Exhibit 10.3

STANDARD PROPERTY LEASE

 

Landlord:  

HANCOCK PARK DEVELOPMENT, LLC

Tenant:  

JADAK, LLC

Building Location:  

William Barry Boulevard

            Lot No. 1B Section A – Hancock Park

 

Town of Cicero, New York

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TABLE OF CONTENTS

 

ARTICLE 1 - Premises, Construction and Use of Premises      4   

1.01 - Premises

     4   

1.02 - Construction of Premises

     4   

1.03 - Use of the Premises

     4    ARTICLE 2 - Term of Lease      5   

2.01 - Initial Term

     5   

2.02 - Construction Not Completed

     5   

2.03 - Renewal Term(s)

     6   

2.04 - Surrender of Premises

     6    ARTICLE 3 - Rent      6   

3.01 - Rent

     6   

3.02 - Payment of Rent

     7   

3.03 - Absolute Net Lease

     8   

3.04 - Payment of Additional Rent

     8   

3.05 - Past Due Rent

     8   

3.06 - Lease Year

     9    ARTICLE 4 - Utilities      9   

4.01 - Utilities

     9    ARTICLE 5 - Insurance and Indemnification      9   

5.01 - Tenant’s Insurance

     9   

5.02 - Landlord’s Insurance

     10   

5.03 - Subrogation

     11   

5.04 - Tenant’s Payment of Insurance Premiums

     11   

5.05 - Increase in Fire Insurance Premiums

     12   

5.06 - Indemnification and Hold Harmless

     12    ARTICLE 6 - Taxes, Parking and Operating Expenses      13   

6.01 - Payment of Taxes, Assessments, Etc.

     13   

6.02 – Parking

     13   

6.03 - Operating Expenses

     13    ARTICLE 7 - Repairs and Maintenance      15   

7.01 - Repairs and Maintenance of the Premises by Tenant

     15   

7.02 - Repairs by Landlord

     15   

7.03 - Standard for Repairs

     15   

7.04 – Landlord Warranty

     16    ARTICLE 8 - Alterations and Improvements      16   

8.01 - Alterations and Improvements

     16    ARTICLE 9 - Damage by Fire, Etc.      16   

9.01 - Restoration of Premises

     16   

9.02 - Restoration During Last Two Years

     17    ARTICLE 10 - Eminent Domain      18   

10.01 - Eminent Domain

     18   

10.02 - Termination of Lease

     18   

10.03 - Abatement in Event of Partial Taking

     18   

10.04 - Rights of Tenant to Award

     18    ARTICLE 11 - Bankruptcy and Default Provisions      19   

11.01 - Conditional Limitations

     19   

 

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11.02 - Landlord’s Remedies

     19   

11.03 - Landlord’s Self-Help

     21   

ARTICLE 12 - Mechanic’s Liens

     21   

12.01 - Mechanic’s Liens

     21   

ARTICLE 13 - Mortgages, Assignments, Subleases and Transfers of Tenant’s
Interest

     21   

13.01 - Limitation of Tenant’s Rights

     21   

13.02 - Effect of Landlord’s Consent

     22   

ARTICLE 14 - Compliance with Governmental Orders, Etc.

     22   

14.01 - Tenant to Comply

     22   

14.02 - Failure to Comply

     23   

14.03 - ADA Compliance

     23   

ARTICLE 15 - Subordination to Mortgages

     23   

15.01 - Subordination to Mortgages

     23   

ARTICLE 16 - Inspection of Premises

     23   

16.01 - Inspection of Premises by Landlord

     23   

ARTICLE 17 - Notice and Certificates

     24   

17.01 - Notices and Certificates

     24   

17.02 - Certificates

     24   

ARTICLE 18 - Covenant of Quiet Enjoyment

     24   

18.01 - Covenant of Quiet Enjoyment

     24   

ARTICLE 19 - Miscellaneous Provisions

     25   

19.01 - Holdover

     25   

19.02 - Limitation on Landlord’s Personal Liability

     25   

19.03 - Force Majeure

     26   

19.04 - Attornment by Tenant

     26   

19.05 - Landlord May Pay Tenant’s Obligations

     26   

19.06 - Indemnification by Tenant

     26   

19.07 - Effect of Captions

     26   

19.08 - Tenant Authorized to Do Business in New York

     26   

19.09 - Execution in Counterparts

     27   

19.10 - Memorandum of Lease

     27   

19.11 - Law Governing Jurisdiction and Venue, Effect and Gender

     27   

19.12 - Complete Agreement

     27   

19.13 - Loss of Property and Water Damage

     27   

19.14 - Security Agreement

     27   

19.15 - No Representations by Landlord

     27   

19.16 - Lease Binding

     27   

19.17 - Amendments

     28   

19.18 - Arbitration

     28   

19.19 - Rights of Parties

     28   

19.20 - Invalidity of Particular Provisions

     28   

19.21 - Execution of Lease by Landlord

     28   

19.22 - Relationship of the Parties

     28   

19.23 - Assignment of Rents

     29   

19.24 - Environmental Covenants

     29   

19.25 - Tenant’s Right of First Refusal

     30   

19.26 - INTENTIONALLY DELETED

     30   

19.27 - Tenant’s Signage on the Building

     30   

19.28 - INTENTIONALLY DELETED

     30   

19.29 - Brokerage

     30   

 

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STANDARD PROPERTY LEASE

AGREEMENT made this 31st day of May, 2013 by and between the following parties:

Landlord:

HANCOCK PARK DEVELOPMENT, LLC, a New York limited liability company having its
office at 225 Greenfield Parkway, Suite 202, Liverpool, New York 13088

Tenant:

JADAK, LLC, a New York Limited Liability Company having a principal office at
7279 William Barry Boulevard, North Syracuse, New York 13212

W I T N E S S E T H :

ARTICLE 1

Premises, Construction and Use of Premises

1.01 - Premises

Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, that
certain parcel of land containing approximately 6.725 acres (the “Land”) and
approximately 55,000 rentable square feet of space in a one story, single tenant
building (the “Building”), 15,000 rentable square feet of which (the “Original
Premises”) is presently used and occupied by Tenant pursuant to the terms of
that certain Standard Property Lease dated December 21, 2006 between Landlord
and Tenant (the “2006 Lease”), and 40,000 rentable square feet of which (the
“Expansion Premises”) to be constructed and owned by Landlord on the Land owned
by Landlord located in the Hancock Air Park (the “Park”) on Taft Road in the
Town of Cicero, County of Onondaga and State of New York as more fully described
in the legal description attached hereto and made a part hereof as Exhibit “A”
and as shown on the site plan annexed hereto and made a part hereof as Exhibit
“B”, subject to liens, encumbrances, easements, covenants and restrictions of
record, (the Original Premises and the Expansion Premises are hereinafter
referred to together as the “Premises”).

1.02 - Construction of Premises

(a) Landlord shall, at its sole cost and expense (except as otherwise stated in
this Lease), (i) construct the Expansion Premises for Tenant’s use and occupancy
using new construction materials in accordance with the Base Building
Specifications identified on Exhibit “C” attached hereto and made a part hereof,
and (ii) renovate the Original Premises in accordance with the plan therefor
attached hereto as Exhibit “C-1” (collectively, “Landlord’s Work”).

(b) Tenant shall, at its sole cost and expense, improve the Expansion Premises
and the Original Premises accordance with the plans and specifications
identified on Exhibit “D” attached hereto and made a part hereof (“Tenant’s
Work”).

(c) INTENTIONALLY DELETED

1.03 - Use of the Premises

The Premises shall be used and occupied as a general office and light assembly
facility and for any other lawful purpose. Tenant agrees that it will not
knowingly conduct or permit to be conducted on the Premises any unlawful act.
Tenant agrees to comply with the “Protective Covenants and Restrictions” for the
Hancock Air Park attached hereto and made a part hereof as Exhibit E-1, and with
those other rules and regulations set forth in Exhibit E-2, and, provided

 

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Tenant has prior written notice, with such reasonable modifications thereof and
additions thereto as Landlord may hereafter from time to time make for the
Building, the Land on which the Building is located, the parking areas and the
common areas within the Park, if any.

ARTICLE 2

Term of Lease

2.01 - Initial Term

The initial term of this Lease shall be fifteen (15) years commencing on the
Term Commencement Date as defined in paragraph 2.02 hereof and ending fifteen
(15) years after the Term Commencement Date. If the initial term commences on a
date other than the first day of a month, the initial term shall expire at the
end of the day fifteen (15) years and zero (0) months from the first day of the
month following the month in which the initial term commenced. If the initial
term commences on the first day of a month, the initial term shall expire at the
end of the day fifteen (15) years and zero (0) months from the last day of the
preceding month.

2.02 - Construction Not Completed

If construction of the Expansion Premises and the renovation of the Original
Premises is not completed on the date hereof, the initial term of this Lease
shall commence on the date which is first day of the calendar month following
the later to occur of (i) the date of which the Expansion Premises are Ready for
Occupancy (as defined below), and (ii) the date on which the Landlord’s Work
with respect to the Original Premises is completed; provided however, that if
Tenant takes possession of the Premises earlier than the date so determined, the
term of this Lease shall commence upon the date Tenant first conducts business
in the Premises (the date as so determined is hereinafter referred to as the
“Term Commencement Date”).

The parties agree to execute and deliver a written Stipulation of Term of Lease
in the form attached hereto and made a part hereof as Exhibit “F” to be prepared
by Landlord expressing the commencement and termination dates of the initial
term hereof within thirty (30) days after such dates have been determined, it
being hereby agreed that the expiration date of this Lease shall always be the
last day of a calendar month.

The Premises shall be deemed “Ready for Occupancy” on the date that there is
delivered to Tenant a statement in writing by Landlord certifying that the
following conditions have been fulfilled:

(a) That the Landlord has substantially completed all of Landlord’s Work
described in Exhibit “C” hereto annexed. Substantially completed shall mean that
Tenant may commence the installation of its fixtures and equipment without
significant interference from Landlord’s workmen and that facilities shall have
been installed in the Premises to insure reasonable security of said fixtures
and equipment.

(b) That adequate facilities exist for safe and convenient access to and egress
from the Expansion Premises by persons for the purposes of readying the
Expansion Premises for the conduct of Tenant’s business therein.

(c) That a Certificate of Occupancy or Temporary Certificate of Occupancy has
been issued by the building inspector having jurisdiction for the Premises
allowing occupancy of the Expansion Premises; provided, however that this
condition shall be deemed satisfied if the Certificate is not available due
solely to Tenant’s failure to complete Tenant’s Work in the Expansion Premises,
if any.

Landlord agrees that Tenant shall have the right to enter the Expansion Premises
at least thirty (30) days prior to the date on which such Expansion Premises are
Ready for Occupancy, at its sole risk, cost and expense, to install its
telecommunications, computer systems, furniture systems and otherwise prepare
the Expansion Premises for the conduct of Tenant’s business therein.

 

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Notwithstanding anything to the contrary herein, Tenant shall have the right at
any time up until the date that is sixty (60) days after the Term Commencement
Date to notify Landlord in writing of “punch list” items relating to Landlord’s
Work that require correction. Landlord will correct such items to the reasonable
satisfaction of Tenant within sixty (60) days from its receipt of any such
notice.

2.03 - Renewal Term(s)

Tenant is hereby granted the option of extending the initial term of this Lease
for two (2) consecutive periods of five (5) years each (each such five (5) year
period being herein referred to as a “renewal term”) upon the condition that, at
the date of Tenant’s exercise of its option with respect to each such renewal
term, and at the date of commencement of each such renewal term, there is no
default by Tenant in the performance of its obligations under this Lease as to
which a notice of default has been given to Tenant and which is then continuing.
In the event that Tenant desires to exercise its option to so extend the term of
this Lease, written notice of Tenant’s exercise of its option shall be given to
the Landlord at least six (6) months prior to that date upon which, but for the
exercise of said option, the term of this Lease would otherwise expire. Each
such renewal term shall be upon the same terms and conditions set forth in this
Lease, except that there shall be no option to extend the term of this Lease
beyond the second (2nd) renewal term herein set forth and except that the annual
Base Rent for each such renewal term shall be as set forth in paragraphs 3.01(g)
and 3.01(h) hereof.

2.04 - Surrender of Premises

At the expiration or earlier termination of the term of this Lease, Tenant shall
surrender the Premises in good condition and broom clean, reasonable wear and
tear and damage by fire or casualty excepted. All leasehold improvements shall
at Landlord’s option remain in the Premises including, but without limitation,
carpeting, wall covering, heating, ventilating and air-conditioning equipment,
and lighting and plumbing fixtures, but not including Tenant’s furniture
systems, computer and telecommunications equipment (to the extent removable
without causing material damage to the Premises), moveable trade fixtures and
equipment.

ARTICLE 3

Rent

3.01 - Rent

Tenant shall pay to Landlord at the address of Landlord set forth at the
beginning of this Lease, or at such other place that may be designated by
Landlord, without any offset or defense and without any prior demand therefor,
as Base Rent during the term of this Lease:

(a) commencing on the date on which the Expansion Premises are Ready for
Occupancy (as defined in paragraph 2.02 above) and continuing thereafter until
the Landlord’s Work with respect to the Original Premises is completed, the sum
of Five Hundred Eighty-One Thousand Six Hundred Twenty-Five and 00/100 Dollars
($581,625.00) per year (being 75% of the annual rate of $14.10 per rentable
square foot) payable in equal consecutive monthly installments of Forty-Eight
Thousand Four Hundred Sixty-Eight and 75/100 Dollars ($48,468.75) each; and

(b) commencing on the Term Commencement Date and continuing thereafter until the
last day of the thirty-sixth (36th) month of the term, the sum of Seven Hundred
Seventy-Five Thousand Five Hundred and 00/100 Dollars ($775,500.00) per year
(being at the annual rate of $14.10 per rentable square foot) payable in equal
consecutive monthly installments of Sixty-Four Thousand Six Hundred Twenty-Five
and 00/100 Dollars ($64,625.00) each;

 

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(c) commencing on the first day of the thirty-seventh (37th) month of the
initial term and continuing thereafter through the end of the sixtieth
(60th) month of the initial term, the sum of Eight Hundred Thirty-Three Thousand
Two Hundred Fifty and 00/100 Dollars ($833,250.00) per year (being at the annual
rate of $15.15 per rentable square foot) payable in equal consecutive monthly
installments of Sixty-Nine Thousand Four Hundred Thirty-Seven and 50/100 Dollars
($69,437.50) each;

(d) commencing on the first day of the sixty-first (61st) month of the initial
term and continuing thereafter through the end of the one hundred eighth
(108th) month of th initial term, the sum of Eight Hundred Eighty Thousand and
00/100 Dollars ($880,000.00) per year (being at the annual rate of $16.00 per
rentable square foot) payable in equal consecutive monthly installments of
Seventy-Three Thousand Three Hundred Thirty-Three and 33/100 Dollars
($73,333.33) each;

(e) commencing on the first day of the one hundred ninth (109st) month of the
initial term and continuing thereafter through the end of the one hundred
forty-fourth (144th) month of the initial term, the sum of Nine Hundred
Twenty-Six Thousand Seven Hundred Fifty and 00/100 Dollars ($926,750.00) per
year (being at the annual rate of $16.85 per rentable square foot) payable in
equal consecutive monthly installments of Seventy-Seven Thousand Two Hundred
Twenty-Nine and 17/100 Dollars ($77,229.17) each;

(f) commencing on the first day of the one hundred forty-fifth (145th) month of
the initial term and continuing thereafter through the end of the one hundred
eightieth (180th) month and the expiration of the initial term, the sum of Nine
Hundred Seventy-Six Thousand Two Hundred Fifty and 00/100 Dollars ($976,250.00)
per year (being at the annual rate of $17.75 per rentable square foot) payable
in equal consecutive monthly installments of Eighty-One Thousand Three Hundred
Fifty-Four and 17/100 Dollars ($81,354.17) each;

(g) if Tenant timely exercises its option to extend the initial term by the
first renewal term, then the rent for such first renewal term shall be the sum
of Nine Hundred Seventy-Six Thousand Two Hundred Fifty and 00/100 Dollars
($976,250.00) per year (being at the annual rate of $17.75 per rentable square
foot) payable in equal consecutive monthly installments of Eighty-One Thousand
Three Hundred Fifty-Four and 17/100 Dollars ($81,354.17) each; and

(h) if Tenant timely exercises its option to extend the initial term by the
second renewal term, then the rent for such second renewal term shall be the sum
of Nine Hundred Seventy-Six Thousand Two Hundred Fifty and 00/100 Dollars
($976,250.00) per year (being at the annual rate of $17.75 per rentable square
foot) payable in equal consecutive monthly installments of Eighty-One Thousand
Three Hundred Fifty-Four and 17/100 Dollars ($81,354.17) each.

3.02 – Rent Adjustment

(a) General Concept: Landlord and Tenant will share the benefit or risk with
respect to the cost of construction and interest rate fluctuation. There will be
an assumed construction amount, interest rate and lease rental rates as set
forth in Section 3.01 above. The rental rates will decrease if the construction
cost is under budget. The rental rates will decrease if the interest rate is
lower than budget. Conversely, the rental rates will increase if the
construction cost is over budget or if the interest rate is higher than
budgeted. The rental rates may increase or decrease if there is a mix of
increase or decrease in construction cost or interest rate. The Landlord’s
profit in the first year is set at a fixed minimum no matter what the final
rental rate is determined to be.

(b) Specific Pro Forma Amounts:

Construction Budget – The budget amount for the hard cost of construction in
total is $5,500,000. This covers the cost to construct the building which
includes contractor General Conditions, Construction Manager Fee, Tenant
Allowance to fit-up interiors to the new building and modify the existing
building, and a contingency. All soft costs are to be paid by the Landlord with
no risk sharing by the Tenant.

 

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Hard Cost Construction Budget Total Amount - $5,500,000 which includes:

Contingency - $250,000

Tenant Allowance - $1,150,000

Construction Manager Fee - $175,000

Landlord First Year Profit - $180,000

Permanent Loan Interest Rate – 4.75%

Permanent Loan Amortization Schedule – 20 Years (240 months)

(c) Rent Adjustment Calculation:

A debt service constant will be calculated based on the 240 month amortization
schedule and the permanent loan interest rate as stated by the Mortgagee at the
time the permanent loan becomes effective. The debt service constant will be
multiplied by the amount of the hard cost of construction above or below
$5,500,000. The result will be the annual increase or decrease in the rental
rates stated in paragraph 3.01 above. By way of illustration and example only:

Example 1 – Change in Construction Cost:

Interest Rate – 4.75%

Amortization Schedule – 240 Months

Debt Service Constant - .07755

Hard Cost of Construction above Budget - $100,000

Annual Rent Increase above each of the stated rental rates - $7,755

Example 2 – Change in Interest Rate:

Interest Rate – 4.5%

Amortization Schedule – 240 Months

Debt Service Constant - .07592

Hard Cost of Construction on Budget - $5,500,000

Annual Rent Decrease below each of the stated rental rates - $8,965

3.03 - Payment of Rent

Each monthly installment of rent herein provided to be paid by Tenant to
Landlord shall be paid in advance, on the first day of each month, by check,
draft, or like instrument payable to the order of Landlord or such other person,
firm or corporation as shall have been designated in writing by Landlord to
receive such payment from time to time during the term of this Lease, without
any set-off or deduction whatsoever. Rent for any period less than a full
calendar month shall be apportioned based on the number of days in that month.

3.04 - Absolute Net Lease

This is an absolute net Lease and Landlord shall not be required to provide any
services, or do any act or thing with respect to the Premises except as
expressly herein provided, and the rent reserved herein shall be paid to
Landlord without any claim on the part of Tenant for diminution, set-off or
abatement and nothing shall suspend, abate or reduce any rent to be paid by
Tenant hereunder except as otherwise specifically provided in this Lease. Tenant
shall be responsible for the payment of any sales or use taxes now or hereafter
imposed upon the annual rent or additional rent payable by Tenant under this
Lease provided such sales or use tax is not an income tax.

3.05 - Payment of Additional Rent

Any additional rent payable hereunder by Tenant shall be paid by Tenant to
Landlord within ten (10) business days after receipt by Tenant of notice
(monthly or at such other time (not more frequently than monthly) as Landlord
shall determine from time to time) of the amount thereof, or, at Landlord’s
election, such additional rent shall be paid as follows: during each full lease
year the reasonably estimated amount of additional rent to be owed by Tenant for
such lease year shall be paid monthly and Tenant, upon notice from Landlord,
shall pay any excess of the actual amount of additional rent over such estimated
amount for such full lease year (or receive credit if the estimated amount paid
exceeds the actual amount of additional rent).

 

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3.06 - Past Due Rent

If during the term of this Lease, Tenant shall fail to pay the monthly rent or
additional rent or any other charge hereunder within ten (10) days after the
same is due and payable, Tenant shall pay to Landlord, as liquidated damages for
such late payment and in addition to such fixed monthly rent, additional rent or
any other charge, without notice or demand by Landlord, a sum equal to five
percent (5%) of the amount thereof. Nothing contained in this paragraph 3.05
shall be construed to be a limitation of or in substitution of Landlord’s rights
and remedies under Article 12 of this Lease.

3.07 - Lease Year

The expression “Lease Year” as used herein means twelve (12) consecutive
calendar months, the first Lease Year to begin on the first day of the first
full month of the term of this Lease. If the first Lease Year begins on a day
other than January 1, Landlord may adjust the Lease Year to coincide with a
calendar year for billing of additional rent.

ARTICLE 4

Utilities

4.01 - Utilities

Tenant shall continue to pay for all gas, water, electricity and other utility
services used or consumed in connection with the Original Premises. Beginning on
the date Tenant first takes occupancy of the Expansion Premises and continuing
thereafter throughout the term of this Lease, Tenant shall pay for all gas,
water, electricity and other utility services used or consumed in connection
with the Premises. Such payments shall be made directly by Tenant to the utility
company, municipality or other entity providing such utilities, and shall be
made on or before the date such payments are due.

ARTICLE 5

Insurance and Indemnification

5.01 - Tenant’s Insurance

At all times during the term of this Lease, Tenant shall at Tenant’s sole cost
and expense keep in full force and effect as a minimum, the following insurance
coverages for the mutual benefit of Landlord and Tenant as their respective
insurable interests may appear:

(a) A policy of comprehensive general public liability and property damage
insurance including independent contractors, broad form property damage,
personal injury and blanket contractual liability endorsements under which
Landlord is named as an additional insured with a combined single limit with
respect to each occurrence or each claim in an amount not less than $2,000,000
in the aggregate for bodily or personal injury, death or damage to property, and
umbrella liability in the amount of $5,000,000. While Tenant is moving its
furniture, fixtures and equipment in or out of the Premises, Tenant shall
require its moving contractors to carry the same insurance coverages as required
by this Lease naming Tenant and Landlord as additional insureds.

(b) A policy against fire and other casualty on the personal property owned by
the Tenant on the Premises on a “special cause of loss” form sufficient to
provide 100% replacement value of such personal property located in or on the
Premises. Such policy shall contain a replacement cost endorsement and a clause
pursuant to which the insurance carrier waives all rights of subrogation against
the Landlord with respect to losses payable under the policy.

 

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(c) A Worker’s Compensation policy providing statutory benefits for Tenant’s
employees and employer’s liability coverage with a limit in an amount not less
than that which is required by law.

(d) Protective liability insurance insuring Landlord and Tenant against any
liability which may arise on account of alterations, additions, improvements or
construction for tenant’s improvements, with a minimum limit of $2,000,000 with
respect to each occurrence or each claim for injury to or death of any one
person and damage to property.

(e) Such other insurance and in such amounts as may from time to time be
reasonably required by Landlord against other insurable hazards, which at the
time are commonly insured against for premises similarly situated, due regard
being given to the type of building, its construction, use and occupancy. Tenant
shall also carry insurance on the Tenant’s inventory, furniture and fixtures,
leasehold improvements and operating equipment.

All insurance coverages that Tenant is required to maintain under this Lease
shall name Landlord as an additional insured and shall be effected under a valid
and enforceable policy issued by reputable insurers licensed and permitted to do
business in the State of New York in which the Building is located, and rated in
Best’s Insurance Guide, as having a general policyholder rating of “A” and a
financial rating of at least Class VIII. Tenant shall cause certificates
evidencing the issuance of such policies to be delivered to Landlord before
occupancy of the Premises and at least ten (10) days prior to the expiration of
such policies evidencing their renewal. Each certificate shall set forth the
coverages that Tenant is required to maintain under this Lease and shall be
non-cancellable with respect to Landlord without ten (10) days written notice to
Landlord. In the event that Tenant shall not have delivered such certificate(s)
to Landlord as required above, Landlord may obtain such insurance as it may
reasonably require to protect its interest. The cost for such policies shall be
paid by Tenant to Landlord as additional rent upon demand.

Any loss under any such policies shall be adjusted with the insurance company by
Tenant and the proceeds of such insurance shall be payable to Landlord and to
Landlord’s first mortgagee if the policy so provides, as their respective
insurable interests may appear. Each such policy shall contain a provision that
no act or omission of Tenant shall affect or limit the obligation of the
insurance company to pay the Landlord or the Landlord’s mortgagee the amount of
any loss sustained and shall contain an agreement by the insurer that such
policy shall not be canceled without at least thirty (30) days prior written
notice to the Landlord, Tenant and any mortgagee to whom a loss thereunder may
be payable.

5.02 - Landlord’s Insurance

Landlord shall obtain and keep in full force and effect at Landlord’s expense
(except as otherwise provided herein) during the Lease term a minimum of the
following insurance coverages for the mutual benefit of Landlord and Tenant of
their respective insurable interests may appear:

(a) A policy of comprehensive general public liability and property damage
insurance including independent contractors, broad form property damage,
personal injury and blanket contractual liability endorsements under which
Tenant is named as an additional insured with a combined single limit with
respect to each occurrence or each claim in an amount not less than $2,000,000
in the aggregate for bodily or personal injury, death or damage to property.

(b) A Workers’ Compensation policy providing statutory benefits for Landlord’s
employees, if any, and employers’ liability coverage in an amount of not less
than that required by law.

(c) A policy against fire and other casualty on the Building and Premises and
personal property owned by Landlord on a “special cause of loss” form sufficient
to provide 100% replacement value of such real and personal property. Such
policy shall contain a

 

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replacement cost endorsement (being the cost of replacing all such buildings on
the Premises exclusive of the costs of excavation and footings below the lowest
grade level) and a clause pursuant to which the insurance carrier waives all
rights of subrogation against the Tenant with respect to losses payable under
the policy. Such full replacement cost shall be determined from time to time
(but not more frequently than once in every twelve (12) calendar months) by an
appraiser, architect or other person or firm designated by Landlord. Any loss
under any such policy shall be adjusted with the insurance company by Landlord
and the proceeds of such insurance shall be payable to Landlord, Tenant and to
Landlord’s first mortgagee if the policy so provides, as their respective
insurable interests may appear. Each such policy shall contain a provision that
no act or omission of Landlord shall affect or limit the obligation of the
insurance company to pay the Tenant or the Landlord’s mortgagee the amount of
any loss sustained and shall contain an agreement by the insurer that such
policy shall not be canceled without at least thirty (30) days prior written
notice to the Landlord, Tenant and any mortgagee to whom a loss thereunder may
be payable.

(d) Protective liability insurance insuring Tenant and Landlord against any
liability which may arise on account of alterations, additions, improvements or
construction performed by the Landlord on the Premises during the Lease term, in
an amount of not less than $2,000,000 combined single limit with respect to each
occurrence or each claim for injury to or death of any one person and damage to
property.

All insurance coverages that Landlord is required to maintain under this Lease
shall be effected under valid and enforceable policies issued by reputable
insurers licensed and permitted to do business in the State of New York in which
the Building is located, and rated in Best’s Insurance Guide as having a General
policyholder rating of “A” and a financial rating of at least Class VIII. Upon
written request of the Tenant, Landlord shall cause certificates evidencing the
issuance of such policies to be delivered to Tenant upon occupancy of the
Premises and at least ten (10) days prior to expiration of such policies
evidencing their renewal.

Tenant shall be responsible for the prompt and proper investigation of all
accidents and injuries that occur or could have a bearing on the liability of
the Landlord. Tenant shall investigate all accidents immediately and thoroughly
with particular attention given to all pertinent facts leading up to, during and
following the occurrence. Copies of any and all accident investigations shall be
sent from Tenant to Landlord within 24 hours after the occurrence.

5.03 - Subrogation

Each party hereto hereby waives on behalf of the insurers of such party’s
property any and all claim or right of subrogation of any such insurer against
the other party hereto for loss of or damage to the property so insured other
than loss or damage resulting from the willful act of the other party, it being
understood, however, (a) that such waiver shall be ineffective as to any insurer
whose policy does not authorize such waiver, (b) that it shall be the obligation
of each party seeking the benefit of the foregoing waiver to request the other
party (i) to submit copies of its insurance, and (ii) in case such waiver is not
so authorized by any such policy, to procure an express waiver from the insurer
thereunder, any additional charge for such waiver to be paid by the party
requesting the benefit of such waiver, and (c) that neither party shall be
liable to the other party under clause (b) hereof except for willful failure to
comply with any request pursuant to said clause (b).

5.04 - Tenant’s Payment of Insurance Premiums

Tenant shall reimburse Landlord for the premiums paid by Landlord for the
casualty and liability insurance carried by Landlord as set forth in paragraph
5.02 above applicable solely to the Building and the Land and their operation
although part of a blanket policy or policies, such payment to be made by Tenant
within fifteen (15) days after Tenant has received Landlord’s demand therefor
which demand will be accompanied by a copy of the paid premium invoice from
Landlord’s insurance agent or insurer for which reimbursement is sought.

 

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5.05 - Increase in Fire Insurance Premiums

Tenant shall not do or suffer to be done, or keep or suffer to be kept, anything
in, upon or about the Premises which will contravene Landlord’s policies
insuring against loss or damage by fire or other hazards, or which will prevent
Landlord from procuring such policies from companies acceptable to Landlord or
which will in any way cause an increase in the insurance rates upon any portion
of the Building. If the Tenant violates any prohibition provided for in the
first sentence of this paragraph, Landlord may, without notice to Tenant,
correct the same at Tenant’s expense. Tenant shall pay to Landlord as additional
rent forthwith upon demand the amount of any increase in premiums for insurance
resulting from any violation of the first sentence of this paragraph, even if
Landlord shall have consented to the doing of or the keeping of anything on the
Premises which constituted such a violation (but payment of such additional rent
shall not entitle Tenant to violate the provisions of the first sentence of this
paragraph).

5.06 - Indemnification and Hold Harmless

If any damage on the Premises or to the land on which the Building is located or
to Building or to any equipment or appurtenance therein (whether belonging to
Landlord or to other tenants or to occupants of the Building) results from the
action or neglect of the Tenant, its employees, agents or invitees, then Tenant
shall be liable therefore and Landlord, at its option, may repair such damage
and Tenant shall upon demand of Landlord reimburse Landlord for all reasonable
costs of such repairs and damage to the extent resulting from the action or
neglect of Tenant.

Tenant covenants with Landlord that Landlord shall not be liable for any damage
or liability of any kind from any injury to or death of persons or damage to
property of Tenant or any other person during the term of this Lease from any
cause whatsoever, by reasons of use, occupancy and enjoyment of the Premises by
Tenant or any person thereof or holding under Tenant, and that Tenant does
hereby indemnify Landlord (and such other persons as are in privity of estate
with Landlord) and save it harmless from and against any and all claims,
actions, damages, liability and expense in connection with loss of life,
personal injury and/or damage to property arising from or out of any occurrence
in, upon or at the Premises, or the occupancy or use by Tenant of the Premises
or any part thereof, or occasioned wholly or in part by any act or omission of
Tenant, its agents, contractors, employees, servants, lessees or
concessionaires, or on account of any such real or claimed damage or injury and
from all liens, claims and demands arising out of the use of the Premises and
its facilities, for any repairs or alterations which Tenant may make upon said
Premises, but Tenant shall not be liable for damage or injury occasioned by the
negligence of Landlord and its agents, servants or employees.

Landlord covenants with Tenant that Tenant shall not be liable for any damage or
liability of any kind from any injury to or death of persons or damage to
property of Landlord or any other person during the term of this Lease, from any
cause whatsoever, by reason of the presence or activities on the Premises by
Landlord or its designated agents, servants or employees for any reason
whatsoever, and that Landlord will indemnify and save harmless Tenant from all
liability whatsoever, on account of any such real or claimed damage or injury
and from all liens, claims and demands arising out of Landlord’s or Landlord’s
designated agents, servants or employees presence or activities on the Premises,
but Landlord shall not be liable for damage or injury occasioned by the
negligence of Tenant and its designated agents, servants or employees.

This obligation to indemnify and hold harmless shall include reasonable legal
and investigation costs and all other reasonable costs, expenses and liabilities
from the first notice that any claim or demand is to be made or may be made.

Each party shall procure an appropriate clause in, or endorsement on, each of
its policies for fire or extended coverage insurance covering the Premises or
the Building or personal property, fixtures or equipment located thereon or
therein, pursuant to which the insurance company waives subrogation or consents
to a waiver of right of recovery against the other party, and each party, hereby
agrees that it will not make any claim against or seek to recover from the other
party for any loss or damage to its property or the property of others covered
by such fire or extended coverage insurance.

 

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ARTICLE 6

Taxes, Parking and Operating Expenses

6.01 - Payment of Taxes, Assessments, Etc.

Tenant shall pay directly to the taxing jurisdiction before any fine, penalty,
interest or cost may be added thereto or become due or be imposed by operation
of law for the non-payment thereof, all real estate taxes (or payments in lieu
thereof), assessments, water and sewer rents, rates and charges, and other
governmental charges, general and special, ordinary and extraordinary,
unforeseen or foreseen, of any kind and nature whatsoever which at any time
during the term of this Lease may be assessed, levied, imposed upon, or grow or
become due and payable out of or in respect to, or become a lien on, the
Premises or any part thereof or any improvements or appurtenances thereto (all
such taxes, assessments, water and sewer rents, rates and charges, and other
governmental charges being hereinafter referred to as “Impositions”), provided,
however, that any Imposition levied or assessed against the Expansion Premises
which relates to a fiscal period of the taxing authority a part of which period
is included within the term of this Lease and a part of which is included in a
period of time prior to the Term Commencement Date or after the expiration of
the term of this Lease, shall be adjusted between Landlord and Tenant as of the
Term Commencement Date or the expiration of the term of this Lease, as the case
may be, so that Tenant shall pay that portion of such Imposition which relates
to that part of such fiscal period included within the term of this Lease, and
Landlord shall pay the remainder thereof. If Landlord is unable to arrange for
the taxing authority(ies) to forward the tax bill(s) directly to Tenant,
Landlord shall forward tax bills to Tenant promptly upon receipt and Tenant
shall provide Landlord with a copy of such receipted bill following payment.

Nothing herein contained shall require Tenant to pay municipal, state or federal
income taxes assessed against Landlord, municipal, state or federal capital
levy, estate, succession, inheritance or transfer taxes of Landlord or
corporation franchise taxes imposed upon any corporate owner of the fee of the
Premises; provided, however, that if at any time during the term of this Lease
the methods of taxation prevailing at the Term Commencement Date shall be
altered so as to cause the whole or any part of the taxes, assessments, levies,
impositions or charges now or hereafter levied, assessed or imposed on real
estate and the improvements thereon to be levied, assessed and imposed, wholly
or partially as a capital levy, or otherwise, on the rents received therefrom
then all such taxes, assessments, levies, impositions or charges, shall be
deemed to be included within the term “Impositions” for the purposes hereof, and
Tenant shall pay and discharge the same as herein provided in respect to the
payment of Impositions.

The certificate, invoice or bill of an appropriate official designated by law to
make or issue the same or to receive payment of any Imposition or non-payment of
such Imposition shall be prima facie evidence that such Imposition is due and
unpaid at the time of the making or issuance of such certificate, invoice or
bill.

Landlord shall use its best efforts to seek, apply for and obtain any and all
real estate tax abatement and/or incentive programs that are or may in the
future during the term of this Lease be applicable to the Premises, including
but without limitation, Section 485-b of the Real Property Tax Law, and Empire
Zone status.

6.02 - Parking

Landlord shall provide to Tenant such parking spaces in the parking area to be
developed for the Building as may be required by the Town of Cicero based on the
Premises containing approximately 55,000 rentable square feet.

6.03 - Operating Expenses

(a) Tenant shall, at its sole cost and expense, operate, manage and maintain the
Building and the Land upon which the Building is located, including the
landscaped areas and the parking area in accordance with accepted principles of
sound management and accounting practices as applied for first-class office
buildings, including, without limitation:

(i) janitorial labor and supplies;

 

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(ii) maintenance, snowplowing, ice removal, repair, replacement and engineering
labor and supplies;

(iii) Intentionally Deleted;

(iv) window cleaning;

(v) painting;

(vi) security;

(vii) trash removal;

(viii) Intentionally Deleted;

(ix) gas and other fuels, water;

(x) landscaping and lawn care; and

(xi) parking lot resurfacing.

It is understood that the Tenant is the sole occupant of the Building and
responsible for all the Operating Expenses, Impositions (as defined in paragraph
6.01 above), and for all utility charges for the Building (as provided in
paragraph 4.01, and the Land upon which the Building is located and the parking
areas for the Building.

Notwithstanding anything to the contrary, the following expenses shall be
excluded from Operating Expenses:

(a) expenses for any capital improvement made to the Building which do not
reduce Operating Expenses;

(b) expenses for repairs or other work occasioned by an insured fire or other
insured casualty;

(c) expenses incurred in leasing or procuring new tenants, including commissions
and fees for legal services and advertising;

(d) legal expenses incurred in enforcing the terms and conditions of any lease;

(e) interest or amortization payments on any mortgage or obligation in the
nature of a mortgage;

(f) expenses incurred in connection with the maintenance and operation of any
pay parking area;

(g) land rent or ground lease payments, if any;

(h) costs of refinancing;

(i) interest or penalties incurred by Landlord’s late payments;

(j) cost of art work;

 

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(k) net income taxes;

(l) capital tax, succession tax, transfer tax, franchise tax, gift or estate
tax;

(m) costs actually reimbursed through the proceeds of insurance;

(n) repairs incurred during the first Lease Year or for items subject to a
longer warranty, during the warranty coverage period exclusive of those items
subject to normal wear and tear and damage caused by Tenant, its agents,
contractors or employees;

(o) Roof and sidewalk repairs during the initial term except those caused by
Tenant, its agents, contractors or employees;

(p) Intentionally Deleted; and

(q) Repairs or other costs resulting from the negligence or willful misconduct
of Landlord, its agents, contractors or employees during the warranty coverage
period.

ARTICLE 7

Repairs and Maintenance

7.01 - Repairs and Maintenance of the Premises by Tenant

Throughout the term of this Lease, Tenant at its sole cost and expense will take
good care of the Premises and will keep the same neat, clean, free of debris, in
good order and repair, and make all necessary non-structural repairs thereto,
interior and exterior, ordinary and extraordinary, including replacement of
plate glass. In addition, Tenant shall, at its cost and expense, be responsible
to repair, maintain and replace all specialty equipment installed by Tenant.
When used in this Article 7, the term “repairs” shall include all necessary
replacements, repairs, alterations, interior and exterior painting, additions
and betterments to the Premises and the ceilings, floor coverings, lighting
fixtures and plumbing, heating, ventilating, air conditioning, sprinkler,
electric and sewage systems, facilities, appliances, parking areas and driveways
(including repaving thereof), and landscaped areas, and repair, maintenance
and/or replacement of Tenant’s specialty equipment associated with the conduct
of Tenant’s business in the Premises. Tenant shall also keep the Premises free
from any infestation of insects, rodents, bugs or other animals. All repairs
made by Tenant shall be at least equal in quality and class to the condition of
the Premises when Tenant first conducted its business therein. Landlord shall
have the right, at Tenant’s sole cost and expense, to repair any damage to the
Building or to the parking area for the Building caused by Tenant, its
contractors or employees.

7.02 - Repairs by Landlord

Landlord shall maintain the Building in good repair and in a safe, clean and
first-rate condition (other than those obligations assumed by Tenant under this
Lease, and except for damage caused by or repairs or replacements necessitated
by Tenant, its agents, employees or contractors), including but not limited to
maintaining, repairing and replacing, as necessary, all structural portions of
the Building, and all service systems for the Building, including but without
limitation, the roof membrane, the roof structure, foundation, air-conditioning,
heating, plumbing, electrical and sewage systems, exterior windows, the
structural framing and soundness of the exterior and interior walls of the
Building.

7.03 - Standard for Repairs

The necessity for and adequacy of repairs pursuant to paragraphs 7.01 and 7.02
above shall be measured by the standard which is appropriate for buildings,
equipment, systems and appliances of similar construction and class. Any and all
fixtures, equipment, and furnishings owned by Landlord and situated in the
Premises including replacements thereof shall be and remain the property of
Landlord and shall remain in the Premises at the expiration or earlier
termination of this Lease.

 

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7.04 – Landlord Warranty

Landlord shall warranty to Tenant against damage, destruction and/or defect to
any and all portions of the Building, structural and non-structural, for a
period of one (1) year from the Term Commencement Date, except that the roof of
the Expansion Premises shall have a fifteen (15) year warranty, the roof of the
Original Premises shall have a warranty until December 31, 2021, and further
except: (a) latent defects, which Landlord shall warranty for the Term of this
Lease; (b) any building components that generally have greater than a one
(1) year warranty, in which case, Landlord shall warranty said components for a
commercially reasonable period of time, not to be less than one (1) year;
(c) normal wear and tear; and (d) damage or destruction caused by the negligent
acts or omissions of Tenant or its agents.

ARTICLE 8

Alterations and Improvements

8.01 - Alterations and Improvements

Following the Term Commencement Date, Tenant may, at its option during the term
of this Lease without the written approval of Landlord, move or alter movable
partitioning, furnishings, and electrical lighting, provided the electrical
lighting is not disconnected from its power source, within the Premises at its
sole cost and expense as may be required in Tenant’s sole determination by the
business conducted therein. Tenant shall not make any other alteration to the
Premises without first obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. All such alterations,
improvements and replacements which require the prior written consent of
Landlord shall remain the property of Tenant and may be removed from the
Premises at any time during the term or at the termination of Tenant’s occupancy
hereunder, provided that any damage caused by such removal shall be repaired by
Tenant. Tenant may at its option elect not to remove any or all of such
improvements, installations or replacements in which case the same shall become
the property of Landlord upon Tenant’s surrender of the Premises; provided,
however, that Landlord may require Tenant to remove any such additions,
installations or replacements by written notice from Landlord to Tenant received
by Tenant within fifteen (15) days prior to the expiration of the term of this
Lease if such additions, installations or replacements are structural or
substantial. Tenant agrees that any and all alterations, additions, or
replacements shall be made in compliance with the building codes and ordinances,
laws and regulations applicable to the Premises. Should a building or other
permit or permits be required by Tenant to accomplish any improvements,
installations or replacements provided for in this paragraph, Landlord will
execute, at Tenant’s expense, any necessary documents which are consistent with
the terms of this Lease. With respect to any approvals to be given by Landlord
or with respect to any supervision which may be required of Landlord under this
paragraph, Tenant shall reimburse Landlord for Landlord’s reasonable
out-of-pocket expenses.

ARTICLE 9

Damage by Fire, Etc.

9.01 - Restoration of Premises

The parties hereto mutually agree that if the Premises are partially or totally
destroyed or damaged by fire or other hazard, then Landlord shall repair and
restore same as soon as is reasonably practicable to substantially the same
condition in which such Premises were in before such damage; provided that, if
the insurance proceeds collected by Landlord for its own account (and not
retained by any mortgagee as a consequence of such destruction or damage) are
less than ninety percent (90%) of the estimated cost of such repairs and
restoration, Landlord shall not be obligated to commence or perform such repairs
and restorations, and this Lease upon

 

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notice by Landlord to Tenant shall at the option of Landlord terminate, unless
Tenant undertakes (in form and upon terms satisfactory to Landlord) to pay the
difference between such estimated cost and such insurance proceeds.

If however, the Premises are completely destroyed or so damaged that Landlord
cannot reasonably restore or rebuild the Premises in six (6) months to their
original condition, then Landlord shall not be required to rebuild or restore
and this Lease shall be terminable by either party hereto by serving written
notice upon the other. In any event, if repairs have not been commenced within
sixty (60) days from the date of said destruction or damage, this Lease may be
immediately terminated by Tenant serving written notice upon Landlord, but in no
event may Tenant terminate this Lease after such repairs have been commenced by
Landlord so long as Landlord diligently proceeds to complete same.

In the event the improvements erected or to be erected upon the Premises are
completely or partially destroyed or so damaged by fire or other hazard that
they cannot reasonably be used by Tenant or can only be partially used by Tenant
and this Lease is not terminated as above provided, then rent and additional
rent shall abate in proportion to the amount of the premises that is being used
until the premises is rendered entirely usable.

9.02 - Restoration During Last Two Years

Anything in paragraph 9.01 to the contrary notwithstanding, if, within the two
(2) years prior to the expiration of the initial term, or if the casualty occurs
in a renewal term, within the two (2) years prior to the expiration of such
renewal term, the Premises shall be damaged or destroyed by fire or otherwise,
and the estimated cost shall be equal to or exceed 50% of the replacement cost
of the Premises, Landlord shall be under no obligation to repair or restore the
Premises and the Lease shall terminate (and the Tenant shall not be entitled to
any portion of the insurance proceeds, all of which shall become the property of
Landlord) unless Tenant at its sole election shall notify Landlord in writing
within thirty (30) days after such destruction or damage that Tenant elects to
enter into a modification of this Lease and, within thirty (30) days after
receipt of such written notice by Landlord, Landlord and Tenant enter into a
modification to this Lease by the terms of which the term of this Lease shall be
extended five (5) years beyond the end of the initial term (or renewal term if
such damage or destruction occurs during a renewal term) upon the same terms and
conditions except that the rent effective upon the date of such modification
agreement shall be, and Tenant covenants and agrees to pay, an amount equal to
the rent payable in the first renewal term if the damage occurs in the last two
(2) years of the initial term, an amount equal to the rent payable in the second
renewal term if the damage occurs in the last two (2) years of the first renewal
term and, if the damage occurs in the last two (2) years of the second renewal
term, an amount equal to the product resulting from multiplying the rent in
effect at the date of the occurrence of such damage or destruction by the
percentage (which shall in no event be less than 100%) found by dividing the
Index (as defined below) for the calendar month in which the damage or
destruction occurred by the Index for the calendar month in which falls the Term
Commencement Date under this Lease, said rent to be payable as the rent in equal
monthly installments thereafter.

The “Index” is defined to mean the “Consumer Price Index for All Urban
Consumers, All Items, U.S. City Average, 1982-1984=100, of the United States
Department of Labor’s Bureau of Labor Statistics in effect and generally
published for the calendar month in which falls the beginning of such renewal
term. If the aforesaid Price Index shall no longer be published or if any of the
separate components utilized to compute the Index are altered or removed after
the date of this Lease, then another price index generally recognized as
authoritative and computed as nearly as practicable in the same manner as the
Index, shall be substituted by agreement of the parties, it being intended by
the parties that as consistent a basis as is possible be utilized for making any
calculations herein required. During any period while the determination of such
dispute is pending, the fixed monthly rent then in effect shall continue to be
paid by Tenant, provided that the fixed monthly rent as finally determined shall
be effective from the beginning of the five (5) year extended term as provided
in paragraph 9.02 above, and any deficiency owing by Tenant from the
commencement of such term shall be paid promptly by Tenant upon final
determination of the dispute.

 

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ARTICLE 10

Eminent Domain

10.01 - Eminent Domain

In the event that the Premises, or any part thereof, shall be taken by exercise
of the right of condemnation or eminent domain or by agreement between Landlord
and those authorized to exercise such right (collectively herein referred to as
“Condemnation Proceedings”), Landlord shall be entitled to collect from any
condemnor the entire award that may be made in any such proceeding, without
deduction therefrom for any estate hereby vested in or owned by Tenant, subject
to Tenant’s rights as set forth in this Article 10.

Tenant agrees to execute any and all further documents that may be required in
order to facilitate collection by Landlord of any and all such awards. Tenant,
in cooperation with Landlord, shall have the right to participate in any
condemnation proceedings only for the purpose of protecting Tenant’s interest
hereunder.

10.02 - Termination of Lease

If, at any time during the term of this Lease, title to the whole or materially
all of the Premises shall be taken in Condemnation Proceedings, this Lease shall
terminate and expire on the date on which Tenant is deprived of possession
thereby and the fixed monthly rent and all other amounts provided to be paid by
Tenant hereunder shall be apportioned and paid to such date.

10.03 - Abatement in Event of Partial Taking

Except as herein otherwise specifically provided, if title to less than the
whole or materially all of the Premises shall be taken as aforesaid and the
remaining portion of the Premises satisfies Tenant’s requirements in Tenant’s
reasonable discretion, this Lease shall continue, but the rent thereafter
payable by Tenant shall be apportioned and reduced from the date of such partial
taking by an amount equal to the proportion of the total square footage of
building area that is so taken.

Any rent becoming due and payable hereunder between the date of any such partial
taking and the date of determination of the amount of the rent reduction, if
any, to be made in respect hereof shall be paid at the rate theretofore payable
hereunder; provided, however, that after such determination Landlord, within
(10) days after request, shall pay to Tenant an amount equal to the amount by
which any rent theretofore paid by Tenant for such period shall exceed the
amount of the monthly rent for such period as so reduced or Tenant, at its
election, may deduct such amount from any subsequent monthly installment or
installments of rent payable hereunder.

10.04 - Rights of Tenant to Award

Tenant shall not be entitled to share in any award or awards made in any
Condemnation Proceedings for the taking of the Premises or any part thereof, or
for consequential damages or for the taking of any appurtenances to the Premises
or rights in, under or above any streets, or for the taking of space, or rights
therein, below the surface of, or above, the Premises and Tenant shall have no
claim for the value of any unexpired term of this Lease and no right or claim to
any part of any award on account thereof and Tenant hereby waives and releases
any such claim or right. Notwithstanding the foregoing to the contrary, Tenant
shall be entitled to that portion of the award allocable to its personal
property, alterations and improvements, business interruption and relocation
expenses.

 

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ARTICLE 11

Bankruptcy and Default Provisions

11.01 - Conditional Limitations

This Lease and the Lease term are subject to the limitation that if, at any time
prior to or during the Lease term, any one or more of the following events
(herein called an “event of default”) shall occur, that is to say:

(a) If Tenant shall make an assignment for the benefit of its creditors, or

(b) If the leasehold estate hereby created shall be taken on execution or by
other process of law, or

(c) If any petition shall be filed against Tenant in any court, whether or not
pursuant to any statute of the United States or of any State, in any bankruptcy,
reorganization, composition, extension, arrangement or insolvency proceedings,
and Tenant shall thereafter be adjudicated bankrupt, or such petition shall be
approved by the court, or the court shall assume jurisdiction of the subject
matter and if such proceedings shall not be dismissed with ninety (90) days
after the institution of the same; or if any such petition shall be so filed by
the Tenant; or

(d) If in any proceedings a receiver or trustee be appointed for Tenant’s
property, and such receivership or trusteeship shall not be vacated or set aside
within ninety (90) days after the appointment of such receiver or trustee; or

(e) If Tenant shall vacate or abandon the Premises and permit the same to remain
unoccupied or closed for business for more than thirty (30) days; or

(f) If Tenant shall fail to pay any installment of the rent, or additional rent
or any part thereof when the same shall become due and payable, and such failure
shall continue for ten (10) days after written notice thereof from Landlord is
received or refused by Tenant; or

(g) If Tenant shall fail to pay any other charge required to be paid by Tenant
hereunder, and such failure shall continue for ten (10) days after written
notice thereof from Landlord is received or refused by Tenant; or

(h) If Tenant shall fail to perform or observe any other requirement of this
Lease (not hereinbefore in this paragraph specifically referred to) on the part
of Tenant to be performed or observed, and such failure shall continue for
thirty (30) days after written notice thereof from Landlord is received or
refused by Tenant (unless such failure cannot be cured within thirty (30) days
after written notice from Landlord to Tenant in which event the Tenant shall not
be in default if Tenant commences to cure the failure within the thirty [30]day
period and proceeds diligently thereafter to effect a cure within not more than
ninety [90] days);

then, upon the happening of any one or more of the aforementioned events of
default, and the expiration of the period of time prescribed in any such notice
of default, Landlord may give Tenant a written notice (hereinafter called
“Notice of Termination”) of Landlord’s intention to end the term of the Lease at
the expiration of ten (10) days from the date of such Notice of Termination, and
at the expiration of such ten (10) days, this Lease and the term hereof, as well
as all of the right, title and interest of Tenant hereunder, shall wholly cease
and expire in the same manner and with the same force and effect as if the date
of expiration of such ten (10) day period were the date originally specified
herein for the expiration of the Lease and the Lease term, and Tenant shall then
quit and surrender the Premises to Landlord, but Tenant shall remain liable as
hereinafter provided.

11.02 - Landlord’s Remedies

(a) If this Lease shall be terminated as provided in paragraph 11.01 above,
Landlord or Landlord’s agents or employees may immediately or at any time
thereafter re-enter the Premises and remove therefrom the Tenant, its agents,
employees, servants, licensees, and any

 

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subtenants and other persons, firms or corporations, and all or any of its or
their property therefrom, whether by summary dispossess proceedings or by any
suitable action or proceeding at law, without being liable to indictment,
prosecution or damages therefor, and repossess and enjoy said Premises, together
with all alterations, additions and improvements thereto.

(b) In case of any such termination, re-entry or dispossess by summary
proceedings or otherwise, the rents and all other charges required to be paid up
to the time of such termination, re-entry or dispossess, shall be paid by Tenant
and Tenant shall also pay to Landlord all reasonable expenses which Landlord may
then or thereafter incur for legal expenses, attorneys’ fees, brokerage
commissions and all other costs reasonably paid or incurred by Landlord for
restoring the Premises to good order and condition and for altering and
otherwise preparing the same for reletting. Landlord may, at any time and from
time to time, relet the Premises, in whole or in part, for any rental then
obtainable either in its own name or as agent of Tenant, for a term or terms
which, at Landlord’s option, may be for the remainder of the then current term
of this Lease or for any longer or shorter period. Landlord agrees to exercise
reasonable diligence to mitigate any damages it incurs as a result of Tenant’s
breach.

(c) If this Lease is terminated as aforesaid, Tenant nevertheless covenants and
agrees, notwithstanding any entry or re-entry by Landlord whether by summary
proceedings, termination or otherwise, to pay and be liable for on the days
originally fixed herein for the payment thereof, amounts equal to the several
installments of fixed monthly rent and additional rent as they would under the
terms of this Lease become due if this Lease had not been terminated or if
Landlord had not entered or re-entered as aforesaid, whether the Premises are
relet or remain vacant in whole or in part for a period less than the remainder
of the Lease term or for the whole thereof, but in the event the Premises are
relet by Landlord, Tenant shall be entitled to a credit in the net amount of
rent received by Landlord in reletting the Premises after deduction of all
expenses and costs incurred or paid as aforesaid in reletting the Premises and
in collecting the rent in connection therewith. As an alternative, at the
election of Landlord, Tenant shall pay to Landlord as damages, such a sum as at
the time of such termination represents the amount of the excess, if any, of the
then present value of the total fixed monthly rent and additional rent and other
benefits which would have accrued to Landlord under this Lease for the remainder
of the then current term if the Lease had been fully complied with by Tenant
over and above the then present rental value of the Premises for the balance of
said term.

(d) Tenant hereby expressly waives, so far as permitted by law, the service of
any notice of intention to re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant, also waives any and all
right of redemption or re-entry or repossession under present or future laws
including specifically but without limitation Section 761 of the New York Real
Property Actions and Proceedings Law including any amendments hereafter made
thereto, and any and all right to restore the operation of this Lease. In case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge
by or in case of any expiration or termination of this Lease, Landlord and
Tenant, so far as permitted by law, hereby waive and will waive trial by jury in
any action, proceeding or counterclaim brought by either of the parties hereto
against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use
or occupancy of said Premises or any claim of injury or damage. The terms
“enter”, “re-enter”, “entry”, or re-entry, as used in this Lease are not
restricted to their technical legal meaning.

(e) No failure by Landlord to insist upon the strict performance of any
covenant, agreement, term or condition of this Lease or to exercise any right or
remedy consequent upon a breach thereof, and no acceptance of full or partial
rent during the continuance of any such breach, shall constitute a waiver of any
such breach or of such covenant, agreement, term or condition. No waiver of any
breach shall affect or alter this Lease, but each and every covenant, agreement,
term and condition of this Lease shall continue in full force and effect with
respect to any other then existing or subsequent breach thereof.

(f) In the event of any breach or threatened breach by Tenant of any of the
covenants, agreements, terms or conditions contained in this Lease, Landlord
shall be entitled to enjoin such breach or threatened breach and shall have the
right to invoke any right and remedy allowed at law or in equity or by statute
or otherwise.

(g) Each right and remedy of Landlord provided for in this Lease shall be
cumulative and shall be in addition to every other right or remedy provided for
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise.

 

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11.03 - Landlord’s Self-Help

In addition to Landlord’s rights to self-help set forth elsewhere in this Lease,
if Tenant at any time fails to perform any of its obligations under this Lease
in a manner reasonably satisfactory to Landlord, Landlord shall have the right,
but not the obligation, upon giving Tenant at least five (5) days prior written
notice of its election to do so (in the event of an emergency, however, no such
prior notice shall be required), to perform such obligations on behalf of and
for the account of Tenant. In such event, Landlord’s costs and expenses incurred
in connection therewith shall be paid by Tenant as additional rent immediately
following Landlord’s demand therefor, with interest thereon from the date
Landlord performs such work at the rate of one percent (1%) above the Prime Rate
(or such other rate as may be used in place of Prime Rate to reflect the rate
charged the bank’s best companies) as announced from time to time by JP Morgan
Chase Bank. The performance by Landlord of any such obligation shall not
constitute a release of Tenant therefrom or a waiver of Tenant’s failure to
perform same.

ARTICLE 12

Mechanic’s Liens

12.01 - Mechanic’s Liens

Tenant agrees to pay when due all sums of money that may become due for or
purporting to be due for any labor, services, materials, supplies or equipment
alleged to have been furnished or to be furnished to or for Tenant in, upon or
about the Premises and/or Landlord’s interest therein.

If any mechanic’s liens shall be filed against the Premises based upon any act
of Tenant or anyone claiming through Tenant, the Tenant shall forthwith commence
such action by bonding, deposit, payment or otherwise as will remove or satisfy
such lien within fifteen (15) business days.

However, nothing in this Article 13 shall be deemed or construed as
(a) Landlord’s consent to any person, firm or corporation for the performance of
any work or services or the supply of any materials to the Premises or any
improvement thereon, or (b) giving Tenant or any other person, firm or
corporation any right to contract for or to perform or supply any work, services
or materials that would permit or give rise to a lien against the Premises or
any part thereof.

ARTICLE 13

Mortgages, Assignments, Subleases and

Transfers of Tenant’s Interest

13.01 - Limitation of Tenant’s Rights

During the term of this Lease, neither this Lease nor the interest of Tenant in
this Lease or in any sublease or in any rentals under any sublease, shall be
sold, assigned, transferred, mortgaged, pledged, hypothecated or otherwise
disposed of, whether by operation of law or otherwise, nor shall the Premises be
sublet, without the prior written consent of the Landlord in each instance,
which shall not be unreasonably withheld or delayed. However, Landlord agrees
that it will consent to an assignment or sublease to an entity that is a parent
or subsidiary of Tenant or an entity under common control of the Tenant

 

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It is understood and agreed between the parties that, should Tenant request
Landlord’s consent to a proposed assignment of this Lease or a subletting of all
or any portion of the Premises, Landlord will, in addition to any other
requirements which may be imposed as conditions to Landlord’s consent, require
that Tenant execute and deliver to Landlord an agreement whereby Tenant
obligates itself, as additional rent, to pay over to Landlord the amount, if
any, of all rent, additional rent and any other consideration paid by such
assignee or sublessee to Tenant pursuant to such assignment or sublease which is
in excess of the rent and additional rent due and payable from time to time from
Tenant to Landlord pursuant to this Lease.

No consent by Landlord to an assignment of this Lease and no assignment made as
hereafter permitted, shall be effective until there shall have been obtained and
delivered to Landlord (a) an agreement, in recordable form, executed by Tenant
and the proposed assignee, wherein and whereby such assignee assumes due
performance of the obligations on Tenant’s part to be performed under this Lease
to the end of the term hereof and (b) a written consent to such assignment by
the holder of any fee or leasehold mortgage to which this Lease is then subject
if so required by the terms of such fee or leasehold mortgage.

Notwithstanding the assumption by such assignee of due performance, Tenant shall
continue to be fully responsible for the due performance of Tenant’s obligations
hereunder in the same manner and to the same extent as if no such assignment had
been made.

Any assignment, mortgage, pledge, sublease or hypothecation of this Lease, or of
the interest of Tenant hereunder, without full compliance with any and all
requirements set forth in this Lease shall be a breach of this Lease and a
default hereunder.

13.02 - Effect of Landlord’s Consent

Any consent by Landlord to a sale, assignment, mortgage, pledge, hypothecation,
or transfer of this Lease shall apply only to the specific transaction thereby
authorized and shall not relieve Tenant from the requirement of obtaining the
prior written consent of Landlord to any further sale, assignment, mortgage,
pledge, hypothecation, or other transfer of this Lease. In instances where the
consent of Landlord is required hereunder to any proposed assignment or sublease
of this Lease, or to the mortgaging, pledging or hypothecation of this Lease,
contemporaneously with the request of Tenant therefor Tenant shall submit, in
writing, information reasonably sufficient to enable Landlord to decide with
respect thereto.

With respect to any of the consents requested by Tenant under the provisions of
this Article 13, whether or not the Landlord shall have consented thereto,
Tenant shall pay to the Landlord all reasonable counsel fees and other
out-of-pocket expenses incurred by the Landlord in connection therewith.

ARTICLE 14

Compliance with Governmental Orders, Etc.

14.01 - Tenant to Comply

Tenant, at its own expense, shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the federal, state
and local governments and of any and all other departments and bureaus
applicable to the Premises for the correction, prevention and abatement of all
nuisances, violations or other grievances in, upon, or connected with the
Premises (herein referred to as “Government Orders”) during the term of this
Lease and shall also comply promptly with and execute all rules, orders and
regulations of the Board of Fire Underwriters, rating boards and insurance
companies for the prevention of fires and liability risks, except to the extent
relating to Landlord’s Work or the negligence or willful misconduct of Landlord,
its employees, agents or controllers, which issues should be the responsibility
of Landlord. Tenant agrees at its expense to furnish and maintain in good order
an adequate number and type of fire extinguishers on the Premises at all times.

 

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14.02 - Failure to Comply

In case Tenant shall fail or neglect to comply with the aforementioned
Government Orders or in case Tenant shall fail or neglect to make any necessary
repairs as herein required of Tenant, then Landlord or its agents may enter the
Premises and make said repairs and comply with any and all of the said
Government Orders at the cost and expense of the Tenant, and in case of Tenant’s
failure to pay therefor within five business days after notice from Landlord of
the amount of said cost and expense, the said cost and expense shall be added to
the next month’s rent installment and be due and payable as such, or Landlord
may deduct the same from any balance remaining in Landlord’s hands. This
provision is in addition to the right of the Landlord to terminate this Lease by
reason of default on the part of Tenant.

14.03 – ADA Compliance

Landlord warrants and represents to Tenant that upon completion, the Premises
will be in compliance with the applicable requirements of the Americans With
Disabilities Act of 1990.

ARTICLE 15

Subordination to Mortgages

15.01 - Subordination to Mortgages

This Lease and all rights of the Tenant hereunder are and shall be automatically
subject and subordinate to the lien of any mortgages which may now or hereafter
affect the Premises and to all renewals, modifications, consolidations,
replacements and extensions thereof. Although it is the intent of the parties
that no further instrument of subordination shall be necessary to effect the
foregoing and that the provisions for subordination shall be self-operative,
Tenant agrees that it will, upon demand, execute and deliver such instruments to
effect more fully such subordination of this Lease to the lien of any mortgage
or mortgages that shall be requested by Landlord or any mortgagee or proposed
mortgagee provided that such mortgagee execute an agreement not to disturb
Tenant’s use and occupancy in a form reasonably acceptable to Tenant.

Tenant will not do, suffer or permit any act, happening or occurrence or any
condition to occur or remain which has been caused by Tenant which may be
prohibited under the terms or provisions of any mortgage to which this Lease is
subject or which will create a default thereunder except that Tenant shall not
be obligated to pay the principal indebtedness or any installment thereof or
interest thereon.

ARTICLE 16

Inspection of Premises

16.01 - Inspection of Premises by Landlord

Landlord shall have the right to enter the Premises at all reasonable business
hours and upon a reasonable prior notice to Tenant for the purpose of:

(a) inspecting the same;

(b) making any repairs to the Premises and performing any work therein that may
be required to be performed by Landlord under this Lease and which will not
unreasonably interfere with the operation of Tenant’s business or that may be
necessary by reason of Tenant’s default under the terms of this Lease which
continues beyond any applicable period of notice and opportunity to cure;

 

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(c) exhibiting the Premises for the purpose of sale, ground lease or mortgage;
or

(d) exhibiting the Premises (within one year prior to the expiration of the term
of this Lease) to prospective tenants.

Nothing in this Lease shall imply any duty upon the part of Landlord to do any
such work which, under any of the provisions of this Lease, Tenant may be
required to perform and the performance thereof by Landlord shall not constitute
a waiver of Tenant’s default.

ARTICLE 17

Notice and Certificates

17.01 - Notices and Certificates

Any notice, statement, certificate, request or demand required or permitted to
be given in this Lease shall be in writing sent by FedEx, UPS or other
recognized national overnight courier providing for a receipt upon delivery, or
by registered or certified mail, postage prepaid, return receipt requested,
addressed, as the case may be, to Landlord at the address shown at the beginning
of this Lease or to Tenant at the address shown at the beginning of this Lease,
or to such other addresses as Landlord or Tenant shall have previously
designated in the manner herein provided. Such notice, statement, certificate,
request or demand shall be deemed to have been given on the date sent via
overnight courier or mailed as aforesaid in any post office or branch post
office regularly maintained by the United States Government, except for notice
of change of address or revocation of a prior notice, which shall only be
effective upon receipt.

At any time or times when Tenant’s interest herein shall be vested in more than
one person, firm or corporation , jointly, in common or in severalty, a notice
given by Landlord to any one such person, firm or corporation shall be
conclusively deemed to have been given to all such persons, firms or
corporations. Any notice by Tenant pursuant to the provisions hereof, shall be
void and ineffective unless signed by all such persons, firms and corporations,
unless all such persons, firms and corporations shall have previously given
notice to Landlord, signed by each of them, designating and authorizing one or
more of them to give notice to Landlord hereunder and such notice shall then be
unrevoked by any prior notice to Landlord.

17.02 - Certificates

Each party agrees that from time to time upon not less than ten (10) days prior
notice from the other, to deliver to the person or persons as the party making
the request shall designate in such notice, a statement in writing certifying
(a) that this Lease is unmodified and in full force and effect and contains the
full agreement between the parties (or, if there have been modifications or
additional agreements, that the Lease is in full force and effect, as modified,
and identifying the modifications thereof or additional agreements), (b) the
dates to which the base rent, additional rent and other charges due under the
Lease have been paid, and (c) that, insofar as the party making the statement
knows, the other party is not in default under any provision of this Lease and
has performed all of the obligations to be performed by such other party to date
thereunder (or, if the party making the statement has knowledge of any default
or of any unperformed obligations, a statement of the nature thereof).

ARTICLE 18

Covenant of Quiet Enjoyment

18.01 - Covenant of Quiet Enjoyment

Tenant, subject to the terms and provisions of this Lease, and upon payment of
the rent and observing, keeping and performing all of the terms and provisions
of this Lease on its part to be observed, kept and performed, shall lawfully,
peaceably and quietly have, hold and enjoy the Premises during the term hereof
on and after the Term Commencement Date without hindrance

 

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or ejection by any persons lawfully claiming under Landlord; but it is
understood and agreed that this covenant, and any and all other covenants of the
Landlord contained in this Lease, shall be binding upon Landlord and its
successors only with respect to breaches occurring during its and their
respective ownership of Landlord’s interest hereunder.

ARTICLE 19

Miscellaneous Provisions

19.01 - Holdover

Should the Tenant continue to occupy the Premises after the expiration of the
term hereof or after a forfeiture incurred, whether with or against the consent
of the Landlord, such tenancy shall be from month-to-month and such
month-to-month tenancy shall be under all the terms, covenants and conditions of
this Lease except its term, and except that the rent during such month-to-month
tenancy shall be one hundred ten percent (110%) of the rent payable in the last
month of the initial term or the renewal term expired, as the case may be.
Either party may terminate such month-to-month tenancy by giving to the other
party thirty (30) days written notice of its intent to terminate.

19.02 - Limitation on Landlord’s Personal Liability

(a) It is understood and agreed that Tenant shall look solely to the estate and
property of the Landlord in the Premises (including but not limited to
reasonable or other amounts paid to Landlord by Tenant) for the satisfaction of
Tenant’s remedies for the collection of a judgment (or other judicial process)
requiring the payment of money by the Landlord in the event of any default or
breach by the Landlord with respect to any of the terms, covenants and
conditions of this Lease to be observed and/or performed by the Landlord and any
other obligation of Landlord created by or under this Lease and no other
property or assets of the Landlord or its members, partners, beneficiaries or
co-tenants shall be subject to levy, execution or other enforcement procedure
for the satisfaction of Tenant’s remedies.

(b) The term “Landlord”, as used in this Lease, so far as the covenants and
agreements on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the Premises and
Lease and in the event of any transfer or transfers of the title to the said
Lease and/or the Premises, Landlord herein named (and in case of any subsequent
transfers or conveyances, the then grantor), including each of its partners or
members, shall be automatically freed and relieved from and after the date of
such transfer and conveyance of all liability with respect to the performance of
any covenants and agreements on the part of the Landlord contained in this Lease
thereafter to be performed, and it shall be deemed and construed without further
agreement that such grantee or transferee has assumed and agreed to be bound by
all of the covenants and agreements in this Lease to be performed on the part of
Landlord, and the Landlord or the grantor shall turn over to grantee all monies,
if any, then held by Landlord or such grantor on behalf of Tenant and shall
assign to such grantee all right, title and interest of Landlord or such grantor
in and to such sums held by Landlord under the terms, covenants and conditions
of said Lease.

(c) Notwithstanding anything to the contrary in this Lease, in the event that
title to the Land or Building (or any portion of either) is transferred in
connection with the exercise by any lender to a Landlord (such Landlord being
hereinafter referred to as the “Claim Party”) of such lender’s rights with
respect to the Land or Building (or any portion of either), a claim by Tenant
against the Claim Party for monetary damages which arises prior to such transfer
shall survive such transfer and Tenant shall have the continuing right to
collect from the Claim Party (including any assets of the Claim Party) amounts
due under any related monetary judgment, regardless of whether such monetary
judgment was entered before or after such transfer.

 

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19.03 - Force Majeure

The period of time during which either party is prevented or delayed in the
performance of the making of any improvements or repairs or fulfilling any
obligation under this Lease other than the payment of the rent or additional
rent required to be paid by Tenant under this Lease, due to unavoidable delays
caused by fire, catastrophe, strikes or labor trouble, civil commotion, Acts of
God or the public enemy, governmental prohibitions or regulations or inability
to obtain materials by reason thereof, or other causes beyond such party’s
reasonable control, shall be added to such party’s time for performance thereof,
and such party shall have no liability by reason thereof.

19.04 - Attornment by Tenant

If at any time during the term of this Lease, the Landlord hereunder shall be
the holder of a leasehold estate covering premises which include the Premises
and if such leasehold estate shall be canceled or otherwise terminated prior to
the expiration date thereof and prior to the expiration of the term of this
Lease or in the event of the surrender thereof whether voluntary, involuntary or
by operation of law, the Tenant shall make full and complete attornment to the
lessor of such leasehold estate for the balance of the term of this Lease, upon
the same covenants and conditions as are contained herein so as to establish
direct privity between such lessor and the Tenant and with the same force and
effect as though this Lease was made directly from such lessor to the Tenant.
The Tenant shall make all rent payments thereafter directly to such lessor.

19.05 - Landlord May Pay Tenant’s Obligations

All costs and expenses which Tenant assumes or agrees to pay under the
provisions of this Lease shall at Landlord’s election be treated as additional
rent and, in the event of non-payment, Landlord shall have all the rights and
remedies herein provided for in case of non-payment of rent or of a breach of
covenant. If Tenant shall default in making any payment required to be made by
Tenant (other than the payment of rent as provided by Article 3 above) or shall
default in performing any term, covenant or condition of this Lease on the part
of the Tenant to be performed which shall involve the expenditure of money by
Tenant, Landlord at Landlord’s option may, but shall not be obligated to, on
behalf of Tenant, expend such sum as may be reasonably necessary to perform and
fulfill such term, covenant or condition, and any and all sums so expended by
Landlord, with interest thereon at the rate of one and one-half percent (1 1⁄2%)
per month from the date of such expenditure, shall be deemed additional rent,
and shall be repaid by Tenant to Landlord on demand, but no such payment or
expenditure by Landlord shall be deemed a waiver of Tenant’s default nor shall
it affect any other remedy of Landlord by reason of such default.

19.06 - Indemnification by Tenant

In case Landlord (and such other persons as are in privity of estate with
Landlord) shall, without fault on its part, be made a party to any litigation
commenced by or against Tenant, then Tenant agrees to protect and hold Landlord
harmless and to pay all costs, expenses, and reasonable attorney’s fees incurred
or paid by Landlord in connection with such litigation. Tenant also agrees to
pay all costs, expenses and reasonable attorneys fees that may be incurred or
paid by Landlord in enforcing the covenants and agreements in this Lease.

19.07 - Effect of Captions

The captions or legends on this Lease are inserted only for convenient reference
or identification of the particular paragraphs. They are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this Lease,
or any paragraph or provision thereof.

19.08 - Tenant Authorized to Do Business in New York

Tenant represents and covenants that it is and throughout the term of this Lease
shall be authorized to do business in the State of New York.

 

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19.09 - Execution in Counterparts

This Lease may be executed in one or more counterparts, any one or all of which
shall constitute but one agreement.

19.10 - Memorandum of Lease

At the request of either party, the other party agrees to promptly execute a
Memorandum of Lease in recordable form pursuant to Section 291-c of the Real
Property Law of the State of New York.

19.11 - Law Governing, Effect and Gender

This Lease shall be construed in accordance with the laws of the State of New
York and shall be binding upon the parties hereto and their respective legal
representatives, successors and assigns except as expressly provided otherwise.
Use of the neuter gender shall be deemed to include the masculine and feminine,
as the sense requires. Any reference to successors and assigns of Tenant is not
intended to constitute a consent to any assignment by Tenant but has reference
only to those instances in which Landlord may later give consent to a particular
assignment as required by the provisions of Article 13 hereof.

19.12 - Complete Agreement

This Lease contains and embraces the entire agreement between the parties hereto
and it or any part of it may not be changed, altered, modified, limited,
terminated, or extended orally or by any agreement between the parties unless
the same is expressed in writing, signed and acknowledged by the parties hereto,
their legal representatives, successors or assigns.

19.13 - Loss of Property and Water Damage

Landlord shall not be responsible to Tenant for any loss or theft of property in
or from the Premises, or for any loss or theft or damage of or to any property
left with any employee of Landlord, however occurring. Landlord shall not be
liable for any damages caused by water, rain, snow or ice, or by breakage,
stoppage or leakage of water, gas, sewer or other pipes or conduits, or in,
upon, about or adjacent to the Premises, or the buildings upon the Premises,
unless caused by the negligence of Landlord, its employees, agents or
contractors or if caused by a warranty from Landlord.

19.14 - Security Agreement - INTENTIONALLY OMITTED.

19.15 - No Representations by Landlord

Landlord and Landlord’s agents have made no representations or promises with
respect to the Premises except as herein expressly set forth, and no right,
easements, or licenses are acquired by Tenant by implication or otherwise except
as expressly set forth in the provisions of this Lease.

19.16 - Lease Binding

All covenants in this Lease which are binding upon Tenant shall be construed to
be equally applicable to and binding upon Tenant’s agents, employees and others
claiming the right to be in the Premises through or under Tenant. If more than
one individual, firm or corporation shall join as Tenant, the singular context
shall be construed to be plural wherever necessary, and the covenants of Tenant
shall be the joint and several obligations of each party signing as Tenant; and,
when the parties signing as Tenant; and, when the parties signing as Tenant are
partners, it shall be the joint and several obligations of the firm and of the
individual members thereof.

 

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19.17 - Amendments

The parties hereto mutually agree that so long as a mortgage or any extension
thereof shall be a lien upon the Premises they will not reduce the rents from
that provided for in this Lease, provide for payments of rents prior to the time
herein provided for, nor terminate said Lease prior to the end of the term,
except as otherwise provided in this Lease, without first obtaining the consent
of the mortgage in writing, and that any such proposed modifications or
termination without said mortgagee’s consent shall not be void as against said
mortgagee.

19.18 - Arbitration

Any controversy or claims arising or relative to any matter in connection with
this Lease, with reference to which this Lease shall expressly provide that this
paragraph governs, shall be settled by arbitration in the City of Syracuse, New
York, in accordance with the rules of the American Arbitration Association or
its successor organization, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction hereof.

19.19 - Rights of Parties

Either Landlord or Tenant may from time to time at its option exercise any or
all of its rights or remedies which it may have at law, in equity or under this
Lease; and nothing contained herein, and no exercise of any rights or remedies
under this Lease, at law or in equity shall be construed as in any way abridging
or waiving any such rights or remedies; and any consent, waiver, compromise or
indulgence by one party hereto of or under any of the provisions of this Lease,
or as to any breach or default hereunder by the other party hereto, shall not
constitute or be construed as a waiver of such party’s right to enforce strict
interpretation and performance of the conditions and terms hereof at all other
times.

19.20 - Invalidity of Particular Provisions

If any term or provision of this Lease or the application thereof to any person
or circumstances shall to any extent be invalid or unenforceable, the remainder
of this Lease, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term and provision of this Lease shall be
valid and be enforced to the fullest extent permitted by law.

19.21 - Execution of Lease by Landlord

The submission of this document for examination and negotiation does not
constitute an offer to lease, or a reservation of, or option for, the Premises
and this document becomes effective and binding only upon the execution and
delivery hereof by Landlord and by Tenant. All negotiations, considerations,
representations and understandings between Landlord and Tenant are incorporated
herein and may be modified or altered only by an agreement in writing between
Landlord and Tenant, and no act or omission of any employee or other agent of
Landlord shall alter, change or modify any of the provisions hereof.

19.22 - Relationship of the Parties

Nothing contained herein shall be deemed or construed by the parties hereto nor
by any third party as creating the relationship of principal and agent or of
partnership or of joint venture between the parties hereto, it being understood
and agreed that neither the method of computation of rent nor any other
provision herein contained, nor any acts of the parties hereto, shall be deemed
to create any relationship between the parties hereto other than Landlord and
Tenant.

 

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19.23 - Assignment of Rents

With reference to any assignment by Landlord of Landlord’s interest in this
Lease, or the rents payable hereunder, conditional in nature or otherwise, which
assignment is made to the holder of a ground lease or mortgage on the Premises
or the Building or the land underlying the Building, Tenant agrees:

(a) that the execution thereof by Landlord, and the acceptance thereof by the
ground lessor or the mortgagee, shall not be treated as an assumption by such
ground lessor or mortgagee of any of the obligations of Landlord hereunder,
unless the ground lessor or mortgagee shall, by notice sent to Tenant,
specifically elect otherwise; and

(b) that except as aforesaid, such ground lessor or mortgagee shall be treated
as having assumed Landlord’s obligations hereunder only upon a foreclosure of
such mortgage and the taking of possession of the Premises, or, in the case of a
ground lessor, the express, written assumption of Landlord’s position hereunder
by such ground lessor.

Where a party acquires the Landlord’s interest in property (whether land only,
or land and buildings) which includes the Premises, and simultaneously leases
the same back, such acquisition shall not be treated as an assumption of
Landlord’s position hereunder, and this Lease shall thereafter be subject and
subordinate to such lease-back.

19.24 - Environmental Covenants

(a) Tenant will, at all times comply with, and will not violate in connection
with the rental, use, maintenance or operation of its business within the
Premises, and Landlord will, at all times comply with and will not violate, in
connection with Landlord’s performance of its obligations under this Lease, any
applicable federal, state, county, or local statutes, laws, regulations, rules,
ordinances, codes, licenses and permits of any governmental authorities having
jurisdiction relating to environmental matters and any amendments or extensions
thereof, including, without limitation: (i) the Clean Air Act, the Federal Water
Control Pollution Act of 1972; (ii) the Resource Conservation and Recovery Act
of 1976; (iii) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980; (iv) the Toxic Substances Control Act; (v) the New York
State Environmental Conservation Law; (vi) the New York State Public Health Law;
and (vii) all other applicable environmental requirements.

(b) Without limiting the generality of paragraph 19.24(a) above, Tenant and
Landlord, each to the extent that said party is obligated to perform its
respective obligations under this Lease, (i) will operate the Premises and will
at all times receive, handle, use, store, treat, and dispose of all hazardous or
toxic substances, petroleum products and waste in strict compliance with all
applicable environmental, health, or safety statutes, ordinances, orders, rules,
regulations or governmental requirements; and, except as otherwise provided for
herein, (ii) will remove from and off the Premises all hazardous or toxic
substances, petroleum products and waste contamination in compliance with all
applicable laws, rules and regulations.

(c) Except as provided for herein, neither Tenant nor Landlord will cause any
hazardous or toxic materials, substances, pollutants or contaminants to be
released into the environment, or deposited, discharged placed or disposed of
at, or near, the Premises.

(d) Tenant and Landlord will, immediately upon receipt of notice of any
violation of any of the matters referred to in paragraphs 19.24(a) through
19.24(c) above relating to the Premises or its use, deliver a copy of same to
the other.

(e) Each party expressly acknowledges and agrees that it will reimburse, defend,
indemnify and hold the other party harmless from and against any and all
liabilities, claims, damages, penalties, expenditures, losses or charges
(including, but not limited to, all costs of investigation, monitoring, legal
fees, fines, penalties, remedial response, removal, restoration or permit
acquisition) which may now or in the future, be undertaken, suffered, paid,
awarded, assessed, or otherwise incurred as a result of:

(i) any contamination on, above or under the Premises at any time during the
term of the Lease which exists as a result of the acts or failure to act by the
indemnifying party, its employees, contractors or lessees; or,

 

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(ii) any investigation, monitoring, cleanup, removal, restoration, remedial
response or remedial work undertaken on the Premises by or on behalf of Landlord
or Tenant at any time during the term of the Lease which is necessitated by an
act or failure to act by the indemnifying party, its employees, contractors or
lessees.

(f) Tenant and Landlord acknowledge and agree that the termination or expiration
of the Lease shall not relieve or release them of any legal liability and
responsibility they would otherwise have as the user of, or provider of services
to, respectively, the Premises whether by way of damages, penalties, remedial
actions or otherwise for any adverse effects or consequences resulting at any
time from Tenant’s failure to comply with the provisions of this paragraph 19.24
during the term of the Lease.

(g) Tenant shall pay all costs, expenses, fines, penalties, or damages that may
be imposed on Landlord or Tenant by reason of Tenant’s failure to comply with
the provisions of this paragraph 19.24, and, at Tenant’s sole cost and expense,
Tenant shall indemnify, defend and hold Landlord and Landlord’s third party
contractor harmless (including legal fees and expenses) from and against any
actions, claims, and suits arising from such noncompliance, utilizing counsel
reasonably satisfactory to Landlord.

19.25 - Tenant’s Right of First Refusal

During the term of this Lease, so long as Tenant shall not be in default, Tenant
shall have the right of first refusal with respect to the purchase of the
Building containing the Premises (hereinafter called the “Property”). If during
the term, Landlord desires to sell the Property and Landlord receives a purchase
offer in writing from a bona fide third party satisfactory to Landlord (the
“Purchase Offer”), Landlord shall notify the Tenant, which notice shall make
reference to this Lease, and shall also provide to the Tenant an accurate and
complete photocopy of the Purchase Offer. Tenant shall then have thirty
(30) business days commencing with the next business day following actual
receipt of such notice from Landlord within which to exercise its right of first
refusal to purchase the Property upon the terms and conditions contained in the
Purchase Offer. Notice of the Tenant’s election to exercise its right of first
refusal shall be timely if said notice is personally delivered to Landlord at
the address set forth at the beginning of this Lease or deposited with the
United States Postal Service certified mail, return receipt requested, on or
before the expiration of the thirty (30) business day period as set forth above.
If the Tenant fails to timely exercise its right of first refusal, then Tenant
agrees to execute and deliver, upon request of Landlord in connection with the
closing of the sale as contemplated in the Purchase Offer, a recordable
acknowledgment of the termination of its right of first refusal under this
paragraph 19.25. In the event, however, that Tenant fails to exercise its right
of first refusal and the contemplated sale to the third party pursuant to the
Purchase Offer fails to close for any reason by the date set for the closing in
the Purchase Offer, then Tenant’s right of first refusal under this paragraph
19.25 shall be and remain in full force and effect to the extent of the
unexpired term of this Lease and any future purchase offer for the Property
shall be subject to such right of first refusal.

19.26 - Tenant’s Option To Expand the Building – Intentionally Deleted

19.27 - Tenant’s Signage on the Building

Landlord agrees that Tenant shall have the right to place its identification
sign(s) on the exterior of the Building to the extent that such signage is
permitted by the applicable codes, rules and regulations of the Town of Cicero
and the Hancock Air Park. Prior to the erection of any exterior sign, Tenant
shall submit the design, location and method of installation thereof for the
approval of Landlord, which approval shall not be unreasonably withheld.

19.28 - Tenant’s Guarantor – Intentionally Deleted

19.29 - Brokerage

Landlord and Tenant each warrants to the other that it has had no dealing with
any broker or agent in connection with this Lease. Landlord agrees to hold
harmless and indemnify Tenant

 

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from and against any and all costs, expense or liability (including attorneys’
fees) for any compensation, commissions and charges claimed by any broker in
connection with this Lease arising from or out of the acts or omissions of
Landlord. Tenant agrees to hold harmless and indemnify Landlord from and against
any and all costs, expense or liability (including attorneys’ fees) for any
compensation, commissions and charges claimed by any broker in connection with
this Lease arising from or out of the acts or omissions of Tenant.

19.30 – 2006 Lease

Landlord and Tenant agree that the 2006 Lease shall remain in full force and
effect until the date on which the Expansion Premises is Ready for Occupancy (as
defined in paragraph 2.02 above). Upon such date, the 2006 Lease shall be deemed
to be terminated and of no further force and effect and the rights, duties and
obligations of Landlord and Tenant shall be governed and controlled by this
Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement on the
date first above written. The Individuals signing on behalf of a principal
warrant that they have the authority to bind the principal.

 

    LANDLORD:     HANCOCK PARK DEVELOPMENT, LLC

 

    By:  

 

Witness     Gary J. Malfitano, Member     TENANT:     JADAK, LLC

 

    By:  

 

Witness     Name:       Title:  

 

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TABLE OF EXHIBITS

 

EXHIBIT A    Legal Description EXHIBIT B    Site Plan EXHIBIT C   
Identification of Plans and Specifications for Construction of the Premises to
be Completed by the Landlord EXHIBIT D    Identification of Plans and
Specifications for Improvements to the Premises to be Completed by the Tenant
EXHIBIT E-1    Hancock Air Park Protective Covenants and Restrictions EXHIBIT
E-2    Additional Rules and Regulations EXHIBIT F    Stipulation of Term of
Lease EXHIBIT G    Guaranty of Lease – INTENTIONALLY DELETED

 

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EXHIBIT A

Legal Description

 

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EXHIBIT B

Site Plan

 

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EXHIBIT C

Identification of Plans and Specifications for Construction

of the Expansion Premises to be Completed by the Landlord

Drawings by Macknight Architects, LLP dated May 22, 2013 and labeled as Drawing
Numbers:

T-1

T-2

A101

A102

A105

A105.1

A201

A301

A401.1

A401.2

A401.3

A402.2

A402.3

A402.4

A403.1

A404.2

A405.1

A406.1

A501

A503

A701

 

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EXHIBIT D

Identification of Plans and Specifications for Improvements

to the Premises to be Completed by the Tenant

Telephone, data, cable TV systems – purchase and installation

Wi Fi wiring

Interior signage

Furniture systems - purchase and installation, including the cost to energize
the furniture systems

 

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EXHIBIT E

ADDITIONAL RULES AND REGULATIONS

(a) Tenant shall occupy and use the Premises during the term for uses set forth
in Paragraph 1.03 above and no other purpose whatsoever.

(b) Tenant shall not exhibit, sell, or offer for sale on the Premises or in the
Building any article or thing except those articles and things essentially
connected with the stated use of the Premises by the Tenant without the prior
written consent of Landlord.

(c) Tenant will not make or permit to be made any use of the Premises or any
part thereof which would violate any of the covenants, agreements, terms,
provisions and conditions of this Lease or which directly or indirectly is
forbidden by public law, ordinance or governmental regulation, now or hereafter
enacted, or which may be dangerous to life, limb, the environment or property,
or which may invalidate or increase the premium cost of any policy of insurance
carried on the Building or covering its operation, or which will suffer or
permit the Premises or any part thereof to be used in any manner including
storage therein which, in the judgment of Landlord, shall in any way impair or
tend to impair the character, reputation or appearance of the Building as a high
quality office building, or which will impair or interfere with or tend to
impair or interfere with any of the services performed by Landlord for the
Building. Further, Tenant shall not use or permit the use of the Premises in any
manner which would violate any law, rule or regulation relating to the
environment and to the extent Tenant does so, Tenant shall defend and indemnify
Landlord from and against any claims, causes of actions, fines, penalties or the
like which may arise from that use.

(d) Tenant shall not display, inscribe, print, paint, maintain or affix on any
place in or about the Building any sign, notice, legend, direction, figure or
advertisement, except at the doors of the Premises and on the Directory Board,
and then only such name(s) and matter, and in such color, size, style, place and
materials, as shall first have been approved by the Landlord. The listing of any
name other than that of Tenant, whether at the doors of the Premises, on the
Building directory, or otherwise, shall not operate to vest any right or
interest in the Lease or in the Premises, it being expressly understood that any
such listing is a privilege extended by Landlord revocable at will by written
notice to Tenant.

(e) Tenant shall not use the name of the Building for any purposes other than
that of the business address of Tenant, and shall never use any picture or
likeness of the Building in any circulars, notices, advertisements, or
correspondence without Landlord’s consent.

(f) No additional locks or similar devices shall be attached to any door or
window without Landlord’s written consent. No keys for any door other than those
provided by the Landlord shall be made. If more than two keys for one lock are
desired, Landlord will provide the same upon payment by Tenant. All keys must be
returned to Landlord at the expiration or termination of this Lease.

(g) All persons entering or leaving the Building between the hours of 6 p.m. and
8:00 a.m., Monday through Friday, or at any time on Saturdays, Sundays or
holidays, may be required to do so under such reasonable regulations as Landlord
may impose so long as they do not prohibit Tenant’s permitted use of the
Premises. Landlord may exclude or expel any peddler.

(h) The design floor loading capacity for the Building is 100 pounds per square
foot average. Tenant shall not overload any floor. Landlord reasonably may
direct the time and manner of delivery, routing, and removal of all items that
are delivered to the Building for Tenant’s use and may specify the location of
safes and other heavy articles.

(i) Unless Landlord gives advance written notice, Tenant shall not install or
operate any steam or internal combustion engine, machinery, heating device or
air-conditioning apparatus in or about the Premises, or carry on any mechanical
business therein, or use the Premises for housing accommodations or lodging or
sleeping purposes, or use any illumination other than electric light, or use or
permit to be brought into the Building any flammable fluids

 

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such as gasoline, kerosene, naphtha, benzene and solvents, or any explosives,
radioactive materials or other articles deemed extra-hazardous to life, limb or
property except in a manner which would not violate any ordinance or regulation
or any condition imposed by the standard fire insurance policy issued for office
buildings in the County of Onondaga, or do or permit anything to be done, or
keep or permit anything to be kept, in the Premises, which would increase the
fire or other casualty insurance rate on the Building or the property therein,
or which would result in insurance companies of good standing refusing to insure
the Building or any such property in amounts reasonably satisfactory to
Landlord. Tenant shall not use the Premises for any illegal or immoral purpose.
Notwithstanding the foregoing, Tenant may install a refrigerator and microwave
cooking device, and upon the prior written approval of Landlord which will not
be unreasonably withheld or delayed, Tenant may install additional air
conditioning equipment, which shall be operated and maintained at the sole cost
of Tenant.

(j) Tenant shall cooperate fully with Landlord to assure the effective operation
of the Building’s air-conditioning system, including the closing of blinds and
drapes.

(k) Tenant shall not contract for any work or service which might involve the
employment of labor incompatible with the Building employees or employees of
contractors doing work or performing services by or on behalf of Landlord.

(l) The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by Tenant or used for any purpose other than for ingress
to and egress from its Premises. The halls, passages, exits, entrances,
elevators, stairways and roof are not for the use of the general public and
Landlord shall in all cases retain the right to control and prevent access
thereto by all persons whose presence, in the judgment of Landlord, shall be
prejudicial to the safety, character, reputation and interests of the Building
and its tenants, provided that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant normally deals in the ordinary
course of Tenant’s business unless such persons are engaged in illegal
activities. No tenant and no employees or invitees of any tenant shall go upon
the roof or into the mechanical rooms of the Building.

(m) Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Office Park by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises or the
Building.

(n) With respect to the Premises, Tenant shall see that the doors, and windows,
if operable, are closed and securely locked before leaving the Building and must
observe strict care and caution that all water faucets or water apparatus are
entirely shut off before Tenant or Tenant’s employees leave the Building.

 

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EXHIBIT F

STIPULATION OF TERM OF LEASE

AGREEMENT made and entered into as of this      day of                     ,
2013 between HANCOCK PARK DEVELOPMENT, LLC, a New York limited liability company
having its principal place of business at 225 Greenfield Parkway, Suite 202,
Liverpool, New York 13088 (“Landlord”) and JADAK, LLC a Limited Liability
Company organized and existing under the laws of the State of New York having an
office at 7279 William Barry Boulevard, North Syracuse, New York 13212
(“Tenant”).

RECITALS:

A. Pursuant to a certain Standard Property Lease entered into between Landlord
and Tenant dated as of                     , 2013 (hereinafter, together with
the amendments hereto, if any, described in Paragraph B of this Recital, called
the “Lease”), Landlord leased to Tenant the Premises described on Exhibits “A”
and “B” annexed thereto, to wit, the premises designated “Premises” in the
Lease.

B. The Lease has not been modified or amended, except by:

C. Pursuant to 2.02 of the Lease, Landlord and Tenant agreed to execute and
deliver to each other, an agreement setting forth, the date on which the term of
the Lease commenced (hereinafter called, and in the Lease defined as, the “Term
Commencement Date”), the expiration date of the initial term, and the
commencement and expiration dates of the renewal periods (as such terms are
defined in the Lease).

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:

1. The Premises required to be constructed and finished by Landlord in
accordance with the terms of the Lease have been satisfactorily completed by the
Landlord.

2. The Premises have been delivered to and accepted by Tenant and are presently
occupied by Tenant. The Premises contain 55,000 rentable square feet of space.

3. The date of the commencement of the initial term of the Lease is
                    , 20     and the expiration date is                     ,
20    , subject however to the terms and provisions of the Lease. The first
Lease Year shall commence on                     , 20     and expire on
                    , 20    .

4. The annual rent payable under paragraph 3.01 of the Lease for the initial
term shall be                                         .

5. Nothing in the Agreement is intended to change or modify the rights of the
parties under this Lease.

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Agreement to be
executed as of the day and year first above-written.

 

    LANDLORD:     HANCOCK PARK DEVELOPMENT, LLC

 

    By:  

 

Witness     Thomas R. Kennedy, Member     TENANT:     JADAK, LLC

 

    By:  

 

Witness     Name:       Title:  

 

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EXHIBIT G

GUARANTY OF LEASE

INTENTIONALLY OMITTED

 

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