AGREEMENT OF LEASE

     FOR AND IN CONSIDERATION of the mutual covenants herein contained, the
parties hereto do hereby agree as follows:

          1. Incorporated Terms. The following terms are incorporated by
reference into this Agreement:

  (a)   DATE OF LEASE:         September 16, 2004     (b)   NAME AND ADDRESS OF
LANDLORD:         NORTH JERSEY GREEN 501 LLC
a New Jersey limited liability company
c/o North Jersey Development Group, Inc.
101 Roundhill Drive
Rockaway, New Jersey 07866     (c)   NAME AND ADDRESS OF TENANT:         PARTY
CITY CORPORATION
400 Commons Way
Rockaway, New Jersey 07866
Attn: General Counsel     (d)   DESCRIPTION OF PREMISES:         That portion of
the building known as 25 Green Pond Road, Rockaway, New Jersey, consisting of
approximately 106,000 square feet, shown outlined in red on the Floor Plan Rider
(the Premises and the Building shall be measured in accordance with Section 4(b)
below), together with (i) a total of 400 parking spaces consisting of 250
existing parking spaces (which parking spaces are subject to reconfiguration as
part of the site plan approval to be obtained by Landlord as provided herein)
and 150 new parking spaces to be constructed on the adjoining lot (the
“Adjoining Lot Parking Spaces”), which 400 parking spaces are shown striped on
the Plot Plan Rider and are reserved for the exclusive use of Tenant, (ii) the
non-exclusive use of the roof for telecommunications equipment, and (iii) the
right to locate a back-up generator in a located within the Project reasonably
acceptable to Landlord and Tenant as provided herein. The existing 250 parking
spaces are located within the area indicate on the attached Plot Plan Rider (the
Existing Parking Area”). To the extent that site plan application as approved by
Tenant proposes the reconfiguration of the Existing Parking Area resulting in
the reduction of the number of spaces within the Existing Parking Area, Tenant
agrees to accept such lesser number of parking spaces in the existing parking
area. The attached Plot Plan Rider reflects the existing conditions at the
Project, and is subject to amendment by the parties to reflect those site
improvements to be performed as part of Landlord’s Work and Tenant’s Work and
will be finalized for submission as part of the site plan application to be
submitted by Landlord as provided herein. Upon finalization of the Plot Plan
Rider, the parties shall enter into an amendment of this Lease to replace the
attached Plot Plan Rider with the final Plot Plan Rider as agreed upon by the
parties.     (e)   TERM OF LEASE:

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      Commencing on the later of (1) date on which Landlord has received all
unappealable zoning, land use and site plan approvals required for (i) the use
of the Premises for the Intended Uses and the construction of the Adjoining Lot
Parking Spaces and (ii) all exterior signage (including illuminated signage if
desired by Tenant) provided Tenant submits to Landlord its proposed plans and
specifications for same by September 15, 2004, and (2) the date upon which the
Premises are delivered to Tenant in a broom clean condition (the “Commencement
Date”) and ending twelve (12) Lease Years after the Rent Start Date, as may be
extended by Tenant pursuant to the Extension Options Rider. Items (i) and (ii)
are collectively referred to herein as the “Approvals”. If Tenant fails to
submit one or more of the proposed plans and specifications on or before
September 15, 2004, then the Tenant shall be deemed to have waived the
requirement for the item(s) for which the plans and specifications have not been
timely submitted.     (f)   PERMITTED USE:         General offices including,
without limitation, (1) computer, electronic data processing equipment and
business machines, including computer networks and printing and duplicating
equipment (2) training facilities; (3) cafeteria or other dining and cooking
facilities or vending machines for the purpose of preparing and serving food and
beverages for the respective officers, directors, employees and guests of Tenant
and its related entities and their respective subtenants, and for the sale of
snack foods, beverages, confections, newspapers and other convenience items by
vending machines or otherwise for such personnel; (4) meeting rooms,
auditoriums, exercise, health, medical and day care facilities, (5) messenger
service; (6) a barber shop or shoeshine service; (7) the storage of supplies,
furniture, furnishings and equipment, books, records and files and other items
incidental to office uses or incidental to cafeteria use; (8) the installation
of “private” lavatory or bathroom facilities; (9) the operation of “ATM”
machines, vending machines and similar equipment; (10) UPS generator, (11) a
showroom, (12) the installation of telecommunications, specialty photography (or
“dark”) rooms and other electronic and technological support systems in
connection with the foregoing uses and (13) a mock store, and/or for any other
use which may be operated consistent with a first-class office project (the
“Intended Uses”) and for no other purpose. Landlord acknowledges and agrees that
it will not lease or otherwise permit the use of the balance of the Project for
any use other than for the Intended Uses or for any other use which may be
operated consistent with a first-class office project.     (g)   SECURITY
DEPOSIT:         $344,500.00 in form of cash or letter of credit, subject to
return upon the second anniversary of this Lease as provided in Section 35
hereof.     (h)   BROKER:         Cushman & Wakefield of New Jersey, Inc.;
commission to be paid by Landlord.

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  (i)   RIDERS TO LEASE:         Rent Rider
Extension Options Rider
Plot Plan Rider
Floor Plan Rider
Permitted Exceptions Rider     (j)   PROPORTIONATE SHARE:         Tenant’s
Proportionate Share shall be 87.6%, which represents the percentage obtained by
dividing the total square foot area of the Premises by the total square foot
area of the Building.

          2. Description of Premises. Landlord hereby leases to Tenant and
Tenant hereby hires from Landlord, the premises described in Section 1(d) (the
“Premises”). The Premises is part of a multi-tenant building (the “Building”)
located on the land (the “Land”) shown on the Plot Plan Rider (the Land and
Building and other improvements thereon, collectively, the “Project”). The
Project, other than the Premises, may be altered from time to time by Landlord,
without Tenant’s consent, provided that no such alterations or any other change
shall be made by Landlord to the Project without Tenant’s prior consent (which
consent shall not be unreasonably withheld, delayed or conditioned) if such
change would: (a) materially adversely affect access to, the Premises; (b)
materially increase Tenant’s cost to operate its business within the Premises;
(c) materially reduce Landlord’s obligations under this Lease; (d) materially
adversely affect Tenant’s business at or use and occupancy of the Premises; (e)
cause relocation of the parking spaces allocated to Tenant by the terms hereof
unless reasonably geographically comparable parking is provided; or (f) result
in the Project failing to be a first class project.

          3. Term. The term of the Lease (the “Term”) shall commence on the
Commencement Date and terminate on the date described in Section 1(e) (the
“Expiration Date”), except as hereinafter provided. Landlord represents that the
Project is presently zoned industrial. Landlord shall have until January 15,
2005 to obtain the Approvals (the “Approvals Requirement”). Landlord agrees to
use diligent efforts, at Landlord’s sole cost, to satisfy the Approvals
Requirement. In the event that Landlord shall not have satisfied the Approvals
Requirement by January 15, 2005, Landlord and Tenant shall each have the right,
at any time thereafter but prior to the satisfaction of the Approvals
Requirement upon written notice to the other, to elect to terminate this Lease.
The foregoing January 15, 2005 date shall not be subject to extension by reason
of the institution of any appeal of any approval by a third party, or force
majeure. Notwithstanding the foregoing, if Landlord and Tenant are merely
waiting for an appeal period to run, either Landlord or Tenant may extend the
January 15, 2005 date to the date which shall be the first business day
following the expiration of the appeal period. If Tenant delays Landlord’s
prosecution of the Approvals, then the January 15th date shall be extended one
day for each such day that Tenant shall have delayed Landlord. Landlord and
Tenant shall execute an instrument setting forth the Commencement Date, the Rent
Start Date and Expiration Date.

          The first Lease Year shall be the period commencing on the Rent Start
Date (as defined in the attached Rent Rider) and ending twelve calendar months
thereafter, provided, however, that if the Rent Start Date is not the first day
of a month, the first Lease Year shall commence on the Rent Start Date and end
twelve calendar months from the last day of the month in which the Rent Start
Date occurs. Each succeeding twelve calendar month period thereafter shall be a
Lease Year.

          Tenant shall, from and after the date the Landlord delivers possession
of the Premises to Tenant and prior to the Rent Start Date, have free access to
the Premises to perform the Tenant’s Work, provided that Tenant shall pay all
costs of utilities used, ordered or consumed by it with respect to the Premises,
and prior to coming in to the Premises, shall furnish Landlord with valid and
effective policies of insurance in accordance with the provisions of this Lease.
Said installations and the performance thereof shall otherwise comply with the
terms hereof, including, without limitation,

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Section 25 hereof.

          4. Base Rent. (a) Tenant shall pay to Landlord at the address set
forth in Section 1(b), or to such other person or at such other place as
Landlord may from time to time designate, without previous demand therefor and
without counterclaim, deduction or set-off (except as otherwise provided
herein), the rent (“Base Rent”) set forth on the Rent Rider annexed hereto in
lawful money of the United States, such Base Rent to be payable in monthly
installments in advance on the first day of each month during the term of the
Lease. If the Rent Start Date shall be other than the first day of a calendar
month, Tenant shall pay Landlord on the particular Rent Start Date the
proportionate amount of Base Rent for the balance of such month. The first full
monthly installment of Base Rent shall be paid by Tenant on execution of this
Lease. In the event that Landlord shall be unable to satisfy the Approvals
Requirement and Landlord or Tenant shall terminate this Lease, then Landlord
shall return to Tenant the first installment of Base Rent.

          (b) The Base Rent set forth on the Rent Rider and Extension Options
Rider has been calculated upon the assumption that the Premises has an aggregate
floor area of precisely 106,000 square feet. Prior to the Commencement Date,
Landlord shall furnish to Tenant a certification from Benjamin Harten Architect
and Design of the aggregate floor area of the Premises and the Building. In the
event that the aggregate floor area of the Premises is other than 106,000 square
feet, the Base Rent shall be proportionately adjusted. The square foot area of
the Premises and the Building shall be measured in accordance with BOMA 1996.

          (c) The Rent Start Date shall be the later to occur of (i) April 1,
2005, or (ii) the date which shall be ninety (90) days following the date the
Landlord shall satisfy the Approvals Requirement. If the Tenant delays the
Landlord’s prosecution of the Approvals, then the Rent Start Date shall be
accelerated by one day for each such day of delay, but in no event shall the
Rent Start Date be earlier than April 1, 2005.

          5. Net Lease. It is the intention of Landlord and Tenant that this is
a net lease, and that, except as provided herein, the Base Rent shall be net to
Landlord and that, except as provided herein, Tenant shall be responsible for
and pay all costs for the use, operation, maintenance, care and repair of the
Premises and its proportionate share of the same with respect to the Project.
All obligations with respect to the Premises and Project payable by Tenant other
than the Base Rent are additional rent under this Lease. The term “rent” means
the Base Rent and additional rent.

          6. Real Property Taxes. (a) Tenant shall pay to Landlord its
Proportionate Share set forth in Section 1(j) of all real property impositions
during the Term in accordance with Section 2 of the Rent Rider. As used herein,
the term “real property impositions” means the aggregate amount of (i) any tax,
assessment or other governmental charge of any kind which at any time during the
Term may be assessed, levied, imposed upon or become due and payable with
respect to the Building or the Project; (ii) any tax on Landlord’s right to
receive or the receipt of rent from the Project or against Landlord’s business
of leasing the building or the Project (provided that such tax shall not include
any federal, state or local income tax); (iii) any tax or charge for fire
protection, normal office refuse collection, streets, sidewalks or road
maintenance or other services provided to the Building or the Project by any
governmental agency; (iv) any tax replacing or supplementing in whole or in part
any tax previously included within the definition of real property impositions
under this Lease; and (v) the cost of prosecuting any appeal of the real
property impositions, contesting the validity or amount of any real property
impositions or in retaining a refund of real property impositions with respect
to the Project, including attorneys’ fees, appraisers’ fees, limited to the
extent of any savings in such impositions. The real property impositions payable
by Tenant shall be prorated for the fraction of the tax fiscal year included in
the Term. Tenant shall not be responsible for any increase in real estate taxes
arising solely by reason of the sale or refinancing of the Project.

          (b) If an assessment for public improvements is levied against the
Project, Landlord shall be deemed to have elected to pay such assessment in the
maximum number of installments then permitted by law (whether or not Landlord
actually so elects), and Tenant shall pay its Proportionate Share of the
installments payable as a result of such election or deemed election

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during or attributable to the Term, together with any interest due as a result
of the installment payments. Any installment for a period during which the
Commencement Date or Expiration Date occurs shall be prorated for the fraction
of the period included in the Term.

          (c) Real property impositions do not include Landlord’s federal or
state income, franchise, inheritance or estate taxes.

          (d) If at any time during the Term hereof, Tenant shall desire to
contest or prosecute an appeal for any real estate tax assessment affecting the
Project, Tenant shall notify Landlord in writing of its desire to do so, and
Landlord shall permit the Tenant to prosecute such appeal, and shall cooperate
with Tenant in the filing and prosecution of such appeal. Notwithstanding the
foregoing, if Landlord does not believe, in its reasonable judgment, that the
tax appeal would be advisable, then Tenant shall not bring a tax appeal during
the last two (2) years of the Term or any extension thereof. Any such appeal
shall be prosecuted by Tenant without cost and expense to Landlord or the other
tenants of the Project, other than reasonable attorneys’ fees, appraisal costs
and court costs in the event of a successful appeal.

          7. Insurance. (a) Throughout the Term, Tenant shall pay to Landlord in
accordance with Section 2 of the Rent Rider its Proportionate Share set forth in
Section 1(j) of the following policies of insurance for the Project maintained
by Landlord: (i) insurance covering all risk of physical loss or damage to the
Building in the full amount of its replacement value (including agreed amount
endorsement), but in no event less than the amount required by any mortgagee of
the Project (“Landlord’s Mortgagee”) (such policy shall provide protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended perils, including
demolition and increased cost of construction, water damage, sprinkler leakage,
and any other perils which are normally included in the standard “all-risk”
property insurance policy); (ii) rental income insurance in an amount equal to
one year’s fixed rent of the Project, estimated real property impositions and
insurance premiums; (iii) insurance against loss or damage by boiler or
machinery or internal explosion or breakdown of boilers, equipment or electrical
appurtenances, in an amount reasonably required by Landlord or any Landlord’s
Mortgagee; (iv) insurance against breakage of all plate glass; (v) flood hazard
insurance in the amount of the full replacement cost of the Building, or if such
amount of insurance is not obtainable at commercially reasonably rates, in the
maximum amount which is obtainable at such commercially reasonable rates; and
(vi) such other insurance as Landlord or any Landlord’s Mortgagee may reasonably
require consistent with similar commercial office buildings in the Morris County
area. All proceeds payable under any such policy shall be paid to Landlord or
Landlord’s Mortgagee, as their respective interests may appear. Tenant
acknowledges that Landlord shall not carry insurance on and shall not be
responsible for damage to, trade fixtures, equipment, furniture and other
personalty and that Landlord shall not carry insurance against, or be
responsible for any loss suffered by Tenant due to, interruption of Tenant’s
business.

          (b) Throughout the Term, Tenant shall procure and maintain, at its
expense, a policy of commercial public liability insurance, including
contractual liability coverage insuring Tenant as insured and Landlord,
Landlord’s managing agent, Landlord’s Mortgagee as additional insureds against
loss or damage to person or property insured under the standard form of
commercial public liability insurance arising out of the use, occupancy or
maintenance of the Premises or any act or negligence of Tenant. Tenant’s
insurance shall be written on an occurrence basis and shall be primary with
respect to the Premises. The minimum initial amount of such insurance required
to be carried pursuant to this subparagraph (b) shall be at least $3,000,000 in
combined single limit with respect to injury or death in any one accident, and
at least $1,000,000 for damage to property. However, the amount of such
insurance shall not limit Tenant’s liability hereunder.

          (c) Each of Tenant’s insurance policies shall name as additional
insureds Landlord, Landlord’s managing agent, and any Landlord’s Mortgagee of
which Landlord has given Tenant no less than thirty (30) days’ written notice,
as their respective interests may appear. All insurance policies shall be
maintained with insurance companies authorized to transact insurance business in
the state in which the Project is located and holding a “General Policyholder’s
Rating” of A- or better, as set forth in the most current issue of “Best’s
Insurance Guide” and a financial rating of at least IX. Certificates evidencing
the insurance that Tenant is required to maintain hereunder

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shall be deposited with Landlord at least ten (10) days prior to the
Commencement Date. Evidence of renewals or replacements of all policies shall be
deposited with Landlord not less than ten (10) days prior to the end of the term
of each such policy. Such insurance shall not be subject to cancellation,
coverage reduction or material modification, except after at least ten (10) days
prior written notice to Landlord, Landlord’s agents and Landlord’s Mortgagee, by
certified mail, return receipt requested. In addition, upon receipt by Tenant of
any notice of cancellation or any other notice from the insurance carrier which
may adversely affect the coverage of the insureds under such policy, Tenant
shall promptly deliver to Landlord and any other additional insured hereunder a
copy of such notice.

          (d) Landlord and Tenant hereby release the other from any and all
liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise for any loss or damage to property
covered by any insurance then required to be maintained by the releasing party,
even if such loss or damage shall have been caused by the fault or negligence of
the other party, or anyone for whom such party may be responsible. Tenant and
Landlord shall each obtain for each property insurance policy procured by such
regarding the Project or any property located thereon, an appropriate clause
therein or endorsement thereto pursuant to which each such insurance company
waives its subrogation rights against the other party.

          (e) In the event Tenant’s use and occupancy of the Premises, or
Tenant’s manner of use, causes any additional charge or increase in the
insurance premiums on the Project in excess of those rates which would normally
be imposed for insuring a Building of similar construction, Tenant shall pay the
amount of such additional charge or increase in the insurance premiums upon
Landlord’s demand therefor.

          (f) Tenant shall have the right to self-insure for the insurance
required in subparagraph (b) above, on the following terms and conditions:

               (i) “Self-insure” shall mean that Tenant is itself acting as
though it were the insurance company providing the insurance required under the
provisions hereof and Tenant shall pay any amounts due in lieu of insurance
proceeds which would have been payable if the insurance policies had been
carried, which amounts shall be treated as insurance proceeds for all purposes
under this Lease.

               (ii) All amounts which Tenant pays or is required to pay and all
loss or damages resulting from risks for which Tenant has elected to self-insure
shall be subject to the waiver of subrogation provisions hereof and shall not
limit Tenant’s indemnification obligations set forth in Paragraph 25 hereof.

               (iii) Tenant’s right to self-insure and to continue to
self-insure is conditioned upon and subject to the following:

                    (1) The Tenant’s earnings before interest, taxes,
depreciation and amortization (“EBITDA”) in the applicable fiscal year of Tenant
shall be at least thirty million dollars ($30,000,000);

                    (2) Tenant shall provide to Landlord by May 1 of each year
for which Tenant has elected to self-insure, a statement advising Landlord of
Tenant’s intent to continue to self-insure in accordance with the provisions of
this Section 7(g), together with financial statements which shall establish and
confirm that Tenant has the required EBITDA.

               (iv) In the event Tenant fails to satisfy the requirements of
subparagraph (iii), then Tenant shall immediately lose the right to self-insure
and shall be required to provide the insurance hereinabove specified.

               (v) In the event Tenant elects to self-insure, all of the
provisions relating to insurance required to be maintained by Tenant shall apply
as if Tenant had in fact maintained policies of insurance in lieu of such
self-insurance, including, but is not limited to,

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indemnification of Landlord to the extent Landlord would have been indemnified
by insurers under insurance policies set forth above and additional insured
provisions.

               (vi) Tenant shall provide notice to Landlord of Tenant’s election
to self-insure and shall provide to Landlord such evidence as required under
this Section 7(g) in order for Tenant to satisfy the conditions for such
self-insurance at least ten (10) days prior to the commencement of such
self-insurance..

          8. Utilities. Tenant shall pay, directly to the appropriate supplier,
the cost of all light, electricity, HVAC, elevator, cleaning services, power,
natural gas, fuel, oil, sewer service, sprinkler stand-by service, water,
telephone, refuse disposal and other utilities and services supplied to the
Premises. Landlord agrees that Tenant’s electric usage for the Premises
(including HVAC) shall be separately metered. Tenant may obtain such service
directly from the existing utility or any other utility that may be selected by
Tenant in its sole discretion during the Term hereof. If any utilities or
services other than electricity are jointly metered with other property,
Landlord shall make a reasonable determination of Tenant’s share of the cost of
such utilities and Tenant shall pay such share to Landlord in accordance with
Section 2 of the Rent Rider. Landlord shall not be responsible or liable to
Tenant in the event of any interruption, failure or inadequacy of any utility
service supplied to the Premises. Such interruption, failure or inadequacy shall
not constitute an actual or constructive eviction, in whole or in part, or
entitle Tenant to any compensation or to any abatement or diminution of rent, or
relieve Tenant from any of its obligations under this Lease. Notwithstanding the
foregoing, if such interruption or failure of utility service arises out of the
negligent acts or willful misconduct of Landlord, and if such interruption or
failure of utility service is not cured by Landlord within ten (10) days, and if
Tenant is unable to open for business by reason of such interruption or failure
of utility service, then Tenant’s rent shall abate from the eleventh day
following such interruption or failure until the date such utility service shall
be restored.

          9. Use of Premises. (a) The Premises may only be used for the use set
forth in Section 1(f). No part of the Premises may be used for warehousing or
storage of any hazardous materials or so-called “red-labeled” materials or
substances, other than deminimus quantities of hazardous materials that are
commonly used in standard office operations and maintained by Tenant in
compliance with applicable laws.

          (b) Notwithstanding the foregoing, Tenant shall not use or permit the
Premises to be used for (i) any unlawful purpose; (ii) in violation of any
certificate of occupancy covering the Premises ; (iii) any use which constitutes
a public or private nuisance or make voidable any insurance in force relating to
the Premises; or (iv) any purpose which creates or produces noxious odors,
smoke, fumes, emissions, noise or vibrations. Tenant, at Tenant’s expense, shall
at all times keep the Premises orderly, neat, safe, clean and free from rubbish
and dirt, and vermin, and shall store all trash, garbage and solid waste within
the Premises.

          (c) Tenant shall not cause or permit any overloading of the floors of
the Building. Tenant shall not install any equipment or other items upon or
through the roof, or cause openings to be made in the roof, without Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. The installation of Tenant’s improvements and equipment
shall be done in such manner and at such times reasonably designated by
Landlord.

          (d) No storage of any goods, equipment or materials shall be permitted
outside the Building.

          (e) Tenant shall have access to the Premises twenty-four (24) hours
per day, seven (7) days per week.

          10. Landlord’s Work. Except for delivering the Premises to Tenant in
broom clean condition and Landlord’s obligation to provide separate metering for
electric service, and subject to Landlord’s obligation to construct the Adjacent
Parking Spaces and Landlord’s environmental obligations hereunder, and Tenant
shall accept the Premises in its condition as of the date hereof.

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          11. Maintenance and Repairs. (a) Except as set forth in Sections 11(b)
and (c) below, Tenant shall keep and maintain the Premises (including all
non-structural, interior, exterior, systems and equipment) in good order,
condition and repair during the Term. Tenant shall promptly replace any portion
of the Premises or any systems or equipment thereof which cannot be fully
repaired. All repairs and replacements shall be performed in a good and
workmanlike manner to the reasonable satisfaction of Landlord. All of Tenant’s
obligations to maintain and repair the Premises shall be accomplished at
Tenant’s sole expense.

          (b) Landlord shall keep and maintain the structural portions of the
Building in good order, condition and repair and keep the roof free of leaks, at
Landlord’s sole cost and expense. Structural portions of the Building shall
include the Building’s footings, foundations, interior structural steel columns,
roof deck, roof joists, and other structural members supporting the roof; floor
slabs; load-bearing walls; and other load-bearing elements of the Building.
Notwithstanding the foregoing, however, any damage, loss or injury to the
Premises to the extent caused by Tenant’s negligence or intentional acts and not
otherwise covered by Landlord’s insurance shall be restored at the sole cost and
expense of Tenant, and any loss or injury to the Premises to the extent caused
by Landlord’s negligence or intentional acts shall be restored at the sole cost
and expense of Landlord. Tenant shall receive the benefit of any assignable
warranties or guarantees (if any) obtained by Landlord from Landlord’s
contractors.

          (c) Landlord shall maintain and repair the parking areas (filling pot
holes and striping), driveways, parking lot lighting, storm drainage facilities
and landscaped areas of the Project. Landlord shall also arrange for the removal
of accumulations of snow and ice from the parking areas and driveways. Tenant
shall, upon demand, pay Landlord its Proportionate Share of Landlord’s
reasonable cost therefore; provided, however, that Landlord shall be responsible
for , at Landlord’s sole cost and expense, correcting any construction defects
to the parking areas, driveways, parking lot lighting, and storm drainage
facilities of the Project. In the event Landlord elects to perform any capital
improvement to the parking areas, driveways, parking lot lighting, and storm
drainage facilities of the Project, Tenant shall not be responsible for the cost
of any other capital expenditure made by Landlord, to the parking areas,
driveways, parking lot lighting, and storm drainage facilities of the Project,
unless authorized in writing by Tenant, in which event the cost thereof shall be
amortized over the useful life of such improvement (which useful life shall be
as determined under the Internal Revenue Code), and Tenant shall be responsible
for Tenant’s Proportionate Share of the amortized cost thereof allocable to the
remaining Term. Tenant acknowledges that Landlord is not obligated hereunder to
make any such improvements (other than the construction of the Adjacent Parking
Spaces to be performed by Landlord in accordance with the provisions of this
Lease at Landlord’s sole cost and expense).

          (d) Tenant, at Tenant’s sole cost and expense, shall procure and
maintain a service contract for the inspection, service, maintenance and repair
of all heating, ventilating and air conditioning equipment serving the Premises
(the inspection pursuant to such contract shall be made at least annually). The
identity of the contractor and the contract shall be subject to Landlord’s
reasonable approval. Copies of reports of inspections made hereunder shall be
promptly supplied to Landlord.

          12. Alterations and Improvements. (a) Except as provided in this
Section 12, Tenant shall not make any alterations, additions or improvements to
the Premises (the “Alterations”) without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Landlord’s
consent shall not be required for interior non-structural Alterations which (i)
are not visible from the outside of the Building, (ii) consent is not required
under the terms of any mortgage on the Project, and (iii) does not violate the
provisions of the certificate of occupancy for the Building or the Premises or
adversely affect in any material respect any structural parts of the Building,
HVAC or other Building systems or the strength of the Building. In no event
shall Alterations reduce the size or cubic content of the Building or reduce the
value of the Premises. Tenant shall submit to Landlord plans and specifications
in reasonable detail for Alterations requiring Landlord’s consent, which shall
be reviewed by Landlord without charge. Landlord shall grant or deny its consent
to any proposed Alteration within ten (10) business days of

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receipt of Tenant’s written request accompanied by plans and specifications
describing the proposed Alteration. In the event Landlord fails to consent or
deny its consent within ten (10) business days after submission by Tenant to
Landlord, Tenant shall have the right to thereafter deliver notice to Landlord
advising Landlord of its failure to consent or deny its consent to the proposed
Alterations within the ten (10) business day period as specified above, which
notice shall expressly state in bold type as follows: “IN THE EVENT LANDLORD
FAILS TO CONSENT OR DENY ITS CONSENT TO THE REQUESTED ALTERATIONS WITHIN FIVE
(5) BUSINESS DAYS FROM THE DATE OF THIS NOTICE, LANDLORD’S CONSENT SHALL BE
DEEMED GRANTED”. In the event that in the event Landlord fails to consent or
deny its consent within five (5) business days from the date of such notice,
Landlord’s consent shall be deemed granted. Any denial of Landlord’s consent
shall set forth the specific reasons for Landlord’s objection thereto. Tenant
shall also provide to Landlord for its reasonable approval the identity of the
contractor and architect Tenant proposes to employ to construct the Alterations.
All Alterations shall be accomplished in accordance with the following
conditions:

          (1) Tenant shall procure all governmental permits and authorizations
for the Alterations, and obtain and provide to Landlord an official certificate
of occupancy and/or compliance upon completion of the Alterations, if
appropriate. At Tenant’s request, Landlord shall, at Tenant’s cost, join with
Tenant in applying for all necessary permits to be obtained from governmental
authorities for any Alterations to be performed by Tenant in or to the Premises
and Landlord shall, at Tenant’s cost, subject to Landlord’s review and approval
of same, execute any consents and applications as such governmental authorities
may require.

          (2) Tenant shall arrange for extension of the general liability
insurance provided for in Section 7(b) to apply to the construction of the
Alterations. Further, Tenant shall procure and maintain Builders Risk Casualty
Insurance in the amount of the full replacement cost of the Alterations and
statutory Workers Compensation Insurance covering persons employed in connection
with the work. All such insurance shall conform to the requirements of
Section 7(c). Evidence of such coverage, and payment of all premiums therefor,
reasonably satisfactory to Landlord shall be delivered to Landlord prior to
commencing such Alterations.

          (3) Tenant shall construct the Alterations in a good and workmanlike
manner utilizing materials of first class quality in accordance with the plans
and specifications approved by Landlord, if any, in compliance with all laws and
governmental regulations and no such materials shall be subject to any lien,
encumbrance, chattel mortgage, title retention or security agreement.

          (b) Upon completion of the Alterations, Tenant shall, to the extent
available, provide Landlord with “as built” CAD plans of the Alterations.

          (c) Alterations shall be the property of Tenant until the termination
of the Lease, provided that any Alterations (other than trade fixtures, movable
equipment or furniture owned by Tenant] shall become the property of Landlord
and shall remain on the Premises upon termination of the Lease, provided that
Tenant shall remove any and all Alterations installed in the Premises which are
items not ordinarily found in first class office premises (including items such
as bank vaults and vertical penetrations, but expressly excluding partitions,
mezzanines [including any stairways or elevators for accessing such mezzanines],
skylights, finishes, slab reinforcements, kitchen (and related exhaust), wiring,
supplemental HVAC and conduit communications systems and rooftop
telecommunication equipment) (“Non-Standard Office Alterations”).
Notwithstanding the foregoing, if Tenant has requested, at the time of Tenant’s
request for Landlord’s consent to such Alterations that Landlord advise Tenant
whether any proposed Non-Standard Alterations will be required to be removed
upon the expiration or earlier termination of this Lease, and Landlord does not
notify Tenant at the time of Landlord’s consent thereto that Landlord will
require Tenant to remove such Non-Standard Office Alterations, Tenant shall have
no obligation to remove such Non-Standard Office Alterations.

          13. Covenant Against Liens. Tenant shall not have any right to subject
Landlord’s interest in the Project to any construction lien or any other lien
whatsoever. If any construction lien or other lien, charge or order for payment
of money shall be filed as a result of the

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act or omission of Tenant, Tenant shall cause such lien, charge or order to be
discharged or appropriately bonded so as to be discharged within thirty
(30) days after notice from Landlord thereof, and Tenant shall indemnify and
save Landlord harmless from all liabilities and costs resulting therefrom. If
Tenant fails to discharge same within said thirty (30) days, in addition to
Landlord’s other remedies, Landlord may, but shall not be obligated to discharge
same and Tenant shall pay all expenses incurred by Landlord in connection
therewith within thirty (30) days of demand as additional rent.

          14. Signs. Subject to receipt of all requisite governmental approvals,
Tenant may place its name and logo on a sign on the Building exterior face, on a
monument sign at the exterior of the Project, and on a sign at the main entrance
to the Building. All exterior signage may, at Tenant’s option, be illuminated.
In no event shall any sign be installed on the roof or above the parapet height
of the Building. Tenant shall remove its signs upon termination of this Lease
and restore the Project to its condition prior to installation of the signs,
reasonable wear and tear and casualty excluded.

          15. Compliance With Law. Tenant, at Tenant’s sole cost and expense,
shall conform to and comply with all laws, orders and regulations of any
governmental authority or the commercially reasonable requirements of Landlord’s
or Tenant’s insurers, now or hereafter applicable to the Premises or Tenant’s
use or occupancy of the Premises and notify Landlord of any notice of violation
received by Tenant. Tenant, at Tenant’s sole cost and expense, shall obtain all
permits (other than the Approvals), including a certificate of occupancy,
necessary for Tenant’s occupancy and use of the Premises.

          16. Environmental Law Compliance. (a) Tenant shall, at Tenant’s sole
cost and expense, subject to the limitations set forth below, comply with all
environmental laws, now or hereafter applicable to Tenant’s use or occupancy of
the Premises.

          (b) Tenant shall indemnify, defend and hold harmless Landlord from all
fines, suits, procedures, claims and actions of any kind arising out of or in
any way connected with any spills or discharges of hazardous substances or
wastes within the Premises, or outside the Premises if caused by Tenant or its
agents, employees, licensees or invitees.

          (c) Tenant covenants and agrees that it shall not bring onto or cause
to be brought onto the Premises any Hazardous Materials in violation of any
federal, state or local law, ordinance or regulation, other than deminimus
quantities of Hazardous Materials commonly used in office uses.

          (d) The term “Hazardous Materials” as used in this Lease includes
without limitation (i) any hazardous or toxic substance, solid waste, hazardous
waste, hazardous material, pollutants, flammable explosives, radioactive
material or any other material defined in or regulated under any local, state or
federal environmental statute, ordinance, rule or regulation (including without
limitation, the federal statutes commonly known as the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the Solid Waste Disposal Act, the Hazardous
Materials Transportation Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, the Occupational Safety and Health Act or any
regulations promulgated under any of the foregoing Acts, (ii) any substance that
contains gasoline, diesel fuel or other petroleum hydrocarbons or derivatives,
(iii) polychlorinated biphenyls, (iv) paint containing lead, (v) urea
formaldehyde foam insulation and (vi) any other substance which contaminates
soil or ground water and causes degradation of the soil or water to the extent
that remediation or other actions are needed to restore the soil and water to
their natural states.

          (e) Notwithstanding anything to the contrary set forth in this Lease,
in the event that, during the term of this Lease, any Hazardous Materials are
discovered in or under the Premises or the Project, including, but not limited
to, asbestos, and such Hazardous Materials were present prior to the date that
Landlord delivered possession of the Premises to Tenant, or in the event
Landlord, its agents, employees, contractors , licensees and invitees, shall
bring onto or cause to be brought onto the Premises or the Project any Hazardous
Materials in violation of any federal, state or local laws, Landlord shall
undertake remediation or other action to remove the Hazardous Materials from the
Premises and the Project at Landlord’s expense and to the extent that such
remediation or other

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action renders the Premises partially or wholly untenantable, Base Rent and
additional rent shall abate based upon the portion of the Premises rendered
untenantable until such time as the Premises are rendered tenantable. Any
remediation by Landlord shall be performed in compliance with all applicable
Laws governing handling, removal, or disposal of such Hazardous Material and so
as to minimize any interference with Tenant’s business operations. If the
presence of Hazardous Substances at the Premises renders the Premises
untenantable, and if within nine (9) months after receipt of Tenant’s notice
Landlord has not rendered the Premises tenantable, Tenant shall have the option
upon written notice to Landlord, as Tenant’s sole remedy, to terminate this
Lease. Landlord may vitiate any such notice by making the Premises tenantable
within thirty (30) days following Landlord’s receipt of Tenant’s notice of
termination.

          (f) Landlord’s and Tenant’s obligations under this Section shall
survive the expiration of this Lease.

     17. Landlord’s Access. Landlord and its representatives may enter the
Premises at all reasonable times (or at any time in the event of emergency) for
the purpose of inspecting the Premises, or making any repairs, replacements or
improvements or to show the Premises to prospective purchasers, investors,
encumbrancers, tenants or other parties, or for any other purpose Landlord deems
necessary. In the event Landlord so enters the Premises, it shall:

(a) except in the case of emergency, give Tenant reasonable advance notice of
such entry, and permit Tenant at all times to have a representative present
during any entry by Landlord hereunder;

(b) so effect such repairs and installations and store such equipment and
materials as to minimize, so far as practicable, interference with Tenant’s
normal business operation; and

(c) with reasonable promptness, restore the portion of the Premises adversely
affected by such repairs or installations.

          18. Assignment and Subletting. (a) Tenant may assign this Lease or
sublet the Premises, without Landlord’s consent, to any corporation or other
entity which controls, is controlled by or is under common control with Tenant,
or to any corporation or other entity resulting from the merger of or
consolidation with Tenant, (an “Affiliate”), provided such Affiliate shall
assume in writing all of Tenant’s obligations under this Lease, and further
provided any merger or consolidation is not primarily for the purpose of
avoiding or materially limiting the liability of Tenant for its obligations
under the Lease.

          (b) If Tenant desires to assign this Lease or sublet all or any
portion of the Premises, other than to an Affiliate, Tenant shall submit to
Landlord a written request for Landlord’s approval thereof, setting forth the
name, principal business address, and nature of business of the proposed
assignee or sublessee; the financial, banking and other credit information
relating to the proposed assignee or sublessee; and the details of the proposed
assignment or subletting, including a copy of the proposed assignment or
sublease instrument and plans for any Alterations required for the proposed
assignee or sublessee. Tenant shall also furnish any other information
reasonably requested by Landlord. Landlord approval of any such assignment or
subletting shall not be unreasonably withheld, conditioned or delayed.
Landlord’s acceptance of rent from a proposed assignee or sublessee shall not be
construed to constitute its consent to an attempted assignment or subletting.
Tenant shall promptly deliver to Landlord an assumption by any such assignee and
copies of all lease assignments and subleases.

          (c) No assignment or subletting hereunder, whether or not with
Landlord’s consent, shall release Tenant from any obligations under this Lease,
and Tenant shall continue to be primarily liable hereunder. If Tenant’s assignee
or sublessee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing its remedies against the assignee or sublessee. Consent
to one assignment or subletting shall not be deemed a consent to any subsequent
assignment or

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subletting. Landlord may consent to subsequent assignments or modifications of
this Lease or sublettings without notice to Tenant and Tenant shall not be
relieved of liability under this Lease.

          (d) Landlord agrees that, within thirty (30) days following the
written request of Tenant and provided that no default by Tenant exists,
Landlord shall enter into a non-disturbance, recognition, and attornment
agreement (“Nondisturbance Agreement”) with a Qualifying Subtenant, as
hereinafter defined, pursuant to which Landlord shall agree that if this Lease
is terminated prior to the scheduled Expiration Date as a result of a default by
Tenant hereunder (unless caused by a default by the Qualifying Subtenant),
Landlord shall not disturb the Qualifying Subtenant’s possession under the
Qualified Sublease, as hereinafter defined, and shall otherwise recognize the
Qualifying Subtenant’s right to continued possession of the portion of the
Premises subleased to such Qualifying Subtenant, subject to the terms and
conditions set forth herein. The Nondisturbance Agreement shall contain the
following conditions:

          (i) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, the Qualifying Subtenant
shall pay to Landlord a per square foot Base Rent that shall be the greater of:
(x) the per square foot Base Rent otherwise payable by Tenant under this Lease
at the time of the Lease termination, or (y) the per square foot Base Rent
otherwise payable by the Qualifying Subtenant under the Qualifying Sublease at
the time of the Lease termination. The Qualifying Subtenant shall attorn to
Landlord, as its lessor, and such attornment shall be effective and
self-operative without the execution of any further instruments on the part of
either party;

          (ii) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, the Qualifying Subtenant
will perform and abide by the same obligations under this Lease as Tenant with
respect to the subleased premises under the Qualifying Sublease, including, but
not limited to, the obligation to pay Base Rent and Additional Rent, provided
however that Subtenant will have no right to exercise any of the renewal options
under the Extension Options Rider, the right of first offer option under
Section 39, the purchase option under Section 40, or any other similar options
that may be included in this Lease;

          (iii) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, Landlord’s obligations or
liability as sub-landlord under the Qualifying Sublease will not be greater than
Landlord’s obligations or liability under this Lease. In addition, Landlord
shall not be: (i) liable for any previous act or omission by Tenant under any
such sublease; (ii) subject to any offset of rent or defenses that shall
thereunto have accrued to any such sublessee against Tenant; (iii) bound by any
previous prepayment of rent made by any such Qualified Subtenant to Tenant,
unless such prepayment was actually received by Landlord; (iv) liable to
Qualified Subtenant for any security deposit made by any such Qualified
Subtenant to Tenant, unless such security deposit was actually received by
Landlord; (v) be liable for any representations or warranties given or made by
Tenant to Qualified Subtenant; and (vi) Landlord’s liability under such
Qualified Sublease shall be limited as set forth in Section 30 of this Lease and
as otherwise set forth in this Lease.

          (iv) Notwithstanding anything to the contrary in the Qualifying
Sublease, in the event of a termination of this Lease, Landlord will have the
right, at its option, to require that the Qualifying Subtenant enter into a new
lease directly with Landlord for the subleased premises for the remainder of the
Term hereof consistent with the rights and obligations of Landlord and Subtenant
under the provisions of this Section 18 (d), in which event the Qualifying
Sublease will become null and void. In the event Landlord and Qualifying
Subtenant enter into a direct lease pursuant to this subparagraph, Landlord will
not be liable for any commission due to a broker with whom Tenant or the
Qualifying Subtenant has dealt, and Subtenant shall indemnify, defend, and hold
harmless Landlord and the Additional Insureds from and against all threatened or
asserted claims, liabilities, costs or damages (including, without limitation,
reasonable attorney’s fees and disbursements) which may be asserted against or
incurred by Landlord as a result of any claim of any broker in connection
therewith.

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For the purposes of this Paragraph, the following definitions shall apply:

(1) A “Qualifying Subtenant” shall mean a subtenant, as of the date of the
execution of the Nondisturbance Agreement and as of the Lease termination:

(A) that complies with all requirements of this Section 18(d);

(B) is not an affiliate of Tenant;

(C) is an “investment grade” credit (i.e., BBB or higher as rated by Standard
and Poors), or if such subtenant is not otherwise rated, has at such time a
“shadow rating” (as determined using the same criteria utilized by Standard and
Poors, Moodys or in the event neither entity remains in existence, such other
rating agency generally recognized by the investment banking industry reasonably
acceptable to Landlord) that is an “investment grade” credit;

(D) is not in default of any of its obligations under a Qualifying Sublease.

(2) A “Qualifying Sublease” shall mean a sublease with a Qualifying Subtenant:

(A) that complies with all requirements of this Section 18(d); and

(B) under which the subleased premises consists of at least 50,000 rentable
square feet and with entrances separate from the balance of the Demised
Premises, is separately demised with walls and submetered from the balance of
the Premises;

(C) The remainder of the Premises that are not sublet constitute a commercially
reasonable leasable space as approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed.

     19. Casualty. If the Project (excluding Tenant’s trade fixtures, equipment,
furniture and personal property) is damaged by fire or other casualty, and
(i) the insurance proceeds received by Landlord on account of such damage,
together with any deductibles maintained by Landlord, are sufficient to pay for
the necessary repairs, (ii) Landlord’s Mortgagee permits Landlord to utilize the
insurance proceeds to repair such damage (provided that if the existing
Mortgagee does not permit Landlord to utilize the insurance proceeds Landlord is
unable, despite diligent efforts, to obtain replacement financing for the
reconstruction or repair), and (iii) the Project can be fully repaired within
nine (9) months after such casualty occurred, this Lease shall remain in effect
and Landlord shall repair the damage as soon as reasonably possible. If any of
the foregoing conditions requiring Landlord to repair the Project is not met,
either Landlord or Tenant may elect either to (i) terminate this Lease; or
(ii) repair the damage as soon a reasonably possible, in which event this Lease
shall remain in full force and effect (but Tenant shall then have the right to
terminate this Lease if the Premises cannot be fully repaired within nine
(9) months after such casualty occurred). Landlord shall, within thirty
(30) days of such casualty provide Tenant with a written notice (the “Landlord’s
Notice”) setting forth either (i) Landlord’s election to terminate the Lease as
permitted under this Section 19, or (ii) Landlord’s estimate for reconstruction
of the Premises or portions of the Building as hereinafter provided in
accordance with this Section 19. If Landlord’s Notice indicates that such
reconstruction of the Project shall exceed nine (9) months and Landlord does not
elect to terminate this Lease as provided in Landlord’s Notice, Tenant shall
have the right, to be exercised within thirty (30) days after receipt of
Landlord’s Notice, to elect, by notice to Landlord, to cancel this Lease,
(hereinafter called “Tenant’s Notice”). In the event this Lease is not
terminated by either Landlord or Tenant as hereinabove permitted, Landlord shall
commence and proceed with reasonable diligence to restore the portion of the
Building so damaged. If Landlord indicates in its notice that the Project can be
restored within nine (9) months and the Project is not restored within nine
(9) months after the date of such casualty, or if Landlord in Landlord’s Notice
indicates that it will take a period longer than nine (9) months to restore said
the Project, and Tenant shall not have elected to terminate this Lease and said
portions are not restored within such longer period, then this Lease and the
Term

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hereof may at the election of Tenant be terminated by notice in writing from
Tenant to Landlord at any time after expiration of the nine (9) month
restoration period or such longer period, if applicable, which notice shall be
effective thirty (30) days after the giving of such notice if the Premises have
not been restored by that date. In the event this Lease shall remain in full
force and effect following a casualty, Base Rent and additional rent shall abate
based upon the portion of the Premises rendered untenantable until such time as
the Premises are rendered tenantable. Tenant waives the protection of any law
which grants a tenant the right to terminate a lease in the event of the
destruction of a leased property, and agrees that the provisions of this
paragraph shall govern in the event of any destruction of the Building. Landlord
shall not be required to repair any of Tenant’s trade fixtures, equipment,
furniture or personal property. Tenant shall promptly notify Landlord of any
fire or other casualty to the Premises.

          20. Condemnation. If all of the land, the Building and/or the Premises
is taken and/or more than twenty-five (25%) percent of the Land and/or Building
shall be taken under the power of eminent domain or sold under the threat
thereof (“Condemnation”) and Tenant’s use of the Premises is materially
adversely affected in the reasonable opinion of Tenant exercised in good faith,
this Lease shall terminate on the date on which title to the Premises or portion
thereof shall vest in the condemning authority. If this Lease shall remain in
effect as to the portion of the Premises not taken, Landlord shall restore that
part of the Premises not taken as nearly as reasonably practicable to a
self-contained rental unit, including any Tenant’s Alterations for which
Landlord is entitled to receive any award in connection therewith. The Base Rent
shall be reduced proportionately in accordance with the reduction in the square
foot area of the Premises following the Condemnation. Landlord shall be entitled
to receive the entire award in any Condemnation proceeding relating to the
Premises, except that Tenant may assert a separate claim to an award for its
moving expenses and for trade fixtures and personal property installed by Tenant
at its expense. It is understood that Tenant shall have no claim against
Landlord for the value of the unexpired Term of this Lease or any options
granted under this Lease. No temporary taking shall cause a termination of this
Lease, but Tenant shall continue the payment of rent and other sums hereunder
without reduction and be entitled to receive any award for such taking paid
during the term hereof, provided that any payment that covers a period after
this Lease is no longer in effect shall belong to Landlord.

          21. Surrender of Premises. Upon termination of the Lease, Tenant shall
surrender the Premises to Landlord broom clean, and in good order and condition,
except for ordinary wear and tear, and damage by casualty which Tenant was not
obligated to remedy under Section 19. Tenant shall remove its machinery and
equipment and repair any damage to the Premises caused by such removal. Tenant
shall not remove any power wiring or power panels, lighting or lighting
fixtures, wall coverings, blinds or other window coverings, carpets or other
floor coverings, heaters or air conditioners or fencing or gates, except if
installed by Tenant and required by Landlord to be removed from the Premises.
All personal property of Tenant remaining on the Premises after Tenants removal
shall be deemed abandoned and at Landlord#s election may either be retained by
Landlord or may be removed from the Premises at Tenants expense, including the
reasonable out-of-pocket cost of repairing any damage to the Premises caused by
such removal.

          22. Holdover. The parties recognize and agree that the damage to
Landlord resulting from any failure by Tenant to timely surrender possession of
the Premises, as set forth in Article 21 hereof, will be extremely substantial,
will exceed the amount of the monthly rent theretofore payable hereunder, and
will be impossible to accurately measure. Therefore, in the event Tenant remains
in possession of the Premises after the expiration of the term of this Lease
(the “Holdover Period”), Tenant shall pay to Landlord a rental for the Holdover
Period at the rate of 150% of (i) the annual rent payable during the last lease
year of the term on a per diem basis, plus 100% of (ii) all items of additional
rent and other charges with respect to the Premises payable by Tenant. Nothing
herein contained shall be deemed to give Tenant any right to remain in
possession of the Premises after the expiration of the Term of this Lease. The
sum due to Landlord hereunder shall be payable by Tenant upon demand. The
provisions of this Article 22 shall survive the expiration of this Lease.

          23. Events of Default; Remedies. (a) Tenant shall be in default upon
the

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occurrence of one or more of the following events (an “Event of Default”):
(i) Tenant fails to pay rent or any other sum of money required to be paid by
Tenant hereunder within ten (10) days after written notice from Landlord that
such amount was due and remains unpaid; (ii) Tenant fails to perform any of
Tenant’s non-monetary obligations under this Lease within thirty (30) days after
written notice thereof from Landlord (provided that if more than thirty
(30) days are required to complete such performance, Tenant shall not be in
default if Tenant promptly commences such performance within such thirty (30)
day period and thereafter diligently pursues its completion); (iii) Tenant makes
an assignment for the benefit of creditors, or if a petition for adjudication of
bankruptcy or for reorganization is filed by or against Tenant and if filed
against Tenant and without its consent or permission, is not dismissed within
thirty (30) days, or if a receiver or trustee is appointed for a substantial
part of Tenant’s property and if such receiver is appointed without Tenant’s
consent or permission, such appointment is not vacated within thirty (30) days.

          (b) On the occurrence of an Event of Default, without limiting any
other right or remedy Landlord may have, without notice or demand, Landlord may:

               (i) Terminate this Lease and Tenant’s right to possession of the
Premises by summary dispossession proceeding or other appropriate judicial
action, in which event Tenant shall immediately surrender possession of the
Premises to Landlord in accordance with Article 21 of this Lease. Landlord may
thereupon occupy the Premises or cause the Premises to be redecorated, altered,
divided, consolidated with other adjoining property, or otherwise prepared for
reletting, and may relet the Premises or any part thereof for a term or terms to
expire prior to, at the same time or subsequent to the original Expiration Date,
at such rent and upon such other conditions, which may include concessions or
free rent periods, as Landlord, in its reasonable discretion, may determine,
without relieving Tenant of any liability under this Lease or otherwise
affecting any such liability. In the event of a reletting by Landlord, Landlord
shall receive the rent therefor, applying the sums received first to the payment
of such expenses as Landlord may have incurred in connection with the recovery
of possession, preparing for reletting and the reletting itself, including
brokerage and attorneys fees, and then to the payment of damages in amounts
equal to the rent hereunder and to the cost and expense of performance of the
other covenants of Tenant under this Lease. Tenant agrees to pay to Landlord
damages equal to the rent and other sums payable by Tenant under this Lease for
the period which would otherwise have constituted the unexpired portion of the
term, reduced by the net proceeds of the reletting, if any, collected by
Landlord as ascertained from time to time. Tenant shall in no event be entitled
to any rents collected or payable under any reletting, whether or not such rents
exceed the rental reserved in this Lease. Landlord shall use reasonable efforts
to mitigate its damages in the event Tenant is in default under this Lease.

               (ii) Permit Tenant to remain in possession of the Premises, in
which event this Lease shall continue in effect. Landlord shall be entitled to
enforce all of Landlord’s rights and remedies under this Lease, including the
right to receive the rent as it becomes due under this Lease.

               (iii) Pursue any other remedy now or hereafter available under
the laws of the jurisdiction in which the Premises is located.

          (c) The remedies available to Landlord herein specified are
cumulative, are not intended to be exclusive and shall not preclude Landlord
from exercising any other remedy or means of redress to which Landlord may be
lawfully entitled. In addition to other remedies provided in this Lease,
Landlord shall be entitled to restraint by injunction of any violation or
threatened violation by Tenant of any of the provisions of this Lease.
Landlord’s exercise of any right or remedy shall not prevent Landlord from
exercising any other right or remedy.

          (d) In the event Landlord is the prevailing party in any litigation,
Tenant agrees to pay, as additional rent, all attorneys’ fees and other expenses
incurred by Landlord in the enforcement of any of the agreements or obligations
of Tenant under this Lease.

          24. Service Fee; Interest; Legal Fees.

     Service Fee; Interest. (a) Tenant’s failure to pay promptly Base Rent,
additional rent or

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make other payments required under this Lease may cause Landlord to incur
unanticipated costs which are impractical to ascertain. Therefore, if Landlord
does not receive any payment of Annual Rent, Additional Rent or other sum due
from Tenant to Landlord within ten (10) days after it becomes due, Tenant shall
pay Landlord, as additional rent, a service fee equal to five (5%) percent of
the overdue amount (“Service Fee”).

          (b) Any amount owed by Tenant to Landlord which is not paid when due
shall bear interest at a rate equal to the lesser of (i) the maximum legal rate
of interest allowed by law or (ii) two (2) percentage points over the per annum
prime or base rate (the “Prime Rate”) announced from time to time by Citibank,
N.A., which interest shall be deemed Additional Rent hereunder, payable upon
demand by Landlord, commencing thirty (30) days after the due date of such
amount. The payment of Default Interest on such amounts shall not extend the due
date of any amount owed. Notwithstanding anything to the contrary contained in
this Section 24, Landlord shall not assess a Service Fee or Default Interest as
set forth in this Section for the first failure by Tenant to timely pay the Base
Rent or Additional Rent in any consecutive twelve (12) month period provided
that such payment is made by Tenant to Landlord no later than ten (10) days
after notice from Landlord to Tenant of such delinquency.

          25. Indemnification. (a) Tenant shall indemnify and hold harmless
Landlord, Landlord’s managing agent from and against all liability, claims or
costs, including legal fees and disbursements, arising from (i) Tenant’s use of
the Premises; (ii) any breach of this Lease by Tenant; (iii) any other act,
omission or negligence of Tenant, its contractors, licensees, agents, servants,
employees, invitees or visitors; or (iv) any injury to person or damage to
property occurring within the Premises, except to the extent caused by the
negligent acts or willful misconduct of Landlord. Tenant shall defend Landlord
against any such claim of a third party, with counsel reasonably acceptable to
Landlord.

          (b) Landlord shall indemnify and hold harmless Tenant from and against
all liability, claims or costs, including legal fees and disbursements, arising
from (i) any breach of this Lease by Landlord or (ii) any negligent act or
willful misconduct of Landlord, its contractors, agents, or employees, except to
the extent such claims or costs are caused by the negligence or willful
misconduct of Tenant. Landlord shall defend Tenant against any such claim of a
third party, with counsel reasonably acceptable to Tenant.

          (c) The provisions of this Article 25 shall survive the expiration or
earlier termination of this Lease.

          26. Landlord’s Right to Cure Tenant’s Default. If Tenant fails to make
any payment or perform any act on its part to be made or performed beyond any
applicable notice and cure period provide herein, then Landlord, without waiving
or releasing Tenant from such obligation, may make such payment or perform such
act on Tenant’s part, and the reasonable out-of-pocket costs incurred by
Landlord in connection with such payment or performance, together with Default
Interest thereon, shall be paid by Tenant to Landlord within thirty (30) days of
invoicing by Landlord as additional rent.

          27. Waiver of Liability. Notwithstanding anything in this Lease to the
contrary, Tenant acknowledges and agrees that Landlord shall not be liable for
any injury or damage to the business, equipment, merchandise or other property
of Tenant, resulting from any cause, including, but not limited to: (i) fire,
steam, electricity, water, gas or rain; or (ii) leakage, obstruction or other
defects of pipes, sprinklers, wires, plumbing, air conditioning, boilers or
lighting fixtures.

          28. Force Majeure. If either party is unable to perform any of its
obligations due to events beyond such party’s reasonable control, the time
provided to such party for performing such obligations shall be extended by a
period of time equal to the duration of such events, except for any monetary
obligation of either party. Events beyond a party’s reasonable control include,
but are not limited to, acts of God, war, civil commotion, labor disputes,
strikes, casualty, weather conditions, labor or material shortages, or
government regulation or restriction.

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          29. Landlord’s Default. In the event (a) Landlord fails to perform or
observe any of the covenants of this Lease on Landlord’s part to be performed or
observed within thirty (30) days after receiving notice from Tenant thereof (or,
if same cannot reasonably be cured within thirty (30) days, if Landlord shall
fail to promptly commence and diligently prosecute said cure to completion), or
(b) Landlord materially breaches any warranty or representation under this Lease
(any of (a) or (b) above being hereinafter referred to as a “Landlord’s
Default”), then Tenant, may, in its sole discretion:

          (i) as applicable, perform such obligation(s) of Landlord in
accordance with the provisions of this Lease on behalf of, and at the expense of
Landlord (provided that if, in Tenant’s reasonable judgment, an emergency (i.e.,
posing imminent material harm to persons or property or imminent material
disruption to the normal conduct of business operations in the Premises) shall
exist, Tenant may, at its election, and without prior notice to Landlord,
exercise self-help); and/or

          (ii) bring suit for the collection of any amounts for which Landlord
is in default, seek injunctive relief, or seek specific performance for any
other covenant or agreement of Landlord. In the event that Landlord fails to
make such payment when due, it shall bear interest until paid at the Default
Interest Rate.

          If Landlord fails to reimburse Tenant under for any costs for the
performance of Landlord’s obligations as provided in subparagraph (i) above
within 30 days after Landlord’s receipt Tenant’s written demand therefor (and
accompanying documentation), Tenant may seek the entry of a judgment against
Landlord for the amount thereof, plus interest at the Default Interest Rate and
Tenant’s reasonable costs of collection (including reasonable attorney’s fees).
If Tenant thereafter obtains a judgment against Landlord from a court of
competent jurisdiction, and Landlord does not pay said judgment within ten (10)
days of its entry, Tenant shall have the right to offset the amount of such
judgment against rent hereunder.

          In addition to the remedies set forth in this Section, Tenant shall
have the right to terminate this Lease, provided that: (1) Landlord’s Default
materially interferes with the normal conduct of any business operations in the
Premises, (2) Landlord’s Default is not reasonably capable of being cured by
Tenant, and (3) Tenant gives notice of Landlord’s Default to any mortgagee of
whom Landlord shall have previously given Tenant notice (including its address),
and such mortgagee shall not have cured Landlord’s Default within ninety
(90) days after such notice is given (or, if such default cannot reasonably be
cured within ninety (90) days, such Mortgagee fails to promptly commence and
diligently prosecute said cure to completion). In the event Tenant exercises its
remedy to terminate this Lease, such termination shall constitute Tenant’s
exclusive remedy as to Landlord’s Default, except for Landlord’s Default in the
reimbursement of Tenant’s Allowance in which event Tenant’s election to exercise
its termination right hereunder shall not be to the exclusion of any other
remedies available to Tenant.

          30. Landlord’s Liability Limited. There shall be no personal liability
of Landlord or any member, partner, manager, stockholder, officer, director or
other principal, direct and indirect, comprising Landlord in connection with
this Lease. Tenant agrees to look solely to the interest of Landlord in the
Project (including, without limitation, all proceeds thereof and all rents to
become payable after the date of such default) for the collection of any
judgment or other judicial process requiring the payment of money by Landlord in
the event of any default or breach by Landlord with respect to this Lease or in
any way relating to the Premises. No other assets of Landlord or any principal
of Landlord shall be subject to levy, execution or other procedures for the
satisfaction of Tenant’s remedies. In the event of any sale, conveyance,
transfer or assignment of the Project or the Building by any Landlord, said
Landlord shall have no further obligations and liabilities arising after said
sale, conveyance, transfer or assignment, and the transferee shall be deemed to
have assumed the same.

          31. Estoppel Statement; Financial Statement. (a) Upon Landlord’s
request, Tenant shall execute, acknowledge and deliver to Landlord and/or
Landlord’s Mortgagee a written statement certifying: (i) the Commencement Date;
(ii) the Expiration Date; (iii) that this Lease is in full force and effect and
unmodified (or if modified, stating the modifications); (iv) the last date of

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payment of the Base Rent and other charges and the time period covered by each
payment; (v) that, to Tenant knowledge, Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating the nature of the
default); and (vi) such other matters as may be reasonably required by Landlord
or any Landlord’s Mortgagee. Tenant shall deliver such statement to Landlord
within ten (10) business days after Landlord’s request. Any such statement may
be given to and relied upon by any prospective purchaser or encumbrancer of the
Project.

          (b) Upon Tenant’s request, Landlord shall execute, acknowledge and
deliver to Tenant a written statement certifying: (i) the Commencement Date;
(ii) the Expiration Date; (iii) that this Lease is in full force and effect and
unmodified (or if modified, stating the modifications); (iv) the last date of
payment of the Base Rent and other charges and the time period covered by each
payment; (v) that, to Landlord’s knowledge, Tenant is not in default under this
Lease (or, if Tenant is claimed to be in default, stating the nature of the
default); and (vi) such other matters as may be reasonably required by Tenant.
Landlord shall deliver such statement to Tenant within ten (10) business days
after Tenant’s request.

          (c) If Landlord shall be unable to obtain financial information about
Tenant through public sources, then, within ten (10) days after Landlord’s
request, Tenant shall deliver to Landlord such financial statements as are
reasonably required to verify the net worth of Tenant. Any such statement may be
given by Landlord to any Landlord’s Mortgagee or prospective encumbrancer of the
Project, but otherwise shall be kept confidential by Landlord. Tenant shall
represent to Landlord that each such financial statement is a true and accurate
statement as of the date of such statement.

          32. Quiet Enjoyment. (a) Landlord covenants that as long as Tenant
pays the Base Rent and additional rent and performs its other obligations under
this Lease, Tenant shall peaceably and quietly have, hold and enjoy the Premises
for the term provided by this Lease, subject to the provisions of this Lease.

          (b) Landlord reserves to itself such access and utility easements
over, under and across the Premises as may be required by Landlord from time to
time in connection with the ownership, use or operation of any other property of
Landlord or any affiliated party of Landlord. No such easement shall materially
interfere with Tenant’s use of the Premises, the parking area or any access
roadway.

          33. Subordination; Attornment. (a) Subject to the non-disturbance
subordination provisions of paragraph (b), this Lease is subject and subordinate
to each and every ground lease or mortgage which may now or hereafter encumber
the Building or Project, and any renewals, modifications, consolidations,
replacements or extensions thereof.

          (b) Landlord agrees to obtain an Non-Disturbance and Attornment
Agreement (“NDA”), in a form acceptable to Tenant and any such mortgagee, from
all mortgagees of the Project that this Lease and Tenant’s occupancy shall not
be disturbed by any mortgage foreclosure action as long as Tenant shall not be
in default of its obligations hereunder beyond any applicable notice and cure
period. Landlord shall deliver a non-disturbance agreement from any existing
mortgagee within thirty (30) days of the execution of this Lease.

          (c) If Landlord’s interest in the Building or Project is acquired by
any mortgagee, or purchaser at a foreclosure sale, Tenant shall attorn to the
transferee of, or successor to, Landlord’s interest in the Project and recognize
such transferee or successor as landlord under this Lease. Such transferee or
successor shall not be liable for any act or omission of any prior landlord
(except for any default of a continuing nature) or be subject to any offsets or
defenses Tenant might have against any prior Landlord other than any offsets or
defenses expressly permitted in this Lease, or be bound by any Base Rent which
Tenant might have paid for more than the current month to any prior landlord, or
be liable for any security deposit under this Lease unless actually transferred
to such transferee or successor.

          (d) As long as any superior ground lease (with respect only to the
Adjoining

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Parking Lot) or mortgage affecting the Project shall exist, Tenant shall not
seek to terminate this Lease by reason of any act or omission of Landlord unless
Tenant shall have given written notice of such act or omission to all lessor and
mortgagees, and if any such lessor or mortgagee, as the case may be, shall have
notified Tenant of its intention to remedy such act or omission, such lessor or
mortgagee shall have the right, but not the obligation, to remedy such act or
omission within forty-five (45) days after such lessor’s or mortgagee’s receipt
of Tenant’s notice.

          (e) The foregoing provisions shall be self-operative and no further
instrument or act on the part of Tenant shall be necessary to effect the same.
Tenant shall nevertheless sign and deliver any document, in recordable form,
necessary or appropriate to evidence the subordination, attornment or agreement
above provided.

          34. Brokerage. Each party represents to the other that it did not deal
with any real estate broker in connection with this Lease, other than the real
estate broker whose identity is set forth in Section 1(h). The commission of
such broker shall be paid by the party as set forth in Section 1(h). Each party
shall indemnify and hold the other harmless from any claim for a commission or
other fee made by any broker with whom the indemnifying party has dealt, other
than the broker identified in Section 1(h).

          35. Security Deposit. Upon execution of this Lease, Tenant shall
deposit with Landlord the sum set forth in Section (g) as security for the
performance by Tenant of its obligations under this Lease (the “Security
Deposit”). In lieu of a cash Security Deposit, Tenant shall have the right to
post such Security Deposit in the form of a Letter of Credit in such form as may
be reasonable acceptable to Landlord. Landlord shall have the right to use the
Security Deposit to cure any default of Tenant hereunder, including, but not
limited to, payment of Base Rent, additional rent, or other debts of Tenant due
Landlord, or repair or restoration of the Premises. If Landlord uses any part of
the Security Deposit, Tenant shall restore the Security Deposit to its full
amount within thirty (30) days after Landlord’s demand therefor. Provided that
no monetary Event of Default has occurred as of the second (2nd) anniversary of
the Commencement Date, Landlord shall return any cash Security Deposit to Tenant
without interest on the second (2nd) anniversary of the Commencement Date, or if
such Security Deposit is in the form of a letter of credit, shall return to
Tenant the original letter of credit. If a monetary Event of Default has
occurred prior to the second anniversary of the Commencement Date, Landlord
shall return any cash Security Deposit to Tenant without interest at such time
as a period of two (2) years has elapsed without the occurrence of an Event of
Default, or if such Security Deposit is in the form of a letter of credit, shall
return to Tenant the original letter of credit. If Tenant shall not be so
entitled to the return of the Security Deposit as provided above, then Landlord
shall return the Security Deposit to Tenant without interest on the date thirty
(30) days after the surrender of the Premises by Tenant. Landlord shall deliver
the Security Deposit to the purchaser or other transferee of Landlord’s interest
in the Project in the event the Project is sold or otherwise transferred, and
upon such transfer Landlord shall be discharged from any further liability with
respect to the Security Deposit.

          36. Notices. All notices in connection with this Lease or the Premises
shall be in writing and shall be personally delivered, sent by overnight
delivery or sent by certified mail, return receipt requested, postage prepaid.
Notices to Landlord shall be delivered to the address specified in Section 1(b).
Notices to Tenant shall be delivered to the address specified in Section 1(c).
All notices shall be effective upon delivery or attempted delivery in accordance
with this provision. Either party may change its notice address upon written
notice to the other party given in accordance with this provision.

          37. Memorandum of Lease. Tenant shall not record this Lease. However,
either Landlord or Tenant may require that a memorandum of this Lease executed
by both parties be recorded. Such memorandum shall include such portions of this
Lease as either party may reasonably require, but shall not specify the amount
of Base Rent payable hereunder.

          38. Improvement Allowance. Prior to commencement of its regular
business operations, Tenant shall have the right to make interior and exterior
improvements and alterations to the Premises of a nature and design necessary
for the improvement of the Premises, excluding

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Tenant’s trade fixtures, equipment, furniture and personal property, but
including all wiring cabling, telecommunications equipment and back-up generator
(the “Tenant’s Work”). Tenant shall not remove the Tenant’s Work at the
expiration of the Lease. Prior to commencing such Tenant’s Work, Tenant shall
submit plans and specifications therefor in reasonable detail to Landlord for
its approval, which approval shall not be unreasonably withheld, condition or
delayed. In the event Landlord fails to approve or deny its approval within ten
(10) business days after submission by Tenant to Landlord, Tenant shall have the
right to thereafter deliver notice to Landlord advising Landlord of its failure
to approve or deny the plans and specifications, which notice shall expressly
state “IN THE EVENT LANDLORD FAILS TO APPROVE OR DENY ITS APPROVAL TO THE
REQUESTED ALTERATIONS WITHIN FIVE (5) BUSINESS DAYS FROM THE DATE OF THIS
NOTICE, LANDLORD’S CONSENT SHALL BE DEEMED GRANTED”. In the event that in the
event Landlord fails to approve or deny its approval within five days from the
date of such notice, Landlord’s approval shall be deemed granted. Tenant shall
obtain all necessary governmental consents and permits for the Tenant’s Work.
All materials shall be new and both workmanship and materials shall be in good
condition and in compliance with applicable laws. Tenant shall comply with the
requirements of Section 12 in performing the Tenant’s Work. Landlord shall
provide Tenant with an improvement allowance (“Tenant Allowance”) in the amount
of up to $7,000,000.00 for the performance the Tenant’s Work. The Tenant
Allowance shall be paid by Landlord to Tenant within thirty (30) days following
the date that (a) Tenant obtains a certificate of occupancy for Tenant’s Work
and (b) Tenant delivers to Landlord of (i) a statement certified by the chief
financial officer of Tenant showing in reasonable detail the actual amount spent
for the performance of Tenant’s Work; (ii) a description of the work performed;
(iii) and a lien waiver from Tenant’s general contractor and all subcontractors
having a contract in excess of $100,000.00 (the “Reimbursement Documentation”).
If Tenant fails to utilize the entire Tenant Allowance of $7,000,000.00 as of
the date that is the earlier (a) sixty (60) days after a final or temporary
certificate of occupancy is issued for all of Tenant’s Work or (b) the date
Tenant delivers to Landlord the Reimbursement Documentation, then the Base Rent
shall be adjusted as set forth in the Rent Rider, but Tenant shall be deemed to
have waived any right to utilize the balance of said sum. Tenant shall reimburse
Landlord for all reasonable out-of-pocket expenses incurred by Landlord in
connection with its review of the detailed plans and specifications. Tenant
shall also provide to Landlord for its approval the identity of the contractor
and architect Tenant proposes to employ to construct the Tenant’s Work. Tenant
agrees that Landlord or its affiliates shall have the right to bid upon the
Tenant’s Work, provided that Tenant shall have no obligation to award such bid
to Landlord. If Landlord fails to reimburse Tenant under this Section 38 within
30 days after the date on which a certificate of occupancy is issued for
Tenant’s Work and Landlord’s receipt Tenant’s documentation as provided in this
Section 38, such unpaid amount shall accrue interest at the Default Interest
Rate, and in addition to all other remedies which Tenant may have either under
this Lease or as permitted at law or in equity, Tenant shall have the right to
offset any such unpaid amount and accrued interest against rent hereunder.

          39. Right of First Refusal. Landlord does hereby grant to Tenant a
right of first refusal, as more particularly hereinafter defined, during the
Term, to purchase the Project from Landlord, such right of first refusal in
favor of Tenant shall be conditioned upon this Lease shall then be in good
standing and that the Tenant shall not as of the date of exercise by it of the
right of first refusal herein granted to it or as of the closing date with
respect to the exercise of such right of first refusal then be in material,
uncured default of any of its obligations hereunder beyond applicable grace
periods and that the Tenant named in Section 1(c) of this Lease shall not have
assigned the Lease, except to an Affiliate. Landlord shall, prior to entering
into any agreement for the sale of all of Project (Landlord to have no right to
sell less than all of the Project so long as Tenant shall have the right of
first refusal granted herein), first notify Tenant of all of the terms and
conditions pursuant to which Landlord is willing to sell the Project, said
notice to be accompanied by a copy of the firm, written offer from a third party
pursuant to which the proposed sale is to be made. Upon receipt of such notice,
Tenant shall have a period of ten (10) business days from such receipt within
which to elect, by notice to Landlord, whether or not to purchase Project upon
the same terms and conditions as are set forth in such notice. In the event
Tenant fails to notify Landlord of Tenant’s election to purchase as aforesaid
within the ten (10) business day period, Tenant shall be deemed to have elected
not to purchase Project. In the event that Tenant elects to purchase, Tenant and
Landlord shall

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proceed to close title with respect to Project in accordance with the terms and
conditions set forth in the offer annexed to Landlord’s aforesaid notice and on
the closing date therein specified (‘time being of the essence”). In the event
Tenant elects not to purchase, either by notice to Landlord or by Tenant’s
failure to give any notice within the period specified, Tenant shall thereafter
have no further right of first refusal with respect to any subsequent transfer,
and Landlord shall have the right to sell Project for a purchase price no less
than 95% of the purchase price contained in Landlord’s notice and otherwise on
substantially the same terms and conditions as set forth in Landlord’s notice
free and clear of Tenant’s within defined right of first refusal; provided,
however, that if the closing of title to the third party that issued the firm,
written offer does not occur within the time period required for closing under
Landlord’s notice, as may be reasonably extended, Tenant’s right of first
refusal shall be reinstated. Notwithstanding the foregoing, in the event of a
transfer of the Project other than pursuant to an arms-length sale to a
bona-fide third party that is not an affiliated with Landlord, Tenant’s right of
first refusal shall survive such transfer.

          40. Option to Purchase. Provided that this Lease shall then be in good
standing and that the Tenant shall not as of the date of exercise by it of the
option herein granted to it then be in material, uncured default of any of its
obligations hereunder beyond applicable grace periods and that the Tenant named
in Section 1(c) of the Lease shall not have assigned the Lease, except to an
Affiliate, Landlord does hereby grant to Tenant the right and option to purchase
the Project on the Closing Date set forth below for the purchase price set forth
below, upon full compliance by Tenant with all of the conditions and
requirements set forth in the within Section.

          (a) Conditions of Exercise of Option and Establishment of Closing Date

          The within option shall be exercised, if at all, only in the following
manner:

          Tenant shall notify Landlord by certified or registered mail of its
intention to exercise the within option, which notice shall be accompanied by
Tenant’s check for good funds in the sum of $250,000 (the “Deposit”), which
Deposit shall be maintained in an interest bearing account and which Deposit and
any interest accrued thereon shall be allowed as a credit to Tenant against the
purchase price at closing. Except as otherwise herein provided, said notice must
be received by Landlord not earlier than the first day of the eleventh Lease
Year of the Term hereof and not later than the later of: (a) the last day of the
eleventh Lease Year of the Term hereof or (b) thirty (30) days after Tenant
receives notice from Landlord of Tenant’s option right to purchase the Project
(“Purchase Option Reminder Notice”). The Purchase Option Reminder Notice may not
be sent earlier than thirty days prior to the last day of the eleventh Lease
Year of the Term hereof. The last day of the twelfth Lease Year of the Term
shall be deemed to be the Closing Date. In the event that the Closing Date shall
be a Sunday or a legal holiday, then and in such event the date of closing shall
be postponed until the next following business day. The Closing Date and the
last date for the exercise of Tenant’s option to purchase hereunder shall each
be a “time of essence date”.

          The closing shall take place at the offices of Landlord between
10:00 A.M. and 4:00 P.M. or at such other time and place as shall be mutually
satisfactory to the parties. Interest on any institutional mortgage to which the
conveyance is subject shall be adjusted and apportioned between the parties as
of the date of closing. In the event that the Project shall be subject to the
lien of a bona fide first institutional mortgage, the Landlord shall have the
right and option to convey the Project subject to the lien of such mortgage, and
Tenant shall assume all of the obligations arising under the note or other
obligations secured by said mortgage from and after the said closing, and the
Tenant shall be allowed a credit in the amount of the then existing unpaid
principal balance of such mortgage. Notwithstanding the foregoing, Tenant shall
have the right to require the Landlord to deliver the Premises free and clear of
any such first institutional mortgage, provided that Tenant shall pay all
prepayment premiums charged by such first institutional mortgagee in connection
with the prepayment of any such mortgage Landlord shall provide Tenant with
copies of the Loan Documents so that Tenant may review same and may confirm the
amount of any prepayment premium. At the said closing of title, Landlord shall
pay any fee required by the holder of any first institutional mortgage in order
to permit the transfer of title to take place.

          Landlord shall furnish and Tenant shall accept at closing, as
conclusive evidence of

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the amount of any transfer fee or prepayment fee set forth therein, a letter or
certification from the holder of any mortgage affecting the Project evidencing
the amount of the unpaid principal balance and interest thereon, the amount of
any fee required to permit the transfer, and the date of maturity thereof and
the rate of interest thereon.

     Upon the exercise of the Purchase Option, Tenant shall have a period of
thirty (30) days thereafter to confirm all physical, environmental and other
matters regarding the Property. Landlord agrees to provide all information and
permit all investigations as may be reasonably required by Tenant for the
purpose of conducting Tenant’s due diligence investigation, including, but not
limited to, all other leases or other occupancy agreements for the Project, all
mortgage documents, all environmental reports, structural and other engineering
reports relating to the improvements, all plans and surveys, and all existing
service agreements. Tenant shall have the right, in Tenant’s sole discretion, to
withdraw its exercise of its Purchase Option no later than the thirtieth (30th)
day following the date of Tenant’s notice exercising its Purchase Option.

          (b) Documents to be Delivered at Closing:

          Title to the Project shall be conveyed by seller’s Bargain and Sale
Deed with covenant against Grantor’s Acts conveying to Tenant the fee simple of
the Project free of all encumbrances except:

          (i) those items of exception appearing on the Permitted Title
Exceptions Rider; and

          (ii) any institutional mortgage referred to above (and all related
loan documentation), subject to which the Landlord has the right to convey title
to Tenant; and

          (iii) drainage and utility easements, provided such easement shall not
unreasonably interfere with the use and operation of the Project; and

          (iv) liens, encumbrances or title defects imposed or consented to in
writing by Tenant.

All of the foregoing items are herein referred to as the Permitted Exceptions.

Additional closing documents include an Affidavit of Title in standard form
(subject to the foregoing encumbrances), FIRPTA certificate, assignment of
leases, bill of sale, assignment of all zoning and land use approvals,
warranties, if any, and other general intangibles relating to the Project, as
well as fee title to the portion of the lot upon which the Adjoining Lot Parking
Spaces are located or an irrevocable easement upon such lot permitting the
exclusive use, of the Adjacent Parking Space.

     The exercise by Tenant of its right to purchase the Project shall not
otherwise affect this Lease or the relationship of the parties as Landlord and
Tenant hereunder and Tenant shall continue to perform all obligations and to pay
all rentals due hereunder until the closing of title. Such relationship shall
continue until title to the Project shall have closed and until the full
consideration for the purchase price shall have been paid. Tenant shall not in
any event be deemed to be a vendee in possession of the Project; nor shall the
exercise by Tenant of any such right entitle Tenant to any reduction in Base
Rent or additional rent.

          (c) Purchase Price:

          The purchase price to be paid by Tenant to Landlord in connection with
the purchase of the Project shall be paid by wire or federal funds or bank
check.

          The purchase price shall be the greater of (i) the fair market value
of the Project, or (ii) the sum which shall be the greater of (1) $13,000,000.00
or (2) the sum (which sum shall in no event exceed $17,000,000) determined by
multiplying the sum of $13,000,000.00 by a fraction, the numerator of which
shall consist of the level of the “Index” (s hereinafter defined) existing on
the last day of the eleventh Lease Year and the denominator of which shall
consist of the level of the

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“Index” existing as of the date of execution hereof. The term of the “Index” as
employed herein shall mean and shall refer to the Revised Consumer Price Index,
All Urban Consumers (CPI-U), for the New York-Northern New Jersey-Long Island,
NY-NJ-CT Area, All Items, (1967 = 100) of the U.S. Bureau of Labor Statistics of
the U.S. Department of Labor. In the event that the Index is no longer published
or issued, such other index as is then generally recognized and accepted as a
basis for wage negotiations shall be used and employed in the place and stead
thereof. In the event the Index shall hereafter be converted to a different
standard reference base or otherwise revised, the determination shall be made
with the use of such conversion factor, formula or table for converting the
Index as may be published by the Bureau of Labor Statistics or, if said Bureau
shall not publish the same, then with the use of such conversion factor, formula
or table as may be published by Prentice Hall, Inc., or, failing such
publication, by any other nationally recognized publisher of similar statistical
information.

          The “fair market value of the Project” shall be determined as follows:

     Following receipt by Landlord of Tenant’s notice of Tenant’s exercise of
the option to purchase, Landlord shall notify Tenant of the “fair market value”
of the Project (including the use of the Adjoining Lot Parking Spaces) as of the
Closing Date. The fair market value of the Project shall include the value of
all Tenant Work or other Tenant improvements or alterations. If Tenant disagrees
with Landlord’s determination, Tenant shall, within thirty (30) days after
receipt of Landlord’s determination, notify Landlord that Tenant disputes
Landlord’s determination and shall submit to Landlord with such notice Tenant’s
good faith determination of the fair market value . In the event Tenant notifies
Landlord that Tenant disputes Landlord’s determination, then Landlord and Tenant
shall attempt to agree upon the fair market value. If Landlord and Tenant fail
to reach agreement within thirty (30) days following Tenant’s notice to Landlord
disputing Landlord’s determination (“Outside Purchase Option Agreement Date”),
then each party shall, within fifteen (15) days of the Outside Purchase Option
Agreement Date, mutually agree upon a Qualified Appraiser and each shall submit
to such Qualified Appraiser within twenty (20) days of the Outside Purchase
Option Agreement Date its sealed final determination of the fair market value
(provided that Landlord’s sealed final determination shall in no event be
greater than the fair market value set forth in Landlord’s determination, and
Tenant’s sealed final determination shall in no event be less than Tenant’s
determination as set forth in Tenant’s original notice disputing Landlord’s
original determination). Each of the Landlord and Tenant may submit to the
independent Qualified Appraiser documentation in support of its determination of
fair market value. If the parties are unable to agree upon such independent
Qualified Appraiser, either party may request the American Arbitration
Association in Somerset, New Jersey, to appoint such independent Qualified
Appraiser which request shall be made no later than fifteen (15) days after the
Outside Purchase Option Agreement Date. The independent Qualified Appraiser
shall, within thirty (30) days of his/her appointment, make a determination of
fair market value, which determination shall be binding upon both Landlord and
Tenant. The parties shall share equally in the cost of any independent Qualified
Appraiser. Both Landlord and Tenant agree to be irrevocably bound by the final
decision in arbitration, provided that Tenant have the right to withdraw
Tenant’s exercise of its purchase option within ten (10) days of a final
determination of the fair market value.

          41. Miscellaneous. (a) The failure of either party to insist on strict
performance of any provision of this Lease, or to exercise any right contained
herein, shall not be construed as a waiver of such provision or right in any
other instance. All amendments to this Lease shall be in writing and signed by
both parties. No act or thing done by Landlord, its employees or agents,
including the delivery of any keys to such parties, shall be deemed an
acceptance of a surrender of this Lease, and no agreement to accept or surrender
shall be valid unless signed by Landlord. The receipt by Landlord of any rent
with knowledge of a breach of this Lease shall not be deemed a waiver thereof.

          (b) The captions in this Lease are intended to assist the parties in
reading this Lease and are not a part of the provisions of this Lease. Whenever
required by the context of this Lease, the singular shall include the plural and
the plural shall include the singular. The masculine, feminine and neuter
genders shall each include the other.

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          (c) Landlord and Tenant hereby waive trial by jury in any legal
proceeding brought by either of them against the other with respect to any
matters arising out of or in any way connected with this Lease or the Premises.

          (d) The laws of the state in which the Project is located shall govern
this Lease.

          (e) If Tenant is a corporation, limited liability company or
partnership, each person signing this Lease on behalf of Tenant represents that
he has full authority to do so and that this Lease binds the corporation,
limited liability company or partnership, as the case may be. If Landlord is a
corporation, limited liability company or partnership, each person signing this
Lease on behalf of Landlord represents that he has full authority to do so and
that this Lease binds the corporation, limited liability company or partnership,
as the case may be.

          (f) Tenant shall have the exclusive right to use the roof of the
Building (subject only to Landlord’s right to access the roof for the
performance of Landlord’s obligations hereunder) to erect or place one or more
telecommunications dish antenna or similar telecommunications equipment (the
“Telecommunications Equipment”) on the roof of the Building, in accordance with
the following provisions, which Telecommunications Equipment shall be designed
in accordance with the specifications to be provided by Tenant and approved by
Landlord with respect to the size, weight, location, screening, mounting and
connection of the Telecommunications Equipment, such approval not to be
unreasonably withheld, conditioned or delayed, and any rejection by Landlord
shall specify its basis for such rejection. Upon approval of Tenant’s plans and
specifications, the Telecommunications Equipment shall be installed by Tenant at
Tenant’s expense, subject to reasonable supervision by Landlord with respect
thereto. Subsequent to the installation of the Telecommunications Equipment,
Tenant shall comply with all applicable laws and keep the Premises, Building and
Land free and clear from liens arising from or related to Tenant’s installation.
Tenant shall be responsible for obtaining any requisite licenses, approvals or
permits that may be required for the installation and use of any
Telecommunications Equipment and the related support systems or operation of any
equipment served thereby. Landlord and Tenant shall each reasonably cooperate
with the other in procuring such licenses, approvals and permits. Upon
termination or expiration of this Lease, Tenant shall not remove any
Telecommunications Equipment installed by it as part of Tenant Work. In the
event Tenant elects to remove any Telecommunications Equipment that is not
installed as part of Tenant Work, Tenant shall restore any damage caused by such
removal. Tenant agrees that any such Telecommunications Equipment shall not be
installed in any manner which would void or invalidate any roof warranties or
bonds obtained by Landlord with respect to the roof at the Premises. Tenant
shall cause the satellite system to be installed by a roofing contractor
selected by Tenant and reasonably approved by Landlord, at Tenant’s cost, and in
accordance with all applicable laws, rules and regulations. Additionally, Tenant
shall defend, indemnify, and hold Landlord harmless from and against any claims,
costs or expenses incurred by Landlord as a result of such installation. Tenant
shall be solely responsible for all roof leaks caused by the installation and
maintenance of the Telecommunications Equipment.

          (g) Subject to compliance with applicable laws, Tenant shall have the
right, to install back-up generator(s) for the exclusive use of Tenant
(“Tenant’s Generator”) on the Property in such location as may be approved by
Landlord (which approval shall not be unreasonably withheld, delayed or
conditioned and in accordance with the provisions of this paragraph. Tenant
shall furnish detailed plans and specifications for each Tenant’s Generator, the
associated fuel tank (which shall be located above-ground) or other fuel supply
source required for the operation of Tenant’s Generator (“Tenant’s Tank”) and
all wires, lines, pipes conduits and other apparatus in connection with Tenant’s
Generator to Landlord for its prior approval, which approval shall not be
unreasonably withheld, conditioned, or delayed. Upon approval of Tenant’s plans
and specifications, Tenant shall have the right to install Tenant’s Generator
and Tenant’s Tank, at Tenant’s expense subject to Landlord’s reasonable
supervision. Landlord shall not charge any supervisory fee, review charge or
surcharge in connection with this installation. Tenant shall comply with all
applicable laws in connection with the installation and maintenance of Tenant’s
Generator, Tenant’s Tank and all lines, wiring, pipes, conduits, other apparatus
in connection therewith and Tenant shall keep the Premises, Building and Land
free and clear from liens arising from or related to the installation,
maintenance and repair thereof. In all other cases, Tenant shall be responsible
for procuring whatever approvals, licenses or

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permits may be required for the installation and use of Tenant’s Generator and
the related support systems or operation of any equipment served thereby.
Landlord agrees that, at no cost to Landlord, it shall cooperate with Tenant in
Tenant’s pursuit of any such approvals, licenses, or permits, which cooperation
shall include executing any necessary owner’s consent forms. Upon termination or
expiration of this Lease, Tenant shall not remove Tenant’s Generator and any
fuel tank. Landlord and Tenant shall cooperate in the design and allocation of
routing for any Tenant’s Generator.

          (h) This Lease is binding upon any party who legally acquires any
rights or interest in this Lease from Landlord or Tenant; provided, however,
Landlord shall have no obligation to Tenant’s successor unless the interest of
Tenant’s successor in this Lease is acquired in accordance with Section 18.

          (i) The submission of this Lease to Tenant shall not be deemed to be
an offer and shall not bind either party until duly executed by Landlord and
Tenant.

          (j) This Lease may be executed in counterparts, and, when all
counterpart documents are executed, the counterparts shall constitute a single
binding instrument.

          (k) A determination by a court of competent jurisdiction that any
provision of this Lease or any part thereof is illegal or unenforceable shall
not invalidate the remainder of this Lease or such provision, which shall
continue to be in effect.

          (l) Tenant shall have the right to the exclusive use of the 400
parking areas, walkways, sidewalks and driveways shown on the Plot Plan Rider,
except for those areas designated as “Excepted.”

          (n) This Lease contains the entire agreement between the parties and
supercedes all prior understandings, if any, with respect thereto. This Lease
shall be construed without any presumption against the party causing this Lease
to be drafted.

          (o) Tenant hereby (a) irrevocably consents and submits to the
jurisdiction of any Federal, state, county or municipal court sitting in the
State of New Jersey in respect to any action or proceeding brought therein by
Landlord against Tenant concerning any matters arising out of or in any way
relating to this Lease; (b) irrevocably waives personal service of any summons
and complaint and consents to the service upon it of process in any such action
or proceeding by mailing of such process to Tenant at the address set forth
herein; (c) agrees that the laws of the State of New Jersey shall govern in any
such action or proceeding and waives any defense to any action or proceeding
granted by the laws of any other country or jurisdiction unless such defense is
also allowed by the laws of the State of New Jersey; and (d) agrees that any
final judgment rendered against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law. Tenant further agrees that any action or
proceeding by Tenant against Landlord in respect to any matters arising out of
or in any way relating to this Lease shall be brought only in the State of New
Jersey.

          (p) Landlord hereby expressly subordinates any lien granted to
Landlord, statutory, contractual or otherwise, with respect to Tenant’s personal
property, trade fixtures, inventory or stock-in-trade in or on the Demised
Premises for non-payment of Base Rent, additional rent, default by Tenant or any
other reason whatsoever. Landlord shall reasonably cooperate with any lender of
Tenant in executing and delivering such lender’s standard form of Landlord’s
subordination of lien.

          (q) Landlord acknowledges that the Adjacent Parking Spaces are located
on a parcel adjacent to the Property that is not presently owned by Landlord,
but is ground leased to North Jersey Green 502 LLC, an affiliate of Landlord
(“Landlord’s Affiliate”), with the option for Landlord’s Affiliate to acquire
fee title to the Adjacent Parcel. Landlord has provided to Tenant a true and
complete copy of the existing ground lease and option to purchase. Landlord
covenants that, prior to the Rent Start Date, Landlord shall either (i) acquire
fee title to the Adjacent Parcel, (ii) cause the lease to be assigned from
Landlord’s affiliate to Landlord and extend the lease for the

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Adjacent Parcel for a term co-terminus with the Term hereof, or (iii) obtain an
easement for the exclusive use of the Adjacent Parking Spaces. Notwithstanding
anything contained in this Lease, Landlord shall be solely responsible for, and
Tenant shall have not obligation to pay or reimburse Landlord for, any ground
rent, purchase price, easement consideration or other cost or expense in
connection with the acquisition of the Adjacent Parcel or any rights therein.
Landlord shall be solely responsible for all costs incurred for the construction
of the Additional Parking Spaces and any other improvements constructed by
Landlord upon the Adjacent Parcel. In the event Landlord continues to lease the
Adjacent Parcel, Landlord shall obtain for the benefit of Tenant a
non-disturbance, recognition, and attornment agreement from the owner of the
Adjacent Parcel in form reasonably acceptable to Tenant and the fee owner of
such lot, pursuant to which Tenant shall continue to maintain its right to the
exclusive use of the Adjacent Parking Spaces notwithstanding any default by
Landlord under such ground lease or any early termination of such ground lease.

          (r) Landlord covenants that (i) Landlord shall provide Tenant with not
less than 40 parking spaces on the Adjacent Lot in a mutually acceptable
location reasonably proximate to the Building (which area need not be paved but
will have a gravel base if necessary for reasonable use) on or before the date
upon which a certificate of occupancy is issued for Tenant’s Work, and (ii)
shall substantially complete the Adjacent Parking Space by June 30, 2005.
Landlord’s failure to provide the parking by the dates as provided above shall
immediately constitute a Landlord’s Default, and shall permit Tenant to
immediately avail itself of the remedies as set forth in this Lease upon the
occurrence of a Landlord’s Default.

          (s) Tenant shall have the right at any time during the Lease Term in
which Tenant leases the entire Building, upon thirty (30) days’ prior written
notice to Landlord to elect to furnish any of the services or utilities for the
Premises that Landlord is required to furnish pursuant to this Lease for which
Tenant is responsible for the cost thereof.

          The riders enumerated in Section 1(i) are attached hereto and made a
part of this lease as fully as if set forth herein at length. The terms used in
the riders have the same meanings as set forth in the Lease. The provisions of a
rider shall prevail over any provisions of this Lease which are inconsistent or
conflict with the provisions of the rider.

          (q) Landlord represents to Tenant that:

               (1) Landlord is the record fee owner of the Project, other than
the Adjacent Parcel. The Adjacent Parcel is presently leased to Landlord’s
Affiliate, and Landlord has the full right and authority to construct the
Adjoining Parking Spaces upon the Adjacent Parcel and to grant to Tenant the
right to use the Adjoining Parking Spaces on an exclusive basis;

               (2) To the best of Landlord’s knowledge, and in reliance upon the
owner’s title insurance policy no. 72107-724083 issued by Chicago Title
Insurance Company dated August 2, 2002, a copy of which has been supplied to
Tenant, the Property is free and clear of all encumbrances and restrictions,
except those described in the Permitted Title Exceptions Rider;

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               (3) Landlord and each person executing this Lease on behalf of
Landlord (or in any representative capacity) have full right and lawful
authority to enter into this Lease;

     IN WITNESS WHEREOF, the parties hereby have duly executed this Lease as of
the date set forth in Section 1(a).

                      LANDLORD:
 
                    NORTH JERSEY GREEN 501 LLC     a New Jersey limited
liability company
 
                    BY:   North Jersey Green Associates LLC, a New Jersey
limited liability company, its Sole Member
 
                        By:   North Jersey Green Pond LLC, a Delaware limited
liability company, co-managing member
 
               
WITNESS:
               
 
               
/s/ Gladys Spong
          By:   /s/ Daniel Cohen

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              Daniel Cohen, Member
 
                ATTEST:   PARTY CITY CORPORATION
 
                /s/ Joseph J. Zepf   BY:   /s/ Richard H. Griner

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The undersigned, as the current lessee of the Adjacent Parcel, hereby executes
this Lease to acknowledge and confirm Tenant’s rights hereunder for the
exclusive use of the Adjacent Parking Spaces, and shall recognize and be bound
by the provisions of Sections 1(d), 39, 40, 41(g) and 41 (h) with respect to the
Adjacent Parking Spaces. Landlord’s Affiliate’s obligations hereunder with
respect to the Adjacent Parking Spaces shall continue until such time as
Landlord’s Affiliate conveys to Landlord its entire interest in the portion of
the Adjoining Parcel upon which the Adjacent Parking spaces are located.

                      NORTH JERSEY GREEN 502 LLC     a New Jersey limited
liability company
 
                    BY:   North Jersey Green Associates LLC, a New Jersey
limited liability company, its Sole Member
 
                        By:   North Jersey Green Pond LLC, a Delaware limited
liability company, co-managing member
 
               
WITNESS:
               
 
               
/s/ Gladys Spong
          By:   /s/ Daniel Cohen

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--------------------------------------------------------------------------------

 

              Daniel Cohen, Member

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RENT RIDER

     
Date of Lease:
  September 16, 2004
 
   
Landlord:
  North Jersey Green 501 LLC
 
   
Tenant:
  Party City Corporation

          1 Base Rent. The Base Rent payable by Tenant to Landlord during the
Term shall be at the annual amounts and for the periods and be payable in the
monthly installments as follows:

                      Monthly   Annual Period

--------------------------------------------------------------------------------

  Installment

--------------------------------------------------------------------------------

  Amount

--------------------------------------------------------------------------------

Lease Years 1-6
  $ 136,978.42     $ 1,643,741.00  
Lease Years 7-12
  $ 145,811.75     $ 1,749,741.00  

          2. Adjustment. The Base Rent set forth herein has been calculated upon
the assumption that the Tenant has utilized the full Tenant Allowance of
$7,000,000. Prior to the Rent Start Date, Tenant shall deliver to the Landlord a
notice of the actual amount of the Tenant Allowance to be utilized by Tenant. If
Tenant elects to use less than $7,000,000.00, then the Base Rent shall be
adjusted as follows (Tenant hereby acknowledges that, Tenant may only reduce the
Tenant Allowance by a number evenly divisable by $100,000.00):

                  Tenant   Monthly Rent   Yearly Rent Allowance

--------------------------------------------------------------------------------

  Reduction

--------------------------------------------------------------------------------

  Reduction

--------------------------------------------------------------------------------

$6,900,000
  $ 980.11     $ 11,761.36  
$6,800,000
  $ 1,960.23     $ 23,522.71  
$6,700,000
  $ 2,940.34     $ 35,284.07  
$6,600,000
  $ 3,920.45     $ 47,045.43  
$6,500,000
  $ 4,900.57     $ 58,806.78  
$6,400,000
  $ 5,880.68     $ 70,568.14  
$6,300,000
  $ 6,860.79     $ 82,329.50  
$6,200,000
  $ 7,840.90     $ 94,090.86  
$6,100,000
  $ 8,821.02     $ 105,852.21  
$6,000,000
  $ 9,801.13     $ 117,613.57  
$5,900,000
  $ 10,781.24     $ 129,374.93  
$5,800,000
  $ 11,761.36     $ 141,136.28  
$5,700,000
  $ 12,741.47     $ 152,897.64  
$5,600,000
  $ 13,721.58     $ 164,659.00  
$5,500,000
  $ 14,701.70     $ 176,420.35  
$5,400,000
  $ 15,681.81     $ 188,181.71  
$5,300,000
  $ 16,661.92     $ 199,943.07  
$5,200,000
  $ 17,642.04     $ 211,704.42  
$5,100,000
  $ 18,622.15     $ 223,465.78  
$5,000,000
  $ 19,602.26     $ 235,227.14  
$4,900,000
  $ 20,582.37     $ 246,988.50  
$4,800,000
  $ 21,562.49     $ 258,749.85  
$4,700,000
  $ 22,542.60     $ 270,511.21  
$4,600,000
  $ 23,522.71     $ 282,272.57  
$4,500,000
  $ 24,502.83     $ 294,033.92  
$4,400,000
  $ 25,482.94     $ 305,795.28  
$4,300,000
  $ 26,463.05     $ 317,556.64  

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                  Tenant   Monthly Rent   Yearly Rent Allowance

--------------------------------------------------------------------------------

  Reduction

--------------------------------------------------------------------------------

  Reduction

--------------------------------------------------------------------------------

$4,200,000
  $ 27,443.17     $ 329,317.99  
$4,100,000
  $ 28,423.28     $ 341,079.35  
$4,000,000
  $ 29,403.39     $ 352,840.71  
$3,900,000
  $ 30,383.51     $ 364,602.06  
$3,800,000
  $ 31,363.62     $ 376,363.42  
$3,700,000
  $ 32,343.73     $ 388,124.78  
$3,600,000
  $ 33,323.84     $ 399,886.14  
$3,500,000
  $ 34,303.96     $ 411,647.49  
$3,400,000
  $ 35,284.07     $ 423,408.85  
$3,300,000
  $ 36,264.18     $ 435,170.21  
$3,200,000
  $ 37,244.30     $ 446,931.56  
$3,100,000
  $ 38,224.41     $ 458,692.92  
$3,000,000
  $ 39,204.52     $ 470,454.28  

     Landlord and Tenant shall execute an agreement which shall confirm any such
reduction in the Base Rent.

     

  Initials:
 
   

  Landlord

   

 

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  Tenant

   

 

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EXTENSION OPTIONS RIDER

     
Date of Lease:
  September 16, 2004
 
   
Landlord:
  North Jersey Green 501 LLC
Tenant:
  Party City Corporation
Premises:
  Portion of 25 Green Pond Road, Rockaway, New Jersey

          1. Grant of Options. Subject to the provisions of Section 3 of this
Rider, Landlord hereby grants to Tenant option(s) (each such option is referred
to as the “Option”) to extend the Term following the expiration of the original
term hereof (the “Initial Term”) for two (2) additional term(s) of five (5)
years each (each such additional term is hereinafter referred to as the
“Extension Term”).

          2. Exercise of Options. Each Option shall be exercised only by written
notice (the “Extension Notice”) delivered to Landlord in accordance with
Section 36 of the Lease no later than the later of: (a) twelve (12) months prior
to the expiration of the Term then in effect; or (b) five (5) business days
after Tenant receives notice from Landlord of Tenant’s right to extend the Term
(“Renewal Reminder Notice”). The Renewal Reminder Notice applicable to each of
the two- five (5) year extension periods may not be sent earlier than thirteen
(13) months before what would otherwise be the last day of the otherwise
expiring Term. If Tenant fails to deliver any Extension Notice within the
specified time period, the Option related thereto and any succeeding Options (if
any) shall lapse, and Tenant shall have not further right to extend the Term.

          3. Conditions Precedent to Options. Each Option shall be exercisable
by Tenant and the Lease shall continue for the Extension Term on all of the
following conditions:

          (a) At the time Landlord receives the Extension Notice, Tenant shall
not be in default under any of the provisions of the Lease, beyond any
applicable notice and grace period.

          (b) At the time Landlord receives the Extension Notice, the Tenant
named in Section 1(c) of the Lease shall not have assigned the Lease, except as
permitted in Section 18(a) of the Lease.

          (c) With respect to any Option for an Extension Term following the
first Extension Term, Tenant shall have theretofore timely expressed all prior
Options.

          4. Extension Term Provisions. Each Extension Term shall be on all of
the same terms and conditions set forth in the Lease and applicable to the
Initial Term, except the Base Rent payable by Tenant during a particular
Extension Term shall be equal to the greater of (i) the Base Rent immediately
prior to the Extension Term or (ii) ninety-five (95%) percent of the fair market
rental for the Premises, as of the date which is two hundred seventy (270) days
prior to the commencement of such Extension Term. At least two hundred ten
(210) days prior to the commencement of the applicable Extension Term, Landlord
shall notify Tenant of the Base Rent to be charged during that Extension Term,
based upon the fair market rental as calculated below. All provisions for the
payment of Additional Rent shall continue to apply without limitation except as
otherwise provided.

          The “fair market rental value” shall be determined as follows:

          Following receipt by Landlord of Tenant’s notice of Tenant’s exercise
of the option to extend for such Extension Term, Landlord shall notify Tenant of
the “fair market rental value” of the Premises as of the New Rental Valuation
Date. The parties agree that fair market value shall be determined by taking
into account the Tenant Work or any other improvements made by Tenant to the
Premises, and that there shall be no break in the rent stream for lease-up time,
construction time, free rent or other lease procurement costs, and shall
otherwise take into account all other matters relevant to the leasing of the
Premises, including the net nature of the Lease. If Tenant disagrees

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with Landlord’s determination, Tenant shall, within thirty (30) days after
receipt of Landlord’s determination, notify Landlord that Tenant disputes
Landlord’s determination and shall submit to Landlord with such notice Tenant’s
good faith determination of the fair market rental value and the annual Base
Rent. In the event Tenant notifies Landlord that Tenant disputes Landlord’s
determination, then Landlord and Tenant shall attempt to agree upon the fair
market rental value. If Landlord and Tenant fail to reach agreement within
thirty (30) days following Tenant’s notice to Landlord disputing Landlord’s
determination (“Outside Renewal Agreement Date”), then each party shall, within
fifteen (15) days of the Outside Renewal Agreement Date, mutually agree upon an
appraiser who is a member of the Appraisal Institute and who has at least five
(5) years experience in the appraisal of office buildings in the Morris County,
New Jersey area (“Qualified Appraiser”) and each shall submit to such Qualified
Appraiser within twenty (20) days of the Outside Renewal Agreement Date its
sealed final determination of the fair market rent (provided that Landlord’s
sealed final determination shall in no event be greater than the rental set
forth in Landlord’s determination, and Tenant’s sealed final determination shall
in no event be less than Tenant’s determination as set forth in Tenant’s
original notice disputing Landlord’s original determination). Each of the
Landlord and Tenant may submit to the independent Qualified Appraiser
documentation in support of its determination of fair market rent. If the
parties are unable to agree upon such independent Qualified Appraiser, either
party may request the American Arbitration Association in Somerset, New Jersey,
to appoint such independent Qualified Appraiser which request shall be made no
later than fifteen (15) days after the Outside Renewal Agreement Date. The
independent Qualified Appraiser shall, within thirty (30) days of his/her
appointment, determine the fair market rent, which determination shall be
binding upon both Landlord and Tenant. The parties shall share equally in the
cost of any independent Qualified Appraiser. Both Landlord and Tenant agree to
be irrevocably bound by the final decision in arbitration, provided that Tenant
have the right to withdraw Tenant’s exercise of its option to renew within ten
(10) days of a final determination of the fair market rent.

          All provisions for the payment of Additional Rent shall continue to
apply without limitation except as otherwise provided. The Extension Term shall,
upon the commencement thereof, be deemed a part of the term of this Lease.
Notwithstanding anything to the contrary herein, Tenant shall have no further
right to renew or extend the term of this Lease upon the expiration of the
second Extension Term.

     

  Initials:
 
   

  Landlord

   

 

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  Tenant

   

 

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RIGHT OF FIRST OFFER RIDER

     
Date of Lease:
  September 16, 2004
 
   
Landlord:
  North Jersey Green 501 LLC
Tenant:
  Party City Corporation
Premises:
  Portion of 25 Green Pond Road, Rockaway, New Jersey

     Provided no Event of Default remains uncured at the time, Landlord grants
to Tenant the right to lease any space in the Building (the “First Offer Space”)
if such space becomes available during the Term hereof (which shall not apply to
the initial leasing thereof provide Landlord enters into a lease for such space
within six (6) months of the date hereof), upon the following terms and
conditions:

          (i) Landlord shall provide Tenant with written notice (“Landlord’s
Notice”) of the availability of the First Offer Space, specifying the terms and
conditions upon which Landlord will offer the First Offer Space to Tenant.
Tenant shall have the right, by furnishing Landlord with written notice of its
election (“Tenant’s Notice”), to lease the First Offer Space, which Tenant’s
Notice shall be received by Landlord no later than fifteen (15) days after
Tenant’s receipt of Landlord’s Notice of the availability of the First Offer
Space. The failure by Tenant to furnish Tenant’s Notice to Landlord in a timely
manner as provided above shall constitute a waiver by Tenant of all of Tenant’s
rights under this Rider for such space set forth in Landlord’s Notice, and shall
release Landlord from any further obligation to offer to Tenant the First Offer
Space described in Landlord’s Notice (unless Landlord has not entered into a
lease for such space within six (6) months of the date of Landlord’s Notice, or
such space again become vacant after the next leasing thereof, at which time the
provisions of this Rider shall again apply), and Tenant shall have no further
right to the leasing of such space, except as expressly provided in this Rider.
In the event Tenant timely delivers written notice to Landlord of its election
to lease the First Offer Space, described in the written notice delivered to
Tenant Landlord and Tenant shall, within ten (10) days after receipt of Tenant’s
Notice, enter into an amendment of this Lease, providing for those terms and
conditions as set forth in Landlord’s offer; provided that the term for such
First Offer Space shall be co-terminus with the Term hereof, and such First
Offer Space shall be included as part of the Premises for the purpose of
exercise the renewal options hereunder. In the event that Tenant elects not to
exercise its Right of First Offer for the First Offer Space, Landlord shall be
entitled to market and lease the First Offer Space to other parties provided
Landlord shall not have the right to lease the First Offer Space for a base rent
of less than ninety-five (95%) percent of the base rent quoted to Tenant in
Landlord’s Notice (without again providing Tenant with Landlord’s Notice,
revised to reflect the revised terms upon which Landlord is willing to lease the
First Offer Space (the “Revised Notice”). Thereafter Tenant shall have a period
of five (5) business days from the receipt of the Revised Notice to furnish
Landlord with written notice of its election to lease the First Offer Space on
such terms and conditions as set forth in the Revised Notice, which period shall
be deemed time of the essence. In the event that Tenant elects not to exercise
its Right of First Offer for the First Offer Space within the time period
provided above, Landlord shall be entitled to market and lease the First Offer
Space to other parties, provided Landlord shall not have the right to lease the
First Offer Space at a base rent of less than ninety-five (95%) percent of the
base rent quoted to Tenant in Landlord’s Revised Notice without again offering
the First Offer Space to Tenant pursuant to the above provisions.

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