Exhibit 10.4
EXECUTION COPY
LEASE AGREEMENT
by and between
LT FIT (AZ-MD) LLC,
a Delaware limited liability company
as LANDLORD
and
LTF REAL ESTATE COMPANY, INC.,
a Minnesota corporation,
as TENANT
Premises: Columbia, Maryland
                 Scottsdale, Arizona
Dated as of: September 26, 2008

 

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TABLE OF CONTENTS

                      Page  
1.
  Demise of Premises     1  
2.
  Certain Definitions     1  
3.
  Title and Condition; Single Lease Transaction     7  
4.
  Use of Leased Premises; Quiet Enjoyment     9  
5.
  Term     9  
6.
  Basic Rent     10  
7.
  Additional Rent     10  
8.
  Net Lease: Non-Terminability     11  
9.
  Payment of Impositions     12  
10.
  Compliance with Laws and Easement Agreements; Environmental Matters     13  
11.
  Liens; Recording     14  
12.
  Maintenance and Repair     15  
13.
  Alterations and Improvements     15  
14.
  Permitted Contests     16  
15.
  Indemnification     17  
16.
  Insurance     17  
17.
  Casualty and Condemnation     20  
18.
  Termination Events     21  
19.
  Restoration     23  
20.
  Procedures Upon Purchase     24  
21.
  Assignment and Subletting: Prohibition against Leasehold Financing     25  
22.
  Events of Default     28  
23.
  Remedies and Damages Upon Default     30  
24.
  Notices     33  
25.
  Estoppel Certificate     33  
26.
  Surrender     33  
27.
  No Merger of Title     34  
28.
  Books and Records     34  
29.
  Tenant’s Property     35  
30.
  Non-Recourse as to Landlord     36  
31.
  Financing     36  
32.
  Subordination, Non-Disturbance and Attornment     37  

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                      Page  
33.
  Tax Treatment; Reporting     37  
34.
  Right of First Offer     37  
35.
  State Specific Provisions     39  
36.
  Post-Closing Obligations     40  
(i)
  Estoppel Certificate by The Columbia Association, Inc., a Maryland Non-Profit
Membership Corporation, regarding Deed, Agreement and Declaration of Covenants,
Easements, Charges And Liens recorded in Liber 463, Folio 158, Howard County,
Maryland; as amended by Agreement and Declaration of Annexation dated 12/1/04,
recorded 2/22/05 in Liber 8998, Folio 239.     40  
37.
  Miscellaneous     41  

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      EXHIBITS    
 
   
Exhibit “A”
  - Premises
Exhibit “B”
  - Machinery and Equipment
Exhibit “C”
  - Schedule of Permitted Encumbrances
Exhibit “D”
  - Rent Schedule
Exhibit “E”
  - Termination Amounts
Exhibit “F”
  - Premises Percentage Allocation of Basic Rent

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     LEASE AGREEMENT, made as of this                      day of September,
2008, between LT FIT (AZ-MD) LLC, a Delaware limited liability company
(“Landlord”), with an address c/o W. P. Carey & Co. LLC, 50 Rockefeller Plaza,
2nd Floor, New York, New York 10020, and LTF REAL ESTATE COMPANY, INC., a
Minnesota corporation (“Tenant”) with an address c/o Life Time Fitness, Inc.,
2902 Corporate Place, Chanhassen, MN 55317.
     In consideration of the rents and provisions herein stipulated to be paid
and performed, Landlord and Tenant hereby covenant and agree as follows:
          1. Demise of Premises. Landlord hereby demises and lets to Tenant, and
Tenant hereby takes and leases from Landlord, for the term and upon the
provisions hereinafter specified, the following described property (hereinafter
referred to collectively as the “Leased Premises” and individually as the
“Scottsdale Premises” and “Columbia Premises”, each of which premises shall
include the following item (a) and the following items (b) and (c) of this
Paragraph 1 located thereon or therein and appertaining thereto: (a) the real
property described in Exhibit “A” hereto, together with the Appurtenances
(collectively, the “Land”); (b) the buildings containing approximately 220,338
square feet in the aggregate, structures and other improvements now or hereafter
constructed on the Land (collectively, the “Improvements”); and (c) the
fixtures, machinery, equipment and other property described in Exhibit “B”
hereto (collectively, the “Equipment”).
          2. Certain Definitions.
               “Additional Rent” shall mean Additional Rent as defined in
Paragraph 7.
               “Adjoining Property” shall mean all sidewalks, driveways, curbs,
gores and vault spaces adjoining any of the Leased Premises that Landlord is
obligated by contract or applicable Law to maintain and/or repair.
               “Affected Premises” shall mean the Affected Premises as defined
in Paragraph 18.
               “Affiliate” of any Person shall mean any Person which shall
(i) control, (ii) be under the control of, or (iii) be under common control with
such Person (the term “control” as used herein shall be deemed to mean ownership
of more than 50% of the outstanding voting stock of a corporation or other
majority equity and control interest if such Person is not a corporation) and
the power to direct or cause the direction of the management or policies of such
Person.
               “Alterations” shall mean all changes, additions, improvements or
repairs to, all alterations, reconstructions, restorations, renewals,
replacements or removals of and all substitutions or replacements for any of the
Improvements or Equipment, both interior and exterior, structural and
non-structural, and ordinary and extraordinary.
               “Appurtenances” shall mean all tenements, hereditaments,
easements, rights-of-way, rights, privileges in and to the Land, including
(a) easements over other lands granted by any Easement Agreement and (b) any
streets, ways, alleys, vaults, gores or strips of land adjoining the Land.
               “Asset Transfer” shall mean Asset Transfer as defined in
Paragraph 21(j).

 

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               “Assignment” shall mean any first lien assignment of rents and
leases from Landlord to a Lender which (a) encumbers any of the Leased Premises
and (b) secures Landlord’s obligation to repay a Loan, as the same may be
amended, supplemented or modified from time to time.
               “Basic Rent” shall mean Basic Rent as defined in Paragraph 6.
               “Basic Rent Payment Date” shall mean Basic Rent Payment Date as
defined in Paragraph 6.
               “Casualty” shall mean any loss of or damage to or destruction of
or which affects the Leased Premises or Adjoining Property.
               “Commencement Date” shall mean Commencement Date as defined in
Paragraph 5.
               “Condemnation” shall mean a Taking.
               “Condemnation Notice” shall mean notice or knowledge of the
institution of or intention to institute any proceeding for Condemnation.
               “Costs” of a Person or associated with a specified transaction
shall mean all reasonable out-of-pocket costs and expenses incurred by such
Person or associated with such transaction, including without limitation,
attorneys’ fees and expenses.
               “Default Rate” shall mean the Default Rate as defined in
Paragraph 7(a)(iv).
               “Easement Agreement” shall mean any conditions, covenants,
restrictions, easements, declarations, licenses and other agreements listed as
Permitted Encumbrances or as may hereafter affect any Related Premises (other
than any Mortgage, Assignment or other document or agreement relating to a
Loan).
               “Environmental Law” shall mean (a) whenever enacted or
promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (i) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (ii) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of any Hazardous Substance, Hazardous
Condition or Hazardous Activity, in each case as amended and as now or hereafter
in effect, and (b) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence, nuisance,
trespass and strict liability) that may impose liability or obligations for
injuries or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. The term Environmental
Law includes, without limitation, the federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act, the federal Clean
Air Act, the federal Clean Water Act, the federal Resources Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments to
RCRA), the federal Solid Waste Disposal Act, the federal Toxic Substance Control
Act, the federal Insecticide, Fungicide and Rodenticide Act, the federal
Occupational Safety and Health Act of 1970, the federal National Environmental
Policy Act and the federal Hazardous Materials

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Transportation Act, each as amended and as now or hereafter in effect and any
similar state or local Law.
               “Environmental Violation” shall mean (a) any direct or indirect
discharge, disposal, spillage, emission, escape, pumping, pouring, injection,
leaching, release, seepage, filtration or transporting of any Hazardous
Substance at, upon, under, onto or within any Related Premises, or from any
Related Premises to the environment, in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which could result in any liability to Landlord, Tenant or Lender, any Federal,
state or local government or any other Person for the costs of any removal or
remedial action or natural resources damage or for bodily injury or property
damage, (b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within any Related Premises or which extends to any
Adjoining Property in violation of any Environmental Law or in excess of any
reportable quantity established under any Environmental Law or which could
result in any liability to any Federal, state or local government or to any
other Person for the costs of any removal or remedial action or natural
resources damage or for bodily injury or property damage, (c) the abandonment or
discarding on or about any Related Premises of any barrels, containers or other
receptacles containing any Hazardous Substances in violation of any
Environmental Laws, (d) any activity, occurrence or condition which could result
in any liability, cost or expense to Landlord or Lender, or which could result
in a creation of a lien on any Related Premises under any Environmental Law or
(e) any violation of or noncompliance with any Environmental Law.
               “Equipment” shall mean the Equipment as defined in Paragraph 1,
but specifically excluding Tenant’s Property.
               “Event of Default” shall mean an Event of Default as defined in
Paragraph 22(a).
               “Federal Funds” shall mean federal or other immediately available
funds which at the time of payment are legal tender for the payment of public
and private debts in the United States of America.
               “Guarantor” shall mean Life Time Fitness, Inc., a Minnesota
corporation.
               “Guaranty” shall mean the Guaranty and Suretyship Agreement dated
as of the date hereof from Guarantor to Landlord guaranteeing the payment and
performance by Tenant of all of Tenant’s obligations under the Lease.
               “Hazardous Activity” means any activity, process, procedure or
undertaking which directly or indirectly (a) procures, generates or creates any
Hazardous Substance on or about any Related Premises; (b) causes or results in
(or threatens to cause or result in) the release, seepage, spill, leak, flow,
discharge or emission of any Hazardous Substance from any Related Premises into
the environment (including the air, ground water, watercourses or water
systems), (c) involves the containment or storage of any Hazardous Substance on
or about any Related Premises; or (d) would cause any of the Leased Premises or
any portion thereof to become a hazardous waste treatment, recycling,
reclamation, processing, storage or disposal facility within the meaning of any
Environmental Law.
               “Hazardous Condition” means any condition which would support any
claim or liability under any Environmental Law, including the presence of
underground storage tanks.
               “Hazardous Substance” means (i) any substance, material, product,
petroleum, petroleum product, derivative, compound or mixture, mineral
(including asbestos),

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chemical, gas, medical waste, or other pollutant, in each case whether naturally
occurring, man-made or the by-product of any process, that is toxic, harmful or
hazardous or acutely hazardous to the environment or public health or safety and
regulated under applicable Environmental Law or (ii) any substance supporting a
claim under any Environmental Law, whether or not defined as hazardous as such
under any Environmental Law. Hazardous Substances include, without limitation,
any toxic or hazardous waste, pollutant, contaminant, industrial waste,
petroleum or petroleum-derived substances or waste, radon, radioactive
materials, asbestos, asbestos containing materials, microbial matter (including
but not limited to mold, mildew and other fungi or bacterial matter which
reproduces through the release of spores or the splitting of cells), urea
formaldehyde foam insulation, lead and polychlorinated biphenyls.
               “Impositions” shall mean the Impositions as defined in
Paragraph 9(a).
               “Improvements” shall mean the Improvements as defined in
Paragraph 1.
               “Indemnitee” shall mean an Indemnitee as defined in Paragraph 15.
               “Initial Term” shall mean Initial Term as defined in
Paragraph 5(a).
               “Insurance Requirements” shall mean the requirements of all
insurance policies maintained in accordance with this Lease.
               “Land” shall mean the Land as defined in Paragraph 1.
               “Law” shall mean any applicable constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule, regulation,
policy, requirement or administrative or judicial determination, even if
unforeseen or extraordinary, of every duly constituted governmental authority,
court or agency, now or hereafter enacted or in effect.
               “Lease” shall mean this Lease Agreement.
               “Lease Year” shall mean, with respect to the first Lease Year,
the period commencing on the Commencement Date and ending at midnight on the
last day of the twelfth (12th) full consecutive calendar month following the
month in which the Commencement Date occurred, and each succeeding twelve
(12) month period during the Term.
               “Leased Premises” shall mean the Leased Premises as defined in
Paragraph 1.
               “Legal Requirements” shall mean the requirements of all present
and future Laws (including but not limited to Environmental Laws and Laws
relating to accessibility to, usability by, and discrimination against, disabled
individuals) and all Easement Agreements which may be applicable to Tenant or to
any of the Leased Premises or any Related Premises, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
restoration of any of the Leased Premises or any Related Premises, even if
compliance therewith necessitates structural changes or improvements or results
in interference with the use or enjoyment of any of the Leased Premises or any
Related Premises or requires Tenant to carry insurance other than as required by
this Lease.
               “Lender” shall mean any Person (and its respective successors and
assigns) which may, on or after the date hereof, make a Loan to Landlord or be
the holder of a Note.

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               “Loan” shall mean any first lien mortgage loan made by one or
more Lenders to Landlord, which loan is secured by a Mortgage and an Assignment
and evidenced by a Note.
               “Monetary Obligations” shall mean Rent and all other sums payable
by Tenant under this Lease to Landlord, to any third party on behalf of Landlord
or to any Indemnitee.
               “Moody’s” shall mean Moody’s Investor Services, Inc.
               “Mortgage” shall mean any first lien mortgage or deed of trust
from Landlord to a Lender which (a) encumbers any of the Leased Premises and
(b) secures Landlord’s obligation to repay a Loan, as the same may be amended,
supplemented or modified.
               “Net Award” shall mean (a) the entire award payable to Landlord
or Lender by reason of a Condemnation whether pursuant to a judgment or by
agreement or otherwise, or (b) the entire proceeds of any insurance required
under clauses (i) (except with respect to Tenant’s Property), (ii) (to the
extent payable to Landlord or Lender), (iv) (except with respect to Tenant’s
Property), (v) (to the extent of the Rent payable to or for the benefit of
Landlord under this Lease) or (vi) of Paragraph 16(a), as the case may be, less
any expenses incurred by Landlord and Lender in collecting such award or
proceeds.
               “Note” shall mean any promissory note evidencing Landlord’s
obligation to repay a Loan, as the same may be amended, supplemented or
modified.
               “Partial Casualty” shall mean any Casualty which does not
constitute a Termination Event.
               “Partial Condemnation” shall mean any Condemnation which does not
constitute a Termination Event.
               “Permitted Encumbrances” shall mean those covenants,
restrictions, reservations, liens, conditions and easements and other
encumbrances, other than any Mortgage or Assignment or any other document or
agreement relating to a Loan, listed on Exhibit “C” hereto (but such listing
shall not be deemed to revive any such encumbrances that have expired or
terminated or are otherwise invalid or unenforceable).
               “Person” shall mean an individual, partnership, association,
corporation or other entity.
               “Premises Percentage Allocation” shall mean the percentage
allocated to each Related Premises in Exhibit “F” to this Lease as the same may
be adjusted in accordance with the formula specified in Exhibit “F”.
               “Prepayment Premium” shall mean any payment required to be made
by Landlord to a Lender under a Note or other document evidencing or securing a
Loan (other than payments of principal and/or interest which Landlord is
required to make under a Note or a Mortgage) solely by reason of any prepayment
or defeasance by Landlord of any principal due under a Note or Mortgage, and
which may take the form of either: (i) a customary and commercially reasonable
“make whole” or yield maintenance clause requiring a prepayment premium for
loans from similar types of lenders to Lender or (ii) a customary and
commercially reasonable defeasance payment for loans from similar types of
lenders to Lender (such defeasance payment to be an amount equal to the positive
difference between (a) the total amount required to defease a Loan and (b) the
outstanding principal balance of the Loan as of the

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date of such defeasance (plus reasonable Costs of Landlord and Lender) or (iii)
“breakage costs” or (iv) any combination of clauses (i), (ii) and (iii) above.
               “Present Value” of any amount shall mean such amount discounted
by a rate of eight (8%) per annum.
               “Prime Rate” shall mean the interest rate per annum as published,
from time to time, in The Wall Street Journal as the “Prime Rate” in its column
entitled “Money Rate”. The Prime Rate may not be the lowest rate of interest
charged by any “large U.S. money center commercial banks” and Landlord makes no
representations or warranties to that effect. In the event The Wall Street
Journal ceases publication or ceases to publish the “Prime Rate” as described
above, the Prime Rate shall be the average per annum discount rate (the
“Discount Rate”) on ninety-one (91) day bills (“Treasury Bills”) issued from
time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points. If no such 91-day Treasury Bills are then
being issued, the Discount Rate shall be the discount rate on Treasury Bills
then being issued for the period of time closest to ninety-one (91) days.
               “Related Premises” shall mean any one of the Scottsdale Premises,
and Columbia Premises.
               “Remaining Premises” shall mean the Related Premises which are
not Affected Premises under Paragraph 18.
               “Renewal Term” shall mean Renewal Term as defined in Paragraph 5.
               “Rent” shall mean, collectively, Basic Rent and Additional Rent.
               “S&P” shall mean Standard and Poor’s Corporation.
               “Site Assessment” shall mean a Site Assessment as defined in
Paragraph 10(c).
               “State” shall mean the State of Maryland.
               “Subsidiary(ies)” of a Person shall mean a corporation,
partnership, limited liability company, or other entity in which that Person
directly or indirectly owns or controls the shares of stock or other equity
interests having ordinary voting power to elect a majority of the board of
directors (or appoint other comparable managers) of such corporation,
partnership, limited liability company, or other entity.
               “Surviving Obligations” shall mean any obligations of Tenant
under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
               “Taking” shall mean any taking or damaging of all or a portion of
any of the Leased Premises (i) in or by condemnation or other eminent domain
proceedings pursuant to any Law, general or special, or (ii) by reason of any
agreement with any condemnor in settlement of or under threat of any such
condemnation or other eminent domain proceeding. The Taking shall be considered
to have taken place as of the later of the date actual physical possession is
taken by the condemnor, or the date on which the right to compensation and
damages accrues under the law applicable to the Related Premises.

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               “Tenant Group” shall mean Guarantor and its Subsidiaries if and
for so long as each such Person shall be part of the group for the purpose of
reporting financial positions and results on a consolidated basis.
               “Tenant’s Property” shall mean Tenant’s Property as defined in
Paragraph 29.
               “Term” shall mean the Term as defined in Paragraph 5.
               “Termination Amount” shall mean (i) with respect to a
Condemnation the applicable amount set forth in Exhibit “E” and (ii) with
respect to a Casualty the applicable amount set forth in Exhibit “E” plus any
Prepayment Premium which Landlord will be required to pay in prepaying or
defeasing in whole or in part, as applicable, any Loan with proceeds of the
Termination Amount.
               “Termination Date” shall mean the Termination Date as defined in
Paragraph 18.
               “Termination Event” shall mean a Termination Event as defined in
Paragraph 18.
               “Termination Notice” shall mean Termination Notice as defined in
Paragraph 18(a).
               “Third Party Purchaser” shall mean the Third Party Purchaser as
defined in Paragraph 21 (h).
               “Warranties” shall mean Warranties as defined in Paragraph 3(e).
               “Work” shall mean Work as defined in Paragraph 13(b).
          3. Title and Condition; Single Lease Transaction.
               (a) The Leased Premises are demised and let subject to
(i) subject to Paragraph 32 the Mortgage and Assignment in effect as of the
Commencement Date, (ii) the rights of any Persons in possession of the Leased
Premises, (iii) the state of title of any of the Leased Premises as of the
Commencement Date, including any Permitted Encumbrances, (iv) any state of facts
which an accurate survey or physical inspection of the Leased Premises might
show, (v) all Legal Requirements, including any existing violation of any
thereof, and (vi) the condition of the Leased Premises as of the commencement of
the Term, without representation or warranty by Landlord.
               (b) Tenant acknowledges that the Leased Premises are in good
condition and repair at the inception of this Lease. LANDLORD LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS WHERE IS AND WITH
ALL FAULTS. TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD
HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL
LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR
REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE
OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE
EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO AS OF
THE COMMENCEMENT DATE,

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(v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE,
(ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION,
(xiii) DURABILITY (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS
SUBSTANCE, OR (xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW OR LEGAL
REQUIREMENT; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT
ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND TO ITS
SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE BEEN INSPECTED BY TENANT AND
ARE SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE
LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE
ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF
THIS PARAGRAPH 3(b) HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE
EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING
OTHERWISE.
               (c) Tenant represents to Landlord that Tenant has examined the
title to and condition of the Leased Premises as of the execution and delivery
of this Lease and has found the same to be satisfactory for the purposes
contemplated hereby. Tenant acknowledges that fee simple title (both legal and
equitable) to the Leased Premises is in Landlord and that Tenant has only the
leasehold right of possession and use of the Leased Premises, as provided
herein.
               (d) Landlord hereby assigns to Tenant, without recourse or
warranty whatsoever, in conjunction with Landlord, the right to enforce all
assignable warranties, guaranties, indemnities, causes of action and similar
rights (collectively “Warranties”) which Landlord may have against any
manufacturer, seller, engineer, contractor or builder in respect of any of the
Leased Premises. Such assignment shall remain in effect until the expiration or
earlier termination of this Lease (unless Tenant or its affiliate or designee
acquires any of the Leased Premises, in which instance such assignment shall
become permanent and irrevocable with respect to such Leased Premises),
whereupon such assignment shall cease and all of the Warranties shall
automatically revert to Landlord. In confirmation of such reversion Tenant shall
execute and deliver promptly any certificate or other document reasonably
required by Landlord. Landlord shall also retain the right to enforce any
Warranties upon the occurrence of an Event of Default.
               (e) LANDLORD AND TENANT AGREE THAT IT IS THEIR MUTUAL INTENT TO
CREATE, AND THAT THIS LEASE CONSTITUTES, A SINGLE LEASE WITH RESPECT TO ALL
PARCELS OF LAND AND IMPROVEMENTS (WHEREVER LOCATED) THAT THIS LEASE IS NOT
INTENDED AND SHALL NOT BE CONSTRUED TO BE SEPARATE LEASES AND THAT ALL THE TERMS
AND CONDITIONS HEREOF SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF LANDLORD AND
TENANT WITH RESPECT THERETO.
               (f) TENANT, ON BEHALF OF ITSELF AND ANY TRUSTEE OR LEGAL
REPRESENTATIVE EXPRESSLY ACKNOWLEDGES AND AGREES THAT, NOTWITHSTANDING THE
PROVISIONS OF PARAGRAPH 18 HEREOF OR ANY OTHER PROVISION IN THIS LEASE TO THE
CONTRARY, IT IS THE EXPRESS INTENT OF LANDLORD AND TENANT TO CREATE, AND THAT
THIS LEASE CONSTITUTES, A SINGLE LEASE WITH RESPECT TO ALL PARCELS OF LAND AND
IMPROVEMENTS AND EQUIPMENT INCLUDED IN EACH AND ALL OF THE RELATED PREMISES

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(WHEREVER LOCATED) AND SHALL NOT BE (OR BE DEEMED TO BE) DIVISIBLE OR SEVERABLE
INTO SEPARATE LEASES FOR ANY PURPOSE WHATSOEVER, AND TENANT, ON BEHALF OF ITSELF
AND ANY SUCH TRUSTEE OR LEGAL REPRESENTATIVE, HEREBY WAIVES ANY RIGHT TO CLAIM
OR ASSERT A CONTRARY POSITION IN ANY ACTION OR PROCEEDING; IT BEING FURTHER
UNDERSTOOD AND AGREED BY TENANT THAT THE ALLOCATIONS OF ACQUISITION COST AND
PERCENTAGE ALLOCATION OF BASIC RENT AS SET FORTH ON EXHIBIT “E” AND EXHIBIT “F”
HEREOF ARE INCLUDED TO PROVIDE A FORMULA FOR RENT ADJUSTMENT AND LEASE
TERMINATION UNDER CERTAIN CIRCUMSTANCES THAT ARE BEYOND THE REASONABLE CONTROL
OF THE PARTIES HERETO AND AS AN ACCOMMODATION TO TENANT. ANY EVENT OF DEFAULT
HEREUNDER IN CONNECTION WITH ANY RELATED PREMISES SHALL BE DEEMED TO BE AN EVENT
OF DEFAULT WITH RESPECT TO THE ENTIRE LEASED PREMISES (WHEREVER LOCATED). THE
FOREGOING AGREEMENTS AND WAIVERS BY TENANT IN THIS PARAGRAPH 3(f) ARE MADE AS A
MATERIAL INDUCEMENT TO LANDLORD TO ENTER INTO THE TRANSACTION CONTEMPLATED BY
THIS LEASE AND THAT, BUT FOR THE FOREGOING AGREEMENTS AND WAIVERS BY TENANT,
LANDLORD WOULD NOT CONSUMMATE THIS LEASE TRANSACTION.
          4. Use of Leased Premises; Quiet Enjoyment.
               (a) Tenant may occupy and use the Leased Premises for any
commercial purpose (except for any noxious or manufacturing use) and for any
ancillary uses incidental thereto and for no other purpose without the prior
written consent of Landlord. Tenant shall not use or occupy or permit any of the
Leased Premises to be used or occupied, nor do or permit anything to be done in
or on any of the Leased Premises, in a manner which would or might (i) violate
any Law, Legal Requirement or Permitted Encumbrance, (ii) make void or voidable
or cause any insurer to cancel any insurance required by this Lease, or make it
impossible to obtain any such insurance at commercially reasonable rates,
(iii) cause structural injury to any of the Improvements or (iv) constitute a
public or private nuisance or waste.
               (b) Subject to the provisions hereof, so long as no Event of
Default has occurred and is continuing, Tenant shall quietly hold, occupy and
enjoy the Leased Premises throughout the Term, without any hindrance, ejection
or molestation by Landlord or any Person claiming by, through, or under Landlord
with respect to matters that arise after the date hereof, provided that Landlord
or its agents may enter upon and examine any of the Leased Premises during
normal business hours, upon not less than twenty-four (24) hours’ prior written
notice to Tenant (except in the case of any emergency, in which event only such
notice as shall be reasonable under the circumstances shall be required), and in
a manner which does not unreasonably interfere with Tenant’s business or
operations, for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers, making any repairs and
taking such other action with respect to the Leased Premises as is permitted by
any provision hereof.
          5. Term.
               (a) Subject to the provisions hereof, Tenant shall have and hold
the Leased Premises for an initial term (the “Initial Term”) (such Initial Term,
as extended or renewed in accordance with the provisions hereof, being called
the “Term”) commencing on the date hereof (the “Commencement Date”) and ending
at 11:59 P.M. at each Related Premises on October 31, 2028.

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               (b) Provided that if, on or prior to the Expiration Date or any
other Renewal Date (as hereinafter defined) this Lease shall not have been
terminated pursuant to any provision hereof, then on the Expiration Date and on
the fifth (5th), tenth (10th) and fifteenth (15th) anniversaries of the
Expiration Date (the Expiration Date and each such anniversary being referred to
herein as a “Renewal Date”), the Term shall be deemed to have been automatically
extended for an additional period of five (5) years (each such extension, a
“Renewal Term”), unless Tenant shall notify Landlord in writing at least
eighteen (18) months prior to the next Renewal Date that Tenant is terminating
this Lease as of the next Renewal Date. Any such extension of the Term shall be
subject to all of the provisions of this Lease, as the same may be amended,
supplemented or modified (except that, in the case of the fourth Renewal Term,
Tenant shall not have the right to any additional Renewal Terms).
               (c) If Tenant exercises its option pursuant to Paragraph 5(b) not
to have the Term automatically extended, then Landlord shall have the right
during the remainder of the Term then in effect and, in any event, Landlord
shall have the right during the last year of the Term, to show any of the Leased
Premises to prospective purchasers or tenants or their agents during normal
business hours upon not less than twenty-four (24) hors’ written notice to
Tenant and in a manner which does not unreasonably interfere with Tenant’s
business or operations.
          6. Basic Rent. Tenant shall pay to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with
Exhibit “D” hereto (“Basic Rent”), payable quarterly in advance for the next
three (3) calendar months and, commencing on the twenty-fifth (25th) day of
October, 2008, and thereafter on the same day of each January, April, July and
October during the Term which shall be payable as set forth in said Exhibit “D”.
The date that each payment of Basic Rent is due is hereinafter referred to as a
“Basic Rent Payment Date”. Each such payment of Basic Rent shall be made in
Federal Funds on each Basic Rent Payment Date to Landlord and/or to such one or
more other Persons, pursuant to wire transfer instructions delivered to Tenant
from time to time at such addresses and in such proportions as Landlord may
direct by fifteen (15) days’ prior written notice to Tenant (in which event
Tenant shall give Landlord notice of each such payment concurrent with the
making thereof).
          7. Additional Rent.
               (a) Tenant shall pay and discharge, as additional rent
(collectively, “Additional Rent”):
                    (i) except as otherwise specifically provided herein, all
costs and expenses of Tenant and Landlord which are incurred in connection or
associated with (A) the ownership, use, non-use, occupancy, monitoring,
possession, operation, condition, design, construction, maintenance, alteration,
repair or restoration of any of the Leased Premises, (B) the performance of any
of Tenant’s obligations under this Lease, (C) the exercise or enforcement by
Landlord, its successors and assigns, of any of its rights under this Lease in
connection with an Event of Default, (D) any amendment to or modification or
termination of this Lease made at the request of Tenant, (E) Costs of Landlord’s
counsel and reasonable internal Costs of Landlord incurred in connection with
any act undertaken by Landlord (or its counsel) at the request of Tenant, any
act of Landlord performed on behalf of Tenant in connection with an Event of
Default or the review and monitoring of compliance by Tenant with the terms of
this Lease in connection with an Event of Default, including compliance with
[Post Closing Obligations and] applicable Law, (F) all costs and fees associated
with the wire transfers of Rent payments, and (G) any other items specifically
required to be paid by Tenant under this Lease;

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                    (ii) after the date all or any portion of any installment of
Basic Rent is due and not paid by the applicable Basic Rent Payment Date, an
amount (the “Late Charge”) equal to four percent (4%) of the amount of such
unpaid installment or portion thereof to reimburse Landlord for its cost and
inconvenience incurred as a result of Tenant’s delinquency, provided, however,
that with respect to the first late payment of all or any portion of any
installment of Basic Rent in any Lease Year, the Late Charge shall not be due
and payable unless the Basic Rent has not been paid within five (5) days’
following notice thereof from Landlord to Tenant that such installment is due
and payable. Tenant acknowledges that the damages to and costs incurred by
Landlord resulting from Tenant’s late payment of Basic Rent would be difficult,
if not impossible, to ascertain with any accuracy, and that the four percent
(4%) charge represents Landlord and Tenant’s efforts to approximate such
potential damages and costs;
                    (iii) a sum equal to any late charge in excess of the amount
payable under clause (ii) above for that portion of the Basic Rent paid to the
Lender as scheduled installments of principal and interest, any default interest
in excess of amounts payable under clause (iv) below for that portion of the
Basic Rent paid to the Lender as scheduled installments of principal and
interest, and fees of Lender’s counsel, which are payable by Landlord to any
Lender under any Note by reason of Tenant’s late payment or non-payment of Basic
Rent or by reason of an Event of Default; and
                    (iv) interest at the rate (the “Default Rate”) of five
percent (5%) over the Prime Rate per annum on the following sums until paid in
full: (A) all overdue installments of Basic Rent from the respective due dates
thereof, and (B) all overdue amounts of Additional Rent relating to obligations
which Landlord shall have paid on behalf of Tenant pursuant to this Lease, from
the date of payment thereof by Landlord;
                    (v) five thousand dollars ($5,000) per month for each month
that Tenant is late in the delivery of the annual and quarterly financial
statements that are required to be delivered pursuant to Paragraph 28(b).
               (b) Tenant shall pay and discharge (i) any Additional Rent
referred to in Paragraph 7(a)(i) when the same shall become due, provided that
amounts which are billed to Landlord or any third party, but not to Tenant,
shall be paid within thirty (30) days after Landlord’s demand for payment
thereof, and (ii) any other Additional Rent, within thirty (30) days after
Landlord’s demand for payment thereof.
               (c) In no event shall amounts payable under Paragraph 7(a)(ii),
(iii) and (iv) or elsewhere in this Lease exceed the maximum amount permitted by
applicable Law.
          8. Net Lease: Non-Terminability.
               (a) This is a net lease and all Monetary Obligations shall be
paid without notice or demand and without set-off, counterclaim, recoupment,
abatement, suspension, deferment, diminution, deduction, reduction or defense
(collectively, a “Set-Off”), except as otherwise provided in this Lease.
               (b) This Lease and the rights of Landlord and the obligations of
Tenant hereunder shall not be affected by any event or for any reason or cause
whatsoever foreseen or unforeseen, except as otherwise provided in this Lease.
               (c) The obligations of Tenant hereunder shall be separate and
independent covenants and agreements, all Monetary Obligations shall continue to
be payable in all events (or, in lieu thereof, Tenant shall pay amounts equal
thereto), and the obligations of

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Tenant hereunder shall continue unaffected unless the requirement to pay or
perform the same shall have been terminated or abated pursuant to an express
provision of this Lease. All Rent payable by Tenant hereunder shall constitute
“rent” for all purposes (including Section 502(b)(6) of the Federal Bankruptcy
Code).
               (d) Except as otherwise expressly provided herein, Tenant shall
have no right and hereby waives all rights which it may have under any Law
(i) to quit, terminate or surrender this Lease or any of the Leased Premises, or
(ii) to any Set-Off of any Monetary Obligations.
          9. Payment of Impositions.
               (a) Subject to Paragraph 9(b) below, Tenant shall, before
interest or penalties are due thereon, pay directly to the applicable
governmental authority, all taxes (including real and personal property,
franchise, sales, use, gross receipts and rent taxes), all charges payable
pursuant to any Easement Agreement, all assessments and levies, all permit,
inspection and license fees, all rents and charges for water, sewer, utility and
communication services relating to any of the Leased Premises, and all other
public charges whether of a like or different nature, even if unforeseen or
extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s
possessory interest in the Leased Premises, (iii) any of the Leased Premises, or
(iv) Landlord as a result of or arising in respect of the ownership, occupancy,
leasing, use or possession of any of the Leased Premises, any activity conducted
on any of the Leased Premises, or the Rent (collectively, the “Impositions”);
provided, that nothing herein shall obligate Tenant to pay (A) income, excess
profits or other taxes of Landlord (or Lender) which are determined on the basis
of Landlord’s (or Lender’s) net income or net worth (unless such taxes are in
lieu of or a substitute for any other tax, assessment or other charge upon or
with respect to the Leased Premises which, if it were in effect, would be
payable by Tenant under the provisions hereof or by the terms of such tax,
assessment or other charge), (B) any estate, inheritance, succession, gift or
similar tax imposed on Landlord or (C) any capital gains tax imposed on Landlord
in connection with the sale of the Leased Premises to any Person. Landlord shall
have the right to require Tenant to pay, together with scheduled installments of
Basic Rent, the amount of the gross receipts or rent tax, if any, payable with
respect to the amount of such installment of Basic Rent. If any Imposition may
be paid in installments without penalty, Tenant shall have the option to pay
such Imposition in installments. Tenant shall be liable only for Impositions or
installments thereof which become due and payable during the Term. Tenant shall
be responsible to obtain all bills for the payment of Impositions and shall
prepare and file all tax reports required by governmental authorities which
relate to the Impositions. Tenant shall deliver to Landlord (1) copies of all
settlements and notices pertaining to the Impositions which may be issued by any
governmental authority within ten (10) days after Tenant’s receipt thereof,
(2) receipts for payment of all taxes required to be paid by Tenant hereunder
within thirty (30) days after the due date thereof and (3) receipts for payment
of any other Impositions within ten (10) days after Landlord’s request therefor.
               (b) If Landlord is required by a Lender, Tenant shall pay to
Landlord such amounts (each an “Escrow Payment”) quarterly or as required by
such Lender (but not more often than quarterly) so that there shall be in an
escrow account an amount sufficient to pay the Escrow Charges (as hereinafter
defined) as they become due. As used herein, “Escrow Charges” shall mean:
(i) real estate taxes and assessments due and payable during the Term on or with
respect to the Leased Premises or payments in lieu thereof, and premiums on any
insurance required by this Lease; and (ii) any reserves for capital
improvements, deferred maintenance, repair and/or tenant improvements and
leasing commissions required by any Lender following the occurrence of an Event
of Default. Landlord shall reasonably determine the amount of the Escrow Charges
(it being agreed that if required by a Lender, such amount shall equal any
corresponding escrow installments required to be paid by Landlord) and the
amount of each

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Escrow Payment. Escrow Charges for real estate taxes and assessments and
insurance premiums may be commingled with other funds of Landlord or other
Persons and no interest thereon shall be due or payable to Tenant. Escrow
Charges listed in Paragraph 9(b)(ii) above shall be held in a separate interest
bearing money market or similar account and all interest thereon shall become
part of and applied to Escrow Payments. Landlord shall apply the Escrow Payments
to the payment of the Escrow Charges in such order or priority as Landlord shall
determine or as required by Law but in no event later than when same are due and
payable. If at any time the Escrow Payments theretofore paid to Landlord shall
be insufficient for the payment of the Escrow Charges, Tenant, within ten
(10) days after Landlord’s demand therefor, shall pay the amount of the
deficiency to Landlord. At the expiration or earlier termination of this Lease,
all Escrow Payments not applied as provided in this Paragraph 9(b) shall be
promptly refunded to Tenant, provided there is not then an uncured Event of
Default existing under this Lease.
          10. Compliance with Laws and Easement Agreements; Environmental
Matters.
               (a) Tenant shall, at its expense, comply with and conform to, and
cause the Leased Premises and any other Person occupying any part of the Leased
Premises to comply with and conform to, all Insurance Requirements and Legal
Requirements (including all applicable Environmental Laws). Tenant shall not at
any time (i) cause, permit or suffer to occur any Environmental Violation or
(ii) permit any sublessee, assignee or other Person occupying the Leased
Premises under or through Tenant to cause, permit or suffer to occur any
Environmental Violation and, at the request of Landlord or Lender, Tenant shall
promptly undertake any reasonable and appropriate response action to correct any
existing Environmental Violation, however immaterial, and (iii) without the
prior written consent of Landlord and Lender, permit any drilling or exploration
for or extraction, removal, or production of any minerals from the surface or
the subsurface of the Land, regardless of the depth thereof or the method of
mining or extraction thereof. Any and all reports prepared for or by Landlord
with respect to the Leased Premises shall be for the sole benefit of Tenant,
Landlord and Lender and no other Person shall have the right to rely on any such
reports.
               (b) Tenant, at its sole cost and expense, will at all times
promptly and faithfully abide by, discharge and perform all of the covenants,
conditions and agreements contained in any Easement Agreement on the part of
Landlord or the occupier to be kept and performed thereunder. Neither Landlord
nor Tenant will alter, modify, amend or terminate any Easement Agreement, give
any consent or approval thereunder, or enter into any new Easement Agreement
without, in each case, prior written consent of the other party.
               (c) Upon not less than five (5) days’ prior written notice from
Landlord, Tenant shall permit such persons as Landlord may designate (“Site
Reviewers”) to visit the Leased Premises during normal business hours and in a
manner which does not unreasonably interfere with Tenant’s business or
operations and perform, as agents of Tenant, environmental site investigations
and assessments (“Site Assessments”) on the Leased Premises in any of the
following circumstances: (i) in connection with any sale, financing or
refinancing of the Leased Premises, (ii) within the six month period prior to
the expiration of the Term, (iii) if required by Lender or the terms of any
credit facility to which Landlord is bound, (iv) if an Event of Default exists,
or (v) at any other time that, in the opinion of Landlord or Lender, a
reasonable basis exists to believe that an Environmental Violation or any
condition that could reasonably be expected to result in any Environmental
Violation exists. Such Site Assessments may include both above and below the
ground testing for Environmental Violations and such other tests as may be
necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments, and shall
make available for meetings with the Site

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Reviewers appropriate personnel having knowledge of such matters. The cost of
performing and reporting Site Assessments shall be paid by Landlord; provided,
however, in the case of a Site Assessment being performed as a result of an
event enumerated in (ii), (iv) or (v) above, Tenant shall bear the cost of such
Site Assessment.
               (d) If an Environmental Violation occurs or is found to exist
and, in Landlord’s reasonable judgment, the cost of remediation of, or other
response action with respect to, the same is likely to exceed $500,000, Tenant
shall provide to Landlord, within ten (10) days after Landlord’s request
therefor, adequate financial assurances that Tenant will effect such remediation
in accordance with applicable Environmental Laws. Such financial assurances
shall be a bond or letter of credit satisfactory to Landlord in form and
substance and in an amount equal to or greater than Landlord’s reasonable
estimate, based upon a Site Assessment performed pursuant to Paragraph 10(c), of
the anticipated cost of such remedial action.
               (e) If Tenant fails to comply with any requirement of any
Environmental Law in connection with any Environmental Violation which occurs or
is found to exist, Landlord shall have the right (but no obligation) to take any
and all actions as Landlord shall deem necessary or advisable in order to cure
such Environmental Violation.
               (f) Tenant shall notify Landlord within ten (10) days after
becoming aware of any Environmental Violation (or alleged Environmental
Violation) or noncompliance with any of the covenants contained in this
Paragraph 10 and shall forward to Landlord within ten (10) days after receipt
thereof copies of all orders, reports, notices, permits, applications or other
communications relating to any such violation or noncompliance.
               (g) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall contain covenants
of the other party thereto which are identical to the covenants contained in
Paragraph 10(a).
          11. Liens; Recording.
               (a) Tenant shall not, directly or indirectly, create or permit to
be created or to remain and shall promptly discharge or remove any lien, levy or
encumbrance on any of the Leased Premises or, to the extent caused by Tenant, on
any Rent or any other sums payable by Tenant under this Lease, other than any
Mortgage or Assignment or any other document or agreement executed in connection
with any Loan, the Permitted Encumbrances and any mortgage, lien, encumbrance or
other matter created by or resulting from any act or omission of Landlord or any
Person claiming by, through or under Landlord. NOTICE IS HEREBY GIVEN THAT
LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR
TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED
PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY
SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LANDLORD IN AND TO ANY OF THE LEASED PREMISES. LANDLORD MAY AT ANY TIME POST ANY
NOTICES REQUIRED UNDER APPLICABLE LAW ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD.
               (b) Landlord and Tenant shall execute, deliver and record, file
or register (collectively, “record”) all such instruments as may be required or
permitted by any present or future Law in order to evidence the respective
interests of Landlord and Tenant in any of the Leased Premises, and shall cause
a memorandum of this Lease (or, if such a memorandum cannot be recorded, this
Lease), and any supplement hereto or thereto, to be recorded in such manner and
in such places as may be required or permitted by any present or future Law in
order to protect the validity and priority of this Lease.

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          12. Maintenance and Repair.
               (a) Tenant shall at all times maintain each Related Premises and
the Adjoining Property in as good repair as each is in on the date hereof and
fit to be used for their intended use in accordance with the better of the
practices generally recognized as then acceptable by other companies in its
industry or observed by Tenant with respect to the other real properties owned
or operated by it, and, in the case of the Equipment, in as good mechanical
condition as it was on the later of the date hereof or the date of its
installation, except for ordinary wear and tear. Tenant shall promptly make all
Alterations of every kind and nature, whether foreseen or unforeseen, which may
be required to comply with the foregoing requirements of this Paragraph 12(a).
Landlord shall not be required to make any Alteration, whether foreseen or
unforeseen, or to maintain any Related Premises or Adjoining Property in any
way, and Tenant hereby expressly waives any right which may be provided for in
any Law now or hereafter in effect to make Alterations at the expense of
Landlord or to require Landlord to make Alterations. Any Alteration made by
Tenant pursuant to this Paragraph 12 shall be made in conformity with the
provisions of Paragraph 13.
               (b) If any Improvement, now or hereafter constructed, shall
(i) encroach upon any setback or any property, street or right-of-way adjoining
any Related Premises or (ii) violate the provisions of any Easement Agreement,
Tenant shall, within a reasonable time after receiving notice or otherwise
acquiring knowledge thereof, either (A) obtain from all necessary parties
waivers or settlements of all claims, liabilities and damages resulting from
each such encroachment, violation, hindrance, obstruction or impairment, whether
the same shall affect Landlord, Tenant or both, or (B) take such action as shall
be reasonably necessary to remove all such encroachments, hindrances or
obstructions and to end all such violations or impairments, including, if
necessary, making Alterations.
          13. Alterations and Improvements.
               (a) Tenant shall have the right, without having obtained the
prior written consent of Landlord or Lender and provided that no Event of
Default then exists, (i) to make any and all non-structural Alterations or a
series of related non-structural Alterations to any Related Premises that are
decorative in nature and consistent with Tenant’s normal business practice of
upgrading the “look and feel” of other real properties owned or operated by it
(collectively, the “Decorative Alterations”), (ii) to make non-structural
Alterations or a series of related non-structural Alterations (other than
Decorative Alterations) that, as to any such Alterations or series of related
Alterations, do not cost in excess of $500,000 with respect to any Related
Premises, and (iii) to install Equipment in the Improvements or accessions to
the Equipment that, as to such Equipment or accessions, do not cost in excess of
$500,000, so long as at the time of construction or installation of any such
Equipment or Alterations no Event of Default exists and the value and utility of
the Leased Premises is not diminished thereby. If the cost of any non-structural
Alterations (other than Decorative Alterations), series of related
non-structural Alterations (other than Decorative Alterations), Equipment or
accessions thereto is in excess of $500,000 or if Tenant desires to make
structural Alterations to any Related Premises, the prior written approval of
Landlord and Lender shall be required. Tenant shall not construct upon the Land
any additional buildings without having first obtained the prior written consent
of Landlord and Lender. Landlord shall have the right to require Tenant to
remove any Alterations except for Decorative Alterations, those Alterations
required by Law or for which Landlord has agreed in writing, or is deemed to
have approved pursuant to the following sentence, that removal will not be
required. If Tenant desires not to remove any Alterations at the expiration of
the Term, Tenant shall provide to Landlord written notice specifying the
Alterations for which it is requesting agreement that removal will not be
required (which notice may be given by Tenant at any time during the Term
(including, without limitation, at the time Tenant seeks any required approval
from Landlord pursuant to this Paragraph 13)). If Landlord does not disapprove
such

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request by Tenant within fifteen (15) days of receipt of such notice, such
approval shall be deemed given. Notwithstanding anything to the contrary in this
Lease, in no event shall Tenant be required to remove any Decorative
Alterations.
               (b) If Tenant makes any Alterations pursuant to this Paragraph 13
or as required by Paragraph 12 or 17 (such Alterations and actions being
hereinafter collectively referred to as “Work”), then (i) the market value of
the Leased Premises shall not be lessened by any such Work, (ii) all such Work
shall be performed by Tenant in a good and workmanlike manner, (iii) all such
Work shall be expeditiously completed in compliance with all Legal Requirements,
(iv) all such Work shall comply with the requirements of all insurance policies
required to be maintained by Tenant hereunder, (v) if any such Work involves the
replacement of Equipment or parts thereto, all replacement Equipment or parts
shall have a value and useful life equal to the greater of (A) the value and
useful life on the date hereof of the Equipment being replaced or (B) the value
and useful life of the Equipment being replaced immediately prior to the
occurrence of the event which required its replacement (assuming such replaced
Equipment was then in the condition required by this Lease), (vi) Tenant shall
promptly discharge or remove all liens filed against any of the Leased Premises
arising out of such Work, (vii) Tenant shall procure and pay for all permits and
licenses required in connection with any such Work, (viii) all such Work shall
be the property of Landlord and shall be subject to this Lease, and Tenant shall
execute and deliver to Landlord any document requested by Landlord evidencing
the assignment to Landlord of all estate, right, title and interest (other than
the leasehold estate created hereby) of Tenant or any other Person thereto or
therein, and (ix) Tenant shall comply, to the extent requested by Landlord or
required by this Lease, with the provisions of Paragraphs 12(a) and 19(a),
whether or not such Work involves restoration of any Related Premises.
          14. Permitted Contests. Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or
remove any lien referred to in Paragraph 11 or 13, (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b), or (d) comply with any Law or Easement Agreement
with respect to the Leased Premises (such non-compliance with the terms hereof
being hereinafter referred to collectively as “Permitted Violations”) and may
dispute or contest the same, so long as at the time of such non-compliance no
Event of Default exists and so long as Tenant shall contest, in good faith, the
existence, amount or validity thereof, the amount of the damages caused thereby,
or the extent of its or Landlord’s liability therefor by appropriate proceedings
which shall operate during the pendency thereof to prevent or stay (i) the
collection of, or other realization upon, the Permitted Violation so contested,
(ii) the sale, forfeiture or loss of any of the Leased Premises or any Rent to
satisfy or to pay any damages caused by any Permitted Violation, (iii) any
interference with the use or occupancy of any of the Leased Premises, (iv) any
interference with the payment of any Rent, or (v) the cancellation or increase
in the rate of any insurance policy or a statement by the carrier that coverage
will be denied. Tenant shall provide Landlord security which is satisfactory, in
Landlord’s reasonable judgment, to assure that such Permitted Violation is
corrected, including all Costs, interest and penalties that may be incurred or
become due in connection therewith. While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by Law to correct
such Permitted Violation and Tenant’s contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, has the right to
attempt to settle or compromise such contest through negotiations. Tenant shall
pay any and all losses, judgments, decrees and Costs in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest and Costs thereof or in connection
therewith,

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and perform all acts the performance of which shall be ordered or decreed as a
result thereof. No such contest shall subject Landlord to the risk of any
criminal liability.
          15. Indemnification.
               (a) Tenant shall pay, protect, indemnify, defend, save and hold
harmless Landlord, Lender and all other Persons described in Paragraph 30 (each
an “Indemnitee”) from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs (including attorneys’ fees and
costs), causes of action, suits, claims, demands or judgments of any nature
whatsoever, howsoever caused, without regard to the form of action and whether
based on strict liability, gross negligence, negligence or any other theory of
recovery at law or in equity, arising from (i) any matter pertaining to the use,
non-use, occupancy, operation, management, condition, design, construction,
maintenance, repair or restoration of any of the Leased Premises or Adjoining
Property, except to the extent arising in connection with the gross negligence
or willful misconduct of Landlord or any Person described in Paragraph 30,
(ii) any casualty in any manner arising from any of the Leased Premises or
Adjoining Property, whether or not Indemnitee has or should have knowledge or
notice of any defect or condition causing or contributing to said casualty,
except to the extent arising in connection with the gross negligence or willful
misconduct of Landlord or any Person described in Paragraph 30, (iii) any
violation by Tenant of any provision of this Lease, any contract or agreement to
which Tenant is a party, any Legal Requirement or any Permitted Encumbrance or
any encumbrance Tenant consented to, or (iv) any alleged, threatened or actual
Environmental Violation, including (A) liability for response costs and for
costs of removal and remedial action incurred by the United States Government,
any state or local governmental unit or any other Person, or damages from injury
to or destruction or loss of natural resources, including the reasonable costs
of assessing such injury, destruction or loss, incurred pursuant to Section 107
of CERCLA, or any successor section or act or provision of any similar state or
local Law, (B) liability for costs and expenses of abatement, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any of the other Environmental Laws and (C) liability for personal
injury or property damage arising under any statutory or common-law tort theory,
including damages assessed for the maintenance of a public or private nuisance
or for carrying on of a dangerous activity.
               (b) In case any action or proceeding is brought against any
Indemnitee by reason of any such claim, (i) Tenant may, except in the event of a
conflict of interest or a dispute between Tenant and any such Indemnitee or
during the continuance of an Event of Default, retain its own counsel and defend
such action (it being understood that Landlord may employ counsel of its choice
to monitor the defense of any such action, the reasonable cost of which shall be
paid by Tenant) and (ii) such Indemnitee shall notify Tenant to resist or defend
such action or proceeding by retaining counsel reasonably satisfactory to such
Indemnitee, and such Indemnitee will cooperate and assist in the defense of such
action or proceeding if reasonably requested to do so by Tenant. In the event of
a conflict of interest or dispute or during the continuance of an Event of
Default, Landlord shall have the right to select counsel, and the cost of such
counsel shall be paid by Tenant.
               (c) The obligations of Tenant under this Paragraph 15 shall
survive any termination, expiration or rejection in bankruptcy of this Lease
with respect to matters that existed, arose or occurred prior to such
termination, expiration or rejection.
          16. Insurance.
               (a) Tenant shall obtain, pay for and maintain the following
insurance on or in connection with the Leased Premises:

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                    (i) Insurance against all risk of physical loss or damage to
the Improvements and Equipment as provided under “Special Causes of Loss” form
coverage, and including customarily excluded perils of hail, windstorm, flood
coverage for any Related Premises located in a designated flood plain under
applicable Law, earthquake coverage for any Related Premises located in a
designated earthquake zone under applicable Law and, to the extent required by
Lender (X) terrorism, in amounts not less than the actual replacement cost of
the Improvements and Equipment and (Y) mold insurance for which a sub-limit may
apply; provided that, if Tenant’s insurance company is unable or unwilling to
include any of all of such excluded perils, Tenant shall have the option of
purchasing coverage against such perils from another insurer on a “Difference in
Conditions” form or through a stand-alone policy. Such policies shall contain
Replacement Cost and Agreed Amount Endorsements in addition to “Law and
Ordinance” coverage for which a sub-limit may apply. Such policies and
endorsements shall contain deductibles not more than $50,000 per occurrence,
except that with respect to the flood coverage the deductible may not exceed
$250,000.00.
                    (ii) Commercial General Liability Insurance and Business
Automobile Liability Insurance (including Non-Owned and Hired Automobile
Liability) against claims for personal and bodily injury, death or property
damage occurring on, in or as a result of the use of the Leased Premises, in an
amount not less than $15,000,000 per occurrence/annual aggregate, with no
self-insured retention or deductible, on a claims occurrence basis.
                    (iii) Workers’ compensation insurance in the amount required
by applicable Law and employers’ liability insurance covering all persons
employed by Tenant in connection with any work done on or about any of the
Leased Premises.
                    (iv) Comprehensive Boiler and Machinery/Equipment Breakdown
Insurance on any of the Equipment or any other equipment on or in the Leased
Premises, in an amount not less than $5,000,000 per accident for damage to
property (and which may be carried as part of the coverage required under clause
(i) above or pursuant to a separate policy or endorsement). Either such Boiler
and Machinery policy or the Special Causes of Loss policy required in clause
(i) above shall include at least $1,000,000 per incidence for Off-Premises
Service Interruption, and not less than $100,000 per incident for Expediting
Expenses, Ammonia Contamination, and Hazardous Materials Clean-Up Expense and
may contain a deductible not to exceed $50,000.
                    (v) Business Income/Extra Expense Insurance at limits
sufficient to cover 100% of the period of indemnity not less than eighteen
(18) months from time of loss, including an extended period of indemnity which
provides that after the physical loss to the Improvements and Equipment has been
repaired, the continued loss of income will be insured until such income either
returns to the same level it was at prior to the loss, or the expiration of six
(6) months from the date that the applicable Related Premises is repaired or
replaced and operations are resumed, whichever first occurs. Such insurance
shall name Landlord as loss payee (but only with respect to Rent payable to or
for the benefit of the Landlord under this Lease), and Tenant shall receive a
dollar-for-dollar credit against Rent due hereunder for any amounts received by
Landlord under any such policy.
                    (vi) During any period in which substantial Alterations at
the Leased Premises are being undertaken, builder’s risk insurance covering the
total completed value, including all hard and soft costs (which shall include
business interruption coverage) with respect to the Improvements being
constructed, altered or repaired (on a completed value, non-reporting basis),
replacement cost of work performed and equipment, supplies and materials
furnished in connection with such construction, alteration or repair of
Improvements or Equipment, together with such other endorsements as Landlord may
reasonably require, and

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general liability, worker’s compensation and automobile liability insurance with
respect to the Improvements being constructed, altered or repaired.
                    (vii) Such other insurance (or other or different terms with
respect to any insurance required pursuant to this Paragraph 16, including
without limitation amounts of coverage, deductibles, insurer rating, form of
mortgagee clause) on or in connection with any Related Premises as Landlord or
Lender may reasonably require, which at the time is usual and commonly obtained
in connection with properties similar in type of building size, use and location
to the applicable Related Premises or in connection with loans similar to the
Loan.
               (b) The insurance required by Paragraph 16(a) shall be written by
companies having a Best’s rating of A:X or above and a claims paying ability
rating of A or better by Standard & Poor’s Rating Services, a division of the
McGraw Hill Companies, Inc. or equivalent rating agency approved by Landlord and
Lender in their sole discretion and are authorized to write insurance policies
by, the State Insurance Department (or its equivalent) for the states in which
the Leased Premises are located. The insurance policies (i) shall be for such
terms as Landlord may reasonably approve and (ii) shall be in amounts sufficient
at all times to satisfy any coinsurance requirements thereof. If said insurance
or any part thereof shall expire, be withdrawn, become void, voidable,
unreliable or unsafe for any reason, including a breach of any condition thereof
by Tenant or the failure or impairment of the capital of any insurer, or if for
any other reason whatsoever said insurance shall become reasonably
unsatisfactory to Landlord, Tenant shall immediately obtain new or additional
insurance reasonably satisfactory to Landlord. The insurance referred to in
Paragraphs 16(a)(i), 16(a)(iv) and 16(a)(vi) shall name Landlord and Lender as
loss payee as its interest may appear and Lender as mortgagee. The insurance
referred to in Paragraph 16(a)(ii) shall name Landlord and Lender as additional
insureds, and the insurance referred to in Paragraph 16(a)(v) shall name
Landlord as insured and Lender and Landlord as loss payee as its interest may
appear.
               (c) Each insurance policy referred to in clauses (i), (iv),
(v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender. Each policy required by
any provision of Paragraph 16(a), except clause (iii) thereof, shall provide
that it may not be cancelled, substantially modified or allowed to lapse on any
renewal date except after at least thirty (30) days’ prior written notice to
Landlord and Lender.
               (d) Tenant shall pay as they become due all premiums for the
insurance required by Paragraph 16(a), shall renew or replace each policy and
deliver to Landlord evidence of the payment of the full premium therefor or
installment then due at least ten (10) days prior to the expiration date of such
policy, and shall promptly deliver to Landlord all original certificates of
insurance evidencing such coverages or, if required by Lender, original or
certified policies. All certificates of insurance (including liability coverage)
provided to Landlord and Lender shall be on ACORD Form 28 (or its equivalent).
               (e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a “blanket” policy or policies covering
other properties of Tenant or under an “umbrella” policy or policies covering
other liabilities of Tenant, as applicable; provided that, such blanket or
umbrella policy or policies otherwise comply with the provisions of this
Paragraph 16, and upon request, Tenant shall provide to Landlord a Statement of
Values which may be reviewed annually and shall be amended to the extent
determined necessary by Landlord based on revised Replacement Cost Valuations.
The original or a certified copy of each such blanket or umbrella policy shall
promptly be delivered to Landlord upon Landlord’s request.

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               (f) Tenant shall not carry separate insurance concurrent in form
or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate insurance
complies with the other provisions of this Paragraph 16. Tenant shall
immediately notify Landlord of such separate insurance and shall deliver to
Landlord the original policies or certified copies thereof.
               (g) Each policy (other than worker’s compensation coverage) shall
contain an effective waiver by the carrier against all claims for payment of
insurance premiums against Landlord and shall contain a full waiver of
subrogation against the Landlord.
               (h) The proceeds of any insurance required under Paragraph 16(a)
shall be payable as follows:
                    (i) proceeds payable under clauses (ii), (iii) and (iv) of
Paragraph 16(a) and proceeds attributable to the general liability coverage of
Builder’s Risk insurance under clause (vi) of Paragraph 16(a) shall be payable
to the Person entitled to receive such proceeds; and
                    (ii) proceeds of insurance required under clause (i) of
Paragraph 16(a) and proceeds attributable to Builder’s Risk insurance (other
than its general liability coverage provisions) under clause (vi) of Paragraph
16(a) shall be payable to Landlord or Lender and applied as set forth in
Paragraph 17 or, if applicable, Paragraph 18.
          17. Casualty and Condemnation.
               (a) If any Casualty occurs to any Related Premises occurs the
insurance proceeds for which are reasonably estimated by Tenant to be equal to
or in excess of Five Hundred Thousand Dollars ($500,000), Tenant shall give
Landlord and Lender immediate notice thereof. So long as (i) no Event of Default
exists and (ii) Tenant has not given a Termination Notice to Landlord, Tenant is
hereby authorized to adjust, collect and compromise all claims under any of the
insurance policies required by Paragraph 16(a) (except public liability
insurance claims payable to a Person other than Tenant, Landlord or Lender) and
to execute and deliver on behalf of Landlord all necessary proofs of loss,
receipts, vouchers and releases required by the insurers and Landlord shall have
the right to join with Tenant therein. Any final adjustment, settlement or
compromise of any such claim which is reasonably estimated by Landlord to result
in proceeds in excess of $500,000, shall be subject to the reasonable prior
written approval of Landlord, and, with respect thereto, Landlord shall have the
right to prosecute or contest, or to require Tenant to prosecute or contest, any
such claim, adjustment, settlement or compromise. If any final adjustment,
settlement or compromise of any such claim is reasonably estimated by Landlord
to result in proceeds of less than or equal to $500,000 and so long as no Event
of Default exists and Tenant has not given a Termination Notice to Landlord,
then such adjustment, settlement or compromise shall not require the approval of
Landlord. If an Event of Default exists, Tenant shall not be entitled to adjust,
collect or compromise any such claim or to participate with Landlord in any
adjustment, collection and compromise of the Net Award payable in connection
with a Casualty. Tenant agrees to sign, upon the request of Landlord, all such
proofs of loss, receipts, vouchers and releases. Each insurer is hereby
authorized and directed to make payment under said policies, including return of
unearned premiums, directly to Landlord or, if required by the Mortgage, to
Lender instead of to Landlord and Tenant jointly, and Tenant hereby appoints
each of Landlord and Lender as Tenant’s attorneys-in-fact to endorse any draft
therefor. The rights of Landlord under this Paragraph 17(a) shall be extended to
Lender if and to the extent that any Mortgage so provides.

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               (b) Tenant, immediately upon receiving a Condemnation Notice,
shall notify Landlord and Lender thereof. So long as no Event of Default exists,
Tenant is authorized to collect, settle and compromise the amount of any Net
Award and Landlord shall have the right to join with Tenant herein. If an Event
of Default exists, Landlord shall be authorized to collect, settle and
compromise the amount of any Net Award and Tenant shall not be entitled to
participate with Landlord in any Condemnation proceeding or negotiations under
threat thereof or to contest the Condemnation or the amount of the Net Award
therefor. No agreement with any condemnor in settlement or under threat of any
Condemnation shall be made by Tenant without the written consent of Landlord.
Subject to the provisions of this Paragraph 17(b), Tenant hereby irrevocably
assigns to Landlord any award or payment to which Tenant is or may be entitled
by reason of any Condemnation, whether the same shall be paid or payable for
Tenant’s leasehold interest hereunder or otherwise; but nothing in this Lease
shall impair Tenant’s right to any award or payment on account of Tenant’s
Property, moving expenses or loss of business, if available, to the extent that
and so long as (i) Tenant shall have the right to make, and does make, a
separate claim therefor against the condemnor and (ii) such claim does not in
any way reduce either the amount of the award otherwise payable to Landlord for
the Condemnation of Landlord’s fee interest in the applicable Related Premises
or the amount of the award (if any) otherwise payable for the Condemnation of
Tenant’s leasehold interest hereunder. The rights of Landlord under this
Paragraph 17(b) shall also be extended to Lender if and to the extent that any
Mortgage so provides.
               (c) If any Partial Casualty (whether or not insured against) or
Partial Condemnation shall occur to any Related Premises, this Lease shall
continue with respect to the Leased Premises, notwithstanding such event, and
there shall be no abatement or reduction of any Monetary Obligations. Promptly
after such Partial Casualty or Partial Condemnation, Tenant, as required in
Paragraph 12(a), shall commence and diligently continue to restore the
applicable Related Premises as nearly as possible to their value, condition and
character immediately prior to such event (assuming such Related Premises to
have been in the condition required by this Lease, together with such
Alterations as shall be permitted or approved pursuant to Paragraph 13). So long
as no Event of Default exists, any Net Award paid to or on behalf of Landlord
under Paragraph 16(a)(i), (iv) or (vi) which is up to and including $500,000
shall be paid by Landlord to Tenant and Tenant shall restore the applicable
Related Premises in accordance with the requirements of Paragraph 13(b) of this
Lease. Any Net Award paid to or on behalf of Landlord under Paragraph 16(a)(i),
(iv) or (vi) which is in excess of $500,000 shall (unless such Casualty
resulting in the Net Award is a Termination Event) be made available by Landlord
(or Lender if the terms of the Mortgage so require) to Tenant for the
restoration of any of the applicable Related Premises pursuant to and in
accordance with and subject to the provisions of Paragraph 19 hereof. If any
Casualty or Condemnation which is not a Partial Casualty or Partial Condemnation
shall occur, Tenant shall comply with the terms and conditions of Paragraph 18.
          18. Termination Events.
               (a) If either (i) all of any Related Premises shall be taken by a
Taking, or (ii) any substantial portion of any Related Premises shall be taken
by a Taking and Tenant certifies and covenants to Landlord that it will forever
abandon operations at the Related Premises, or (iii) all or any substantial
portion of any Related Premises shall be totally or substantially damaged or
destroyed by a Casualty, Tenant does not elect to treat such Casualty as a
Partial Casualty and to restore the applicable Related Premises in accordance
with Paragraph 17(c) above and Tenant certifies and covenants to Landlord that
it will forever abandon operations at the Related Premises (any one or all of
the Related Premises described in the above clauses (i), (ii) and (iii) above
being hereinafter referred to as the “Affected Premises” and each of the events
described in the above clauses (i), (ii) and (iii) shall hereinafter be referred
to as a “Termination Event”), then (x) in the case of (i) above, Tenant shall be
obligated, within thirty

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(30) days after Tenant receives a Condemnation Notice, and (y) in the case of
(ii) and (iii) above, Tenant shall have the option, within thirty (30) days
after Tenant receives a Condemnation Notice or thirty (30) days after the
Casualty, as the case may be, to give to Landlord written notice in the form
described in Paragraph 18(b) of the Tenant’s election to terminate this Lease as
to the Affected Premises (a “Termination Notice”). If Tenant elects under clause
(y) above not to give Landlord a Termination Notice, then Tenant shall rebuild
or repair the Affected Premises in accordance with Paragraphs 17 and 19.
               (b) A Termination Notice shall contain:
                    (i) in the event of a Termination Notice pursuant to an
event described in Paragraphs 18(a)(i) or (ii) above (a “Condemnation
Termination Notice”), (A) notice of Tenant’s intention to terminate this Lease
as to the Affected Premises on the first Basic Rent Payment Date which occurs at
least thirty (30) days after delivery of the Condemnation Termination Notice
(the “Termination Date”), and (B) if the Termination Event is an event described
in Paragraph 18(a)(ii), the certification and covenants described therein; and
                    (ii) in the event of a Termination Notice pursuant to an
event described in Paragraph 18(a)(iii) above (a “Casualty Termination Notice”),
(A) notice of Tenant’s intention to terminate this Lease as to the Affected
Premises on the first Basic Rent Payment Date which occurs at least thirty
(30) days after delivery of the Casualty Termination Notice (also, a
“Termination Date”), (B) a binding and irrevocable offer of Tenant to pay to
Landlord the Termination Amount, and (C) the certification and covenants
described in Paragraph 18(a)(iii).
               (c) If (x) Landlord shall reject such offer by Tenant to pay to
Landlord the Termination Amount as to the Affected Premises pursuant to a
Casualty Termination Notice above by written notice to Tenant (a “Rejection”),
which Rejection shall contain the written consent of Lender to Landlord’s
rejection of Tenant’s offer to pay the Termination Amount, not later than thirty
(30) days after Landlord’s receipt of the Casualty Termination Notice, or
(y) Tenant delivers a Condemnation Termination Notice, then this Lease shall
terminate as to the Affected Premises on the Termination Date; provided, that if
Tenant has not satisfied all Monetary Obligations which have arisen as to the
Affected Premises (collectively, “Remaining Obligations”) on or prior to the
Termination Date, then Landlord may, at its option, extend the date on which
this Lease may terminate as to the Affected Premises to a date which is no later
than the first Basic Rent Payment Date after the Termination Date on which
Tenant has satisfied all Remaining Obligations. Upon such termination (i) all
obligations of Tenant hereunder as to the Affected Premises shall terminate
except for any Surviving Obligations, (ii) Tenant shall immediately vacate and
shall have no further right, title or interest in or to any of the Affected
Premises, and (iii) the Net Award shall be retained by Landlord.
               (d) Unless Tenant shall have received a Rejection (as consented
to by Lender as aforesaid) not later than the thirtieth (30th) day following
Landlord’s receipt of the Casualty Termination Notice, Landlord shall be
conclusively deemed to have accepted such offer from Tenant to pay the
Termination Amount. If such offer from Tenant to pay the Termination Amount is
accepted or deemed accepted by Landlord then, on the Termination Date, Tenant
shall pay to Landlord the Termination Amount and all Remaining Obligations and,
if requested by Tenant, Landlord shall convey to Tenant or its designee the
Affected Premises or the remaining portion thereof, if any, all in accordance
with Paragraph 20.
               (e) In the event of the termination of this Lease as to the
Affected Premises as hereinabove provided, this Lease shall remain in full force
and effect as to the Remaining Premises; provided, that the Basic Rent for the
Remaining Premises to be paid after

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such termination shall be the Basic Rent otherwise payable hereunder with
respect to the Leased Premises multiplied by the percentage set forth on Exhibit
“F” for the Remaining Premises.
          19. Restoration.
               (a) If any Net Award is in excess of $500,000, Landlord (or
Lender if required by any Mortgage) shall hold the Net Award in a fund (the
“Restoration Fund”) and disburse amounts from the Restoration Fund only in
accordance with the following conditions:
                    (i) prior to commencement of restoration, the architects,
contracts, contractors, plans and specifications and a budget for the
restoration which shall have been approved by Landlord and which may, at
Tenant’s option, provide for Alterations and other upgrades to the Leased
Premises, a so-called “cost savings” provision in favor of Tenant (which shall
remain for Tenant’s sole benefit), an overhead cost allocation, and/or
supervision and/or development fees to Tenant or any affiliate of Tenant;
                    (ii) at the time of any disbursement, no Event of Default
shall exist and no mechanics’ or materialmen’s liens shall have been filed
against any of the Leased Premises and remain undischarged or uncontested in
accordance with Paragraph 14;
                    (iii) disbursements shall be made from time to time in an
amount not exceeding the cost of the Work completed since the last disbursement,
upon receipt of (A) satisfactory evidence, including architects’ certificates,
of the stage of completion, the estimated total cost of completion and
performance of the Work to date in a good and workmanlike manner in accordance
with the contracts, plans and specifications, (B) partial waivers of liens,
(C) contractors’ sworn statements as to completed Work and the cost thereof for
which payment is requested, (D) a satisfactory bringdown of title insurance and
(E) other reasonable and customary evidence of cost and payment so that Landlord
and Lender can verify that the amounts disbursed from time to time are
represented by Work that is completed, in place and free and clear of mechanics’
and materialmen’s lien claims;
                    (iv) each request for disbursement shall be accompanied by a
certificate of an officer of Tenant, describing the Work for which payment is
requested, stating the cost incurred in connection therewith, stating that
Tenant has not previously received payment for such Work and, upon completion of
the Work, also stating that the Work has been fully completed and complies with
the applicable requirements of this Lease;
                    (v) any construction contract or agreement in connection
with the restoration shall provide for a 10% retainage until the Work to be
performed under such contract or agreement shall have been satisfactorily
completed;
                    (vi) If the Restoration Fund is held by Landlord, the
Restoration Fund shall not be commingled with Landlord’s other funds and shall
bear interest at a rate agreed to by Landlord and Tenant; and
                    (vii) such other reasonable and customary conditions as
Landlord or Lender may impose.
               (b) Prior to commencement of restoration and at any time during
restoration, if the estimated cost of completing the restoration Work free and
clear of all liens, as determined by Landlord, exceeds the amount of the Net
Award available for such restoration, the amount of such excess shall, upon
demand by Landlord, be paid by Tenant to Landlord to be added to the Restoration
Fund. Any sum so added by Tenant which remains in the Restoration Fund upon
completion of restoration shall be refunded to Tenant. For purposes of
determining

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the source of funds with respect to the disposition of funds remaining after the
completion of restoration, the Net Award shall be deemed to be disbursed prior
to any amount added by Tenant.
               (c) If any sum remains in the Restoration Fund after completion
of the restoration and any refund to Tenant pursuant to Paragraph 19(b), such
sum shall be retained by Landlord or, if required by a Note or Mortgage, paid by
Landlord to a Lender; provided, however, Landlord acknowledges and agrees that
it is the intention of the parties that, subject to the other provisions of this
Paragraph 19, the full amount of the Restoration Fund shall be made available to
Tenant for the performance of the work contemplated under Paragraph 17(c).
          20. Procedures Upon Purchase.
               (a) If the Leased Premises or any of the Related Premises are
purchased by Tenant pursuant to any provision of this Lease, Landlord need not
convey any better title thereto than that which was conveyed to Landlord, and
Tenant or its designee shall accept such title, subject, however, only to the
Permitted Encumbrances and to all other exceptions and restrictions on, against
or relating to any of the applicable Related Premises and to all applicable
Laws, but free of the lien of and security interest created by any mortgage or
assignment of leases and rents and any other liens, exceptions and restrictions
on, against or relating to the applicable Related Premises which have been
created by or resulted from acts of Landlord after the date of this Lease,
unless the same are Permitted Encumbrances or customary utility easements
benefiting the applicable Related Premises or were created with the concurrence
of Tenant or as a result of a default by Tenant under this Lease.
               (b) Upon the date fixed for any such purchase of any Related
Premises pursuant to Paragraph 18 (any such date the “Purchase Date”), Tenant
shall pay to Landlord, or to any Person to whom Landlord directs payment, the
Termination Amount therefor specified herein, in Federal Funds, less a credit
for any Net Award received and retained by Landlord or a Lender, and Landlord
shall deliver to Tenant (i) a special warranty deed which describes the premises
being conveyed and conveys the title thereto as provided in Paragraph 20(a),
(ii) such other instruments as shall be necessary to transfer to Tenant or its
designee any other property (or rights to any Net Award not yet received by
Landlord or a Lender) then required to be sold by Landlord to Tenant pursuant to
this Lease and (iii) any Net Award received by Landlord or Lender, not credited
to Tenant against the Termination Amount; provided, that if any accrued Monetary
Obligations remain outstanding on such date, then Landlord may deduct from the
Net Award the amount of such Monetary Obligations; and further provided, that if
any event has occurred which, in Landlord’s reasonable judgment, is likely to
subject any Indemnitee to any liability which Tenant is required to indemnify
against pursuant to Paragraph 15, then an amount shall be deducted from the Net
Award which, in Landlord’s reasonable judgment, is sufficient to satisfy such
liability, which amount shall be deposited in an escrow account with a financial
institution reasonably satisfactory to Landlord and Tenant pending resolution of
such matter. If on the Purchase Date any Monetary Obligations remain outstanding
and no Net Award is payable to Tenant by Landlord or the amount of such Net
Award is less than the amount of the accrued Monetary Obligations, then Tenant
shall pay to Landlord on the Purchase Date the amount of such accrued Monetary
Obligations. Upon the completion of such purchase, this Lease and all
obligations and liabilities of Tenant hereunder with respect to the applicable
Related Premises (but not with respect to the Remaining Premises) shall
terminate, except any Surviving Obligations.
               (c) If the completion of such purchase shall be delayed after
(i) the Termination Date, in the event of a purchase pursuant to Paragraph 18
or, (ii) the date scheduled for such purchase, in the event of a purchase under
any other provision of this Lease then Rent shall continue to be due and payable
until completion of such purchase.

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               (d) Any prepaid Monetary Obligations paid to Landlord shall be
prorated as of the Purchase Date, and the prorated unapplied balance shall be
deducted from the Termination Amount due to Landlord; provided, that no
apportionment of any Impositions shall be made upon any such purchase.
          21. Assignment and Subletting: Prohibition against Leasehold
Financing.
               (a) Except as otherwise expressly provided to the contrary in
this Paragraph 21, Tenant may not (i) assign this Lease, voluntarily or
involuntarily, whether by operation of law or otherwise (including through
merger or consolidation) to any Person other than to a Person which is and
continues throughout the Term to be a direct or indirect wholly-owned Subsidiary
of Tenant or Guarantor or which is a Credit Entity, or (ii) sublet any of the
Leased Premises at any time to any other Person other than to an Affiliate of
Tenant or Guarantor (but only so long as such Person remains such an Affiliate)
or to a Credit Entity, without the prior written consent of Landlord, which
consent may be granted or withheld by Landlord in accordance with the provisions
of Paragraphs 21(b) or 21(c) below, as applicable, and subject, in each case, to
the provisions of Paragraphs 21(j) and 21(k) below. Any purported sublease or
assignment in violation of this Paragraph 21 including an Affiliate transaction
in violation of the provisions of Paragraphs 21(j) or 21(k) below shall be null
and void. In addition, notwithstanding anything to the contrary contained in
this Paragraph 21, Tenant shall not have the right to assign this Lease
(voluntarily or involuntarily, whether by operation of law or otherwise), or
sublet any of the Leased Premises to any Person at any time that an Event of
Default shall exist. As used herein, a “Credit Entity” shall mean any Person
that immediately following such assignment or subletting and having given effect
thereto will have a publicly traded unsecured senior debt rating of “Baa3” or
better from Moody’s or a rating of “BBB-” or better from S&P and is not on
“Negative Credit Watch” by S&P or Moody’s (or, if such Person does not then have
rated debt, a determination that by either of such rating agencies its unsecured
senior debt would be so rated by such agency), and in the event both such rating
agencies cease to furnish such ratings, then a comparable rating by any rating
agency acceptable to Landlord and Lender.
               (b) If Tenant desires to assign this Lease, whether by operation
of law or otherwise, to a Person (“Non-Preapproved Assignee”) that is not a
wholly-owned subsidiary of Tenant or Guarantor or a Credit Entity or (each a
“Non-Preapproved Assignment”) then Tenant shall, not less than ninety (90) days
prior to the date on which it desires to make a Non-Preapproved Assignment,
submit to Landlord and Lender information regarding the following with respect
to the Non-Preapproved Assignee (collectively, the “Review Criteria”):
(A) credit, (B) capital structure, (C) management, (D) operating history,
(E) proposed use of the Leased Premises and (F) risk factors associated with the
proposed use of the Leased Premises by the Non-Preapproved Assignee, taking into
account factors such as environmental concerns, product liability and the like.
Landlord and Lender shall review such information and shall approve or
disapprove the Non-Preapproved Assignee applying prudent business judgment no
later than the thirtieth (30th) day following receipt of all such information,
and Landlord and Lender shall be deemed to have acted reasonably in granting or
withholding consent if such grant or disapproval is based on their review of the
Review Criteria applying prudent business judgment. If a response is not
received by Tenant by the expiration of such thirty (30) day period, such
non-Preapproved Assignee shall be deemed disapproved.
               (c) Notwithstanding anything to the contrary in this Lease,
Tenant shall have the right, upon thirty (30) days prior written notice to
Landlord and Lender, but without the necessity of Landlord’s or Lender’s
consent, to enter into (i) one or more subleases or licenses with any Affiliate
of Tenant or Guarantor or Credit Entity and (ii) one or more subleases or
licenses with any third parties that demise, in the aggregate, up to, but not to
exceed thirty-three percent (33%) of the gross leasable area of the Improvements
at any Related

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Premises, with no consent or approval of Landlord being required or necessary
(each, a “Preapproved Sublet”). Other than pursuant to Preapproved Sublets, at
no time during the Term shall subleases exist for more than thirty-three percent
(33%) of the gross leasable area of the Improvements at any Related Premises
without the prior written consent of Landlord, which consent shall be granted or
withheld based on a review of the Review Criteria as they relate to the proposed
sublessee and the terms of the proposed sublease. Landlord and Lender shall be
deemed to have acted reasonably in granting or withholding consent if such grant
or disapproval is based on their review of the Review Criteria applying prudent
business judgment. In addition to the foregoing, Landlord and Tenant acknowledge
that, contemporaneously with the execution of this Lease, Tenant has entered
into separate sublease agreements with LTF Club Operations Company, Inc., a
Minnesota corporation and Affiliate of Tenant, with regard to each of the
Related Premises, copies of which subleases have been provided to and approved
by Landlord.
               (d) If Tenant assigns all its rights and interest under this
Lease, the assignee under such assignment shall expressly assume all the
obligations of Tenant hereunder, actual or contingent, including obligations of
Tenant which may have arisen on or prior to the date of such assignment, by a
written instrument delivered to Landlord at the time of such assignment and
shall also provide any certification reasonably required by Landlord related to
the USA Patriot Act. Each sublease of any of the Leased Premises shall (A) be
expressly subject and subordinate to this Lease and any Mortgage encumbering the
Leased Premises; (B) not extend beyond the then current Term minus one day;
(C) terminate upon any termination of this Lease, unless Landlord elects in
writing, to cause the sublessee to attorn to and recognize Landlord as the
lessor under such sublease, whereupon such sublease shall continue as a direct
lease between the sublessee and Landlord upon all the terms and conditions of
such sublease; and (D) bind the sublessee to all covenants contained in
Paragraph 4(a), 10 and 12 with respect to subleased premises to the same extent
as if the sublessee were the Tenant. No assignment or sublease shall affect or
reduce any of the obligations of Tenant hereunder (or of the Guarantor under the
Guaranty), and all such obligations of Tenant shall continue in full force and
effect as obligations of a principal and not as obligations of a guarantor, as
if no assignment or sublease had been made, except that, if Tenant assigns this
Lease to a Person that, immediately following such assignment (including,
without limitation, as contemplated by Paragraphs 21(j) or 21(k) below) and
after having given effect thereto, is a Release Credit Entity, then the
transferor Tenant shall be released from all liabilities and obligations under
this Lease with respect to matters that first arose, occurred or accrued after
the date of such assignment. No assignment or sublease shall impose any
additional obligations on Landlord under this Lease. For purposes of this
Paragraph 21(d), “Release Credit Entity” shall mean any Person that immediately
following such assignment (other than an assignment, whether voluntary or
involuntary, by operation of law, including, without limitation, a consolidation
or merger) and having given effect thereto shall have a publicly traded
unsecured senior debt rating of “Baa1” or better from Moody’s or a rating of
“BBB+” or better from S&P and is not on “Negative Credit Watch” by S&P or
Moody’s (or, if such Person does not then have rated debt, a determination that
by either of such rating agencies its unsecured senior debt would be so rated by
such agency), and in the event both such rating agencies cease to furnish such
ratings, then a comparable rating by any rating agency acceptable to Landlord
and Lender.
               (e) Tenant shall, within ten (10) days after the execution and
delivery of any assignment or sublease, deliver a duplicate original copy
thereof to Landlord which, in the event of an assignment, shall be in recordable
form. With respect to any Preapproved Assignment or any Preapproved Sublet, at
least thirty (30) days prior to the effective date of such assignment or
sublease, Tenant shall provide to Landlord information reasonably required by
Landlord to establish that the Person involved in any such proposed assignment
or sublet satisfies the criteria set forth in this Lease for a Preapproved
Assignment or Preapproved Sublet.

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               (f) As security for performance of its obligations under this
Lease, Tenant hereby grants, conveys and assigns to Landlord all right, title
and interest of Tenant in and to all subleases now in existence or hereafter
entered into for any or all of the Leased Premises, any and all extensions,
modifications and renewals thereof and all rents, issues and profits therefrom.
Landlord hereby grants to Tenant a license to collect and enjoy all rents and
other sums of money payable under any sublease of any of the Leased Premises;
provided, however, that Landlord shall have the absolute right at any time and
upon notice to Tenant and any subtenants to revoke said license and to collect
such rents and sums of money and to retain the same; provided, further, however,
that Landlord’s right to revoke said license and to collect such rents and sums
of money and to retain the same shall only be applicable with regard to any
Preapproved Sublet pursuant to Paragraph 21(c)(ii) while there’s an uncured
Event of Default. Any amounts collected shall be applied to Rent payments next
due and owing. Tenant shall not accept any rents more than one (1) month in
advance of the accrual thereof nor do nor permit anything to be done, the doing
of which, nor omit or refrain from doing anything, the omission of which, will
or could be a breach of or default in the terms of any of the subleases.
               (g) Notwithstanding anything to the contrary contained in
Paragraphs 21 (j) or (k) below, Tenant shall not have the power to mortgage,
pledge or otherwise encumber its interest under this Lease or any sublease of
the Leased Premises, and any such mortgage, pledge or encumbrance made in
violation of this Paragraph 21 shall be void and of no force and effect.
               (h) Notwithstanding any provision in this Paragraph 21 or
elsewhere in this Lease to the contrary, including any right or option Tenant
may have to assign this Lease or sublease all or any portion of the Leased
Premises without Landlord’s consent, Tenant shall, upon the request of Landlord,
provide and cause such assignee or sublessee to provide, such information
(including, without limitation, any certification) as to any proposed assignee
or sublessee and its principals as may be required for Landlord and Tenant to
comply with regulations administered by the Office of Foreign Asset Control
(“OFAC”) of the Department of the Treasury, codified at 31 C.F.R. Part 500
(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 governmental action
regarding persons or entities with whom U.S. persons or entities are restricted
from doing business (including persons or entities who have violated the U.S.
Foreign Corrupt Practices Act 15 U.S.C. §§78dd-1, 78dd-2 and 78dd-3)
               (i) Subject to the provisions of Paragraph 35 hereof (Tenant’s
right of first offer), Landlord may sell or transfer subject to this Lease the
Leased Premises at any time without Tenant’s consent to any third party (each a
“Third Party Purchaser”). In the event of any such transfer, Tenant shall attorn
to any Third Party Purchaser as Landlord so long as such Third Party Purchaser
and Landlord notify Tenant in writing of such transfer. At the request of
Landlord, Tenant will execute such documents confirming the agreement referred
to above and such other agreements as Landlord may reasonably request, provided
that such agreements do not increase the liabilities and obligations of Tenant
hereunder.
               (j) Tenant shall not, in a single transaction or series of
related transactions (including any interim merger or consolidation), enter into
an agreement to sell or convey, transfer, abandon or lease or sell or convey,
transfer or lease all or substantially all of its assets (an “Asset Transfer”)
to any Person, and any such Asset Transfer shall be deemed an assignment in
violation of this Lease; except that, Tenant shall have the right to conduct an
Asset Transfer to a Person without Landlord’s consent if the following
conditions are met: (i) the Asset Transfer is to a Person that (A) immediately
following such transaction or transactions, taken in the aggregate, is (or would
be, on a pro forma basis) a Credit Entity, (B) is a wholly owned

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Subsidiary of Tenant or Guarantor (but only for so long as such Person shall
remain a wholly owned Subsidiary of Tenant or Guarantor), or (C) is approved in
writing by Landlord under the Review Criteria as a Non-Preapproved Assignee in
accordance with the provisions of Paragraph 21(b) of this Lease; and (ii) this
Lease is assigned to and assumed by such Person as a part of such Asset
Transfer. In the event of an Asset Transfer to a wholly-owned Subsidiary of
Tenant or Guarantor, any subsequent sale of the assets of the original Tenant
named herein by such wholly-owned Subsidiary of Tenant or Guarantor shall be
governed by the requirements of this subparagraph (j) irrespective of whether or
not such sale would be considered a sale of all or substantially all of the
assets of the wholly-owned Subsidiary of Tenant or Guarantor; further provided,
however, neither the granting by Tenant or Guarantor or any Subsidiary of either
thereof of any mortgage, pledge, collateral assignment or encumbrance with
respect to any or all of its assets for the purposes of obtaining, modifying or
refinancing a senior loan facility (including, without limitation, Guarantor’s
current senior loan facility with U. S. Bank National Association ), nor the
foreclosure, exercise or other realization on any such mortgage, pledge,
assignment or encumbrance, shall be or be deemed to be an assignment or an Asset
Transfer for purposes of this Section 21(j) or the other provisions of this
Lease.
               (k) At no time during the Term shall any Person or “group”
(within the meaning of Section 13(d) or Section 14(d) of the Securities Exchange
Act of 1934, as amended) pursuant to a single transaction or series of related
transactions (i) acquire, directly or indirectly, more than 50% of the voting
stock, partnership interests, membership interests or other equitable and/or
beneficial interests of Tenant (“Control”) or (ii) obtain, directly or
indirectly, the power (whether or not exercised) to elect a majority of the
directors of Tenant or voting control of any partnership or limited liability
company or other entity acting as its general partner or managing member
(including through a merger or consolidation of Tenant with or into any other
Person), unless the purchaser of such Control or Person who acquires such voting
power shall: (A) after taking into account the transaction that resulted in the
acquisition of such Control or voting power, be a Credit Entity and such Person
shall enter into a guaranty satisfactory to Landlord pursuant to which it
guarantees the payment and performance of the obligations of Tenant under this
Lease, or (B) be approved in writing by Landlord under the Review Criteria as a
Non-Preapproved Assignee in accordance with the provisions of Paragraph 21(b)
above. Except as permitted in this Paragraph 21(k) above, any such change of
Control or voting power (by operation of law, merger, consolidation or
otherwise) shall be deemed as an assignment of this Lease to a Non-Preapproved
Assignee and the approval of Landlord and Lender shall be required as set forth
in Paragraph 21(b) above and any consummation of such assignment absent such
approval shall be in violation of this Lease; provided, however, that a deemed
assignment pursuant to the transfer of the outstanding capital stock of Tenant,
Guarantor or any Subsidiary of either thereof shall not be deemed to include the
sale of such stock by persons or parties through the “over-the-counter market”
or through any recognized stock exchange, other than by those deemed to be a
“control-person” within the meaning of the Securities Exchange Act of 1934;
further provided, however, neither the granting by Tenant or Guarantor or any
Subsidiary of either thereof of any mortgage, pledge, collateral assignment or
encumbrance with respect to any or all of its assets for the purposes of
obtaining, modifying or refinancing a senior loan facility (including, without
limitation, Guarantor’s current senior loan facility with U. S. Bank National
Association ), nor the foreclosure, exercise or other realization on any such
mortgage, pledge, assignment or encumbrance, shall be or be deemed to be an
assignment or change in Control for purposes of this Section 21(k) or the other
provisions of this Lease.
          22. Events of Default.
               (a) The occurrence of any one or more of the following (after
expiration of any applicable cure period as provided in Paragraph 22(b)) shall,
at the sole option of Landlord, constitute an “Event of Default” under this
Lease:

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                    (i) a failure by Tenant to make any payment of any Monetary
Obligation on or prior to its due date, regardless of the reason for such
failure;
                    (ii) a failure by Tenant duly to perform and observe, or a
violation or breach of, any other provision hereof not otherwise specifically
mentioned in this Paragraph 22(a);
                    (iii) any representation or warranty made by Tenant herein
or in any certificate, demand or request made pursuant hereto proves to be
incorrect, now or hereafter, in any material respect;
                    (iv) a default beyond any applicable notice and cure period
by (A) Tenant in its capacity as lessee under the terms of that certain Lease
Agreement, dated as of July 26, 2006, with Well-PROP (MULTI) LLC, a Delaware
limited liability company, as landlord (the “2006 Lease”), or (B) LIFE TIME
FITNESS INC., a Minnesota corporation (“LTF”), under the terms of that certain
Lease Agreement, dated as of September 30, 2003, between LTF, as tenant, and LT
FITNESS (DE) QRS 15-53, INC., a Delaware corporation, as landlord (the “2003
Lease” and, together with the 2006 Lease, collectively, the “Existing Leases”),
in either case, other than any such default under Paragraph 22 (a)(iv) of each
of the Existing Leases;
                    (v) Tenant shall (A) voluntarily be adjudicated a bankrupt
or insolvent, (B) seek or consent to the appointment of a receiver or trustee
for itself or for any of the Related Premises, (C) file a petition seeking
relief under the bankruptcy or other similar laws of the United States, any
state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
                    (vi) a court shall enter an order, judgment or decree
appointing, without the consent of Tenant, a receiver or trustee for it or for
any of the Related Premises or approving a petition filed against Tenant which
seeks relief under the bankruptcy or other similar laws of the United States,
any state or any jurisdiction, and such order, judgment or decree shall remain
undischarged or unstayed sixty (60) days after it is entered;
                    (vii) any Related Premises shall have been (A) vacated in
its entirety (i.e., neither Tenant nor any sublessee or licensee shall be in
possession of any portion thereof), provided that Tenant shall have the right to
vacate either one or both of the Related Premises for up to six (6) months and,
so long as Tenant has retained a third party broker and during such initial six
(6) month period Tenant has diligently attempted to sublet such Related
Premises, for an additional six (6) months, or (B) abandoned;
                    (viii) Tenant shall be liquidated or dissolved or shall
begin proceedings towards its liquidation or dissolution;
                    (ix) the estate or interest of Tenant in any of the Related
Premises shall be levied upon or attached in any proceeding and such estate or
interest is about to be sold or transferred or such process shall not be vacated
or discharged within sixty (60) days after it is made;
                    (x) a failure by Tenant to perform or observe, or a
violation or breach of, or a misrepresentation by Tenant under, any provision of
any Assignment or any other document between Tenant and Lender or from Tenant to
Lender, if such failure, violation, breach or misrepresentation gives rise to a
default beyond any applicable cure period with respect to any Loan;

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                    (xi) Tenant shall violate the provisions of Paragraph 21
(j) or (k), or otherwise cause or permit an assignment or sublease in violation
of Paragraph 21 hereof;
                    (xii) a Non-Preapproved Assignment shall occur and Tenant
shall have failed to comply with the provisions of Paragraph 21(b), if
applicable;
                    (xiii) Tenant shall fail to deliver the estoppel described
in Paragraph 25 within the time period specified therein;
                    (xiv) an Event of Default (as defined in the Guaranty)
beyond any applicable cure period shall occur under the Guaranty, or
                    (xv) Tenant shall enter into an Asset Transfer or change of
Control in violation of Paragraph 21.
               (b) No notice or cure period shall be required in any one or more
of the following events: the occurrence of an Event of Default under clause (i)
(except as otherwise set forth below), (iv), (v), (vi), (vii), (viii), (ix),
(x), (xi), (xii), (xiii), (xiv) or (xv) of Paragraph 22(a). If the default
consists of the failure to comply with any insurance required by Paragraph 16,
then the applicable cure period shall be three (3) days from the date on which
notice is given, but Landlord shall not be obligated to give notice of, or allow
any cure period for, any such default more than one (1) time within any Lease
Year. If the default consists of the failure to pay Basic Rent, then applicable
cure period shall be five (5) days from the date on which notice is given, but
Landlord shall not be obligated to give notice of, or allow any cure period for,
any such default more than one (1) time within any Lease Year. If the default
consists of the failure to pay any Monetary Obligation except Basic Rent, then
the applicable cure period shall be ten (10) days from the date on which notice
is given but Landlord shall not be obligated to give notice of, or allow any
cure period for, the same default more than one (1) time in any Lease Year. If
the default consists of a default under clauses (ii) or (iii) (but with respect
to (iii), if and only if same is reasonably susceptible of being cured) of
Paragraph 22(a), other than the events specified in clause (B) of the first
sentence of this Paragraph 22(b), the applicable cure period shall be thirty
(30) days from the date on which notice is given or, if the default cannot be
cured within such thirty (30) day period and delay in the exercise of a remedy
would not (in Landlord’s reasonable judgment) cause any material adverse harm to
Landlord or any of the Leased Premises, the cure period shall be extended for
the period required to cure the default (but such cure period, including any
extension, shall not in the aggregate exceed ninety (90) days), provided that
Tenant shall commence to cure the default within the said thirty-day period and
shall actively, diligently and in good faith proceed with and continue the
curing of the default until it shall be fully cured..
          23. Remedies and Damages Upon Default.
               (a) If an Event of Default shall have occurred and is continuing
beyond the expiration of any applicable notice and/or cure period, then Landlord
shall have the right, at its sole option, then or at any time thereafter upon
not less than three (3) days prior written notice to Tenant, to exercise its
remedies and to collect damages from Tenant in accordance with this Paragraph 23
and subject in all events to any conditions and limitations (including any
additional notice requirements) of applicable Law, without demand upon or notice
to Tenant except as otherwise provided in Paragraph 22(b) and this Paragraph 23.
                    (i) Landlord may terminate this Lease by giving Tenant
written notice thereof; such termination to be effective as of the date
specified in such notice unless a longer notice period is prescribed by
applicable Law (in which event, such longer period shall deemed set forth in
such notice and shall control). Upon such date, this Lease, the estate

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hereby granted and all rights of Tenant hereunder shall expire and terminate and
Tenant shall immediately surrender and deliver possession of the Leased Premises
to Landlord in accordance with and in the condition required by Paragraph 26
hereof . If Tenant does not so surrender and deliver possession of all of the
Leased Premises, Landlord may re-enter and repossess any of the Leased Premises
not surrendered, with or without legal process, by peaceably entering any of the
Leased Premises and changing locks or by summary proceedings, ejectment or any
other lawful means or procedure.
                    (ii) Landlord may terminate Tenant’s right of possession
(but not this Lease) and may repossess the Leased Premises by any available
legal process without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant and without terminating this
Lease.
                    (iii) Upon or at any time after taking possession of any of
the Leased Premises pursuant to Paragraph 23(a)(i) or 23(a)(ii), Landlord may,
by peaceable means or legal process, remove any Persons or property therefrom.
Landlord shall be under no liability for or by reason of any such entry,
repossession or removal. Notwithstanding such entry or repossession, Landlord
may collect the damages set forth in Paragraph 23(b)(i) and 23(b)(ii).
                    (iv) After repossession of any of the Leased Premises
pursuant to clause (i) or (ii) above, Landlord shall have the right to relet any
of the Leased Premises to such tenant or tenants, for such term or terms, for
such rent, on such conditions and for such uses as Landlord in its sole
discretion may determine, and collect and receive any rents payable by reason of
such reletting. Landlord may make such Alterations in connection with such
reletting as it may deem advisable in its sole discretion. Notwithstanding any
such termination of Tenant’s right of possession of the Leased Premises,
Landlord may at any time thereafter elect to terminate this Lease and in such
event Landlord shall have the right and remedies specified in Paragraph 23 (a)
(iii).
               (b) The following constitute damages to which Landlord shall be
entitled if Landlord exercises its remedies under Paragraph 23(a)(i), (ii) and
(iii):
                    (i) If Landlord exercises its remedy under Paragraphs
23(a)(i) or (ii) but not its remedy under Paragraph 23(a)(iv) (or attempts to
exercise such remedy and is unsuccessful in reletting the Leased Premises) then,
upon written demand from Landlord, Tenant shall pay to Landlord, as liquidated
and agreed final damages for Tenant’s default and in lieu of all current damages
beyond the date of such demand (it being agreed that it would be impracticable
or extremely difficult to fix the actual damages), an amount equal to the
Present Value of the excess, if any, of (A) all Basic Rent allocated for each
Related Premises based on Exhibit “F” from the date of such demand to the date
on which the Term is scheduled to expire hereunder in the absence of any earlier
termination, re-entry or repossession over (B) the then fair market rental value
of each Related Premises for the same period. Tenant shall also pay to Landlord
all of Landlord’s Costs in connection with the repossession of the Leased
Premises and any attempted reletting thereof, including all brokerage
commissions, legal expenses, reasonable attorneys’ fees, employees’ expenses,
costs of Alterations and expenses and preparation for reletting.
                    (ii) If Landlord exercises its remedy or remedies under
Paragraphs 23(a)(i), (ii), (iii) or (iv), then Tenant shall, until the end of
what would have been the Term in the absence of the termination of the Lease,
and whether or not any of the Leased Premises shall have been relet, be liable
to Landlord for, and shall pay to Landlord, as liquidated and agreed current
damages all Monetary Obligations which would be payable under this Lease by
Tenant in the absence of such termination less the net proceeds, if any, of any
reletting pursuant to Paragraph 23(a)(iv), after deducting from such proceeds
all of Landlord’s Costs

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(including the items listed in the last sentence of Paragraph 23(b)(i) hereof)
incurred in connection with such repossessing and reletting; provided, that if
Landlord has not relet the Leased Premises, such Costs of Landlord shall be
considered to be Monetary Obligations payable by Tenant. Tenant shall be and
remain liable for all sums aforesaid, and Landlord may recover such damages from
Tenant and institute and maintain successive actions or legal proceedings
against Tenant for the recovery of such damages. Nothing herein contained shall
be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired by its own terms had
there been no such Event of Default.
                    (iii) Tenant shall be and remain liable for all sums
aforesaid, and Landlord may recover such damages from Tenant and institute and
maintain successive actions or legal proceedings against Tenant for the recovery
of such damages. Nothing herein contained shall be deemed to require Landlord to
wait to begin such action or other legal proceedings until the date when the
Term would have expired by its own terms had there been no such Event of
Default.
               (c) Notwithstanding anything to the contrary herein contained, in
lieu of or in addition to any of the foregoing remedies and damages, Landlord
may exercise any remedies and collect any damages available to it at law or in
equity. If Landlord is unable to obtain full satisfaction pursuant to the
exercise of any remedy, it may pursue any other remedy which it has hereunder or
at law or in equity.
               (d) Notwithstanding anything to the contrary contained herein,
Landlord shall use reasonable efforts to mitigate any damages hereunder
following any termination of this Lease or any termination of Tenant’s
possession of the Premises and Landlord shall be deemed to have acted reasonably
if Landlord has, within a reasonable time after such termination, retained a
third party broker to relet the Leased Premises on such terms as shall be
recommended by such third party broker. If any Law shall validly limit the
amount of any damages provided for herein to an amount which is less than the
amount agreed to herein, Landlord shall be entitled to the maximum amount
available under such Law.
               (e) No termination of this Lease, repossession or reletting of
any of the Leased Premises, exercise of any remedy or collection of any damages
pursuant to this Paragraph 23 shall relieve Tenant of any Surviving Obligations.
               (f) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD OR
TENANT HEREUNDER, TENANT HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY.
               (g) Upon the occurrence of any Event of Default, Landlord shall
have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose
               (h) No failure of Landlord (i) to insist at any time upon the
strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any sum
in satisfaction of any Monetary Obligation with knowledge of the breach of any
provision hereof shall not be deemed a waiver of such breach, and no waiver by
Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
               (i) Tenant hereby waives and surrenders, for itself and all those
claiming under it, including creditors of all kinds, any right and privilege
which it or any of them

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may have under any present or future Law to redeem any of the Leased Premises or
to have a continuance of this Lease after termination of this Lease or of
Tenant’s right of occupancy or possession pursuant to any court order or any
provision hereof.
               (j) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be exhausted
by any exercise thereof.
          24. Notices. All notices, demands, requests, consents, approvals,
offers, statements and other instruments or communications required or permitted
to be given pursuant to the provisions of this Lease shall be in writing and
shall be deemed to have been given and received for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) business days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated on page one of this Lease or
when delivery is refused. Notices sent to Landlord shall be to the attention of
Director, Asset Management, and notices sent to Tenant shall be to the attention
of Tenant’s General Counsel. A copy of any notice given by Tenant to Landlord
shall simultaneously be given by Tenant to Reed Smith LLP, 599 Lexington Avenue,
29th Floor, New York, New York, 10022, Attention: Chairman, Real Estate
Department. For the purposes of this Paragraph, any party may substitute another
address stated above (or substituted by a previous notice) for its address by
giving fifteen (15) days’ notice of the new address to the other party, in the
manner provided above.
          25. Estoppel Certificate. At any time upon not less than ten
(10) days’ prior written request by either Landlord or Tenant (the “Requesting
Party”) to the other party (the “Responding Party”), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect,
(b) the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by a court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. Any such statements by the
Responding Party may be relied upon by the Requesting Party, any Person whom the
Requesting Party notifies the Responding Party in its request for the
Certificate is an intended recipient or beneficiary of the Certificate, any
Lender or their assignees and by any prospective purchaser or mortgagee of any
of the Leased Premises. Any certificate required under this Paragraph 25 and
delivered by Tenant shall state that, in the opinion of each person signing the
same, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to the subject matter of such certificate,
and shall briefly state the nature of such examination or investigation. In no
event shall any person signing a Certificate be personally liable hereunder.
          26. Surrender. Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the Leased Premises or
Affected Premises, as is applicable, to Landlord in the same condition in which
the Leased Premises or Affected Premises, as applicable, was at the commencement
of this Lease, except as repaired, rebuilt, restored, altered, replaced or added
to as permitted or required by any provision of this Lease, ordinary wear and
tear and damage from any Casualty or Condemnation excepted; provided, however,
that with respect to any Casualty Tenant has paid to Landlord the deductible
under Paragraph 16(a)(i) or, if applicable, Landlord has received the
Termination Amount. Upon such

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surrender, Tenant shall (a) remove from the Leased Premises or Affected
Premises, as applicable, Tenant’s Property and Alterations required to be
removed pursuant to Paragraph 13 hereof, and (b) repair any damage caused by
such removal. Property not so removed shall become the property of Landlord, and
Landlord may thereafter cause such property to be removed from the Leased
Premises or Affected Premises, as applicable. The cost of removing and disposing
of such property and repairing any damage to any of the Leased Premises or
Affected Premises, if applicable, caused by such removal shall be paid by Tenant
to Landlord upon demand. Landlord shall not in any manner or to any extent be
obligated to reimburse Tenant for any such property which becomes the property
of Landlord pursuant to this Paragraph 26. Notwithstanding anything to the
contrary in this Lease, Tenant shall be under no obligation to patch, repair or
replace finish work, such as wallcoverings, paint and carpeting, or to patch,
repair or cover holes in the walls or floor left by the removal of any
Alteration or Tenant’s property to the extent such removal was performed in a
reasonable or normal manner.
          27. No Merger of Title. There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate created hereby or any part thereof or
interest therein and (b) the fee estate in any of the Leased Premises or any
part thereof or interest therein, unless and until all Persons having any
interest in the interests described in (a) and (b) above which are sought to be
merged shall join in a written instrument effecting such merger and shall duly
record the same.
          28. Books and Records.
               (a) Tenant shall keep adequate records and books of account with
respect to the finances and business of Tenant generally and with respect to the
Leased Premises, in accordance with generally accepted accounting principles
(“GAAP”) consistently applied, and shall permit Landlord and Lender by their
respective agents, accountants and attorneys to visit and inspect the Leased
Premises and examine (and make copies of) at Tenant’s main offices the records
and books of account and to discuss the finances and business with the officers
of Tenant, at such reasonable times as may be requested by Landlord, upon not
less than ten (10) days’ prior notice to Tenant. Upon the request of Lender or
Landlord (either telephonically or in writing), Tenant shall provide within ten
(10) days’ the requesting party with copies of any information to which such
party would be entitled in the course of a personal visit.
               (b) If at any time during the Term, Guarantor ceases to be a
publicly traded company and/or its financial reports and statements (i.e. 10-K
and 10-Q reports) are no longer available to Landlord via Edgar or other online
reporting sources without material cost to Landlord, then, for so long as Tenant
is a direct or indirect wholly-owned subsidiary of Guarantor, Tenant shall
deliver to Landlord and to Lender (i) within one hundred twenty (120) days of
the close of each fiscal year of Guarantor, annual audited financial statements
of the Tenant Group certified by a nationally recognized firm of independent
certified public accountants, and (ii) within forty-five (45) days after the end
of each of the three remaining quarters unaudited financial statements and all
other quarterly reports of the Tenant Group, certified by the Guarantor’s chief
financial officer, and all filings, if any, of Form 10-K, Form 10-Q and other
required filings with the Securities and Exchange Commission pursuant to the
provisions of the Securities Exchange Act of 1934, as amended, or any other
similar Law. If, at any time during the Term Tenant is not a direct or indirect
wholly-owned subsidiary of Guarantor, Tenant shall deliver to Landlord and to
Lender (ii) within one hundred twenty (120) days of the close of each fiscal
year of Tenant annual audited financial statements of Tenant prepared by
nationally recognized independent certified public accountants and (ii) within
forty-five (45) days after the end of each of the three remaining quarters
unaudited financial statements and all other quarterly reports of Tenant,
certified by Tenant’s chief financial officer, and all filings, if any, of Form
10-K, Form 10-Q and other required filings with the Securities and

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Exchange Commission pursuant to the provisions of the Securities Exchange Act of
1934, as amended, or any other similar Law. All financial statements of Tenant
shall be prepared in accordance with GAAP consistently applied. All annual
financial statements shall be accompanied (i) by an opinion of said accounting
firm stating that (A) there are no qualifications as to the scope of the audit
and (B) the audit was performed in accordance with GAAP and (ii) by the
affidavit of the president or a vice president of Tenant, dated within five
(5) days of the delivery of such statement, stating that (C) the affiant knows
of no Event of Default, or event which, upon notice or the passage of time or
both, would become an Event of Default which has occurred and is continuing
hereunder or, if any such event has occurred and is continuing, specifying the
nature and period of existence thereof and what action Tenant has taken or
proposes to take with respect thereto and (D) except as otherwise specified in
such affidavit, that Tenant has fulfilled all of its obligations under this
Lease which are required to be fulfilled on or prior to the date of such
affidavit; provided that no such affidavit shall be a personal obligation or, or
create any liability to, the affiant.
          29. Tenant’s Property.
               (a) The following property (collectively, “Tenant’s Property”),
whether or not located in or on the Leased Premises, does not constitute a
portion of the Leased Premises and shall at all times during and after the Term
be the property of Tenant:
                    (i) All items of personal property, equipment and trade
fixtures (so long as same are not necessary for the operation of the Leased
Premises as opposed to the business from time to time conducted at the Leased
Premises) about the Leased Premises, and whether or however attached to the
Improvements, at any time that are necessary or incidental to the business from
time to time conducted at the Leased Premises, including, without limitation,
exercise equipment, kitchen equipment and furnishings, work stations, portable
or movable partitions, receptionist desks, millwork, credenzas, computer
installations (including computers, computer hardware, raised flooring,
freestanding supplemental air conditioning or cooling systems therefor),
communications systems and equipment, financial services equipment (such as
ATM’s), safes, safe doors, bulletin boards, book shelves and file cabinets, but
excluding central HVAC and other building systems (other than telecommunications
equipment, which shall be deemed the personal property of Tenant), walls (other
than demountable walls or partitions), doors, trim, floor and wall coverings,
ceiling lights and tile, window shades and the like;
                    (ii) All furniture, inventory, machinery (so long as same is
not necessary for the operation of the Leased Premises as opposed to the
business from time to time conducted at the Leased Premises), racking, shelving,
and other personal property;
                    (iii) Any personal property, equipment or trade fixtures (so
long as same are not necessary for the operation of the Leased Premises as
opposed to the business from time to time conducted at the Leased Premises)
which is either not owned by Landlord or Tenant or is on consignment to Tenant,
including any personal property owned by Tenant’s, subtenant’s, employees or
invitees;
                    (iv) All signs and other forms of business identification;
and
                    (v) Any other items of personal property whatsoever.
               (b) (b) Tenant and each permitted subtenant at either Related
Premises shall have the right in its sole and absolute discretion from time to
time to install, alter, remove and/or replace their respective Tenant’s Property
as it shall deem to be useful or desirable in connection with its business in
the Leased Premises. Tenant further shall have the

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right to enter into such agreements and assignments with respect to the Tenant’s
Property as Tenant or any permitted subtenant at either Related Premises in
their sole discretion shall deem advisable, including financing and similar
arrangements.
               (c) Landlord agrees that, upon the request of any Person that
shall be Tenant’s senior secured lender or an equipment lender or equipment
lessor of Tenant, Landlord shall negotiate in good faith for the purpose of
executing and delivering a commercially reasonable waiver of Landlord’s
statutory lien rights, if any, and a consent and agreement with respect to the
respective rights of Landlord and such Person regarding the security interests
in, and the timing and removal of, any inventory, equipment or other collateral
in which such Person has a secured interest (the “Collateral”), in form and
substance reasonably acceptable to Landlord and such Person, so long as such
waiver and agreement (i) provides for the indemnification of Landlord against
any claims by Tenant or any Person claiming through Tenant, and against any
physical damage caused to the Leased Premises, in connection with the removal of
any of the Collateral by such Person, (ii) expressly excludes any claim by such
Person to any right, title or interest in or to any of the Equipment as defined
in this Lease, (iii) provides for a reasonable, but in no event more than sixty
(60) days, time frame for the removal of such Collateral by such Person after
the expiration of which same shall be deemed abandoned, and (iv) provides for
the per diem payment of Basic Rent due hereunder by such Person for each day
following the date of the expiration or termination of this Lease that Landlord
permits such Person’s Collateral to remain in the Leased Premises.
          30. Non-Recourse as to Landlord. Anything contained herein to the
contrary notwithstanding, any claim based on or in respect of any liability of
Landlord under this Lease shall be limited to actual damages and shall be
enforced only against the Leased Premises and not against any other assets,
properties or funds of (a) Landlord, (b) any director, member, officer, general
partner, limited partner, employee or agent of Landlord, or any general partners
or shareholders of Landlord (or any legal representative, heir, estate,
successor or assign of any thereof), (c) any predecessor or successor
partnership or corporation (or other entity) of Landlord, or any of its general
partners, either directly or through Landlord or its general partners or any
predecessor or successor partnership or corporation or their shareholders,
officers, directors, employees or agents (or other entity), or (d) any other
Person (including Carey Property Advisors, Carey Asset Management Corp., W. P.
Carey & Co., LLC, Carey Management Securities, Inc. and any Person affiliated
with any of the foregoing, or any director, officer, employee or agent of any
thereof.
          31. Financing.
               (a) Tenant agrees to pay, not later than three (3) business days
following written request from Landlord (or upon the date of this Lease with
respect to costs and expenses incurred as of such date): (i) all costs and
expenses incurred by Landlord in connection with the initial purchase and
leasing of the Leased Premises, including, without limitation, transfer taxes
and recording fees and charges, the cost of appraisals, environmental reports,
property condition report and zoning reports; UCC and related searches; owner’s
title insurance charges and premiums (including endorsements), the cost of
surveys; the costs of any updates to any of the foregoing or any reliance
letters required in connection therewith; and the fees and expenses of
Landlord’s counsel, and (ii) all costs and expenses incurred by Landlord in
connection with the financing of the initial Loan, including without limitation,
any “points”, application charges, commitment fees, costs of updates or
additions to searches or any of the reports identified under clause (i) hereof
or any reliance letters required in connection therewith, Lender’s title charges
and premiums (including endorsements), and the fees and expenses of Lender’s
counsel.

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               (b) Tenant agrees to pay, within three (3) business days of
written demand thereof, any cost, charge or expense (other than the principal of
the Note and interest thereon at the contract rate of interest specified
therein) imposed upon Landlord by Lender pursuant to the Note, the Mortgage or
the Assignment which is not caused solely by the gross negligence or willful
misconduct of Landlord and which is not otherwise reimbursed by Tenant to
Landlord pursuant to any other provision of this Lease.
               (c) If Landlord desires to obtain or refinance any Loan, Tenant
shall negotiate in good faith with Landlord concerning any request made by any
Lender or proposed Lender for changes or modifications in this Lease. In
particular, Tenant shall agree, upon request of Landlord, to supply any such
Lender with such notices and information as Tenant is required to give to
Landlord hereunder and to extend the rights of Landlord hereunder to any such
Lender and to consent to such financing if such consent is requested by such
Lender. Tenant shall provide any other consent or statement and shall execute
any and all other documents that such Lender reasonably requires in connection
with such financing, including any environmental indemnity agreement and
subordination, non-disturbance and attornment agreement which complies with
Paragraph 32 hereof, so long as the same do not materially adversely affect any
right, benefit or privilege of Tenant under this Lease or materially increase
Tenant’s obligations under this Lease. Such subordination, nondisturbance and
attornment agreement may require Tenant to confirm that (i) Lender and its
assigns will not be liable for any misrepresentation, act or omission of
Landlord and (ii) Lender and its assigns will not be subject to any
counterclaim, demand or offsets which Tenant may have against Landlord.
          32. Subordination, Non-Disturbance and Attornment.
               (a) This Lease and Tenant’s interest hereunder shall be
subordinate to any Mortgage or other security instrument hereafter placed upon
the Leased Premises by Landlord, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that any such Mortgage or other security instrument
(or a separate instrument in recordable form duly executed by the holder of any
such Mortgage or other security instrument and delivered to Tenant) shall
provide for the recognition and non-disturbance of this Lease and all Tenant’s
rights hereunder unless and until an Event of Default exists or Landlord shall
have the right to terminate this Lease pursuant to any applicable provision
hereof.
          33. Tax Treatment; Reporting. Landlord and Tenant each acknowledge
that each shall treat this transaction as a true lease for state law purposes
and shall report this transaction as a lease for Federal income tax purposes.
For Federal income tax purposes each shall report this Lease as a true lease
with Landlord as the owner of the Leased Premises and Equipment and Tenant as
the lessee of such Leased Premises and Equipment including: (i) treating
Landlord as the owner of the property eligible to claim depreciation deductions
under Section 167 or 168 of the Internal Revenue Code of 1986 (the “Code”) with
respect to the Leased Premises and Equipment, (ii) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (iii) Landlord
reporting the Rent payments as rental income. For the avoidance of doubt,
nothing in this Lease shall be deemed to constitute a guaranty, warranty or
representation by either Landlord or Tenant as to the actual treatment of this
transaction for state law purposes and for federal law purposes.
          34. Right of First Offer.
               (a) If Landlord decides to offer the Leased Premises for sale to
any third party, Landlord shall first offer by written notice (the “Offer”) to
sell the Leased Premises

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to Tenant for a specific purchase price (the “ROFO Purchase Price”) and, upon
such terms and conditions as Landlord, in Landlord’s sole discretion, would
otherwise intend to offer to sell the Leased Premises, prior to Landlord’s
offering to sell the Leased Premises to any such third party except that the
terms and conditions of any such sale to Tenant shall be (i) consistent with the
terms and provisions of this Paragraph 34 and (ii) the sale to Tenant shall be
“AS IS”, “WHERE IS”, without representation or warranty by Landlord. If Landlord
shall make the Offer, then, whether or not Tenant has accepted the Offer,
Landlord shall have the unilateral right, in Landlord’s sole discretion, to
revoke the Offer if an Event of Default exists under this Lease on the date on
which Landlord shall give, or would otherwise be required to give, Tenant the
Offer.
               (b) Tenant shall have the right to accept the Offer only by
giving Landlord written notice of such acceptance (the “ROFO Notice”) within
thirty (30) days after delivery by Landlord to Tenant of the Offer. Time shall
be of the essence with respect to said thirty (30) day period and delivery of
the ROFO Notice by Tenant. If Tenant shall accept the Offer, Tenant shall
execute any documentation reasonably required by Landlord to reflect Tenant’s
acceptance of the Offer. Notwithstanding anything to the contrary contained in
this Lease, upon the delivery of the ROFO Notice by Tenant, no event or
circumstances affecting the Leased Premises including, but not limited to, a
Condemnation or Casualty, shall give Tenant any right or option of Tenant to
cancel, surrender or otherwise terminate this Lease, and any other right or
option of Tenant under the Lease to acquire the Leased Premises, shall
automatically be deemed to have been waived by Tenant for all purposes under
this Lease.
               (c) If Tenant does not accept, or fails to accept, the Offer in
accordance with the provisions herein, then, except as provided below, Landlord
shall be under no further obligation with respect to such Offer pursuant to the
terms contained herein, and Tenant shall have forever waived and relinquished
its right to such Offer, and Landlord shall for a period of one (1) year after
Tenant’s rejection of the Offer or the expiration of the thirty (30) day period
specified in Paragraph 34(b) above be entitled to market the Leased Premises to
others upon such terms and conditions as Landlord in its sole discretion may
determine, except that if the price (“Third Party Price”) for which Landlord
enters into a letter of intent or a binding contract (“Third Party Contract”) to
sell the Leased Premises is less than ninety percent (90%) of the ROFO Purchase
Price, Tenant shall have fifteen (15) days in which to accept the Third Party
Price and if it is between ninety percent (90%) and ninety-five percent (95%),
Tenant shall have three (3) days in which to accept the Third Party Price.
Tenant shall, within five (5) days after Landlord’s request therefor, deliver an
instrument in form reasonably satisfactory to Landlord confirming the aforesaid
waiver, but no such instrument shall be necessary to make the provisions hereof
effective. If at the expiration of such one (1) year period Landlord shall not
have sold the Leased Premises, Tenant shall again have the rights under this
Paragraph 34.
               (d) If Tenant does not timely deliver the ROFO Notice and the
Leased Premises are transferred to a third party, Tenant will attorn to such
third party as Landlord so long as such third party and Landlord notify Tenant
in writing of such transfer. At the request of Landlord, Tenant will execute
such documents confirming the agreement referred to above and such other
agreements as Landlord may reasonably request, provided that such agreements do
not increase the liabilities and obligations of Tenant hereunder.
               (e) Notwithstanding anything to the contrary contained herein,
the provisions of this Paragraph 34 shall not apply to or prohibit (i) any
mortgaging, subjection to deed of trust or other hypothecation of Landlord’s
interest in the Leased Premises, (ii) any sale of the Leased Premises pursuant
to a private power of sale under or judicial foreclosure of any Mortgage or
other security instrument or device to which Landlord’s interest in the Leased
Premises is now or hereafter subject, (iii) any transfer of Landlord’s interest
in the Leased Premises to a Lender, beneficiary under deed of trust or other
hold of a security interest therein or their designees by deed in lieu of
foreclosure, (iv) any transfer of the Leased Premises to any

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governmental or quasi-governmental agency with power of condemnation, (v) any
transfer of the Leased Premises or any interest therein or in Landlord to any
affiliate of Corporate Property Associates 17 — Global Incorporated (“CPA:17”)
or Corporate Property Associates 16 — Global Incorporated (“CPA:16”) or to any
entity for whom W.P. Carey & Co. LLC or any of its Affiliates or subsidiaries
provides management or advisory services or investment advice, (vi) a transfer
to any Person or entity to whom CPA:17 or CPA:16 sells all or substantially all
of its assets, (vii) any transfer of the interest of CPA:17 or CPA:16 in
Landlord to any Affiliate of CPA:17 or CPA:16, or (viii) any transfer of the
Leased Premises to any of the successors or assigns of any of the persons or
entities referred to in the foregoing clauses (i) through (vii).
               (f) If the Leased Premises is purchased by Tenant pursuant to
this Paragraph 34, Landlord need not convey any better title thereto than that
which was conveyed to Landlord, and Tenant shall accept such title, subject,
however, to the Permitted Encumbrances and to all other exceptions and
restrictions on, against or relating to any of the Leased Premises and to all
applicable Laws, but free of the lien of and security interest created by any
mortgage or assignment of leases and rents and any other liens, exceptions and
restrictions on, against or relating to the Leased Premises which have been
created by or resulted solely from acts of Landlord after the date of this
Lease, unless the same are Permitted Encumbrances or customary utility easements
benefiting the Leased Premises or were created with the concurrence of Tenant or
as a result of a default by Tenant under this Lease.
               (g) Upon the date fixed for a purchase of the Leased Premises
pursuant to this Paragraph 34 which shall be a date mutually acceptable to
Landlord and Tenant which shall be no later than either sixty (60) days
following acceptance of the Offer or the date specified in the Third Party
Contract, if applicable, (the “Purchase Date”), Tenant shall pay to Landlord, or
to any Person or entity to whom Landlord directs payment, the ROFO Purchase
Price and all other sums payable by Tenant under the Offer, in Federal Funds,
and Landlord shall deliver to Tenant or its designee (i) special warranty deeds
or their equivalent which describe the Leased Premises being conveyed and
conveys the title thereto as provided in Paragraph 34(f) above and (ii) such
other instruments as shall be necessary to transfer the Leased Premises to
Tenant or its designee. Upon the completion of such purchase by Tenant or its
designee, this Lease and all obligations and liabilities of Tenant hereunder
shall terminate, except any Monetary Obligations of Tenant and any other
obligations of Tenant under this Lease, actual or contingent, which arise on or
prior to the expiration or termination of this Lease and which survive such
expiration or termination by their own terms. Any prepaid Monetary Obligations
paid to Landlord shall be prorated as of the Purchase Date, and the prorated
unapplied balance shall be deducted from the ROFO Purchase Price due to
Landlord; provided, that no apportionment of any Impositions shall be made upon
any such purchase.
               (h) If the completion of the purchase by Tenant or its designee
pursuant to this Paragraph 34 shall be delayed after the date scheduled for such
purchase, Basic Rent and Additional Rent shall continue to be due and payable
until completion of such purchase.
          35. State Specific Provisions.
               Notwithstanding anything to the contrary contained in this Lease,
the following provisions shall be applicable to the extent the Laws of the
jurisdiction in which a corresponding Related Premises is located are determined
to be applicable to this Lease, and Tenant hereby expressly acknowledges and
agrees to the application of same; provided that, (i) nothing herein is intended
or shall be deemed to supersede or diminish the provisions of Paragraph 37(l)
hereof with the respect to the parties choice of law governing this Lease, and
(ii) nothing herein is intended to or shall be construed as superseding or
diminishing any express

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waiver by Tenant contained in this Lease, each of which shall be enforced to the
fullest extent permitted by the Laws of the applicable jurisdiction:
               (a) Arizona Provisions: None
               (b) Maryland Provisions: None
          36. Post-Closing Obligations.
               Tenant shall use commercially reasonable efforts to obtain and
deliver to Landlord, within ninety (90) days of the date of this Lease, fully
executed originals (or copies, if indicated) of the following:
                    (i) Estoppel Certificate by The Columbia Association, Inc.,
a Maryland Non-Profit Membership Corporation, regarding Deed, Agreement and
Declaration of Covenants, Easements, Charges And Liens recorded in Liber 463,
Folio 158, Howard County, Maryland; as amended by Agreement and Declaration of
Annexation dated 12/1/04, recorded 2/22/05 in Liber 8998, Folio 239.
                    (ii) Estoppel Certificate of Compliance by The Howard
Research and Development Corporation, a Maryland Corporation, regarding Columbia
Gateway, Declaration of Covenants, Conditions and Restrictions recorded in Liber
1503, Folio 235, as amended by Declaration of Annexation by The Howard Research
and Development Corporation dated 12/9/04, recorded 2/22/05 in Liber 8998, Folio
243.
                    (iv) Copies of the registrations for the 6 onsite dry wells
located at the Leased Premises.
               (a) Pursuant to that certain property condition assessment of the
Leased Premises (“PCR”) performed by IVI DUE DILIGENCE SERVICES, INC., dated
August 27, 2008, Tenant shall complete, repair or obtain, or cause to be
completed, repaired or obtained within ninety (90) days of the date of this
Lease, the following items (the “Post Closing Obligations”):
                    (i) The damaged rubber seal for one window at the second
story on the rear façade and any work incidental thereto. (Estimated Cost:
$400.00)
                    (ii) Malfunctioning fire alarm detection device and any
related items to be repaired in order to ensure proper operation of the fire
alarm system at the Columbia Premises. (Estimated Cost: $1,300.00)
                    (iii) Exterior painting at the Columbia Premises, as
identified in the PCR. (Estimated Cost: $7,540.00)
                    (iv) Exterior painting at the Scottsdale Premises, as
identified in the PCR. (Estimated Cost: $7,540.00)
               (b) If Tenant shall fail to timely complete each of the Post
Closing Obligations, Landlord shall have the option as its sole and exclusive
remedy (but not the obligation) to satisfy the Post Closing Obligations, at
Tenant’s sole cost and expense, as

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Additional Rent hereunder, payable on demand within five (5) days after Tenant’s
receipt of such demand.
               (c) Tenant shall provide all communications regarding the Post
Closing Obligations including Tenant’s proof of satisfactory completion of these
obligations to Landlord with, in the case of item (a)(iv) above, a copy
addressed to:
Louis A. Naugle, Esq.
Reed Smith LLP
435 Sixth Avenue
Pittsburgh, PA 15219
Telephone: 412-288-8586
Fax: 412-288-3063
E-mail: lnaugle@reedsmith.com
               (d) Tenant agrees to reasonably consult with Landlord in
connection with the its Post-Closing Obligation set forth above, including
providing drafts of reports or agency submittals, if any, incorporating
Landlord’s comments to the extent practicable, providing copies of any material
agency correspondence; and providing advance notice of any meetings with agency
representatives. Landlord agrees to timely review any drafts provided and, if
Landlord fails to provide comments within the comment period specified by
Tenant, Tenant may proceed to act without further delay.
          37. Miscellaneous.
               (a) The Paragraph headings in this Lease are used only for
convenience in finding the subject matters and are not part of this Lease or to
be used in determining the intent of the parties or otherwise interpreting this
Lease.
               (b) As used in this Lease, the singular shall include the plural
and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) “including”
shall mean “including without limitation”; (ii) “provisions” shall mean
“provisions, terms, agreements, covenants and/or conditions”; (iii) “lien” shall
mean “lien, charge, encumbrance, title retention agreement, pledge, security
interest, mortgage and/or deed of trust”; (iv) “obligation” shall mean
“obligation, duty, agreement, liability, covenant and/or condition”; (v) “any of
the Leased Premises” shall mean “the Leased Premises or any part thereof or
interest therein”; (vi) “any of the Land” shall mean “the Land or any part
thereof or interest therein”; (vii) “any of the Improvements” shall mean “the
Improvements or any part thereof or interest therein”; (viii) “any of the
Equipment” shall mean “the Equipment or any part thereof or interest therein”;
and (ix) “any of the Adjoining Property” shall mean “the Adjoining Property or
any part thereof or interest therein”.
               (c) Any act which Landlord is permitted to perform under this
Lease may be performed at any time and from time to time by Landlord or any
person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Landlord shall not unreasonably withhold or delay its consent whenever
such consent is required under this Lease, except as otherwise provided herein
and except that with respect to any assignment of this Lease or subletting of
any Related Premises not expressly permitted by the terms of this Lease,
Landlord may withhold its consent in accordance with the standards set forth in
Paragraph 21. In any instance in which Landlord agrees not to act unreasonably,
Tenant hereby waives any claim for damages against or liability of Landlord
which is based upon a claim that Landlord has unreasonably withheld or

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unreasonably delayed any consent or approval requested by Tenant, and Tenant
agrees that its sole remedy shall be an action for declaratory judgment. If with
respect to any required consent or approval Landlord is required by the express
provisions of this Lease not to unreasonably withhold or delay its consent or
approval, and if it is determined in any such proceeding referred to in the
preceding sentence that Landlord acted unreasonably, the requested consent or
approval shall be deemed to have been granted; however, Landlord shall have no
liability whatsoever to Tenant for its refusal or failure to give such consent
or approval. Tenant’s sole remedy for Landlord’s unreasonably withholding or
delaying, consent or approval shall be as provided in this Paragraph. Time is of
the essence with respect to the performance by Tenant of its obligations under
this Lease.
               (d) Landlord shall in no event be construed for any purpose to be
a partner, joint venturer or associate of Tenant or of any subtenant, operator,
concessionaire or licensee of Tenant with respect to any of the Leased Premises
or otherwise in the conduct of their respective businesses.
               (e) This Lease and any documents which may be executed by Tenant
on or about the effective date hereof at Landlord’s request constitute the
entire agreement between the parties and supersede all prior understandings and
agreements, whether written or oral, between the parties hereto relating to the
Leased Premises and the transactions provided for herein. Landlord and Tenant
are business entities having substantial experience with the subject matter of
this Lease and have each fully participated in the negotiation and drafting of
this Lease. Accordingly, this Lease shall be construed without regard to the
rule that ambiguities in a document are to be construed against the drafter.
               (f) This Lease may be modified, amended, discharged or waived
only by an agreement in writing signed by the party against whom enforcement of
any such modification, amendment, discharge or waiver is sought.
               (g) The covenants of this Lease shall run with the land and bind
Tenant, its successors and assigns and all present and subsequent encumbrancers
and subtenants of any of the Leased Premises, and shall inure to the benefit of
Landlord, its successors and assigns. If there is more than one Tenant, the
obligations of each shall be joint and several.
               (h) Notwithstanding any provision in this Lease to the contrary,
all Surviving Obligations of Tenant shall survive the expiration or termination
of this Lease with respect to any Related Premises.
               (i) If any one or more of the provisions contained in this Lease
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
               (j) All exhibits attached hereto are incorporated herein as if
fully set forth.
               (k) Tenant is not, nor will Tenant become (i) a Person 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 governmental action
or (ii) a Person who violates the U.S. Foreign Corrupt Practices Act 15 U.S.C.
§§78dd-1, 78dd-2

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and 78dd-3 and Tenant not will engage in any dealings or transactions or be
otherwise associated with such persons or entities.
               (l) Each of Landlord and Tenant hereby agree that the State of
Maryland has a substantial relationship to the parties and to the underlying
transaction embodied hereby, and in all respects (including, without limiting
the generality of the foregoing, matters of construction, validity and
performance) this Lease and the obligations arising hereunder shall be governed
by, and construed in accordance with, the laws of the State of Maryland
applicable to contracts made and performed therein and all applicable law of the
United States of America. To the fullest extent permitted by law, Tenant hereby
unconditionally and irrevocably waives any claim to assert that the law of any
other jurisdiction governs this Lease. Any legal suit, action or proceeding
against Tenant arising out of or relating to this Lease may be instituted in any
federal or state court sitting in the County of Howard, State of Maryland, and
Tenant waives any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding in such County and State, and
Tenant hereby expressly and irrevocably submits to the jurisdiction of any such
court in any suit, action or proceeding. Notwithstanding the foregoing, nothing
herein shall prevent or prohibit Landlord from instituting any suit, action or
proceeding in any other proper venue or jurisdiction in which Tenant is located
or where service of process can be effectuated.
               (m) This Lease may be executed in a number of counterparts and by
different parties hereto in separate counterparts each of which, when so
executed, shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

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     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed under seal as of the day and year first above written.

            LANDLORD:

LT FIT (AZ-MD) LLC,
a Delaware limited liability company
      By:   CPA:17 LIMITED PARTNERSHIP,         a Delaware limited partnership,
its sole        managing member              By:   CORPORATE PROPERTY        
ASSOCIATES 17 — GLOBAL        INCORPORATED, a Maryland corporation, its general
partner              By:           Gino M. Sabatini,        Executive Director 
      TENANT:

LTF REAL ESTATE COMPANY, INC.,
a Minnesota corporation
      By:   /s/ Eric J. Buss         Eric J. Buss, Secretary             

SIGNATURE PAGE TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed under seal as of the day and year first above written.

            LANDLORD:

LT FIT (AZ-MD) LLC,
a Delaware limited liability company
      By:   CPA:17 LIMITED PARTNERSHIP,         a Delaware limited partnership,
its sole        managing member              By:   CORPORATE PROPERTY        
ASSOCIATES 17 — GLOBAL        INCORPORATED, a Maryland corporation, its general
partner              By:   /s/ Gino M. Sabatini         Gino M. Sabatini,       
Executive Director        TENANT:

LTF REAL ESTATE COMPANY, INC.,
a Minnesota corporation
      By:           Eric J. Buss, Secretary             

SIGNATURE PAGE TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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EXHIBIT A
PREMISES
     COLUMBIA, MARYLAND
     Real property in the City of Columbia, County of Howard, State of Maryland,
described as follows:
     Being all that piece of land situate, lying and being in the Sixth (6th)
Election District of Howard County, Maryland, being all of the Parcel ‘U-7’ as
shown on Plats of Subdivision entitled “COLUMBIA GATEWAY, PARCELS ‘U-7’ & ‘U-8’
AND LOT 15, A RESUBDIVISION OF COLUMBIA GATEWAY PARCEL ‘U-3’, P.N. 14900,
PARCELS ‘U-5’ & ‘U-6’, P.N. 15269, AND A REVISION TO COLUMBIA GATEWAY, LOT 15,
P.N. 14341 & 14342, SHEETS 1 THROUGH 4 OF 4” and recorded December 8, 2004,
among the Land Records of Howard County, Maryland as Plat Nos. 17098, 17099,
17100 and 17101.
     SCOTTSDALE, ARIZONA
     PARCEL 1:
     A PORTION OF LOT C AS SHOWN ON THE FINAL PLAT FOR CHAUNCEY RANCH, RECORDED
IN BOOK 619 OF MAPS, PAGE 50, MARICOPA COUNTY RECORDS (M.C.R.), LYING WITHIN
SECTION 34, TOWNSHIP 4 NORTH, RANGE 4 EAST, OF THE GILA AND SALT RIVER BASE AND
MERIDIAN, MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
     COMMENCING AT THE NORTH QUARTER CORNER OF SAID SECTION 34, A G.L.O. BRASS
CAP, FROM WHICH THE CENTER OF SAID SECTION, A 1/2-INCH REBAR WITH CAP RLS 15573,
BEARS SOUTH 00º00’02” EAST (BASIS OF BEARING), A DISTANCE OF 2642.04 FEET;
     THENCE ALONG THE NORTH-SOUTH MID-SECTION LINE OF SAID SECTION 34 AND ALONG
THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID LOT C, SOUTH 00º00’02”
EAST, A DISTANCE OF 660.47 FEET, TO THE POINT OF BEGINNING;
     THENCE LEAVING SAID NORTH-SOUTH MID-SECTION LINE AND SAID WESTERLY LINE
NORTH 89º59’58” EAST, A DISTANCE OF 639.69 FEET; THENCE SOUTH 00º00’02” EAST, A
DISTANCE OF 621.09 FEET, TO THE SOUTHERLY LINE OF SAID LOT C AND THE NORTHERLY
RIGHT-OF-WAY LINE OF CHAUNCEY LANE AS SHOWN ON THE MAP OF DEDICATION (M.O.D.)
FOR CHAUNCEY RANCH INFRASTRUCTURE, RECORDED IN BOOK 587, PAGE 37, M.C.R.;
     THENCE ALONG SAID SOUTHERLY LINE AND SAID NORTHERLY LINE, NORTH 89º57’07”
WEST, A DISTANCE OF 596.91 FEET;
EXHIBIT A TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE — 1

 

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     THENCE NORTH 44º58’34” WEST, A DISTANCE OF 60.52 FEET, TO SAID NORTH-SOUTH
MID-SECTION LINE AND SAID WESTERLY LINE;
     THENCE LEAVING SAID SOUTHERLY LINE AND SAID NORTHERLY LINE, ALONG SAID
NORTH-SOUTH MID-SECTION LINE AND SAID WESTERLY LINE, NORTH 00º00’02” WEST, A
DISTANCE OF 577.77 FEET, TO THE POINT OF BEGINNING; EXCEPT 1/16TH OF ALL OIL,
GAS, OTHER HYDROCARBON SUBSTANCES, HELIUM OR OTHER SUBSTANCES OF A GASEOUS
NATURE, COAL, METALS, MINERALS, FOSSILS, FERTILIZER OF EVERY NAME AND
DESCRIPTION, TOGETHER WITH ALL URANIUM, THORIUM, OR ANY OTHER MATERIAL WHICH IS
OR MAY BE DETERMINED BY THE LAWS OF THE UNITED STATES, OR OF THE STATE OF
ARIZONA, OR DECISIONS OF COURT, TO BE PECULIARLY ESSENTIAL TO THE PRODUCTION OF
FISSIONABLE MATERIALS, WHETHER OR NOT OF COMMERCIAL VALUE, AS RESERVED TO THE
STATE OF ARIZONA IN THE PATENT TO SAID LAND RECORDED IN DOCKET 16343, PAGE 1147,
RECORDS OF MARICOPA COUNTY, ARIZONA.

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EXHIBIT B
MACHINERY AND EQUIPMENT
All fixtures, machinery, apparatus, equipment, fittings and appliances of every
kind and nature whatsoever now or hereafter affixed or attached to or installed
in any of the Leased Premises (except as hereafter provided), including all
electrical, anti-pollution, heating, lighting (including hanging fluorescent
lighting), incinerating, power, air cooling, air conditioning, humidification,
sprinkling, plumbing, lifting, cleaning, fire prevention, fire extinguishing and
ventilating systems, devices and machinery and all engines, pipes, pumps, tanks
(including exchange tanks and fuel storage tanks), motors, conduits, ducts,
steam circulation coils, blowers, steam lines, compressors, oil burners,
boilers, doors, windows, loading platforms, lavatory facilities, stairwells,
fencing (including cyclone fencing), passenger and freight elevators, overhead
cranes and garage units, together with all additions thereto, substitutions
therefor and replacements thereof required or permitted by this Lease, but
excluding Tenant’s Property.
EXHIBIT B TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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EXHIBIT C
PERMITTED ENCUMBRANCES
SCOTTSDALE, ARIZONA

1.   Real estate taxes not yet due and payable for the 2nd half 2008 and
thereafter, a lien not yet due and payable.   2.   Right of entry to the State
of Arizona and its lessees in connection with the mineral estate and the
production of oil and gas and set forth in Arizona Revised Statutes and in the
Patent to said land recorded in Docket 16343, Page 1147.   3.   Dedications,
easements and other matters shown on the plat of Chauncey Ranch, as recorded in
Plat Book 619 of Maps, Page(s) 50 as it relates to the subject land, excepting
therefrom the easement for electric lines and incidental purposes in the
document recorded June 18, 1982 as Docket 16126, Page 940, which has been
released by Release of Easement recorded in 2004-0606647 of Official Records,
but deleting any covenant, condition or restriction indicating a preference,
limitation or discrimination based on race, color, religion, sex, handicap,
familial status or national origin to the extent such covenants, conditions or
restrictions violate 42 USC 3604(c).   4.   Declaration of Covenants, Conditions
and Restrictions recorded December 21, 2004 as 2004-1497044 of Official Records
and First Amendment recorded as 2005-1441352 of Official Records, but deleting
any covenant, condition or restriction indicating a preference, limitation or
discrimination based on race, color, religion, sex, handicap, familial status or
national origin to the extent such covenants, conditions or restrictions violate
42 USC 3604(c).   5.   The terms and provisions contained in the document
entitled “Multi-Use Easement Agreement” recorded December 06, 2000 as
2000-0933323 of Official Records and thereafter Amended and Restated Multi-Use
Easement Agreement recorded December 21, 2004 as 2004-1497042 of Official
Records.   6.   Memorandum of Pre-Annexation and Development Agreement” recorded
March 05, 2001 as 2001-0169234 of Official Records.   7.   The terms and
provisions contained in the document entitled “Reciprocal Easement Agreement”
recorded December 21, 2004 as 2004-1497046 of Official Records and Amended and
Restated Agreement recorded March 11, 2005 as 2005-0298617 of Official Records.
  8.   The terms and provisions contained in the document entitled “Declaration
of Parking and Access Easement” recorded December 20, 2004 as 2004-1495815 of
Official Records and re-recorded December 21, 2004 as 2004-1498677 of Official
Records.   9.   All matters as set forth in Map of Dedication for “Chauncey
Ranch Infrastructure”, recorded as Book 587 of Maps, Page 37 as it relates to
the subject land.

EXHIBIT C TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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10.   All matters as set forth in Record of Survey for Chauncey Ranch — Parcel
C, recorded March 09, 2005 as Book 733 of Maps, Page 32 as it relates to the
subject land.   11.   All matters set forth in Declaration of Roadway and
Utility Easement, recorded December 28, 2005 as 2005-1949714 of Official
Records.   12.   An easement for fire hydrant and incidental purposes in the
document recorded as 2001-1111627 of Official Records.   13.   An easement for
fire hydrant and incidental purposes in the document recorded as 2001-1111628 of
Official Records.   14.   An easement for fire hydrant and incidental purposes
in the document recorded as 2001-1111629 of Official Records.   15.   An
easement for utility and incidental purposes in the document recorded as
2006-1216741 of Official Records.   16.   A document entitled Ordinance S-32712
accepting permanent easements for sidewalk purposes for dedication, recorded
March 6, 2006 as 2006-301993 of Official Records.   17.   Water rights, claims
or title to water, whether or not shown by the public records.

COLUMBIA MARYLAND

1.   State, County and Municipal Taxes and other charges (including, but not
limited to, assessments by any State, County, Municipality, Metropolitan
District or Commission) subsequent to June 30, 2009, and possible future tax
levies and/or front foot benefit assessments, which are a lien not yet due and
payable.   2.   Subject to the following matters as shown on plat entitled
“Columbia Gateway, Parcels “U-5” & “U-6”, a Resubdivision of Columbia Gateway,
Parcel ‘U-4’ as shown on Plat No. 14900,” as recorded among the Land Records of
Howard County, Maryland in Plat MDR No. 15269:

  a.   Ex sewer & Utility Easement     b.   5’ x 40’ Revertible Turnaround
Easement     c.   Minimum BLD Restriction Line as set forth in owners
dedication, the establishment of which refers to the purposes of meeting zoning
requirements, not for creating a restriction of title or covenant, as set forth
in General Note 6 of said Plat.

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3.   Subject to the terms and provisions contained in Agreement recorded among
the Land Records of Howard County, Maryland in Liber 468, folio 239 unto the
Baltimore Gas and Electric Company, granting easement for utility lines and
equipment.   4.   Subject to the following matters as shown on plat entitled
“Columbia Gateway, Parcels ‘U-3’ & ‘U-4’ A Resubdivision of Columbia Gateway,
Parcels ‘U-1’ and ‘U-2’ as shown on plat no. 14341,” which plat is recorded
among the Land records of Howard County, Maryland as Plat No. 14900:

  a.   20’ sewer & utility easement;     b.   ex. 20’ sewer & utility easement;

5.   Terms and conditions of an easement for storm drainage purposes as
contained in Declaration of Storm Drain Easement dated October 4, 2004, recorded
October 18, 2004, in Liber 8704, Page 430.   6.   Terms and conditions of
Declaration of Landscaping Easement dated October 4, 2004, recorded October 18,
2004, in Liber 8704, Page 436, as amended by Amended and Restated Declaration of
Landscaping Easement dated December 8, 2004, recorded February 22, 2005, in
Liber 08998, Folio 246.   7.   Subject to the following matters as shown on Plat
entitled “Columbia, Gateway Parcels ‘U-7’ & ‘U-8’ and Lot 15, A Resubdivision of
Columbia Gateway, Parcel ‘U-3’, P.N. 14900, Parcels ‘U-5 & ‘U-6’, P.N. 15269,
and a revision to Columbia Gateway Lot 15, P.N. 14341 & 14342, Sheet 1, 2, 3 and
4 of 4” which plat is recorded December 8, 2004, among the Land Records of
Howard County, Maryland as Plat Nos. 17098, 17099, 17100 and 17101:

  a.   Ex. 20’ sewer and utility easement, p.n. 11895     b.   Ex. 20’ sewer &
utility easement, p.n. 14900     c.   Ex. 10’ Bell Atlantic-Maryland Easement
(Liber 3708, Folio 594)     d.   Ex. private storm drain easement (Liber 8794,
folio 430)

8.   Terms and conditions of Deed, Agreement and Declaration of Covenants,
Easements, Charges and Liens recorded in Liber 463, Folio 158, as amended by
Agreement and Declaration of Annexation by and between The Columbia Association,
Inc., a Maryland non-profit membership corporation, and GEAPE Land Holdings II,
Inc., a Maryland corporation, dated December 1, 2004, recorded February 22,
2005, in Liber 08998, Folio 239.   9.   Terms and conditions of Columbia Gateway
Declaration of Covenants, Conditions and Restrictions recorded in Liber 1503,
Folio 235, as amended by Declaration of Annexation by and between The Howard
Research and Development Corporation, a Maryland

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    corporation, and GEAPE Land Holdings II, Inc., a Maryland corporation, dated
December 9, 2004, recorded February 22, 2005, in Liber 08998, Folio 243.

10.   Right of Way Easement dated January 12, 2006 and recorded among the
aforesaid land records in Liber 9928, folio 252 by and between LTF Real Estate
Company, Inc. and Verizon Maryland, Inc.

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EXHIBIT D
BASIC RENT PAYMENTS
A. INITIAL TERM AND ALL RENEWAL TERMS.— FOR BOTH PROPERTIES

                  Rent year   Annual Rent   Quarterly rent
1
  $ 5,658,029.36     $ 1,414,507,.34  
2
  $ 5,771,189.95     $ 1,442,797.49  
3
  $ 5,886,613.75     $ 1,471,653,44  
4
  $ 6,004,346.02     $ 1,501,086.51  
5
  $ 6,124,432.94     $ 1,531,108.24  
6
  $ 6,246,921.60     $ 1,561,730.40  
7
  $ 6,371,860.03     $ 1,592,965.01  
8
  $ 6,499,297.23     $ 1,624,824.31  
9
  $ 6,629,283.18     $ 1,657,320.79  
10
  $ 6,761,868.84     $ 1,690,467.21  
11
  $ 6,897,106.22     $ 1,724,276.55  
12
  $ 7,035,048.34     $ 1,758,762.09  
13
  $ 7,175,749.31     $ 1,793,937.33  
14
  $ 7,319,264.30     $ 1,829,816.07  
15
  $ 7,465,649.58     $ 1,866,412.40  
16
  $ 7,614,962.57     $ 1,903,740.64  
17
  $ 7,767,261.83     $ 1,941,815.46  
18
  $ 7,922,607.06     $ 1,980,651.77  
19
  $ 8,081,059.20     $ 2,020,264.80  
20
  $ 8,242,680.39     $ 2,060,670.10  
21
  $ 8,407,533.99     $ 2,101,883.50  
22
  $ 8,575,684.67     $ 2,143,921.17  
23
  $ 8,747,198.36     $ 2,186,799.59  
24
  $ 8,922,142.33     $ 2,230.535.58  
25
  $ 9,100,585.18     $ 2,275,146.29  
26
  $ 9,282,596.88     $ 2,320,649.22  
27
  $ 9,468,248.82     $ 2,367,062.20  
28
  $ 9,657,613.79     $ 2,414,403.45  
29
  $ 9,850,766.07     $ 2,462,691.52  
30
  $ 10,047,781.39     $ 2,511,945.35  
31
  $ 10,248,737.02     $ 2,562,184.25  
32
  $ 10,453,711.76     $ 2,613,427.94  
33
  $ 10,662,786.00     $ 2,665,696.50  
34
  $ 10,876,041.72     $ 2,719,010.43  
35
  $ 11,093,562.55     $ 2,773,390.64  
36
  $ 11,315,433.80     $ 2,828,858.45  
37
  $ 11,541,742.48     $ 2,885,435.62  
38
  $ 11,772,577.33     $ 2,943,144.33  
39
  $ 12,008,028.87     $ 3,002,007.22  
40
  $ 12,248,189.45     $ 3,062,047.36  

EXHIBIT D TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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     Pro rata Basic Rent for the period from the date hereof through the last
day of October, 2008 shall be paid on the date hereof.
B. DEFINITIONS.
     “Rent Year” shall mean with respect to the first Rent Year the period from
November 1, 2008 through October 31, 2009 and with respect to each successive
Rent Year the period from November 1, through October 31.
EXHIBIT D TO LEASE AGREEMENT LIFE TIME FITNESS, INC. 2008 LEASE-2

 

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EXHIBIT E
TERMINATION AMOUNT SCHEDULE

                  Lease Year   Scottsdale Premises   Columbia Premises
 
               
1 — 5
  $ 34,414,662.71     $ 30,217,752.63  
6 — 10
  $ 35,426,858.68     $ 31,106,510.06  
11 — 15
  $ 33,739,865.41     $ 29,625,247.68  
16 — 20
  $ 32,052,872.14     $ 28,143,985.29  
1st Renewal Period
  $ 30,365,878.87     $ 26,662,722.91  
2nd Renewal Period
  $ 30,365,878.87     $ 26,662,722.91  
3rd Renewal Period
  $ 30,365,878.87     $ 26,662,722.91  

EXHIBIT E TO LEASE AGREEMENT FOR LIFE TIME FITNESS, INC. 2008 LEASE

 

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EXHIBIT F
PREMISES PERCENTAGE ALLOCATION OF BASIC RENT

         
Scottsdale Premises
    53.25 %
Columbia Premises
    46.75 %  
 
    100 %

If any Related Premises ceases to be subject to this Lease, the percentage shown
on this Exhibit F for each of the Related Premises which remains subject to this
Lease shall be adjusted proportionately so that the total of such percentages
shall be 100%.
EXHIBIT F to Well-Prop and Starmark Camhood Amended and Restated Lease Agreement
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