Exhibit 10.17

 

BASIC LEASE INFORMATION

 

Lease dated as of October 3, 2003

 

Landlord:                                                                                                            
iStar Garden City LLC, a Delaware limited liability company, together with any
successor or assign.

 

Tenant:                                                                                                                      
AAR Allen Services, Inc., an Illinois corporation, together with any successor
or assign permitted by the Lease.

 

Commencement Date:                                             October 3, 2003.

 

Lease Expiration Date: October 31, 2023, which is the last day of the 240th full
calendar month following the Commencement Date, unless extended pursuant to
paragraph 4(b) of the Lease.

 

Primary Term and any Extension Term Fixed Rent:  The annual Fixed Rent during
the Primary Term and any applicable Extension Term of the Lease shall be payable
monthly in advance (unless specifically set forth to be paid at a different time
below) as follows:

 

(a)                                                                                                                                                 
From the Commencement Date through the 12th full calendar month after the
Commencement Date:  at the annual rate of $1,332,000.00, 1/12 of which shall be
payable in advance on the first day of each month, commencing (i) if the
Commencement Date does not occur on the first day of a month, then on the first
day of the month following the month in which the Commencement Date occurs, and
(ii) if the Commencement Date occurs on the first day of a month, then on the
Commencement Date.  Additionally, if the Commencement Date does not occur on the
first day of a month, then on the Commencement Date, a payment of an amount
equal to the product of $111,000.00 multiplied by a fraction, the numerator of
which is the number of days in the month from and including the Commencement
Date through the end of the month in which the Commencement Date occurs, and the
denominator of which is the total number of days in the month in which the
Commencement Date occurs.

 

(b)                                                                                                                                                
Beginning with the 13th full calendar month after the Commencement Date through
the 24th full calendar month after the Commencement Date:  at the annual rate of
$1,365,300.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 13th full calendar month after the Commencement
Date.

 

(c)                                                                                                                                                         
Beginning with the 25th full calendar month after the Commencement Date through
the 36th full calendar month after the Commencement Date:  at the annual rate of
$1,399,433.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 25th full calendar month after the Commencement
Date.

 

(d)                                                                                                                                                        
Beginning with the 37th full calendar month after the Commencement Date through
the 48th full calendar month after the Commencement Date:  at the annual

 

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rate of $1,434,418.00, 1/12 of which shall be payable in advance on the first
day of each month, commencing with the 37th full calendar month after the
Commencement Date.

 

(e)                                                                                                                                                         
Beginning with the 49th full calendar month after the Commencement Date through
the 60th full calendar month after the Commencement Date:  at the annual rate of
$1,470,279.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 49th full calendar month after the Commencement
Date.

 

(f)                                                                                                                                                           
Beginning with the 61st full calendar month after the Commencement Date through
the 72nd full calendar month after the Commencement Date:  at the annual rate of
$1,507,036.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 61st full calendar month after the Commencement
Date.

 

(g)                                                                                                                                                        
Beginning with the 73rd full calendar month after the Commencement Date through
the 84th full calendar month after the Commencement Date:  at the annual rate of
$1,544,712.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 73rd full calendar month after the Commencement
Date.

 

(h)                                                                                                                                                        
Beginning with the 85th full calendar month after the Commencement Date through
the 96th full calendar month after the Commencement Date:  at the annual rate of
$1,583,329.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 85th full calendar month after the Commencement
Date.

 

(i)                                                                                                                                                            
Beginning with the 97th full calendar month after the Commencement Date through
the 108th full calendar month after the Commencement Date:  at the annual rate
of $1,622,913.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 97th full calendar month after the Commencement
Date.

 

(j)                                                                                                                                                            
Beginning with the 109th full calendar month after the Commencement Date through
the 120th full calendar month after the Commencement Date:  at the annual rate
of $1,663,485.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 109th full calendar month after the Commencement
Date.

 

(k)                                                                                                                                                         
Beginning with the 121st full calendar month after the Commencement Date through
the 132nd full calendar month after the Commencement Date:  at the annual rate
of $1,705,073.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 121st full calendar month after the Commencement
Date.

 

(l)                                                                                                                                                            
Beginning with the 133rd full calendar month after the Commencement Date through
the 144th full calendar month after the Commencement Date:  at the annual rate
of $1,747,699.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 133rd full calendar month after the Commencement
Date.

 

(m)                                                                                                                                                      
Beginning with the 145th full calendar month after the Commencement Date through
the 156th full calendar month after the Commencement Date:  at the annual rate
of $1,791,392.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 145th full calendar month after the Commencement
Date.

 

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(n)                                                                                                                                                        
Beginning with the 157th full calendar month after the Commencement Date through
the 168th full calendar month after the Commencement Date:  at the annual rate
of $1,836,177.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 157th full calendar month after the Commencement
Date.

 

(o)                                                                                                                                                        
Beginning with the 169th full calendar month after the Commencement Date through
the 180th full calendar month after the Commencement Date:  at the annual rate
of $1,882,081.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 169th full calendar month after the Commencement
Date.

 

(p)                                                                                                                                                        
Beginning with the 181st full calendar month after the Commencement Date through
the 192nd full calendar month after the Commencement Date:  at the annual rate
of $1,929,133.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 181st full calendar month after the Commencement
Date.

 

(q)                                                                                                                                                        
Beginning with the 193rd full calendar month after the Commencement Date through
the 204th full calendar month after the Commencement Date:  at the annual rate
of $1,977,361.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 193rd full calendar month after the Commencement
Date.

 

(r)                                                                                                                                                           
Beginning with the 205th full calendar month after the Commencement Date through
the 216th full calendar month after the Commencement Date:  at the annual rate
of $2,026,797.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 205th full calendar month after the Commencement
Date.

 

(s)                                                                                                                                                         
Beginning with the 217th full calendar month after the Commencement Date through
the 228th full calendar month after the Commencement Date:  at the annual rate
of $2,077,465.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 217th full calendar month after the Commencement
Date.

 

(t)                                                                                                                                                           
Beginning with the 229th full calendar month after the Commencement Date through
the 240th full calendar month after the Commencement Date:  at the annual rate
of $2,129,402.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 229th full calendar month after the Commencement
Date.

 

(u)                                                                                                                                                        
During the first Extension Term, the annual Fixed Rent payable shall be as
follows:

 

 

(i)

Beginning with the 241st full calendar month after the Commencement Date through
the 252nd full calendar month after the Commencement Date:  at the annual rate
of $2,182,637.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 241st full calendar month after the Commencement
Date.

 

 

 

 

(ii)

Beginning with the 253rd full calendar month after the Commencement Date through
the 264th full calendar month after the Commencement Date:  at the annual rate
of $2,237,203.00, 1/12 of which shall be payable in advance on the

 

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first day of each month, commencing with the 253rd full calendar month after the
Commencement Date.

 

 

 

 

(iii)

Beginning with the 265th full calendar month after the Commencement Date through
the 276th full calendar month after the Commencement Date:  at the annual rate
of $2,293,133.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 265th full calendar month after the Commencement
Date.

 

 

 

 

(iv)

Beginning with the 277th full calendar month after the Commencement Date through
the 288th full calendar month after the Commencement Date:  at the annual rate
of $2,350,461.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 277th full calendar month after the Commencement
Date.

 

 

 

 

(v)

Beginning with the 289th full calendar month after the Commencement Date through
the 300th full calendar month after the Commencement Date:  at the annual rate
of $2,409,223.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 289th full calendar month after the Commencement
Date.

 

 

 

(v)

 

During the second Extension Term, the annual Fixed Rent payable shall be as
follows:

 

 

 

 

(i)

Beginning with the 301st full calendar month after the Commencement Date through
the 312th full calendar month after the Commencement Date:  at the annual rate
of $2,469,454.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 301st full calendar month after the Commencement
Date.

 

 

 

 

(ii)

Beginning with the 313th full calendar month after the Commencement Date through
the 324th full calendar month after the Commencement Date:  at the annual rate
of $2,531,190.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 313th full calendar month after the Commencement
Date.

 

 

 

 

(iii)

Beginning with the 325th full calendar month after the Commencement Date through
the 336th full calendar month after the Commencement Date:  at the annual rate
of $2,594,470.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 325th full calendar month after the Commencement
Date.

 

 

 

 

(iv)

Beginning with the 337th full calendar month after the Commencement Date through
the 348th full calendar month after the Commencement Date:  at the annual rate
of $2,659,331.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 337th full calendar month after the Commencement
Date.

 

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(v)

Beginning with the 349th full calendar month after the Commencement Date through
the 360th full calendar month after the Commencement Date:  at the annual rate
of $2,725,815.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 349th full calendar month after the Commencement
Date.

 

 

 

(w)

 

During the third Extension Term, the annual Fixed Rent payable shall be as
follows:

 

 

 

 

(i)

Beginning with the 361st full calendar month after the Commencement Date through
the 372nd full calendar month after the Commencement Date:  at the annual rate
of $2,793,960.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 361st full calendar month after the Commencement
Date.

 

 

 

 

(ii)

Beginning with the 373rd full calendar month after the Commencement Date through
the 384th full calendar month after the Commencement Date:  at the annual rate
of $2,863,809.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 373rd full calendar month after the Commencement
Date.

 

 

 

 

(iii)

Beginning with the 385th full calendar month after the Commencement Date through
the 396th full calendar month after the Commencement Date:  at the annual rate
of $2,935,404.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 385th full calendar month after the Commencement
Date.

 

 

 

 

(iv)

Beginning with the 397th full calendar month after the Commencement Date through
the 408th full calendar month after the Commencement Date:  at the annual rate
of $3,008,789.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 397th full calendar month after the Commencement
Date.

 

 

 

 

(v)

Beginning with the 409th full calendar month after the Commencement Date through
the 420th full calendar month after the Commencement Date:  at the annual rate
of $3,084,009.00, 1/12 of which shall be payable in advance on the first day of
each month, commencing with the 409th full calendar month after the Commencement
Date.

 

 

 

Security Deposit Amount:  One year’s Fixed Rent, subject to the provisions set
forth in paragraphs 5 and 25.

 

Landlord Address for Payment by wire transfer to:

 

 

 

JPMorgan Chase Bank

 

 

ABA # 021000021

 

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Account Name: iStar Garden City LLC/ iStar Finance Sub V LLC/

 

 

Property Account

 

 

Acct # 230-329667

 

 

 

Tenant Address:

 

c/o AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

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LEASE AGREEMENT

 

 

Between

 

 

iSTAR GARDEN CITY LLC,

 

as Landlord

 

 

and

 

 

AAR ALLEN SERVICES, INC.,

 

as Tenant

 

 

 

Dated as of October 3, 2003

 

7

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THIS LEASE AGREEMENT, is made and entered into as of the date set forth in the
Basic Lease Information (this lease agreement, together with all amendments and
supplements hereto, this “Lease”), by and between iSTAR GARDEN CITY LLC, a
Delaware limited liability company with offices c/o iStar Financial Inc., 1114
Avenue of the Americas, 27th Floor, New York, New York 10036 (together with any
successor or assigns, hereinafter called the “Landlord”) and AAR ALLEN SERVICES,
INC., an Illinois corporation, having an address at c/o AAR CORP., One AAR
Place, 1100 North Wood Dale Road, Wood Dale, Illinois 60191 (together with any
successor or assign permitted by this Lease, hereinafter collectively called the
“Tenant”).

 

1.                                      DEFINITIONS

 

Capitalized terms used herein shall have the following meanings for all purposes
of this Lease and shall be equally applicable to both the singular and plural
forms of the terms herein defined.

 

“Additional Rent” means all amounts, liabilities and obligations other than
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord or
others.

 

“Affiliates” means Persons (other than individuals) controlled by, controlling,
or under common control with Tenant or Guarantor.

 

“Alternative Credit Rating Agency” means if either or both of S & P and Moody’s
no longer exist or no longer assign Credit Ratings, such other nationally
recognized statistical credit rating agency designated by Landlord, acting in
its sole discretion.

 

“Basic Lease Information” means the page(s) preceding this Lease which are
hereby incorporated by reference.

 

“Business Days” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are closed.

 

“Casualty” shall mean any damage or destruction caused to any Site by any
reason, including fire.

 

“Casualty Repair” is defined in paragraph 10 of this Lease.

 

“Casualty Threshold” is defined in paragraph 10 of this Lease.

 

“Claims” shall mean Liens (including lien removal and bonding costs)
liabilities, obligations, damages, losses, demands, penalties, assessments,
payments, fees of Mortgagee, fines, claims, actions, suits, judgments,
settlements, costs, expenses and disbursements (including legal fees incurred
and expenses and costs of investigation and environmental remedial action) of
any kind and nature whatsoever.

 

“Commencement Date” is defined and shall have the meaning specified in the Basic
Lease Information.

 

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“Control” (including with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”) means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contracts or otherwise.

 

“Corporate Control Event” means any of the following:  (i) a merger or
consolidation of Tenant or Guarantor with another entity, (ii) the sale of all
or substantially all the assets of Tenant or Guarantor to any party, (iii) any
one Person acquiring 50% or more of publicly traded common stock, voting
securities or economic benefits and burdens (including distributions) of Tenant
or Guarantor within any twelve month period, or (iv) a change in 50% or more of
Tenant’s or Guarantor’s Board of Directors in any 12 month period.

 

“Corporate Control Test Dates” means both (a) the date which is ninety (90) days
following the public announcement of a Corporate Control Event and (b) the date
which is sixty (60) days following the consummation of a Corporate Control
Event.

 

“Credit Rating” means the senior unsecured debt rating issued by S&P and Moody’s
or if either or both no longer exist or no longer issue ratings then, for either
or both as so applicable, an Alternative Credit Rating Agency.  All references
to specific levels of a Credit Rating mean such rating with a “stable” or
“positive” outlook, but not a “negative” outlook or “on watch” associated with
such rating.

 

“Environmental Laws” is defined in paragraph 26(b) of this Lease.

 

“Equipment” means the equipment listed on Exhibit B.

 

“Event of Default” is defined in paragraph 15 of this Lease.

 

“Existing Credit Rating” means Guarantor’s Credit Rating as of the date which is
the earlier to occur of one week prior to the public announcement of a Corporate
Control Event or one week prior to the occurrence of a Corporate Control Event.

 

“Extension Terms” is defined in paragraph 4(b) of this Lease.

 

“Fixed Rent” is defined in paragraph 5(a) of this Lease.

 

“Guarantor” means AAR CORP., a Delaware corporation, together with any successor
or assign permitted by this Lease.

 

“Guaranty” means that certain Guaranty dated as of the date of this Lease from
Guarantor to Landlord, pursuant to which, among other things, Guarantor
unconditionally guarantees the payment and performance of Tenant’s obligation
under the Lease, all upon the terms and subject to the conditions set forth
therein, as such Guaranty is amended, modified or restated from time to time.

 

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“Imposition” means the various taxes and other charges referred to in paragraph
6 of this Lease and the present and future governmental laws and regulations
more specifically described in paragraph 6(b) of this Lease.

 

“Improvements” means all of the buildings, structures, improvements, equipment,
and all building fixtures therein (including parking areas, and driveways) now
or hereafter located on the Land and generally described on Exhibit A-2 hereto,
other than and specifically excluding Tenant’s Trade Fixtures.

 

The words “include”, “includes”, “including” and any other derivation of
“include” means “including but not limited to” unless specifically set forth to
the contrary.

 

“Indemnified Partner” is defined in paragraph 26(c) of this Lease.

 

“Initial Appraiser” is defined in Exhibit E of this Lease.

 

“Initial Valuation” is defined in Exhibit E of this Lease.

 

“Investment Grade Criteria” means Tenant or Guarantor has a Credit Rating of
either “BBB-” or higher from S&P or “Baa3” or higher from Moody’s, (or an
approximately equivalent Credit Rating from an Alternative Credit Rating Agency,
as applicable) in each case for the immediately preceding six (6) consecutive
calendar months.

 

“Issuer” is defined in paragraph 5(d)(iii) of this Lease.

 

“Land” means the title and interest of Landlord in and to the two (2) parcels of
real estate described on Exhibit A-1 hereto, and any land lying in the bed of
any existing dedicated street, road or alley adjoining thereto, all strips and
gores adjoining thereto, and all rights, ways, easements, privileges and
appurtenances thereunto belonging, including all of Landlord’s right, title, and
interest in and to all other property rights, tangible or otherwise, arising out
of or connected with Landlord’s ownership thereof, but none of the Improvements
thereon.

 

“Landlord” is defined in the first paragraph of this Lease.

 

“Lease” is defined in the first sentence of this Lease.

 

“Lease Expiration Date” is defined and shall have the meaning specified in the
Basic Lease Information.

 

“Legal Requirements” is defined in paragraph 12 of this Lease.

 

“Letter of Credit” is defined in paragraph 5(d)(iii) of this Lease

 

“Lien” shall mean any lien, mortgage, pledge, charge, security interest or
encumbrance of any kind, or any other type of preferential arrangement that has
the practical effect of creating

 

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a security interest, including any arising under any conditional sale agreement,
capital lease or other title retention agreement.

 

“Moody’s” means Moody’s Investors Services, Inc. and its successors.

 

“Mortgage” shall mean a mortgage, deed to secure debt, deed of trust or other
security instrument of like nature or any ground or underlying lease or other
document of like nature on all or any portion of the Premises given by Landlord
to the Mortgagee.

 

“Mortgagee” shall mean any holder of a Mortgage with respect to the Premises or
any part thereof.

 

“Net Casualty Proceeds” shall mean the compensation and/or insurance payments
(whether received from a third party insurance company or from Tenant because it
has self-insured) net of the reasonable expenses of collecting such amounts
incurred by Landlord, any Mortgagee, Tenant, and received by any Mortgagee,
Landlord or Tenant in respect of any portion of the Premises by reason of and on
account of a fire or other casualty.

 

“Other Taxes” is defined in paragraph 6(b) of this Lease.

 

“Overdue Rate” means the greater of: (x) twelve percent (12%) per annum or (y)
the sum of five percent (5%) plus the prime interest rate as reported from time
to time in The Wall Street Journal, but in any event, if lower, the maximum
annual interest rate allowed by law for business loans (not primarily for
personal, family or household purposes); provided, however, if The Wall Street
Journal is no longer in existence or ceases to publish such information,
Landlord shall use the prime interest rate as reported in a comparable publicly
available publication selected by Landlord in its sole discretion.

 

“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, trustee(s) of a
trust, unincorporated organization, or government or governmental authority,
agency or political subdivision thereof.

 

“Permitted Encumbrances” means:

 

(A)                                  ANY OF THE FOLLOWING, WHICH ARE NOT YET DUE
AND PAYABLE AT THE TIME IN QUESTION:  (I) LIENS FOR WATER, SEWER, AND OTHER
UTILITY SERVICES; (II) TAXES, ASSESSMENTS AND OTHER GOVERNMENTAL CHARGES
(WHETHER FEDERAL, STATE, LOCAL OR FOREIGN); AND (III) ANY LIENS OF MECHANICS,
MATERIALMEN AND LABORERS, INCLUDING ANY CONSTRUCTION LIENS, FOR WORK OR SERVICES
PERFORMED OR MATERIALS FURNISHED IN CONNECTION WITH THE PREMISES;

 

(B)                                 THE EASEMENTS, RIGHTS-OF-WAY, ENCROACHMENTS,
ENCUMBRANCES, RESTRICTIVE COVENANTS AND OTHER MATTERS AFFECTING THE TITLE TO THE
PREMISES OR ANY PART THEREOF SET FORTH ON EXHIBIT C ATTACHED HERETO;

 

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(C)                                  ANY SUBORDINATION, NON-DISTURBANCE, AND
ATTORNMENT AGREEMENT(S) RECORDED OR OTHERWISE, WHICH ARE PROVIDED TO TENANT
PURSUANT TO PARAGRAPH 17 OF THIS LEASE OR AS OTHERWISE ENTERED INTO BY AND AMONG
LANDLORD, TENANT, AND ANY MORTGAGEE;

 

(D)                                 LIENS FOR TAXES (WHETHER FEDERAL, STATE,
LOCAL OR FOREIGN) ATTRIBUTABLE TO ANY TAXABLE PERIOD WHETHER BEFORE, ON OR AFTER
THE COMMENCEMENT DATE WHICH ARE BEING CONTESTED IN GOOD FAITH IN ACCORDANCE WITH
THE TERMS OF THIS LEASE BY TENANT AND FOR WHICH TENANT HAS ESTABLISHED ADEQUATE
RESERVES; AND

 

(E)                                  THIS LEASE AND THE RIGHTS, PRIVILEGES AND
ENTITLEMENTS OF TENANT HEREUNDER.

 

“Permitted Investments” shall mean any one or more of the following obligations
or securities having: (a) a predetermined fixed dollar of principal due at
maturity that cannot vary or change; (b) bearing interest that may either be
fixed or variable but which is tied to a single interest rate index plus a
single fixed rate spread (if any) and move proportionately with that index; and
(c) having the required ratings, if any, provided for in this definition:

 

(I)                                     DIRECT OBLIGATIONS OF, AND OBLIGATIONS
FULLY GUARANTEED AS TO TIMELY PAYMENT OF PRINCIPAL AND INTEREST BY, THE UNITED
STATES OF AMERICA OR ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES OF
AMERICA, THE OBLIGATIONS OF WHICH ARE BACKED BY THE FULL FAITH AND CREDIT OF THE
UNITED STATES OF AMERICA THAT MATURE IN THIRTY (30) DAYS OR LESS AFTER THE DATE
OF ISSUANCE AND THAT DOES NOT HAVE A “R” HIGHLIGHTER AFFIXED TO ITS RATING;

 

(II)                                  TIME DEPOSITS, UNSECURED CERTIFICATES OF
DEPOSIT, OR BANKERS’ ACCEPTANCES THAT MATURE IN THIRTY (30) DAYS OR LESS AFTER
THE DATE OF ISSUANCE AND ARE ISSUED OR HELD BY ANY DEPOSITORY INSTITUTION OR
TRUST COMPANY INCORPORATED OR ORGANIZED UNDER THE LAWS OF THE UNITED STATES OF
AMERICA OR ANY STATE THEREOF AND SUBJECT TO SUPERVISION AND EXAMINATION BY
FEDERAL OR STATE BANKING AUTHORITIES, SO LONG AS THE COMMERCIAL PAPER OR OTHER
SHORT-TERM DEBT OBLIGATIONS OF SUCH DEPOSITORY INSTITUTION OR TRUST COMPANY ARE
RATED AT LEAST “A1” AND “P1” BY S&P AND MOODY’S, RESPECTIVELY, OR SUCH OTHER
RATING AS WOULD NOT RESULT IN THE DOWNGRADING, WITHDRAWAL OR QUALIFICATION OF
THE THEN-CURRENT CREDIT RATING TO THE PASS-THROUGH CERTIFICATES, AS EVIDENCED IN
WRITING AND THAT DOES NOT HAVE A “R” HIGHLIGHTER AFFIXED TO ITS RATING;

 

(III)                               REPURCHASE AGREEMENTS OR OBLIGATIONS WITH
RESPECT TO ANY SECURITY DESCRIBED IN CLAUSE (I) ABOVE WHERE SUCH SECURITY HAS A
REMAINING MATURITY OF THIRTY (30) DAYS OR LESS AND WHERE SUCH REPURCHASE
OBLIGATION HAS BEEN ENTERED INTO WITH A DEPOSITORY INSTITUTION OR TRUST COMPANY
(ACTING AS PRINCIPAL) DESCRIBED IN CLAUSE (II) ABOVE;

 

(IV)                              DEBT OBLIGATIONS BEARING INTEREST OR SOLD AT A
DISCOUNT ISSUED BY ANY CORPORATION INCORPORATED UNDER THE LAWS OF THE UNITED
STATES OF AMERICA OR ANY STATE THEREOF WHICH MATURE IN THIRTY (30) DAYS OR LESS
FROM THE DATE OF ISSUANCE, WHICH DEBT OBLIGATIONS HAVE RATINGS FROM MOODY’S AND
S&P IN THE HIGHEST CATEGORY POSSIBLE, OR SUCH OTHER RATING AS WOULD NOT RESULT
IN THE DOWNGRADING, WITHDRAWAL OR QUALIFICATION OF THE THEN-CURRENT CREDIT
RATING TO ANY PASS-THROUGH CERTIFICATE AND THAT DOES NOT HAVE A “R” HIGHLIGHTER
AFFIXED TO ITS RATING; PROVIDED, HOWEVER, THAT SECURITIES ISSUED BY ANY
PARTICULAR CORPORATION WILL NOT BE PERMITTED INVESTMENTS TO THE EXTENT THAT
INVESTMENT THEREIN WILL CAUSE THE THEN-OUTSTANDING PRINCIPAL

 

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AMOUNT OF SECURITIES ISSUED BY SUCH CORPORATION AND HELD IN THE ACCOUNTS
ESTABLISHED HEREUNDER TO EXCEED 10% OF THE SUM OF THE AGGREGATE PRINCIPAL
BALANCE AND THE AGGREGATE PRINCIPAL AMOUNT OF ALL PERMITTED INVESTMENTS IN SUCH
ACCOUNTS; AND

 

(V)                                 COMMERCIAL PAPER (INCLUDING BOTH
NON-INTEREST-BEARING DISCOUNT OBLIGATIONS AND INTEREST-BEARING OBLIGATIONS)
PAYABLE ON DEMAND OR ON A SPECIFIED DATE MATURING IN THIRTY (30) DAYS OR LESS
AFTER THE DATE OF ISSUANCE THEREOF AND WHICH IS RATED IN THE HIGHEST CATEGORY
POSSIBLE BY MOODY’S AND S&P AND THAT DOES NOT HAVE A “R” HIGHLIGHTER AFFIXED TO
SUCH RATING.

 

“Premises” is defined in paragraph 2(a) of this Lease.

 

“Primary Term” is defined in paragraph 4(a) of this Lease.

 

“Proceeds Trustee” shall mean a federally insured bank or trust company
designated by Landlord, subject to the prior written approval of Tenant, such
approval not to be unreasonably withheld, delayed, or conditioned; provided,
however, if a Mortgage encumbers the Premises, the Mortgagee thereunder may, at
its option, be appointed Proceeds Trustee for so long as such Mortgage remains
outstanding and such Mortgagee does not control Landlord or is not controlled by
or under common control with Landlord.

 

“Property Taxes” is defined in paragraph 6(a) of this Lease.

 

“Rent” means Fixed Rent and Additional Rent.

 

“Restoration Fund” is defined in paragraph 10 of this Lease.

 

“S&P” means Standard & Poor’s Rating Service and its successors or assigns.

 

“Security Deposit” is defined in paragraph 5(d) of this Lease.

 

“Security Deposit Amount” is defined and shall have the meaning specified in the
Basic Lease Information.

 

“Site Assessments” is defined in paragraph 26 of this Lease.

 

“Site Reviewers” is defined in paragraph 26 of this Lease.

 

“Subordination, Non-Disturbance and Attornment Agreement” is defined in
paragraph 17(a) of this Lease.

 

“Tenant” is defined in the first paragraph of this Lease.

 

“Tenant’s Trade Fixtures” means all personal property of Tenant in or on the
Premises, affixed or not, which is not necessary for the operation of the
Improvements, including tire racks and handling equipment, pallets, fork lift
trucks, lift racks, tools, office computers, and other

 

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equipment or machines owned or leased from/by the Tenant, and specifically
excludes the Equipment.

 

“Term” means the Primary Term, together with each Extension Term when Tenant has
exercised or is deemed to have exercised its option related to such Extension
Term.

 

“Termination Date” is defined in paragraph 14 of this Lease.

 

“Third Appraiser” is defined in Exhibit E of this Lease.

 

“Third Valuation” is defined in Exhibit E of this Lease.

 

“Transferee” is defined in paragraph 5(d)(vi) of this Lease.

 

“Treasury Rate” means the yield to maturity of a debt obligation of the United
States Treasury having a maturity date closest to but not earlier than the
then-existing remaining Term of the Lease (excluding any then-unexercised
options for any Extension Terms) and, if more than one have been issued with
such maturity date, then using the debt obligation first issued on or closest to
the date of any termination by Landlord under this Lease.

 

“Underground Tanks” is defined in paragraph 26(f) of this Lease.

 

“Valuation Notice” is defined in Exhibit E of this Lease.

 

“Valuation Period” is defined in Exhibit E of this Lease.

 

2.                                      DEMISE OF PREMISES

 

(A)                                  LANDLORD HEREBY DEMISES AND LEASES TO
TENANT AND TENANT HEREBY LEASES AND RENTS FROM LANDLORD THE PREMISES, IN ITS “AS
IS” CONDITION, SUBJECT TO THE EXISTING STATE OF TITLE (WITHOUT EXPRESS OR
IMPLIED WARRANTY OF LANDLORD WITH RESPECT TO THE CONDITION, QUALITY, REPAIR OR
FITNESS OF THE PREMISES FOR A PARTICULAR USE OR TITLE THERETO, ALL SUCH
WARRANTIES BEING HEREBY DISCLAIMED BY LANDLORD AND WAIVED AND RENOUNCED BY
TENANT).  THE “PREMISES” CONSISTS OF COLLECTIVELY, LANDLORD’S INTEREST IN THE
LAND, THE EQUIPMENT, THE IMPROVEMENTS, TOGETHER WITH ANY EASEMENTS, RIGHTS, AND
APPURTENANCES IN CONNECTION THEREWITH OR BELONGING TO SAID LAND AND
IMPROVEMENTS.  NO EASEMENT FOR LIGHT, AIR OR VIEW IS INCLUDED WITH OR
APPURTENANT TO THE PREMISES.  THE FOREGOING DISCLAIMER IN THIS PARAGRAPH 2(A)
HAS BEEN NEGOTIATED BY LANDLORD AND TENANT, EACH BEING REPRESENTED BY
INDEPENDENT COUNSEL, AND IS INTENDED AS A COMPLETE NEGATION OF ANY
REPRESENTATION OR WARRANTY BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO THE
CONDITION, QUALITY, REPAIR, OR FITNESS OF THE PREMISES FOR A PARTICULAR USE, OR
TITLE THERETO.

 

(B)                                 THE PREMISES INCLUDES THE LAND AND
IMPROVEMENTS LOCATED AT THE ADDRESS COMMONLY KNOWN AS 747 ZECKENDORF BOULEVARD,
GARDEN CITY, NEW YORK, INCLUDING APPROXIMATELY 8.74 ACRES OF LAND.

 

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3.                                      USE

 

Tenant shall, subject to applicable zoning restrictions and any recorded
covenants or restrictions in the public records upon the Commencement Date, use
and occupy the Premises, only for warehousing, distribution, fulfillment, light
assembly, repair, overhaul, packaging, light manufacturing, general offices, and
any other lawful purposes which are both associated and related thereto
(including the following ancillary uses:  ATM machines, cafeteria/food service);
provided, however, except for the recordation of any Mortgage and any
replacements, renewals, amendments, consolidations, modifications, extensions or
refinancing thereof or as otherwise required by governmental order, from and
after the Commencement Date, without first having obtained Tenant’s prior
written consent which may be withheld or granted in Tenant’s sole and absolute
discretion, Landlord shall not record or otherwise take any voluntary action to
subject the Premises or Land to any additional covenants, restrictions,
easements, or other encumbrances of record or otherwise, or any rezoning of any
Site from the zoning classifications presently in existence as of the
Commencement Date.  Tenant shall not use, suffer or permit the Premises, or any
portion thereof, to be used by Tenant, any third party or the public, as such,
without restriction or in such manner as might adversely affect Landlord’s title
to or interest in the Premises, or in such manner as might make possible a claim
or claims of adverse possession by the public, as such, or third Persons, or of
implied dedication of the Premises, or any portion thereof.

 

4.                                      TERM

 

(A)                                  THE PRIMARY TERM OF THIS LEASE (THE
“PRIMARY TERM”) SHALL BE FOR A PERIOD OF APPROXIMATELY TWENTY (20) YEARS,
BEGINNING ON THE COMMENCEMENT DATE AND ENDING ON THE LEASE EXPIRATION DATE.

 

(B)                                 TENANT SHALL HAVE THE RIGHT, AT ITS OPTION,
TO EXTEND THE PRIMARY TERM OF THIS LEASE FOR THREE (3) CONSECUTIVE EXTENSION
TERMS (THE “EXTENSION TERMS”), EACH BEING FIVE (5) YEARS IN LENGTH.  EACH
EXTENSION TERM SHALL COMMENCE ON THE DAY AFTER THE EXPIRATION OF THE PRECEDING
TERM AND SHALL EXPIRE ON OCTOBER 31, 2028 IN THE CASE OF THE FIRST (1ST)
EXTENSION TERM, AND ON OCTOBER 31, 2033 AND OCTOBER 31, 2038 IN THE CASE OF THE
SECOND (2ND) AND THIRD (3RD) EXTENSION TERMS, RESPECTIVELY.  THE OPTIONS TO
EXTEND THE TERM OF THIS LEASE AS DESCRIBED ABOVE SHALL NOT BE DEEMED EXERCISED
BY TENANT UNLESS AT LEAST EIGHTEEN (18) MONTHS PRIOR TO THE LEASE EXPIRATION
DATE FOR THE PRIMARY TERM OR AT LEAST EIGHTEEN (18) MONTHS PRIOR TO THE
EXPIRATION OF THE EXTENSION TERM FOR THE FIRST (1ST) AND SECOND (2ND) EXTENSION
TERMS, RESPECTIVELY, TENANT SHALL HAVE DELIVERED WRITTEN NOTICE TO LANDLORD OF
TENANT’S IRREVOCABLE DECISION TO SO EXTEND THIS LEASE AT THE END OF THE PRIMARY
TERM OR ANY EXERCISED EXTENSION TERM, AS APPLICABLE.  TENANT’S FAILURE TO
DELIVER ONE (1) SUCH TIMELY NOTICE TO LANDLORD SHALL TERMINATE THE EXTENSION
TERM TO WHICH SUCH NOTICE SPECIFICALLY RELATES AND ALL FUTURE EXTENSION TERMS,
IF ANY.  SUBJECT TO THE PROVISIONS OF PARAGRAPH 5, THE TERMS AND CONDITIONS OF
THIS LEASE SHALL APPLY TO EACH EXTENSION TERM WITH THE SAME FORCE AND EFFECT AS
IF SUCH EXTENSION TERM HAD ORIGINALLY BEEN INCLUDED IN THE PRIMARY TERM OF THE
LEASE.  THE RIGHT OF TENANT TO THE EXTENSION TERMS SHALL BE CONDITIONED UPON
THIS LEASE BEING IN FULL FORCE AND EFFECT AND NO EVENT OF DEFAULT THEN EXISTING
AS OF THE LEASE EXPIRATION DATE (FOR THE FIRST (1ST) EXTENSION TERM) OR
EXPIRATION OF THE FIRST (1ST) AND

 

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SECOND (2ND) EXTENSION TERM, AS THE CASE MAY BE FOR THE SECOND (2ND) AND THIRD
(3RD) EXTENSION TERM, RESPECTIVELY.  THE PRIMARY TERM, TOGETHER WITH ANY
EXTENSION TERM WHICH TENANT PROPERLY EXERCISES ITS OPTION WITH RESPECT TO, AND
FOR WHICH THE CONDITIONS RELATED THERETO ARE SATISFIED, SHALL CONSTITUTE THE
“TERM” OF THIS LEASE.

 

5.                                      RENTAL; SECURITY DEPOSIT; GUARANTY

 

(A)                                  TENANT SHALL PAY TO LANDLORD THE FOLLOWING
AMOUNTS AS RENT FOR THE PREMISES:

 

(I)                                     DURING THE TERM OF THIS LEASE, TENANT
SHALL PAY TO LANDLORD, AS FIXED MONTHLY RENT, THE AMOUNT OF MONTHLY FIXED RENT
SPECIFIED IN THE BASIC LEASE INFORMATION (“FIXED RENT”).

 

(II)                                  THROUGHOUT THE TERM OF THIS LEASE, TENANT
SHALL PAY, AS ADDITIONAL RENT, ALL OTHER AMOUNTS OF MONEY AND CHARGES REQUIRED
TO BE PAID BY TENANT UNDER THIS LEASE, WHETHER OR NOT SUCH AMOUNTS OF MONEY OR
CHARGES ARE DESIGNATED ADDITIONAL RENT.  AS USED IN THIS LEASE, “RENT” SHALL
MEAN AND INCLUDE ALL FIXED RENT AND ADDITIONAL RENT PAYABLE BY TENANT IN
ACCORDANCE WITH THIS LEASE.

 

(B)                                 IT IS THE INTENTION OF LANDLORD AND TENANT
THAT THE FIXED RENT PAYABLE BY TENANT TO LANDLORD DURING THE ENTIRE TERM OF THIS
LEASE SHALL BE ABSOLUTELY NET OF ALL COSTS AND EXPENSES INCURRED IN CONNECTION
WITH THE MANAGEMENT, OPERATION, MAINTENANCE AND REPAIR OF THE PREMISES IN
ACCORDANCE WITH THIS LEASE.  LANDLORD SHALL HAVE NO OBLIGATIONS OR LIABILITIES
WHATSOEVER WITH RESPECT TO THE MANAGEMENT, OPERATION, MAINTENANCE OR REPAIR OF
THE PREMISES DURING THE TERM OF THIS LEASE, AND TENANT SHALL MANAGE, OPERATE,
MAINTAIN AND REPAIR THE PREMISES IN ACCORDANCE WITH THIS LEASE AND SHALL PAY ALL
COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH BEFORE SUCH COSTS OR
EXPENSES BECOME DELINQUENT.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
THROUGHOUT THE ENTIRE TERM OF THIS LEASE, TENANT SHALL PAY, AS ADDITIONAL RENT,
ALL PREMIUMS FOR ALL PROPERTY AND LIABILITY INSURANCE COVERING THE PREMISES
REQUIRED UNDER THIS LEASE, ALL PROPERTY TAXES AND ALL OTHER TAXES THAT ACCRUE
DURING OR ARE ALLOCABLE TO THE TERM OF THIS LEASE, AND FOR PROPERTY TAXES AND
OTHER TAXES, ALLOCABLE FOR ANY PERIOD OF TIME PRIOR TO THE TERM OF THIS LEASE.

 

(C)                                  TENANT SHALL PAY ALL FIXED RENT TO
LANDLORD, IN ADVANCE, ON OR BEFORE THE FIRST BUSINESS DAY OF EACH AND EVERY
CALENDAR MONTH DURING THE TERM OF THIS LEASE (OTHER THAN THE PAYMENT DUE ON THE
COMMENCEMENT DATE WHICH IS DUE AS SET FORTH IN THE BASIC LEASE INFORMATION)
WITHOUT NOTICE, BY WIRE TRANSFER OR OTHER ELECTRONIC MEANS (OR OTHERWISE SO
THERE ARE COLLECTED FUNDS AVAILABLE TO LANDLORD ON THE DUE DATE).  INTEREST AT
THE OVERDUE RATE SHALL ACCRUE ON UNPAID FIXED RENT FROM THE DUE DATE THEREOF TO
THE DATE OF ACTUAL PAYMENT.  IF THE FIXED RENT IS PAID MORE THAN FIVE (5)
BUSINESS DAYS AFTER ITS DUE DATE, A LATE CHARGE OF 5% OF THE DELINQUENT AMOUNT
SHALL BE DUE AND PAYABLE.  TENANT SHALL PAY ALL ADDITIONAL RENT WHEN DUE. 
TENANT SHALL PAY ALL FIXED RENT TO LANDLORD WITHOUT NOTICE, DEMAND, DEDUCTION OR
OFFSET, IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, TO THE WIRE TRANSFER
ADDRESS OF LANDLORD SPECIFIED IN THE BASIC LEASE INFORMATION, OR TO SUCH OTHER
ACCOUNTS AND/OR PERSON OR PERSONS OR AT SUCH OTHER PLACE OR PLACES AS LANDLORD
MAY FROM TIME TO TIME DESIGNATE IN WRITING.

 

(D)                                 SECURITY DEPOSIT REQUIREMENTS ARE SET FORTH
BELOW.

 

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(I)                                     SUBJECT TO PARAGRAPH 5(D)(V) BELOW,
CONCURRENTLY WITH THE EXECUTION OF THIS LEASE, TENANT SHALL DELIVER AND MAINTAIN
THE SECURITY DEPOSIT AMOUNT (IN EFFECT FROM TIME TO TIME) TO LANDLORD AS A
SECURITY DEPOSIT (“SECURITY DEPOSIT”) IN CASH OR OTHER IMMEDIATELY AVAILABLE
FUNDS OR IN THE FORM OF AN IRREVOCABLE STANDBY LETTER OF CREDIT, IN EITHER CASE
MEETING THE REQUIREMENTS OF THIS PARAGRAPH 5(D), TO SECURE THE FULL AND FAITHFUL
PERFORMANCE OF TENANT’S OBLIGATIONS UNDER THIS LEASE.  IF THERE IS AN EVENT OF
DEFAULT AT ANY TIME DURING THE TERM OR ANY HOLDOVER PERIOD, LANDLORD SHALL HAVE
THE RIGHT, BUT NOT THE OBLIGATION, IN ACCORDANCE WITH THE TERMS OF SUCH LETTER
OF CREDIT AND THIS LEASE, FROM TIME TO TIME TO DRAW UPON ALL OR ANY PART OF THE
SECURITY DEPOSIT BUT ONLY IN SUCH AMOUNTS AS ARE NECESSARY TO CURE OR PARTIALLY
CURE THE EVENT OF DEFAULT WHICH CAN BE CURED OR PARTIALLY CURED WITH THE PAYMENT
OF MONEY, OR TO PAY ITSELF ANY RENTS THEN DUE, DAMAGES OR OTHER AMOUNTS THAT
LANDLORD WOULD BE ENTITLED TO RECOVER AND WHICH ARE CURRENTLY DUE FROM TENANT ON
ACCOUNT OF THE EVENT OF DEFAULT.  IF LANDLORD DRAWS UPON SUCH SECURITY DEPOSIT,
LANDLORD SHALL APPLY SUCH PROCEEDS TO SUCH AMOUNTS OTHERWISE DUE FROM TENANT AS
SET FORTH ABOVE.  IF LANDLORD SHALL SO DRAW ON THE SECURITY DEPOSIT AND APPLY
ALL OF SUCH PROCEEDS SO DRAWN AS SET FORTH ABOVE, UPON LANDLORD’S DEMAND, TENANT
SHALL, WITHIN FIVE (5) BUSINESS DAYS FOLLOWING NOTICE, RESTORE THE SECURITY
DEPOSIT TO ITS PREVIOUS AMOUNT AND ANY FAILURE TO DO SO SHALL BE AN EVENT OF
DEFAULT WITHOUT FURTHER NOTICE.  TENANT MAY NOT USE THE SECURITY DEPOSIT TO PAY
RENT OR OTHERWISE CAUSE LANDLORD TO OFFSET ANY AMOUNTS PAYABLE BY TENANT AGAINST
THE SECURITY DEPOSIT (EXCEPT AS PROVIDED HEREIN).  THE SECURITY DEPOSIT SHALL BE
RETURNED TO TENANT WITHIN THIRTY (30) DAYS AFTER THE FIRST TO OCCUR OF (1) THE
INVESTMENT GRADE CRITERIA BEING SATISFIED AND THE WAIVER SET FORTH IN PARAGRAPH
5(D)(V) BEING APPLICABLE, AND (2) THE EXPIRATION OR EARLIER TERMINATION OF THE
TERM AND TENANT’S SURRENDER OF THE PREMISES TO LANDLORD AS REQUIRED BY
PARAGRAPH 22 OF THIS LEASE, IN EACH CASE LESS SUCH AMOUNTS AS MAY HAVE BEEN USED
TO CURE OR PARTIALLY CURE ANY EVENTS OF DEFAULT BY TENANT.  TENANT’S FAILURE TO
DEPOSIT, MAINTAIN AND REPLENISH THE SECURITY DEPOSIT AS REQUIRED BY THIS LEASE
SHALL CONSTITUTE AN IMMEDIATE EVENT OF DEFAULT UNDER THIS LEASE.

 

(II)                                  IF TENANT DESIRES TO MAKE THE SECURITY
DEPOSIT IN CASH OR OTHER IMMEDIATELY AVAILABLE FUNDS, THE SECURITY DEPOSIT SHALL
BE HELD FROM TIME TO TIME IN AN ACCOUNT IN LANDLORD’S OR MORTGAGEE’S NAME (IN
EITHER CASE WITH PROPER NOTATION BY SUCH ACCOUNT INSTITUTION TO INDICATE THAT
THE SECURITY DEPOSIT IS TENANT’S PROPERTY SUBJECT TO THE LIEN ARISING UNDER
PARAGRAPH 5(D)(V) BELOW), AS DETERMINED BY LANDLORD, AT A FEDERALLY INSURED
INSTITUTION AND NOT OPERATING UNDER ANY REGULATORY OR SUPERVISORY AGREEMENT, AND
IN SUCH STATE WITHIN THE CONTINENTAL UNITED STATES AS THE HOLDER THEREOF SHALL
DETERMINE.  SUCH FUNDS SHALL NOT BE DEEMED TO BE TRUST FUNDS BUT SHALL NOT BE
COMMINGLED WITH THE GENERAL FUNDS OF LANDLORD AND SHALL INSTEAD BE HELD IN A
SEPARATE ESCROW ACCOUNT OPENED AND MAINTAINED FOR THIS LEASE ALONE; PROVIDED,
HOWEVER, TO THE EXTENT SO RECEIVED, ANY MORTGAGEE WHICH IS AN ENTITY
UNAFFILIATED WITH LANDLORD OR ANY AFFILIATE OF LANDLORD, MAY COMMINGLE SUCH
SECURITY DEPOSIT FUNDS.  LANDLORD SHALL CAUSE INTEREST TO BE EARNED UPON ANY
CASH OR OTHER IMMEDIATELY AVAILABLE FUNDS BY DEPOSITING SUCH CASH OR FUNDS IN A
SEPARATE INTEREST-BEARING FEDERALLY INSURED ACCOUNT AT AN INSTITUTION NOT
OPERATING UNDER ANY REGULATORY OR SUPERVISORY AGREEMENT, OR INVESTING IT IN
PERMITTED INVESTMENTS (AS DIRECTED BY, OR ON BEHALF OF, TENANT).  ANY SUCH
INTEREST EARNED ON THE SECURITY DEPOSIT SHALL BE PAID ANNUALLY TO TENANT. 
TENANT SHALL COOPERATE WITH LANDLORD TO ENSURE THAT ANY TAX LIABILITY ATTRIBUTED
TO LANDLORD FOR SUCH INTEREST SHALL BE PROPERLY REALLOCATED TO TENANT AND PAID
FOR BY TENANT, AND TENANT AGREES TO INDEMNIFY, DEFEND AND HOLD LANDLORD

 

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HARMLESS FROM ALL SUCH TAX LIABILITY.  SUCH INDEMNITY SHALL SURVIVE THE
EXPIRATION OR EARLIER TERMINATION OF THE LEASE FOR SIX (6) YEARS.

 

(III)                               IF TENANT DESIRES TO MAKE THE SECURITY
DEPOSIT BY DELIVERING AN IRREVOCABLE STANDBY LETTER OF CREDIT TO LANDLORD, SUCH
LETTER OF CREDIT SHALL MEET ALL OF THE FOLLOWING REQUIREMENTS:  (A) IT IS A
SIGHT DRAFT LETTER OF CREDIT FROM A FINANCIAL INSTITUTION (THE “ISSUER”)
ACCEPTABLE TO LANDLORD AND MORTGAGEE, EACH IN THEIR RESPECTIVE SOLE AND ABSOLUTE
DISCRETION; PROVIDED, HOWEVER, LANDLORD HEREBY PRE-APPROVES ANY FINANCIAL
INSTITUTION HAVING A CREDIT RATING OF “A1” OR HIGHER FROM MOODY’S AND “A+” OR
HIGHER FROM S&P, OR, AS APPLICABLE, AN APPROXIMATELY EQUIVALENT RATING FROM AN
ALTERNATIVE CREDIT RATING AGENCY; (B) IT HAS A FACE AMOUNT OF NOT LESS THAN THE
SECURITY DEPOSIT AMOUNT; (C) IT HAS AN EXPIRATION DATE OF NOT LESS THAN ONE (1)
YEAR FROM THE DATE SUCH LETTER OF CREDIT IS DELIVERED TO LANDLORD OR MORTGAGEE
AND THEREAFTER RENEWED ANNUALLY THROUGHOUT THE TERM OF THE LEASE AT LEAST THIRTY
(30) DAYS PRIOR TO THE EXPIRATION DATE (AND MAY BE DRAWN ON BY THE HOLDER
THEREOF IF NOT SO RENEWED WITH SUCH FUNDS THEN BEING PLACED IN AN ESCROW AS
PROVIDED IN (II) ABOVE); (D) IT IS FREELY ASSIGNABLE BY LANDLORD AND/OR
MORTGAGEE, PROVIDED THAT THE TRANSFEROR AND TRANSFEREE SHALL HAVE COMPLIED WITH
THE ISSUER’S CUSTOMARY TRANSFER REQUIREMENTS AND PAY WHEN DUE THE REASONABLE
COSTS CHARGED BY SUCH ISSUER IN CONNECTION WITH SUCH ASSIGNMENT; (E) IT MAY BE
DRAWN UPON BY LANDLORD OR MORTGAGEE TO CURE EVENTS OF DEFAULT BY TENANT UNDER
THIS LEASE, BUT ONLY IN ACCORDANCE WITH ITS TERMS AND THE TERMS OF THIS LEASE;
(F) IT SHALL PROVIDE LANDLORD AND MORTGAGEE, RESPECTIVELY, THE RIGHTS THAT EACH
WOULD HAVE HEREUNDER AND AS SET FORTH IN THE ESCROW AGREEMENT REFERRED TO IN
(II) ABOVE, AND (G) IT IS OTHERWISE REASONABLY SATISFACTORY TO LANDLORD AND IS
SUBSTANTIALLY SIMILAR TO THE LETTER OF CREDIT FORM ATTACHED HERETO AS EXHIBIT F
AND INCORPORATED HEREIN BY THIS REFERENCE (A LETTER OF CREDIT SATISFYING THE
FOREGOING REQUIREMENTS IS HEREIN CALLED A “LETTER OF CREDIT”).  IF THE ISSUER
CEASES TO HAVE A CREDIT RATING OF BOTH “A+” OR HIGHER BY S&P AND “A1” OR HIGHER
BY MOODY’S, TENANT SHALL, WITHIN TEN (10) BUSINESS DAYS OF THE RATING DOWNGRADE,
REPLACE THE LETTER OF CREDIT ISSUED BY A BANK HAVING SUCH RATING.  TENANT SHALL
PAY ALL COSTS ASSOCIATED WITH ANY CHANGE IN THE ISSUER OR LETTER OF CREDIT,
INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY ASSIGNMENT OF PROCEEDS. 
NOTWITHSTANDING THE FOREGOING, LANDLORD HEREBY APPROVES THE FORM OF LETTER OF
CREDIT ATTACHED HERETO AS EXHIBIT F-1 AND THE ISSUER REFERRED TO THEREIN.

 

(IV)                              TENANT SHALL EXECUTE SUCH DOCUMENTS,
INSTRUMENTS, FINANCING STATEMENTS, AND ACKNOWLEDGMENTS AS LANDLORD MAY
REASONABLY REQUEST FROM TIME TO TIME TO GRANT AND THEREAFTER MAINTAIN A
FIRST-PRIORITY PERFECTED SECURITY INTEREST IN THE SECURITY DEPOSIT.  TENANT
HEREBY GRANTS LANDLORD A SECURITY INTEREST IN THE SECURITY DEPOSIT AS IT EXISTS
FROM TIME TO TIME, AND ALL PROCEEDS AND PRODUCTS THEREOF.  LANDLORD AND TENANT
ACKNOWLEDGE THAT AS OF THE DATE OF THIS LEASE, LANDLORD’S POSSESSION OF THE
SECURITY DEPOSIT WOULD NOT REQUIRE FURTHER DOCUMENTS, INSTRUMENTS OR FINANCING
STATEMENTS TO PROVIDE LANDLORD WITH A FIRST-PRIORITY PERFECTED SECURITY INTEREST
IN THE SECURITY DEPOSIT.  TENANT ACKNOWLEDGES AND AGREES THAT THE SECURITY
DEPOSIT MAY ALSO BE PLEDGED AS SECURITY TO ANY MORTGAGEE AND TENANT SHALL
COOPERATE WITH, PERMIT, AND EXECUTE SUCH DOCUMENTS AND INSTRUMENTS AS MAY BE
REQUIRED TO PROVIDE MORTGAGEE WITH SUCH SECURITY.

 

(V)                                 SO LONG AS NO EVENT OF DEFAULT THEN EXISTS
(IT BEING AGREED THAT IT IS A CONDITION PRECEDENT TO ANY WAIVER IN THE
REQUIREMENT TO MAINTAIN A SECURITY DEPOSIT WITH

 

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LANDLORD AS SET FORTH IN THIS PARAGRAPH 5(D) THAT NO EVENT OF DEFAULT EXISTS)
WHEN THE INVESTMENT GRADE CRITERIA IS SATISFIED, THE REQUIREMENTS OF MAINTAINING
THE SECURITY DEPOSIT SHALL BE WAIVED BY LANDLORD UPON TENANT’S WRITTEN REQUEST
ACCOMPANIED BY EVIDENCE SATISFACTORY TO LANDLORD OF SUCH INVESTMENT GRADE
RATINGS.  SUCH LANDLORD’S WAIVER SHALL CEASE IF TENANT OR GUARANTOR NO LONGER OR
AT ANY TIME DOES NOT SATISFY THE INVESTMENT GRADE CRITERIA.  IF AFTER BEING
GRANTED A WAIVER THE INVESTMENT GRADE CRITERIA IS SUBSEQUENTLY NO LONGER MET,
TENANT’S OBLIGATION TO DEPOSIT AND REPLENISH AND THEREAFTER MAINTAIN SUCH
SECURITY DEPOSIT UNDER THIS LEASE SHALL BE RE-INSTATED, WITHOUT FURTHER ACT,
DEED OR NOTICE; PROVIDED, HOWEVER, TENANT SHALL BE AFFORDED TEN (10) BUSINESS
DAYS AFTER SUCH CESSATION OF SUCH WAIVER WITHIN WHICH TO DEPOSIT THE SECURITY
DEPOSIT WITH LANDLORD; PROVIDED, FURTHER, LANDLORD SHALL AGAIN BE REQUIRED TO
WAIVE TENANT’S OBLIGATION TO MAINTAIN SUCH SECURITY DEPOSIT WHEN TENANT SHALL
HAVE SATISFIED THE CONDITIONS PRECEDENT REQUIRED FOR SUCH WAIVER AS SET FORTH IN
THE FIRST SENTENCE OF THIS SUBSECTION (V).

 

(VI)                              IF A TRANSFEREE OF LANDLORD’S RIGHT, TITLE,
AND INTEREST IN AND TO THE PREMISES, THIS LEASE, AND SUCH SECURITY DEPOSIT (A
“TRANSFEREE”), SHALL HAVE ASSUMED IN WRITING LANDLORD’S OBLIGATIONS HEREUNDER
AND RECOGNIZED TENANT IN WRITING, AS TENANT UNDER THIS LEASE; (II) LANDLORD, OR
SUCH TRANSFEREE, SHALL HAVE DELIVERED WRITTEN EVIDENCE OF SUCH TRANSFEREE’S
ASSUMPTION AND RECOGNITION AS AFORESAID;  (III) LANDLORD SHALL DELIVER THE CASH
SECURITY DEPOSIT (INCLUDING ANY ACCRUED BUT UNPAID INTEREST THEREON TO WHICH
TENANT IS ENTITLED UNDER THIS LEASE) AND/OR THE LETTER OF CREDIT, AS APPLICABLE,
TO ANY SUCH TRANSFEREE OF LANDLORD’S RIGHT, TITLE, AND INTEREST AS AFORESAID,
THE THEN-CURRENT LANDLORD DELIVERING SUCH SECURITY DEPOSIT TO SUCH TRANSFEREE
SHALL BE DISCHARGED FROM FURTHER LIABILITY THEREFOR; PROVIDED, HOWEVER, IF THE
IMMEDIATELY PRECEDING CONDITIONS (I), (II), AND (III) ARE NOT SATISFIED, TENANT
SHALL HAVE NO OBLIGATIONS HEREUNDER TO SUCH TRANSFEREE SOLELY WITH RESPECT TO
THE SECURITY DEPOSIT (INCLUDING ANY REPLENISHMENT, REPLACEMENT, OR TRANSFER
OBLIGATIONS) UNLESS AND UNTIL SUCH CONDITIONS SHALL HAVE BEEN SATISFIED AND THE
THEN-CURRENT LANDLORD SHALL HAVE DELIVERED THE SECURITY DEPOSIT TO SUCH
TRANSFEREE.

 

(E)                                  TENANT ACKNOWLEDGES AND AGREES THAT IT WAS
A CONDITION PRECEDENT TO LANDLORD ENTERING INTO THIS LEASE THAT LANDLORD RECEIVE
A GUARANTY OF TENANT’S PAYMENT AND PERFORMANCE OF ALL OF TENANT’S OBLIGATIONS
UNDER THIS LEASE (IN SUCH FORM AS APPROVED BY LANDLORD, THE “GUARANTY”) FROM
GUARANTOR, WHICH GUARANTY IS BEING ENTERED INTO CONTEMPORANEOUSLY WITH THE
EXECUTION OF THIS LEASE.  TENANT HEREBY REPRESENTS AND WARRANTS TO LANDLORD AS
OF THE DATE HEREOF AND COVENANTS TO LANDLORD THAT THROUGHOUT THE TERM OF THIS
LEASE TENANT SHALL CAUSE GUARANTOR TO BE BOUND BY THE TERMS OF THE GUARANTY TO
LANDLORD.

 

6.                                      TAXES

 

(A)                                  TENANT SHALL PAY, AS ADDITIONAL RENT, ALL
PROPERTY TAXES PRIOR TO THE ASSESSMENT OF ANY INTEREST OR PENALTY FOR LATE
PAYMENT (SUBJECT TO TENANT’S RIGHTS UNDER THIS PARAGRAPH (A) TO MAKE PAYMENT
THEREOF IN INSTALLMENTS OR UNDER PARAGRAPH 6(E) BELOW TO PROTEST PROPERTY
TAXES); PROVIDED, HOWEVER, IF LANDLORD OR MORTGAGEE IS HOLDING TENANT’S
ESTIMATED PAYMENTS THEREOF PURSUANT TO PARAGRAPH 6(F) BELOW, LANDLORD OR
MORTGAGEE SHALL INSTEAD MAKE SUCH PAYMENTS TIMELY UPON TENANT’S BEHALF;
PROVIDED, FURTHER, IF ANY SUCH PROPERTY TAXES MAY LEGALLY BE PAID IN
INSTALLMENTS, TENANT MAY, AT ITS OPTION, PAY SUCH PROPERTY TAXES IN SUCH
INSTALLMENTS TOGETHER

 

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WITH ANY INTEREST DUE THEREON PROVIDED THAT TENANT SHALL HAVE PAID ALL SUCH
INSTALLMENTS, OR PROVIDED TO LANDLORD OR MORTGAGEE, SUCH AMOUNTS AS ARE
NECESSARY FOR THE PAYMENT OF, ALL SUCH INSTALLMENTS PRIOR TO THE EXPIRATION OR
EARLIER TERMINATION OF THIS LEASE.  “PROPERTY TAXES” SHALL MEAN ALL TAXES,
ASSESSMENTS, EXCISES, LEVIES, FEES AND CHARGES (AND ANY TAX, ASSESSMENT, EXCISE,
LEVY, MUNICIPAL SERVICE FEE, FEE OR CHARGE LEVIED WHOLLY OR PARTLY IN LIEU
THEREOF OR AS A SUBSTITUTE THEREFOR OR AS AN ADDITION THERETO) OF EVERY KIND AND
DESCRIPTION, GENERAL OR SPECIAL, ORDINARY OR EXTRAORDINARY, FORESEEN OR
UNFORESEEN, SECURED OR UNSECURED, WHETHER OR NOT NOW CUSTOMARY OR WITHIN THE
CONTEMPLATION OF LANDLORD AND TENANT, THAT ARE LEVIED, ASSESSED, CHARGED,
CONFIRMED OR IMPOSED BY ANY PUBLIC OR GOVERNMENT AUTHORITY ON OR AGAINST, OR
OTHERWISE WITH RESPECT TO, THE PREMISES OR ANY PART THEREOF OR ANY PERSONAL
PROPERTY USED IN CONNECTION WITH THE PREMISES, INCLUDING LANDLORD’S FRANCHISE
TAXES BASED UPON GROSS RECEIPTS (OR DERIVATIVES THEROF, SPECIFICALLY EXCLUDING,
HOWEVER, NET INCOME) BUT ONLY TO THE EXTENT THAT SUCH TAXES ARE IN LIEU OF OR A
SUBSTITUTE FOR ANY PROPERTY TAXES.  PROPERTY TAXES SHALL NOT INCLUDE NET INCOME
OR INHERITANCE TAXES, FRANCHISE TAXES (TO THE EXTENT NOT INCLUDED IN THE
DEFINITION OF PROPERTY TAXES), ESTATE TAXES OF LANDLORD OR ANY SUCCESSION OR
TRANSFER TAXES GROWING OUT OF OR LEVIED IN CONNECTION WITH THIS LEASE, IN EACH
CASE, OF LANDLORD, UNLESS LEVIED OR ASSESSED AGAINST LANDLORD AS A SUBSTITUTE
FOR ANY PROPERTY TAXES.

 

(B)                                 TENANT SHALL PAY, AS ADDITIONAL RENT, ALL
OTHER TAXES PRIOR TO THE ASSESSMENT OF ANY INTEREST OR PENALTY FOR LATE PAYMENT
(SUBJECT TO TENANT’S RIGHTS UNDER PARAGRAPH 6(E) BELOW TO PAYMENT IN
INSTALLMENTS OR TO PROTEST OTHER TAXES); PROVIDED, HOWEVER, IF LANDLORD OR
MORTGAGEE IS HOLDING TENANT’S ESTIMATED PAYMENTS THEREOF PURSUANT TO PARAGRAPH
6(F) BELOW, LANDLORD OR MORTGAGEE SHALL INSTEAD MAKE SUCH PAYMENTS TIMELY UPON
TENANT’S BEHALF; PROVIDED, FURTHER, IF ANY SUCH OTHER TAXES MAY LEGALLY BE PAID
IN INSTALLMENTS, TENANT MAY, AT ITS OPTION, PAY SUCH OTHER TAXES IN SUCH
INSTALLMENTS TOGETHER WITH ANY INTEREST DUE THEREON PROVIDED THAT TENANT SHALL
HAVE PAID, OR PROVIDED TO LANDLORD OR MORTGAGEE, SUCH AMOUNTS AS ARE NECESSARY
FOR THE PAYMENT OF,  ALL SUCH INSTALLMENTS PRIOR TO THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.  “OTHER TAXES” SHALL MEAN ALL TAXES, ASSESSMENTS,
EXCISES, LEVIES, FEES AND CHARGES, INCLUDING ALL PAYMENTS RELATED TO THE COST OR
OCCUPATION OF PROVIDING FACILITIES OR SERVICES, WHETHER OR NOT NOW CUSTOMARY OR
WITHIN THE CONTEMPLATION OF LANDLORD AND TENANT, THAT ARE LEVIED, ASSESSED,
CHARGED, CONFIRMED OR IMPOSED BY ANY PUBLIC OR GOVERNMENT AUTHORITY UPON, OR
MEASURED BY, OR REASONABLY ATTRIBUTABLE TO (I) THE PREMISES, (II) THE COST OR
VALUE OF TENANT’S EQUIPMENT, FURNITURE, FIXTURES AND OTHER PERSONAL PROPERTY
LOCATED IN THE PREMISES OR THE COST OR VALUE OF ANY LEASEHOLD IMPROVEMENTS MADE
IN OR TO THE PREMISES BY OR FOR TENANT, REGARDLESS OF WHETHER TITLE TO SUCH
IMPROVEMENTS IS VESTED IN TENANT OR LANDLORD, (III) ANY RENT PAYABLE UNDER THIS
LEASE, INCLUDING ANY GROSS INCOME TAX OR EXCISE TAX LEVIED BY ANY PUBLIC OR
GOVERNMENT AUTHORITY WITH RESPECT TO THE RECEIPT OF ANY SUCH RENT BUT ONLY TO
THE EXTENT THAT SUCH TAXES ARE IN LIEU OF OR A SUBSTITUTE FOR ANY PROPERTY
TAXES, (IV) THE POSSESSION, LEASING, OPERATION, MANAGEMENT, MAINTENANCE,
ALTERATION, REPAIR, USE OR OCCUPANCY BY TENANT OF THE PREMISES, OR (V) THIS
TRANSACTION OR ANY DOCUMENT TO WHICH TENANT IS A PARTY CREATING OR TRANSFERRING
AN INTEREST OR AN ESTATE IN THE PREMISES.  “OTHER TAXES” SHALL NOT INCLUDE NET
INCOME, OR INHERITANCE TAXES OF LANDLORD UNLESS LEVIED OR ASSESSED AGAINST
LANDLORD IN WHOLE OR IN PART IN LIEU OF, AS A SUBSTITUTE FOR, OR AS AN ADDITION
TO ANY OTHER TAXES.

 

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(C)                                  EXCEPT FOR ANY TAX ON THE NET INCOME
DERIVED FROM THE FIXED RENT, IF AT ANY TIME DURING THE TERM, ANY METHOD OF
TAXATION SHALL BE SUCH THAT THERE SHALL BE LEVIED, ASSESSED OR IMPOSED ON THE
LANDLORD, OR ON THE FIXED RENT OR ADDITIONAL RENT, OR ON THE PREMISES, OR ANY
PORTION THEREOF, A CAPITAL LEVY, GROSS RECEIPTS TAX, OCCUPATIONAL LICENSE TAX OR
OTHER TAX ON THE RENTS RECEIVED THEREFROM, OR A FRANCHISE TAX, OR AN ASSESSMENT,
GROSS RECEIPTS LEVY OR CHARGE MEASURED BY OR BASED IN WHOLE OR IN PART UPON SUCH
GROSS RENTS, TENANT, TO THE EXTENT PERMITTED BY LAW, COVENANTS TO PAY AND
DISCHARGE THE SAME, IT BEING THE INTENTION OF THE PARTIES HERETO THAT THE FIXED
RENT TO BE PAID HEREUNDER SHALL BE PAID TO LANDLORD ABSOLUTELY NET WITHOUT
DEDUCTION OR CHARGE OF ANY NATURE WHATSOEVER, FORESEEABLE OR UNFORESEEABLE,
ORDINARY OR EXTRAORDINARY, OR OF ANY NATURE, KIND, OR DESCRIPTION, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS LEASE.

 

(D)                                 TENANT COVENANTS TO FURNISH LANDLORD, WITHIN
FIFTEEN (15) DAYS AFTER REQUEST BY LANDLORD OFFICIAL RECEIPTS OF THE APPROPRIATE
TAXING AUTHORITY, IF ANY, OR OTHER APPROPRIATE PROOF REASONABLY SATISFACTORY TO
LANDLORD, EVIDENCING THE PAYMENT OF ALL IMPOSITIONS.  THE CERTIFICATE, ADVICE OR
BILL OF THE APPROPRIATE OFFICIAL DESIGNATED BY LAW TO MAKE OR ISSUE THE SAME OR
TO RECEIVE PAYMENT OF ANY IMPOSITION MAY BE RELIED UPON BY LANDLORD AS
SUFFICIENT EVIDENCE THAT SUCH IMPOSITION IS DUE AND UNPAID AT THE TIME OF MAKING
OR ISSUANCE OF SUCH CERTIFICATE, ADVICE OR BILL.

 

(E)                                  TENANT SHALL HAVE THE RIGHT TO CONTEST THE
AMOUNT OR VALIDITY, IN WHOLE OR IN PART, OF ANY PROPERTY TAX OR OTHER TAX OR TO
SEEK A REDUCTION IN THE VALUATION OF THE PREMISES AS ASSESSED FOR REAL ESTATE
PROPERTY TAX PURPOSES BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED IN GOOD
FAITH (BUT ONLY AFTER PAYMENT OF SUCH TAX).  LANDLORD SHALL NOT BE REQUIRED TO
JOIN IN ANY PROCEEDING REFERRED TO IN THIS SUBPARAGRAPH (E) UNLESS REQUIRED BY
LAW, IN WHICH EVENT LANDLORD SHALL, UPON WRITTEN REQUEST BY TENANT, JOIN IN SUCH
PROCEEDINGS OR PERMIT THE SAME TO BE BROUGHT IN ITS NAME, ALL AT TENANT’S
EXPENSE.  LANDLORD AGREES TO PROVIDE, AT TENANT’S EXPENSE, WHATEVER ASSISTANCE
TENANT MAY REASONABLY REQUIRE IN CONNECTION WITH ANY SUCH CONTEST.  TENANT
COVENANTS THAT LANDLORD SHALL NOT SUFFER OR SUSTAIN ANY COSTS OR EXPENSES
(INCLUDING COUNSEL FEES) OR ANY LIABILITY IN CONNECTION WITH ANY SUCH
PROCEEDING.  NO SUCH CONSENT SHALL SUBJECT LANDLORD TO ANY CIVIL LIABILITY OR
THE RISK OF ANY CRIMINAL LIABILITY OR FORFEITURE.

 

(F)                                    DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT OR AS REQUIRED BY A MORTGAGEE, TENANT SHALL PAY TO LANDLORD ON THE FIRST
DAY OF EACH CALENDAR MONTH AN AMOUNT EQUAL TO ONE TWELFTH (1/12) OF THE PROPERTY
TAXES AND OTHER TAXES THEREAFTER DUE AND PAYABLE, AS REASONABLY ESTIMATED BY
LANDLORD ON THE BASIS OF ASSESSMENTS AND BILLS AND ESTIMATES THEREOF.  SUCH
AMOUNTS SHALL BE HELD BY LANDLORD OR MORTGAGEE, WITHOUT INTEREST, AND SHALL NOT
BE DEEMED TO BE TRUST FUNDS BUT SHALL NOT BE COMMINGLED WITH THE GENERAL FUNDS
OF LANDLORD AND SHALL INSTEAD BE HELD IN A SEPARATE ESCROW ACCOUNT OF LANDLORD
OR MORTGAGEE, AS APPLICABLE, OPENED AND MAINTAINED FOR THIS LEASE ALONE;
PROVIDED, HOWEVER, TO THE EXTENT SO RECEIVED, ANY MORTGAGEE WHICH IS AN ENTITY
UNAFFILIATED WITH LANDLORD OR ANY AFFILIATE OF LANDLORD, MAY COMMINGLE SUCH
FUNDS.  LANDLORD SHALL APPLY SUCH AMOUNTS PAID BY TENANT UNDER THIS
PARAGRAPH 6(F) (INCLUDING ANY AMOUNTS TENDERED BY TENANT WHICH ARE INTENDED FOR
INTEREST IF TENANT SHALL HAVE ELECTED TO MAKE SUCH PAYMENTS IN INSTALLMENTS) TO
THE PAYMENT BEFORE DELINQUENCY OF THE PROPERTY TAXES AND OTHER TAXES, SUBJECT TO
ANY RIGHTS OF THE MORTGAGEE THERETO.  LANDLORD AND MORTGAGEE SHALL MAKE NO
CHARGE FOR HOLDING AND APPLYING SUCH AMOUNTS.  IF AT ANY TIME THE AMOUNT ON
DEPOSIT PURSUANT TO

 

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THIS PARAGRAPH 6(F) SHALL BE LESS THAN THE AMOUNT REASONABLY DEEMED NECESSARY BY
LANDLORD TO PAY SUCH PROPERTY TAXES OR OTHER TAXES AS THEY BECOME DUE, TENANT
SHALL PAY TO LANDLORD THE AMOUNT NECESSARY TO MAKE THE DEFICIENCY WITHIN FIVE
(5) BUSINESS DAYS AFTER NOTICE FROM LANDLORD REQUESTING PAYMENT THEREOF.

 

(G)                                 LANDLORD WILL, WITHIN THIRTY (30) DAYS AFTER
RECEIPT, REIMBURSE TENANT FOR ANY REFUND OF PROPERTY TAX OR OTHER TAX RECEIVED
BY LANDLORD OR MORTGAGEE AS A RESULT OF ANY TAX CONTEST RELATING TO THE TERM.

 

7.                                      NET LEASE; NON-TERMINABILITY

 

(A)                                  THIS IS AN ABSOLUTELY NET LEASE AND THE
FIXED RENT, ADDITIONAL RENT AND ALL OTHER SUMS PAYABLE HEREUNDER BY TENANT SHALL
BE PAID WITHOUT NOTICE (EXCEPT AS EXPRESSLY PROVIDED HEREIN), DEMAND, SET-OFF,
COUNTERCLAIM, ABATEMENT, SUSPENSION, DEDUCTION OR DEFENSE.  IT IS THE INTENTION
OF THE PARTIES HERETO THAT THE FIXED RENT SHALL BE AN ABSOLUTELY NET RETURN TO
LANDLORD THROUGHOUT THE TERM OF THIS LEASE.  IN ORDER THAT SUCH RENT SHALL BE
ABSOLUTELY NET TO LANDLORD, TENANT SHALL PAY WHEN DUE, AND SAVE LANDLORD
HARMLESS FROM AND AGAINST, ANY AND ALL COSTS, CHARGES AND EXPENSES ATTRIBUTABLE
TO THE PREMISES, INCLUDING EACH FINE, FEE, PENALTY, CHARGE (INCLUDING
GOVERNMENTAL CHARGES), ASSESSMENTS, SEWER RENT, IMPOSITIONS, INSURANCE PREMIUMS
AS MAY BE REQUIRED FROM TIME TO TIME BY LANDLORD OR MORTGAGEE, UTILITY EXPENSES,
CARRYING CHARGES, COSTS, EXPENSES AND OBLIGATIONS OF EVERY KIND AND NATURE
WHATSOEVER, GENERAL AND SPECIAL, ORDINARY AND EXTRAORDINARY, FORESEEN AND
UNFORESEEN, THE PAYMENT FOR WHICH LANDLORD OR TENANT IS, OR SHALL BECOME LIABLE
BY REASON OF ANY RIGHTS OR INTEREST OF LANDLORD OR TENANT IN, TO OR UNDER THE
PREMISES OR THIS LEASE OR IN ANY MANNER RELATING TO THE OWNERSHIP, LEASING,
OPERATION, MANAGEMENT, MAINTENANCE, REPAIR, REBUILDING USE OR OCCUPATION OF THE
PREMISES, OR OF ANY PORTION THEREOF; PROVIDED, HOWEVER, THAT NOTHING HEREIN
CONTAINED SHALL BE CONSTRUED AS IMPOSING UPON TENANT ANY OBLIGATION TO PAY ANY
ESTATE, INHERITANCE, SUCCESSION, FRANCHISE (TO THE EXTENT EXCLUDED AS SET FORTH
IN PARAGRAPH 6) OR TRANSFER TAX OF LANDLORD GROWING OUT OF, OR LEVIED IN
CONNECTION WITH, THIS LEASE OR THE LANDLORD’S RIGHT OR INTEREST IN THE PREMISES.

 

(B)                                 THIS LEASE SHALL NOT TERMINATE, NOR SHALL
TENANT HAVE ANY RIGHT TO TERMINATE THIS LEASE, EXCEPT AS EXPRESSLY PROVIDED IN
PARAGRAPH 14, NOR SHALL TENANT BE ENTITLED TO ANY ABATEMENT OR REDUCTION OF RENT
HEREUNDER EXCEPT AS REQUIRED BY PARAGRAPH 14, NOR SHALL THE OBLIGATIONS OF
TENANT UNDER THIS LEASE BE AFFECTED, BY REASON OF (I) ANY DAMAGE TO OR
DESTRUCTION OF ALL OR ANY PART OF THE PREMISES FROM WHATEVER CAUSE; (II) SUBJECT
TO PARAGRAPH 14, THE TAKING OF THE PREMISES OR ANY PORTION THEREOF BY
CONDEMNATION, REQUISITION OR EMINENT DOMAIN PROCEEDINGS; (III) THE PROHIBITION,
LIMITATION OR RESTRICTION OF TENANT’S USE OF ALL OR ANY PART OF THE PREMISES, OR
ANY INTERFERENCE WITH SUCH USE, (IV) ANY EVICTION BY PARAMOUNT TITLE OR
OTHERWISE, (V) TENANT’S ACQUISITION OR OWNERSHIP OF ALL OR ANY PART OF THE
PREMISES OTHERWISE THAN AS EXPRESSLY PROVIDED HEREIN; (VI) ANY DEFAULT ON THE
PART OF LANDLORD UNDER THIS LEASE, OR UNDER ANY OTHER AGREEMENT TO WHICH
LANDLORD AND TENANT MAY BE PARTIES; OR (VII) ANY OTHER CAUSE WHETHER SIMILAR OR
DISSIMILAR TO THE FOREGOING, ANY PRESENT OR FUTURE LAW TO THE CONTRARY
NOTWITHSTANDING.  IT IS THE INTENTION OF THE PARTIES HERETO THAT THE OBLIGATIONS
OF TENANT HEREUNDER SHALL BE SEPARATE AND INDEPENDENT COVENANTS AND AGREEMENTS,
THAT THE FIXED RENT, THE ADDITIONAL RENT AND ALL OTHER SUMS PAYABLE BY TENANT
HEREUNDER SHALL CONTINUE TO BE PAYABLE IN ALL EVENTS AND THAT THE

 

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OBLIGATIONS OF TENANT HEREUNDER SHALL CONTINUE UNAFFECTED UNLESS THE REQUIREMENT
TO PAY OR PERFORM THE SAME SHALL HAVE BEEN TERMINATED PURSUANT TO ANY EXPRESS
PROVISION OF THIS LEASE.  TENANT AGREES THAT TENANT WILL NOT BE RELIEVED OF THE
OBLIGATIONS TO PAY THE FIXED RENT OR ANY ADDITIONAL RENT IN CASE OF DAMAGE TO OR
DESTRUCTION OR A CONDEMNATION (EXCEPT AS EXPRESSLY PROVIDED IN PARAGRAPH 14) OF
THE PREMISES.

 

(C)                                  TENANT AGREES THAT IT WILL REMAIN OBLIGATED
UNDER THIS LEASE IN ACCORDANCE WITH ITS TERMS, AND THAT IT WILL NOT TAKE ANY
ACTION TO TERMINATE, RESCIND OR VOID THIS LEASE, NOTWITHSTANDING (I) THE
BANKRUPTCY, INSOLVENCY, REORGANIZATION, COMPOSITION, READJUSTMENT, LIQUIDATION,
DISSOLUTION OR WINDING-UP OR OTHER PROCEEDING AFFECTING LANDLORD OR ITS
SUCCESSOR IN INTEREST, OR (II) ANY ACTION WITH RESPECT TO THIS LEASE WHICH MAY
BE TAKEN BY ANY TRUSTEE OR RECEIVER OF LANDLORD OR ITS SUCCESSOR IN INTEREST OR
BY ANY COURT IN ANY SUCH PROCEEDING.

 

(D)                                 TENANT WAIVES ALL RIGHTS WHICH MAY NOW OR
HEREAFTER BE CONFERRED BY LAW (I) TO QUIT, TERMINATE OR SURRENDER THIS LEASE OR
THE PREMISES OR ANY PART THEREOF, OR (II) TO ANY ABATEMENT, SUSPENSION,
DEFERMENT OR REDUCTION OF THE FIXED RENT, ADDITIONAL RENT OR ANY OTHER SUMS
PAYABLE UNDER THIS LEASE, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN.

 

8.                                      SERVICES

 

Tenant shall, at Tenant’s sole cost and expense, supply the Premises with
electricity, heating, ventilating and air conditioning, water, natural gas,
lighting, replacement for all lights, restroom supplies, telephone service,
window washing, security service, janitor, pest control and disposal services
(including hazardous and biological waste disposal), and such other services as
Tenant determines to furnish to the Premises.  Landlord shall not be in default
hereunder or be liable for any damage or loss directly or indirectly resulting
from, nor shall the Fixed Rent or Additional Rent be abated or a constructive or
other eviction be deemed to have occurred by reason of, the installation, use or
interruption of use of any equipment in connection with the furnishing of any of
the foregoing services, any failure to furnish or delay in furnishing any such
services, whether such failure or delay is caused by accident or any condition
beyond the control of Landlord or Tenant or by the making of repairs or
improvements to the Premises, or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines.  Tenant shall pay the full
cost of all of the foregoing services and all other utilities and services
supplied to the Premises as Additional Rent.

 

9.                                      REPAIRS AND MAINTENANCE; REPLACEMENT

 

(A)                                  AT ALL TIMES ON AND AFTER THE COMMENCEMENT
DATE TO AND INCLUDING THE DATE OF THE TERMINATION OF THE TERM, BY LAPSE OF TIME
OR OTHERWISE, TENANT SHALL, AT ITS OWN SOLE COST AND EXPENSE, KEEP THE PREMISES
IN GOOD ORDER AND IN A CONDITION EQUAL TO OR BETTER THAN THE CONDITION EXISTING
AS OF THE DATE HEREOF, SUBJECT TO ORDINARY WEAR AND TEAR, EXCEPT AS REPAIRED,
REBUILT OR ALTERED AS REQUIRED OR PERMITTED BY THIS LEASE (OR, IN THE CASE OF
TERMINATION PURSUANT TO PARAGRAPH 14, AS CONDEMNED).  TENANT SHALL TIMELY AND
PROPERLY MAINTAIN, REPAIR AND REPLACE ALL

 

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OF THE PREMISES AND ALL ITS COMPONENT PARTS, INCLUDING PARKING LOT SURFACE AND
STRIPES, ALL LANDSCAPING, MECHANICAL SYSTEMS, ELECTRICAL AND LIGHTING SYSTEMS,
PLUMBING AND SEWAGE SYSTEMS, FIXTURES AND APPURTENANCES, INTERIOR AND EXTERIOR
WALLS, ROOF, FOUNDATIONS, FLOOR SLABS, COLUMNS AND STRUCTURAL STEEL SO AS TO
PRESERVE AND PROTECT THE USEFUL LIFE, UTILITY AND VALUE OF SUCH COMPONENTS, AND
IN ALL EVENTS SO AS TO PRESERVE THE EFFECTIVENESS OF ANY WARRANTY RELATING
THERETO, SUCH REPAIRS AND REPLACEMENTS TO BE AT LEAST EQUAL IN QUALITY AND CLASS
TO THE ORIGINAL WORK.  IF ANY BUILDING SYSTEM OR COMPONENT SHALL BECOME
OBSOLETE, NON-FUNCTIONAL, OR UNECONOMIC TO REPAIR, TENANT SHALL REMOVE SUCH ITEM
FROM THE PREMISES AND, PROMPTLY REPLACE IT WITH AN ITEM OF COMPARABLE INITIAL
VALUE AND FUNCTION.  PROMPTLY UPON INSTALLATION OF ANY EQUIPMENT WHICH IS NOT
TENANT TRADE FIXTURES, TENANT SHALL DELIVER TO LANDLORD THE ORIGINAL WARRANTY
RELATING TO SUCH EQUIPMENT (WHICH SHALL SPECIFY LANDLORD AS THE OWNER OF THE
EQUIPMENT AND UPON LANDLORD’S RECEIPT OF SUCH ORIGINAL WARRANTY, LANDLORD SHALL
BE DEEMED TO HAVE GRANTED TENANT A NON-EXCLUSIVE LICENSE AND AUTHORITY OF
LANDLORD SOLELY TO ENFORCE SUCH WARRANTY DURING THE TERM OF THE LEASE).  TENANT
SHALL DELIVER TO LANDLORD A WRITTEN STATEMENT SHOWING ALL REMOVALS AND
REPLACEMENTS OF SUCH SYSTEMS OR COMPONENTS DURING THE PRECEDING CALENDAR YEAR,
INCLUDING MANUFACTURERS, MODEL NUMBERS, AND SERIAL NUMBERS.  EXCEPT FOR SITE
ASSESSMENTS AS PROVIDED IN PARAGRAPH 26(D), LANDLORD MAY, UPON TEN (10) BUSINESS
DAYS’ PRIOR NOTICE CAUSE INDEPENDENT PRIVATE INSPECTORS TO MAKE INSPECTIONS OF
ANY BUILDING AND BUILDING SYSTEMS ON THE PREMISES OR SEGMENTS THEREOF TO
DETERMINE TENANT’S COMPLIANCE UNDER THIS PARAGRAPH 9.  TENANT SHALL PAY THE COST
OF ONE (1) SUCH INSPECTION ON THE PREMISES BY OR ON BEHALF OF LANDLORD ONCE
EVERY TWO (2) CALENDAR YEARS; PROVIDED, HOWEVER, IF SUCH INSPECTION BY LANDLORD
REVEALS THAT THE PREMISES, OR ANY PORTION THEREOF, INCLUDING ANY EQUIPMENT
THEREON, IS NOT IN THE CONDITION REQUIRED BY THIS LEASE, THEN TENANT SHALL PAY
FOR SUCH ADDITIONAL INSPECTIONS PERFORMED BY LANDLORD THROUGH THE INSPECTION
APPROVING THE CONDITION OF SUCH PREMISES AS BEING IN CONFORMITY WITH THE LEASE. 
NOTWITHSTANDING THE FOREGOING REQUIREMENTS OF THIS PARAGRAPH 9, TENANT SHALL
HAVE NO OBLIGATION TO DELIVER ANY WARRANTIES FOR ANY TRADE FIXTURES AT THE
PREMISES WHICH MAY AND WHICH ARE SUBSEQUENTLY REMOVED BY TENANT UPON EXPIRATION
OR EARLIER TERMINATION OF THIS LEASE.

 

Landlord may, but is not required to, after five (5) Business Days notice to
Tenant (except in the case of emergency, in which case Tenant shall be given
notice contemporaneously with entry), enter the Premises and make such repairs,
alterations, improvements, additions, replacements or maintenance as Landlord
deems necessary to cure any Event of Default of Tenant hereunder which remains
uncured after the expiration of any notice and cure period provided under this
Lease, as applicable, in a diligent fashion, and Tenant shall pay Landlord as
Additional Rent forthwith (and in any event within thirty (30) days) after being
billed for same by Landlord the cost thereof plus an administrative fee of five
percent (5%) of such cost, which bill shall be accompanied by reasonably
supporting documentation.  Such amounts shall bear interest at the Overdue Rate
from the date of expenditure by Landlord to the date of repayment by Tenant at
the Overdue Rate.

 

(B)                                 IT IS INTENDED BY TENANT AND LANDLORD THAT
LANDLORD SHALL HAVE NO OBLIGATION, IN ANY MANNER WHATSOEVER, TO REPAIR OR
MAINTAIN THE PREMISES (OR ANY EQUIPMENT THEREIN), WHETHER STRUCTURAL OR
NONSTRUCTURAL, ALL OF WHICH OBLIGATIONS ARE INTENDED, AS BETWEEN LANDLORD AND
TENANT, TO BE THOSE OF TENANT.  TENANT EXPRESSLY WAIVES THE BENEFIT OF ANY
STATUTE NOW OR IN THE FUTURE IN EFFECT WHICH WOULD OTHERWISE AFFORD TENANT THE
RIGHT TO MAKE REPAIRS AT LANDLORD’S

 

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EXPENSE OR TO TERMINATE THIS LEASE BECAUSE OF LANDLORD’S FAILURE TO KEEP THE
PREMISES IN GOOD ORDER, CONDITION AND REPAIR.  NOTWITHSTANDING THE FOREGOING,
LANDLORD SHALL REPAIR OR RESTORE THE PREMISES TO THE EXTENT SUCH REPAIRS OR
RESTORATION IS NECESSITATED BY ANY ACT OR OMISSION OF LANDLORD, ITS AGENTS,
CONTRACTORS OR EMPLOYEES.

 

(C)                                  TENANT SHALL MAINTAIN ON THE PREMISES, AND
TURN OVER TO LANDLORD UPON EXPIRATION OR TERMINATION OF THIS LEASE, THEN CURRENT
OPERATING MANUALS AND ORIGINAL WARRANTIES (TO THE EXTENT APPLICABLE) FOR THE
EQUIPMENT THEN LOCATED ON THE PREMISES SPECIFICALLY EXCLUDING, IN ALL CASES,
TENANT’S TRADE FIXTURES AT THE PREMISES WHICH MAY BE AND WHICH ARE SUBSEQUENTLY
REMOVED BY TENANT UPON EXPIRATION OR EARLIER TERMINATION OF THIS LEASE.

 

10.                               DESTRUCTION OF OR DAMAGE TO PREMISES

 

If the Premises is damaged by fire or other casualty during the Term of this
Lease, Tenant shall (a) repair such damage and restore the Premises to
substantially the same or better condition as existed before the occurrence of
such fire or other casualty using materials of the same or better grade than
that of the materials being replaced (herein, a “Casualty Repair”) and this
Lease shall remain in full force and effect.  Such repair and replacement by
Tenant shall be done in accordance with paragraph 23 and the standards of
paragraph 9 and Tenant shall, at its expense, obtain all permits required for
such work. An architect or engineer selected by Landlord shall review, at
Tenant’s expense, all plans and specifications and all draw requests hereunder. 
In no event shall Fixed Rent or Additional Rent abate, nor shall this Lease
terminate by reason of such damage or destruction.  Provided that no Event of
Default by Tenant shall then exist under this Lease (and no event has occurred
which, with the passage of time, the giving of notice, or both, would constitute
an Event of Default), and provided Tenant has:  (i) delivered to Landlord plans
and specifications and a budget for such Casualty Repair (all of which Landlord
shall have approved), and (ii) deposited with Landlord or the Proceeds Trustee
cash in the sum equal to the excess, if any, of the total cost set forth in such
approved budget over the amount of insurance proceeds received on account of
such casualty, then to the extent such proceeds are available to Landlord from
Mortgagee, Landlord shall make available to Tenant all insurance proceeds
actually received by Landlord on account of such casualty, for application to
the costs of such approved repair and restoration, as set forth below.

 

For all Casualty Repairs, the following apply:

 

As used herein the “Casualty Threshold” means $250,000; provided, however, that
if Tenant or Guarantor, at the time of such fire or casualty, has a Credit
Rating of “BBB+” or higher from S&P and “Baa1” or higher from Moody’s, then the
“Casualty Threshold” shall be $1,000,000.  If the Net Casualty Proceeds are less
than the Credit Threshold at the time of the applicable fire or other casualty,
such Net Casualty Proceeds shall be paid to Tenant to apply to the cost of
restoration.  If the Net Casualty Proceeds are equal to or greater than the
Casualty Threshold at the time of the applicable fire or other casualty, such
Net Casualty Proceeds shall be paid to the Proceeds Trustee (herein called the
“Restoration Fund”) for release to Tenant as restoration progresses, subject to
and in accordance with paragraph 23(c).  If Landlord mortgages the Premises with
a Mortgage, the Mortgagee thereunder may, at its option be appointed

 

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Proceeds Trustee for so long as such Mortgage remains outstanding and such
Mortgagee does not control Landlord or is not controlled by or under common
control with Landlord.  Insurance proceeds shall be deposited in an interest
bearing account and interest shall be distributed to Tenant upon completion of
said installation, repair, replacement or rebuilding, provided no default has
occurred and is continuing hereunder.  All checks drawn on said account shall be
signed by the Proceeds Trustee.  Insurance proceeds shall be disbursed to Tenant
by the Proceeds Trustee under the following procedure:

 

(I)                                     NO MORE FREQUENTLY THAN ONCE PER
CALENDAR MONTH, TENANT MAY REQUEST THAT LANDLORD REIMBURSE TENANT OUT OF SUCH
INSURANCE PROCEEDS FOR COSTS INCURRED BY TENANT FOR WORK IN PLACE TO REPAIR AND
RESTORE THE DAMAGED PREMISES DURING THE IMMEDIATELY PRECEDING CALENDAR MONTH. 
TENANT’S REQUEST SHALL CERTIFY THAT ALL WORK FOR WHICH REIMBURSEMENT IS
REQUESTED WAS PERFORMED IN COMPLIANCE WITH THE PLANS AND SPECIFICATIONS APPROVED
BY LANDLORD PURSUANT TO PARAGRAPH 23 AND ALL APPLICABLE LAWS, AND SHALL INCLUDE
REASONABLY SATISFACTORY EVIDENCE OF THE COSTS INCURRED BY TENANT AND
UNCONDITIONAL PARTIAL (AS TO THE AMOUNT RECEIVED COMPARED TO PERCENTAGE
COMPLETION) OR FINAL LIEN RELEASES, AS APPLICABLE, IN FORM AND SUBSTANCE
REQUIRED BY APPLICABLE LAW EXECUTED BY ALL MECHANIC’S, MATERIALMEN, LABORERS,
SUPPLIERS AND CONTRACTORS WHO PERFORMED ANY PORTION OF THE REPAIR WORK OR
SUPPLIED MATERIALS; AND

 

(II)                                  WITHIN FIFTEEN (15) DAYS AFTER RECEIVING
TENANT’S REQUEST, LANDLORD SHALL APPROVE OR DISAPPROVE TENANT’S REQUEST, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED, OR CONDITIONED BY WRITTEN
NOTICE TO TENANT.  IF LANDLORD APPROVES ALL OR ANY PORTION OF A REQUEST AND
LANDLORD HAS RECEIVED (AND NOT PREVIOUSLY DISBURSED) INSURANCE PROCEEDS FOR SUCH
COSTS, THEN LANDLORD’S APPROVAL SHALL INCLUDE A CHECK IN THE AMOUNT APPROVED BY
LANDLORD.  IF LANDLORD DISAPPROVES ALL OR ANY PORTION OF A REQUEST, THEN
LANDLORD’S NOTICE SHALL STATE THE REASONS FOR THAT DISAPPROVAL.  LANDLORD’S
FAILURE TO DELIVER A NOTICE APPROVING OR DISAPPROVING A REQUEST SHALL BE
CONCLUSIVELY DEEMED LANDLORD’S DISAPPROVAL OF THE REQUEST.

 

11.                               INSURANCE, HOLD HARMLESS AND INDEMNIFICATION

 

(A)                                  TO THE FULLEST EXTENT PERMITTED BY LAW,
LANDLORD SHALL NOT BE LIABLE TO TENANT FOR ANY DAMAGE TO OR LOSS OR THEFT OF ANY
PROPERTY OR FOR ANY BODILY OR PERSONAL INJURY, ILLNESS OR DEATH OF ANY PERSON
IN, ON OR ABOUT THE PREMISES ARISING AT ANY TIME AND FROM ANY CAUSE WHATSOEVER,
EXCEPT TO THE EXTENT SUCH LIABILITY ARISES OUT OF ANY ACT OR OMISSION OF
LANDLORD, ITS AGENTS, EMPLOYEES OR CONTRACTORS.  TENANT WAIVES ALL CLAIMS
AGAINST LANDLORD ARISING FROM ANY LIABILITY DESCRIBED IN THIS PARAGRAPH 11(A).

 

(B)                                 EXCEPT TO THE EXTENT SUCH LIABILITY ARISES
OUT OF THE ACTS OR OMISSIONS OF LANDLORD, ITS AGENTS, EMPLOYEES OR CONTRACTORS,
TENANT HEREBY AGREES TO INDEMNIFY AND DEFEND LANDLORD AGAINST AND HOLD LANDLORD
HARMLESS FROM ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS AND
EXPENSES, INCLUDING ATTORNEYS’ FEES AND DISBURSEMENTS, ARISING FROM OR RELATED
TO ANY USE OR OCCUPANCY OF THE PREMISES, OR ANY CONDITION OF THE PREMISES, OR
ANY DEFAULT IN THE PERFORMANCE OF TENANT’S OBLIGATIONS HEREUNDER, OR ANY DAMAGE
TO ANY PROPERTY (INCLUDING PROPERTY OF EMPLOYEES AND INVITEES OF TENANT) OR ANY
BODILY OR PERSONAL INJURY, ILLNESS OR DEATH OF ANY PERSON (INCLUDING EMPLOYEES
AND INVITEES OF TENANT) OCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART

 

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THEREOF OR ANY PART OF THE BUILDING OR THE LAND CONSTITUTING A PART OF THE
PREMISES ARISING AT ANY TIME AND FROM ANY CAUSE WHATSOEVER OR OCCURRING OUTSIDE
THE PREMISES WHEN SUCH DAMAGE, BODILY OR PERSONAL INJURY, ILLNESS OR DEATH IS
CAUSED BY ANY ACT OR OMISSION OF TENANT OR ITS AGENTS, OFFICERS, EMPLOYEES,
CONTRACTORS, INVITEES OR LICENSEES.  THIS PARAGRAPH 11(B) SHALL SURVIVE THE
TERMINATION OF THIS LEASE WITH RESPECT TO ANY DAMAGE, BODILY OR PERSONAL INJURY,
ILLNESS OR DEATH OCCURRING PRIOR TO SUCH TERMINATION.

 

(C)                                  TENANT SHALL, AT ALL TIMES AND DURING THE
TERM OF THIS LEASE AND AT TENANT’S SOLE COST AND EXPENSE, OBTAIN AND KEEP IN
FORCE COMPREHENSIVE COMMERCIAL GENERAL LIABILITY INSURANCE, INCLUDING
CONTRACTUAL LIABILITY (SPECIFICALLY COVERING THIS LEASE), CROSS LIABILITY, FIRE
LEGAL LIABILITY, AND PREMISES OPERATIONS, ALL ON AN “OCCURRENCE” POLICY FORM,
WITH A MINIMUM COMBINED SINGLE LIMIT IN THE AMOUNT OF THIRTY MILLION DOLLARS
($30,000,000) PER OCCURRENCE FOR BODILY OR PERSONAL INJURY TO, ILLNESS OF, OR
DEATH OF PERSONS AND DAMAGE TO PROPERTY OCCURRING IN, ON OR ABOUT THE PREMISES,
AND SUCH INSURANCE SHALL NAME THE LANDLORD, ANY MORTGAGEE, AND ANY OTHER PARTIES
DESIGNATED BY LANDLORD AS ADDITIONAL INSUREDS.  TENANT SHALL, AT TENANT’S SOLE
COST AND EXPENSE, BE RESPONSIBLE FOR INSURING TENANT’S FURNITURE, EQUIPMENT,
FIXTURES, COMPUTERS, OFFICE MACHINES AND PERSONAL PROPERTY.

 

(D)                                 TENANT SHALL, AT ALL TIMES DURING THE TERM
OF THIS LEASE AND AT TENANT’S SOLE COST AND EXPENSE, OBTAIN AND KEEP IN FORCE
WORKER’S COMPENSATION AND EMPLOYER’S LIABILITY INSURANCE IN NEW YORK STATE.

 

(E)                                  TENANT SHALL, AT ALL TIMES DURING THE TERM
OF THIS LEASE, AT TENANT’S SOLE COST AND EXPENSE, OBTAIN AND KEEP IN FORCE OR
REIMBURSE LANDLORD FOR THE COST OF (A) INSURANCE AGAINST LOSS (INCLUDING
TERRORISM, EARTHQUAKE AND FLOOD) OR DAMAGE TO THE PREMISES BY FIRE AND ALL OTHER
RISKS OF PHYSICAL LOSS (INCLUDING EARTHQUAKE AND FLOOD) COVERED BY INSURANCE OF
THE TYPE NOW KNOWN AS “ALL RISK,” WITH DIFFERENCE IN CONDITIONS COVERAGE, IN AN
AMOUNT NOT LESS THAN THE FULL REPLACEMENT COST OF THE PREMISES (WITHOUT
DEDUCTION FOR DEPRECIATION), INCLUDING THE COST OF DEBRIS REMOVAL AND SUCH
ENDORSEMENTS AS LANDLORD MAY REASONABLY REQUIRE, AND CONTAINING “REPLACEMENT
COST” AND “AGREED AMOUNT” ENDORSEMENTS; (B) BOILER AND MACHINERY INSURANCE
COVERING PRESSURE VESSELS, AIR TANKS, BOILERS, MACHINERY, PRESSURE PIPING,
HEATING, VENTILATION AND AIR CONDITIONING EQUIPMENT, AND ELEVATOR AND ESCALATOR
EQUIPMENT, PROVIDED THE PREMISES CONTAIN EQUIPMENT OF SUCH NATURE AND INSURANCE
AGAINST LOSS OF OCCUPANCY OR USE ARISING FROM ANY BREAKDOWN OF ANY SUCH ITEMS,
IN SUCH AMOUNTS AS LANDLORD MAY REASONABLY DETERMINE; (C) BUSINESS INTERRUPTION
INSURANCE INSURING THAT THE FIXED RENT WILL BE PAID TO LANDLORD FOR UP TO ONE
YEAR IF THE PREMISES ARE DESTROYED OR RENDERED UNTENANTABLE BY ANY CAUSE INSURED
AGAINST (IT BEING UNDERSTOOD THAT THE EXISTENCE OF SUCH INSURANCE DOES NOT
REDUCE TENANT’S OBLIGATION TO PAY FIXED RENT WITHOUT DIMINUTION), AND IN THE
EVENT OF TERMINATION OF THIS LEASE DUE TO ANY SUCH INSURED CAUSE, PAY TO
LANDLORD ONE YEAR’S FIXED RENT; AND (D) INSURANCE IN AMOUNTS AND AGAINST SUCH
OTHER RISKS AS LANDLORD OR MORTGAGEE MAY REASONABLY REQUIRE AND AGAINST SUCH
RISKS AS ARE CUSTOMARILY INSURED AGAINST BY OPERATORS OF SIMILAR PROPERTIES.

 

(F)                                    ALL INSURANCE REQUIRED TO BE MAINTAINED
BY TENANT UNDER THIS PARAGRAPH 11 AND ALL RENEWALS THEREOF SHALL BE ISSUED BY
GOOD AND RESPONSIBLE COMPANIES QUALIFIED TO DO AND DOING BUSINESS IN THE STATE
WHERE THE PREMISES ARE LOCATED AND HAVING AN S&P CLAIMS PAYING ABILITY

 

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RATING OF AT LEAST “A” AND SHALL BE REASONABLY SATISFACTORY TO LANDLORD.  ALL
DEDUCTIBLE AMOUNTS SHALL NOT EXCEED $100,000 UNDER EACH SUCH INSURANCE POLICY. 
EACH POLICY TO BE MAINTAINED BY TENANT SHALL EXPRESSLY PROVIDE THAT THE POLICY
SHALL NOT BE CANCELED OR ALTERED WITHOUT THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE
TO LANDLORD AND MORTGAGEE AND SHALL REMAIN IN EFFECT NOTWITHSTANDING ANY SUCH
CANCELLATION OR ALTERATION UNTIL SUCH NOTICE SHALL HAVE BEEN GIVEN TO LANDLORD
AND SUCH PERIOD OF THIRTY (30) DAYS SHALL HAVE EXPIRED.  ALL INSURANCE UNDER
THIS PARAGRAPH 11 TO BE MAINTAINED BY TENANT SHALL DESIGNATE LANDLORD,
MORTGAGEE, AND ANY OTHER PARTIES DESIGNATED BY LANDLORD AS AN ADDITIONAL INSURED
AND LOSS PAYEE, SHALL BE PRIMARY AND NONCONTRIBUTING WITH ANY INSURANCE WHICH
MAY BE CARRIED BY LANDLORD, SHALL AFFORD COVERAGE FOR ALL CLAIMS BASED ON ANY
ACT, OMISSION, EVENT OR CONDITION THAT OCCURRED OR AROSE (OR THE ONSET OF WHICH
OCCURRED OR AROSE) DURING THE POLICY PERIOD, AND SHALL EXPRESSLY PROVIDE THAT
LANDLORD, ALTHOUGH NAMED AS AN ADDITIONAL INSURED, SHALL NEVERTHELESS BE
ENTITLED TO RECOVER UNDER THE POLICY FOR ANY LOSS, INJURY OR DAMAGE TO
LANDLORD.  TENANT MAY CARRY SUCH INSURANCE UNDER “BLANKET” POLICIES, PROVIDED
SUCH POLICIES EXPRESSLY RESERVE AN AMOUNT OF COVERAGE FOR THE PREMISES EQUAL TO
THE AMOUNT REQUIRED BY THIS LEASE.  UPON THE ISSUANCE OF EACH SUCH POLICY TO BE
MAINTAINED BY TENANT, TENANT SHALL DELIVER A CERTIFICATE THEREOF (ACORD 27 FORM)
TO LANDLORD FOR RETENTION BY LANDLORD.  TENANT SHALL PAY TO LANDLORD,
IMMEDIATELY UPON DEMAND ALL COSTS INCURRED BY LANDLORD, AS ADDITIONAL RENT, TO
OBTAIN AND MAINTAIN IN EFFECT THE POLICIES OF INSURANCE REQUIRED UNDER THIS
PARAGRAPH 11 OR OTHERWISE REQUIRED BY LANDLORD.

 

(G)                                 LANDLORD AND TENANT, AS APPLICABLE, EITHER
PRIOR TO OR IMMEDIATELY AFTER THE COMMENCEMENT DATE, PROCURE FROM EACH OF THEIR
RESPECTIVE INSURERS PROVIDING THE INSURANCE REQUIRED BY THIS PARAGRAPH 11, A
WAIVER OF ALL RIGHTS OF SUBROGATION WHICH SUCH INSURER MIGHT OTHERWISE, IF AT
ALL, HAVE TO ANY CLAIMS AGAINST LANDLORD OR TENANT, AS APPLICABLE.

 

(H)                                 DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT OR AS REQUIRED BY A MORTGAGEE, TENANT SHALL PAY TO LANDLORD ON THE FIRST
DAY OF EACH CALENDAR MONTH AN AMOUNT EQUAL TO ONE TWELFTH (1/12) OF THE PREMIUMS
FOR THE INSURANCE REQUIRED BY THIS PARAGRAPH 11, AS REASONABLY ESTIMATED BY
LANDLORD ON THE BASIS OF BILLS AND ESTIMATES THEREOF.  IF SUCH PREMIUM PAYMENTS
SHALL HAVE BEEN MADE BY TENANT, SUCH AMOUNTS SHALL BE HELD BY LANDLORD OR
MORTGAGEE, WITHOUT INTEREST, AND SHALL NOT BE DEEMED TO BE TRUST FUNDS AND MAY
BE COMMINGLED WITH THE GENERAL FUNDS OF LANDLORD OR MORTGAGEE.  LANDLORD SHALL
APPLY SUCH AMOUNTS TO THE PAYMENT OF THE INSURANCE PREMIUMS WITH RESPECT TO
WHICH SUCH AMOUNTS WERE PAID, SUBJECT TO ANY RIGHTS OF MORTGAGEE THERETO. 
LANDLORD AND MORTGAGEE SHALL MAKE NO CHARGE FOR HOLDING AND APPLYING SUCH
AMOUNTS.  IF AT ANY TIME THE AMOUNT ON DEPOSIT PURSUANT TO THIS PARAGRAPH 11(H)
SHALL BE LESS THAN THE AMOUNT DEEMED NECESSARY BY LANDLORD TO PAY SUCH PREMIUMS
AS THEY BECOME DUE, TENANT SHALL PAY TO LANDLORD THE AMOUNT NECESSARY TO MAKE
THE DEFICIENCY WITHIN FIVE (5) DAYS AFTER NOTICE FROM LANDLORD REQUESTING
PAYMENT THEREOF.  UPON THE EXPIRATION OR TERMINATION OF THE TERM OF THIS LEASE
(OTHER THAN AS A RESULT OF AN EVENT OF DEFAULT), LANDLORD SHALL PROMPTLY REFUND,
AND CAUSE ITS MORTGAGEE TO REFUND, TO TENANT ANY AMOUNT HELD BY LANDLORD
PURSUANT TO THIS PARAGRAPH.

 

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12.                               COMPLIANCE WITH LAWS, COVENANTS

 

Tenant shall throughout the Term promptly comply or cause compliance with or
remove or cure any violation of any and all present and future laws including
the Americans with Disabilities Act of 1990, as the same may be amended from
time to time, ordinances (zoning or otherwise), orders, rules, regulations and
requirements of all Federal, State, municipal and other governmental bodies
having jurisdiction over the Premises and the appropriate departments,
commissions, boards and officers thereof, and the orders, rules and regulations
of the Board of Fire Underwriters where the Premises are situated, or any other
body now or hereafter constituted exercising lawful or valid authority over the
Premises (collectively, “Legal Requirements”), or any portion thereof, or the
sidewalks, curbs, roadways, alleys or entrances adjacent or appurtenant thereto,
or exercising authority with respect to the use or manner of use of the
Premises, or such adjacent or appurtenant facilities, and whether the
compliance, curing or removal of any such violation and the costs and expenses
necessitated thereby shall have been foreseen or unforeseen, ordinary or
extraordinary, and whether or not the same shall be presently within the
contemplation of Landlord or Tenant or shall involve any change in governmental
policy, or require structural or extraordinary repairs, alterations or additions
by Tenant and irrespective of the amount of the costs thereof.  Tenant, at its
sole cost and expense, shall comply with all agreements, contracts, easements,
restrictions, reservations or covenants, if any, running with the land or
hereafter created by Tenant or consented to, in writing, by Tenant or requested,
in writing, by Tenant.  Tenant shall also comply with, observe and perform all
provisions and requirements of all policies of insurance at any time in force
with respect to the Premises and required to be obtained and maintained by
Tenant under the terms of paragraph 11 hereof and shall comply with all
development permits issued by governmental authorities issued in connection with
development of the Premises; provided, however, Landlord agrees, upon request of
Tenant, to sign promptly and without a charge therefor (except as provided in
the final sentence of this subparagraph) any applications or filings (1) for
such licenses and permits as may be required by Legal Requirements for the
conduct, operation or restoration of the Premises and the business to be
conducted therein in accordance with the terms hereof, and (2) the maintenance
of the existing zoning for each Site to continue to permit Tenant’s use thereof,
in both cases where the signature of Landlord is required by Legal Requirements
in force at the time.  All costs incurred by Landlord in connection with
obtaining any such licenses and permits and zoning matters shall be borne by
Tenant.

 

If Tenant shall at any time fail to pay any Imposition in accordance with the
provisions of paragraphs 6 or 26, or to take out, pay for, maintain and deliver
any of the insurance policies or certificates of insurance provided for in
paragraph 11, or shall fail to make any other payment or perform any other act
on its part to be made or performed hereunder, then Landlord, after five
business (5) days prior written notice to Tenant (or without notice in
situations where Landlord determines that delay is likely to cause harm to
Landlord’s interest in the Premises), and without waiving or releasing Tenant
from any obligation of Tenant contained in this Lease, may, but shall be under
no obligation to do so,

 

(I)                                     PAY ANY IMPOSITION PAYABLE BY TENANT
PURSUANT TO THIS LEASE; OR

 

(II)                                  MAKE ANY OTHER PAYMENT OR PERFORM ANY
OTHER ACT ON TENANT’S PART TO BE PAID OR PERFORMED HEREUNDER WHICH TENANT SHALL
NOT HAVE PERFORMED WITHIN THE TIME REQUIRED

 

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THEREFOR, EXCEPT THAT ANY TIME PERMITTED TO TENANT TO PERFORM ANY ACT REQUIRED
BY THIS PARAGRAPH SHALL BE EXTENDED FOR SUCH REASONABLE PERIOD NOT TO EXCEED ONE
HUNDRED EIGHTY (180) DAYS AS MAY BE NECESSARY TO EFFECTUATE SUCH PERFORMANCE,
PROVIDED THROUGHOUT SUCH TIME TENANT IS CONTINUOUSLY, DILIGENTLY AND IN GOOD
FAITH PROSECUTING SUCH PERFORMANCE.

 

Landlord may enter upon the Premises for any such cure purpose set forth in this
paragraph 12 and take all such action in or on the Premises as may be necessary
therefor pursuant to this paragraph 12.  All sums, reasonable under the
circumstances, actually so paid by Landlord and all costs and expenses,
including attorney’s fees, incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Overdue Rate
and an administrative fee equal to five percent (5%) of all such costs and
expenses, shall be paid by Tenant to Landlord on demand and submission of
reasonable evidence of such expenditures.  Landlord shall not be limited in the
proof of any damages which Landlord may claim against Tenant arising out of or
by reason of Tenant’s failure to provide and keep in force insurance as
aforesaid, to the amount of the insurance premium or premiums not paid or
incurred by Tenant, and which would have been payable upon such insurance, but
Landlord shall also be entitled to recover, as damages for such breach, the
uninsured amount of any loss, damages, costs and expenses of suit, including
attorney’s fees, suffered or incurred by reason of damage to or destruction of
the Premises, or any portion thereof or other damage or loss which Tenant is
required to insure against hereunder, occurring during any period when Tenant
shall have failed or neglected to provide insurance as aforesaid.

 

13.                               PARTIAL TAKING

 

If less than substantially all of the Premises shall be taken for public or
quasi-public purposes, Tenant will promptly, at its sole cost and expense,
restore, repair, replace or rebuild the improvements so taken in conformity with
the requirements of paragraph 9 as nearly as practicable to the condition, size,
quality of workmanship and market value thereof immediately prior to such
taking, without regard to the adequacy of any condemnation award for such
purpose.  There shall be no abatement of Rent during such period of
restoration.  In performing its obligations, Tenant shall be entitled to all
condemnation proceeds available to Landlord for restoration or repair of the
Premises under the same terms and conditions for disbursement set forth for
casualty proceeds in paragraph 10 hereof, including such proceeds being made
available by Mortgagee.  Tenant shall, at its sole cost and expense, negotiate
and, if necessary, litigate, the amount of the award, and Landlord shall have
the right to participate in such process, and if Tenant fails to diligently
prosecute such efforts, Landlord may take control of the process.  Any
condemnation proceeds in excess of the amounts as are made available to Tenant
for restoration or repair of the Premises, shall be the sole and exclusive
property of Landlord.  Tenant shall have the right to participate in
condemnation proceedings with Landlord, and shall be entitled to receive any
award made by the condemning authority in respect of business loss or, if
available, business relocation and any other claim permitted by law which does
not, in any such case, diminish Landlord’s recovery.

 

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14.                               SUBSTANTIAL TAKING

 

If all or substantially all of the Premises shall be taken for public or
quasi-public purposes, and if Tenant determines that such event has rendered the
Premises unavailable for use or unsuitable for restoration for continued use and
occupancy in Tenant’s business, then Tenant, in lieu of rebuilding as
contemplated by paragraph 13, shall, not later than 90 days after such
occurrence (including a final determination of the condemnation award associated
therewith), deliver to Landlord (i) notice of its intention to terminate this
Lease on a date occurring not more than 180 days nor less than 90 days after
such notice (the “Termination Date”), (ii) a certificate by the president or a
vice president of Tenant describing the event giving rise to such termination,
stating that such event has rendered the Premises unavailable for use or
unsuitable for restoration for continued use and occupancy in Tenant’s business
and that such termination will not violate any operating agreement or covenant
then in effect, and (iii) an irrevocable offer to purchase any remaining portion
of the Premises and the related condemnation award at a price equal to the
greater of (x) $14,800,000.00 plus any prepayment premium or breakage fees
charged by Mortgagee, or (y) the fair market value (as determined in accordance
with Exhibit E) of the Premises, considered as encumbered by this Lease
including assuming all Extension Terms have been exercised by Tenant and
considered as not having been the subject of a condemnation.  Notwithstanding
the foregoing, in no event shall the final determination of the condemnation
award exceed $16,280,000.00.  Landlord shall accept or reject such offer by
notice given to Tenant not later than thirty (30) days after receipt of Tenant’s
notice, and if Landlord fails to act, it shall be deemed to have accepted the
offer.  If Landlord shall have accepted such offer or is deemed to have accepted
such offer, (1) on the Termination Date, Landlord shall convey by special or
limited warranty deed to Tenant any remaining portion of the Premises in
accordance with paragraph 29, along with the right to receive any related
condemnation award to which Landlord is entitled, (2) this Lease shall no longer
apply to the Premises as of the Termination Date, except for liabilities which
accrued prior thereto related to the Premises, (3) Landlord and Tenant shall
execute a termination to this Lease confirming the foregoing, which termination
shall be prepared by or on behalf of Landlord, and (4) Tenant shall pay all of
Landlord’s costs and expenses (including attorney’s fees and expenses) related
to all of the foregoing.  If Landlord rejects such offer, as of the Termination
Date, (1) this Lease shall no longer apply to the Premises, except for
liabilities which accrued prior thereto related to the Premises, (2) Landlord
and Tenant shall execute a termination of this Lease confirming the foregoing,
which termination shall be prepared by or on behalf of Landlord, and (3) Tenant
shall pay all of Landlord’s costs and expenses (including attorney’s fees and
expenses) related to all of the foregoing.

 

15.                               DEFAULT:  EVENTS OF DEFAULT

 

The occurrence of any one or more of the following events (“Event of Default”)
shall constitute a breach of this Lease by Tenant:

 

(A)                                  TENANT FAILS TO PAY ANY FIXED RENT AS AND
WHEN SUCH FIXED RENT BECOMES DUE, AND SUCH FAILURE CONTINUES FOR FIVE (5) DAYS
AFTER WRITTEN NOTICE THEREOF, PROVIDED THAT IF TENANT IS MORE THAN FIVE (5) DAYS
LATE IN THE PAYMENT OF FIXED RENT ONCE IN ANY TWELVE (12) CONSECUTIVE

 

8

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MONTH PERIOD, ONLY ONE NOTICE NEED BE GIVEN BY LANDLORD DURING SUCH 12 MONTH
PERIOD AND ANY SUBSEQUENT FAILURE TO PAY FIXED RENT ON OR BEFORE ITS DUE DATE
WITHIN SUCH TWELVE (12) CONSECUTIVE MONTHS SHALL CONSTITUTE AN EVENT OF DEFAULT
AFTER FIVE (5) DAYS WITHOUT NOTICE; OR

 

(B)                                 TENANT FAILS TO PAY ANY ADDITIONAL RENT AS
AND WHEN SUCH ADDITIONAL RENT BECOMES DUE AND PAYABLE AND SUCH FAILURE CONTINUES
FOR MORE THAN TEN (10) DAYS AFTER LANDLORD GIVES WRITTEN NOTICE THEREOF TO
TENANT; OR

 

(C)                                  AN EVENT OF DEFAULT OCCURS UNDER PARAGRAPH
25, SUBLETTING/ASSIGNMENT; OR

 

(D)                                 TENANT FAILS TO PERFORM OR BREACHES ANY
AGREEMENT OR COVENANT OF THIS LEASE NOT SEPARATELY COVERED IN THIS PARAGRAPH 15
TO BE PERFORMED OR OBSERVED BY TENANT AS AND WHEN PERFORMANCE OR OBSERVANCE IS
DUE AND SUCH FAILURE OR BREACH CONTINUES FOR MORE THAN THIRTY (30) DAYS AFTER
LANDLORD’S GIVING WRITTEN NOTICE THEREOF TO TENANT; PROVIDED, HOWEVER, THAT IF,
BY THE NATURE OF SUCH AGREEMENT OR COVENANT, SUCH FAILURE OR BREACH CANNOT
REASONABLY BE CURED WITHIN SUCH PERIOD OF THIRTY (30) DAYS, AN EVENT OF DEFAULT
SHALL NOT EXIST AS LONG AS TENANT COMMENCES WITH DUE DILIGENCE AND DISPATCH THE
CURING OF SUCH FAILURE OR BREACH WITHIN SUCH PERIOD OF THIRTY (30) DAYS AND,
HAVING SO COMMENCED, THEREAFTER PROSECUTES WITH DILIGENCE AND DISPATCH AND
COMPLETES THE CURING OF SUCH FAILURE OR BREACH WITHIN A REASONABLE TIME NOT TO
EXCEED ONE HUNDRED EIGHTY (180) DAYS; OR

 

(E)                                  TENANT (I) FILES, OR CONSENTS BY ANSWER OR
OTHERWISE TO THE FILING AGAINST TENANT OF, A PETITION FOR RELIEF OR
REORGANIZATION OR ARRANGEMENT OR ANY OTHER PETITION IN BANKRUPTCY OR FOR
LIQUIDATION OR TO TAKE ADVANTAGE OF ANY BANKRUPTCY, INSOLVENCY OR OTHER DEBTORS’
RELIEF LAW OF ANY JURISDICTION, (II) MAKES AN ASSIGNMENT FOR THE BENEFIT OF
TENANT’S CREDITORS, (III) CONSENTS TO THE APPOINTMENT OF A CUSTODIAN, RECEIVER,
TRUSTEE OR OTHER OFFICER WITH SIMILAR POWERS OF TENANT OR OF ANY SUBSTANTIAL
PART OF TENANT’S PROPERTY, OR (IV) TAKES ACTION FOR THE PURPOSE OF ANY OF THE
FOREGOING; OR

 

(F)                                    A COURT OR GOVERNMENT AUTHORITY ENTERS AN
ORDER, AND SUCH ORDER IS NOT VACATED WITHIN SIXTY (60) DAYS, (I) APPOINTING A
CUSTODIAN, RECEIVER, TRUSTEE OR OTHER OFFICER WITH SIMILAR POWERS WITH RESPECT
TO TENANT OR WITH RESPECT TO ANY SUBSTANTIAL PART OF TENANT’S PROPERTY, OR (II)
CONSTITUTING AN ORDER FOR RELIEF OR APPROVING A PETITION FOR RELIEF OR
REORGANIZATION OR ARRANGEMENT OR ANY OTHER PETITION IN BANKRUPTCY, INSOLVENCY OR
OTHER DEBTORS’ RELIEF LAW OF ANY JURISDICTION, OR (III) ORDERING THE
DISSOLUTION, WINDING-UP OR LIQUIDATION OF TENANT; OR

 

(G)                                 ANY EVENT OCCURS WHICH IS SPECIFICALLY
STATED TO BE AN EVENT OF DEFAULT UNDER THIS LEASE; OR

 

(H)                                 AN EVENT OF DEFAULT SHALL OCCUR UNDER ANY
LOAN AGREEMENT OR INDENTURE OF TENANT OR GUARANTOR SECURING AN AMOUNT IN EXCESS
OF $10,000,000 AND WHICH EVENT OF DEFAULT CAUSES THE LENDERS UNDER SUCH LOAN
AGREEMENT OR INDENTURE TO EXERCISE THE RIGHT TO ACCELERATE THE DEBT SECURED
THEREBY.  TENANT SHALL PROMPTLY GIVE NOTICE OF ANY SUCH ACCELERATION TO
LANDLORD; OR

 

(I)                                     ANY REPRESENTATION OR WARRANTY OF TENANT
CONTAINED IN ANY WRITING DELIVERED TO LANDLORD SHALL HAVE BEEN MATERIALLY AND
ADVERSELY FALSE AS OF THE DATE IT WAS MADE; OR

 

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(J)                                     THIS LEASE OR ANY ESTATE OF TENANT
HEREUNDER IS LEVIED UPON UNDER ANY ATTACHMENT OR EXECUTION AND SUCH ATTACHMENT
OR EXECUTION IS NOT VACATED WITHIN SIXTY (60) DAYS; OR

 

(K)                                  TENANT SHALL ABANDON THE PREMISES FOR ONE
HUNDRED EIGHTY (180) DAYS.  LANDLORD AND TENANT AGREE THAT NO PORTION OF THE
PREMISES SHALL BE DEEMED TO BE ABANDONED IF DURING SUCH PERIOD OF ABANDONMENT,
TENANT SHALL CONTINUE TO PAY RENT AND MAINTAIN THE PREMISES IN ACCORDANCE WITH
THIS LEASE AND IF SUCH PORTION OF THE PREMISES (I) IS INCLUDED IN SECURITY
PROCEDURES INVOLVING MAINTAINING AT LEAST ONE (1) PERSON AT SUCH PORTION OF THE
PREMISES AT ALL TIMES, (II) DAILY INSPECTIONS ARE MADE TO SUCH PORTIONS OF THE
PREMISES (WHICH INSPECTIONS MAY BE MADE BY THE SECURITY PERSONNEL), AND (III)
ONE (1) SUCH PORTION OF THE PREMISES IS OTHERWISE IN COMPLIANCE WITH THE TERMS
OF THIS LEASE; OR

 

(L)                                     ANY JUDGMENT OR ORDER FOR THE PAYMENT OF
MONEY IN EXCESS OF $10,000,000 SHALL BE RENDERED AGAINST TENANT OR GUARANTOR AND
NOT PAID WITHIN THIRTY (30) DAYS AFTER THE RENDERING OF A FINAL NON-APPEALABLE
DETERMINATION THAT TENANT OR GUARANTOR IS LIABLE FOR SUCH PAYMENT; OR

 

(M)                               TENANT FAILS TO PAY ANY INSURANCE PREMIUMS
WHEN DUE OR OTHERWISE FAILS TO CONTINUOUSLY MAINTAIN ALL INSURANCE REQUIRED TO
BE MAINTAINED BY TENANT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
LEASE; OR

 

(N)                                 GUARANTOR DEFAULTS IN ITS OBLIGATIONS UNDER
THE GUARANTY.

 

Landlord may treat the occurrence of any one or more of the foregoing Events of
Default as a breach of this Lease.  For so long as such Event of Default
continues, Landlord, at its option and with or without notice or demand of any
kind to Tenant or any other Person, may have any one or more of the remedies
provided in this Lease, in addition to all other remedies and rights provided at
law or in equity.

 

16.                               REMEDIES

 

Upon the occurrence of an Event of Default, Landlord shall, in addition to, and
not in derogation of any remedies for any preceding breach, with or without
notice of demand (except as otherwise expressly provided herein) and without
limiting Landlord in the exercise of any right or remedy which Landlord may have
by reason of such Event of Default have all of the following remedies available:

 

(A)                                  LANDLORD SHALL HAVE THE RIGHT TO TERMINATE
TENANT’S RIGHT TO POSSESSION OF THE PREMISES AND REPOSSESS THE PREMISES BY ANY
LAWFUL MEANS WITHOUT TERMINATING THIS LEASE.  LANDLORD SHALL USE GOOD FAITH AND
REASONABLY PROMPT EFFORTS, TO THE EXTENT REQUIRED BY APPLICABLE LAW OF THE STATE
WHERE THE PREMISES ARE LOCATED, TO RE-LET THE PREMISES FOR THE ACCOUNT OF TENANT
FOR SUCH RENT AND UPON SUCH TERMS AS MAY BE SATISFACTORY TO LANDLORD.  FOR THE
PURPOSES OF THAT RE-LETTING, LANDLORD MAY REPAIR, AND PERFORM NORMAL REMODELING
AND ALTERATIONS TO THE PREMISES.  IF LANDLORD FAILS TO RE-LET THE PREMISES,
TENANT SHALL PAY TO LANDLORD THE RENT IN THIS LEASE FOR THE BALANCE OF THE TERM
AS THOSE AMOUNTS BECOME DUE IN ACCORDANCE WITH THE TERMS OF THIS LEASE.  IF
LANDLORD RE-LETS THE PREMISES, BUT FAILS TO REALIZE A SUFFICIENT SUM FROM THE
RE-LETTING TO PAY THE FULL AMOUNT OF RENT IN THIS LEASE FOR THE BALANCE OF THE
TERM AS THOSE AMOUNTS BECOME DUE IN

 

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ACCORDANCE WITH THE TERMS OF THIS LEASE, AFTER PAYING ALL OF THE COSTS AND
EXPENSES OF ALL NORMAL AND CUSTOMARY DECORATION, REPAIRS, REMODELING,
ALTERATIONS AND ADDITIONS AND THE EXPENSES OF THE RE-LETTING AND OF THE
COLLECTION OF THE RENT ACCRUING FROM THE RE-LETTING, TENANT SHALL PAY TO
LANDLORD THE AMOUNT OF ANY DEFICIENCY UPON LANDLORD’S DEMAND FROM TIME TO TIME
MADE.

 

(B)                                 LANDLORD SHALL HAVE THE RIGHT AT ANY TIME TO
GIVE A WRITTEN TERMINATION NOTICE TO TENANT AND, ON THE DATE SPECIFIED IN SUCH
NOTICE, TENANT’S RIGHT TO POSSESSION SHALL TERMINATE AND THIS LEASE SHALL
TERMINATE.  UPON SUCH TERMINATION, LANDLORD SHALL HAVE THE RIGHT TO RECOVER FROM
TENANT:

 

(I)                                     THE WORTH AT THE TIME OF DETERMINATION
OF ALL UNPAID RENT WHICH HAD BEEN EARNED AT THE TIME OF TERMINATION;

 

(II)                                  THE WORTH AT THE TIME OF DETERMINATION OF
THE AMOUNT OF ALL UNPAID RENT FOR THE BALANCE OF THE THEN-TERM OF THIS LEASE
AFTER THE TIME OF TERMINATION EXCLUDING THE POTENTIAL LEASE TERM UNDER ANY
UNEXERCISED OPTIONS FOR ANY EXTENSION TERMS REDUCED ONLY TO THE EXTENT OF NET
RENTAL PROCEEDS ACTUALLY RECEIVED FROM ANY SUBSEQUENT REPLACEMENT TENANT(S) FOR
THE PREMISES; PROVIDED, HOWEVER, EXCEPT TO THE EXTENT THE PREMISES’ STATE
STATUTES OR COMMON LAW REQUIRES LANDLORD TO MITIGATE ITS DAMAGES ARISING FROM AN
EVENT OF DEFAULT BY TENANT UNDER THIS LEASE, FROM AND AFTER ANY SUCH EVENT OF
DEFAULT, LANDLORD SHALL HAVE NO DUTY TO MITIGATE ITS DAMAGES BY RE-LETTING, OR
ATTEMPTING TO RE-LET, THE PREMISES TO ANY REPLACEMENT TENANT(S); AND

 

(III)                               ALL OTHER AMOUNTS NECESSARY TO COMPENSATE
LANDLORD FOR ALL THE DETRIMENT PROXIMATELY CAUSED BY TENANT’S FAILURE TO PERFORM
ALL OF TENANT’S OBLIGATIONS UNDER THIS LEASE OR WHICH IN THE ORDINARY COURSE OF
THINGS WOULD BE LIKELY TO RESULT THEREFROM.  THE “WORTH AT THE TIME OF
DETERMINATION” OF THE AMOUNTS REFERRED TO IN CLAUSE (I) ABOVE SHALL BE COMPUTED
BY ALLOWING INTEREST AT THE OVERDUE RATE.  THE “WORTH AT THE TIME OF
DETERMINATION” OF THE AMOUNT REFERRED TO IN CLAUSE (II) ABOVE SHALL BE COMPUTED
BY DISCOUNTING SUCH AMOUNT TO PRESENT VALUE BY USING THE DISCOUNT RATE EQUAL TO
THE THEN TREASURY RATE.  FOR THE PURPOSE OF DETERMINING UNPAID RENT UNDER CLAUSE
(I) AND (II) ABOVE, THE RENT RESERVED IN THIS LEASE SHALL BE DEEMED TO BE THE
TOTAL RENT PAYABLE BY TENANT UNDER PARAGRAPH 5 HEREOF.

 

(C)                                  EVEN THOUGH TENANT HAS BREACHED THIS LEASE,
THIS LEASE SHALL CONTINUE IN EFFECT FOR SO LONG AS LANDLORD DOES NOT TERMINATE
TENANT’S RIGHT TO POSSESSION, AND LANDLORD SHALL HAVE THE RIGHT TO ENFORCE ALL
ITS RIGHTS AND REMEDIES UNDER THIS LEASE, INCLUDING THE RIGHT TO RECOVER ALL
RENT AS IT BECOMES DUE UNDER THIS LEASE.  ACTS OF MAINTENANCE OR PRESERVATION OR
EFFORTS TO RELET THE PREMISES OR THE APPOINTMENT OF A RECEIVER UPON INITIATIVE
OF LANDLORD TO PROTECT LANDLORD’S INTEREST UNDER THIS LEASE SHALL NOT CONSTITUTE
A TERMINATION OF TENANT’S RIGHT TO POSSESSION UNLESS WRITTEN NOTICE OF SUCH
TERMINATION IS GIVEN BY LANDLORD TO TENANT.  LANDLORD SHALL HAVE UNRESTRICTED
RIGHTS OF ENTRY FOR SUCH PURPOSES FOLLOWING AN EVENT OF DEFAULT.  LANDLORD SHALL
BE ENTITLED TO AN ADMINISTRATIVE FEE OF FIVE PERCENT (5%) OF ALL AMOUNTS
EXPENDED UNDER THIS PARAGRAPH 16.

 

(D)                                 ALL AGREEMENTS AND COVENANTS TO BE PERFORMED
OR OBSERVED BY TENANT UNDER THIS LEASE SHALL BE AT TENANT’S SOLE COST AND
EXPENSE AND WITHOUT ANY ABATEMENT OF FIXED RENT OR

 

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ADDITIONAL RENT.  IF TENANT FAILS TO PAY ANY SUM OF MONEY TO BE PAID BY TENANT
OR TO PERFORM ANY OTHER ACT TO BE PERFORMED BY TENANT UNDER THIS LEASE AS AND
WHEN DUE OR REQUIRED TO BE PERFORMED, LANDLORD SHALL HAVE THE RIGHT, BUT SHALL
NOT BE OBLIGATED, AND WITHOUT WAIVING OR RELEASING TENANT FROM ANY OBLIGATIONS
OF TENANT, TO MAKE ANY SUCH PAYMENT OR TO PERFORM ANY SUCH OTHER ACT ON BEHALF
OF TENANT IN ACCORDANCE WITH THIS LEASE.  ALL SUMS SO PAID BY LANDLORD AND ALL
NECESSARY INCIDENTAL COSTS SHALL BE DEEMED ADDITIONAL RENT HEREUNDER AND SHALL
BE PAYABLE BY TENANT TO LANDLORD ON DEMAND, TOGETHER WITH INTEREST ON ALL SUCH
SUMS FROM THE DATE OF EXPENDITURE BY LANDLORD TO THE DATE OF REPAYMENT BY TENANT
AT THE OVERDUE RATE.  LANDLORD SHALL HAVE, IN ADDITION TO ALL OTHER RIGHTS AND
REMEDIES OF LANDLORD, THE SAME RIGHTS AND REMEDIES IN THE EVENT OF THE
NONPAYMENT OF SUCH SUMS (PLUS INTEREST AT THE OVERDUE RATE) BY TENANT AS IN THE
CASE OF DEFAULT BY TENANT IN THE PAYMENT OF RENT.

 

(E)                                  INTENTIONALLY OMITTED.

 

(F)                                    IF TENANT ABANDONS OR SURRENDERS THE
PREMISES, OR ANY PORTION THEREOF, OR AN EVENT OF DEFAULT BY TENANT PURSUANT TO
PARAGRAPH 15(K) ABOVE SHALL HAVE OCCURRED, OR TENANT IS DISPOSSESSED BY PROCESS
OF LAW OR OTHERWISE, ANY MOVABLE FURNITURE, EQUIPMENT, TRADE FIXTURES OR
PERSONAL PROPERTY BELONGING TO TENANT AND LEFT IN THE PREMISES, OR ANY PORTION
THEREOF, SHALL BE DEEMED TO BE ABANDONED, AT THE OPTION OF LANDLORD, AND
LANDLORD SHALL HAVE THE RIGHT TO SELL OR OTHERWISE DISPOSE OF SUCH PERSONAL
PROPERTY IN ANY COMMERCIALLY REASONABLE MANNER.  IF TENANT ABANDONS THE
PREMISES, OR ANY PORTION THEREOF, LANDLORD SHALL HAVE THE RIGHT, BUT NOT THE
OBLIGATION, TO SUBLET THE PREMISES, OR ANY PORTION THEREOF, ON REASONABLE TERMS
FOR THE ACCOUNT OF TENANT, AND TENANT SHALL BE LIABLE FOR ALL COSTS OF SUCH
SUBLETTING, INCLUDING THE COST OF PREPARING THE PREMISES, OR ANY PORTION
THEREOF, FOR SUBTENANTS AND LEASING COMMISSIONS PAID TO BROKERS.

 

(G)                                 IF ANY EVENT OF DEFAULT HAS OCCURRED, THEN
LANDLORD MAY SERVE UPON TENANT A WRITTEN FIVE-DAY NOTICE OF CANCELLATION AND
TERMINATION OF THIS LEASE.  UPON THE EXPIRATION OF SUCH FIVE-DAY PERIOD, THIS
LEASE AND THE TERM SHALL AUTOMATICALLY AND WITHOUT ANY ACTION BY ANYONE
TERMINATE, EXPIRE AND COME TO AN END, BY THE MERE LAPSE OF TIME, AS FULLY AND
COMPLETELY AS IF THE EXPIRATION OF SUCH FIVE-DAY PERIOD WERE THE EXPIRATION DATE
AND THE LAST DAY OF THE TERM AS ORIGINALLY DEFINED IN THIS LEASE.  THE PASSAGE
OF SUCH FIVE-DAY PERIOD CONSTITUTES THE LIMIT BEYOND WHICH TENANT’S TENANCY NO
LONGER EXISTS.  UPON THE MERE OCCURRENCE OF THE PASSAGE OF FIVE DAYS FOLLOWING
LANDLORD’S NOTICE, THIS LEASE SHALL AUTOMATICALLY EXPIRE BY ITS EXPRESS TERMS,
AND NO RE-ENTRY OR OTHER ACT SHALL BE NECESSARY TO TERMINATE THIS LEASE.  TENANT
SHALL THEN QUIT AND SURRENDER THE PREMISES TO LANDLORD.  TENANT SHALL, HOWEVER,
REMAIN LIABLE AS THIS LEASE PROVIDES.  THE TERMINATION OF THIS LEASE SHALL IN NO
WAY LIMIT TENANT’S LIABILITY UNDER THIS LEASE.  IT IS A CONDITIONAL LIMITATION
OF THIS LEASE THAT THE TERM SHALL TERMINATE AND EXPIRE AS SET FORTH IN THIS
PARAGRAPH.  THIS PARAGRAPH IS INTENDED TO ESTABLISH A CONDITIONAL LIMITATION AND
NOT A CONDITION SUBSEQUENT.  THIS PARAGRAPH DOES NOT LIMIT ANY OTHER RIGHT OR
REMEDY OF LANDLORD.

 

(H)                                 TENANT HEREBY EXPRESSLY WAIVES THE RIGHT OF
REDEMPTION PROVIDED FOR IN NEW YORK REAL PROPERTY ACTIONS AND PROCEEDINGS LAW
SECTION 761, AND ANY SIMILAR OR SUCCESSOR STATUTE.

 

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17.                               SUBORDINATION

 

(A)                                  SUBORDINATION, NON-DISTURBANCE.  TENANT
AGREES AT ANY TIME HEREAFTER, AND FROM TIME TO TIME WITHIN TEN (10) DAYS OF
WRITTEN REQUEST OF LANDLORD, TO EXECUTE AND DELIVER TO LANDLORD AT LANDLORD’S
ELECTION EITHER (1) AN INSTRUMENT IN THE FORM CUSTOMARILY USED BY ANY
INSTITUTIONAL INVESTOR BECOMING A MORTGAGEE OR (2) A SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT SUBSTANTIALLY IN THE FORM ATTACHED
HERETO AS EXHIBIT D (IN EITHER SUCH CASE, SUCH INSTRUMENT, RELEASE, DOCUMENT, OR
AGREEMENT IS HEREIN CALLED THE “SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT”), IN EITHER CASE SUBJECTING AND SUBORDINATING THIS LEASE TO THE LIEN
OF ANY MORTGAGE, WHICH AT ANY TIME MAY BE PLACED UPON THE PREMISES, OR ANY
PORTION THEREOF, BY LANDLORD, AND TO ANY REPLACEMENTS, RENEWALS, AMENDMENTS,
CONSOLIDATIONS, MODIFICATIONS, EXTENSIONS OR REFINANCING THEREOF.  IT IS AGREED,
NEVERTHELESS, THAT SO LONG AS THERE EXISTS NO EVENT OF DEFAULT, SUCH
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT SHALL NOT INTERFERE
WITH, HINDER OR REDUCE TENANT’S RIGHT TO QUIET ENJOYMENT UNDER THIS LEASE, NOR
THE RIGHT OF TENANT TO CONTINUE TO OCCUPY THE PREMISES, AND ALL PORTIONS
THEREOF, AND TO CONDUCT ITS BUSINESS THEREON IN ACCORDANCE WITH THE COVENANTS,
CONDITIONS, PROVISIONS, TERMS AND AGREEMENTS OF THIS LEASE.  THE COSTS OF
PREPARING AND RECORDING SUCH DOCUMENT SHALL BE BORNE BY LANDLORD, BUT TENANT
SHALL BE RESPONSIBLE FOR ITS OWN COUNSEL FEES.

 

(B)                                 MORTGAGEE PROTECTION CLAUSE.  IN THE EVENT
OF ANY ACT OR OMISSION OF LANDLORD CONSTITUTING A DEFAULT BY LANDLORD, TENANT
SHALL NOT EXERCISE ANY REMEDY UNTIL TENANT HAS GIVEN LANDLORD AND ANY MORTGAGEE
OF THE PREMISES WRITTEN NOTICE OF SUCH ACT OR OMISSION, AND UNTIL A REASONABLE
PERIOD OF TIME (NOT LESS THAN 10 BUSINESS DAYS) TO ALLOW LANDLORD OR THE
MORTGAGEE TO REMEDY SUCH ACT OR OMISSION SHALL HAVE ELAPSED FOLLOWING RECEIPT OF
SUCH NOTICE.  HOWEVER, IF SUCH ACT OR OMISSION CANNOT, WITH DUE DILIGENCE AND IN
GOOD FAITH, BE REMEDIED WITHIN SUCH PERIOD OR CANNOT BE CURED SIMPLY BY THE
PAYMENT OF MONEY, THE LANDLORD AND THE MORTGAGEE SHALL BE ALLOWED SUCH FURTHER
PERIOD OF TIME AS MAY BE REASONABLY NECESSARY PROVIDED THAT IT COMMENCES
REMEDYING THE SAME WITH DUE DILIGENCE AND IN GOOD FAITH AND THEREAFTER
DILIGENTLY PROSECUTES SUCH CURE, PROVIDED SUCH CURE PERIOD SHALL NOT EXTEND
BEYOND 270 DAYS AFTER THE NOTICE OF SUCH DEFAULT.  NOTHING HEREIN CONTAINED
SHALL BE CONSTRUED OR INTERPRETED AS REQUIRING ANY MORTGAGEE RECEIVING SUCH
NOTICE TO REMEDY SUCH ACT OR OMISSION.

 

(C)                                  ATTORNMENT.  IF ANY MORTGAGEE SHALL SUCCEED
TO THE RIGHTS OF LANDLORD UNDER THIS LEASE OR TO OWNERSHIP OF THE PREMISES,
WHETHER THROUGH POSSESSION OR FORECLOSURE OR THE DELIVERY OF A DEED TO THE
PREMISES IN LIEU OF FORECLOSURE, THEN SUCH MORTGAGEE SHALL AUTOMATICALLY BE
DEEMED TO HAVE RECOGNIZED THIS LEASE AND TO ASSUME THE OBLIGATIONS OF LANDLORD
HEREUNDER ACCRUING ON AND AFTER THE DATE SUCH MORTGAGEE ACQUIRED TITLE TO THE
PREMISES (INCLUDING THE OBLIGATION TO CURE ANY LANDLORD DEFAULTS THEN REMAINING
UNCURED UNDER THIS LEASE), AND TENANT SHALL ATTORN TO AND RECOGNIZE SUCH
MORTGAGEE AS TENANT’S LANDLORD UNDER THIS LEASE AND SHALL PROMPTLY EXECUTE AND
DELIVER ANY INSTRUMENT CONSISTENT WITH THE SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT THAT SUCH MORTGAGEE MAY REASONABLY REQUEST TO EVIDENCE SUCH
ATTORNMENT (WHETHER BEFORE OR AFTER THE MAKING OF THE MORTGAGE).  IN THE EVENT
OF ANY OTHER TRANSFER OF LANDLORD’S INTEREST HEREUNDER, SUCH TRANSFEREE SHALL
AUTOMATICALLY BE DEEMED TO HAVE RECOGNIZED THIS LEASE AND TO ASSUME THE
OBLIGATIONS OF LANDLORD HEREUNDER ACCRUING ON AND AFTER THE DATE OF SUCH
TRANSFER, TENANT SHALL ATTORN TO AND RECOGNIZE SUCH TRANSFEREE AS TENANT’S
LANDLORD UNDER THIS LEASE AND SHALL PROMPTLY EXECUTE AND DELIVER ANY INSTRUMENT
CONSISTENT WITH

 

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THE SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT THAT SUCH TRANSFEREE
AND LANDLORD MAY REASONABLY REQUEST TO EVIDENCE SUCH ATTORNMENT.

 

(D)                                 ACKNOWLEDGMENT.  UPON TEN (10) DAYS’ ADVANCE
WRITTEN NOTICE, TENANT AGREES TO EXECUTE, ACKNOWLEDGE AND DELIVER A DOCUMENT
ACKNOWLEDGING THE ASSIGNMENT BY LANDLORD OF THIS LEASE TO A MORTGAGEE, IN A FORM
THEN IN USE AMONG INSTITUTIONAL LENDERS, WITH SUCH CHANGES THEREIN AS MAY BE
REASONABLY REQUESTED BY THE MORTGAGEE.

 

18.                               LANDLORD’S RIGHT OF ENTRY

 

Landlord, Mortgagee, and their respective designees, shall have the right to
enter the Premises, and any part of the Premises, at any time during normal
business hours and any part of the Premises on five (5) Business Days’ advance
notice and to inspect the same, post notices of non-responsibility, monitor
construction, perform appraisals, perform engineering studies, and during the
last twenty four (24) months of the Term or at any time after an Event of
Default, exhibit the Premises to prospective purchasers and mortgagees, and
examine Tenant’s books and records pertaining to the Premises, insurance
policies, certificates of occupancy and other documents, records and permits in
Tenant’s possession with respect to the Premises all of which shall be customary
and adequate and reasonably satisfactory to Landlord.

 

19.                               NOTICES

 

Notices, statements, demands, or other communications required or permitted to
be given, rendered or made by either party to the other pursuant to this Lease
or pursuant to any applicable law or requirement of public authority, shall be
in writing (whether or not so stated elsewhere in this Lease) and shall be
deemed to have been properly given, rendered or made, when received by overnight
delivery or overnight courier delivery (or, if such delivery is refused, upon
the date that delivery would have occurred but for such refusal) or facsimile
transmission (with electronic confirmation therefor) with a confirmation copy of
the entire original transmittal sent by overnight delivery or by overnight
courier delivery addressed to the other parties as follows:

 

To Landlord:

 

iStar Garden City LLC

 

 

1114 Avenue of the Americas

 

 

27th Floor

 

 

New York, New York  10036

 

 

Attention: Chief Financial Officer

 

 

Telephone: (212) 930-9400

 

 

Facsimile: (212) 930-9494

 

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With a copy to:

 

iStar Financial Inc.

 

 

1114 Avenue of the Americas

 

 

27th Floor

 

 

New York, New York  10036

 

 

Attention: General Counsel

 

 

Telephone: (212) 930-9400

 

 

Facsimile: (212) 930-9494

 

 

 

With a copy (which shall not constitute notice) to:

 

 

Katten Muchin Zavis Rosenman

 

 

525 West Monroe Street

 

 

16th Floor

 

 

Chicago, Illinois  60661-3693

 

 

Attention: Gregory P. L. Pierce, Esq.

 

 

Telephone: (312) 902-5200

 

 

Facsimile: (312) 902-1061

 

 

 

To Tenant:

 

AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention: Tim Romenesko

 

 

Telephone: (630) 227-2090

 

 

Facsimile: (630) 227-2101

 

 

 

With a copy (which shall not constitute notice) to:

 

 

AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois  60191

 

 

Attention: Legal Department

 

 

Telephone: (630) 227-2040

 

 

Facsimile: (630) 227-2058

 

 

 

 

 

Schiff Hardin & Waite

 

 

623 Fifth Avenue

 

 

New York, New York 10022

 

 

Attention:  Christine A. McGuinness

 

 

Telephone: (212) 745-0831

 

 

Facsimile: (212) 753-5044

 

Any party listed in this paragraph 19 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.

 

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20.                               ESTOPPEL CERTIFICATE; FINANCIAL DATA

 

(A)                                  AT ANY TIME AND FROM TIME TO TIME, TENANT
SHALL, WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN REQUEST BY LANDLORD, EXECUTE,
ACKNOWLEDGE AND DELIVER TO LANDLORD A CERTIFICATE CERTIFYING:  (A) THAT THIS
LEASE IS UNMODIFIED AND IN FULL FORCE AND EFFECT (OR, IF THERE HAVE BEEN
MODIFICATIONS, THAT THIS LEASE IS IN FULL FORCE AND EFFECT AS MODIFIED, AND
STATING THE DATE AND NATURE OF EACH MODIFICATION); (B) THE COMMENCEMENT DATE AND
THE EXPIRATION DATE DETERMINED IN ACCORDANCE WITH PARAGRAPH 4 AND THE BASIC
LEASE INFORMATION, AND THE DATE, IF ANY, TO WHICH ALL RENT AND OTHER SUMS
PAYABLE HEREUNDER HAVE BEEN PAID; (C) THE AMOUNT OF FIXED RENT CURRENTLY PAYABLE
MONTHLY, (D) THAT NO NOTICE HAS BEEN RECEIVED BY TENANT OF ANY DEFAULT BY TENANT
HEREUNDER WHICH HAS NOT BEEN CURED, EXCEPT AS TO DEFAULTS SPECIFIED IN SUCH
CERTIFICATE; (E) THAT LANDLORD IS NOT IN DEFAULT UNDER THIS LEASE, EXCEPT AS TO
DEFAULTS SPECIFIED IN SUCH CERTIFICATE; AND (F) SUCH OTHER MATTERS AS MAY BE
REASONABLY REQUESTED BY LANDLORD OR ANY ACTUAL OR PROSPECTIVE PURCHASER OR
MORTGAGE LENDER.  ANY SUCH CERTIFICATE MAY BE RELIED UPON BY LANDLORD AND ANY
ACTUAL OR PROSPECTIVE PURCHASER OR MORTGAGE LENDER OF THE PREMISES OR ANY PART
THEREOF.

 

(B)                                 TENANT SHALL AND SHALL CAUSE GUARANTOR TO
DELIVER TO LANDLORD AND TO ANY MORTGAGEE, LENDER, OR PURCHASER DESIGNATED BY
LANDLORD THE FOLLOWING INFORMATION WITHIN NINETY (90) DAYS AFTER THE END OF EACH
FISCAL YEAR OF GUARANTOR OR SUCH LONGER PERIOD AS MAY BE PERMITTED BY ANY
NATIONALLY RECOGNIZED STOCK EXCHANGE UPON WHICH GUARANTOR’S CAPITAL STOCK IS
LISTED:  AN AUDITED BALANCE SHEET OF GUARANTOR AND GUARANTOR’S CONSOLIDATED
SUBSIDIARIES AS AT THE END OF SUCH YEAR, AN AUDITED STATEMENT OF PROFITS AND
LOSSES OF GUARANTOR AND GUARANTOR’S CONSOLIDATED SUBSIDIARIES FOR SUCH YEAR, AND
AN AUDITED STATEMENT OF CASH FLOWS OF GUARANTOR AND GUARANTOR’S CONSOLIDATED
SUBSIDIARIES FOR SUCH YEAR, SETTING FORTH IN EACH CASE, IN COMPARATIVE FORM, THE
CORRESPONDING FIGURES FOR THE PRECEDING FISCAL YEAR IN REASONABLE DETAIL AND
SCOPE AND CERTIFIED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF RECOGNIZED
NATIONAL STANDING SELECTED BY TENANT AND GUARANTOR; AND WITHIN FORTY-FIVE (45)
DAYS OR SUCH LONGER PERIOD AS MAY BE PERMITTED BY ANY NATIONALLY RECOGNIZED
STOCK EXCHANGE UPON WHICH TENANT’S OR GUARANTOR’S STOCK IS LISTED AFTER THE END
OF EACH OF THE FIRST THREE FISCAL QUARTERS OF GUARANTOR A BALANCE SHEET OF
GUARANTOR AND GUARANTOR’S CONSOLIDATED SUBSIDIARIES AS AT THE END OF SUCH
QUARTER, STATEMENTS OF PROFITS AND LOSSES OF GUARANTOR AND GUARANTOR’S
CONSOLIDATED SUBSIDIARIES FOR SUCH QUARTER AND A STATEMENT OF CASH FLOWS OF
GUARANTOR AND GUARANTOR’S CONSOLIDATED SUBSIDIARIES FOR SUCH QUARTER, SETTING
FORTH IN EACH CASE, IN COMPARATIVE FORM, THE CORRESPONDING FIGURES FOR THE
SIMILAR QUARTER OF THE PRECEDING YEAR (OR IN THE CASE OF AN INTERIM BALANCE
SHEET, TO THE END OF THE PRIOR YEAR), IN REASONABLE DETAIL AND SCOPE, AND
CERTIFIED TO BE COMPLETE AND ACCURATE BY A FINANCIAL OFFICER OF GUARANTOR HAVING
KNOWLEDGE THEREOF; THE FOREGOING FINANCIAL STATEMENTS ALL BEING PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED. 
IF AND SO LONG AS TENANT AND GUARANTOR IS A REPORTING COMPANY UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, THE FOREGOING REQUIREMENTS OF
THIS PARAGRAPH 20(B) WILL BE SATISFIED BY THE DELIVERY OF TENANT’S OR
GUARANTOR’S FORMS 10-K, 10-Q AND ANNUAL REPORTS PROMPTLY UPON THEIR FILING WITH
THE SECURITIES AND EXCHANGE COMMISSION.  TOGETHER WITH THE ANNUAL FINANCIAL
STATEMENTS DESCRIBED ABOVE, TENANT SHALL DELIVER TO LANDLORD AN ANNUAL PREMISES
OPERATING EXPENSE STATEMENTS FOR THE PREMISES IN DETAIL REASONABLY SATISFACTORY
TO LANDLORD AND CERTIFIED TO BE COMPLETE AND ACCURATE BY AN OFFICER OF TENANT OR
GUARANTOR.

 

(C)                                  UPON TEN (10) DAYS’ PRIOR NOTICE, TENANT
AND GUARANTOR WILL PERMIT LANDLORD AND ITS PROFESSIONAL REPRESENTATIVES TO VISIT
TENANT’S AND GUARANTOR’S OFFICES, AND DISCUSS TENANT’S

 

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AND GUARANTOR’S AFFAIRS AND FINANCES WITH APPROPRIATE OFFICERS, AND WILL MAKE
AVAILABLE SUCH INFORMATION AS LANDLORD MAY REASONABLY REQUEST BEARING ON THE
TENANT, GUARANTOR, THE PREMISES OR THIS LEASE AS TENANT OR GUARANTOR MAY
MAINTAIN IN THE ORDINARY COURSE OF BUSINESS.  LANDLORD SHALL AGREE TO MAINTAIN
THE CONFIDENTIALITY OF ANY INFORMATION DESIGNATED BY TENANT OR GUARANTOR AS
“NONPUBLIC”.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, AND SUBJECT TO
COMPLIANCE WITH APPLICABLE FEDERAL OR STATE SECURITIES LAWS, EACH PARTY TO THIS
LEASE, TOGETHER WITH ANY EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF SUCH PARTY,
IS EXPRESSLY AUTHORIZED TO DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATION
OF ANY KIND, ANY INFORMATION WITH RESPECT TO THE “TAX STRUCTURE” AND “TAX
TREATMENT” (AS SUCH TERMS ARE DEFINED UNDER TREASURY REGULATION § 1.6011-4(C))
OF THE TRANSACTION CONTEMPLATED HEREBY AND ALL MATERIALS OF ANY KIND (INCLUDING
OPINIONS OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO IT RELATING TO SUCH TAX
STRUCTURE AND TAX TREATMENT, PROVIDED THAT WITH RESPECT TO ANY DOCUMENT OR
SIMILAR ITEM THAT IN EITHER CASE CONTAINS NONPUBLIC INFORMATION, THIS SENTENCE
SHALL ONLY APPLY TO SUCH PORTIONS OF SUCH DOCUMENT OR SIMILAR ITEM THAT RELATE
TO THE TAX TREATMENT OR TAX STRUCTURE OF THE TRANSACTION CONTEMPLATED HEREBY.

 

21.                               MECHANICS’ LIENS

 

(A)                                  EXCEPT FOR LIENS CREATED THROUGH THE ACT OF
LANDLORD, TENANT SHALL NOT SUFFER OR PERMIT ANY MECHANIC’S LIEN OR OTHER LIEN TO
BE FILED OR RECORDED AGAINST THE PREMISES, EQUIPMENT OR MATERIALS SUPPLIED OR
CLAIMED TO HAVE BEEN SUPPLIED TO THE PREMISES AT THE REQUEST OF TENANT, OR
ANYONE HOLDING THE PREMISES, OR ANY PORTION THEREOF, THROUGH OR UNDER TENANT. 
IF ANY SUCH MECHANIC’S LIEN OR OTHER LIEN SHALL AT ANY TIME BE FILED OR RECORDED
AGAINST THE PREMISES, OR ANY PORTION THEREOF, TENANT SHALL CAUSE THE SAME TO BE
DISCHARGED OF RECORD WITHIN THIRTY (30) DAYS AFTER THE DATE OF FILING OR
RECORDING OF THE SAME.  HOWEVER, IN THE EVENT TENANT DESIRES TO CONTEST THE
VALIDITY OF ANY LIEN IT SHALL (I) ON OR BEFORE THIRTY (30) DAYS PRIOR TO THE DUE
DATE THEREOF (BUT IN NO EVENT LATER THAN 30 DAYS AFTER THE FILING OR RECORDING
THEREOF), NOTIFY LANDLORD, IN WRITING, THAT TENANT INTENDS TO SO CONTEST SAME;
(II) ON OR BEFORE THE DUE DATE THEREOF, IF SUCH LIEN INVOLVES AN AMOUNT IN
EXCESS OF $50,000 OR IF ANY MORTGAGEE SO REQUIRES, DEPOSIT WITH LANDLORD
SECURITY (IN FORM AND CONTENT REASONABLY SATISFACTORY TO LANDLORD OR MORTGAGEE)
FOR THE PAYMENT OF THE FULL AMOUNT OF SUCH LIEN, AND FROM TIME TO TIME DEPOSIT
ADDITIONAL SECURITY SO THAT, AT ALL TIMES, ADEQUATE SECURITY WILL BE AVAILABLE
FOR THE PAYMENT OF THE FULL AMOUNT OF THE LIEN TOGETHER WITH ALL INTEREST,
PENALTIES, COSTS AND OTHER CHARGES IN RESPECT THEREOF.

 

If Tenant complies with the foregoing, and Tenant continues, in good faith, to
contest the validity of such lien by appropriate legal proceedings which shall
operate to prevent the collection thereof and the sale or forfeiture of the
Premises, or any part thereof, to satisfy the same, Tenant shall be under no
obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises.  Any surplus deposit retained
by Landlord, after the payment of the lien shall be repaid to Tenant.  Provided
that nonpayment of such lien does not cause Landlord to be in violation of any
of its contractual undertakings, Landlord agrees not to pay such lien during the
period of Tenant’s contest.  However, if Landlord pays for the discharge of a
lien or any part thereof from funds of Landlord, any amount paid by Landlord,
together with all costs, fees and expenses in connection therewith (including
attorney’s fees of Landlord plus an administration fee equal to 5% of such costs
and expenses), shall be repaid by Tenant to Landlord on demand by Landlord,
together with interest thereon at

 

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the Overdue Rate.  Tenant shall indemnify and defend Landlord against and save
Landlord and the Premises, and any portion thereof, harmless from and against
all losses, costs, damages, expenses, liabilities, suits, penalties, claims,
demands and obligations, including attorney’s fees, resulting from the
assertion, filing, foreclosure or other legal proceedings with respect to any
such mechanic’s lien or other lien or the attempt by Tenant to discharge same as
above provided.

 

(B)                                 ALL MATERIALMEN, CONTRACTORS, ARTISANS,
ENGINEERS, MECHANICS, LABORERS AND ANY OTHER PERSON NOW OR HEREAFTER FURNISHING
ANY LABOR, SERVICES, MATERIALS, SUPPLIES OR EQUIPMENT TO TENANT WITH RESPECT TO
THE PREMISES, OR ANY PORTION THEREOF, ARE HEREBY CHARGED WITH NOTICE THAT THEY
MUST LOOK EXCLUSIVELY TO TENANT TO OBTAIN PAYMENT FOR THE SAME.  NOTICE IS
HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES,
MATERIALS, SUPPLIES, SKILL, MACHINERY, FIXTURES OR EQUIPMENT FURNISHED OR TO BE
FURNISHED TO TENANT UPON CREDIT, AND THAT NO MECHANIC’S LIEN OR OTHER LIEN FOR
ANY SUCH LABOR, SERVICES, MATERIALS, SUPPLIES, MACHINERY, FIXTURES OR EQUIPMENT
SHALL ATTACH TO OR AFFECT THE ESTATE OR INTEREST OF LANDLORD IN AND TO THE
PREMISES, OR ANY PORTION THEREOF.

 

(C)                                  TENANT SHALL NOT CREATE, PERMIT OR SUFFER,
AND, SUBJECT TO THE PROVISIONS OF PARAGRAPH 21(A) HEREOF, SHALL PROMPTLY
DISCHARGE AND SATISFY OF RECORD, ANY OTHER LIEN, ENCUMBRANCE, CHARGE, SECURITY
INTEREST, OR OTHER RIGHT OR INTEREST WHICH, AS A RESULT OF TENANT’S ACTION OR
INACTION CONTRARY TO THE PROVISIONS HEREOF, SHALL BE OR BECOME A LIEN,
ENCUMBRANCE, CHARGE OR SECURITY INTEREST UPON THE PREMISES, OR ANY PORTION
THEREOF, OR THE INCOME THEREFROM, OTHER THAN PERMITTED ENCUMBRANCES.

 

22.                               END OF TERM

 

(A)                                  UPON THE EXPIRATION OR EARLIER TERMINATION
OF THE TERM OF THIS LEASE, TENANT SHALL SURRENDER THE PREMISES TO LANDLORD IN
GOOD REPAIR AND IN A CONDITION EQUAL TO OR BETTER THAN THE CONDITION EXISTING AS
OF THE DATE HEREOF, SUBJECT TO ORDINARY WEAR AND TEAR, EXCEPT AS REPAIRED,
REBUILT OR ALTERED AS REQUIRED OR PERMITTED BY THIS LEASE (OR, IN THE CASE OF
TERMINATION PURSUANT TO PARAGRAPH 14, AS CONDEMNED), WITH THE EQUIPMENT AND
IMPROVEMENTS, INCLUDING ALL SYSTEMS AND COMPONENTS THEREOF LISTED ON EXHIBIT G
ATTACHED HERETO, IN GOOD WORKING ORDER AND CONDITION AS REASONABLY DETERMINED BY
LANDLORD, AND TENANT SHALL SURRENDER ALL KEYS TO THE PREMISES TO LANDLORD AT THE
PLACE THEN FIXED FOR NOTICES TO LANDLORD AND SHALL INFORM LANDLORD OF ALL
COMBINATIONS ON LOCKS, SAFES AND VAULTS, IF ANY.  EXCEPT AS OTHERWISE PROVIDED
HEREIN, TENANT SHALL AT SUCH TIME REMOVE ALL OF ITS PROPERTY (INCLUDING TENANT’S
TRADE FIXTURES) THEREFROM AND ALL ALTERATIONS AND IMPROVEMENTS PLACED THEREON BY
TENANT AND NOT CONSENTED TO BY LANDLORD.  TENANT SHALL REPAIR ANY DAMAGE TO THE
PREMISES CAUSED BY SUCH REMOVAL, AND ANY AND ALL SUCH PROPERTY NOT SO REMOVED
WHEN REQUIRED SHALL, AT LANDLORD’S OPTION, BECOME THE EXCLUSIVE PROPERTY OF
LANDLORD OR BE DISPOSED OF BY LANDLORD, AT TENANT’S COST AND EXPENSE, WITHOUT
FURTHER NOTICE TO OR DEMAND UPON TENANT.

 

(B)                                 IF THE PREMISES ARE NOT SURRENDERED AS ABOVE
SET FORTH, TENANT SHALL INDEMNIFY, DEFEND AND HOLD LANDLORD HARMLESS FROM AND
AGAINST LOSS OR LIABILITY RESULTING FROM THE DELAY BY TENANT IN SO SURRENDERING
PREMISES, INCLUDING ANY CLAIM MADE BY ANY SUCCEEDING OCCUPANT FOUNDED ON SUCH
DELAY.  TENANT’S OBLIGATION TO OBSERVE OR PERFORM THIS COVENANT SHALL SURVIVE
THE EXPIRATION OR OTHER TERMINATION OF THIS LEASE FOR THREE (3) YEARS.  IN
ADDITION TO THE FOREGOING, AND

 

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IN ADDITION TO THE ADDITIONAL RENT, TENANT SHALL PAY TO LANDLORD A SUM EQUAL TO
ONE HUNDRED FIFTY PERCENT (150%) OF THE FIXED RENT PAYABLE DURING THE PRECEDING
YEAR DURING EACH MONTH OR PORTION THEREOF FOR WHICH TENANT SHALL REMAIN IN
POSSESSION OF THE PREMISES OR ANY PART THEREOF AFTER THE TERMINATION OF THE TERM
OR OF TENANT’S RIGHTS OF POSSESSION, WHETHER BY LAPSE OF TIME OR OTHERWISE.  THE
PROVISIONS OF THIS PARAGRAPH 22(B) SHALL NOT BE DEEMED TO LIMIT OR CONSTITUTE A
WAIVER OF ANY OTHER RIGHTS OR REMEDIES OF LANDLORD PROVIDED HEREIN, AT LAW OR AT
EQUITY.

 

(C)                                  ALL PROPERTY OF TENANT NOT REMOVED ON OR
BEFORE THE LAST DAY OF THE TERM OF THIS LEASE SHALL BE DEEMED ABANDONED. TENANT
HEREBY AGREES THAT LANDLORD MAY REMOVE ALL PROPERTY OF TENANT, INCLUDING
TENANT’S TRADE FIXTURES, FROM THE PREMISES UPON TERMINATION OF THIS LEASE AND TO
CAUSE ITS TRANSPORTATION AND STORAGE, ALL AT THE SOLE COST AND RISK OF TENANT
AND LANDLORD SHALL NOT BE LIABLE FOR DAMAGE, THEFT, MISAPPROPRIATION OR LOSS
THEREOF AND LANDLORD SHALL NOT BE LIABLE IN ANY MANNER IN RESPECT THERETO AND
LANDLORD SHALL BE ENTITLED TO DISPOSE OF SUCH PROPERTY, AS LANDLORD DEEMS FIT,
WITHOUT THE REQUIREMENT OF AN ACCOUNTING.  TENANT SHALL PAY ALL COSTS AND
EXPENSES OF SUCH REMOVAL, TRANSPORTATION AND STORAGE.  TENANT SHALL REIMBURSE
LANDLORD UPON DEMAND FOR ANY EXPENSES REASONABLY AND ACTUALLY INCURRED BY
LANDLORD WITH RESPECT TO REMOVAL OR STORAGE OF ABANDONED PROPERTY AND WITH
RESPECT TO RESTORING SAID PREMISES TO GOOD ORDER, CONDITION AND REPAIR.

 

(D)                                 EXCEPT FOR SURRENDER UPON THE EXPIRATION OR
EARLIER TERMINATION OF THE TERM HEREOF AS EXPRESSLY PROVIDED HEREIN, NO
SURRENDER TO LANDLORD OF THIS LEASE OR OF THE PREMISES SHALL BE VALID OR
EFFECTIVE UNLESS AGREED TO AND ACCEPTED IN WRITING BY LANDLORD.

 

23.                               ALTERATIONS

 

(A)                                  TENANT SHALL OBTAIN LANDLORD’S PRIOR
WRITTEN CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD, CONDITIONED,
OR DELAYED SO LONG AS THE VALUE OR UTILITY OF THE PREMISES IN ITS CURRENT USE IS
NOT DIMINISHED THEREBY, BEFORE MAKING ANY CHANGE IN THE STRUCTURE OF THE
IMPROVEMENTS OR ANY BUILDING SYSTEM COSTING AT LEAST OR MORE THAN $500,000. 
SUBJECT TO THE TERMS OF THE PRECEDING SENTENCE, TENANT MAY MAKE ALTERATIONS,
ADDITIONS OR IMPROVEMENTS TO THE PREMISES COSTING LESS THAN $500,000 WITHOUT
LANDLORD’S CONSENT ONLY IF (I) SUCH ALTERATIONS, ADDITIONS OR IMPROVEMENTS WILL
BE IN COMPLIANCE WITH ALL APPLICABLE LAWS, CODES, RULES, REGULATIONS AND
ORDINANCES, (II) SUCH ALTERATIONS, ADDITIONS OR IMPROVEMENTS WILL NOT REDUCE THE
FAIR MARKET VALUE OR UTILITY OF THE PREMISES IN ITS PERMITTED USE, CONSIDERED AS
UNENCUMBERED BY THIS LEASE, AND (III) SUCH ALTERATIONS, ADDITIONS OR
IMPROVEMENTS WILL NOT AFFECT IN ANY WAY THE STRUCTURAL, EXTERIOR OR ROOF
ELEMENTS OF THE PREMISES OR MECHANICAL, ELECTRICAL, PLUMBING, UTILITY OR LIFE
SAFETY SYSTEMS OF THE PREMISES, BUT TENANT SHALL GIVE PRIOR WRITTEN NOTICE OF
ANY SUCH ALTERATIONS, ADDITIONS OR IMPROVEMENTS TO LANDLORD.  IN ALL OTHER
CASES, LANDLORD’S PRIOR WRITTEN CONSENT SHALL BE REQUIRED WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD, CONDITIONED, OR DELAYED SO LONG AS THE VALUE OR
UTILITY OF THE PREMISES IN ITS CURRENT USE IS NOT DIMINISHED THEREBY.  AT
LANDLORD’S OPTION, ANY IMPROVEMENT MADE WITHOUT LANDLORD’S CONSENT SHALL BE
REMOVED AND THE AREA REPAIRED AT TENANT’S EXPENSE AT THE TERMINATION OF THE
TERM.  NOTWITHSTANDING THE FOREGOING, LANDLORD HEREBY CONSENTS TO THE
CONSTRUCTION OF CERTAIN OFFICE SPACE IN THE SOUTHEAST CORNER OF THE PREMISES,
WHICH CONSTRUCTION HAS COMMENCED AS OF THE DATE HEREOF AND WILL COST

 

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APPROXIMATELY $52,000 TO COMPLETE SUCH OFFICE SPACE TO MATCH THE EXISTING OFFICE
SPACE IN THE PREMISES AND AN ADDITIONAL $22,000 TO INSTALL CARPETING PER
TENANT’S SPECIFICATIONS.

 

(B)                                 EXCEPT AS PROVIDED IN PARAGRAPH 26(F), IN NO
EVENT SHALL TENANT BE PERMITTED TO INSTALL UNDERGROUND STORAGE TANKS OR FUEL
SYSTEMS ON THE PREMISES, OR ANY PORTION THEREOF.

 

(C)                                  ALL ALTERATIONS, ADDITIONS OR IMPROVEMENTS
REQUIRING LANDLORD’S CONSENT SHALL BE MADE AT TENANT’S SOLE COST AND EXPENSE AS
FOLLOWS:

 

(I)                                     TENANT SHALL SUBMIT TO LANDLORD, FOR
LANDLORD’S WRITTEN APPROVAL, COMPLETE PLANS AND SPECIFICATIONS FOR ALL WORK TO
BE DONE BY TENANT.  SUCH PLANS AND SPECIFICATIONS SHALL BE PREPARED BY THE
LICENSED ARCHITECT(S) AND ENGINEER(S) APPROVED IN WRITING BY LANDLORD, SHALL
COMPLY WITH ALL APPLICABLE CODES, ORDINANCES, RULES AND REGULATIONS, SHALL NOT
ADVERSELY AFFECT THE STRUCTURAL ELEMENTS OF THE PREMISES, SHALL BE IN A FORM
SUFFICIENT TO SECURE THE APPROVAL OF ALL GOVERNMENT AUTHORITIES WITH
JURISDICTION OVER THE PREMISES, AND SHALL BE OTHERWISE SATISFACTORY TO LANDLORD
IN LANDLORD’S REASONABLE DISCRETION.

 

(II)                                  LANDLORD SHALL USE REASONABLE EFFORTS TO
NOTIFY TENANT IN WRITING AS PROMPTLY AS POSSIBLE, BUT IN NO EVENT LATER THAN
THIRTY (30) DAYS FOLLOWING TENANT’S SUBMISSION OF COMPLETE PLANS AND
SPECIFICATIONS FOR LANDLORD’S WRITTEN APPROVAL, WHETHER LANDLORD APPROVES,
APPROVES ON CONDITION THAT TENANT REVERSE THE ALTERATION AT TENANT’S EXPENSE AT
THE TERMINATION OR EXPIRATION OF THIS LEASE, OR DISAPPROVES SUCH PLANS AND
SPECIFICATIONS.  TENANT MAY SUBMIT TO LANDLORD REVISED PLANS AND SPECIFICATIONS
FOR LANDLORD’S PRIOR WRITTEN APPROVAL, WHICH APPROVAL SHALL NOT BE WITHHELD OR
DELAYED IF (A) THE WORK TO BE DONE WOULD NOT, IN LANDLORD’S REASONABLE JUDGMENT,
ADVERSELY AFFECT THE VALUE, CHARACTER, RENTABILITY OR USEFULNESS OF THE PREMISES
OR ANY PART THEREOF, OR (B) THE WORK TO BE DONE SHALL BE REQUIRED BY ANY LAW
(HEREINAFTER DEFINED).  TENANT SHALL PAY ALL COSTS, INCLUDING THE FEES AND
EXPENSES OF THE LICENSED ARCHITECT(S) AND ENGINEER(S), IN PREPARING SUCH PLANS
AND SPECIFICATIONS.

 

(III)                               ALL CHANGES (OTHER THAN FIELD CHANGES FOR
WHICH NO CHANGE ORDER IS PROPOSED AND WHICH WILL BE REFLECTED IN THE FINAL “AS
BUILT” PLANS) IN THE PLANS AND SPECIFICATIONS APPROVED BY LANDLORD SHALL BE
SUBJECT TO LANDLORD’S PRIOR WRITTEN APPROVAL.  IF TENANT WISHES TO MAKE SUCH
CHANGE IN APPROVED PLANS AND SPECIFICATIONS, TENANT SHALL HAVE SUCH ARCHITECT(S)
AND ENGINEER(S) PREPARE PLANS AND SPECIFICATIONS FOR SUCH CHANGE AND SUBMIT THEM
TO LANDLORD FOR LANDLORD’S WRITTEN APPROVAL.  LANDLORD SHALL NOTIFY TENANT IN
WRITING PROMPTLY WHETHER LANDLORD APPROVES, APPROVES ON CONDITION THAT TENANT
REVERSE THE ALTERATION AT TENANT’S EXPENSE AT THE TERMINATION OR EXPIRATION OF
THIS LEASE, OR DISAPPROVES SUCH CHANGE.  TENANT MAY SUBMIT TO LANDLORD REVISED
PLANS AND SPECIFICATIONS FOR SUCH CHANGE FOR LANDLORD’S WRITTEN APPROVAL.  AFTER
LANDLORD’S WRITTEN APPROVAL OF SUCH CHANGE, SUCH CHANGE SHALL BECOME PART OF THE
PLANS AND SPECIFICATIONS APPROVED BY LANDLORD.

 

(IV)                              TENANT SHALL OBTAIN AND COMPLY WITH ALL
BUILDING PERMITS AND OTHER GOVERNMENT PERMITS AND APPROVALS REQUIRED IN
CONNECTION WITH THE WORK.  TENANT SHALL, THROUGH TENANT’S LICENSED CONTRACTOR,
PERFORM THE WORK SUBSTANTIALLY IN ACCORDANCE WITH THE PLANS AND SPECIFICATIONS
APPROVED IN WRITING BY LANDLORD.  TENANT SHALL PAY, AS ADDITIONAL RENT, THE
ENTIRE

 

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COST OF ALL WORK (INCLUDING THE COST OF ALL UTILITIES, PERMITS, FEES, TAXES, AND
PROPERTY AND LIABILITY INSURANCE PREMIUMS IN CONNECTION THEREWITH) REQUIRED TO
MAKE THE ALTERATIONS, ADDITIONS OR IMPROVEMENTS.  UNDER NO CIRCUMSTANCES SHALL
LANDLORD BE LIABLE TO TENANT FOR ANY DAMAGE, LOSS, COST OR EXPENSES INCURRED BY
TENANT ON ACCOUNT OF ANY PLANS AND SPECIFICATIONS, CONTRACTORS OR
SUBCONTRACTORS, DESIGN OF ANY WORK, CONSTRUCTION OF ANY WORK, OR DELAY IN
COMPLETION OF ANY WORK.

 

(V)                                 TENANT SHALL GIVE WRITTEN NOTICE TO LANDLORD
OF THE DATE ON WHICH CONSTRUCTION OF ANY WORK TO BE DONE BY OUTSIDE CONTRACTORS
WILL BE COMMENCED AT LEAST TEN (10) DAYS PRIOR TO SUCH DATE.  LANDLORD SHALL
HAVE THE RIGHT TO POST AND KEEP POSTED ON THE PREMISES ANY NOTICES THAT MAY BE
PROVIDED BY LAW OR WHICH LANDLORD MAY DEEM TO BE PROPER FOR THE PROTECTION OF
LANDLORD AND THE PREMISES, OR ANY PORTION THEREOF, FROM LIENS, AND TO TAKE ANY
OTHER ACTION LANDLORD DEEMS NECESSARY TO REMOVE OR DISCHARGE LIENS AT THE
EXPENSE OF TENANT.

 

(VI)                              ALL ALTERATIONS, ADDITIONS, IMPROVEMENTS, AND
FIXTURES, WHETHER TEMPORARY OR PERMANENT IN CHARACTER, MADE IN OR TO THE
PREMISES BY TENANT, SHALL BECOME PART OF THE PREMISES AND LANDLORD’S PROPERTY,
EXCEPT THOSE WHICH ARE READILY REMOVABLE WITH CAUSING MATERIAL DAMAGE TO THE
PREMISES (WHICH SHALL BE AND REMAIN THE PROPERTY OF TENANT).  UPON TERMINATION
OR EXPIRATION OF THIS LEASE, TENANT SHALL, AT TENANT’S EXPENSE, REMOVE ALL
MOVABLE FURNITURE, EQUIPMENT, TRADE FIXTURES, OFFICE MACHINES AND OTHER PERSONAL
PROPERTY (INCLUDING TENANT’S TRADE FIXTURES) FROM THE PREMISES (BUT NOT THE
IMPROVEMENTS OR EQUIPMENT) AND REPAIR ALL DAMAGE CAUSED BY SUCH REMOVAL. 
TERMINATION OF THIS LEASE SHALL NOT AFFECT THE OBLIGATIONS OF TENANT PURSUANT TO
THIS PARAGRAPH 23(C) TO BE PERFORMED AFTER SUCH TERMINATION.

 

(D)                                 PROMPTLY FOLLOWING THE COMPLETION OF ANY
ALTERATION, ADDITION, OR IMPROVEMENT TO THE PREMISES, TENANT SHALL FURNISH
LANDLORD WITH A COPY OF THE COMPLETE PLANS AND SPECIFICATIONS FOR SUCH WORK
(INCLUDING, IF AVAILABLE, SO-CALLED “AS-BUILT” PLANS AND SPECIFICATIONS).

 

(E)                                  NOTWITHSTANDING ANYTHING TO THE CONTRARY
PROVIDED HEREIN, TENANT SHALL CAUSE THE REPAIR ITEMS LISTED ON EXHIBIT H
ATTACHED HERETO TO BE COMPLETED WITHIN TWELVE (12) MONTHS OF THE COMMENCEMENT
DATE.

 

24.                               MEMORANDUM OF LEASE

 

The parties agree to promptly execute a Memorandum of Lease in recordable form
and in a form mutually satisfactory to both parties.

 

25.                               SUBLETTING/ASSIGNMENT

 

(A)                                  TENANT SHALL NOT, DIRECTLY OR INDIRECTLY,
WITHOUT THE PRIOR WRITTEN CONSENT OF LANDLORD AND MORTGAGEE, ASSIGN THIS LEASE
OR ANY INTEREST HEREIN, OR ANY INTEREST IN TENANT, OR SUBLEASE THE PREMISES OR
ANY PART THEREOF, OR PERMIT THE USE OR OCCUPANCY OF THE PREMISES BY ANY PERSON
OTHER THAN TENANT.  THIS LEASE SHALL NOT, NOR SHALL ANY INTEREST HEREIN, BE
ASSIGNABLE AS TO THE INTEREST OF TENANT INVOLUNTARILY OR BY OPERATION OF LAW
WITHOUT THE PRIOR WRITTEN CONSENT OF LANDLORD AND MORTGAGEE.

 

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For purposes of this paragraph 25(a), the occurrence of a Corporate Control
Event, or the public announcement thereof, shall be deemed to be an assignment
of this Lease which is prohibited by the preceding paragraph unless Tenant
obtains Landlord’s and Mortgagee’s prior written consent as set forth above.

 

Notwithstanding anything to the contrary provided herein, in the event of an
assignment or sublease to an entity with a Credit Rating of either “BBB” or
higher from S&P or “Baa2” or higher from Moody’s, in each case for six (6)
consecutive calendar months immediately preceding such assignment or sublease,
as the case may be, (i) Landlord’s and Mortgagee’s prior written consent shall
not be required for such assignment or sublease, as the case may be, and (ii)
Guarantor shall be released from its obligations under the Guaranty.

 

Any of the foregoing prohibited acts without such prior written consent of
Landlord and Mortgagee, if required, shall be void and shall, at the option of
Landlord or Mortgagee, constitute an immediate Event of Default that entitles
Landlord to all remedies available at law and pursuant to this Lease.  Tenant
agrees that the instrument by which any assignment or sublease to which Landlord
and Mortgagee consent is accomplished shall expressly provide that the assignee
or subtenant will perform all of the covenants to be performed by Tenant under
this Lease (in the case of a partial assignment or a sublease, only insofar as
such covenants relate to the portion of the Premises subject to such partial
assignment or a sublease) as and when performance is due after the effective
date of the assignment or sublease and that Landlord will have the right to
enforce such covenants directly against such assignee or subtenant.  Any
purported assignment or sublease without an instrument containing the foregoing
provisions shall be void.  Unless and until expressly released by Landlord and
Mortgagee, Tenant shall in all cases remain primarily liable (and not liable
merely as a guarantor or surety) for the performance by any assignee or
subtenant of all such covenants, as if no assignment or sublease had been made.

 

(B)                                 IF LANDLORD AND MORTGAGEE CONSENT IN
WRITING, TENANT MAY COMPLETE THE INTENDED ASSIGNMENT OR SUBLEASE SUBJECT TO THE
FOLLOWING CONDITIONS: (I) NO ASSIGNMENT OR SUBLEASE SHALL BE VALID AND NO
ASSIGNEE OR SUBTENANT SHALL TAKE POSSESSION OF THE PREMISES OR ANY PART THEREOF
UNTIL AN EXECUTED DUPLICATE ORIGINAL OF SUCH ASSIGNMENT OR SUBLEASE, IN
COMPLIANCE WITH PARAGRAPH 25(A), HAS BEEN DELIVERED TO LANDLORD AND MORTGAGEE,
AND (II) NO ASSIGNEE OR SUBTENANT SHALL HAVE A RIGHT FURTHER TO ASSIGN OR
SUBLEASE WITHOUT THE PRIOR WRITTEN CONSENT OF LANDLORD AND MORTGAGEE WHICH
CONSENTS SHALL NOT BE UNREASONABLY WITHHELD, DELAYED, OR CONDITIONED.

 

(C)                                  UNLESS AND UNTIL EXPRESSLY RELEASED BY
LANDLORD AND MORTGAGEE, NO ASSIGNMENT OR SUBLEASE WHATSOEVER SHALL RELEASE
TENANT FROM TENANT’S OBLIGATIONS AND LIABILITIES UNDER THIS LEASE (WHICH SHALL
CONTINUE AS THE OBLIGATIONS OF A PRINCIPAL AND NOT OF A GUARANTOR OR SURETY) OR
ALTER THE PRIMARY LIABILITY OF TENANT TO PAY ALL RENT AND TO PERFORM ALL
OBLIGATIONS TO BE PAID AND PERFORMED BY TENANT.  THE ACCEPTANCE OF RENT BY
LANDLORD FROM ANY OTHER PERSON SHALL NOT BE DEEMED TO BE A WAIVER BY LANDLORD OF
ANY PROVISION OF THIS LEASE.  CONSENT TO ONE ASSIGNMENT OR SUBLEASE SHALL NOT BE
DEEMED CONSENT TO ANY SUBSEQUENT ASSIGNMENT OR SUBLEASE.  IF ANY ASSIGNEE,
SUBTENANT OR SUCCESSOR OF TENANT DEFAULTS IN THE PERFORMANCE OF ANY OBLIGATION
TO BE PERFORMED BY TENANT UNDER THIS LEASE, LANDLORD MAY PROCEED DIRECTLY
AGAINST TENANT WITHOUT THE NECESSITY

 

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OF EXHAUSTING REMEDIES AGAINST SUCH ASSIGNEE, SUBTENANT OR SUCCESSOR.  LANDLORD
MAY CONSENT TO SUBSEQUENT ASSIGNMENTS OR SUBLEASES OR AMENDMENTS OR
MODIFICATIONS TO THIS LEASE WITH ASSIGNEES, SUBTENANTS OR SUCCESSOR OF TENANT,
WITHOUT NOTIFYING TENANT OR ANY SUCCESSOR OF TENANT AND WITHOUT OBTAINING ANY
CONSENT THERETO FROM TENANT OR ANY SUCCESSOR OF TENANT, AND SUCH ACTION SHALL
NOT RELEASE TENANT FROM LIABILITY UNDER THIS LEASE.

 

(D)                                 TENANT SHALL HAVE NO RIGHT TO MORTGAGE,
GRANT A LIEN UPON, ENCUMBER OR OTHERWISE FINANCE TENANT’S INTEREST UNDER THIS
LEASE OR RECORD A LIEN UPON TENANT’S INTEREST IN THE PREMISES UNDER THIS LEASE,
AND TENANT SHALL NOT PERMIT, CAUSE OR SUFFER TO BE RECORDED IN THE REAL ESTATE
RECORDS OF THE COUNTY IN WHICH THE PREMISES ARE LOCATED ANY MORTGAGE, DEED TO
SECURE DEBT, DEED OF TRUST, ASSIGNMENT, UCC FINANCING STATEMENT OR ANY OTHER
DOCUMENT GRANTING, PERFECTING, OR RECORDING A LIEN UPON TENANT’S INTEREST IN
THIS LEASE OR INTEREST IN THE PREMISES UNDER THIS LEASE.  TENANT SHALL NOT GIVE
ANY NOTICE, OR PERMIT OR CAUSE ANY OTHER PARTY TO GIVE ANY NOTICE, TO LANDLORD
OF ANY EXISTING LIEN ON OR SECURITY INTEREST IN TENANT’S INTEREST IN THIS LEASE
OR INTEREST IN THE PREMISES UNDER THIS LEASE.  TENANT SHALL NOT REQUEST THAT
LANDLORD EXECUTE (NOR SHALL LANDLORD HAVE ANY OBLIGATION TO EXECUTE) ANY
NON-DISTURBANCE, ATTORNMENT OR ANY OTHER AGREEMENT IN FAVOR OF ANY PARTY
TRANSACTING ANY BUSINESS OR TRANSACTION WITH OR RELATED TO TENANT.

 

(E)                                  IF TENANT SHALL ASSIGN THIS LEASE OR SUBLET
THE PREMISES TO ANY PERSON OTHER THAN LANDLORD, OR REQUEST THE CONSENT OF
LANDLORD AND MORTGAGEE TO ANY ASSIGNMENT, SUBLETTING, OR OTHER ACTION WHICH
REQUIRES LANDLORD’S CONSENT HEREUNDER, TENANT SHALL PAY (I) LANDLORD’S
REASONABLE STANDARD PROCESSING FEE WHICH SHALL NOT EXCEED FIVE THOUSAND DOLLARS
($5,000) IN EACH INSTANCE AND (II) LANDLORD’S AND MORTGAGEE’S ATTORNEYS’ FEES
AND COSTS INCURRED IN CONNECTION THEREWITH.

 

(F)                                    TENANT AGREES TO GIVE NOTICE TO MORTGAGEE
OF ANY REQUEST FOR CONSENT TO ANY ASSIGNMENT OR TRANSFER OF THE LEASE OR
SUBLETTING OF ALL OR ANY PORTION OF THE PREMISES SIMULTANEOUSLY WITH DELIVERY OF
NOTICE THEREOF TO LANDLORD.

 

26.                               HAZARDOUS MATERIAL

 

(A)                                  TENANT (I) SHALL COMPLY, AND CAUSE THE
PREMISES TO COMPLY, WITH ALL ENVIRONMENTAL LAWS (AS HEREINAFTER DEFINED)
APPLICABLE TO THE PREMISES (INCLUDING THE MAKING OF ALL SUBMISSIONS TO
GOVERNMENTAL AUTHORITIES REQUIRED BY ENVIRONMENTAL LAWS AND THE CARRYING OUT OF
ANY REMEDIATION PROGRAM SPECIFIED BY SUCH AUTHORITY), (II) EXCEPT AS CURRENTLY
EXISTING AS OF THE COMMENCEMENT DATE, SHALL PROHIBIT THE USE OF THE PREMISES FOR
THE GENERATION, MANUFACTURE, REFINEMENT, PRODUCTION, OR PROCESSING OF ANY
HAZARDOUS MATERIAL (AS HEREINAFTER DEFINED) OR FOR THE STORAGE, HANDLING,
TRANSFER OR TRANSPORTATION OF ANY HAZARDOUS MATERIAL (OTHER THAN IN CONNECTION
WITH THE OPERATION, BUSINESS AND MAINTENANCE OF THE PREMISES AND IN COMMERCIALLY
REASONABLE QUANTITIES AS A CONSUMER THEREOF AND SUPPLIER OF CONSUMER PRODUCTS
AND IN COMPLIANCE WITH ENVIRONMENTAL LAWS), (III) SHALL NOT PERMIT TO REMAIN,
INSTALL OR PERMIT THE INSTALLATION ON THE PREMISES OF ANY SURFACE IMPOUNDMENTS,
UNDERGROUND STORAGE TANKS (OTHER THAN THE UNDERGROUND TANKS IN ACCORDANCE WITH
THE PROVISIONS OF PARAGRAPH 26(F)), PCB-CONTAINING TRANSFORMERS OR
ASBESTOS-CONTAINING MATERIALS, AND (IV) SHALL CAUSE ANY ALTERATIONS OF THE
PREMISES TO BE DONE IN A WAY SO AS TO NOT EXPOSE IN AN UNSAFE MANNER THE PERSONS
WORKING ON OR VISITING

 

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THE PREMISES TO HAZARDOUS MATERIALS AND IN CONNECTION WITH ANY SUCH ALTERATIONS
SHALL REMOVE ANY HAZARDOUS MATERIALS PRESENT UPON THE PREMISES WHICH ARE NOT IN
COMPLIANCE WITH ENVIRONMENTAL LAWS OR WHICH PRESENT A DANGER TO PERSONS WORKING
ON OR VISITING THE PREMISES.

 

(B)                                 “ENVIRONMENTAL LAWS” MEANS THE RESOURCE
CONSERVATION AND RECOVERY ACT OF 1976, AS AMENDED, 42 U.S.C. §§6901, ET SEQ.
(RCRA), AS AMENDED, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND
LIABILITY ACT OF 1980, AS AMENDED BY THE SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT OF 1986, 42 U.S.C. §§9601 ET SEQ. (CERCLA), AS AMENDED, THE
TOXIC SUBSTANCE CONTROL ACT, AS AMENDED, 15 U.S.C. §§2601 ET SEQ., THE FEDERAL
INSECTICIDE, FUNGICIDE AND RODENTICIDE ACT, AS AMENDED, 7 U.S.C. §§136 ET SEQ.,
AND ALL APPLICABLE FEDERAL, STATE AND LOCAL ENVIRONMENTAL LAWS, ORDINANCES,
RULES AND REGULATIONS, AS ANY OF THE FOREGOING MAY HAVE BEEN OR MAY BE FROM TIME
TO TIME AMENDED, SUPPLEMENTED OR SUPPLANTED, AND ANY OTHER FEDERAL, STATE OR
LOCAL LAWS, ORDINANCES, RULES AND REGULATIONS, NOW OR HEREAFTER EXISTING
RELATING TO REGULATIONS OR CONTROL OF HAZARDOUS MATERIAL OR MATERIALS.  THE TERM
“HAZARDOUS MATERIALS” AS USED IN THIS LEASE SHALL MEAN SUBSTANCES DEFINED AS
“HAZARDOUS SUBSTANCES”, “HAZARDOUS MATERIALS”, “HAZARDOUS WASTES” OR “TOXIC
SUBSTANCES” IN ANY APPLICABLE FEDERAL, STATE OR LOCAL STATUTE, RULE, REGULATION
OR DETERMINATION, INCLUDING THE COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, 42 U.S.C. §§9601, ET SEQ.;
THE HAZARDOUS MATERIALS TRANSPORTATION ACT, 49 U.S.C. §§1801, ET SEQ.; THE
RESOURCE, CONSERVATION AND RECOVERY ACT OF 1976, 42 U.S.C. §§6901, ET SEQ.; AND,
ASBESTOS, PCB’S, RADIOACTIVE SUBSTANCES, METHANE, VOLATILE HYDROCARBONS,
PETROLEUM OR PETROLEUM-DERIVED SUBSTANCES OR WASTES, RADON, INDUSTRIAL SOLVENTS
OR ANY OTHER MATERIAL AS MAY BE SPECIFIED IN APPLICABLE LAW OR REGULATIONS.

 

(C)                                  EXCEPT TO THE EXTENT THE FOLLOWING
INDEMNITY ARISES OUT OF THE ACTS OR OMISSIONS OF LANDLORD, ITS AGENTS, EMPLOYEES
OR CONTRACTORS, TENANT AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD HARMLESS
LANDLORD, ITS MEMBERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND ANY
SUCCESSORS TO LANDLORD’S INTEREST IN THE CHAIN OF TITLE TO THE PREMISES, THEIR
DIRECT OR INDIRECT MEMBERS, PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS
(COLLECTIVELY, THE “INDEMNIFIED PARTNER”), FROM AND AGAINST ANY AND ALL
LIABILITY, INCLUDING ALL FORESEEABLE AND ALL UNFORESEEABLE DAMAGES INCLUDING
ATTORNEY’S AND CONSULTANT’S FEES, FINES, PENALTIES AND CIVIL DAMAGES, DIRECTLY
OR INDIRECTLY ARISING OUT OF TENANT’S USE, GENERATION, STORAGE, TREATMENT,
RELEASE, THREATENED RELEASE, DISCHARGE, SPILL, PRESENCE OR DISPOSAL OF HAZARDOUS
MATERIALS FROM, ON, AT, TO OR UNDER THE PREMISES PRIOR TO OR DURING THE TERM OF
THIS LEASE, AND INCLUDING FOR ALL MATTERS DISCLOSED IN THE ENVIRONMENTAL
REPORTS, AND THE COST OF ANY REQUIRED OR NECESSARY REPAIR, RESPONSE ACTION,
REMEDIATION, INVESTIGATION, CLEANUP OR DETOXIFICATION AND THE PREPARATION OF ANY
CLOSURE OR OTHER REQUIRED PLANS IN CONNECTION THEREWITH, WHETHER SUCH ACTION IS
REQUIRED OR NECESSARY PRIOR TO OR FOLLOWING TRANSFER OF TITLE TO THE PREMISES. 
THIS AGREEMENT TO INDEMNIFY AND HOLD HARMLESS SHALL BE IN ADDITION TO ANY OTHER
OBLIGATIONS OR LIABILITIES TENANT MAY HAVE TO LANDLORD AT COMMON LAW UNDER ALL
STATUTES AND ORDINANCES OR OTHERWISE, AND SHALL SURVIVE FOLLOWING THE DATE OF
EXPIRATION OR EARLIER TERMINATION OF THIS LEASE FOR THREE (3) YEARS, EXCEPT
WHERE THE EVENT GIVING RISE TO THE LIABILITY FOR WHICH INDEMNITY IS SOUGHT
ARISES OUT OF TENANT’S ACTS, IN WHICH CASE THE AGREEMENT TO INDEMNIFY SHALL
SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITHOUT LIMIT OF TIME. 
TENANT EXPRESSLY AGREES THAT THE REPRESENTATIONS, WARRANTIES AND COVENANTS MADE
AND THE INDEMNITIES STATED IN THIS LEASE ARE NOT PERSONAL TO LANDLORD, AND THE
BENEFITS UNDER THIS LEASE MAY BE

 

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ASSIGNED TO SUBSEQUENT PARTIES IN INTEREST TO THE CHAIN OF TITLE TO THE
PREMISES, WHICH SUBSEQUENT PARTIES IN INTEREST MAY PROCEED DIRECTLY AGAINST
TENANT TO RECOVER PURSUANT TO THIS LEASE.  TENANT, AT ITS EXPENSE, MAY INSTITUTE
APPROPRIATE LEGAL PROCEEDINGS WITH RESPECT TO ENVIRONMENTAL MATTERS OF THE TYPE
SPECIFIED IN THIS PARAGRAPH 26(C) OR ANY LIEN FOR SUCH ENVIRONMENTAL MATTERS,
NOT INVOLVING LANDLORD OR ITS MORTGAGEE AS A DEFENDANT (UNLESS LANDLORD OR ITS
MORTGAGEE IS THE ALLEGED CAUSE OF THE DAMAGE), CONDUCTED IN GOOD FAITH AND WITH
DUE DILIGENCE, PROVIDED THAT SUCH PROCEEDINGS SHALL NOT IN ANY WAY IMPAIR THE
INTERESTS OF LANDLORD OR MORTGAGEE UNDER THIS LEASE OR CONTRAVENE THE PROVISIONS
OF ANY MORTGAGE.  COUNSEL TO TENANT IN SUCH PROCEEDINGS SHALL BE REASONABLY
APPROVED BY LANDLORD IF LANDLORD IS A DEFENDANT IN THE SAME PROCEEDING. 
LANDLORD SHALL HAVE THE RIGHT TO APPOINT CO-COUNSEL, WHICH CO-COUNSEL WILL
COOPERATE WITH TENANT’S COUNSEL IN SUCH PROCEEDINGS.  THE FEES AND EXPENSES OF
SUCH CO-COUNSEL SHALL BE PAID BY LANDLORD, UNLESS SUCH CO-COUNSEL ARE APPOINTED
BECAUSE THE INTERESTS OF LANDLORD AND TENANT IN SUCH PROCEEDINGS, IN SUCH
COUNSEL’S OPINION, ARE OR HAVE BECOME ADVERSE, OR TENANT OR TENANT’S COUNSEL IS
NOT CONDUCTING SUCH PROCEEDINGS IN GOOD FAITH OR WITH DUE DILIGENCE.

 

(D)                                 TENANT, UPON FIVE (5) DAYS PRIOR NOTICE
SHALL PERMIT SUCH PERSONS AS LANDLORD OR ANY ASSIGNEE OF LANDLORD MAY DESIGNATE
AND (UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING) APPROVED BY
TENANT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED (“SITE
REVIEWERS”), TO VISIT THE PREMISES FROM TIME TO TIME AND PERFORM ENVIRONMENTAL
SITE INVESTIGATIONS AND ASSESSMENTS (“SITE ASSESSMENTS”) ON THE PREMISES FOR THE
PURPOSE OF DETERMINING WHETHER THERE EXISTS ON THE PREMISES ANY ENVIRONMENTAL
CONDITION WHICH MAY RESULT IN ANY LIABILITY, COST OR EXPENSE TO LANDLORD OR ANY
OTHER OWNER OR OCCUPIER OF THE PREMISES.  SUCH SITE ASSESSMENTS MAY INCLUDE BOTH
ABOVE AND BELOW THE GROUND TESTING FOR ENVIRONMENTAL DAMAGE OR THE PRESENCE OF
HAZARDOUS MATERIAL ON THE PREMISES AND SUCH OTHER TESTS ON THE PREMISES AS MAY
BE NECESSARY TO CONDUCT THE SITE ASSESSMENTS IN THE REASONABLE OPINION OF THE
SITE REVIEWERS.  TENANT SHALL SUPPLY TO THE SITE REVIEWERS SUCH HISTORICAL AND
OPERATIONAL INFORMATION REGARDING THE PREMISES AS MAY BE REASONABLY REQUESTED BY
THE SITE REVIEWERS TO FACILITATE THE SITE ASSESSMENTS (OTHER THAN INFORMATION
PREVIOUSLY SUPPLIED IN WRITING TO LANDLORD BY TENANT) AND SHALL MAKE AVAILABLE
FOR MEETINGS WITH THE SITE REVIEWERS APPROPRIATE PERSONNEL HAVING KNOWLEDGE OF
SUCH MATTERS.  THE COST OF PERFORMING AND REPORTING ALL SITE ASSESSMENTS SHALL
BE PAID BY LANDLORD UNLESS AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR
UNLESS THE SITE REVIEWERS DISCOVER AN ENVIRONMENTAL CONDITION CAUSING THE
PREMISES NOT TO BE IN COMPLIANCE WITH APPLICABLE ENVIRONMENTAL LAWS, IN EITHER
OF WHICH EVENTS SUCH COST WILL BE PAID BY TENANT WITHIN TEN (10) DAYS AFTER
DEMAND BY LANDLORD WITH INTEREST TO ACCRUE AT THE OVERDUE RATE.  LANDLORD,
PROMPTLY AFTER WRITTEN REQUEST BY TENANT AND PAYMENT BY TENANT TO THE EXTENT
REQUIRED AS AFORESAID, SHALL DELIVER TO TENANT COPIES OF REPORTS, SUMMARIES OR
OTHER COMPILATIONS OF THE RESULTS OF SUCH SITE ASSESSMENTS.  TENANT’S SOLE
REMEDY FOR LANDLORD’S BREACH OF THE PRECEDING SENTENCE SHALL BE A MANDATORY
INJUNCTION, AND NOT A TERMINATION OF THIS LEASE OR A WITHHOLDING OR REDUCTION OF
RENT.

 

(E)                                  TENANT SHALL NOTIFY LANDLORD IN WRITING,
PROMPTLY UPON TENANT’S LEARNING THEREOF, OF ANY:

 

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(I)                                     NOTICE OR CLAIM TO THE EFFECT THAT
TENANT IS OR MAY BE LIABLE TO ANY PERSON AS A RESULT OF THE RELEASE OR
THREATENED RELEASE OF ANY HAZARDOUS MATERIAL INTO THE ENVIRONMENT FROM THE
PREMISES;

 

(II)                                  NOTICE THAT TENANT IS SUBJECT TO
INVESTIGATION BY ANY GOVERNMENTAL AUTHORITY EVALUATING WHETHER ANY REMEDIAL
ACTION IS NEEDED TO RESPOND TO THE RELEASE OR THREATENED RELEASE OF ANY
HAZARDOUS MATERIAL INTO THE ENVIRONMENT FROM THE PREMISES;

 

(III)                               NOTICE THAT THE PREMISES ARE SUBJECT TO AN
ENVIRONMENTAL LIEN; AND

 

(IV)                              NOTICE OF VIOLATION TO TENANT OR AWARENESS BY
TENANT OF A CONDITION WHICH MIGHT REASONABLY RESULT IN A NOTICE OF VIOLATION OF
ANY APPLICABLE ENVIRONMENTAL LAW THAT COULD HAVE A MATERIAL ADVERSE EFFECT UPON
THE PREMISES.

 

(F)                                    TENANT ACKNOWLEDGES THAT, AS OF THE DATE
HEREOF, THE FOLLOWING TWO (2) UNDERGROUND STORAGE TANKS (THE “UNDERGROUND
TANKS”) ARE LOCATED ON THE PREMISES: (I) ONE (1) 550-GALLON TANK USED TO COLLECT
OIL/MATERIAL SPILLS INSIDE THE PREMISES AND (II) ONE (1) 10,000-GALLON NO.2 FUEL
OIL TANK.  IN CONNECTION WITH THE UNDERGROUND TANKS, THE FOLLOWING PROVISIONS
SHALL APPLY:

 

(I)                                     TENANT SHALL AT ALL TIMES DURING THE
TERM MAINTAIN, AND SHALL HAVE FURNISHED LANDLORD WITH EVIDENCE OF, INSURANCE
MEETING OR EXCEEDING THE REQUIREMENTS SET FORTH ON EXHIBIT I ATTACHED HERETO,
WHICH EVIDENCE SHALL BE IN THE FORM OF CERTIFICATES OF INSURANCE.  IF LANDLORD
SHALL HAVE NOT RECEIVED SUCH EVIDENCE OF INSURANCE MEETING OR EXCEEDING THE
REQUIREMENTS SET FORTH ON EXHIBIT I ATTACHED HERETO BY OCTOBER 20, 2003, TENANT
SHALL BE DEEMED TO HAVE REQUESTED THAT LANDLORD PROVIDE SUCH COVERAGE FOR TENANT
BY INCLUDING THE PREMISES UNDER SUCH INSURANCE POLICIES MAINTAINED BY LANDLORD
OR ITS AFFILIATES AND TENANT SHALL THEREAFTER PROMPTLY PAY, AS ADDITIONAL RENT,
ONE HUNDRED AND THREE PERCENT (103%) OF LANDLORD’S COST FOR CARRYING SUCH
INSURANCE.  LANDLORD WILL MAINTAIN SUCH INSURANCE ON TENANT’S BEHALF UNTIL (X)
TENANT NOTIFIES LANDLORD TO CEASE CAUSING SUCH INSURANCE TO BE SO CARRIED AND
(Y) TENANT PROVIDES LANDLORD WITH COPIES OF THE POLICIES WHICH TENANT OBTAINS TO
REPLACE SUCH LANDLORD’S POLICIES, WHICH TENANT FURNISHED POLICIES MUST BE IN
CONFORMANCE WITH THE REQUIREMENTS OF THIS LEASE.

 

(II)                                  TENANT SHALL CAUSE, AT TENANT’S SOLE COST
AND EXPENSE, THE UNDERGROUND TANKS TO BE MAINTAINED AND OPERATED IN ACCORDANCE
WITH ALL APPLICABLE LAWS, ORDINANCES AND REQUIREMENTS OF GOVERNMENT AUTHORITIES
INCLUDING, BUT NOT LIMITED TO, MAKING ANY CHANGES THEREIN AS MAY BE REQUIRED
FROM TIME TO TIME BY SUCH LAWS, ORDINANCES OR OTHER REQUIREMENTS.

 

(III)                               TENANT SHALL MAINTAIN COMPLETE AND ACCURATE
RECORDS OF ALL MAINTENANCE AND TESTING OF THE UNDERGROUND TANKS, AND EACH
PORTION THEREOF, AND MAKE SUCH RECORDS AVAILABLE UPON FIVE (5) DAYS’ PRIOR
NOTICE BY LANDLORD.  ADDITIONALLY, TENANT SHALL FURNISH LANDLORD WITH COPIES OF
ALL CERTIFICATION AND INSPECTION REPORTS OBTAINED BY TENANT FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO AS REQUIRED FOR INSURANCE PURPOSES, WITHIN THIRTY
(30) DAYS OF TENANT’S RECEIPT OF SUCH CERTIFICATION AND INSPECTION REPORTS.

 

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(IV)                              TENANT SHALL CAUSE THE INSPECTION AND TESTING
OF THE UNDERGROUND TANKS FOR TIGHTNESS WITHIN ONE HUNDRED TWENTY (120) DAYS OF
THE COMMENCEMENT DATE AND THEREAFTER NO LESS FREQUENTLY THAN EVERY FIVE (5)
YEARS DURING THE TERM.  TENANT SHALL FURNISH LANDLORD WITH A WRITTEN REPORT OF
THE RESULTS OF ALL SUCH TIGHTNESS INSPECTIONS AND TESTING WITHIN THIRTY (30)
DAYS OF TENANT’S RECEIPT OF SUCH REPORTS.

 

(V)                                 IF AT LEAST ONE (1) YEAR PRIOR TO THE LEASE
EXPIRATION DATE, TENANT SHALL HAVE RECEIVED NOTICE FROM LANDLORD OF LANDLORD’S
REQUEST THAT TENANT REMOVE THE UNDERGROUND TANKS PRIOR TO THE LEASE EXPIRATION
DATE, TENANT SHALL BE OBLIGATED TO REMOVE THE UNDERGROUND TANKS PRIOR TO THE
LEASE EXPIRATION DATE IN ACCORDANCE WITH ALL THEN APPLICABLE LAWS, APPROVALS,
REGULATIONS AND ORDINANCES APPLICABLE THERETO.

 

(VI)                              TENANT AGREES THAT IN NO MANNER, EXPRESSED OR
IMPLIED, SHALL LANDLORD HAVE ANY RESPONSIBILITY FOR THE UNDERGROUND TANKS
INCLUDING THE MAINTENANCE, OPERATION, AND, AS APPLICABLE, REMOVAL OF THE
UNDERGROUND TANKS.  TENANT HEREBY AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS
LANDLORD FROM ANY AND ALL CLAIMS AND DAMAGES IN ANY WAY RELATING TO THE
MAINTENANCE, OPERATION AND, IF APPLICABLE, REMOVAL, OF THE UNDERGROUND TANKS,
INCLUDING CLAIMS AND DAMAGES FROM SUBSURFACE AND GROUNDWATER CONDITIONS RELATING
TO ANY OF THE MAINTENANCE, OPERATION AND, IF APPLICABLE, REMOVAL, OF THE
UNDERGROUND TANKS.  SUCH INDEMNITY SHALL SURVIVE THE TERMINATION OF THIS LEASE.

 

(G)                                 TENANT HAS FURNISHED LANDLORD WITH THAT
CERTAIN ASBESTOS OPERATIONS AND MAINTENANCE HANDBOOK, OSHA CLASS III AND IV,
PREPARED BY PSI IN 1995 AND SHALL FURNISH LANDLORD WITH UPDATES OF SUCH PLAN
FROM TIME TO TIME THROUGHOUT THE TERM TO ACCURATELY REFLECT CONDITIONS AT THE
PREMISES.

 

27.                               FINANCING

 

(A)                                  LANDLORD MAY ASSIGN THIS LEASE TO ANY
PERSON, INCLUDING ANY MORTGAGEE.  TENANT SHALL EXECUTE, ACKNOWLEDGE AND DELIVER
ANY DOCUMENTS REASONABLY REQUESTED BY LANDLORD, ANY SUCH TRANSFEREE, OR
MORTGAGEE RELATING TO SUCH ASSIGNMENT OF THE LEASE BY LANDLORD OR THE MORTGAGE
FINANCING.

 

(B)                                 IF LANDLORD PROPOSES TO REFINANCE ANY
MORTGAGE, TENANT SHALL COOPERATE IN THE PROCESS, AND SHALL NEGOTIATE IN GOOD
FAITH ANY REQUEST MADE BY A PROSPECTIVE MORTGAGEE FOR CHANGES OR MODIFICATIONS
TO THIS LEASE, AND SHALL NOT UNREASONABLY WITHHOLD ITS CONSENT TO ANY SUCH
PROPOSED CHANGE OR MODIFICATION SO LONG AS THE SAME DOES NOT ADVERSELY AFFECT
ANY SIGNIFICANT RIGHT OF TENANT UNDER THIS LEASE, SHORTEN ANY NOTICE OR CURE
PERIOD TO WHICH TENANT IS ENTITLED, OR INCREASE TENANT’S OBLIGATIONS UNDER THIS
LEASE AND, DURING THE LAST TWENTY-FOUR (24) MONTHS OF THE TERM OF ANY MORTGAGE
HELD BY MORTGAGEE, EXHIBIT THE PREMISES TO PROSPECTIVE MORTGAGEES, AND PERMIT
SUCH POTENTIAL MORTGAGEE TO EXAMINE ALL MATERIALS AND RECORDS WHICH SHALL BE
CUSTOMARY FOR A MORTGAGEE’S INSPECTION, SUBJECT AT ALL TIMES TO LANDLORD’S
INDEMNITY SET FORTH IN SECTION 18 AND THE CONFIDENTIALITY REQUIREMENTS SET FORTH
IN THIS LEASE.  TENANT AGREES TO EXECUTE, ACKNOWLEDGE AND DELIVER DOCUMENTS
REASONABLY REQUESTED BY THE PROSPECTIVE MORTGAGEE (SUCH AS A CONSENT TO THE
FINANCING (WITHOUT ENCUMBERING TENANT’S ASSETS), A CONSENT TO

 

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ASSIGNMENT OF LEASE, AND A SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT MEETING THE STANDARDS SET FORTH IN PARAGRAPH 17) CUSTOMARY FOR TENANTS
TO SIGN IN CONNECTION WITH MORTGAGE LOANS TO THEIR LANDLORDS, SO LONG AS SUCH
DOCUMENTS ARE IN FORM THEN CUSTOMARY AMONG INSTITUTIONAL LENDERS (PROVIDED THE
SAME DO NOT ADVERSELY CHANGE TENANT’S RIGHTS OR OBLIGATIONS IN A WAY NOT
PREVIOUSLY CHANGED BY LOAN DOCUMENTS PREVIOUSLY EXECUTED BY TENANT IN CONNECTION
WITH AN EARLIER MORTGAGE).

 

(C)                                  TENANT SHALL PERMIT LANDLORD AND ANY
MORTGAGEE OR PROSPECTIVE MORTGAGEE, AT THEIR EXPENSE,  TO MEET WITH MANAGEMENT
PERSONNEL OF TENANT OR GUARANTOR AT TENANT’S OR GUARANTOR’S OFFICES AND TO
DISCUSS THE TENANT’S OR GUARANTOR’S BUSINESS AND FINANCES.  ON REQUEST OF
LANDLORD, TENANT AGREES TO PROVIDE ANY MORTGAGEE OR PROSPECTIVE MORTGAGEE THE
INFORMATION TO WHICH LANDLORD IS ENTITLED HEREUNDER. IF ANY SUCH INFORMATION IS
NON-PUBLIC EACH PARTY REQUESTING SUCH INFORMATION SHALL SIGN A CONFIDENTIALITY
AGREEMENT IN FORM AND SUBSTANCE SATISFACTORY TO TENANT PRIOR TO SUCH MORTGAGEE’S
OR PROSPECTIVE MORTGAGEE’S RECEIVING SUCH INFORMATION.

 

28.                               MISCELLANEOUS PROVISIONS

 

(A)                                  THIS LEASE AND ALL OF THE COVENANTS AND
PROVISIONS HEREOF SHALL INURE TO THE BENEFIT OF, AND BE BINDING UPON, THE
PARTIES HERETO AND THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND PERMITTED
ASSIGNS OF THE PARTIES.

 

(B)                                 THE TITLES AND HEADINGS APPEARING IN THIS
LEASE ARE FOR REFERENCE ONLY AND SHALL NOT BE CONSIDERED A PART OF THIS LEASE OR
IN ANY WAY TO MODIFY, AMEND OR AFFECT THE PROVISIONS THEREOF.

 

(C)                                  THIS LEASE CONTAINS THE COMPLETE AGREEMENT
OF THE PARTIES WITH REFERENCE TO THE LEASING OF THE PREMISES, AND MAY NOT BE
AMENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT AND
CONSENTED BY MORTGAGEE (IF ANY).

 

(D)                                 ANY PROVISION OR PROVISIONS OF THIS LEASE
WHICH SHALL PROVE TO BE INVALID, VOID OR ILLEGAL SHALL IN NO WAY AFFECT, IMPAIR
OR INVALIDATE ANY OTHER PROVISION HEREOF, AND THE REMAINING PROVISIONS HEREOF
SHALL NEVERTHELESS REMAIN IN FULL FORCE AND EFFECT.

 

(E)                                  THIS LEASE MAY BE EXECUTED IN ONE OR MORE
COUNTERPARTS, AND MAY BE SIGNED BY EACH PARTY ON A SEPARATE COUNTERPART,  EACH
OF WHICH, TAKEN TOGETHER,  SHALL BE AN ORIGINAL, AND ALL OF WHICH SHALL
CONSTITUTE ONE AND SAME INSTRUMENT.

 

(F)                                    THE TERM “LANDLORD” AS USED IN THIS LEASE
SHALL MEAN ONLY THE OWNER OR OWNERS AT THE TIME IN QUESTION OF THE PREMISES AND
IN THE EVENT OF ANY TRANSFER OF SUCH TITLE OR INTEREST, LANDLORD NAMED IN THIS
LEASE (AND IN CASE OF ANY SUBSEQUENT TRANSFERS, THEN THE GRANTOR) SHALL BE
RELIEVED FROM AND AFTER THE DATE OF SUCH TRANSFER OF ALL LIABILITY AS RESPECTS
LANDLORD’S OBLIGATIONS THEREAFTER TO BE PERFORMED HEREUNDER, PROVIDED THAT ANY
FUNDS IN THE HANDS OF LANDLORD OR THE THEN GRANTOR AT THE TIME OF SUCH TRANSFER,
IN WHICH TENANT HAS AN INTEREST, SHALL BE DELIVERED TO THE GRANTEE. THE
OBLIGATIONS CONTAINED IN THIS LEASE TO BE PERFORMED BY LANDLORD SHALL, SUBJECT
AS AFORESAID, BE BINDING ON LANDLORD’S SUCCESSORS AND ASSIGNS, ONLY DURING THEIR
RESPECTIVE PERIODS OF OWNERSHIP.

 

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(G)                                 FOR ALL ISSUES WHICH ARE SITE-SPECIFIC, THIS
LEASE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
SUBJECT TO THE LAWS OF THE STATE WHERE THE SITE IS LOCATED, AND FOR ALL ISSUES
WHICH ARE NOT SITE SPECIFIC, THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICTS OF
LAWS, OF THE STATE OF NEW YORK.

 

(H)                                 ANY CLAIM BASED ON OR IN RESPECT OF ANY
LIABILITY OF LANDLORD UNDER THIS LEASE SHALL BE ENFORCED ONLY AGAINST THE
PREMISES AND NOT AGAINST ANY OTHER ASSETS, PROPERTIES OR FUNDS OF (1) LANDLORD
OR ANY DIRECTOR, OFFICER, MEMBER, SHAREHOLDER, GENERAL PARTNER, LIMITED PARTNER,
OR DIRECT OR INDIRECT MEMBER, PARTNER, EMPLOYEE OR AGENT OF LANDLORD OR ANY OF
ITS MEMBERS (OR ANY LEGAL REPRESENTATIVE, HEIR, ESTATE, SUCCESSOR OR ASSIGN OF
ANY THEREOF), (2) ANY PREDECESSOR OR SUCCESSOR PARTNERSHIP, CORPORATION OR
LIMITED LIABILITY COMPANY (OR OTHER ENTITY) OF LANDLORD OR ANY OF ITS MEMBERS,
EITHER DIRECTLY OR THROUGH LANDLORD OR ITS PREDECESSOR OR SUCCESSOR PARTNERSHIP,
CORPORATION OF LIMITED LIABILITY COMPANY (OR OTHER PERSON) OF LANDLORD OR ITS
GENERAL PARTNERS, AND (3) ANY OTHER PERSON.

 

(I)                                     WITHOUT THE WRITTEN APPROVAL OF LANDLORD
AND TENANT, NO PERSON OTHER THAN LANDLORD (INCLUDING ITS DIRECT AND INDIRECT
PARTNERS), MORTGAGEE, TENANT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS SHALL
HAVE ANY RIGHTS UNDER THIS LEASE.

 

(J)                                     THERE SHALL BE NO MERGER OF THE
LEASEHOLD ESTATE CREATED HEREBY BY REASON OF THE FACT THAT THE SAME PERSON MAY
OWN DIRECTLY OR INDIRECTLY, (1) THE LEASEHOLD ESTATE CREATED HEREBY OR ANY
INTEREST IN THIS LEASE OR SUCH LEASEHOLD ESTATE AND (2) THE FEE ESTATE IN THE
PREMISES.  NOTWITHSTANDING ANY SUCH COMBINED OWNERSHIP, THIS LEASE SHALL
CONTINUE IN FULL FORCE AND EFFECT UNTIL TERMINATED BY AN INSTRUMENT EXECUTED BY
BOTH LANDLORD AND TENANT.

 

(K)                                  WHENEVER IN THIS LEASE EITHER PARTY IS
REQUIRED TO TAKE AN ACTION WITHIN A PARTICULAR TIME PERIOD, DELAYS CAUSED BY
ACTS OF GOD, WAR, MAJOR CASUALTY, STRIKE, LABOR SHORTAGE OR OTHER CAUSE BEYOND
THE REASONABLE CONTROL OF SUCH PARTY SHALL NOT BE COUNTED IN DETERMINING THE
TIME IN WHICH SUCH PERFORMANCE MUST BE COMPLETED (EXCEPT IN THE CASE OF THE
OBLIGATION TO PAY MONEY) SO LONG AS SUCH PARTY SHALL, PROMPTLY AFTER BECOMING
AWARE OF THE COMMENCEMENT OF SUCH DELAY, SHALL GIVE THE OTHER PARTY NOTICE
THEREOF AND ESTIMATING THE DURATION THEREOF.

 

(L)                                     IF AT ANY TIME A DISPUTE SHALL ARISE AS
TO ANY AMOUNT TO BE PAID BY ONE PARTY TO THE OTHER HEREUNDER, THE OBLIGOR MAY
MAKE PAYMENT “UNDER PROTEST”, AND SUCH PAYMENT SHALL NOT BE DEEMED A VOLUNTARY
PAYMENT, AND THE RIGHT OF THE OBLIGOR TO CONTEST ITS LIABILITY FOR SUCH PAYMENT
SHALL SURVIVE SUCH PAYMENT WITHOUT PREJUDICE TO THE OBLIGOR’S POSITION.

 

(M)                               LANDLORD AND TENANT EACH REPRESENT THAT THEY
HAVE DEALT WITH NO BROKER, FINDER OR OTHER PERSON WHO COULD LEGALLY CHARGE A
COMMISSION IN CONNECTION WITH LANDLORD’S ACQUISITION OF THE LAND OR WITH THE
LEASE; PROVIDED, HOWEVER, LANDLORD AND TENANT ACKNOWLEDGE AND AGREE THAT
LANDLORD WAS INTRODUCED TO THE TRANSACTION BY LASALLE DEBT CAPITAL MARKETS WHICH
WILL BE COMPENSATED BY TENANT OUT OF THE SALES PROCEEDS FUNDED BY LANDLORD AT
CLOSING.

 

(N)                                 THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGE
AND AGREE THAT, NOTWITHSTANDING ANY OTHER PROVISION CONTAINED IN THIS LEASE, IT
IS THE INTENT OF THE PARTIES THAT THEIR RELATIONSHIP

 

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HEREUNDER IS AND SHALL AT ALL TIMES BE THAT OF LANDLORD AND TENANT, AND NOT THAT
OF PARTNERS, JOINT VENTURERS, LENDER AND BORROWER, OR ANY OTHER RELATIONSHIP
OTHER THAN THAT OF A LANDLORD AND TENANT.

 

(O)                                 THE PARTIES HERETO SPECIFICALLY ACKNOWLEDGE
AND AGREE THAT TIME IS OF THE ESSENCE WITH REGARD TO ALL OBLIGATIONS UNDER THIS
LEASE.

 

(P)                                 LANDLORD REPRESENTS THAT AS OF THE
COMMENCEMENT DATE LANDLORD IS A SINGLE PURPOSE ENTITY WHOLLY OWNED BY ISTAR
FINANCIAL INC. AND CONSOLIDATED FOR ACCOUNTING PURPOSES BY ISTAR FINANCIAL INC.

 

(Q)                                 TO THE EXTENT PERMITTED BY APPLICABLE LAW,
LANDLORD AND TENANT HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING, AND
WITH RESPECT TO ANY CLAIM ASSERTED IN ANY SUCH ACTION OR PROCEEDING, BROUGHT BY
EITHER OF THE PARTIES AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, ANY CLAIM OF INJURY OR
DAMAGE, OR ANY EMERGENCY OR OTHER STATUTORY REMEDY WITH RESPECT THERETO.

 

29.                               PURCHASE PROCEDURE

 

(A)                                  IN THE EVENT OF THE PURCHASE OF THE
PREMISES OR ANY SITE BY TENANT PURSUANT TO PARAGRAPHS 14 AND 30 OF THIS LEASE,
LANDLORD NEED NOT TRANSFER AND CONVEY TO TENANT OR ITS DESIGNEE ANY BETTER TITLE
THERETO THAN THAT WHICH WAS TRANSFERRED AND CONVEYED TO LANDLORD, AND TENANT (OR
ITS DESIGNEE) SHALL ACCEPT SUCH TITLE, SUBJECT, HOWEVER, TO ALL LIENS,
EXCEPTIONS AND RESTRICTIONS ON, AGAINST OR RELATING TO THE PREMISES OR SUCH SITE
AND TO ALL APPLICABLE LAWS, BUT FREE OF THE LIEN OF AND SECURITY INTEREST
CREATED BY ANY AND ALL MORTGAGES (UNLESS EXPRESSLY ASSUMED BY TENANT) AND LIENS,
EXCEPTIONS AND RESTRICTIONS ON, AGAINST OR RELATING TO ANY OF THE PREMISES OR
SUCH SITE WHICH HAVE BEEN CREATED BY OR RESULTED FROM ACTS OF LANDLORD,
LANDLORD’S MORTGAGEE OR ANY PERSON LAWFULLY ACTING BY OR THROUGH EITHER OF THEM,
UNLESS THE SAME WERE CREATED WITH THE CONSENT OF TENANT OR AS A RESULT OF A
DEFAULT BY TENANT UNDER THIS LEASE OR ARE OTHERWISE THE RESPONSIBILITY OF THE
TENANT HEREUNDER.  EXECUTION BY TENANT OF A CONSENT TO FINANCING AND A
NONDISTURBANCE AGREEMENT PURSUANT TO PARAGRAPH 27 SHALL NOT CONSTITUTE THE
CONSENT OF TENANT TO A MORTGAGE OR OTHER LIEN SECURING SUCH FINANCING FOR
PURPOSES OF THIS PARAGRAPH 29.

 

(B)                                 UPON THE DATE FIXED FOR ANY SUCH PURCHASE OF
THE PREMISES OR ANY SITE PURSUANT TO PARAGRAPHS 14 AND 30 OF THIS LEASE, TENANT
SHALL PAY TO LANDLORD OR TO ANY PERSON TO WHOM LANDLORD DIRECTS PAYMENT, AT
LANDLORD’S ADDRESS SET FORTH ABOVE, OR AT ANY OTHER PLACE DESIGNATED BY
LANDLORD, THE APPLICABLE PURCHASE PRICE THEREFOR SPECIFIED HEREIN, IN FEDERAL OR
OTHER IMMEDIATELY AVAILABLE FUNDS WHICH AT THE TIME OF SUCH PAYMENT SHALL BE
LEGAL TENDER FOR THE PAYMENT OF PUBLIC OR PRIVATE DEBTS IN THE UNITED STATES OF
AMERICA, LESS ANY CREDITS OF THE NET AWARDS OR NET PROCEEDS ALLOWED AGAINST THE
APPLICABLE PURCHASE PRICE PURSUANT TO THE PROVISIONS OF PARAGRAPH 14, AND
LANDLORD SHALL THEREUPON DELIVER TO TENANT (I) A SPECIAL OR LIMITED WARRANTY
DEED WHICH DESCRIBES ANY OF THE PREMISES, OR SUCH SITE, AS APPLICABLE, THEN
BEING SOLD TO TENANT AND CONVEYS AND TRANSFERS THE TITLE THERETO WHICH IS
DESCRIBED IN PARAGRAPH 29(A); (II) SUCH OTHER INSTRUMENTS AS SHALL BE NECESSARY
TO TRANSFER TO TENANT OR ITS DESIGNEE ANY OTHER PROPERTY (OR RIGHTS TO ANY NET
PROCEEDS OR NET AWARD NOT YET RECEIVED BY LANDLORD, IF APPLICABLE) THEN REQUIRED

 

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

 

to be transferred or sold by Landlord pursuant to this Lease; and (iii) any net
award or net proceeds received by Landlord, if applicable, not credited to
Tenant against the applicable purchase price and required to be delivered by
Landlord to Tenant pursuant to this Lease.  Additionally, Landlord and Tenant
shall execute an amendment to this Lease to reflect such change in the Premises
and Rent.  Tenant shall pay all charges incident to such conveyance and
transfer, including Landlord’s counsel fees, escrow fees, recording fees, title
insurance premiums and all applicable federal, state and local real estate
transfer taxes or deed stamps which may be incurred or imposed by reason of such
conveyance and transfer and/or by reason of the delivery of said deed and other
instruments.  Only upon the completion of Tenant’s purchase of all of the
Premises, including all Sites, but not prior thereto, this Lease and all
obligations hereunder shall terminate (including the obligations to pay Rent),
except any obligations and liabilities of Tenant, actual or contingent, under
this Lease, which (a) arose on or prior to such date or purchase or (b) survive
termination of this Lease.  In the event that the completion of such purchase
shall be delayed other than through the sole fault of Landlord, then the
applicable purchase price payable by Tenant upon the purchase of the Premises or
any Site pursuant to any provisions of this Lease shall, at Landlord’s sole
option, be determined as of the actual date of such purchase by Tenant, provided
that Tenant shall have paid to Landlord all Rent due and payable hereunder to
and including such date.  Any prepaid Fixed Rent or other prepaid sums paid to
Landlord shall be prorated as of the date the purchase is completed, and the
prorated unapplied balance shall be deducted from the applicable purchase price
due to Landlord.

 

No apportionment of any Impositions shall be made upon such purchase, Tenant
being liable for payment thereof during the Term as Tenant and being liable
thereafter as owner.

 

(C)                                  IN THE EVENT OF THE PURCHASE OF THE
PREMISES OR ANY SITE BY TENANT PURSUANT TO ANY PROVISION OF THIS LEASE, TENANT
SHALL, ON THE DATE OF THE CLOSING OF SUCH PURCHASE, PAY TO LANDLORD (IN ADDITION
TO PAYMENT OF THE APPLICABLE PURCHASE PRICE) ALL RENT AND OTHER SUMS THEN DUE
AND OWING BY TENANT TO LANDLORD HEREUNDER RELATING TO THE PROPERTY PURCHASED
THROUGH THE DATE OF THE CLOSING OF SUCH PURCHASE.

 

30.                               RIGHT OF FIRST REFUSAL

 

(A)                                  FROM AUGUST 1, 2012 THROUGH OCTOBER 31,
2012 (“ROFR PERIOD”) AND SO LONG AS NO EVENT OF DEFAULT THEN EXISTS (UNLESS,
SOLELY FOR THE PURPOSES OF THIS PARAGRAPH 30, EITHER (X) SUCH EVENT OF DEFAULT
IS WAIVED IN WRITING BY LANDLORD, LANDLORD HAVING NO OBLIGATION TO DO SO OR (Y)
TENANT REMEDIES SUCH EVENT OF DEFAULT AS FOLLOWS:  (1) WITH RESPECT TO A
MONETARY EVENT OF DEFAULT, TENANT PAYS ALL SUMS THEN DUE AND PAYABLE TO CURE
SUCH EVENT OF DEFAULT AND (2) WITH RESPECT TO A NON-MONETARY EVENT OF DEFAULT,
TENANT INDEMNIFIES LANDLORD AGAINST ANY AND ALL LOSSES OR CLAIMS ARISING AS A
RESULT OF SUCH NON-MONETARY EVENT OF DEFAULT), BUT SUBJECT TO TERMINATION AS SET
FORTH BELOW, TENANT SHALL HAVE A RIGHT OF FIRST REFUSAL TO PURCHASE THE PREMISES
UPON THE TERMS AND CONDITIONS SET FORTH IN THIS PARAGRAPH 30.  DURING THE ROFR
PERIOD LANDLORD SHALL NOT SELL OR AGREE TO SELL THE PREMISES WITHOUT FIRST
COMPLYING WITH THIS PARAGRAPH 30.

 

(B)                                 DURING THE ROFR PERIOD, IF LANDLORD RECEIVES
AN OFFER TO SELL THE PREMISES TO A PERSON THAT IS NOT A LANDLORD AFFILIATE OR AN
AFFILIATE OF TENANT OR GUARANTOR WHICH LANDLORD

 

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

 

DESIRES TO ACCEPT, LANDLORD SHALL NOTIFY (“ROFR NOTICE”) TENANT IN WRITING OF
SUCH EVENT.  LANDLORD AGREES THAT IF LANDLORD RECEIVES SUCH AN OFFER TO SELL THE
PREMISES DURING THE ROFR PERIOD FOR A PURCHASE PRICE OF $16,280,000.00 OR
GREATER ON AN ALL-CASH BASIS, LANDLORD SHALL AGREE TO ACCEPT SUCH OFFER SOLELY
FOR PURPOSES OF THIS PARAGRAPH 30 AND COMPLYING WITH THE PROVISIONS OF THIS
PARAGRAPH 30.  THE DATE SUCH NOTICE IS GIVEN IS HEREIN CALLED THE “ROFR NOTICE
DATE”.  THE ROFR NOTICE SHALL STATE THAT LANDLORD INTENDS TO SELL THE PREMISES
TO A PERSON THAT IS NOT A LANDLORD AFFILIATE OR AN AFFILIATE OF TENANT OR
GUARANTOR, FOR THE SPECIFIED PRICE IN SUCH OFFER (“ROFR NOTICE PRICE”) ON AN
ALL-CASH BASIS.  TENANT SHALL HAVE THE RIGHT, AT ITS OPTION, TO MAKE AN OFFER
(“TENANT’S ROFR OFFER”) TO PURCHASE THE PREMISES IN ACCORDANCE WITH PARAGRAPH 29
ON NOVEMBER 1, 2013 (NOTWITHSTANDING ANY OTHER PROPOSED CLOSING DATE IN ANY
OFFER REFERENCED IN THE ROFR NOTICE) FOR THE ROFR NOTICE PRICE, WHICH OFFER
SHALL BE AN ALL CASH OFFER.

 

(C)                                  TENANT SHALL EXERCISE ITS RIGHT OF FIRST
REFUSAL TO PURCHASE THE PREMISES, IF AT ALL, BY DELIVERING IN WRITING TENANT’S
ROFR OFFER TO LANDLORD ON OR BEFORE THE DATE WHICH IS 30 DAYS FOLLOWING THE ROFR
NOTICE DATE.  IF TENANT MAKES SUCH TENANT’S ROFR OFFER WITHIN SUCH 30 DAY
PERIOD, LANDLORD SHALL THEN ACCEPT TENANT’S ROFR OFFER WITHIN 10 BUSINESS DAYS,
AND TENANT SHALL CLOSE A PURCHASE OF THE PREMISES ON AN ALL-CASH BASIS AT THE
ROFR NOTICE PRICE ON NOVEMBER 1, 2013, IN ACCORDANCE WITH PARAGRAPH 29 ABOVE.

 

(D)                                 IF AN EVENT OF DEFAULT UNDER THIS LEASE HAS
OCCURRED OR IS CONTINUING AT THE TIME OF THE CLOSING DATE FOR THE SALE TO TENANT
UNDER THIS PARAGRAPH 30, LANDLORD MAY, AT LANDLORD’S OPTION, TERMINATE TENANT’S
RIGHT AND OBLIGATION TO PURCHASE THE PREMISES PURSUANT TO THIS PARAGRAPH 30;
PROVIDED, HOWEVER, THAT TENANT MAY REMEDY SUCH EVENT OF DEFAULT AS FOLLOWS:  (1)
WITH RESPECT TO A MONETARY EVENT OF DEFAULT, TENANT PAYS ALL SUMS THEN DUE AND
PAYABLE TO CURE SAID EVENT OF DEFAULT AND (2) WITH RESPECT TO A NON-MONETARY
EVENT OF DEFAULT, TENANT INDEMNIFIES LANDLORD AGAINST ANY AND ALL LOSSES OR
CLAIMS ARISING AS A RESULT OF SUCH NON-MONETARY EVENT OF DEFAULT.  TENANT’S
FAILURE TO CLOSE THE PURCHASE OF THE PREMISES ON THE CLOSING DATE SHALL BE AN
IMMEDIATE EVENT OF DEFAULT UNDER THIS LEASE.

 

(E)                                  LANDLORD SHALL NOT ACCEPT ANY UNSOLICITED
OFFERS TO SELL THE PREMISES DURING THE ROFR PERIOD WITHOUT FIRST COMPLYING WITH
THE PROVISIONS OF THIS PARAGRAPH 30.

 

(F)                                    TENANT’S RIGHT OF FIRST REFUSAL PURSUANT
TO THIS PARAGRAPH 30 SHALL NOT APPLY TO ACQUISITION OF THE PREMISES, OR ANY
PORTION THEREOF, BY A THIRD PARTY IN A CONDEMNATION PROCEEDING OR A CONVEYANCE
IN LIEU OF CONDEMNATION.

 

[SIGNATURE PAGE FOLLOWS]

 

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

 

IN WITNESS WHEREOF, the parties have hereunto set their hands under seal on the
day and year first above written.

 

 

LANDLORD:

 

 

 

iSTAR GARDEN CITY LLC,  a Delaware limited liability company

 

 

 

 

 

By: 

iStar Financial Inc., a Maryland corporation

 

Its:

Sole Class A Member

 

 

 

 

 

By:

/s/ BARCLAY G. JONES, III

 

 

Name:

Barclay G. Jones, III

 

Title:

Executive Vice President

 

 

 

 

 

TENANT:

 

 

 

AAR ALLEN SERVICES, INC.,
an Illinois corporation

 

 

 

By:

/s/ TIMOTHY J. ROMENESKO

 

 

Name:

Timothy J. Romenesko

 

Title:

Vice President

 

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

 

STATE OF New York

)

 

)  SS

COUNTY OF New York

)

 

On the 2nd day of October in the year 2003 before me, the undersigned,
personally appeared Barclay G. Jones, personally known to me or proved to me on
the basis of satisfactory evidence to be the individuals whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their capacity, and that by their signatures on the instrument, the
individuals, or the person or entity upon behalf of which the individual acted,
executed the instrument.

 

 

/s/ SAMANTHA GARBUS

 

Notary Public

 

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

 

STATE OF Illinois

)

 

)  SS

COUNTY OF DuPage

)

 

On the 2nd day of October in the year 2003 before me, the undersigned,
personally appeared Timothy J. Romenesko, personally known to me or proved to me
on the basis of satisfactory evidence to be the individuals whose names are
subscribed to the within instrument and acknowledged to me that they executed
the same in their capacity, and that by their signatures on the instrument, the
individuals, or the person or entity upon behalf of which the individual acted,
executed the instrument.

 

/s/ JO-ELLEN KIDDIE

 

Notary Public

 

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

 

TABLE OF CONTENTS

 

1.

DEFINITIONS

 

2.

DEMISE OF PREMISES

 

3.

USE

 

4.

TERM

 

5.

RENTAL; SECURITY DEPOSIT; GUARANTY

 

6.

TAXES

 

7.

NET LEASE; NON-TERMINABILITY

 

8.

SERVICES

 

9.

REPAIRS AND MAINTENANCE; REPLACEMENT

 

10.

DESTRUCTION OF OR DAMAGE TO PREMISES

 

11.

INSURANCE, HOLD HARMLESS AND INDEMNIFICATION

 

12.

COMPLIANCE WITH LAWS, COVENANTS

 

13.

PARTIAL TAKING

 

14.

SUBSTANTIAL TAKING

 

15.

DEFAULT:  EVENTS OF DEFAULT

 

16.

REMEDIES

 

17.

SUBORDINATION

 

18.

LANDLORD’S RIGHT OF ENTRY

 

19.

NOTICES

 

20.

ESTOPPEL CERTIFICATE; FINANCIAL DATA

 

21.

MECHANICS’ LIENS

 

22.

END OF TERM

 

23.

ALTERATIONS

 

24.

MEMORANDUM OF LEASE

 

25.

SUBLETTING/ASSIGNMENT

 

26.

HAZARDOUS MATERIAL

 

27.

FINANCING

 

28.

MISCELLANEOUS PROVISIONS

 

29.

PURCHASE PROCEDURE

 

30.

RIGHT TO PURCHASE

 

 

i

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EXHIBITS:

 

 

 

A-1

LEGAL DESCRIPTION FOR THE PREMISES - REAL ESTATE

 

A-2

IMPROVEMENTS

 

B

EQUIPMENT

 

C

PERMITTED ENCUMBRANCES

 

D

FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

E

FAIR MARKET VALUE DETERMINATION FOR PREMISES

 

F

FORM OF LETTER CREDIT

 

F-1

APPROVED FORM OF LETTER OF CREDIT

 

G

GOOD WORKING ORDER ITEMS

 

H

REPAIR ITEMS

 

I

INSURANCE REQUIREMENTS FOR UNDERGROUND TANKS

 

 

ii

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EXHIBIT A-1

 

(Description Of The Land)

 

 

EXHIBIT A-2

 

Improvements

 

One-story building built in 1952 and located on 8.74 acres of land with a total
of approximately 145,000 square feet, 30,000 of which is office space.

 

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

 

EXHIBIT B

 

Equipment

 

 

All of the fixtures, equipment, and apparatus of every nature and description,
if any, located in or on the Land, necessary for the operation of the
Improvements excluding Tenant’s Trade Fixtures.

 

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

 

EXHIBIT C

 

Permitted Encumbrances

 

 

The items listed on Exhibit B of Chicago Title Insurance Company title policy
number 3503-00013 effective as of October 3, 2003.

 

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

 

EXHIBIT D

 

Form of Subordination, Non-Disturbance and Attornment Agreement

 

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”)
is made as of the          day of                               , 2003 by and
between                                     , a Delaware limited liability
company, having an address at c/o iStar Financial Inc., 1114 Avenue of the
Americas, 27th Floor, New York, New York 10036 (“Lender”) and AAR ALLEN
SERVICES, INC., an Illinois corporation, having an address at c/o AAR CORP., One
AAR Place, 1100 North Wood Dale Road, Wood Dale, Illinois 60191 (“Tenant”).

 

 

RECITALS:

 

A.                                                                                  
Lender is the present owner and holder of a certain mortgage and security
agreement ( together with any and all extensions, renewals, substitutions,
replacements, amendments, modifications and/or restatements thereof, the
“Security Instrument”) dated                    , 2003, given by Landlord
(defined below) to Lender which encumbers the fee estate of Landlord in certain
premises described in Exhibit A attached hereto (the “Property”) and which
secures the payment of certain indebtedness owed by Landlord to Lender evidenced
by a certain promissory note dated                           , 2003, given by
Landlord to Lender (the note together with all extensions, renewals,
modifications, substitutions and amendments thereof shall collectively be
referred to as the “Note”);

 

B.                                                                                    
Tenant is the holder of a leasehold estate in a portion of the Property under
and pursuant to the provisions of a certain lease dated                        ,
2003 between iStar Garden City LLC, as landlord (“Landlord”) and Tenant, as
tenant, (such lease, as modified and amended as set forth herein being
hereinafter referred to as the “Lease”); and

 

C.                                                                                    
Tenant has agreed to subordinate the Lease to the Security Instrument and to the
lien thereof and Lender has agreed to grant non-disturbance to Tenant under the
Lease on the terms and conditions hereinafter set forth.

 

 

AGREEMENT:

 

For good and valuable consideration, Tenant and Lender agree as follows:

 

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

 

1.                                       SUBORDINATION.  The Lease and all of
the terms, covenants and provisions thereof and all rights, remedies and options
of Tenant thereunder are and shall at all times continue to be subject and
subordinate in all respects to the terms, covenants and provisions of the
Security Instrument and to the lien thereof, including without limitation, all
renewals, increases, modifications, spreaders, consolidations, replacements and
extensions thereof and to all sums secured thereby and advances made thereunder
with the same force and effect as if the Security Instrument had been executed,
delivered and recorded prior to the execution and delivery of the Lease.

 

2.                                       NON-DISTURBANCE.  If any action or
proceeding is commenced by Lender for the foreclosure of the Security Instrument
or the sale of the Property, Tenant shall not be named as a party therein unless
such joinder shall be required by law, provided, however, such joinder shall not
result in the termination of the Lease or disturb the Tenant’s possession or use
of the premises demised thereunder, and the sale of the Property in any such
action or proceeding and the exercise by Lender of any of its other rights under
the Note or the Security Instrument shall be made subject to all rights of
Tenant under the Lease, provided that at the time of the commencement of any
such action or proceeding or at the time of any such sale or exercise of any
such other rights (a) the Lease shall be in full force and effect and (b) Tenant
shall not be in default beyond any applicable notice and cure periods under any
of the terms, covenants or conditions of the Lease or of this Agreement on
Tenant’s part to be observed or performed.

 

3.                                       ATTORNMENT.  If Lender or any other
subsequent purchaser of the Property shall become the owner of the Property by
reason of the foreclosure of the Security Instrument or the acceptance of a deed
or assignment in lieu of foreclosure or by reason of any other enforcement of
the Security Instrument (Lender or such other purchaser being hereinafter
referred as “Purchaser”), and the conditions set forth in Section 2 above have
been met at the time Purchaser becomes owner of the Property, the Lease shall
not be terminated or affected thereby but shall continue in full force and
effect as a direct lease between Purchaser and Tenant upon all of the terms,
covenants and conditions set forth in the Lease and in that event, Tenant agrees
to attorn to Purchaser and Purchaser by virtue of such acquisition of the
Property shall be deemed to have agreed to accept such attornment, provided,
however, that Purchaser shall not be (i) liable for the failure of any prior
landlord (any such prior landlord, including Landlord, being hereinafter
referred to as a “Prior Landlord”) to perform any obligations of Prior Landlord
under the Lease which have accrued prior to the date on which Purchaser shall
become the owner of the Property provided such Purchaser cures any continuing
default of Prior Landlord under the Lease, (ii) subject to any offsets,
defenses, abatements or counterclaims which shall have accrued in favor of
Tenant against any Prior Landlord prior to the date upon which Purchaser shall
become the owner of the Property, (iii) liable for the return of rental security
deposits, if any, paid by Tenant to any Prior Landlord in accordance with the
Lease unless such sums are actually received by Purchaser, (iv) bound by any
payment of rents, additional rents or other sums which Tenant may have paid more
than one (1) month in advance to any Prior Landlord unless (i) such sums are
actually received by Purchaser or (ii) such prepayment shall have been expressly
approved of by Purchaser or (v) bound by any agreement terminating or amending
or modifying the rent, term, commencement date or other material term of the
Lease, or any voluntary surrender of the premises demised under the Lease, made
without Lender’s or Purchaser’s prior

 

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

 

written consent prior to the time Purchaser succeeded to Landlord’s interest. 
In the event that any liability of Purchaser does arise pursuant to this
Agreement or the Lease, such liability shall be limited and restricted to
Purchaser’s interest in the Property and shall in no event exceed such interest.

 

4.                                       NOTICE TO TENANT.  After notice is
given to Tenant by Lender that the Landlord is in default under the Note and the
Security Instrument and that the rentals under the Lease should be paid to
Lender pursuant to the terms of the assignment of leases and rents executed and
delivered by Landlord to Lender in connection therewith, Tenant shall thereafter
pay to Lender or as directed by the Lender, all rentals and all other monies due
or to become due to Landlord under the Lease and Landlord hereby expressly
authorizes Tenant to make such payments to Lender and hereby releases and
discharges Tenant from any liability to Landlord on account of any such
payments.

 

5.                                       NOTICE TO LENDER AND RIGHT TO CURE. 
Tenant shall notify Lender of any default by Landlord under the Lease and agrees
that, notwithstanding any provisions of the Lease to the contrary, no notice of
cancellation thereof or of an abatement shall be effective unless Lender shall
have received notice of default giving rise to such cancellation or abatement
and shall have failed within sixty (60) days after receipt of such notice to
cure such default, or if such default cannot be cured within sixty (60) days,
shall have failed within sixty (60) days after receipt of such notice to
commence and thereafter diligently pursue any action necessary to cure such
default.  Notwithstanding the foregoing, Lender shall have no obligation to cure
any such default.

 

6.                                       NOTICES.  All notices or other written
communications hereunder shall be deemed to have been properly given (i) upon
delivery, if delivered in person or by facsimile transmission with receipt
acknowledged by the recipient thereof and confirmed by telephone by sender, (ii)
one (1) Business Day (hereinafter defined) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:

 

If to Tenant:

 

AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention:  Tim Romenesko

 

 

Telephone:  (630) 227-2090

 

 

Facsimile:   (630) 227-2101

 

 

 

 

 

 

If to Lender:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

or addressed as such party may from time to time designate by written notice to
the other parties.  For purposes of this Section 6, the term “Business Day”
shall mean a day on which commercial banks are not authorized or required by law
to close in the state where the Property is located.  Either party by notice to
the other may designate additional or different addresses for subsequent notices
or communications.

 

7.                                       SUCCESSORS AND ASSIGNS.  This Agreement
shall be binding upon and inure to the benefit of Lender, Tenant and Purchaser
and their respective successors and assigns.

 

8.                                       GOVERNING LAW.  This Agreement shall be
deemed to be a contract entered into pursuant to the laws of the State where the
Property is located and shall in all respects be governed, construed, applied
and enforced in accordance with the laws of the State where the Property is
located.

 

9.                                       MISCELLANEOUS.  This Agreement may not
be modified in any manner or terminated except by an instrument in writing
executed by the parties hereto.  If any term, covenant or condition of this
Agreement is held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such provision.  This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original.  This Agreement may be executed in several
counterparts, each of which counterparts shall be deemed an original instrument
and all of which together shall constitute a single Agreement.  The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.  Whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa.

 

 

[NO FURTHER TEXT ON THIS PAGE]

 

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

 

IN WITNESS WHEREOF, Lender and Tenant have duly executed this Agreement as of
the date first above written.

 

 

 

LENDER:

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

TENANT:

 

 

 

AAR ALLEN SERVICES, INC., an Illinois corporation

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

The undersigned accepts and agrees to the provisions of Section 4 hereof:

 

 

 

LANDLORD:

 

 

 

iSTAR GARDEN CITY LLC,
a Delaware limited liability company

 

 

 

By: iStar Financial Inc., a Maryland corporation

 

Its: Sole Class A Member

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

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

 

EXHIBIT E

 

Fair Market Value Determination For Premises or any Site

 

Determination of fair market value of the Premises under paragraph 14 of this
Lease shall be made in accordance with the following procedures:

 

(a)                                  Fair market value of the Premises shall be
determined by the agreement of two (2) MAI appraisers (each, an “Initial
Appraiser”), one of which shall be selected by Landlord and the other of which
shall be selected by Tenant as set forth in this Exhibit E.  Tenant shall
identify in writing, as part of Tenant’s written notice exercising the purchase
option set forth in paragraph 14, the Initial Appraiser selected and retained by
Tenant and specifically identify such Initial Appraiser’s name, address, phone
number and qualifications as an appraiser.  Within thirty (30) days after
receipt of notice of Tenant’s Initial Appraiser, Landlord shall select its
Initial Appraiser and notify Tenant in writing of the name, address, phone
number and qualifications of such appraiser.  Within five (5) days after Tenant
receives from Landlord such notice of Landlord’s Initial Appraiser, each of
Landlord and Tenant shall direct, in writing with a copy to the other party, its
Initial Appraiser to work with the other party’s Initial Appraiser to endeavor
to determine and reach agreement upon the fair market value of the Premises,
considered as encumbered by this Lease, and thereafter to deliver in writing to
Landlord and Tenant within thirty (30) days (such 30-day period, the “Valuation
Period”) the agreed-upon fair market value (the “Valuation Notice”).  The costs
and expenses of each Initial Appraiser shall be paid by the party selecting such
Initial Appraiser.  If Tenant fails to identify in writing an Initial Appraiser
as required by this Exhibit E, Landlord shall identify an Initial Appraiser on
behalf of Tenant; provided, however, Tenant shall be liable for the costs and
expenses of such Initial Appraiser identified on Tenant’s behalf by Landlord as
if Tenant had selected such Initial Appraiser.

 

(b)                                 If the Initial Appraisers are not able to
reach agreement upon the fair market value within the Valuation Period, within
ten (10) days after the end of the Valuation Period each Initial Appraiser shall
deliver a written notice to Landlord, Tenant, and the other Initial Appraiser
setting forth (i) such Initial Appraiser’s valuation of the fair market value
(each, an “Initial Valuation”) and (ii) the name, address and qualifications of
a third MAI appraiser selected jointly by the Initial Appraisers (the “Third
Appraiser”).  The Initial Appraisers shall, in writing with a copy to Landlord
and Tenant, direct the Third Appraiser (or substitute Third Appraiser) to
determine a valuation of the fair market value of the Premises, considered as
encumbered by this Lease, and to deliver in writing to Landlord, Tenant and the
Initial Appraisers such valuation (the “Third Valuation”) within twenty (20)
days of the date of the written direction retaining such Third Appraiser.  The
fair market value shall be the arithmetic mean of (A) the Third Valuation and
(B) the Initial Valuation closer to the Third Valuation.  If the Third Valuation
is exactly between the two Initial Valuations, then the fair market value shall
be the Third Valuation.  If the Initial Appraisers are unable to agree upon the
designation of a Third Appraiser within the requisite time period or if the
Third Appraiser selected does not make a valuation of the fair market value
within twenty (20) days after being directed by the Initial Appraisers, then
such Third Appraiser or a substitute Third Appraiser, as

 

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

 

applicable, shall, at the request of Landlord or Offeror, be appointed by the
President or Chairman of the American Arbitration Association in the area in
which the Premises are located which is the subject of the fair market valuation
determination determined hereunder.  The costs and expenses of the Third
Appraiser (and substitute Third Appraiser and the American Arbitration
Association, if applicable) shall be divided evenly between, and paid for by,
Landlord and Tenant.

 

(c)                                  All appraisers selected or appointed
pursuant to this Exhibit E shall be independent qualified appraisers.  Such
appraisers shall have no right, power or authority to alter or modify the
provisions of this Lease, and such appraisers shall determine the fair market
value of the Premises, considered as encumbered by this Lease.

 

(d)                                 Notwithstanding the foregoing, if Landlord
and Tenant are able to agree upon a fair market value of the Premises, prior to
the date on which Tenant receives notice of Landlord’s Initial Appraiser,
Landlord and Tenant shall execute an agreement setting forth such agreed-upon
fair market value of the Premises, and waiving each party’s right to have the
fair market value of the Premises, determined in accordance with the procedures
set forth in paragraphs (a) and (b) of this Exhibit E.

 

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EXHIBIT F

 

Irrevocable Standby Letter Of Credit Number         

 

LETTER OF CREDIT AMOUNT

 

ISSUE DATE

 

EXPIRATION DATE

 

USD $                

 

 

 

 

 

 

BENEFICIARY:

APPLICANT:

 

 

 

 

C/O ISTAR FINANCIAL INC.

 

1114 AVENUE OF THE AMERICAS, 27TH FLOOR

 

NEW YORK, NEW YORK 10036

 

ATTN:  CHIEF OPERATING OFFICER

 

 

 

WITH A COPY TO:

WITH A FURTHER COPY TO:

 

 

ISTAR FINANCIAL INC.

 

1114 AVENUE OF THE AMERICAS, 27TH FLOOR

3480 PRESTON RIDGE ROAD, SUITE 575

NEW YORK, NEW YORK 10036

ALPHARETTA, GEORGIA 30005

ATTN:  GENERAL COUNSEL

ATTN:  DIRECTOR OF LEASE

 

ADMINISTRATION

 

GENTLEMEN:

 

WE HEREBY OPEN OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR FOR THE
ACCOUNT OF THE ABOVE REFERENCED APPLICANT IN THE TOTAL AGGREGATE AMOUNT OF USD
                    WHICH IS AVAILABLE BY PAYMENT OF YOUR DRAFT(S) AT SIGHT
DRAWN ON OURSELVES.

 

IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY
EXTENDED WITHOUT WRITTEN AMENDMENT FOR ONE YEAR FROM THE PRESENT OR ANY FUTURE
EXPIRY DATE UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO SUCH EXPIRATION DATE, WE
NOTIFY YOU IN WRITING AT THE ABOVE ADDRESS THAT WE ELECT NOT TO RENEW THIS
LETTER OF CREDIT FOR ANY SUCH ADDITIONAL PERIOD(S).

 

THIS LETTER OF CREDIT IS TRANSFERABLE IN ITS ENTIRETY.  WE SHALL NOT RECOGNIZE
ANY TRANSFER OF THE CREDIT UNTIL AN EXECUTED TRANSFER REQUEST IN A FORM SUITABLE
TO US, BEARING CERTIFICATION BY YOUR BANKERS THAT THE SIGNATURE IS VALID, IS
FILED WITH US, AND NOTICE OF THE TRANSFER ENDORSED ON THE REVERSE OF THIS CREDIT
BY US.

 

THIS LETTER OF CREDIT IS SUCCESSIVELY TRANSFERABLE IN ITS ENTIRETY.

 

WE HEREBY AGREE WITH YOU THAT DRAFT(S) DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS AND CONDITIONS OF THIS CREDIT SHALL BE DULY HONORED IF PRESENTED TOGETHER
WITH DOCUMENT(S) AS SPECIFIED ABOVE AND THE ORIGINAL OF THIS CREDIT, AT OUR
OFFICE LOCATED AT
                                                                                                ,
ATTENTION:  STANDBY LETTER OF CREDIT DEPARTMENT ON OR BEFORE THE ABOVE STATED
EXPIRY DATE OR ANY AUTOMATICALLY EXTENDED EXPIRY DATE AS PROVIDED FOR HEREIN.

 

DRAFT(S) DRAWN UNDER THIS CREDIT MUST SPECIFICALLY REFERENCE OUR CREDIT NUMBER.

 

THIS LETTER OF CREDIT IS SUBJECT TO THE 1998 INTERNATIONAL STANDBY PRACTICES,
INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 590 (“ISP98”).

 

SINCERELY,

 

 

 

AUTHORIZED SIGNATURE

 

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EXHIBIT F-1

 

Approved Letter Of Credit

 

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EXHIBIT G

 

Good Working Order Items

 

Roof

 

•        Flashings

•        No bubbles or holes on roof surface

•        Drains free and clear

•        Skylights and flashings

•        All vents and stacks

•        Curbs

•        Expansion joints

 

ASPHALT PAVED AREA

 

•        Sealed and striped within last 12 months

•        No dips or holes

 

Plumbing

 

•        Bathrooms – toilets, sinks, urinals

 

ELECTRICAL

 

•        Master switch boxes

•        Transformers

•        Receptacles and switches

•        Lighting

 

FIRE AND SAFETY

 

•        Sprinkler system will have been drained, flow tested and certified by a
licensed contractor within the last 6 months

•        Security System

 

HVAC

 

•        Roof top unit

•        Controls

•        Filters replaced within last 6 months

•        All drain lines to have been cleaned within last 3 months

 

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EXHIBIT H

 

Repair Items

 

The following items noted are those more specifically described as Immediate
Needs in Property Condition Assessment report prepared by Aaron & Wright
Technical Services Incorporated for iStar Financial Inc. and dated September 16,
2003:

 

•                  Repair severely deteriorated asphalt-paved areas and parking
lot throughout the subject site. (Report Section 5.2 Paving and Curbing)

 

•                  Repair deteriorated section of roofing membrane at the west
side of the subject building and replace ballasted roofing at northwest and west
end section of subject building. (Report Section 6.3 Roofing)

 

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EXHIBIT I

 

Insurance Requirements for Underground Tanks

 

Tenant shall, at its own expense, maintain and keep in force during the period
of the Lease Agreement, the following additional coverage:

 

•                                          Pollution Legal Liability (with
specific coverage for legal liability involving the Underground Tanks)

 

$1,000,000 per incident; $2,000,000 aggregate

 

 

The liability policies should name Landlord and its affiliates as certificate
holders and additional insureds as follows:

 

iStar Garden City LLC

iStar Financial Inc., and its

Subsidiaries, successors and assigns

3480 Preston Ridge Rd., Suite 575

Alpharetta, GA 30005

 

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GUARANTY

 

THIS GUARANTY (as amended, modified and restated from time to time is herein
called the “Guaranty”) is made as of October 3, 2003, by AAR CORP., a Delaware
corporation (“Guarantor”), to and for the benefit of iSTAR GARDEN CITY LLC, a
Delaware limited liability company (such limited liability company, together
with its successors, transferees and assigns is herein called the “Landlord”).

 

RECITALS

 

A.                                    AAR Allen Services, Inc., an Illinois
corporation (“Tenant”), is entering into that certain Lease Agreement with
Landlord dated as of the date hereof (such Lease Agreement as modified and
restated from time to time is herein called the “Lease”), relating to the
property having a common address of 747 Zeckendorf Boulevard, Garden City, New
York.  All terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Lease.

 

B.                                    Guarantor owns all of the issued and
outstanding shares in Tenant, directly or indirectly.  Guarantor shall receive
substantial benefits from Tenant’s entering into the Lease.  Guarantor has
received and reviewed, and hereby approves and acknowledges the terms and
conditions of the Lease.

 

C.                                    The execution and delivery of this
Guaranty by Guarantor is a condition precedent to Landlord’s entering into the
Lease with Tenant, and without this Guaranty, Landlord would be unwilling to
enter into the Lease.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby conclusively acknowledged by Guarantor, and to induce
Landlord to enter into the Lease with Tenant, Guarantor hereby absolutely,
unconditionally and irrevocably agrees as follows:

 

1.                                      GUARANTY.

 

(A)                                  GUARANTOR, AS A PRIMARY OBLIGOR AND NOT
MERELY AS A SURETY, HEREBY ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY
GUARANTEES TO LANDLORD THE PROMPT AND COMPLETE PAYMENT AND, IN THE CASE OF
NON-PECUNIARY OBLIGATIONS, PERFORMANCE OF ALL OF THE GUARANTEED OBLIGATIONS (AS
DEFINED BELOW) IN FULL, WHEN AND AS THE SAME SHALL BECOME DUE, WHETHER ON ANY
DUE DATE OR PERFORMANCE DATE, OR UPON DEMAND OR OTHERWISE.  THIS GUARANTY
CONSTITUTES THE AGREEMENT TO PAY MONEY AND TO ACT IN THE FIRST INSTANCE AND IS
NOT TO BE CONSTRUED AS A CONTRACT OF INDEMNITY OR A GUARANTY OF COLLECTABILITY.

 

(B)                                 AS USED IN THIS GUARANTY, “GUARANTEED
OBLIGATIONS” MEANS, COLLECTIVELY, ALL OF THE FOLLOWING:

 

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

 

(I)                                     ALL OF THE INDEBTEDNESS, LIABILITIES AND
OBLIGATIONS OF EVERY KIND AND NATURE OF TENANT TO LANDLORD RELATING TO THE
PAYMENT OF MONEY ARISING UNDER OR IN ANY WAY RELATING TO THE LEASE, HOWSOEVER
CREATED, INCURRED OR EVIDENCED, WHETHER DIRECT OR INDIRECT, ABSOLUTE OR
CONTINGENT, NOW OR HEREAFTER EXISTING, DUE OR TO BECOME DUE, AND HOWSOEVER
OWNED, HELD, OR ACQUIRED BY LANDLORD (COLLECTIVELY, WITH THE ITEMS SET FORTH IN
(III) AND (IV) BELOW, THE “MONETARY OBLIGATIONS”), INCLUDING ALL OF TENANT’S
PAYMENT OBLIGATIONS OWED TO LANDLORD UNDER THE LEASE, INCLUDING TIMELY FULL
PAYMENT OF ALL RENT AND ALL OTHER AMOUNTS PAYABLE BY TENANT UNDER THE LEASE,
INCLUDING, TO THE EXTENT APPLICABLE, ALL PAYMENTS REQUIRED UNDER SECTIONS 14 AND
16 OF THE LEASE;

 

(II)                                  ALL OF THE COVENANTS, LIABILITIES, AND
OBLIGATIONS OF EVERY KIND AND NATURE OF TENANT TO LANDLORD WHICH DO NOT RELATE
TO THE PAYMENT OF MONEY ARISING UNDER OR IN ANY WAY RELATING TO THE LEASE,
HOWSOEVER CREATED, INCURRED OR EVIDENCED, WHETHER DIRECT OR INDIRECT, ABSOLUTE
OR CONTINGENT, NEW OR HEREAFTER EXISTING, DUE OR TO BECOME DUE, AND HOWSOEVER
OWNED, HELD, OR ACQUIRED BY LANDLORD;

 

(III)                               ALL INTEREST, FEES, COSTS AND EXPENSES DUE
LANDLORD AFTER THE FILING OF A BANKRUPTCY PETITION BY OR AGAINST TENANT
REGARDLESS OF WHETHER SUCH AMOUNTS CAN BE COLLECTED DURING THE PENDENCY OF THE
BANKRUPTCY PROCEEDINGS; AND

 

(IV)                              ALL ENFORCEMENT COSTS (AS DEFINED HEREIN).

 

2.                                      REPRESENTATIONS AND WARRANTIES. 
GUARANTOR ACKNOWLEDGES AND AGREES THAT LANDLORD’S AGREEMENT TO ENTER INTO THE
LEASE WITH TENANT IS OF SUBSTANTIAL AND MATERIAL BENEFIT TO GUARANTOR AND
FURTHER AGREES THAT THE FOLLOWING SHALL CONSTITUTE REPRESENTATIONS AND
WARRANTIES OF GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT LANDLORD INTENDS TO
ENTER INTO THE LEASE IN RELIANCE THEREON:

 

(A)                                  THERE IS NO EXISTING EVENT OF DEFAULT, AND
NO EVENT HAS OCCURRED WHICH WITH THE PASSAGE OF TIME OR THE GIVING OF NOTICE OR
BOTH WILL CONSTITUTE AN EVENT OF DEFAULT, UNDER ANY AGREEMENT TO WHICH GUARANTOR
IS A PARTY, THE EFFECT OF WHICH EVENT OF DEFAULT WILL IMPAIR PERFORMANCE BY
GUARANTOR OF GUARANTOR’S OBLIGATIONS PURSUANT TO AND AS CONTEMPLATED BY THE
TERMS OF THIS GUARANTY, AND NEITHER THE EXECUTION AND DELIVERY OF THIS GUARANTY
NOR COMPLIANCE WITH THE TERMS AND PROVISIONS HEREOF WILL (I) VIOLATE ANY
PRESENTLY EXISTING PROVISION OF LAW OR ANY PRESENTLY EXISTING REGULATION, ORDER,
WRIT, INJUNCTION OR DECREE OF ANY COURT OR GOVERNMENTAL DEPARTMENT, COMMISSION,
BOARD, BUREAU, AGENCY OR INSTRUMENTALITY, OR (II) CONFLICT OR WILL BE
INCONSISTENT WITH, OR WILL RESULT IN ANY BREACH OF, ANY OF THE TERMS, COVENANTS,
CONDITIONS OR PROVISIONS OF, OR CONSTITUTE A DEFAULT UNDER, ANY INDENTURE,
MORTGAGE, DEED OF TRUST, INSTRUMENT, DOCUMENT, AGREEMENT OR CONTRACT OF ANY KIND
THAT CREATES, REPRESENTS, EVIDENCES OR PROVIDES FOR ANY LIEN, CHARGE OR
ENCUMBRANCE UPON ANY OF THE PROPERTY OR ASSETS OF GUARANTOR, OR ANY OTHER
INDENTURE, MORTGAGE, DEED OF TRUST, INSTRUMENT, DOCUMENT, AGREEMENT OR CONTRACT
OF ANY KIND TO WHICH GUARANTOR IS A PARTY OR BY WHICH GUARANTOR OR ANY OF
GUARANTOR’S PROPERTY MAY BE SUBJECT, OR IN THE EVENT OF ANY SUCH CONFLICT, THE
REQUIRED CONSENT OR WAIVER OF THE OTHER PARTY OR PARTIES THERETO HAS BEEN
VALIDLY GRANTED, IS IN FULL FORCE AND EFFECT, IS VALID AND SUFFICIENT THEREFOR
AND HAS BEEN APPROVED IN WRITING BY LANDLORD;

 

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

 

 

(B)                                 THERE ARE NO ACTIONS, SUITS OR PROCEEDINGS
PENDING OR, TO GUARANTOR’S KNOWLEDGE, THREATENED AGAINST GUARANTOR BEFORE ANY
COURT OR ANY GOVERNMENTAL, ADMINISTRATIVE, REGULATORY, ADJUDICATORY OR
ARBITRATIONAL BODY OR AGENCY OF ANY KIND THAT WILL ADVERSELY AFFECT PERFORMANCE
BY GUARANTOR OF GUARANTOR’S OBLIGATIONS PURSUANT TO AND AS CONTEMPLATED BY THE
TERMS AND PROVISIONS OF THIS GUARANTY;

 

(C)                                  NEITHER THIS GUARANTY NOR ANY DOCUMENT,
FINANCIAL STATEMENT, CREDIT INFORMATION, CERTIFICATE OR STATEMENT HERETOFORE
FURNISHED OR REQUIRED HEREIN TO BE FURNISHED TO LANDLORD BY GUARANTOR CONTAINS
ANY UNTRUE STATEMENT OF FACT OR OMITS TO STATE A FACT MATERIAL TO THIS GUARANTY;
AND

 

(D)                                 GUARANTOR IS A CORPORATION, DULY
INCORPORATED AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE AND
HAS AS ITS PRINCIPAL PLACE OF BUSINESS AT ONE AAR PLACE, 1100 NORTH WOOD DALE
ROAD, WOOD DALE, ILLINOIS 60191.

 

3.                                      COVENANTS.  GUARANTOR AGREES AND
COVENANTS THAT:

 

(A)                                  ANY INDEBTEDNESS OF TENANT NOW OR HEREAFTER
EXISTING OR OWING, TOGETHER WITH ANY INTEREST THEREON, TO GUARANTOR, IS HEREBY
SUBORDINATED TO THE RENT PAYMENTS AND ANY OTHER PAYMENTS DUE FROM TENANT TO
LANDLORD UNDER THE LEASE, AND SUCH INDEBTEDNESS OF TENANT TO GUARANTOR SHALL BE
COLLECTED, ENFORCED AND RECEIVED BY GUARANTOR IN TRUST FOR THE BENEFIT OF
LANDLORD, AND SHALL BE PAID OVER TO LANDLORD ON ACCOUNT OF THE RENT PAYMENTS AND
OTHER PAYMENTS DUE FROM TENANT TO LANDLORD TO THE EXTENT TENANT FAILS TO PAY THE
SAME TO LANDLORD AND GUARANTOR IS OBLIGATED UNDER THIS GUARANTY FOR SUCH RENT
PAYMENTS, BUT WITHOUT IMPAIRING OR AFFECTING IN ANY MANNER THE LIABILITY OF
GUARANTOR UNDER THE OTHER PROVISIONS OF THIS GUARANTY;

 

(B)                                 (1) NO PAYMENT BY GUARANTOR UNDER ANY
PROVISION OF THIS GUARANTY SHALL ENTITLE GUARANTOR, BY SUBROGATION TO THE RIGHTS
OF LANDLORD OR OTHERWISE, TO (I) ANY PAYMENT BY TENANT OR OUT OF ITS PROPERTY,
OR (II) ANY PAYMENT FROM OR RIGHTS IN ANY APPLICABLE BONDS, TITLE INSURANCE
CERTIFICATIONS, COMMITMENTS OR INDEMNITIES OR OTHER SECURITY HELD BY OR FOR THE
BENEFIT OF LANDLORD IN CONNECTION WITH THE PREMISES; (2) UNTIL TENANT’S
GUARANTEED OBLIGATIONS ARE INDEFEASIBLY PAID IN FULL AND ALL PERIODS UNDER
APPLICABLE BANKRUPTCY LAW FOR THE CONTEST OF ANY PAYMENT BY ANY GUARANTOR OR
TENANT AS A PREFERENTIAL OR FRAUDULENT PAYMENT HAVE EXPIRED, GUARANTOR
KNOWINGLY, AND WITH ADVICE OF COUNSEL, WAIVES, RELINQUISHES, RELEASES AND
ABANDONS ALL RIGHTS AND CLAIMS TO INDEMNIFICATION, CONTRIBUTION, REIMBURSEMENT,
SUBROGATION AND PAYMENT WHICH SUCH GUARANTOR MAY NOW OR HEREAFTER HAVE BY AND
FROM TENANT AND THE SUCCESSORS AND ASSIGNS OF TENANT, FOR ANY PAYMENTS MADE BY
GUARANTOR TO LANDLORD, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS WHICH MIGHT
ALLOW TENANT, TENANT’S SUCCESSORS, A CREDITOR OF TENANT, OR A TRUSTEE IN
BANKRUPTCY OF TENANT TO CLAIM IN BANKRUPTCY OR ANY OTHER SIMILAR PROCEEDINGS
THAT ANY PAYMENT MADE BY TENANT OR TENANT’S SUCCESSORS AND ASSIGNS TO LANDLORD
WAS ON BEHALF OF OR FOR THE BENEFIT OF GUARANTOR AND THAT SUCH PAYMENT IS
RECOVERABLE BY TENANT, A CREDITOR OR TRUSTEE IN BANKRUPTCY OF TENANT AS A
PREFERENTIAL PAYMENT, FRAUDULENT CONVEYANCE, PAYMENT OF AN INSIDER OR ANY OTHER
CLASSIFICATION OF PAYMENT WHICH MAY OTHERWISE BE RECOVERABLE FROM LANDLORD; AND
(3) UNLESS AND UNTIL TENANT’S GUARANTEED OBLIGATIONS AND GUARANTOR’S OBLIGATIONS
UNDER THIS

 

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GUARANTY HAVE BEEN INDEFEASIBLY PAID AND PERFORMED IN FULL, GUARANTOR WILL NOT
ASSIGN OR OTHERWISE TRANSFER ANY SUCH CLAIM TO ANY OTHER PERSON OR ENTITY.

 

(C)                                  LANDLORD, IN ITS SOLE DISCRETION, MAY AT
ANY TIME ENTER INTO AGREEMENTS WITH TENANT TO AMEND AND MODIFY THE LEASE, AND
MAY WAIVE OR RELEASE ANY PROVISION OR PROVISIONS THEREOF AND, WITH REFERENCE
THERETO, MAY MAKE AND ENTER INTO ANY SUCH AGREEMENT OR AGREEMENTS AS LANDLORD OR
TENANT MAY DEEM PROPER OR DESIRABLE, WITHOUT ANY NOTICE TO OR FURTHER ASSENT
FROM GUARANTOR AND WITHOUT IN ANY MANNER IMPAIRING OR AFFECTING THIS GUARANTY OR
ANY OF LANDLORD’S RIGHTS HEREUNDER;

 

(D)                                 LANDLORD MAY ENFORCE THIS GUARANTY WITHOUT
THE NECESSITY AT ANY TIME OF RESORTING TO OR EXHAUSTING ANY OTHER REMEDY OR ANY
OTHER SECURITY OR COLLATERAL AND WITHOUT THE NECESSITY OF PROCEEDING AGAINST
TENANT;

 

(E)                                  NOTHING CONTAINED HEREIN OR OTHERWISE SHALL
PREVENT LANDLORD FROM PURSUING CONCURRENTLY OR SUCCESSIVELY ALL RIGHTS AND
REMEDIES AVAILABLE TO LANDLORD PURSUANT TO ANY DOCUMENT OR AGREEMENT IN LAW OR
IN EQUITY AND AGAINST ANY PERSONS, FIRMS OR ENTITIES WHATSOEVER (AND
PARTICULARLY, BUT NOT BY WAY OF LIMITATION, LANDLORD MAY EXERCISE ANY RIGHTS
AVAILABLE TO LANDLORD UNDER THE LEASE), AND THE EXERCISE OF ANY OF LANDLORD’S
RIGHTS OR THE COMPLETION OF ANY OF LANDLORD’S REMEDIES SHALL NOT CONSTITUTE A
DISCHARGE OF ANY OBLIGATION OF GUARANTOR HEREUNDER, IT BEING THE PURPOSE AND
INTENT OF GUARANTOR THAT GUARANTOR’S OBLIGATIONS SHALL BE ABSOLUTE, INDEPENDENT
AND UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER;

 

(F)                                    THE LIABILITY OF GUARANTOR HEREUNDER OR
ANY REMEDY FOR THE ENFORCEMENT THEREOF SHALL IN NO WAY BE AFFECTED BY (I) THE
RELEASE OR DISCHARGE OF TENANT IN ANY CREDITORS’ RECEIVERSHIP, BANKRUPTCY OR
OTHER SIMILAR PROCEEDINGS, (II) THE IMPAIRMENT, LIMITATION, MODIFICATION OR
TERMINATION OF THE LIABILITIES OF TENANT TO LANDLORD OR THE ESTATE OF TENANT IN
BANKRUPTCY, OR OF ANY LIEN OR SECURITY INTEREST SECURING SAID LIABILITIES, OR
ANY REMEDY FOR THE ENFORCEMENT OF TENANT’S SAID LIABILITY UNDER THE LEASE,
RESULTING FROM THE OPERATION OF ANY PRESENT OR FUTURE PROVISION OF TITLE 11 OF
THE UNITED STATES CODE OR OTHER SIMILAR STATUTE OR FROM THE DECISION IN ANY
COURT ARISING FROM, (III) THE REJECTION OR DISAFFIRMANCE OF THE LEASE IN ANY
SUCH PROCEEDINGS, (IV) ANY DISABILITY OR OTHER DEFENSE OF TENANT, (V) THE
CESSATION FROM ANY CAUSE WHATSOEVER OF THE LIABILITY OF THE TENANT TO LANDLORD,
OR (VI) ANY DEFENSE, CURRENT OR FUTURE, OF GUARANTOR TO ANY ACTION, SUIT OR
PROCEEDING AT LAW OR OTHERWISE, THAT MAY BE INSTITUTED ON THIS GUARANTY;

 

(G)                                 THIS GUARANTY SHALL CONTINUE TO BE EFFECTIVE
AND BE DEEMED TO HAVE CONTINUED IN EXISTENCE OR BE REINSTATED (AS THE CASE MAY
BE) IF AT ANY TIME PAYMENT OF ALL OR ANY PART OF ANY SUM PAYABLE PURSUANT TO THE
LEASE IS RESCINDED OR OTHERWISE REQUIRED TO BE RETURNED BY THE PAYEE UPON THE
INSOLVENCY, BANKRUPTCY, DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE PAYOR,
ALL AS THOUGH SUCH PAYMENT TO LANDLORD HAD NOT BEEN MADE, REGARDLESS OF WHETHER
LANDLORD CONTESTED THE ORDER REQUIRING THE RETURN OF SUCH PAYMENT.  THE
OBLIGATIONS OF GUARANTOR PURSUANT TO THE PRECEDING SENTENCE SHALL SURVIVE ANY
TERMINATION, CANCELLATION, OR RELEASE OF THIS GUARANTY;

 

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

 

(H)                                 GUARANTOR HEREBY GRANTS LANDLORD PERMISSION
TO DELIVER TO ANY PARTY HOLDING A MORTGAGE OR DEED OF TRUST ON ALL OR ANY
PORTION OF THE PREMISES (EACH HEREIN A “MORTGAGEE”) COPIES OF ALL FINANCIAL
STATEMENTS AND REPORTS REQUIRED TO BE DELIVERED BY TENANT TO LANDLORD UNDER THE
LEASE;

 

(I)                                     UPON TEN (10) DAYS’ PRIOR NOTICE,
GUARANTOR WILL PERMIT LANDLORD AND ITS PROFESSIONAL REPRESENTATIVES TO VISIT
GUARANTOR’S OFFICES, AND DISCUSS GUARANTOR’S AFFAIRS AND FINANCES WITH
APPROPRIATE OFFICERS, AND WILL MAKE AVAILABLE SUCH INFORMATION AS LANDLORD MAY
REASONABLY REQUEST BEARING ON GUARANTOR, THE PREMISES OR THE LEASE, AND LANDLORD
SHALL MAINTAIN THE CONFIDENTIALITY OF ANY INFORMATION DESIGNATED BY GUARANTOR AS
“NONPUBLIC” AND LANDLORD WILL EXECUTE AND USE ITS REASONABLE EFFORTS TO CAUSE
LANDLORD’S PROFESSIONAL REPRESENTATIVES TO EXECUTE APPROPRIATE CONFIDENTIALITY
AGREEMENTS; AND

 

(j)                                     On the date hereof after giving effect
to this Guaranty, the Guarantor will be Solvent.  As used in this paragraph, the
term “Solvent” means, with respect to a particular date, that on such date(A)
the present fair market value (or present fair saleable value) of the assets of
Guarantor is not less than the total amount required to pay the probable
liabilities of Guarantor on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, (B) Guarantor is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and commitments as they mature and become due in the
normal course of business, (C) Guarantor is not incurring debts or liabilities
beyond its ability to pay as such debts and liabilities mature and (D) Guarantor
is not engaged in any business or transaction, and is not about to engage in any
business or transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which Guarantor is engaged.  In computing the amount of such
contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

4.                                      CONTINUING GUARANTY.  GUARANTOR AGREES
THAT THE OBLIGATIONS OF GUARANTOR TO LANDLORD HEREUNDER CONSTITUTE AN ABSOLUTE,
PRESENT, PRIMARY, CONTINUING, IRREVOCABLE, UNLIMITED, UNCONDITIONAL GUARANTY OF
PAYMENT AND PERFORMANCE AND, WITHOUT LIMITATION, IS NOT CONDITIONED OR
CONTINGENT UPON ANY EFFORT TO ATTEMPT TO SEEK PAYMENT OR PERFORMANCE FROM ANY
OTHER PERSON OR ENTITY (WHETHER OR NOT PURSUANT TO THIS GUARANTY) OR UPON ANY
OTHER CONDITION OR CONTINGENCY.  IN ADDITION, THE OBLIGATIONS OF GUARANTOR
HEREUNDER SHALL NOT BE SUBJECT TO ANY COUNTERCLAIM, SET-OFF, ABATEMENT,
SUSPENSION, DEDUCTION, DEFERMENT OR DEFENSE, AND SHALL REMAIN IN FULL FORCE AND
EFFECT WITHOUT REGARD TO, AND SHALL NOT BE RELEASED, DISCHARGED OR AFFECTED IN
ANY WAY BY ANY CIRCUMSTANCES OR CONDITION (WHETHER OR NOT GUARANTOR SHALL HAVE
ANY KNOWLEDGE THEREOF), INCLUDING:

 

(A)                                  ANY LACK OF VALIDITY OR ENFORCEABILITY OF
THE LEASE;

 

(B)                                 ANY TERMINATION OF THE LEASE IN ACCORDANCE
WITH ITS TERMS OR AMENDMENT, MODIFICATION OR OTHER CHANGE IN THE LEASE;

 

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

 

(C)                                  ANY FAILURE, OMISSION OR DELAY ON THE PART
OF TENANT, GUARANTOR OR LANDLORD TO CONFORM OR COMPLY WITH ANY TERM OF ANY OF
THE LEASE;

 

(D)                                 ANY WAIVER, COMPROMISE, RELEASE, SETTLEMENT,
FORBEARANCE OR EXTENSION OF TIME OF PAYMENT OR PERFORMANCE OR OBSERVANCE OF ANY
OF THE OBLIGATIONS OR AGREEMENTS CONTAINED IN THE LEASE;

 

(E)                                  ANY ACTION OR INACTION BY LANDLORD UNDER OR
IN RESPECT OF THE LEASE, ANY FAILURE, LACK OF DILIGENCE, OMISSION OR DELAY ON
THE PART OF LANDLORD TO ENFORCE, ASSERT OR EXERCISE ANY RIGHT, POWER OR REMEDY
CONFERRED ON LANDLORD IN THE LEASE, OR ANY OTHER ACTION OR INACTION ON THE PART
OF LANDLORD;

 

(F)                                    THE DEATH OR INCAPACITY OF GUARANTOR, AS
APPLICABLE, OR ANY VOLUNTARY OR INVOLUNTARY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, ARRANGEMENT, READJUSTMENT, ASSIGNMENT FOR THE BENEFIT OF
CREDITORS, COMPOSITION, RECEIVERSHIP, LIQUIDATION, MARSHALLING OF ASSETS AND
LIABILITIES OR SIMILAR EVENTS OR PROCEEDINGS WITH RESPECT TO TENANT OR
GUARANTOR, AS APPLICABLE, OR ANY OF THEIR RESPECTIVE PROPERTIES, OR ANY ACTION
TAKEN BY ANY TRUSTEE OR RECEIVER OR BY ANY COURT IN ANY SUCH PROCEEDING;

 

(G)                                 ANY MERGER OR CONSOLIDATION OF TENANT INTO
OR WITH ANY OTHER ENTITY, OR ANY SALE, LEASE OR TRANSFER OF ANY OF THE ASSETS OF
TENANT OR GUARANTOR TO ANY OTHER PERSON OR ENTITY;

 

(H)                                 ANY CHANGE IN THE OWNERSHIP OF THE 100% OF
ISSUED AND OUTSTANDING STOCK OWNED IN TENANT BY GUARANTOR OR ANY OTHER CHANGE IN
THE RELATIONSHIP BETWEEN TENANT AND GUARANTOR, OR ANY TERMINATION OF ANY SUCH
RELATIONSHIP;

 

(I)                                     TO THE EXTENT PERMITTED BY LAW, ANY
RELEASE OR DISCHARGE BY OPERATION OF LAW OF TENANT FROM ANY OBLIGATION OR
AGREEMENT CONTAINED IN THE LEASE;

 

(J)                                     ANY CONVEYANCE, MORTGAGE, OR OTHER
TRANSFER OF ALL OR ANY PART OF TENANT’S INTEREST IN THE PREMISES, OR ALL OR PART
OF GUARANTOR’S INTEREST THEREIN;

 

(K)                                  ANY ASSUMPTION BY ANY PERSON OF ANY OR ALL
OF TENANT’S OBLIGATIONS UNDER THE LEASE, OR TENANT’S ASSIGNMENT OF ANY OR ALL OF
ITS INTEREST IN THE LEASE (WHICH ASSIGNMENT IS NOT PERMITTED BY THE LEASE
WITHOUT LANDLORD’S WRITTEN CONSENT);

 

(L)                                     THE POWER OR AUTHORITY OR LACK THEREOF
OF TENANT TO EXECUTE, ACKNOWLEDGE OR DELIVER THE LEASE;

 

(M)                               ANY DEFENSES WHATSOEVER THAT TENANT MAY OR
MIGHT HAVE TO THE PAYMENT OF THE MONETARY OBLIGATIONS, EXCEPT FOR THE PAYMENT
THEREOF;

 

(N)                                 THE EXISTENCE OR NON-EXISTENCE OF TENANT AS
A LEGAL ENTITY;

 

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

 

(O)                                 ANY SALE OR ASSIGNMENT BY LANDLORD OF THE
PREMISES, THIS GUARANTY, AND/OR THE LEASE (INCLUDING ANY ASSIGNMENT BY LANDLORD
TO ANY MORTGAGEE CONSISTENT WITH THE PROVISIONS OF PARAGRAPH 10 OF THIS
GUARANTY);

 

(P)                                 ANY DEFAULT BY TENANT UNDER THE LEASE OR ANY
RIGHT OF SETOFF, COUNTERCLAIM OR DEFENSE (OTHER THAN PAYMENT IN FULL OF THE
MONETARY OBLIGATIONS IN ACCORDANCE WITH THE TERMS OF THE LEASE) THAT GUARANTOR
MAY OR MIGHT HAVE TO ITS RESPECTIVE UNDERTAKING, LIABILITIES, AND OBLIGATIONS
HEREUNDER, EACH AND EVERY SUCH DEFENSE BEING HEREBY WAIVED BY GUARANTOR; OR

 

(Q)                                 TO THE EXTENT PERMITTED BY LAW, ANY OTHER
OCCURRENCE, CIRCUMSTANCE, HAPPENING OR EVENT, WHETHER SIMILAR OR DISSIMILAR TO
THE FOREGOING AND WHETHER FORESEEN OR UNFORESEEN, WHICH OTHERWISE MIGHT
CONSTITUTE A LEGAL OR EQUITABLE DEFENSE OR DISCHARGE OF THE LIABILITIES OF A
GUARANTOR OR SURETY OR WHICH OTHERWISE MIGHT LIMIT RECOURSE AGAINST TENANT OR
GUARANTOR.

 

5.                                      WAIVERS.  GUARANTOR IRREVOCABLY WAIVES
(I) NOTICE OF ACCEPTANCE OF THIS GUARANTY BY THE LANDLORD AND ANY AND ALL
NOTICES AND DEMANDS OF EVERY KIND THAT MAY BE REQUIRED TO BE GIVEN BY ANY
STATUTE OR RULE OR LAW, (II) ANY DEFENSE ARISING BY REASON OF ANY DISABILITY OR
OTHER DEFENSE OF TENANT, (III) PRESENTMENT, DEMAND, NOTICE OF DISHONOR, PROTEST
AND ALL OTHER NOTICES WHATSOEVER, (IV) ANY RIGHT TO PARTICIPATE IN ANY SECURITY
NOW OR HEREAFTER HELD BY LANDLORD, (V) ANY RIGHT TO ENFORCE REMEDIES LANDLORD
NOW HAS, OR LATER MAY HAVE, AGAINST TENANT, GUARANTOR, OR ANY OTHER PARTY, (VI)
DILIGENCE IN COLLECTION OR PROTECTION OF OR REALIZATION UPON ANY OBLIGATION
HEREUNDER, OR ANY SECURITY FOR OR GUARANTY OF ANY OF THE FOREGOING, AND ANY AND
ALL FORMALITIES THAT OTHERWISE MIGHT BE LEGALLY REQUIRED TO CHARGE TENANT,
GUARANTOR, OR ANY OTHER PARTY WITH LIABILITY, (VII) ANY RIGHT TO REQUIRE
LANDLORD TO PROCEED AGAINST TENANT OR ANY OTHER PERSON AT ANY TIME OR TO PROCEED
AGAINST OR EXHAUST ANY SECURITY HELD BY LANDLORD AT ANY TIME OR TO PURSUE OR
EXHAUST ANY OTHER REMEDY WHATSOEVER AT ANY TIME, (VIII) THE DEFENSE OF ANY
STATUTE OF LIMITATIONS AFFECTING THE LIABILITY OF GUARANTOR HEREUNDER OR THE
ENFORCEMENT THEREOF, TO THE EXTENT PERMITTED BY LAW, (IX) ANY DEFENSE ARISING BY
REASON OF ANY INVALIDITY OR UNENFORCEABILITY OF THE LEASE, OR ANY DEFENSE OF
TENANT, OR ANY DISABILITY OF TENANT, OR BY ANY CESSATION OF THE LIABILITY OF
TENANT FROM ANY CAUSE WHATSOEVER, (X) ANY DUTY OF LANDLORD TO ADVISE GUARANTOR
OF ANY INFORMATION KNOWN TO LANDLORD REGARDING ANY AND ALL FAVORABLE OR
UNFAVORABLE INFORMATION, FINANCIAL OR OTHERWISE, ABOUT THE PREMISES LEARNED OR
ACQUIRED BY LANDLORD AT ANY TIME (IT IS AGREED THAT GUARANTOR ASSUMES THE
RESPONSIBILITY FOR BEING AND KEEPING INFORMED REGARDING SUCH INFORMATION), (XI)
ALL RIGHTS AT LAW OR IN EQUITY TO SEEK SUBROGATION, CONTRIBUTION,
INDEMNIFICATION OR ANY OTHER FORM OF REIMBURSEMENT OR REPAYMENT FROM TENANT OR
ANY OTHER PERSON OR ENTITY NOW OR HEREAFTER PRIMARILY OR SECONDARILY LIABLE FOR
ANY OF TENANT’S OBLIGATIONS FOR ANY DISBURSEMENTS MADE BY GUARANTOR UNDER OR IN
CONNECTION WITH THIS GUARANTY AND FURTHER AGREES THAT GUARANTOR SHALL HAVE NO
CLAIMS OF ANY KIND OR TYPE AGAINST TENANT AS A RESULT OF ANY PAYMENT MADE BY
GUARANTOR TO LANDLORD, ALL SUCH CLAIMS BEING SPECIFICALLY WAIVED, (XII) ANY
RIGHT TO ENFORCE ANY REMEDY WHICH LANDLORD NOW HAS OR MAY HEREAFTER HAVE AGAINST
TENANT AND ANY BENEFIT OF, AND THE RIGHT TO PARTICIPATE IN, ANY SECURITY NOW OR
HEREAFTER HELD BY LANDLORD, (XIII) ANY DEFENSE ARISING BY REASON OF ANY ACT OR
FAILURE TO ACT BY LANDLORD, ANY ELECTION OF REMEDIES MADE BY LANDLORD OR ANY
OTHER ELECTION AFFORDED TO LANDLORD PURSUANT TO APPLICABLE LAW, WHETHER OR NOT
PURSUANT TO A BANKRUPTCY, INSOLVENCY, LIQUIDATION, REORGANIZATION OR SIMILAR
PROCEEDING FILED BY OR AGAINST

 

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TENANT, (XIV) NOTICE OF ANY OF THE CIRCUMSTANCES OR CONDITIONS SET FORTH IN
ITEMS (A) THROUGH (Q), INCLUSIVE, OF PARAGRAPH 4 ABOVE, AND (XV) THE REQUIREMENT
OF LANDLORD TO MITIGATE DAMAGES.

 

6.                                      EFFECT OF LANDLORD’S DELAY OR ACTION. 
NO DELAY ON THE PART OF LANDLORD IN THE EXERCISE OF ANY RIGHT OR REMEDY SHALL
OPERATE AS A WAIVER THEREOF, AND NO SINGLE OR PARTIAL EXERCISE BY LANDLORD OF
ANY RIGHT OR REMEDY SHALL PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR THE
EXERCISE OF ANY OTHER RIGHT OR REMEDY.  NO ACTION OF LANDLORD PERMITTED
HEREUNDER SHALL IN ANY WAY AFFECT OR IMPAIR THE RIGHTS OF LANDLORD AND THE
OBLIGATION OF GUARANTOR UNDER THIS GUARANTY.

 

7.                                      ENFORCEMENT.  ALL OF THE REMEDIES SET
FORTH HEREIN OR PROVIDED BY THE LEASE OR LAW OR EQUITY SHALL BE EQUALLY
AVAILABLE TO LANDLORD, AND THE CHOICE BY LANDLORD OF ONE SUCH ALTERNATIVE OVER
ANOTHER SHALL NOT BE SUBJECT TO QUESTION OR CHALLENGE BY GUARANTOR, NOR SHALL
ANY SUCH CHOICE BE ASSERTED AS A DEFENSE, SETOFF, OR FAILURE TO MITIGATE DAMAGES
IN ANY ACTION, PROCEEDING, OR COUNTERACTION BY LANDLORD TO RECOVER OR SEEK ANY
OTHER REMEDY UNDER THIS GUARANTY, NOR SHALL SUCH CHOICE PRECLUDE LANDLORD FROM
SUBSEQUENTLY ELECTING TO EXERCISE A DIFFERENT REMEDY. THE OBLIGATIONS OF
GUARANTOR HEREUNDER ARE INDEPENDENT OF THE OBLIGATIONS OF TENANT AND, IN THE
EVENT OF A DEFAULT HEREUNDER, A SEPARATE ACTION OR ACTIONS MAY BE BROUGHT AND
PROSECUTED AGAINST GUARANTOR WHETHER OR NOT GUARANTOR IS THE ALTER EGO OF TENANT
AND WHETHER OR NOT TENANT IS JOINED THEREIN OR A SEPARATE ACTION OR ACTIONS ARE
BROUGHT AGAINST TENANT.  GUARANTOR AGREES THAT ONE OR MORE SUCCESSIVE ACTIONS
MAY BE BROUGHT AGAINST GUARANTOR, AS OFTEN AS LANDLORD DEEM ADVISABLE, UNTIL ALL
OF THE GUARANTEED OBLIGATIONS ARE PAID AND PERFORMED IN FULL.

 

8.                                      ENFORCEMENT COSTS.  IF:  (I) THIS
GUARANTY IS PLACED IN THE HANDS OF AN ATTORNEY FOR COLLECTION OR IS COLLECTED
THROUGH ANY LEGAL PROCEEDING; (II) AN ATTORNEY IS RETAINED TO REPRESENT LANDLORD
IN ANY BANKRUPTCY, REORGANIZATION, RECEIVERSHIP, OR OTHER PROCEEDINGS AFFECTING
CREDITORS’ RIGHTS AND INVOLVING A CLAIM UNDER THIS GUARANTY OR THE LEASE; (III)
AN ATTORNEY IS RETAINED TO PROTECT OR ENFORCE THE LEASE OR TO PROVIDE ADVICE OR
OTHER REPRESENTATION WITH RESPECT TO THE PREMISES OR THE LEASE IN CONNECTION
WITH AN ENFORCEMENT ACTION OR POTENTIAL ENFORCEMENT ACTION; OR (IV) AN ATTORNEY
IS RETAINED TO REPRESENT LANDLORD IN ANY OTHER LEGAL PROCEEDINGS WHATSOEVER IN
CONNECTION WITH THIS GUARANTY OR THE LEASE, THEN GUARANTOR SHALL PAY TO LANDLORD
UPON DEMAND ALL ACTUAL OUT OF POCKET ATTORNEY’S FEES, COSTS AND EXPENSES,
INCLUDING, COURT COSTS, FILING FEES, RECORDING COSTS, EXPENSES OF FORECLOSURE,
TITLE INSURANCE PREMIUMS, SURVEY COSTS, MINUTES OF FORECLOSURE, AND ALL OTHER
COSTS AND EXPENSES INCURRED IN CONNECTION THEREWITH (ALL OF WHICH ARE REFERRED
TO HEREIN AS “ENFORCEMENT COSTS”), IN ADDITION TO ALL OTHER AMOUNTS DUE
HEREUNDER.

 

9.                                      NOTICES.  ANY NOTICE, DEMAND, REQUEST,
OR OTHER COMMUNICATION WHICH ANY PARTY HERETO MAY BE REQUIRED OR MAY DESIRE TO
GIVE HEREUNDER SHALL BE IN WRITING, ADDRESSED AS FOLLOWS, AND SHALL BE DEEMED TO
HAVE BEEN PROPERLY GIVEN, RENDERED, MADE AND DELIVERED (I) WHEN SENT BY
CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, ON THE FIFTH (4TH)
DAY AFTER DEPOSIT IN SUCH MAIL, OR (II) WHEN RECEIVED BY OVERNIGHT DELIVERY OR
OVERNIGHT COURIER DELIVERY (OR IF SUCH DELIVERY IS REFUSED, THE DATE OF SUCH
REFUSAL) OR (III) BY FACSIMILE TRANSMISSION WITH A CONFIRMATION COPY SENT BY
OVERNIGHT DELIVERY OR BY OVERNIGHT COURIER DELIVERY ADDRESSED TO THE OTHER PARTY
AS FOLLOWS:

 

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

 

If to Guarantor:

 

AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention:

Tim Romenesko

 

 

Telephone:

630.227.2090

 

 

Fax:

630.227.2101

 

 

 

With copies to:

 

AAR CORP.

 

 

One AAR Place

 

 

1100 North Wood Dale Road

 

 

Wood Dale, Illinois 60191

 

 

Attention:

Legal Department

 

 

Telephone:

630.227.2040

 

 

Fax:

630.227.2058

 

 

 

 

 

and

 

 

 

 

 

Schiff Hardin & Waite

 

 

623 Fifth Avenue

 

 

New York, New York 10022

 

 

Attention:

Christine A. McGuinness, Esq.

 

 

Telephone:

212.745.0831

 

 

Fax:

212.753.5044

 

 

 

To Landlord:

 

iStar Garden City LLC

 

 

c/o iStar Financial Inc.

 

 

1114 Avenue of the Americas

 

 

27th Floor

 

 

New York, New York  10036

 

 

Attention:

Chief Financial Officer

 

 

Telephone:

212.930.9400

 

 

Fax:

212.930.9494

 

 

 

With copies to:

 

iStar Garden City LLC

 

 

c/o iStar Financial Inc.

 

 

1114 Avenue of the Americas

 

 

27th Floor

 

 

New York, New York  10036

 

 

Attention:

General Counsel

 

 

Telephone:

212.930.9400

 

 

Fax:

212.930.9494

 

 

 

 

 

and

 

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

 

 

 

Katten Muchin Zavis Rosenman

 

 

525 West Monroe Street

 

 

16th Floor

 

 

Chicago, Illinois  60661-3693

 

 

Attention:

Nina B. Matis, Esq.

 

 

 

Gregory P. L. Pierce, Esq.

 

 

Telephone:

312.902.5541

 

 

Fax:

312.902.1061

 

or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.  Notices given in any other fashion shall be
effective only upon receipt.

 

10.                               ASSIGNMENT AND MODIFICATIONS.  THIS GUARANTY
SHALL BE ASSIGNABLE BY LANDLORD, ITS SUCCESSORS AND ASSIGNS TO ANY ASSIGNEE OF
ALL OR A PORTION OF LANDLORD’S RIGHTS UNDER THE LEASE, INCLUDING MORTGAGEE,
WHETHER DIRECTLY OR BY WAY OF A GRANT OF A SECURITY INTEREST HEREIN, WITHOUT THE
CONSENT OF GUARANTOR, AND GUARANTOR SHALL EXECUTE, ACKNOWLEDGE AND DELIVER ANY
DOCUMENTS REASONABLY REQUESTED BY LANDLORD OR SUCH ASSIGNEE IN CONNECTION
THEREWITH.  NO MODIFICATION, WAIVER, AMENDMENT, DISCHARGE OR CHANGE OF THIS
GUARANTY SHALL BE BINDING UPON LANDLORD EXCEPT AS EXPRESSLY SET FORTH IN A
WRITING DULY SIGNED AND DELIVERED ON BEHALF OF LANDLORD.

 

11.                               SEVERABILITY.  THE PARTIES HERETO INTEND AND
BELIEVE THAT EACH PROVISION IN THIS GUARANTY COMPORTS WITH ALL APPLICABLE LOCAL,
STATE AND FEDERAL LAWS AND JUDICIAL DECISIONS.  HOWEVER, IF ANY PROVISION OR
PROVISIONS, OR IF ANY PORTION OF ANY PROVISION OR PROVISIONS, IN THIS GUARANTY
IS FOUND BY A COURT OF LAW TO BE IN VIOLATION OF ANY APPLICABLE LOCAL, STATE, OR
FEDERAL LAW, STATUTE, ORDINANCE, ADMINISTRATIVE OR JUDICIAL DECISION, OR PUBLIC
POLICY, AND IF SUCH COURT DECLARES SUCH PORTION, PROVISION, OR PROVISIONS OF
THIS GUARANTY TO BE ILLEGAL, INVALID, UNLAWFUL, VOID OR UNENFORCEABLE AS
WRITTEN, THEN IT IS THE INTENT OF ALL PARTIES HERETO THAT SUCH PORTION,
PROVISION, OR PROVISIONS SHALL BE GIVEN FORCE TO THE FULLEST POSSIBLE EXTENT
THAT THEY ARE LEGAL, VALID AND ENFORCEABLE, AND THAT THE REMAINDER OF THIS
GUARANTY SHALL BE CONSTRUED AS IF SUCH ILLEGAL, INVALID, UNLAWFUL, VOID, OR
UNENFORCEABLE PORTION, PROVISION, OR PROVISIONS WERE NOT CONTAINED THEREIN, AND
THAT THE RIGHTS, OBLIGATIONS, AND INTERESTS OF GUARANTOR AND LANDLORD UNDER THE
REMAINDER OF THIS GUARANTY SHALL CONTINUE IN FULL FORCE AND EFFECT.

 

12.                               SUCCESSORS AND ASSIGNS.  THIS GUARANTY SHALL
BE BINDING UPON THE HEIRS, EXECUTORS, LEGAL AND PERSONAL REPRESENTATIVES,
SUCCESSORS AND ASSIGNS OF GUARANTOR AND SHALL INURE TO THE BENEFIT OF LANDLORD’S
SUCCESSORS AND ASSIGNS.

 

13.                               JURISDICTION.  WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY, THE PREMISES OR THE LEASE
(“PROCEEDINGS”) GUARANTOR (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY AND STATE WHERE ANY OF THE
PREMISES ARE LOCATED OR IN THE STATE OF NEW YORK AND (II) WAIVES ANY OBJECTION
WHICH GUARANTOR MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDINGS
BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT SUCH PROCEEDINGS HAVE BEEN
BROUGHT IN AN INCONVENIENT FORUM AND FURTHER

 

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

 

WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT
DOES NOT HAVE JURISDICTION OVER GUARANTOR.

 

14.                               USE OF TERMS.  ALL PERSONAL PRONOUNS USED IN
THIS GUARANTY, WHETHER USED IN THE MASCULINE, FEMININE OR NEUTER GENDER, SHALL
INCLUDE ALL OTHER GENDERS; THE SINGULAR SHALL INCLUDE THE PLURAL AND VICE VERSA
AND SHALL REFER SOLELY TO THE PARTIES SIGNATORY THERETO EXCEPT WHERE OTHERWISE
SPECIFICALLY PROVIDED.  THE WORDS “INCLUDE”, “INCLUDES”, “INCLUDING” AND ANY
OTHER DERIVATION OF “INCLUDE” MEANS “INCLUDING, BUT NOT LIMITED TO” UNLESS
SPECIFICALLY SET FORTH TO THE CONTRARY.

 

15.                               MATERIAL INDUCEMENT.  GUARANTOR ACKNOWLEDGES
AND AGREES THAT LANDLORD IS SPECIFICALLY RELYING UPON THE REPRESENTATIONS,
WARRANTIES, AGREEMENTS AND WAIVERS CONTAINED HEREIN AND THAT SUCH
REPRESENTATIONS, WARRANTIES, AGREEMENTS AND WAIVERS CONSTITUTE A MATERIAL
INDUCEMENT TO LANDLORD TO ACCEPT THIS GUARANTY AND TO ENTER INTO THE LEASE AND
THE TRANSACTION CONTEMPLATED THEREIN.

 

16.                               RECITALS INCORPORATED.  THE RECITALS TO THIS
AGREEMENT ARE HEREBY INCORPORATED INTO THIS AGREEMENT TOGETHER WITH ALL
EXHIBITS, SCHEDULES AND APPENDICES HERETO.

 

17.                               GOVERNING LAW.  THIS GUARANTY SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE INTERNAL LAWS (AS OPPOSED TO THE LAW OF
CONFLICTS) OF THE STATE OF NEW YORK.

 

18.                               WAIVER OF JURY TRIAL.  GUARANTOR HEREBY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENTS OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY
AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.

 

19.                               CERTIFICATE.                                 
WITHIN FIFTEEN (15) DAYS AFTER REQUEST BY LANDLORD, GUARANTOR SHALL DELIVER A
CERTIFICATE CONFIRMING THAT THIS GUARANTY IS IN FULL FORCE AND EFFECT AND
UNAMENDED (OR, IF AMENDED, SPECIFYING SUCH AMENDMENT), AND WHETHER, TO THE
KNOWLEDGE OF GUARANTOR, ANY DEFAULT EXISTS UNDER THE LEASE OR THIS GUARANTY.

 

20.                               REFINANCE COOPERATION.                 IF
LANDLORD PROPOSES TO FINANCE OR REFINANCE THE PREMISES, GUARANTOR SHALL
COOPERATE IN THE PROCESS, AND SHALL NEGOTIATE IN GOOD FAITH ANY REQUEST MADE BY
A PROSPECTIVE MORTGAGEE FOR CHANGES OR MODIFICATIONS TO THE LEASE AND THIS
GUARANTY, AND SHALL NOT UNREASONABLY WITHHOLD ITS CONSENT TO ANY SUCH PROPOSED
CHANGE OR MODIFICATION SO LONG AS THE SAME DOES NOT ADVERSELY AFFECT ANY
SIGNIFICANT RIGHT OR OBLIGATION OF TENANT UNDER THE LEASE, SHORTEN ANY NOTICE OR
CURE PERIOD TO WHICH TENANT IS ENTITLED UNDER THE LEASE OR INCREASE TENANT’S
OBLIGATIONS UNDER THE LEASE OR CHANGE GUARANTOR’S RIGHTS AND OBLIGATIONS UNDER
THIS GUARANTY.  GUARANTOR AGREES TO EXECUTE, ACKNOWLEDGE AND DELIVER DOCUMENTS
REASONABLY REQUESTED BY THE PROSPECTIVE MORTGAGEE (SUCH AS A CONSENT TO THE
FINANCING (WITHOUT ENCUMBERING GUARANTOR’S OR TENANT’S ASSETS), A CONSENT TO
ASSIGNMENT OF LEASE AND OF THIS

 

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

 

GUARANTY, ESTOPPEL CERTIFICATE AND A SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT) CUSTOMARY FOR TENANTS AND THEIR GUARANTORS TO SIGN IN
CONNECTION WITH MORTGAGE LOANS TO LANDLORDS, SO LONG AS SUCH DOCUMENTS ARE IN
FORM THEN CUSTOMARY AMONG INSTITUTIONAL LENDERS (PROVIDED THE SAME DO NOT
ADVERSELY CHANGE TENANT’S RIGHTS OR OBLIGATIONS IN A WAY NOT PREVIOUSLY CHANGED
BY LOAN DOCUMENTS PREVIOUSLY EXECUTED BY TENANT IN CONNECTION WITH AN EARLIER
MORTGAGE OR ADVERSELY CHANGE GUARANTOR’S RIGHTS AND OBLIGATIONS UNDER THIS
GUARANTY).  GUARANTOR SHALL PERMIT LANDLORD AND ANY MORTGAGEE OR PROSPECTIVE
MORTGAGEE, AT THEIR EXPENSE, TO MEET WITH OFFICERS OF GUARANTOR AT GUARANTOR’S
OFFICES AND TO DISCUSS THE GUARANTOR’S BUSINESS AND FINANCES. ON REQUEST OF
LANDLORD, GUARANTOR AGREES TO PROVIDE ANY MORTGAGEE OR PROSPECTIVE MORTGAGEE THE
INFORMATION TO WHICH LANDLORD IS ENTITLED HEREUNDER, PROVIDED THAT IF ANY SUCH
INFORMATION IS NON-PUBLIC AND DESIGNATED AS SUCH BY GUARANTOR, LANDLORD WILL
TAKE REASONABLE STEPS TO ASSURE THE CONFIDENTIALITY OF SUCH INFORMATION.

 

[EXECUTION PAGE FOLLOWS]

 

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

 

IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in as of the date
first written above.

 

 

GUARANTOR:

 

 

 

AAR CORP., a Delaware corporation

 

 

 

By:

/s/ TIMOTHY J. ROMENESKO

 

Name:

Timothy J. Romenesko

 

Title:

Vice President & Chief Financial Officer

 

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

 

STATE OF Illinois

)

 

)SS

COUNTY OF DuPage

)

 

I, Jo-Ellen Kiddie, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Timothy J. Romenesko, personally known to me
to be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person and acknowledged that he signed, sealed
and delivered the same instrument as his free and voluntary act, for the uses
and purposes therein set forth.

 

GIVEN under my hand and notarial seal this 2nd day of October, 2003.

 

 

/s/ JO-ELLEN KIDDIE

 

Notary Public

 

 

 

My Commission expires:

 

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