservation, efforts to relet the Premises or the appointment of a receiver upon Landlord's initiative to protect its interest under this Lease shall not of themselves constitute a termination of Tenant's right to possession. 18.2.3 The right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell such property and apply the proceeds therefrom pursuant to applicable law. In such event, Landlord may from time to time sublet the Premises or any part thereof for such term or terms (which may extend beyond the Term) and at such rent and such other terms as Landlord in its sole discretion may deem advisable, with the right to make alterations and repairs (in character substantially similar to those commonly made in warehouse and distribution facilities in the Northern New Jersey area) to the Premises. Upon each such subletting, rents received from such subletting shall be applied by Landlord, first, to payment of any costs of such subletting (including, without limitation, reasonable attorneys' and accountants' fees, costs of alterations of the Premises, interest costs, and brokers’ fees) and of any such alterations and repairs; second, to payment of Base Rent and Additional Rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future Base Rent and Additional Rent as they become due. If any rental or other charges due under such sublease shall not be promptly paid to Landlord by the sublessees, or if such rentals received from such subletting during any month are less than. Base Rent and Additional Rent to be paid during that month by Tenant, Tenant shall pay any such deficiency to Landlord the costs of such subletting (including, without limitation, attorneys' and accountants' fees, costs of alterations of the Premises, interest costs and brokers' fees), and any other amounts due Landlord under this Section 18.2. Such deficiency shall be calculated and paid monthly. No taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant Landlord's subletting the Premises without termination shall not constitute a waiver of Landlord's right to elect to terminate this Lease for such previous breach. 18.2.4 The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the Premises, to apply any rental collected from the Premises and to exercise all other rights and remedies granted to Landlord pursuant to this Section. 18.2.5 If Tenant shall default in the performance of any of its obligations under this Lease after notice and expiration of the applicable cure period, Landlord, at any time thereafter and 1I52810.v14

- 27- without additional notice, may remedy such default for Tenant's account and at Tenant's expense, without waiving any other rights or remedies of Landlord with respect to such defauh. Notwithstanding the foregoing, Landlord shall have the right to cure any failure by Tenant to perform any of its obligations under this Lease without notice to Tenant if such failure results in an immediate threat to life or safety of any person, or impairs the Building or its efficient operation. 18.2.6 The exercise of any remedy provided by law or the provisions of this Lease shall not exclude any other remedies unless they are expressly excluded by this Lease. Tenant hereby waives any right of redemption or relief from forfeiture following termination of, or exercise of any remedy by Landlord with respect to, this Lease. 18.3 Events of Default by Landlord and Tenant's Remedies. The failure by Landlord to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by Landlord, where such failure shall continue for a period of thirty (30) days after written notice thereof by Tenant to Landlord, shall be deemed to be a default by Landlord under this Lease; provided, however, that if the nature of Landlord's default is such that more than thirty (30) days are reasonably required for its cure, then Landlord shall not be deemed to be in default if Landlord commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. In the event of a default by Landlord beyond applicable cure periods. Tenant shall have the right, at its election, to: (a) sue for damages (excluding punitive. consequential, indirect, special or speculative damages) sustained by reason of the default; or (b) perform the obligations described in the notice in which case Landlord shall reimburse Tenant for the reasonable cost of the performance of such obligations within ten (10) business days after Tenant's submission of an invoice therefor. If Tenant elects to proceed under clause (b) above, then the Landlord's default shall be deemed to have been cured when Tenant's expense has been reimbursed in full. In the event Tenant commences a suit for damages sustained by reason of a Landlord default and prevails in such suit and obtains a final, non-appea1able judgment with respect to such suit, Tenant may then set-off the amount of such judgment against the amounts due to Landlord under this Lease. Tenant shall have no other right to set-off. None of Landlord's covenants, undertakings or agreements under this Lease is made or intended as personal covenants, undertakings or agreements by Landlord, or by any of Landlord's shareholders, directors. officers, trustees or constituent partners. All liability for damage or breach or nonperformance by Landlord shall be collectible only out of Landlord's interest from time to time in the Property, and no personal liability is assumed by nor at any time may be asserted against Landlord or any of Landlord's shareholders, directors, officers, trustees or constituent partners. 19. Insolvency or Bankruptcy. The occurrence of any of the following shall, at Landlord's option, constitute a breach of this Lease by Tenant: (i) the appointment of a receiver to take possession of all or substantially all of the assets of Tenant or the Premises. (ii) an assigmnent by Tenant for the benefit of creditors, (iii) any action taken or suffered by Tenant under any insolvency, bankruptcy, reorganization, moratorium or other debtor relief act or statute, whether now existing or hereafter amended or enacted, (iv) the filing of any voluntary petition in bankruptcy by Tenant, or the filing of any involuntary petition by Tenant's creditors, which involuntary petition remains undischarged for a period of ninety (90) days, (v) the attachment, execution or other judicial seizure of all or substantially all of Tenant's assets or the Premises, if such attachment or other seizure remains undismissed or undischarged for a period of thirty (30) days after the levy thereof, (vi) the admission of Tenant in writing of its inability to pay its debts as they become due, (vii) the filing by Tenant of any answer admitting or failing timely to contest a material allegation of a petition filed against Tenant in any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation or dissolution of Tenant or similar relief, or (viii) if within sixty (60) days after the commencement of any proceeding against Tenant 1 1528 lO.vl4

1IS2810.vI4 seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed. Upon the occurrence of any such event or at any time thereafter, Landlord may elect to exercise any of its remedies under Section 18 above or any other remedy available at law or in equity. Notwithstanding the provisions of Section 18.1, there shall be no cure periods for any breach or default under this Section 19 except as expressly provided in this Section 19. 20. Fees and Expenses; Indemnity; Payment. 20.1 Indemnity. (a) Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses, costs, liabilities, expenses including, without limitation, penalties, fines and reasonable attorneys' fees, and damages (collectively, "Losses") to the extent incurred in connection with or arising from (i) any default by Tenant in the performance of its obligations under this Lease, or the failure of any representation made by Tenant in this Lease, (ii) any Release of Hazardous Substances at, in, under or about the Premises or the Property caused by Tenant or any Tenant Parties;(iii) any violation of Environmental Statutes at the Premises caused by Tenant or any Tenant Parties; l~ (iv) any costs of complying with ISRA due to actions of Tenant or Tenant Parties; and (v) the use or / occupancy or manner of use or occupancy of the Premises or any injury or damage caused by Tenant, Tenant Parties or any person occupying the Premises through Tenant ; provided, however, in no event shall Tenant be liable for punitive, consequential, special. incidental or indirect damages, except, however, Tenant shall be liable for documented consequential damages in connection with a default by Tenant of its obligations set forth in Section 26.8 (provided Landlord bas given Tenant at least thirty [30] days' prior written notice that Landlord is obligated to deliver possession of the Premises on a date certain) or Section 7 (provided Landlord has given Tenant at least thirty [30] days' prior written notice of Tenant's failure to comply with Section 7). (b) Landlord shall indemnify, defend and hold Tenant harmless from and against any and all Losses to the extent incurred in connection with or arising from (i) any injury or damage caused by any negligent or willful acts of Landlord or (ii) the presence of Hazardous Substances in, on, under or about the Premises or the Property which are the result of a Release caused by the Landlord or its agents, employees, representatives or contractors; provided, however, in no event shall Landlord be liable for punitive, consequential, special, incidental or indirect damages. (c) The terms of this Section 20.1 shall survive the expiration or sooner termination of this Lease. 20.2 Interest on Past Due Obligations. Unless otherwise specifically provided herein, any amount due from Tenant to Landlord, including any late charges, under this Lease which is not paid within five (5) days after written notice from Landlord shall bear interest from the due date until paid at the Lease Interest Rate. 21. Access to Premises. Landlord reserves for itself and its agents, employees and independent contractors the right to enter the Premises upon at least one (1) business days' notice to inspect the Premises, to supply any service to be provided by Landlord to Tenant, to prospective purchasers, mortgagees, beneficiaries or (no earlier than twelve (12) months prior to the expiration of this Lease) tenants, to post notices of nonresponsibility, to determine whether Tenant is complying with its obligations under this Lease, and to alter, improve or repair the Premises or any other portion of the Building. Landlord's right to enter the Premises shall include the right to grant reasonable access to the Premises to governmental or utility employees. In the event of an emergency, Landlord shall have the - 28-

right to enter the Premises at any time without notice. Except to the extent caused by Landlord's negligence or willful misconduct, Tenant waives any claim for damages for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, any right to abatement of Rent. or any other loss occasioned by Landlord's exercise of any of its rights under this Section 21. Any entry to the Premises or portions thereof obtained by Landlord in accordance with this Section 21 shall not be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from the Premises or any portion thereof. Landlord shall perform any work pursuant to this Section 21 in a manner designed to cause as little interference with Tenant's use of the Premises as is reasonably practical; provided, however, that Landlord shall not be obligated to perform work during other than normal business hours. To the extent reasonably practicable, any entry shall occur during normal business hours. 22. Notices. Except as otherwise expressly provided in this Lease, any payment required to be made and any bills, statements, notices, demands, requests or other communications given or required to be given under this Lease shall be effective only if rendered or given in writing, sent by personal delivery or registered or certified mail, return receipt requested, or by overnight courier service, or by facsimile or electronic transmission, addressed (a) to Tenant at Tenant's Address, (b) to Landlord at Landlord's Address, or (c) to such other address as either Landlord or Tenant may designate as its new address for such purpose by notice given to the other in accordance with the provisions of this Section 22. Any such bill, statement, notice, demand, request or other communication shall be deemed to have been rendered or given on the date of receipt or refusal to accept delivery. 23. No Waiver. Neither this Lease nor any term or provision of this Lease may be waived, and no breach thereof shall be waived, except by a written instrument signed by the party against which the enforcement of the waiver is sought. No failure by Landlord to insist upon the strict performance of any obligation of Tenant under this Lease or to exercise any right, power or remedy consequent upon a breach thereof no acceptance of full or partial Base Rent or Additional Rent during the continuance of any such breach, no course of conduct between Landlord and Tenant, and no acceptance of the keys or to possession of the Premises before the termination of the Term by Landlord or any employee of Landlord shall constitute a waiver of any such breach or a waiver or modification of any term, covenant or condition of this Lease or operate as a surrender of this Lease. No waiver of any breach shall affect or alter this Lease, but each and every term, covenant and condition of this Lease shall continue in full force and effect with respect to any other then-existing or subsequent breach thereof. No payment by Tenant or receipt by Landlord of a lesser amount than the aggregate of all Base Rent and Additional Rent then due under this Lease shall be deemed to be other than on account of the first items of such Base Rent and Additional Rent then accruing or becoming due, unless Landlord elects otherwise. No endorsement or statement on any check and no letter accompanying any check or other payment of Base Rent or Additional Rent in any such lesser amount and no acceptance by Landlord of any such check or other payment shall constitute an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Base Rent or Additional Rent or to pursue any other legal remedy. 24. Estoppel Certificates. Either party, at any time and from time to time, but not more than twice in every 12-month period, within ten (10) days after written request from the other, shall execute, acknowledge and deliver to the other party, addressed (at Landlord's request) to the other party and any prospective purchaser, ground or underlying lessor or mortgagee or beneficiary of any part of the Property, an estoppel certificate in form and substance reasonably designated by the other party. It is intended that any such certificate may be relied upon by the party receiving the same and any IlS2810.v14

prospective purchaser, investor, ground or underlying lessor or mortgagee or beneficiary of all or any part of the Property. 25. Tenant's Taxes. In addition to all other sums to be paid by Tenant under this Lease, Tenant shall pay, before delinquency, any and all taxes levied or assessed during the Term. whether or not now customary or within the contemplation of the parties, (a) upon, measured by or reasonably attributable to Tenant's improvements, equipment, furniture, fixtures and other personal property located in the Premises, (b) upon or measured by Base Rent or Additional Rent, or both, payable under this Lease, including without limitation any gross income tax or excise tax levied by any governmental body having jurisdiction with respect to the receipt of such rental; (c) upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (d) upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. Tenant shall reimburse Landlord upon demand for any and all such taxes paid or payable by Landlord (other than state and federal personal or corporate income taxes measured by the net income of Landlord from all sources). 26. Miscellaneous. 26.1 Annual Financial Statement. Within ten (10) days following the request of Landlord, but not more than once in every 12-month period unless (a) Tenant is in default hereunder, or (b) such request is in connection with a potential sale or financing of the Building, at any time during the Term that Tenant is not a "publicly traded company" (i.e., ownership interests are listed on a public securities exchange), then Tenant shall furnish to Landlord a financial statement, in form and substance reasonably satisfactory to Landlord, showing the complete results of such entity's operations for its immediately preceding fiscal year, certified as true and correct by a certified public accountant and prepared after audit in accordance with generally accepted accounting principles applied on a consistent basis from year to year. 262 Intentionally omitted. 26.3 References. All personal pronouns used in this Lease, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. The use herein of the word "including" or "include" when following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation", or "but not limited to." or words of similar import) is used with reference thereto. All references to "mortgage" and "mortgagee" shall include deeds of trust and beneficiaries under deeds of trust, respectively. All Exhibits referenced and attached to this Lease are incorporated in this Lease by this reference. The captions preceding the Sections and Sections of this Lease have been inserted solely as a matter of convenience, and such captions in no way define or limit the scope or intent of any provision of this Lease. 26.4 Successors and Assigns. The terms, covenants and conditions contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and, except as otherwise provided herein, their respective personal representatives and successors and assigns; provided, however, that upon the sale, assignment or transfer by Landlord (or by any subsequent Landlord) of its interest in the Building as owner or lessee, including, without limitation, any transfer upon or in lieu of foreclosure or by operation of law, Landlord (or subsequent Landlord) shall be relieved from all subsequent obligations or liabilities under this Lease, and all obligations subsequent to such sale, assignment or transfer (but not - 30- 1152RlO.v14

any obligations or liabilities that have accrued prior to the date of such sale, assignment or transfer unless assumed by the transferee) shall be binding upon the grantee, assignee or other transferee of such interest. Any such grantee, assignee or transferee, by accepting such interest, shall be deemed to have assumed such subsequent obligations and liabilities. 26.5 Severability. If any provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such provision to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each provision of this Lease shall remain in effect and shall be enforceabJe to the full extent permitted by law. 26.6 Construction. This Lease shall be governed by and construed in accordance with the laws of the State in which the Building is located, without regard for such State's choice of law requirements. 26.7 Integration. The terms of this Lease (including, without limitation, the Exhibits to this Lease) are intended by the parties as a final expression of their agreement with respect to such terms as are included in this Lease and may not be contradicted by evidence of any prior or contemporaneous agreement, arrangement, understanding or negotiation (whether oral or written). The parties further intend that this Lease constitutes the complete and exclusive statement of its terms, and no extrinsic evidence whatsoever may be introduced in any judicial proceeding involving this Lease. Neither Landlord nor Landlord's agents have made any representations or warranties with respect to the Premises, the Building, the Property or this Lease except as expressly set forth herein. The language in all parts of this Lease shall in all cases be construed as a whole and in accordance with its fair meaning and not construed for or against any party by reason of such party having drafted such language. 26.8 Surrender. Upon the expiration or sooner termination of the Term, Tenant will quietly and peacefully surrender to Landlord the Premises in the condition in which they are required to be kept as provided in this Lease, ordinary wear and tear excepted. Tenant's obligations under this Section shall survive the expiration or earlier termination of this Lease. 26.9 Quiet Enjoyment. Upon Tenant paying the Base Rent and Additional Rent and performing all of Tenant's obligations under this Lease, Tenant may peacefully and quietly enjoy the Premises during the Term as against all persons or entities claiming by or through Landlord; subject, however, to the provisions of this Lease and to any mortgages or deeds of trust or ground or underlying leases referred to in Section 11. 26.10 Holding Over. If Tenant shall hold over after the expiration of the Term or the earlier termination of this Lease, Tenant shall pay monthly Base Rent equal to one hundred and fifty percent (150%) of the Base Rent for the first month after the expiration of the Term, and two hundred percent (200%) of the Base Rent for each month thereafter, payable during the final full month of the applicable year (exclusive of abatements, if any) in which such expiration or termination occurs, together with an amount reasonably estimated by Landlord for the monthly Additional Rent payable under this Lease, and shall otherwise be on the terms and conditions herein specified so far as applicable (but expressly excluding all renewal or extension rights). No holding over by Tenant after the Term shall operate to extend the Term. Any holding over with Landlord's written consent shall be construed as a tenancy at sufferance or from month to month, at Landlord's option. Any holding over without Landlord's written consent shall entitle Landlord to reenter the Premises as provided in Section 18, and to enforce all other rights and remedies provided by law or this Lease. - 31 - IIS2810.v14

- 32- 26.11 Time of Essence. Time is of the essence of each and every provision of this Lease. 26.12 Broker's Commissions. Each party represents and warrants to the other that it has not entered into any agreement or incurred or created any obligation which might require the other party to pay any broker's commission, finder's fee or other commission or fee relating to the leasing of the Premises, other than the Brokers referenced in Section 1.3 above, which commissions shall be paid by the Landlord. Each party shall indemnify, defend and hold harmless the other and the other's constituent partners and their respective officers, directors, shareholders, agents and employees from and against all Losses resulting from any such commissions or fees made by anyone claiming by or through the indemnifying party. 26.13 No Merger. The voluntary or other surrender or termination of this Lease by Tenant, or a mutual cancellation hereof shall not work a merger, but, at Landlord's sole option, shall either terminate all existing subleases or subtenancies or shall operate as an assignment to Landlord of all such subleases or subtenancies. 26.14 Survival. All of Tenant's and Landlord's covenants and obligations contained in this Lease which by their nature might not be fully performed or capable of performance before the expiration or earlier termination of this Lease shall survive such expiration or earlier termination. No provision of this Lease providing for termination in certain events shall be construed as a limitation or restriction of Landlord's or Tenant's rights and remedies at law or in equity available upon a breach by the other party of this Lease. [The next page is page S-32]11S2810.v14

11S2810.v1426.15 Amendments. No amendments or modifications of this Lease or any agreements in connection therewith shan be valid unless in writing duly executed by both Landlord and Tenant No amendment to this Lease shall be binding on any mortgagee or beneficiary of Landlord (or purchaser at any foreclosure salc) unless such mortgagee or beneficiary shall have consented in writing to such amendment. [26.16 Intentionally Omitted] 26.17 Confidential Information. Tenant agrees to maintain in strict confidence (and to cause any broker representing Tenant to maintain in strict confidence) all of the terms of this Lease (including, without limitation, the economic terms contained herein) and any or all other materials, data and information delivered to, or received by, any or all of Tenant and Tenant's agents, representatives) employees, attorneys. and consultants either prior to or after the date hereof in connection with the negotiation and execution of this Lease. The provisions of this Section 26.16 shall survive the expiration or termination of this Lease. 26.18 WAIVER OF JURY TRIAL, LANDLORD AND TENANT KNOWlNGLYY, INTENTIONALLY AND VOLUNTARILY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY AGAINST THE OTHER IN ANY MATTER ARISING OUT OF THIS LEASE. THE RELATIONSHIP OF LANDLORD AND TENANT. TENANTS USE OR OCCUPANCY OF THE PREMISES OR ANY CLAIM OF INJURY OR DAMAGE[Signature Page to Follow]

27. OFAC. Each party represents and warrants that neither it nor any of its officers or directors is, and that, to the actual knowledge of the signatory to this Lease, none of its employees, representatives, or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute, executive order (Including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit. Threaten to Commit, or Support Terrorism), or other govemmental regulation and that it will not transfer the Lease to, or knowingly contract with or otherwise engage in any dealings or transactions or be otherwise associated wfth such persons or entities. Each party represents and warrants that it is currently in compliance with, and shall at all times during the Term of the Lease remain in compliance with, the regulations of OFAC and any other govemmental requirement relating thereto 28. DELIVERY FOR EXAMINATION. DELIVERY OF THE LEASE TO TENANT SHALL NOT BIND LANDLORD IN ANY MANNER AND NO LEASE OR OBLIGATJONS OF LANDLORD SHALL ARISE UNTIL THIS INSTRUMENT IS SlGNED BY BOTH LANDLORD AND TENANT AND DELIVERY IS MADE TO EACH IN WITNESS WHEREOF, landlord and Tenant have each caused their duly authorized representatives to execute this lease on their behalf as of the date first above written.VALVE LINE DISTRIBtITION CENTER INC By. /s/ Howard A. Brecher - S-33 -

EXHIBIT A SITE PLAN- A-I -

-B-1-EXHIBIT B Intentionally Omitted 1IS2810.v14

EXHIBIT C Intentionally Omitted -C-l- 1 1 S281O.v 14

EXHIBIT D LEASE COMMENCEMENT CERTIFICATE DATE Tenant Name Address Re: Agreement of lease (the "Lease") dated _________ 20__, [as amended on ________________, for premises located at _____________ by and between ____________ ("Landlord") and _________ (‘Tenant’). Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease. Condition of Premites. Tenant has accepted possession of the Premises pursuant to the Lease. Any improvements required by the terms of the Lease to be made by Landlord have been completed to the full and complete satisfaction of Tenant in all respects except for the punch list items described on Exlnbit A hereto (the "Punch List Items"), and except for such Punch list Items, Landlord has fulfilled all of its duties under the Lease with respect to such initial tenant improvements. Furthermore, Tenant acknowledges that the Premises are suitable for the Permitted Use. Commencement Date: _ Expiration Date: [Base Rent due and owing tor the month of ________________ 20___ will be pro-rated for the period _________ 20___ through__________________ 20___ totaling $ ______________ .] For the month Of _________ 20___ and thereafter, Base Rent due and owing will be $_______________________ per month. Notwithstanding the foregoing, Rent is due and payable on the first (1st) of each month for the remainder of the Term or late fees will apply per the terms of the Lease. Ratification. Tenant hereby ratifies and confirms its obligations under the Lease. Binding Effect; Governing Law. Except as modified hereby. the Lease shall remain in full effect and this letter shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of this letter and the terms of the Lease, the terms of this letter shall prevail. This letter shall be governed by the laws of the state in which the Premises are located. If you disagree with any of the information set forth above. please advise our office in writing within five (5) days of receipt of this letter; otherwise the information will be as set forth above. Sincerely.llS2810.v1411S28JO.v14By: Name: Title:

-D-2-

EXHIBIT A TO LEASE COMMENCEMENT CERTIFICATE Punch List Items

EXHIBIT E RULES AND REGULATIONS 1. The sidewalks, entrances, passages, courts, vestibules, stairways, corridors or halls shall not be obstructed or used for any purpose other than ingress and egress. The halls, passages, entrances, stairways, balconies and roof are not for the use of the general public, and Landlord shall in all cases retain the right to control or prevent access thereto by all persons whose presence in the judgment of Landlord shall be prejudicial to the safety, character, reputation or interests of Landlord and its tenants, provided that nothing herein contained shall be construed to prevent such access by persons whom the tenant normally deals in the ordinary course of its business unless such persons are engaged in illegal activities. No tenant and no employees of any tenant shall go upon the roof of the building without the written consent of Landlord. 2. No awnings or other projections shall be attached to the outside walls or surfaces of the Building. Skylights, windows, and doors shall not be covered or obstructed by Tenant, and Tenant shall not install any window covering which would affect the exterior appearance of the Building, except as approved in writing by Landlord. Bottles, parcels, or other articles shall not be placed on the windowsills. Tenant shall not remove, without Landlord's prior written consent, any shades, blinds or curtains in the Premises. 3. No sign, picture, plaque, advertisement, notice or other material shall be exhibited, painted, inscribed or affixed by any Tenant on any part of, or so as to be seen from the outside of the premises or building without the prior written consent of Landlord. Tenant shall conform to the building sign specifications at Tenant's sole cost. In the event of the violation of the foregoing by any tenant, Landlord may remove the same without any liability. and may charge the expense incurred in such removal to the tenant violating this rule. Tenant must, upon termination of this tenancy, remove such signage and repair any damage. 4. The toilet and wash basins and other plumbing fixtures shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances shall be thrown therein. All damage resulting from any misuse of the fixtures shall be borne by the tenant who, or whose servants, employees, agents, visitors or licenses, shall have caused the same. 5. No tenant or its officers, agents, employees or invitees shall mark, paint, drill into, or in any way deface any part of the Premises or the Building. No boring, cutting or stringing of wires or laying of linoleum or other similar floor coverings shall be permitted except with the prior written consent of Landlord and as Landlord may direct. 6. The Premises shall not be used for gambling, lodging. or sleeping or for any immoral or illegal purposes. IlS2810.v14

7. No tenant or its officers, agents, employees or invitees shall make, or permit to be made any unseemly or disturbing noises, odors, sounds or vibrations or disturb or interfere with occupants of this or neighboring buildings or premises or those having business with them whether by the use of any musical instrument, radio, unusual noise, or in any other way. 8. Tenant shall not maintain armed security in or about the Premises nor possess any weapons, explosives, combustibles or other hazardous devices in or about the Building and/or Premises. 9. No Tenant or its officers, agents, employees or invitees shall at any time use, bring or keep upon the Premises any inflammable, combustible, explosive foul or noxious fluid, chemical or substance, or do or permit anything to be done in the leased Premises, or bring or keep anything therein, which shall in any way increase the rate of fire insurance on the Building, or on the property kept therein, or obstruct or interfere with the rights of other tenants, or conflict with the regulations of the Fire Department or the fire laws, or with any insurance policy upon the Building, or any part thereof, or with any rules and ordinances established by the Board of Hea1th or other governmental authority. 10. Tenant shall have the right, at Tenant's sale risk and responsibility. to use only Tenant's share of the parking spaces at the Property as reasonably determined by Landlord. Tenant shall comply with all parking regulations promulgated by Landlord from time to time for the orderly use of the vehicles parking areas, including without limitation the following:Parking shall be limited to automobiles, passenger or equivalent vans, motorcycles, and light four wheel pickup trucks and (in designated areas) bicycles. No vehicles shall be left in the parking lot overnight without the Landlord's prior written approval. Parked vehicles shall not be used for vending or any other business or other activity while parked in the parking areas. Vehicles shall be parked only in striped parking spaces, except for loading and unloading, which shall occur solely in zones marked for such purpose, and be so conducted as to not unreasonably interfere with traffic flow within the Property or with loading and unloading areas of other tenants. All vehicles entering or parking in the parking areas shall do so at owner's sole risk and Landlord assumes no responsibility for any damage, vandalism or theft. Any vehicle which violates the parking regulations may be cited, and towed at the expense of the owner. Notwithstanding the foregoing to the contrary, Landlord acknowledges and agrees that Tenant is in possession of a box truck approximately 24 feet in length (the "Box Truck"). The Box Truck shall be pennitted to be parked in the truck court against the Premises or at Tenant's dock positions. Except as otherwise expressly set forth herein, the Box Truck shall be subject to the terms and conditions contained herein. 11. Tenant shall use designated trash receptacle(s) only in proximity to the Building and Premises, and shall not discard bulk trash, pallets, furniture, etc. in any of the Building's E-2 1lS28JO.v14

trash receptacles. If at any time during the term of this Lease, (in Landlord's sole and absolute discretion), Tenant over utilizes or exceeds a normal volume of trash and debris, then Tenant at its sole cost and expense shall arrange for a separate trash receptacle to be placed within the Premises. If at Tenant's request, Landlord consents to Tenant having a dumpster at the Property, Tenant shall locate the dumpster in the area designated by Landlord and shall locate the dumpster in the area designated by Landlord and shall keep and maintain the dumpster clean and painted with lids and doors in good working order, 12. No additional locks or bolts of any kind shall be placed upon any of the doors or windows by any tenant, nor shall any changes be made in existing locks or the mechanism thereof; provided however, subject to Section 9.3 of the Lease. Tenant shall be permitted to place locks upon the perimeter doors the Premises. Each tenant must, upon the termination of this tenancy, restore to Landlord all keys of offices and toilet rooms, either furnished to, or otherwise procured by, such tenant and in the event of the loss of any keys so furnished, such tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change. 13. Tenant and its employees, agents, subtenants, contractors and invitees shall comply with all applicable ''no smoking" ordinances and, irrespective of such ordinances, shall not smoke or permit smoking of cigarettes, cigars or pipes outside of Tenant's Premises in any portions of the Building except areas specifically designated as smoking areas by Landlord. 14. Landlord shall have the right to prohibit any advertising by any tenant which, in Landlord's opinion, tends to impair the reputation of the Building or its desirability, 15. Landlord reserves the right to exclude or expel from the Building any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of the rules and regulations of the Building. 16. Landlord reserves the right to make such other and further reasonable rules and regulations in its judgment may from time to time be needed for the safety, care, and cleanliness of the Premises, and for the preservation of good order therein, and any such other or further rules and regulations shall be binding upon the parties hereto with the same force and effect as if they had been inserted herein at the time of the execution hereof. 17. Tenant will secure Landlord's written approval before any business related items are stored outside the Tenant's premises. Outside overnight storage of business related vehicles must have prior written approval by Landlord. E-3

1152810.v1418. Subject to the terms and conditions of Section 9.3 of the Lease, Tenant shall be permitted to install reasonable alarm systems or devices in the Premises. umlO.v14

EXHIBIT F ISRA LETTER (TO BE PUT ON LETTERHEAD OF TENANT] [INSERT CURRENT DATE] [LANDLORD NAME] [LANDLORD ADDRESS] Re: [Identify Lease by Tit/e, Date and Parties and Identify Relevant Property Address] To Whom It May Concern: In connection with the pending expiration of the above-referenced lease (the "Lease"), the undersigned, in its capacity as "Tenant" under the Lease, hereby confirms and agrees as follows with [LANDLORD NAMEJ, in its capacity as "Landlord" under the Lease: 1. Landlord has advised Tenant that, effective as of April 30, 2008, the State of New Jersey's Department of Environmental Protection ("DEP’) has discontinued the issuance of applicability determinations pursuant to the Industrial Site Recovery Act ("ISRA") as documented by the attached press release by the DEP. 2. During the term of the Lease, Tenant operated under NAICS number_______________, and Tenant confirms that its operations were not an Industrial Establishment under ISRA for the operations described below: [INSERT DESCRIPTION OF TENANT OPERATIONS] 3. In light of the DEP's refusal to process any further applications for applicability determinations (more commonly known as LNAs), Tenant hereby certifies to Landlord that none of the business activities and operations conducted by Tenant, at any time or from time to time during the term of its Lease, have triggered ISRA' s applicability. 4. Tenant understands that Landlord win rely upon this letter, and that any successors to Landlord may also rely upon this letter. 5. Tenant hereby agrees to indemnify and to hold harmless Landlord and Landlord's successors from, of, and against any and all expenses that Landlord may occur if tenant's ISRA non-applicability certification is determined to be incorrect or otherwise inaccurate, including, but not limited to any and all reasonable expenses that Landlord incurs, any and all fines or penalties assessed upon them under ISRA, and any and all reasonable legal fees and costs and environmental consulting and expert fees and costs incurred by Landlord in connection with any of the foregoing. 6. The individual executing this letter on behalf of Tenant is fully authorized to do so, without the need to procure to consent, approval or authorization of any other person or party. All actions necessary to authorize the execution and delivery of this letter, on behalf of Tenant, have been duly taken. Very truly yours, [Tenant Name] F-l IlS2810.vI4

F-2Very truly yours, By. Its: 1lS2810.v14

EXHIBIT G LANDLORD’S WORK 1. Provide additional 400 amps of power to the space to include the following: a. One (1) 400 amp breaker in main switchboard b. One (1) new 400 amp 277/480v 3 phase panel board c. One (1) 75KVA transformer d. One (1) new 200 amp 120/208 v 3 phase panel board 2. Demolish existing metal ramp and provide one new precast drive in ramp w/ rails 3. Re-carpet main office area utilizing Landlord and building standard carpet selections. 4. Replace two (2) broken blinds in front window of the Premises. 5. Deliver bathrooms, heating, plumbing, electric and HV AC systems services the Premises in good working order. 6. Reinforcement of the roof structure, internally below roof deck only, to the extent necessary to accommodate the air conditioning units of Tenant to be installed on the roof as part of Tenant's work. G-I llS2810.v14

EXHIBIT H [RACKING PLANS AND SPECS, WAREHOUSE HVAC, PHONE AND DATA CABLING] [SUBJECT TO LL'S REVIEW AND APPROVAL] H·l 11S2810.v14

EXHIBIT I [SIGNAGE] [SUBJECT TO LL'S REVIEW AND APPROVAL] 1-1 11S2810.v14

Exhibit 31.1

CERTIFICATIONS

I, Howard A. Brecher, certify that:

I have reviewed this report on Form 10-Q of Value Line, Inc. for the quarter ended January 31, 2016;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 11, 2016	By:	/s/ Howard A. Brecher
		Howard A. Brecher
		Chairman and Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Stephen R. Anastasio, certify that:

I have reviewed this report on Form 10-Q of Value Line, Inc. for the quarter ended January 31, 2016;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 11, 2016	By:	/s/ Stephen R. Anastasio
		Stephen R. Anastasio
		Vice President & Treasurer
		(Principal Financial Officer)

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350

In accordance with 18 U.S.C. Section 1350, the undersigned hereby certify, in the indicated capacities with respect to Value Line, Inc. (the “Issuer”), that the report on Form 10-Q for the quarter ended January 31, 2016 of the Issuer fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the quarterly report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Issuer. This certification is not to be deemed to be filed pursuant to the Securities Exchange Act of 1934 and does not constitute a part of the quarterly report on Form 10-Q of the Issuer accompanying this certification.

	By:	/s/ Howard A. Brecher
		Howard A. Brecher
		Chairman and Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Stephen R. Anastasio
		Stephen R. Anastasio
		Vice President & Treasurer
		(Principal Financial Officer)

Date: March 11, 2016