Exhibit 10.9

 

TABLE OF CONTENTS

 

1.

   DEMISE. PREMISES. TERM. RENT. LANDLORD’S WORK    1

2.

   USE AND OCCUPANCY    4

3.

   ALTERATIONS    5

4.

   REPAIRS - FLOOR LOAD    9

5.

   WINDOW CLEANING    10

6.

   REQUIREMENTS OF LAW    11

7.

   SUBORDINATION    12

8.

   RULES AND REGULATIONS    14

9.

   INSURANCE    14      A. Tenant’s Insurance    14      B. Tenant’s Improvement
Insurance    16      C. Waiver of Subrogation    16      D. Landlord’s Insurance
   16

10.

   DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE    16

11.

   EMINENT DOMAIN    19

12.

   ASSIGNMENT AND SUBLETTING    20

13.

   CONDITION OF THE PREMISES    28

14.

   ACCESS TO PREMISES    28

15.

   CERTIFICATE OF OCCUPANCY    30

16.

   LANDLORD’S LIABILITY    30

17.

   DEFAULT    31

18.

   REMEDIES AND DAMAGES    33

19.

   FEES AND EXPENSES    35      A. Curing Tenant’s Defaults    35      B. Late
Charges    36

20.

   NO REPRESENTATIONS BY LANDLORD; CONSENTS AND APPROVALS    36

21.

   END OF TERM    37

22.

   QUIET ENJOYMENT    38

23.

   FAILURE TO GIVE POSSESSION    38

24.

   NO WAIVER; MERGER; NO ORAL MODIFICATIONS    38

25.

   WAIVER OF TRIAL BY JURY    39

 

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26.

   INABILITY TO PERFORM    39

27.

   BILLS AND NOTICES    40

28.

   ESCALATION    41

29.

   SERVICES    56      A. Elevator    56      B. Heating    56      C. Cooling
   57      D. After Hours and Additional Services    57      E. Cleaning    58  
   F. Sprinkler System    59      G. Water    59      H. Security    60      I.
Electricity Service    60      J. Building Directory    61      K. Cafeteria   
62      L. Interruption of Services    62

30.

   PARTNERSHIP TENANT    62

31.

   VAULT SPACE    63

32.

   [INTENTIONALLY DELETED]    63

33.

   CAPTIONS    63

34.

   ADDITIONAL DEFINITIONS    64

35.

   PARTIES BOUND    64

36.

   BROKERAGE    64

37.

   INDEMNITY    64

38.

   ADJACENT EXCAVATION SHORING    65

39.

   MISCELLANEOUS    65      A. No Offer    65      B. Certificates    65      C.
Authority    66      D. Signage    66      E. Rules    67      F. Landlord’s
Withholding of Consent    67

40.

   Intentionally Deleted    67

41.

   Landlord’s Work; Tenant’s Work; Tenant Allowances    67

42.

   Guaranty    68

 

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Exhibit 1

  

Floor Plan of Premises

Exhibit 2

  

Landlord’s Work

Exhibit 3

  

Guaranty of Lease

Schedule A

  

Rules and Regulations

Schedule B

  

Cleaning Specifications

Schedule C

  

HVAC Specifications

Schedule D

  

Current Overtime Service Rates

 

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AGREEMENT OF LEASE, made as of this 8th day of July, 1998, between CBS
BROADCASTING INC., a New York corporation, having an office at 51 West 52nd
Street, New York, New York 10019 (hereinafter called “Landlord”) and LEARNING
TREE INTERNATIONAL USA, INC., a Delaware corporation, having an office at 1831
Michael Faraday Drive, Reston, Virginia 20190 (hereinafter called “Tenant”).

 

WITNESSETH:

 

The parties hereto, for themselves, their successors and assigns, hereby
covenant as follows:

 

1. DEMISE, PREMISES. TERM. RENT. LANDLORD’S WORK.

 

A. Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the
eighteenth floor (18th), comprised of approximately 22,190 square feet, as more
particularly shown hatched on Exhibit 1 annexed hereto and made a part hereof
(hereinafter called the “Eighteenth Floor Premises”) in the building known as 51
West 52nd Street, in the Borough of Manhattan, County, City and State of New
York (said building is hereinafter called the “Building” and the Building,
together with the plot of land upon which it stands, is hereinafter called the
“Real Property”) for a term (hereinafter called the “Term”) to commence on the
Commencement Date (hereinafter defined) and to end the Expiration Date
(hereinafter defined) both dates inclusive unless the Term shall sooner end
pursuant to any of the terms, covenants or conditions of this Lease or pursuant
to law, at the Fixed Rent (hereinafter defined) plus all other amounts payable
by Tenant under this Lease (including without limitation, the escalations
payable under Article 28 hereof) (all such other amounts, whether or not
expressly referred to as Additional Rent herein, shall hereinafter be referred
to collectively as the “Additional Rent”). In addition, the Premises shall be
increased by the addition of the seventeenth floor (17th) comprised of
approximately 22,190 rentable square feet, as more particularly shown in Exhibit
1 (the “Seventeenth Floor Premises”) on the “Seventeenth Floor commencement
Date” (hereinafter defined) upon the terms hereof, except as specifically
provided to the contrary herein. (The Eighteenth Floor Premises and Seventeenth
Floor Premises are jointly referred to herein as the “Premises”). Tenant agrees
to pay all Rent in lawful money of the United States which shall be legal tender
in payment of all debts and dues, public and private, at the time of payment,
and in the case of Fixed Rent in equal monthly installments, in advance,
commencing on the Rent Commencement Date (hereinafter defined) and on the first
(1st) day of each calendar month

 

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thereafter during the Term (except as hereinafter otherwise provided), and, in
the case of Additional Rent, on such dates as is required hereunder, in either
case at the office of Landlord or such other place as Landlord may designate,
without any set-off, offset, abatement or deduction whatsoever except as
provided to the contrary in this Lease. If the Rent Commencement Date shall
occur on a date other than the first (1st) day of any calendar month, Tenant
shall pay to Landlord, on such date, an amount equal to such proportion of an
equal monthly installment of Fixed Rent as the number of days from and including
the Rent Commencement Date to the end of such month bears to the total number of
days in said calendar month.

 

B. The defined terms contained in this subsection B of this Article 1 shall have
the meanings hereinafter set forth:

 

(i) “Commencement Date” shall mean the date upon which Landlord’s Work
(hereinafter defined) in the Eighteenth Floor Premises shall have been
substantially completed and such premises are tendered to Tenant vacant and
broom clean, Landlord’s Work shall be deemed to have been substantially
completed notwithstanding that minor or insubstantial details of construction or
decoration remain to be performed, provided that the non-completion of such
items does not interfere with or delay Tenant’s completion of Tenant’s Work or
Tenant’s enjoyment of the entire Premises. The taking of possession of the
Premises by Tenant shall be conclusive evidence as against Tenant that the
Premises were in good and satisfactory condition and that Landlord’s Work was
substantially completed except for hidden or latent defects. Landlord has
substantially completed the Eighteenth Floor Premises as of execution hereof.
Notwithstanding the foregoing, should Landlord fail to substantially complete
Landlord’s Work and tender such premises vacant and broom clean, by September 1,
1998, then there shall be a rent abatement of two (2) days for each day after
September 1, 1998 the Eighteenth Floor Premises is not substantially completed
and delivered to Tenant vacant and broom clean.

 

(ii) “Seventeenth Floor Commencement Date” shall be that date when Landlord
substantially completes Landlord’s Work, in and tenders to Tenant (in each case
in accord with the requirements of Section lB) (i) above) the Seventeenth Floor
Premises, which date shall be no earlier than eighteen (18) months nor no later
than twenty-four (24) months after the Commencement Date. Notwithstanding the
foregoing, should Landlord be unable to substantially complete and tender such
premises to Tenant vacant and broom clean within twenty-four (24) months after
the Commencement Date, there shall be a rent abatement with regard to such
Premises of two (2) days for each day thereafter that the Seventeenth Floor
Premises are not substantially completed.

 

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(iii) “Expiration Date” shall mean the last day of the month in which the tenth
(10th) anniversary of the Commencement Date occurs.

 

(iv) “Lease Year” shall mean as applicable:

 

(i) the period commencing on the Commencement Date and ending on the last day of
the month in which the first anniversary of the Commencement Date occurs,
(ii) the 12 month period commencing on the day following the expiration if the
first Lease Year described in (i) above, and (iii) each successive 12 month
period thereafter to and including the Expiration Date.

 

(v) “Fixed Rent” shall mean the following:

 

Floor

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Period

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   Square
Footage

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   Rate

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

   Annual
Rent

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

   Monthly
Rent

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18    From Rent Commencement Date until the end of the fifth Lease Year   
22,190    53.00    $ 1,176,070    $ 98,005.83 17    From Seventeenth Floor Rent
Commencement Date until the end of the fifth Lease Year    22,190    53.00    $
1,176,070    $ 98,005.83 18 and 17    From the first day of the sixth Lease Year
until the last day of the tenth Lease Year    44,380    58.00    $ 2,574,040   
$ 214,503.33

 

(vi) “Rent Commencement Date” shall mean 289 days from the Commencement Date.

 

(vii) “Seventeenth Floor Rent Commencement Date” shall be that date which is the
number of days after the Seventeenth Floor Commencement Date derived by
multiplying 289 days by a fraction, the numerator of which is the number of days
from the Seventeenth Floor Commencement Date until the Expiration Date and the
denominator of which is the number of days from the Commencement Date until the
Expiration Date.

 

(viii) “Permitted Uses” shall mean use of the Premises for executive and
administrative offices and/or for institutional seminars and/or computer
training for instructors and information systems professionals and for no other
purposes. In all cases such use shall conform to the Certificate of Occupancy
for the Building.

 

(ix) “Base Tax Year” shall mean July 1, 1998 through June 30, 1999.

 

(x) “Base Operating Expenses” shall mean Operating Expenses (as hereinafter
defined) incurred in calendar year 1999.

 

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(xi) “Tenant’s Proportionate Share” shall mean the percentages described in
Section 28.1.5.

 

(xii) “Hazardous Substances” shall mean, collectively, any pollutant,
contaminant, flammable, explosive, radioactive material, hazardous waste, toxic
substance or related material and any other substance or material defined or
designated as a hazardous or toxic substance, material or waste by any
Requirement (as hereinafter defined) or the removal of which is required, or the
manufacture, use, maintenance, storage, ownership or handling of which is
restricted, prohibited, regulated or penalized by any Requirement.

 

(xiii) “Additional Rent” shall mean any cost or expense which Tenant shall owe
or be required to pay Landlord other than Fixed Rent pursuant to the terms
hereof (including but not limited to Tenant’s proportionate share of Taxes and
Operating Expenses.

 

(xiv) “Rent” shall mean the Fixed Rent and the Additional Rent, collectively,
including any increases thereof pursuant to the terms hereof.

 

C. Landlord shall, at its sole cost and expense, perform the work described on
Exhibit 2 attached hereto and made a part hereof (“Landlord’s Work”) in a good
and workmanlike manner and in compliance with all applicable laws, rules and
regulations.

 

D. In the event of a delay in the Commencement Date or Seventeenth Floor Rent
Commencement Date, the only remedy for Tenant shall be the additional rent
abatement(s) and commensurate delay in the Rent Commencement Date or the
Seventeenth Floor Rent Commencement Date described in Sections l(B)(i) and
l(B)(ii) and the right to equitable relief to enforce Landlord to perform
Landlord’s Work and deliver the Premises (vacant and broom clean) to Tenant.

 

2. USE AND OCCUPANCY.

 

A. Tenant shall use and occupy the Premises for the Permitted Uses, and for no
other purpose.

 

B. Anything contained herein to the contrary notwithstanding, Tenant shall not
use the Premises or any part thereof. or permit the Premises or any part thereof
to be used, (i) for the business of photographic, multilith or multigraph
reproductions or offset printing, (ii) for a banking, trust company, depository,
guarantee or safe deposit business, (iii) as a savings bank, a savings and loan
association, or as a loan company, (iv) for the sale of travelers checks, money
orders, drafts, foreign exchange or letters of credit or for the receipt of
money for transmission, (v) as a “retail” stock broker’s or dealer’s office
which shall be open to the general public (except pursuant to prior
appointment), (vi) as a restaurant or bar or for the sale of confectionery,
soda,

 

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beverages, sandwiches. ice cream or baked goods or for the preparation,
dispensing or consumption of food or beverages in any manner whatsoever,
(vii) as a news or cigar stand, (viii) as an employment agency, labor union
office, physician’s or dentist’s office or for rendition of any other diagnostic
or therapeutic services, dance or music studio, school (except as specifically
permitted herein), (ix) as a barber shop, beauty salon or manicure shop, (x) for
the direct sale, at retail, of any goods or products, (xi) for a public
stenographer, typist or telephone or telegraph agency, telephone or secretarial
service for the public at large, (xii) for a messenger service for the public at
large, (xiii) gambling or gaming activities, obscene or pornographic purposes or
any sort of commercial sex establishment, (xiv) for the possession, storage,
manufacture or sale of alcohol, drugs or narcotics or for any other unlawful
purpose (nothing herein shall, however, prohibit use of alcohol at Tenant
receptions, provided such use is in compliance with all applicable laws, rules,
regulations and ordinances), (xv) for the conduct of a public auction, or
(xvi) for the offices or business of any federal, state, or municipal agency or
any agency of any foreign government. Nothing in this subsection B shall
preclude Tenant from using any part of the Premises for photographic, multilith
or multigraph reproductions in connection with, either directly or indirectly,
its own business and/or activities or as an administrative office for those uses
described in Subsections (i)-(vii) of this Section 2(B), provided it is not open
to the general public and is otherwise in compliance with all applicable laws,
rules, regulations and ordinances and all other provisions of this Lease and is
in conformance with the Certificate of Occupancy for the Building.

 

3. ALTERATIONS.

 

A. Tenant shall not make or perform or permit the making or performance of, any
alterations, installations, improvements, additions or other physical changes in
or about the Premises (hereinafter collectively called “Alterations”) without
Landlord’s prior written consent. Landlord agrees not to withhold, condition or
delay unreasonably its consent or approval to any Alterations which do not
affect the structural elements of the Building and which do not affect the
Building’s mechanical, electrical, sanitary, sewer, plumbing or other Building
systems other than to a de minimis extent, proposed to be made by Tenant to
adapt the Premises for those business purposes permitted by subsection A of
Article 2 hereof, provided that such Alterations are performed only by fully
bonded (i.e., with full performance and completion bonds) contractors or
mechanics approved by Landlord (which approval shall not be unreasonably
withheld conditioned or delayed), do not affect any part of the Building other
than the Premises, do not adversely affect any service required to be famished
by Landlord to Tenant or to any other tenant

 

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or occupant of the Building and do not reduce the value or utility of the
Building. Notwithstanding the foregoing, no Landlord consent shall be required
for any non-structural alteration improvement or installation which does not
affect any building system and in each case is either purely decorative (i.e.,
carpeting) or costs no more than $100,000. Tenant must nevertheless notify
Landlord before performing such work and otherwise comply with all other
applicable provisions of this Article 3 and this Lease. All Alterations shall be
done at Tenant’s expense and at such times and in such manner as Landlord may
from time to time reasonably designate pursuant to the conditions for
Alterations prescribed by Landlord for the Premises. All furniture, furnishings
and movable fixtures and removable partitions installed by Tenant must be
removed from the Premises by Tenant, at Tenant’s expense, on or prior to the
Expiration Date. All Alterations in and to the Premises which may be made by
Tenant at its own cost and expense prior to and during the Term, or any renewal
thereof, may, at Tenant’s election, upon the Expiration Date or earlier end of
the Term or any renewal thereof, be removed from the Premises by Tenant, except
in the case of structural alteration and/or floor penetration of the Building
(e.g., added internal staircases) which shall be removed by Tenant on or prior
to the Expiration Date, at Tenant’s expense. Tenant shall repair and restore in
a good and workmanlike manner to Building standard original condition
(reasonable wear and tear excepted) any damage to the Premises or the Building
caused by such removal. Any of such fixtures or installations not so removed by
Tenant at or prior to the Expiration Date or earlier termination of the Term
shall become the property of Landlord, and shall remain upon and be surrendered
with the Premises as part thereof at the end of the Term, but nothing herein
shall be deemed to relieve Tenant of responsibility for the cost of removal of
any such fixtures or installations which Tenant is obligated to remove
hereunder. Anything contained herein to the contrary notwithstanding, in the
event Landlord shall elect to have Tenant remove any mechanical or other
equipment installed by Tenant within the Premises containing chlorofluorocarbons
(CFC’s) or other Hazardous Substances, the removal, of such equipment shall
conform with all Requirements and industry practices. Additionally, any such
removal shall be done by contractors approved by Landlord (which approval shall
not be unreasonably withheld, delayed or conditioned) and subject to the
procedures to which Landlord’s consent shall have previously been obtained
(which consent shall not be unreasonably withheld, delayed or conditioned).
Subject to the requirements and limitations of Section 3(D) below, Tenant shall
indemnify and hold Landlord harmless from any liability or damages resulting
from any contamination within the Building, as a result of the removal of any of
the aforesaid equipment containing CFC’s or other Hazardous Substances by
Tenant.

 

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B. Prior to making any Alterations, Tenant (i) shall, if in accord with general
industry standards, submit to Landlord or to a consultant appointed by Landlord
(“Landlord’s Consultant”) applicable detailed plans and specifications
(including layout, architectural, mechanical and structural drawings stamped by
a professional engineer or architect licensed in the State of New York) for each
proposed Alteration and shall not commence any such Alteration without first
obtaining Landlord’s approval of such plans and specifications which shall not
be unreasonably withheld, delayed or conditioned, (ii) shall pay to Landlord all
reasonable and necessary costs and expenses incurred by Landlord (including the
cost of Landlord’s Consultant) in connection with Landlord’s review of Tenant’s
plans and specifications, provided that with regard to any internal costs
incurred by Landlord, the charge to Tenant shall be limited to the reasonable
charge of an independent contractor, and further provided no costs shall be
payable for Tenant’s Initial Improvements (as described in Article 41,
(iii) shall, at its expense, obtain all permits, approvals and certificates
required by any governmental or quasi-governmental bodies, and (iv) shall
furnish to Landlord duplicate original policies of workers’ compensation
insurance (covering all persons to be employed by Tenant, and Tenant’s
contractors and subcontractors in connection with such Alteration) and
comprehensive public liability (including property damage coverage) insurance in
such form, with such companies, for such periods and in such amounts as Landlord
in accord with industry standard may reasonably require naming Landlord, and its
agents as additional insureds. Upon notice to Tenant, Landlord or Landlord’s
Consultant may assume responsibility, at Tenant’s expense, to file all plans and
obtain the necessary building permits, provided Landlord acts with due diligence
and by taking such action Landlord does not unreasonably delay commencement of
such work or increase the cost of such work. Upon completion of such Alteration,
Tenant, at Tenant’s expense, shall obtain certificates of final approval of such
Alteration, including the “as-built” drawings, as applicable, showing such
Alterations, required by any governmental or quasi-governmental bodies and shall
furnish Landlord with copies thereof. A11 Alterations shall be made and
performed in accordance with the Rules and Regulations (hereinafter defined) and
in accordance with all Requirements (including, without limitation, the
Americans Disabilities Act, including but not limited to the accessibility
provisions thereof); all materials and equipment to be incorporated in the
Premises as a result of all Alterations shall be new and of quality in keeping
with the construction and maintenance of the Building; no such materials or
equipment shall be subject to any lien, encumbrance, chattel mortgage or title
retention or security, agreement. In the event any Alterations are performed by
Landlord or any agent, employee or affiliate thereof, at the request of Tenant,
the failure by Tenant to pay the cost of such Alterations within thirty
(30) days of

 

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rendition of a bill therefor shall be deemed a material default under this
Lease. Any mechanic’s lien filed against the Premises, or the Real Property, for
work claimed to have been done for, or materials claimed to have been furnished
to, Tenant shall be discharged by Tenant within thirty (30) days of notice to
Tenant by Landlord or the lienor, at Tenant’s expense, by payment or filing the
bond required by law. Tenant shall not, at any time prior to or during the Term,
directly or indirectly employ, or permit the employment of, any contractor.
mechanic or laborer in the Premises, whether in connection with any Alteration
or otherwise, if, in Landlord’s reasonable discretion, such employment will
upset the labor harmony in the Building or will interfere or cause any conflict
with other contractors, mechanics, or laborers engaged in the construction,
maintenance or operation of the Building by Landlord, Tenant or others. In the
event of any such interference or conflict, Tenant, upon demand of Landlord,
shall cause all contractors, mechanics or laborers causing such interference or
conflict to leave the Building immediately.

 

C. All Alterations performed by Tenant and the contractors and subcontractors
performing them shall be subject to Landlord’s reasonable supervision, in
keeping with industry standards. There will be no charge to Tenant for such
supervision and Landlord’s overhead connected therewith, except for standard
Building charges (as hereinafter set forth) for the use of any Building service
or facility (e.g., non-operating hours freight elevator use, after hours HVAC
etc., as hereinafter described) or for any overtime costs incurred by Landlord
at Tenant’s request or because of Tenant’s overtime work. Building freight
elevators will be available to Tenant and its contractors on a non-exclusive
first come first served basis.

 

D. Notwithstanding any approval by Landlord of any Tenant Alteration and any
contractor performing such work or the supervision by Landlord of such work,
Tenant, subject to the following provisions of this paragraph, shall indemnify
and hold Landlord harmless from any claim, demand or liability from any such
contractor (in addition to and not in derogation of the bonding and insurance
requirements in Section 3 A) or in any way arising from or relating to such
Alteration. If any claim, action or proceeding is made or brought against
Landlord, then, upon giving prompt notice thereof and upon demand by Landlord,
Tenant, at its sole cost and expense, shall resist or defend such claim, action
or proceeding in Landlord’s name (only if necessary), by attorneys approved by
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed. Attorneys for Tenant’s insurer shall hereby be deemed approved for
purposes of this Section unless they have a conflict of interest.
Notwithstanding anything herein contained to the contrary, Tenant may settle any
claim, suit or other proceeding provided that (a) such settlement shall involve
no obligation on the part of Landlord other than the payment of money, (b) any
payments to be made pursuant to such settlement shall be paid in full
exclusively by Tenant at the

 

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time such settlement is reached, (c) such settlement shall not require Landlord
to admit any liability, and (d) Landlord shall have received an unconditional
release from all other parties to such claim, suit, other proceeding or from any
other actual or potential claim, litigation or action in any way related to the
subject matter of the claim being settled. Landlord agrees to (x) reasonably
cooperate with Tenant and its counsel, provided Tenant bears any and all costs
relating thereto and (y) executes any and all releases and other documents
determined by Tenant and its counsel as necessary to compromise or settle any
claim that Tenant is permitted hereunder to compromise or settle, provided that
such releases and other documents shall be consistent with the terms and
conditions of this Article and not in derogation of the rights of Landlord
hereunder.

 

4. REPAIRS - FLOOR LOAD. Landlord shall maintain and repair the systems and
structure of the Building and maintain and repair the public portions of the
Building, both exterior and interior, in conformance with standards applicable
to first-class office buildings of comparable age and quality in mid-town
Manhattan. Tenant shall, throughout the Term, take good care of the Premises and
the fixtures and appurtenances therein and at Tenant’s sole cost and expense,
make all nonstructural repairs thereto as and when needed to preserve them in
good working order and condition, reasonable wear and tear and damage by fire or
other insurable casualty excepted. Notwithstanding the foregoing, all damage or
injury to the Premises or to any other part of the Building, or to its fixtures,
equipment and appurtenances, whether requiring structural or nonstructural
repairs, caused by or resulting from carelessness, neglect or improper conduct
or omission of or Alterations made by Tenant, Tenant’s servants, employees,
contractors, agents, visitors, invitees or licensee shall be repaired promptly
by Tenant, at its sole cost and expense, to the satisfaction of Landlord. Tenant
also shall repair all damage to the Building and the Premises caused by the
moving of Tenant’s fixtures, furniture or equipment. All the aforesaid repairs
shall be of quality and class equal to the original work or construction and
shall be made in accordance with the provisions of Article 3 hereof. If Tenant
fails after ten (10) days’ notice to proceed with due diligence to make repairs
required to be made by Tenant hereunder, the same may be made by Landlord, at
the expense of Tenant, and the expenses thereof incurred by Landlord (which are
reasonable in amount, reasonably necessary and actually paid to third parties or
if made by in-house employees or contractors, the charge therefore is no greater
than the charge allowed hereunder for third party contractors) shall be
collectible by Landlord as Additional Rent after rendition of a bill or
statement therefor. Tenant shall give Landlord prompt notice of any defective
condition in any plumbing, electrical, air-cooling or heating system located in,
servicing or passing through the Premises and Landlord shall repair such
condition or

 

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defect or replace the damaged component at its expense, unless the need for such
repair or replacement arises from the improper act or omission of Tenant, in
which case Landlord shall perform the work at Tenant’s expense. Tenant shall not
place a load upon any floor of the Premises exceeding the floor load per square
foot area which such floor was designed to carry and which is allowed by
Requirements. Business machines and mechanical equipment shall be placed and
maintained by Tenant at Tenant’s expense in settings sufficient to absorb and
prevent vibration. noise and annoyance. Except as expressly provided in Article
10 hereof, there shall be no allowance to Tenant for a diminution of rental
value and no liability on the part of Landlord by reason of inconvenience,
annoyance or injury to business arising from Landlord, Tenant or others making,
or failing to make, any repairs, alterations, additions or improvements in or to
any portion of the Building, or the Premises, or in or to fixtures,
appurtenances, or equipment thereof. Notwithstanding the foregoing, Landlord
shall use reasonable efforts to minimize any disruption to Tenant’s use or
occupancy of the Premises. Landlord shall give prior oral notice to Tenant
before entering the Premises to make any repairs, alterations, additions or
improvements (except in case of emergency, when no notice is required) so that
if Tenant desires, it can have a representative present. To the extent any
non-emergency repair, alteration, addition or improvement by Landlord would
materially interfere with Tenant’s use of the Premises during working hours,
Landlord shall perform such work during non-working hours and bear the cost of
any necessary overtime or premium pay rates. Landlord shall also be responsible
to clean up any debris or waste each night after it is performing such work and
upon completion, restore the Premises and Tenant’s Property to condition in
which it existed prior to such work except to the extent changed by the work
performed by Landlord. If the Premises be or become infested with vermin,
Tenant, at Tenant’s expense, shall cause the same to be exterminated from time
to time to the satisfaction of Landlord and shall employ such exterminators and
such exterminating company or companies as shall be approved by Landlord, which
approval shall not be unreasonably withheld, delayed or conditioned. The water
and wash closets and other plumbing fixtures shall not be used for any purposes
other than those for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other substances shall be deposited therein. All of the
requirements and obligations of Tenant with regard to the retention of
contractors and mechanics in Article 3 shall apply to any contractors or
subcontractors retained by Tenant to effect repairs pursuant to this Article 4.

 

5. WINDOW CLEANING. Tenant shall not clean, nor require, permit, suffer or allow
any window in the Premises to be cleaned, from the outside in violation of
Section 202 of the Labor

 

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Law, or any other applicable law, or of the rules of the Board of Standards and
Appeals, if any, or of any other board or body having or asserting jurisdiction.

 

6. REQUIREMENTS OF LAW. Tenant, at its sole expense, shall comply with all
present and future laws, statutes, rules, ordinances. orders, directives,
requirements, codes and regulations of federal, state, county and municipal
authorities, departments, bureaus, boards, agencies, commissions and other
sub-divisions thereof, and of any official thereof and any other governmental
and quasi-public authority and all rules, orders, regulations or requirements of
the New York Board of Fire Underwriters, or any other similar body
(collectively, “Requirements”) which shall now or hereafter impose any
violation, order or duty upon Landlord or Tenant with respect to the Premises as
a result of the use or occupation thereof by Tenant for any purpose other than
the Permitted Uses or the conduct by Tenant of its business in the Premises in a
manner different from the ordinary and proper conduct of such business.
Notwithstanding the foregoing, Tenant, at its expense and after notice to
Landlord, may contest by appropriate proceedings prosecuted diligently and in
good faith, the legality or applicability of any violation, notice or contest
with regard to such Requirements affecting the Premises, provided that
(a) Landlord shall not be subject to prosecution for any crime; (b) such
non-compliance or contest shall not constitute or result in a violation (either
with the giving of notice or the passage of time or both) of the terms of any
Mortgage or Superior Lease, or if such Superior Lease or Mortgage shall
condition such non-compliance or contest upon the taking of action or furnishing
of security by Landlord, such action shall be taken or such security shall be
furnished at the expense of Tenant; (c) Tenant shall keep Landlord regularly
advised as to the status of such proceedings; and (d) subject to the limitations
and conditions of Section 3(D), Tenant shall indemnify and hold Landlord
harmless from any demand, complaint, liability, cost or expense arising from or
relating to Tenant’s violation of or failure to comply with such Requirement at
any time or the failure of Tenant’s contest. Landlord shall be responsible for
compliance with all Requirements as they apply to common areas and building
systems and to the Premises (to the extent that Tenant has no obligation
therefor). Tenant shall not do or permit to be done any act or thing upon the
Premises which will invalidate or be in conflict with any insurance policies
covering the Building and fixtures and property therein (it being understood
that the Permitted Uses will not be such a violation); and shall not do, or
permit anything to be done in or upon the Premises, or bring or keep anything
therein as that is not now or hereafter prohibited by the New York City Fire
Department, New York Board Underwriters, New York Fire Insurance Rating
Organization or other authority having jurisdiction and then only in such
quantity and manner of storage as not to

 

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increase the rate for fire insurance applicable to the Building, or use the
Premises in a manner which shall increase the rate of fire insurance on the
Building or on property located therein, over that in similar type buildings or
in effect prior to this Lease. Landlord shall be responsible for compliance with
all Requirements and all insurance policies as they relate to the common areas
and building systems and to the Premises (to the extent that Tenant has no
obligation therefore). Any work or installations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant pursuant to this
Article shall be made in conformity with, and subject to the provisions of,
Article 3 hereof. If by reason of Tenant’s failure to comply with the provisions
of this Article, the fire insurance rate shall at the beginning of this Lease or
at any time thereafter be higher than it otherwise would be, then Tenant shall
reimburse Landlord, as Additional Rent hereunder, for that part of all fire
insurance premiums thereafter paid by Landlord which shall have been charged
because of such failure of use by Tenant, and shall make such reimbursement upon
the first day of the month following at least ten (10) days prior notice that
Landlord has made such outlay. In any action or proceeding wherein Landlord and
Tenant are parties, a schedule or “make up” of rates for the Building or the
Premises issued by the New York Fire Insurance Rating Organization, or other
body fixing such fire insurance rates, shall be conclusive evidence of the facts
therein stated and of the several items and charges in the fire insurance rate
then applicable to the Premises.

 

7. SUBORDINATION.

 

A. This Lease shall be subject and subordinate to each and every ground or
underlying lease of the Real Property or the Building heretofore or hereafter
made by Landlord (collectively, the “Superior Leases”) and to each and every
trust indenture or mortgage (collectively, the “Mortgages”) which may now or
hereafter affect the Real Property, the Building or any such Superior Lease and
the leasehold interest created thereby, and to all renewals, extensions,
supplements, amendments, modifications, consolidations, and replacements thereof
or thereto, substitutions therefor and advances made thereunder, provided that
as a condition to such subordination, if Tenant is not in default under the
terms hereof, beyond any applicable notice or grace period, it receives a
non-disturbance agreement from such lessor or mortgagee, as the case may be in
each case, protecting all of Tenant’s rights under the Lease so long as it is
not in default thereof, beyond any applicable notice or grace period.
Notwithstanding the foregoing, provided Tenant is not in default under the terms
hereof, beyond any applicable notice or grace period, Landlord shall secure from
the holder of any Superior Lease or Mortgage an agreement (in a form which meets
industry standards or is otherwise reasonably acceptable to Tenant) that Tenant
shall

 

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not be disturbed in its use or occupancy of the Premises and shall be afforded
the protection of all of its rights and benefits hereunder. This clause shall be
self-operative and no further instrument of subordination shall be required to
make the interest of any lessor under a Superior Lease, or trustee or mortgagee
of a Mortgage superior to the interest of Tenant hereunder. In confirmation of
such subordination, however, Tenant shall execute promptly any certificate that
Landlord may request. If, in connection with the financing of the Real Property,
the Building or the interest of the lessee under any Superior Lease, any lending
institution shall request reasonable modifications of this Lease that do not
materially increase the obligations or materially and adversely affect the
rights of Tenant under this Lease, Tenant covenants to make such modifications.

 

B. If at any time prior to the expiration of the Term, any Mortgage shall be
foreclosed or any Superior Lease shall terminate or be terminated for any
reason, Tenant agrees, at the election and upon demand of any owner of the Real
Property or the Building, or the lessor under any such Superior Lease, or of any
mortgagee in possession of the Real Property or the Building to attornment, from
time to time, to any such owner, lessor or mortgagee, upon the then executory
terms and conditions of this Lease, for the remainder of the term originally
demised in this Lease, provided that such owner, lessor or mortgagee, as the
case may be, or receiver caused to be appointed by any of the foregoing, shall
agree not to disturb Tenant in its use or occupancy of the Premises under the
terms of the Lease as long as Tenant is not in default under the terms thereof.
The provisions of this subsection B shall inure to the benefit of any such
owner, lessor or mortgagee, shall apply notwithstanding that, as a matter of
law, this Lease may terminate upon the termination of any such Superior Lease,
and shall be self-operative upon any such demand, and no further instrument
shall be required to give effect to said provisions. Tenant, however, upon
demand of any such owner, lessor or mortgagee, agrees to execute, from time to
time, instruments in confirmation of, the foregoing provisions of this
subsection B, satisfactory to any such owner, lessor or mortgagee, acknowledging
such attornment and setting forth the terms and conditions of its tenancy.
Nothing contained in this subsection B shall be construed to impair any right
otherwise exercisable by any such owner, lessor or mortgagee subject to its
agreement not to disturb Tenant as long as it is not in default hereunder and to
recognize Tenant under all terms of this Lease.

 

C. Landlord represents and warrants that as of execution hereof, the Building is
not subject to any Superior Lease or Mortgage. Nevertheless, if and when it
becomes subject to any such Superior Lease and/or Mortgage, all of the terms of
Sections (A) and 7 (B) shall apply thereto.

 

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8. RULES AND REGULATIONS. Tenant and Tenant’s servants, employees, contractors,
agents. visitors, invitees and licensees shall observe faithfully, and comply
strictly with, the Rules and Regulations annexed hereto and made a part hereof
as Schedule A (the “Rules and Regulations”), and such other and further
reasonable Rules and Regulations as Landlord may from time to time adopt on at
least thirty (30) days prior notice, except in case of emergency. Landlord
covenants that except with regard to changes in the rules relating to building,
security and safety, any changes in rules will not materially change any of
Tenant’s rights or obligations hereunder. In case Tenant disputes the
reasonableness of any additional Rule or Regulation hereafter made or adopted by
Landlord or Landlord’s agents, the parties hereto agree to submit the question
of the reasonableness of such Rule or Regulation for decision to the Chairman of
the Board of Directors of the Management Division of The Real Estate Board of
New York, Inc., or to such impartial person or persons as he may designate,
whose determination shall be final and conclusive upon the parties hereto. The
right to dispute the reasonableness of any additional Rule or Regulation upon
Tenant’s part shall be deemed waived unless the same shall be asserted by
service of a notice in writing upon Landlord within thirty (30) days after
receipt by Tenant of written notice of the adoption of any such additional Rule
or Regulation. Nothing in this Lease contained shall be construed to impose upon
Landlord any duty or obligation to enforce the Rules and Regulations or terms,
covenants or conditions in any other lease, against any other tenant and
Landlord shall not be liable to Tenant for violation of the same by any other
tenant, its servants, employees, agents, visitors or licensees. Should Landlord
decide, in its absolute discretion to enforce any such rules, it will do so in a
uniform manner that does not unreasonably discriminate against Tenant.

 

9. INSURANCE.

 

A. Tenant’s Insurance. Tenant shall obtain at its own expense and keep in full
force and effect during the Term, a policy of commercial general liability and
property damage insurance including broad form contractual liability coverage
under which Tenant is named as the insured, and Landlord, Landlord’s managing
agent and/or such other designee specified by Landlord from time to time, are
named as additional insureds. 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 amount of any loss sustained as well as a waiver of
subrogation or consent to a waiver of right of recovery, whereby the insurer
agrees that it will not make any claim against or seek to recover from Landlord
for any loss, damage or claim whether or not covered under such policy. Such
policy shall also contain a provision that the insurance company will not cancel
or refuse to renew

 

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the policy, or change in any material way the nature or extent of the coverage
provided by such policy, without first giving Landlord and any other additional
insureds at least thirty (30) days’ written notice, which notice shall contain
the policy number and the names of the insureds and policy holder. The minimum
limits of liability shall be a combined single limit with respect to each
occurrence in an aggregate amount of not less than $3,000,000 for injury (or
death) and damage to property or such greater amount as Landlord may, from time
to time, reasonably require in accord with common practice of building owners or
managers of similar buildings in midtown Manhattan. Tenant shall provide to
Landlord upon execution of this Lease and at least thirty (30) days prior to the
termination of any existing policy, a certificate evidencing the effectiveness
of the insurance policies required to be maintained hereunder, and Tenant shall
provide Landlord with a complete copy of any such policy upon written request of
Landlord. Tenant shall have no right to obtain any of the insurance required
hereunder pursuant to a blanket policy covering other properties unless the
blanket policy contains an endorsement that names Landlord, Landlord’s managing
agent and/or designees specified by Landlord from time to time, as additional
insureds, references the Premises, and guarantees a minimum limit available for
the Premises equal to the amount of insurance required to be maintained
hereunder. Each policy required hereunder shall contain a clause that the policy
and the coverage evidenced thereby shall be primary with respect to any policies
carried by Landlord, and that any coverage carried by Landlord shall be excess
insurance. The limits of the insurance required under this subsection shall not
limit the liability of Tenant under this Lease. All insurance required to be
carried by Tenant pursuant to the terms of this Lease shall be effected under
valid and enforceable policies issued by reputable and independent insurers
permitted to do business in the State of New York, and rated in Best’s Insurance
Guide, or any successor thereto (or if there be none, an organization having a
national reputation) as having a general policyholder rating of “A” and a
financial rating of at least “13”. In the event that Tenant fails to provide
Landlord with proof of renewal at least thirty (30) days prior to expiration of
any insurance policy or coverage that Tenant is required to maintain hereunder
or Landlord receives a notice from any insurer that any insurance policy or
coverage which Tenant is required to maintain hereunder will be terminated
within thirty (30) days or Tenant otherwise fails to continuously maintain
insurance as required by this subsection, Landlord may, upon thirty (30) days’
prior written notice to Tenant, at its option and without relieving Tenant of
any obligation hereunder, order such insurance and pay for the same at the
expense (which expenses shall be those reasonably incurred, reasonable in amount
and reasonably necessary and actually paid to independent third party or at
third party rates). Notwithstanding the foregoing, it is understood and agreed
that Landlord may take any

 

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reasonable action to provide that the insurance required by this Section 9(A) is
continuously maintained by Tenant. In such event, Tenant shall repay the amount
expended by Landlord, with interest thereon, as Additional Rent immediately upon
Landlord’s written demand therefor.

 

B. Tenant’s Improvement Insurance. Tenant shall also maintain at its own expense
during the Term a policy against fire and other casualty on the non-standard
construction within the Premises and Tenant property and improvements, including
without limitation, all furniture, fixtures, personal property and inventory
located in the Premises on an “all-risk” form sufficient to provide 100%
replacement value of such personal property, which policy shall otherwise comply
with the provisions of subsections A and C of this Article 9. Tenant shall also
maintain at its own expense during the Term a policy of workers’ compensation
insurance providing statutory benefits for Tenant’s employees and employer’s
liability.

 

C. Waiver of Subrogation. The parties hereto shall procure an appropriate clause
in, or endorsement on, any “all-risk” property insurance covering the Premises
and the Building, as well as personal property, fixtures and equipment located
thereon or therein, pursuant to which the insurance companies waive subrogation
or consent to a waiver of right of recovery, and each party hereby agrees that
it will not make any claim against or seek to recover from the other for any
loss or damage to its property or the property of others resulting from fire or
other hazards coverable by broadest form of all-risk insurance. If the payment
of an additional premium is required for the inclusion of such waiver of
subrogation provision, each party shall advise the other of the amount of any
such additional premiums and the other party shall pay the same. It is expressly
understood and agreed that Landlord will not carry insurance on Tenant’s
fixtures, furnishings, equipment or other property or effects or insurance
against interruption of Tenant’s business.

 

D. Landlord’s Insurance. Landlord shall throughout the term hereof maintain such
policy(ies) of property damage insurance as a prudent owner of the Building or
Real Property would maintain.

 

10. DESTRUCTION OF THE PREMISES: PROPERTY LOSS OR DAMAGE.

 

A. If the Premises (or any common area of the Building necessary for Tenant’s
access to or use of the Premises) shall be damaged by fire or other casualty,
and in such case as the casualty is limited to the Premises, if Tenant shall
give prompt notice thereof to Landlord, the damages shall be repaired by and at
the expense of Landlord. Until such repairs shall be made, the Fixed Rent,
Tenant’s Proportionate Share of Taxes and Operating Expenses shall be reduced in
the proportion which the area of the part of the Premises which is not usable by
Tenant bears to the

 

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total area of the Premises, provided, however, should Tenant reoccupy a portion
of the Premises for the conduct of its business prior to the date such repairs
are made, the Fixed Rent, Tenant’s Proportionate Share of Taxes and Operating
Expenses shall be reinstated with respect to such reoccupied portion of the
Premises and shall be payable by Tenant from the date of such occupancy.
Landlord shall have no obligation to repair any damage to, or to replace, any
Alterations made by Tenant or any fixtures, furniture, furnishings, equipment or
other property or effects of Tenant. Notwithstanding the foregoing, in such case
as the Premises alone, without material damage to remainder of the Building,
suffers a casualty and so much of the Premises (or access to the Premises) is
destroyed that Tenant is unable to conduct business therein in a commercially
reasonable manner, then should Landlord fail to substantially complete
restoration of the Eighteenth (18th) Floor Premises and/or the Seventeenth
(17th) Floor Premises to the same condition they were in on their respective
Commencement Dates within 120 days of notice to Landlord of such casualty,
Tenant may terminate this Lease upon written notice to Landlord given no later
than ten (10) days after the expiration of such 120 day period.

 

B. Anything in subsection A of this Article 10 to the contrary notwithstanding,
if the Premises are totally damaged or are rendered wholly untenantable, and if
Landlord shall decide not to restore the Premises, or if the Building shall be
so damaged by fire or other casualty that, in Landlord’s opinion, substantial
alteration, demolition, or reconstruction of the Building shall be required
(whether or not the Premises shall have been damaged or rendered untenantable)
or the Building, after its repair, alteration or restoration shall nor be
economically viable as an office building, then in any of such events, Landlord,
at Landlord’s option, may, not later than ninety (90) days following the damage,
give Tenant a notice in writing terminating this Lease, provided the leases for
all other tenants in the Building are also terminated. If Landlord elects to
terminate this Lease, the Term shall expire upon the tenth (10’) day after such
notice is given, and Tenant shall vacate the Premises and surrender the same to
Landlord. Upon the termination of this Lease under the conditions provided for
in the immediately preceding sentence, Tenant’s liability for Rent shall cease
as of the day following such damage, provided that Tenant shall remain liable
for all Rent which accrued prior to the day following such damage. Should
Landlord elect not to terminate the Lease, it shall be responsible to restore
the Premises to the condition they were in on the Commencement Date of each
floor therein. Should Landlord fail to substantially complete such restoration
within one (1) year of the date of the casualty, Tenant may terminate this Lease
by written notice to Landlord given no later than thirty (30) days after the
expiration of such one (1) year period.

 

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C. The parties agree that this Article 10 constitutes an express agreement
governing any case of damage or destruction of the Premises or the Building by
fire or other casualty, and that Section 227 of the Real Property Law of the
State of New York, which provides for such contingency in the absence of an
express agreement, and any other law of like import now or hereafter in force
shall have no application in any such case.

 

D. Any Building employee to whom any property shall be entrusted by or on behalf
of Tenant shall be deemed to be acting as Tenant’s agent with respect to such
property and neither Landlord nor its agents shall be liable for any damage to
property of Tenant or of others entrusted to employees of the Building, nor for
the loss of or damage to any property of Tenant by theft or otherwise. Neither
Landlord nor its agents shall be liable for any injury or damage to persons or
property or interruption of Tenant’s business resulting from fire, explosion,
falling plaster, steam, gas, electricity, water, rain or snow or leaks from any
part of the Building or from the pipes. appliances or plumbing works or from the
roof, street or subsurface or from any other place or by dampness or by any
other cause of whatsoever nature; nor shall Landlord or its agents be liable for
any such damage caused by other tenants or persons in the Building or caused by
construction of any private, public or quasi-public work. Anything in this
Article 10 to the contrary notwithstanding, nothing in this Lease shall be
construed to relieve Landlord from responsibility directly to Tenant for any
loss or damage caused directly to Tenant wholly or in part by the negligence or
willful tort of Landlord. Landlord shall use reasonable efforts to minimize any
disruption to Tenant’s use or occupancy of the Premises. Nothing in the
foregoing sentence shall affect any right of Landlord to the indemnity from
Tenant to which Landlord may be entitled under Article 7 hereof in order to
recoup for payments made to compensate for losses of third parties. If at any
time any windows of the Premises are temporarily closed, darkened or bricked-up
for any reason whatsoever except Landlord’s own acts, or any of such windows are
permanently closed, darkened or bricked-up if required by law or related to any
construction upon property adjacent to the Real Property by Landlord or others,
Landlord shall not be liable for any damage Tenant may sustain thereby and
Tenant shall not be entitled to any compensation therefor nor abatement of Rent
nor shall the same release Tenant from its obligations hereunder nor constitute
an eviction. Tenant shall reimburse and compensate Landlord as Additional Rent
within ten (10) days after rendition of a statement for all expenditures made by
Landlord, which are reasonable in amount, reasonably necessary and actually paid
to third parties or if made by in-house employees or contractors, the charge
therefor shall be no greater than the charge allowed for third party
contractors, or damages or fines sustained or incurred by, Landlord due to
nonperformance or noncompliance with or breach or failure to observe any term,
covenant or

 

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condition of this Lease upon Tenant’s part to be kept, observed, performed or
complied with, provided that except in case of emergency, Landlord has first
given Tenant ten (10) days prior notice and opportunity to cure. Tenant shall
give immediate notice to Landlord in case of fire or accident occurring
exclusively in the Premises. Tenant shall not move any safe, heavy machinery,
heavy equipment, freight, bulky matter or fixtures into or out of the Building
without Landlord’s prior consent (which shall not be unreasonably withheld,
conditioned or delayed). If such safe, machinery, equipment, freight, bulky
matter or fixtures requires special handling, Tenant agrees to employ only
persons holding a Master Rigger’s License (if such requirement is general
industry standard) to do said work, and that all work in connection therewith
shall comply with all applicable Requirements, and shall be done during such
hours as Landlord may reasonably designate. Except as otherwise covered by
Section 9(c), notwithstanding said consent of Landlord, Tenant, in accord with
the requirements set forth in Section 3(D), shall indemnify Landlord for, and
hold Landlord harmless and free from, damages sustained by persons or property
and for any damages or monies paid out by Landlord in settlement of any claims
or judgments, as well as for all expenses and attorneys’ fees incurred in
connection therewith and all costs incurred in repairing any damage to the
Building or appurtenances under this Section 10.

 

11. EMINENT DOMAIN.

 

A. If the whole of the Real Property, the Building or the Premises shall be
acquired or condemned for any public or quasi-public use or purpose, this Lease
and the Term shall end as of the date of the vesting of title with the same
effect as if said date were the Expiration Date. If only a part of the Real
Property shall be so acquired or condemned then, (a) except as hereinafter
provided in this subsection A, this Lease and the Term shall continue in force
and effect but, if part of the Premises is included in the part of the Real
Property so acquired or condemned, from and after the date of the vesting of
title, the Fixed Rent and Tenant’s Proportionate Share shall be reduced in the
proportion which the area of the part of the Premises acquired or condemned
bears to the total area of the Premises immediately prior to such acquisition or
condemnation; (b) whether or not the Premises shall be affected thereby, but
provided Landlord takes the same action with regard to all other leases in the
Building, Landlord, at Landlord option, may give to Tenant, within sixty
(60) days next following the date upon which Landlord shall have received notice
of vesting of title, a five (5) days’ notice of termination of this Lease; and
(c) if the part of the Real Property so acquired or condemned shall contain such
area as makes it unreasonable for Tenant to conduct its business in the
remaining area, it being agreed a taking of more than thirty percent (30%) of
the total area of the Premises immediately prior to such acquisition or

 

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condemnation or the denial of access making more than thirty percent (30%) of
the Premises unusable in a commercially reasonable manner, shall be deemed to
make it impractical for Tenant to conduct its business in the Premises or if, by
reason of such acquisition or condemnation, Tenant no longer has reasonable
means of access to the Premises, Tenant, at Tenant’s option, may give to
Landlord, within sixty (60) days next following the date upon which Tenant shall
have received notice of vesting of title, a five (5) days’ notice of termination
of this Lease. If any such five (5) days’ notice of termination is given by
Landlord or Tenant this Lease and the Term shall come to an end and expire upon
the expiration of said five (5) days with the same effect as if the date of
expiration of said five (5) days were the Expiration Date. If a part of the
Premises shall be so acquired or condemned and this Lease and the Term shall not
be terminated pursuant to the foregoing provisions of this subsection A,
Landlord, at Landlord’s expense, shall restore that part of the Premises not so
acquired or condemned to a self-contained rental unit. In the event of any
termination of this Lease and the Term pursuant to the provisions of this
subsection A, the Rent shall be apportioned as of the date of sooner termination
and any prepaid portion of Rent for an period after such date shall be refunded
by Landlord to Tenant.

 

B. In the event of any such acquisition or condemnation of all or any part of
the Real Property, Landlord shall be entitled to receive the entire award for
any such acquisition or condemnation, Tenant shall have no claim against
Landlord or the condemning authority for the value of any unexpired portion of
the Term and Tenant hereby expressly assigns to Landlord all of its right in and
to any such award. Nothing contained in this subsection B shall be deemed to
prevent Tenant from making a claim in any condemnation proceedings for the then
value of any furniture, furnishings and fixtures installed by and at the expense
of Tenant and included in such taking and Tenant’s moving expenses, provided
that such award shall not reduce the amount of the award otherwise payable to
Landlord.

 

12. ASSIGNMENT AND SUBLETTING.

 

A. Except as otherwise set forth in this Article 12, Tenant, for itself, its
successors or assigns expressly covenants that it shall not assign, mortgage,
pledge, encumber, or otherwise transfer this Lease, nor sublet, nor underlet,
nor suffer, nor permit the Premises or any part thereof to be used or occupied
by others (whether for desk space, mailing privileges or otherwise), without the
prior written consent of Landlord in each instance. If this Lease be assigned,
or if the Premises or any part thereof be underlet or occupied by anybody other
than Tenant, Landlord may, after default by Tenant, collect rent from the
assignee, subtenant, undertenant or occupant, and apply the net amount collected
to the Rent herein reserved, but no assignment, subletting,

 

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underletting, occupancy or collection shall be deemed a waiver of the provisions
hereof, the acceptance of the assignee, subtenant, undertenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. The consent by Landlord to an
assignment or subletting or underletting shall not in any way be construed to
relieve Tenant from obtaining the express consent in writing of Landlord to any
further assignment or underletting. In no event shall any permitted sublessee
assign or encumber its sublease or further sublet all or any portion of its
sublet space, or otherwise suffer or permit the sublet space or any part thereof
to be used or occupied by others, without Landlord’s prior written consent in
each instance. Any assignment, sublease, underletting mortgage, pledge,
encumbrance or transfer in contravention of the provisions of this Article 12
shall be void.

 

B. If Tenant shall at any time or times during the Term desire to assign this
Lease or sublet all or part of the Premises, Tenant shall give notice thereof to
Landlord, which notice shall be accompanied by (i) a conformed or photostatic
copy of the proposed draft of the assignment or sublease, the effective or
commencement date of which shall be not less than twenty (20) business days nor
more than one hundred and eighty (180) days after the giving of such notice,
(ii) a statement setting forth in reasonable detail the identity of the proposed
assignee or subtenant, the nature of its business and its proposed use of the
Premises, (iii) current financial information with respect to the proposed
assignee or subtenant, including, without limitation, its most recent financial
report, if any, and (iv) an agreement by Tenant to indemnify Landlord against
liability resulting from any claims that may be made against Landlord by the
proposed assignee or sublessee or by any brokers or other persons claiming a
commission or similar compensation in connection with the proposed assignment or
sublease.

 

C. (l) Provided that Tenant is not in default of any of Tenant’s obligations
under this Lease (after notice and the expiration of any applicable grace
period) as of the time of Landlord’s consent and as of the commencement date of
the proposed sublease or assignment, Landlord’s consent to the proposed
assignment or sublease or any subsequent assignment or sublease shall not be
unreasonably withheld, conditioned or delayed, provided and upon condition that:

 

(i) in Landlord’s reasonable judgment the proposed subtenant is engaged in a
business or activity, and the Premises, or the relevant part thereof, will be
used in a manner, which (a) is in keeping with the then standards of the
Building, (b) is limited to the Permitted Uses and (c) will not violate any
negative covenant contained in any other lease of office space in the Building
as of the date hereof;

 

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(ii) the proposed subtenant is of character and reputation fitting a first-class
office in Midtown Manhattan, and Landlord has been furnished with reasonable
proof thereof;

 

(iii) provided Landlord can otherwise meet the realistic requirements of the
proposed Sublessee (which are not formulated or altered to avoid the restriction
of this subsection) in the Building, neither (a) the proposed sublessee nor
(b) any person which, directly or indirectly controls, is controlled by, or is
under common control with, the proposed sublessee, is then an occupant of any
part of the Building;

 

(iv) the proposed sublessee is not a person with whom Landlord is then
negotiating to lease space in the Building;

 

(v) the form of the proposed sublease shall be in form that complies with the
applicable provisions of this Article 12;

 

(vi) there shall not be more than three (3) occupants in any one whole floor
within the Premises;

 

(vii) Tenant shall reimburse Landlord on demand for the reasonable out-of-pocket
costs that may be incurred by Landlord in connection with said sublease,
including without limitation, the costs of making investigations as to the
acceptability of the proposed subtenant, and legal costs incurred in connection
with the granting of any requested consent;

 

(viii) Tenant shall not have advertised or publicized in any way the
availability of the Premises without prior notice to and approval by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed, nor
shall any advertisement state the name (as distinguished from the address) of
the Building or the proposed rental (notwithstanding the foregoing, Tenant shall
be free to list the availability of the Premises with broker or brokers of its
choice);

 

(ix) the proposed occupancy shall not materially increase the office cleaning
requirements or impose a significant extra burden upon services to be supplied
by Landlord to Tenant unless Landlord reasonably determines that it can deliver
such increased services and Tenant agrees to be responsible for any increased
cost relating thereto; and

 

(x) the proposed subtenant shall not be entitled, directly or indirectly, to
diplomatic or sovereign immunity and shall be subject to the service of process
in, and the jurisdiction of the courts of New York State.

 

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(2) Each subletting consented to by Landlord shall be subject to all of the
covenants, agreements, terms, provisions and conditions contained in this Lease.

 

(3) Notwithstanding any assignment or subletting to any other subtenant, and/or
acceptance of Fixed Rent or Additional Rent by Landlord from any assignee or
subtenant, Tenant shall and will remain fully liable for the payment of the
Fixed Rent and Additional Rent due and to become due hereunder and for the
performance of all the covenants, agreements, terms, provisions and conditions
contained in this Lease on the part of Tenant to be performed and all acts and
omissions of any assignee or subtenant or anyone claiming under or through any
assignee or subtenant which shall be in violation of any of the obligations of
this Lease shall be deemed to be a violation by Tenant. Tenant further agrees
that notwithstanding any assignment or subletting consented to by Landlord, no
other and further assignment or subletting of the Premises by Tenant or any
person claiming through or under Tenant shall or will be made except upon
compliance with and subject to the provisions of this Article 12.

 

(4) If Landlord shall reasonably decline to give its consent to any proposed
assignment or sublease, Tenant shall, subject to the limitations and conditions
set forth in Paragraph 3(D), indemnify, defend and hold harmless Landlord
against and from any and all loss, liability, damages, costs, and expenses
(including reasonable counsel fees) resulting from any claims that may be made
against Landlord by the proposed assignee or sublessee or by any brokers or
other persons claiming a commission or similar compensation in connection with
the proposed assignment or sublease.

 

D. In the event that Landlord consents to a proposed assignment or sublease and
Tenant fails to execute and deliver the assignment or sublease to which Landlord
consented within ninety (90) days after the giving of such consent, then, Tenant
shall again be obligated to comply with all of the provisions and conditions of
subsection B of this Article 12 before assigning this Lease or subletting all or
part of the Premises.

 

E. With respect to each and every sublease or subletting authorized by Landlord
under the provisions of this Lease, it is further agreed that:

 

(i) no subletting shall be for a term ending later than one (1) day prior to the
Expiration Date of this Lease;

 

(ii) no sublease shall be delivered, and no subtenant shall take possession of
the Premises or any part thereof, until an executed counterpart of such sublease
has been delivered to Landlord;

 

(iii) each sublease shall provide that it is subject and subordinate to this
Lease and to the matters to which this Lease is or shall be subordinate, and
that in the event of termination,

 

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re-entry or dispossession by Landlord under this Lease, Landlord may, at its
option, take over all of the right, title and interest of Tenant, as sublessor,
under such sublease, and such subtenant shall, at landlord’s option, attorn to
Landlord pursuant to the then executory provisions of such sublease, except that
Landlord shall not, unless expressly consented to by it, (a) be liable for any
previous act or omission of Tenant under such sublease, (b) be subject to any
counterclaim, offset or defense, not expressly provided in such sublease, which
theretofore accrued to such subtenant against Tenant, or (c) be bound by any
previous modification of such sublease or by any previous prepayment of more
than one (1) month’s Fixed Rent.

 

F. If the Landlord shall give its consent to any assignment of this Lease or to
any sublease or if Tenant shall enter into any other assignment or sublease
permitted hereunder, Tenant shall in consideration therefor, pay to Landlord, as
Additional Rent:

 

(i) In the case of an assignment, an amount equal to 50% of all sums and other
considerations paid to Tenant by the assignee for or by reason of such
assignment (including, but not limited to, sums paid for the sale of Tenant’s
fixtures, leasehold improvements, equipment, furniture, furnishings or other
personal property, less, in the case of a sale thereof, the then net unamortized
or undercoated cost thereof determined on the basis of Tenant’s federal income
tax returns) less all expenses reasonably and actually incurred by Tenant on
account of brokerage commissions, legal fees, advertising costs and other
reasonable costs paid to third parties in connection with such assignment; and
(ii) In the case of a sublease, an amount equal to 50% of any rents, additional
charges or other consideration payable under the sublease to Tenant by the
subtenant which is in excess of the Fixed Rent and Additional Rent accruing
during the term of the sublease in respect of the subleased space (at the rate
per square foot payable by Tenant hereunder) pursuant to the terms hereof
(including, but not limited to, sums paid for the sale or rental of Tenant’s
fixtures, leasehold improvements, equipment, furniture or other personal
property, less, in the case of the sale thereof, the then net unamortized or
undepreciated cost thereof determined on the basis of Tenant’s federal income
tax returns), less all expenses reasonably and actually incurred by Tenant on
account of brokerage commissions, legal fees, advertising costs and the cost of
demising the premises so sublet in connection with such sublease and all other
reasonable costs paid to third parties (including to the subtenant, including
without limitation, costs of initial improvements, free rent and other
allowances). For the purpose of calculating Landlord’s share of excess Fixed
Rent or Additional Rent, all costs incurred by Tenant shall be recovered by
Tenant before Landlord is entitled to such fifty percent (50%) in excess of the
Fixed Rent. The sums

 

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payable under this subsection F (ii) of this Article 12 shall be paid to
Landlord as and when payable by the subtenant to Tenant.

 

(iii) Notwithstanding subsection 12 (F) (ii), should Tenant sublease any part of
the useable area of the eighteenth (18th) floor, Landlord shall be paid any rent
or other consideration, in excess of the Fixed Rent and Additional Rent accruing
during the term of such sublease.

 

(iv) Further, notwithstanding subsections 12(F)(ii), should Tenant sublease 50%
or less of the useable area of the seventeenth (17th) floor and remain in
occupancy of the remainder of the floor, Tenant may retain all rents, additional
charges or other consideration received by it as a result of such subletting.
Should Tenant sublease more than fifty percent (50%) of such floor or otherwise
remain in occupancy of less than 50% of such floor the sublease consideration
shall be divided in accord with Subsection 12 (F) (ii).

 

G. (i) If Tenant is a corporation other than a corporation whose stock is listed
and traded on a nationally recognized stock exchange (hereinafter referred to as
a “public corporation”), the provisions of subsection A of this Article 12 shall
apply to a transfer (by one or more transfers) of a majority of the stock of
Tenant as if such transfer of a majority of the stock of Tenant were an
assignment of this Lease; but said provisions shall not apply to transactions
with a corporation into or with which Tenant is merged or consolidated or to
which all or substantially all of Tenant’s assets are transferred, provided that
in any of such events the successor to Tenant at least ten (10) days prior to
the effective date of any such transaction provides Landlord with (a) a security
deposit of no less than two (2) months Fixed Rent then payable hereunder or
(b) proof satisfactory to Landlord that Tenant has a net worth, computed in
accordance with generally accepted accounting principles, at least equal to the
lesser of (1) the net worth of Tenant immediately prior to such merger,
consolidation or transfer, (2) the net worth of Tenant herein named on the date
of this Lease or in the alternative to either of the foregoing and without
regard to whether it is greater than such net worth valuations or (3) a net
worth of $50,000,000.00. Any security deposit payable hereunder shall be in cash
or a cash equivalent satisfactory to Landlord and shall be replenished by Tenant
should Landlord need to draw upon it because of any Event of Default by Tenant
prior to the end of the term hereof. The balance of such security deposit shall
be returned promptly to Tenant after termination of this Lease and deduction by
Landlord for any cost incurred at the termination of this Lease to make any
restoration or repair which is Tenant’s obligation hereunder or to cure any
Event of Default then existing.

 

(ii) If Tenant is a partnership, the provisions of subsection A of this Article
12 shall apply to a transfer (by one or more transfers) of a majority interest
in the partnership as if

 

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such transfer were an assignment of this Lease if such transfer is effected
solely for the purposes of circumventing the requirements of this Article 12.

 

(iii) If Tenant is a subdivision, authority, body, agency, instrumentality or
other entity created and/or controlled pursuant to the laws of the State of New
York or any city, town or village of such state or of federal government
(“Governmental Entity”), the provisions of subsection A of this Article 12 shall
apply to a transfer (by one or more transfers) of any of Tenant’s rights to use
and occupy the Premises, to any other Governmental Entity, as if such transfer
of the right of use and occupancy were an assignment of this Lease; but said
provisions shall not apply to a transfer of any of Tenant’s rights in and to the
Premises to any Governmental Entity which shall replace or succeed to
substantially similar public functions, responsibilities, and areas of authority
as Tenant, provided that in any of such events the successor Governmental
Entity, (a) shall utilize the Premises in a manner substantially similar to
Tenant, and (b) shall not utilize the Premises in any manner which, in
Landlord’s judgment, would impair the reputation of the Building as a
first-class office building.

 

H. Tenant may, without Landlord’s consent, assign this Lease or sublet all or a
part of the Premises or permit the use of any or all of the Premises without a
sublease by or to any corporations or other business entities (but not including
Governmental Entities) which control, are controlled by, or are under common
control with Tenant (herein referred to as “related corporation”) for any of the
purposes permitted to Tenant, subject however to compliance with Tenant’s
obligations under this Lease (except this Article 12). Notwithstanding the
foregoing, Tenant must give Landlord at least thirty (30) days written notice
before such assignment, sublet or use. No such assignment or subletting shall
relieve, release, impair or discharge any of Tenant’s obligations hereunder and
Tenant named herein shall remain jointly and severally liable to Landlord
without any suretyship defenses which are hereby waived. For the purposes
hereof, “control” shall be deemed to mean ownership of not less than fifty
percent (50%) of all of the voting stock of such corporation or not less than
fifty percent (50%) of all of the legal and equitable interest in any other
business entities.

 

I. Any assignment or transfer, whether made with Landlord’s consent pursuant to
subsection A of this Article 12 or without Landlord’s consent pursuant to
subsection G or H of this Article 12, shall be made only if, and shall not be
effective until, the assignee shall execute, acknowledge and deliver to Landlord
an agreement in form and substance satisfactory to Landlord whereby the assignee
shall assume the obligations of this Lease on the part of Tenant to be performed
or observed and whereby the assignee shall agree that the provisions in
subsection A of this Article 12 shall, notwithstanding such assignment or
transfer, continue to be binding

 

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upon it in respect of all future assignments and transfers. The original named
Tenant covenants that, notwithstanding any assignment or transfer, whether or
not in violation of the provisions of this Lease, and notwithstanding the
acceptance of Fixed Rent and/or Additional Rent by Landlord from an assignee,
transferee, or any other party, the original named Tenant shall remain fully
liable (jointly and severally with the assignee) for the payment of the Fixed
Rent and Additional Rent and for the other obligations of this Lease on the part
of Tenant to be performed or observed without any suretyship defenses which are
hereby waived.

 

J. The Joint and several liability of Tenant and any immediate or remote
successor in interest of Tenant and the due performance of the obligations of
this Lease on Tenant’s part to be performed or observed shall not be discharged,
released or impaired in any respect by any agreement or stipulation made by
Landlord extending the time, or modifying any of the obligations of this Lease,
or by any waiver or failure of Landlord to enforce any of the obligations of
this Lease. Notwithstanding the foregoing, Tenant shall not be liable for any
obligations of any assignee resulting from any modification of this Lease made
after such assignment.

 

K. The listing of any name other than that of Tenant, whether on the doors of
the Premises or the Building directory, or otherwise, shall not operate to vest
any right or interest in this Lease or in the Premises, nor shall it be deemed
to be the consent of Landlord to any assignment or transfer of this Lease or to
any sublease of the Premises or to the use or occupancy thereof by others. Any
such listing shall constitute a privilege extended by Landlord, revocable at
Landlord’s will by notice to Tenant.

 

L. If Landlord shall recover or come into possession of the Premises before the
date herein fixed for the termination of this Lease, Landlord shall have the
right, at its option, to take over any and all subleases of the Premises or any
part thereof made by Tenant and to succeed to all the rights of said subleases
or such of them as it may elect to take over. Tenant hereby expressly assigns
and transfers to Landlord such of the subleases and sublettings as Landlord may
elect to take over at the time of such recovery of possession, such assignment
and transfer not to be effective until the termination of this Lease or re-entry
by Landlord hereunder or if Landlord shall otherwise succeed to Tenant’s estate
in the Premises, at which time Tenant shall upon request of Landlord, execute,
acknowledge and deliver to Landlord such further instruments of assignment and
transfer as may be necessary to vest in Landlord the then existing subleases and
sublettings, but no such instrument shall be necessary in order to make the
terms hereof effective. Every subletting hereunder is subject to the condition
(and, by its acceptance of and entry into a sublease, each subtenant thereunder
shall be deemed conclusively to have thereby agreed from and after the
termination of this Lease or re-entry by Landlord hereunder or any other
succession

 

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by Landlord to Tenant’s estate in the Premises) that such subtenant shall waive
any right to surrender possession or to terminate the sublease and, at
Landlord’s election, such subtenant shall be bound to Landlord for the balance
of the term of such sublease and shall attorn to and recognize Landlord, as its
landlord, under all of the then executory terms of such sublease, except that
Landlord shall not, unless expressly consented to by Landlord, (i) be liable for
any previous act, omission or negligence of Tenant under such sublease, (ii) be
subject to any counterclaim, defense or offset not expressly provided for in
such sublease, which theretofore accrued to such subtenant against Tenant,
(iii) be bound by any previous modification or amendment of such sublease or by
any previous prepayment of more than one (1) month’s Fixed Rent which shall be
payable as provided in the sublease, or (iv) be obligated to perform any work in
the subleased space or the Building or to prepare them for occupancy beyond
Landlord’s obligations under this Lease, and the subtenant shall execute and
deliver to Landlord any instruments Landlord may reasonably request to evidence
and confirm such attornment, but no such instrument shall be necessary in order
to make the terms hereof effective. Each subtenant or licensee of Tenant shall
be deemed automatically, upon and as a condition of occupying or using the
Premises or any part thereof, to have given a waiver of the type described in
and to the extent and upon the other conditions set forth in this Article 12.

 

13. CONDITION OF THE PREMISES. Tenant agrees, subject to Landlord substantially
completing Landlord’s Work in accord with Section l(B)(i) and delivery of
Premises vacant and broom clean, to accept possession of the Premises in the
condition which they currently exist “as is”, and further agrees that, except
for Landlord’s Work and delivery of Premises vacant and broom clean, Landlord
shall have no obligation, to perform any work or make any installations or pay
any sums in order to prepare the Premises for Tenant’s occupancy.

 

14. ACCESS TO PREMISES. Tenant shall permit Landlord, Landlord’s agents and
public utilities servicing the Building to erect, use and maintain concealed
ducts, pipes and conduits in and through the Premises. Landlord or Landlord’s
agents shall have the right upon oral notice to Tenant to enter the Premises at
all reasonable times to examine the same, to show them to prospective
purchasers, mortgagees or lessees of the Building or space therein, and to make
such repairs, alterations, improvements or additions as Landlord may deem
necessary or desirable to the Premises or to any other portion of the Building
or which Landlord may elect to perform following Tenant’s failure after due
notice from Landlord to make repairs or perform any work which Tenant is
obligated to perform under this Lease, or for the purpose of complying with

 

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Requirements and Landlord shall be allowed to take all material into and upon
the Premises that may be required therefor without the same constituting an
eviction or constructive eviction of Tenant in whole or in part and the Rent
shall in nowise abate while said decorations, repairs, alterations,
improvements, or additions are being made, by reason of loss or interruption of
business of Tenant, or otherwise. Landlord shall be responsible, however, to
clean the Premises from any debris or waste each night after performing such
work and upon completion, restore the Premises and Tenant’s property to the
condition in which it existed prior to such work, except to the extent changed
by such work. During the one (1) year prior to the Expiration Date or the
expiration of any renewal or extended term, Landlord may exhibit the Premises to
prospective tenants thereof. Except in case of emergency, Landlord shall give
Tenant oral notice prior to such entry to the Premises so that Tenant may at its
discretion have a representative present. If Tenant shall not be personally
present to open and permit an entry into the Premises, at any time, then for any
reason an entry therein shall be necessary or permissible, Landlord or
Landlord’s agents may enter the same by a master key, or may forcibly enter the
same, without rendering Landlord or such agents liable therefor (if during such
entry Landlord or Landlord’s agents shall accord reasonable care to Tenant’s
property), and without in any manner affecting the obligations and covenants of
this Lease. Landlord shall attempt, however, to avoid forcibly entering the
Premises except in case of emergency. Nothing herein contained, however, shall
be deemed or construed to impose upon Landlord any obligation, responsibility or
liability whatsoever, for the care, supervision or repair of the Building or any
part thereof, other than as herein provided. Notwithstanding the foregoing,
Landlord shall use reasonable efforts to minimize any disruption to Tenant’s use
or occupancy of the Premises created by its entry into the Premises pursuant to
this Article 14. To the extent any non-emergency work or work which Landlord is
performing because of Tenant’s failure to do so after notice in a timely manner
materially interferes with Tenant’s use of the Premises during working hours,
Landlord shall perform such work during non-working hours and bear the cost of
any overtime of premium pay rates. Landlord also shall have the right at any
time, without the same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor, to change the arrangement
and/or location of entrances or passageways, doors and doorways, and corridors,
elevators, stairs, toilets, or other public parts of the Building and to change
the name, number or designation by which the Building is commonly known. In
addition, Tenant understands and agrees that Landlord may perform substantial
renovation work in and to space leased or to be leased to tenants, the public
parts of the Building or the mechanical or other systems serving the Building
(which work may include the replacement of the building exterior facade and
window glass, requiring access to the

 

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same from within the Premises), and that Landlord shall incur no liability to
Tenant, nor shall Tenant be entitled to any abatement of Rent on account of any
noise, vibration or other disturbance to Tenant’s business at the Premises
(provided that Tenant is not denied access to said Premises) which shall arise
out of the performance by Landlord of the aforesaid renovations of the Building.
Tenant understands and agrees that all parts (except surfaces facing the
interior of the Premises) of all walls, windows and doors bounding the Premises
(including exterior Building walls, core corridor walls, doors and entrances),
all space in or adjacent to the Premises used for shafts, stacks, stairways,
chutes, pipes, conduits, ducts, fan rooms, heating, air cooling, plumbing and
other mechanical facilities, service closets and other Building facilities and
systems are not part of the Premises, and Landlord shall have the use thereof,
as well as access thereto through the Premises for the purposes of operation,
maintenance, alteration and repair.

 

15. CERTIFICATE OF OCCUPANCY. Landlord shall maintain the certificate of
occupancy issued for the Building and shall not voluntarily amend it in a manner
which materially affects Tenant’s Permitted Use. Tenant shall not at any time
use or occupy the Premises in violation of the certificate of occupancy issued
for the Premises or for the Building and in the event that any department of the
City or State of New York shall hereafter at any time contend and/or declare by
notice, violation, order or in any other manner whatsoever that the Premises are
used for a purpose which is a violation of such certificate of occupancy,
whether or not such use shall be a Permitted Use, Tenant shall, upon ten
(10) days’ written notice from Landlord, immediately discontinue such use of the
Premises. Failure by Tenant to discontinue such use after such notice shall be
considered a default in the fulfillment of a covenant of this Lease and Landlord
shall have the right to terminate this Lease immediately, and in addition
thereto shall have the right to exercise any and all rights and privileges and
remedies given to Landlord by and pursuant to the provisions of Articles 17 and
18 hereof.

 

16. LANDLORD’S LIABILITY. The obligations of Landlord under this Lease shall not
be binding upon Landlord named herein after the sale, conveyance, assignment
(only if the assignee assumes all Landlord’s obligations hereunder) or transfer
by such Landlord (or upon any subsequent landlord after the sale, conveyance,
assignment or transfer by such subsequent landlord) of its interest in the
Building and the Real Property, as the case may be, and in the event of any such
sale, conveyance, assignment or transfer, Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord
hereunder, and it shall be deemed and construed without further agreement
between the parties or their successors in interest, or

 

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between the parties and the purchaser, grantee, assignee or other transferee
that such purchaser, grantee, assignee or other transferee has assumed and
agreed to carry out any and all covenants and obligations of Landlord hereunder.
Neither the shareholders, directors nor officers of Landlord, if Landlord is a
corporation, nor the partners comprising Landlord (nor any of the shareholders,
directors or officers of such partners), if Landlord is a partnership
(collectively, the “Parties”), shall be liable for the performance of Landlord’s
obligations under this Lease. Tenant shall look solely to Landlord to enforce
Landlord’s obligations hereunder and shall not seek any damages against any of
the Parties. The liability of Landlord for Landlord’s obligations under this
Lease shall not exceed and shall be limited to Landlord’s interest in the
Building and the Real Property and the proceeds thereof, and Tenant shall not
look to any other property or assets of Landlord or the property or assets of
any of the Parties in seeking either to enforce Landlord’s obligations under
this Lease or to satisfy a judgment for Landlord’s failure to perform such
obligations.

 

17. DEFAULT.

 

A. The following events shall constitute “Events of Default” under this Lease:

 

(1) if Tenant shall fail to fully make any payment when due of any installment
of Fixed Rent or Additional Rent, and such failure shall continue for a period
of ten (10) days after notice by Landlord to Tenant of such default setting
forth in bold upper case letters that failure to make full payment within such
ten (10) day period shall be an Event of Default; or

 

(2) if Tenant shall default in the observance or performance of any term,
covenant or condition of this Lease on Tenant’s part to be observed or performed
(other than the covenants for the payment of Fixed Rent and Additional Rent) and
Tenant shall fail to remedy such default within thirty (30) days after notice by
Landlord to Tenant of such default, or if such default is of such a nature that
it cannot be completely remedied within said period of thirty (30) days and
Tenant shall not commence within said period of thirty (30) days, or shall not
thereafter diligently prosecute to completion all steps necessary to remedy such
default; or

 

(3) if Tenant’s interest in this Lease shall devolve upon or pass to any person,
whether by operation of law or otherwise, except as may be expressly permitted
under Article 12 hereof; or

 

(4) if Tenant shall file a voluntary petition in bankruptcy or insolvency, or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking any

 

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reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal bankruptcy act or any
other present or future applicable federal, state or other statute or law, or
shall make an assignment for the benefit of creditors or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any part of Tenant’s property; or

 

(5) if, within sixty (60) days after the commencement of any proceeding against
Tenant, whether by the filing of a petition or otherwise, seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under the present or any future federal bankruptcy act or any
other present or future applicable federal, state or other statute or law, such
proceeding shall not have been dismissed, or if, within sixty (60) days after
the appointment of any trustee, receiver or liquidator of Tenant, or of all or
any part of Tenant’s property, without the consent or acquiescence of Tenant,
such appointment shall not have been vacated or otherwise discharged, or if any
execution or attachment shall be issued against Tenant or any of Tenant’s
property pursuant to which the Premises shall be taken or occupied or attempted
to be taken or occupied.

 

Upon the occurrence, at any time during the Term, of any one or more of such
Events of Default, Landlord, at any time thereafter prior to such Event of
Default being fully cured, at Landlord’s option, may give to Tenant a five
(5) days’ notice of termination of this Lease and, in the event such notice is
given, this Lease and the Term shall come to an end and expire (whether or not
the Term shall have commenced) upon the expiration of said five (5) days with
the same effect as if the date of expiration of said five (5) days were the
Expiration Date, but Tenant shall remain liable for damages as provided in
Article 18 hereof.

 

B. If, at any time, (i) Tenant shall be comprised of two (2) or more persons, or
Tenant’s obligations under this Lease shall have been guaranteed by any person
other than Tenant, or (iii) Tenant’s interest in this Lease shall have been
assigned, the word “Tenant”, as used in clauses (6) and (7) of subsection A of
this Article 17, shall be deemed to mean any one or more of the persons
primarily or secondarily liable for Tenant’s obligations under this Lease. Any
monies received by Landlord from or on behalf of Tenant during the tendency of
any proceeding of the types referred to in said clauses (6) and (7) shall be
deemed paid as compensation for the use and occupation of the Premises and the
acceptance of any such compensation by Landlord shall not be deemed an
acceptance of Rent or a waiver on the part of Landlord of any rights under said
subsection A.

 

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18. REMEDIES AND DAMAGES.

 

A. (1) This Lease and the Term shall expire and come to an end as provided in
Article 17:

 

(a) Landlord and its agents and servants may immediately, or at any time after
such default or after the date upon which this Lease and the Term shall expire
and come to an end, re-enter the Premises or any part thereof, either by summary
proceedings, or by any other applicable action or proceeding (without being
liable to indictment, prosecution or damages therefor), and may repossess the
Premises and dispossess Tenant and any other persons from the Premises and
remove any and all of their property and effects from the Premises; and

 

(b) Landlord, at Landlord’s option, may relet the whole or any part or parts of
the Premises from time to time, either in the name of Landlord or otherwise, to
such tenant or tenants, for such term or terms ending before, on or after the
Expiration Date, at such rental or rentals and upon such other conditions, which
may include concessions. and free rent periods, as Landlord, in its sole
discretion, may determine. Landlord shall have no obligation to relet the
Premises or any part thereof and shall in no event be liable for refusal or
failure to relet the Premises or any part thereof, or, in the event of any such
reletting, for refusal or failure to collect any rent due upon any such
reletting, and no such refusal or failure shall operate to relieve Tenant of any
liability under this Lease or otherwise to affect any such liability; Landlord,
at Landlord’s option, may make such repairs, replacements, alterations,
additions, improvements, decorations and other physical changes in and to the
Premises as Landlord, in its sole discretion, considers advisable or necessary
in connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting any such
liability.

 

(2) Tenant, on its own behalf and on behalf of all persons claiming through or
under Tenant, including all creditors, does further hereby waive any and all
rights which Tenant and all such persons might otherwise have under any
Requirement to redeem the Premises, or to re-enter or repossess the Premises, or
to restore the operation of this Lease, after (i) Tenant shall have been
dispossessed by a judgment or by warrant of any court or judge, or (ii) any
re-entry by Landlord, or (iii) any expiration or termination of this Lease and
the Term, whether such dispossess, re-entry, expiration or termination shall be
by operation of law or pursuant to the provisions of this Lease. The words
“re-enter”, “re-entry” and “reentered” as used in this Lease shall not be deemed
to be restricted to their technical legal meanings. In the event of a breach or
threatened breach by Tenant, or any persons claiming through or under Tenant, of
any term, covenant or condition of this Lease on Tenant’s part to be observed or
performed, Landlord shall

 

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have the right to enjoin such breach and the right to invoke any other remedy
allowed by law or in equity as if re-entry, summary proceedings and other
special remedies were not provided in this Lease for such breach. The right to
invoke the remedies herein before set forth is cumulative and shall not preclude
Landlord from invoking any other remedy allowed at law or in equity.

 

B. (1) If this Lease and the Term shall expire and come to an end as provided in
Article 17, or by or under any summary proceeding or any other action or
proceeding, or if Landlord shall re-enter the Premises as provided in subsection
A of this Article 18, or by or under any summary proceeding or any other action
or proceeding, then, in any of said events:

 

(a) Tenant shall pay to Landlord all Fixed Rent and Additional Rent payable
under this Lease by Tenant to Landlord to the date upon which this Lease and the
Term shall have expired and come to an end or to the date of re-entry upon the
Premises by Landlord, as the case may be;

 

(b) Tenant also shall be liable for and shall pay to Landlord, as damages, any
deficiency (referred to as “Deficiency”) between the Rent reserved in this Lease
for the period which otherwise would have constituted the unexpired portion of
the Term and the net amount, if any, of rents collected under any reletting
effected pursuant to the provisions of subsection A(1) of this Article 18 for
any part of such period (first deducting from the rents collected under any such
reletting all of Landlord’s expenses in connection with the termination of this
Lease, or Landlord’s reentry upon the Premises and with such relenting
including, but not limited to, all repossession costs, brokerage commissions,
legal expenses, attorneys’ fees and disbursements, alteration costs and other
expenses of preparing the Premises for such reletting); any such Deficiency
shall be paid in monthly installments by Tenant on the days specified in this
Lease for payment of installments of Rent, Landlord shall be entitled to recover
from Tenant each monthly Deficiency as the same shall arise, and no suit to
collect the amount of the Deficiency for any month shall prejudice Landlord’s
right to collect the Deficiency for any subsequent month by a similar
proceeding; and

 

(c) whether or not Landlord shall have collected any monthly Deficiencies as
aforesaid, Landlord shall be entitled to recover from Tenant, and Tenant shall
pay to Landlord, on demand, in lieu of any further Deficiencies as and for
liquidated and agreed final damages, a sum equal to the amount by which the Rent
reserved in this Lease for the period which otherwise would have constituted the
unexpired portion of the Term exceeds the then fair and reasonable rental value
of the Premises for the same period, less the aggregate amount of Deficiencies
theretofore collected by Landlord pursuant to the provisions of subsection
B(l)(b) of this Article 18 for the same period; if, before presentation of proof
of such liquidated damages to any court, commission or tribunal, the Premises,
or any part thereof, shall have been relet by Landlord for the period which

 

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otherwise would have constituted the unexpired portion of the Term, or any part
thereof, the amount of rent reserved upon such reletting shall be deemed, prima
facie, to be the fair and reasonable rental value for the part or the whole of
the Premises so relet during the term of the reletting.

 

(2) If the Premises or any part thereof, shall be relet together with other
space in the Building, the rents collected or reserved under any such reletting
and the expenses of any such reletting shall be equitably apportioned for the
purposes of this subsection

 

B. Tenant shall in no event be entitled to any rents collected or payable under
any reletting, whether or not such rents shall exceed the Rent reserved in this
Lease. Solely for the purposes of this Article 18, the term “Rent” as used in
subsection B(l) of this Article 18 shall mean the Fixed Rent and Additional Rent
in effect immediately prior to the date upon which this Lease and the Term shall
have expired and come to an end, or the date of re-entry upon the Premises by
Landlord, as the case may be, adjusted to reflect any increase or decrease
pursuant to the provisions of Article 28 hereof for the Comparison Year (as
defined in said Article 28) immediately preceding such event. Nothing contained
in Article 17 or this Article 18 shall be deemed to limit or preclude the
recovery by Landlord from Tenant of the maximum amount allowed to be obtained as
damages by any statute or rule of law, or of any sums or damages to which
Landlord may be entitled in addition to the damages set forth in subsection B(l)
of this Article 18.

 

(C) Should a legal action or arbitration be brought by Landlord or Tenant in
which an adjudication is tendered, then in each case, the losing party shall
reimburse the prevailing party for all reasonable attorneys’ fees and
disbursements (and all other court costs or expenses incurred by Tenant in such
proceeding).

 

19. FEES AND EXPENSES.

 

A. Curing Tenant’s Defaults. If Tenant shall default in the observance or
performance of any term or covenant on Tenant’s part to be observed or performed
under or by virtue of any of the terms or provisions in any Article of this
Lease, Landlord may at any time thereafter on ten (10) days’ notice (or if such
default cannot reasonably be cured within ten (10) days, if Tenant fails to
commence a cure promptly within such ten (10) day period and diligently pursue
it to completion) perform the same for the account of Tenant (except in case of
emergency when Landlord may act immediately without notice), and if Landlord
makes any reasonable expenditures or incurs any obligations for the payment of
money in connection therewith including. but not limited to, reasonable
attorneys’ fees and disbursements in instituting,

 

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prosecuting or defending any action or proceeding, such sums paid or obligations
incurred with interest (calculated at the Default Rate (as hereinafter defined)
from the date incurred until paid by Tenant) and costs shall be deemed to be
Additional Rent hereunder and shall be paid by Tenant to Landlord within ten
(10) days of rendition of any bill or statement to Tenant therefor.

 

B. Late Charges. If Tenant shall fail to make payment of any installment of
Fixed Rent or any Additional Rent within fifteen (15) days after the date when
such payment is due, Tenant shall pay to Landlord, in addition to such
installment of Fixed Rent or such Additional Rent, as the case may be, as a late
charge and as Additional Rent, a sum based on a rate (the “Default Rate”) equal
to the lesser of (i) three percent (3 7%) per annum above the then current prime
rate charged by Citibank, N.A. or its successor and (ii) the maximum rate
permitted by applicable law, of the amount unpaid computed from the date such
payment was due to and including the date of payment.

 

20. NO REPRESENTATIONS BY LANDLORD; CONSENTS AND APPROVALS.

 

Landlord or Landlord’s agents have made no representations or promises with
respect to the Building, the Real Property, the Premises, or Taxes and Operating
Expenses (as such terms are defined in Article 28 hereof) except as herein
expressly set forth and no rights, easements or licenses are acquired by Tenant
by implication or otherwise except as expressly set forth herein. All references
in this Lease to the consent or approval of Landlord shall be deemed to mean the
written consent of Landlord or the written approval of Landlord and no consent
or approval of Landlord shall be effective for any purpose unless such consent
or approval is given in advance and is set forth in a written instrument
executed by Landlord. When in this Lease Landlord’s consent or approval is
required and this Lease provides that Landlord’s consent or approval shall not
be unreasonably withheld, conditioned or delayed and Landlord shall refuse such
consent or approval, or in any instance in which Landlord shall delay its
consent or approval, Tenant in no event shall be entitled to make, nor shall
Tenant make, any claim, and Tenant hereby waives any claim, for money damages
(nor shall Tenant claim any money damages by way of set-off, counterclaim or
defense) based upon any claim or assertion by Tenant that Landlord unreasonably
withheld or unreasonably delayed its consent or approval. Tenant’s sole remedy
shall be an action or proceeding to enforce any such provision, for specific
performance, injunction or declaratory judgment.

 

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21. END OF TERM.

 

A. Upon the expiration or other termination of the Term, Tenant shall quit and
surrender to Landlord the Premises, broom clean, in good order and condition,
ordinary wear and tear and damage by fire or other insurable casualty excepted,
and Tenant may remove all of its structural alterations or improvements made by
it as well as all of its furniture, furnishings, movable fixtures, removable
partitions and other personal property pursuant to Article 3 hereof. Tenant’s
obligation to observe or perform this covenant shall survive the expiration or
sooner termination of the Term. In addition, the parties recognize and agree
that the damage to Landlord resulting from any failure by Tenant to timely
surrender possession of the Premises as aforesaid will be substantial, will
exceed the amount of the monthly installments of the Fixed Rent and Additional
Rent theretofore payable hereunder, and will be impossible to accurately
measure. Tenant therefore agrees that if possession of the Premises not
surrendered to Landlord within twenty-four (24) hours after the Expiration Date
or sooner termination of the Term, in addition to any other rights or remedy
Landlord may have hereunder or at law, Tenant shall pay to Landlord for each
month and for each portion of any month during which Tenant holds over in the
Premises after the Expiration Date or sooner termination of this Lease, a sum
equal to two (2) times the portion of the Fixed Rent which was payable under
this Lease during the last month of the Term. Additionally, Tenant shall pay
Additional Rent incurred during such hold-over period. Nothing herein contained
shall be deemed to permit Tenant to retain possession of the Premises after the
Expiration Date or sooner termination of this Lease and no acceptance by
Landlord of payments from Tenant after the Expiration Date or sooner termination
of the Term shall be deemed to be other than on account of the amount to be paid
by Tenant in accordance with the provisions of this Article 21, which provisions
shall survive the Expiration Date or sooner termination of this Lease.

 

B. If Tenant shall hold-over or remain in possession of any portion of the
Premises beyond the Expiration Date of this Lease, notwithstanding the
acceptance of any Fixed Rent or Additional Rent paid by Tenant pursuant to
subsection A above, Tenant shall be subject to summary proceeding. In addition,
should such hold-over of any portion of the Premises continue more than three
(3) months after the Expiration Date, Tenant shall also be liable for
consequential damages arising out of lost opportunities (and/or new leases) by
Landlord to re-let the Premises (or any part thereof). All damages to Landlord
by reason of such holding over by Tenant may be the subject of a separate action
and need not be asserted by Landlord in any summary proceedings against Tenant.

 

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22. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that Tenant may
peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and
conditions of this Lease.

 

23. FAILURE TO GIVE POSSESSION. Except as set forth herein, Tenant waives any
right to rescind this Lease under Section 223-a of the New York Real Property
Law or any successor statute of similar import then in force and further waives
the right to recover any damages which may result from Landlord’s failure to
deliver possession of the Premises on the date set forth in Article I hereof for
the commencement of the Term. If Landlord shall be unable to give possession of
the Premises on such date, and provided Tenant is not responsible for such
inability to give possession, the Fixed Rent reserved and covenanted to be paid
herein shall be abated as Tenant’s sole and exclusive remedy as set forth in
Section l(B), and, except as set forth in Section 1(B), no such failure to give
possession on such date shall in any way affect the validity of this Lease or
the obligations of Tenant hereunder or give rise to any claim for damages by
Tenant or claim for rescission of this Lease, nor shall same be construed in
anywise to extend the Term. If permission is given to Tenant to enter into the
possession of the Premises or to occupy premises other than the Premises prior
to the Commencement Date, Tenant covenants and agrees that such occupancy shall
be deemed to be under all the terms, covenants, conditions and provisions of
this Lease, including the covenant to pay Fixed Rent and Additional Rent.

 

24. NO WAIVER; MERGER: NO ORAL MODIFICATIONS.

 

A. No act or thing done by Landlord or Landlord agents during the Term shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept
such surrender shall be valid unless in writing signed by Landlord. No employee
of Landlord or of Landlord’s agents shall have the power to accept the keys of
the Premises prior to the termination of this Lease. The delivery of keys to any
employee of Landlord or of Landlord’s agents shall not operate as a termination
of this Lease or a surrender of the Premises. In the event Tenant at any time
desires to have Landlord sublet the Premises for Tenant’s account, Landlord or
Landlord’s agents are authorized to receive said keys for such purpose without
releasing Tenant from any of the obligations under this Lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant’s
effects in connection with such subletting. The failure of Landlord or Tenant to
seek redress for violation of, or to insist upon the strict performance of, any
covenant or condition of this Lease, or any of the Rules and Regulations set
forth or hereafter adopted by Landlord, shall not prevent a subsequent act,
which would have originally constituted a violation,

 

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from having all force and effect of an original violation. The payment by Tenant
or receipt by Landlord of Rent with knowledge of the breach of any covenant of
this Lease shall not be deemed a waiver of such breach. The failure of Landlord
to enforce any of the Rules and Regulations set forth, or hereafter adopted,
against Tenant and/or any other tenant in the Building shall not be deemed a
waiver of any, such Rules and Regulations. No provision of this Lease shall be
deemed to have been waived by Landlord or Tenant unless such waiver be in
writing signed by such party. No payment by Tenant or receipt by Landlord of a
lesser or greater amount than the Rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated Rent, or as Landlord may elect
to apply same, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such Rent or pursue any other remedy in this Lease
provided and Tenant may pay any amount demanded by Landlord without prejudice to
its right to dispute its obligation to make all or any part of such payment.

 

B. This Lease contains the entire agreement between the parties and all prior
negotiations and agreements are merged in this Lease. Any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.

 

25. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord and
Tenant that the respective parties hereto shall and they hereby do 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 the Premises, and/or any claim of injury or damage,
or for the enforcement of any remedy under any statute, emergency or otherwise.
It is further mutually agreed that in the event Landlord commences any summary
proceeding (whether for nonpayment of Rent or because Tenant continues in
possession of the Premises after the expiration or termination of the Lease
Term), Tenant will not interpose any counterclaim (except for mandatory or
compulsory counterclaims) of whatever nature or description in any such
proceeding.

 

26. INABILITY TO PERFORM. This Lease and the obligations of the parties to
perform all of the other covenants and agreements hereunder on the part of each
of them to be performed shall

 

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in no way be affected, impaired or excused because one party is unable to
fulfill any of its obligations (except any obligation to pay money, including
but not limited to Tenant’s obligation to pay Fixed Rent and Additional Rent)
under this Lease expressly or impliedly to be performed or because such party is
unable to make, or is delayed in making any repairs, additions, alterations,
improvements or decorations or is unable to supply or is delayed in supplying
any equipment or fixtures if such party is prevented or delayed from so doing by
reason of strikes or labor troubles or by accident or by any cause whatsoever
reasonably beyond such party’s control, including, but not limited to,
governmental preemption in connection with a National Emergency or by reason of
any Requirement of any federal, state, county or municipal authority or any
department or subdivision thereof or any government agency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency. Notwithstanding the foregoing, should Tenant be denied use of such a
substantial portion of the Premises that it cannot perform its business in the
remainder thereof, notwithstanding using all reasonable efforts to consolidate
on a temporary basis, for one of the aforesaid reasons through no fault of
Tenant for ten (10) consecutive days, Rent shall proportionately abate until use
of the Premises is restored to Tenant. If the Premises are completely
unavailable for thirty (30) consecutive days, Tenant may terminate the Lease
upon written notice to Landlord until such time as use of the Premises is
restored. Except as provided in the preceding sentence, nothing herein shall be
deemed to excuse Tenant for any reason for payment of Fixed Rent, Additional
Rent or any other payment due hereunder.

 

27. BILLS AND NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be deemed sufficiently given or
rendered only if in writing and sent by registered or certified mail (return
receipt requested), by recognized overnight carrier (e.g., Federal Express) or
by facsimile (provided a confirmation copy is sent by notice method otherwise
permitted herein) addressed (a) to Tenant at Learning Tree International, 1831
Michael Faraday Drive, Reston, VA 20190, Attention: Financial Controller, or
(b) to Landlord at Landlord’s address set forth in this Lease, Attn: Real Estate
Department, with a copy to Landlord at Landlord’s address set forth in this
Lease, Attn: General Counsel, or (c) to such other address as either Landlord or
Tenant may designate as its new address for such purpose by notice given to the
others in accordance with the provisions of this Article 27. Tenant hereby
acknowledges and agrees that any such bill, statement, demand, notice, request
or other communication may be given by Landlord’s agent on behalf of Landlord
and Landlord hereby agrees that any such notice

 

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shall have the same force and effect as if given by Landlord. Upon the request
of Tenant, Landlord shall confirm the authority of its agent. Any such bill,
statement, demand, notice, request or other communication shall be deemed to
have been rendered or given three (3) business days after it shall have been
mailed as provided in this Article 27.

 

28. ESCALATION.

 

Section 28.1 Definitions. For purposes of this Article 28, the following terms
shall have the following meanings:

 

28.1.1 “Operating Expense Year” shall mean a calendar year in which all or any
part of the Term shall fall.

 

28.1.2 Operating Expenses.

 

28.1.2.1 “Operating Expenses” for any Operating Expense Year shall mean the
aggregate of all costs, expenses and disbursements paid or incurred by Landlord
(directly or by way of reimbursement by Landlord to its agents or contractors)
with respect to the operation, repair, cleaning, maintenance, management and
security of the Building, the Real Property and the adjacent sidewalks, plazas
and areas and the loading dock (together, the “Property”).

 

28.1.2.2 Inclusions. Without in any way limiting the generality of the
foregoing, Operating Expenses shall include the following:

 

(i) salaries, wages, bonuses, and fringe benefits of every kind and nature
(including any hospitalization, medical, surgical, Worker’s Compensation, union
or general welfare, pension, retirement, disability or life insurance plans and
any other benefit or expense that is customary for workers in first-class office
buildings) and social security, unemployment and other payroll taxes
(collectively, “Labor Costs”) paid or incurred by Landlord (directly or by way
of reimbursement by Landlord to its agents or contractors) on account of the
employees of Landlord (no higher than the level of building manager) or its
agents or contractors engaged in the operation, repair, cleaning, maintenance,
management and security of the Property; provided that if any such employees of
Landlord or its agents or contractors provide services for more than one
building or for property other than the Property, then a prorated portion of the
Labor Costs shall be included in Operating Expenses, based on the portion of
their working time devoted to the Property;

 

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(ii) The Includable Energy Cost (as defined in Section 28.4); plus the cost of
operating the Building Systems; as well as utility taxes, water rates and
charges and sewer rental and charges;

 

(iii) the cost of cleaning (including windows), janitorial, trash removal,
security (including uniforms) and other services;

 

(iv) the cost of all insurance, including Worker’s Compensation, rental,
property, casualty, liability and fidelity insurance and the fees and charges of
insurance consultants;

 

(v) the cost of repairs to, and maintenance of, the Property;

 

(vi) the cost of building and cleaning goods and supplies;

 

(vii) the cost of machinery, equipment and tools used in the operation, repair,
cleaning, maintenance, management and security of the Property, and any sales
and use taxes thereon;

 

(viii) the cost of uniforms and dry cleaning for all guards and other employees
of Landlord or its agents or contractors whose job reasonably requires use of a
uniform;

 

(ix) management fees for managing the Property no greater than that payable by
similar first class office buildings in Midtown Manhattan; provided, however,
that with respect to any Operating Expense Year in which the Property is not
managed by an independent unaffiliated management company under a contract
(i) not including a leasing agency and (ii) providing for Landlord, not the
managing agent, to incur (or reimburse the management company for) all expenses
thereunder constituting Operating Expenses, there shall be included in Operating
Expenses, in lieu of any management fees otherwise includable, the management
fee that would be charged by such a management company under such a contract;

 

(x) fees and charges payable under service agreements on equipment to the extent
that the services furnished thereunder would be includable in Operating Expenses
if purchased directly by Landlord or performed by Landlord’s employees
(regardless of whether the cost of such equipment itself is includable in
Operating Expenses);

 

(xi) Telephone, telegraph, telecopy (or other telecommunication) costs incurred
by Landlord with respect to the operation, repair, cleaning, maintenance,
management or security of the Property;

 

(xii) legal, accounting and professional fees and disbursements incurred in
connection with the operation, repair, cleaning, maintenance, management and
security of the Property; including, with respect to lawyers employed by
Landlord (commonly

 

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known as inside counsel) with respect to time devoted to legal work relating to
the operation, repair, cleaning, maintenance, management and security of the
Property;

 

(xiii) fees for and costs of licenses, permits and inspections required in
connection with the operation, repair, cleaning, maintenance, management and
security of the Property;

 

(xiv) the cost of landscaping;

 

(xv) those taxes, duties, charges, levies and assessments that are payable in
respect of amounts that are otherwise includable within Operating Expenses and
not otherwise included in Taxes or any other provision of this Article 28;

 

(xvi) all expenses and costs incurred by Landlord as a result of or in order to
comply with applicable (a) Insurance Requirements, or (b) laws to the extent in
each case enacted after the date hereof and not arising solely as the result of
any default of Landlord or Landlord’s negligent or willful acts or omissions;

 

(xvii) the costs of maintenance of a lobby directory (if and when installed);

 

(xviii) rent for personal property leased to Landlord, the purchase price of
which, if purchased, would be fully includable in Operating Expenses in the year
of purchase; and

 

(xix) any net loss paid or incurred by Landlord for the operation of a cafeteria
in the Building; provided, however, that in computing such net loss Landlord may
not include as an expense the rental value of the cafeteria premises.

 

28.1.2.3 Capital Expenditures - Reduction of Operating Expenses. If during any
Operating Expense Year Landlord makes any capital expenditure for the purpose of
reducing Operating Expenses, then,

 

(i) such capital expenditure shall be amortized over the expected useful life of
the capital improvement, as determined by G.A.A.P., to which such capital
expenditure relates, and

 

(ii) in each of the Operating Expense Years during which such capital
expenditure is so amortized, the annual amortization, together with interest
charges paid by Landlord thereon or, in the absence of actual interest, imputed
interest thereon at the imputed interest rate issued by the U.S. Internal
Revenue Service, from time to time in effect (the “Amortization Interest Rate),
shall be included in Operating Expenses.

 

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28.1.2.4 Capital Expenditures - Requirements of Law. If during any Operating
Expense Year Landlord makes any capital expenditure as a result of or in order
to comply with any applicable law becoming effective on or after the date of
this Lease, then,

 

(i) such capital expenditure shall be amortized over the useful life of the
property being depreciated, as determined by G.A.A.P.

 

(ii) in each of the Operating Expense Years during which such capital
expenditure is so amortized, the annual amortization, together with interest
charges paid by Landlord thereon or, in the absence of actual interest, imputed
interest thereon at the Amortization Interest Rate from time to time in effect,
shall be included in Operating Expenses.

 

28.1.2.5 Exclusions. The following items shall be excluded from Operating
Expenses even if includable under one or more of the subdivisions of
Section 28.1.2:

 

(i) expenses relating to leasing space in the Building or preparing space for
lease or for occupancy (including tenant improvements, leasing commissions and
advertising expenses);

 

(ii) legal fees and disbursements paid or incurred for collection of tenant
accounts, or negotiation of leases, or relating to negotiations and disputes
Nothing in the preceding sentence shall be construed to include as Taxes any
inheritance, estate, succession, transfer, gift, franchise, corporation, income,
gains or profit tax or capital levy that is imposed upon Landlord. If, however,
at any time during the Term the methods of taxation prevailing on the date
hereof shall be altered so that in lieu of, in addition to (but in any event in
the nature of a real estate tax), or as a substitute for, the whole or any part
of the Taxes now levied, assessed or imposed on the Real Property there shall be
levied, assessed or imposed (a) a tax on the rents received by Landlord from the
Real Property, (b) a license fee measured by the rents receivable by Landlord
from the Real Property, or (c) a tax or license fee imposed upon Landlord that
is otherwise measured by, or based upon, the Real Property, then, provided that
such tax or fee is imposed generally on building owners in the Borough of
Manhattan and is in the nature of a real estate tax, such other tax or fee,
computed as if the Real Property were the only property of Landlord, and the
income from the Real Property were the only income of Landlord, shall be
included in Taxes. If by law any assessment may be paid in installments, then
for purposes hereof, (y) such assessment shall be deemed to have been paid in
the maximum number of installments permitted by law and (z) there shall be
included in Taxes for any Tax Year only such installments as shall be so deemed
paid during such Tax Year with all interest thereon, if any, which would be
payable during such Tax Year as a result of such installment method of payment.
In no event shall any

 

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fines, penalties, late payment charges or (except as provided in the preceding
sentence) interest be included in Taxes.

 

28.1.4 “Tax Year” shall mean any period of July 1 through June 30 (or such other
period as hereinafter may be duly adopted by the City of New York as its fiscal
year for real property taxes) all or any part of which falls within the Term.

 

28.1.5 “Tenant’s Proportionate Share” shall mean the fraction the numerator of
which is the rentable area of the Premises and the denominator of which (i) with
respect to Taxes, is the rentable area of the Building on or above the ground
floor (i.e., 795,892 square feet of rentable area), and (ii) with respect to
Operating Expenses, is the sum of (x) the Rentable Area of the Building on or
above floor 2, plus 112 of the rentable area of the Building on the ground floor
(i.e., 789,963 square feet of rentable area),

 

With respect to each of the Eighteenth and Seventeenth floors, Tenant’s
Proportionate Share for Taxes is 2.79 % and Tenant’s Proportionate Share for
Operating Expenses is 2.809%. If, during any Tax Year or Operating Expense Year,
any premises are added to the Lease and included in the Premises or are
withdrawn from this Lease and excluded from the Premises, Tenant’s Proportionate
Share shall be computed and applied separately with respect to the portions of
such Tax Year or Operating Expense Year before and after such inclusion or
exclusion.

 

Section 28.2 Payments in Respect of Changes in Taxes and Operating Expenses.

 

28.2.1 Payments in Respect of Changes in Taxes.

 

28.2.1.1 Tax Payment. If the Taxes (as finally determined) for any Tax Year
exceed the Taxes in the Base Tax Year, as finally determined, (“Base Taxes”),
then Tenant shall pay Landlord, as additional rent in respect of such Tax Year,
an amount equal to Tenant’s Proportionate Share of such excess (the “Tax
Payment”). This Section 28.2.1 shall not be applicable to any portion of any Tax
Year prior to the Rent Commencement Date or after the expiration or termination
of the Term and the Tax Payment for the Tax Year in which the Rent Commencement
Date falls or in which this Lease shall expire or be terminated shall be a
prorated amount computed on a per diem basis.

 

28.2.1.2 Estimated Tax Statement. Landlord, no later than sixty (60) days after
the first day of any Tax Year, shall render to Tenant a statement (the
“Estimated Tax Statement”) showing (i) Landlord’s estimate (based upon the most
recent assessment of the Real Property and the most recently announced tax
rates) of the Taxes and the Tax Payment (the “Estimated Tax Payment”) for such
Tax Year, if any, and (ii) the calculations used to

 

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derive such Estimated Tax Payment. Landlord shall include a copy of the relevant
tax bills with the aforesaid statement.

 

Tenant shall pay the Estimated Tax Payment to Landlord in two (2) equal
installments (each an “Estimated Tax Payment Installment”) as follows: (a) the
first installment shall be due and payable on the later of (y) the 30th day
prior to the last day on which Landlord may pay the Taxes for that portion of
the Tax Year without incurring penalty, and (z) the date thirty (30) days after
the date of the giving of such Estimated Tax Statement; and (b) the second
installment shall be due and payable on the later of (y) the 30th day prior to
the last day on which Landlord may pay the Taxes for that portion of the Tax
Year without incurring penalty, and (z) the date thirty (30) days after the date
of the giving of such Estimated Tax Statement.

 

If the taxing authority changes the number or amount of installments of Taxes or
the dates on which Taxes are required to be paid, then the number, amounts or
due dates of the Estimated Tax Payment Installments shall be correspondingly
revised so that the Estimated Tax Payment Installments shall be due on the later
of (1) the last day on which Landlord may pay the Taxes for that portion of the
Tax Year without incurring penalty and (2) the date thirty (30) days after the
date of the giving of the applicable Estimated Tax Statement.

 

28.2.1.3 Year-End Tax Statement. Landlord, within one hundred twenty (120) days
after the end of any Tax Year, shall issue a year-end statement of Taxes for
such Tax Year, including a year-end computation of the Tax Payment for such Tax
Year, if any (the “Year-End Tax Statement”). Each Year-End Tax Statement shall
be accompanied by copies of all relevant supporting documentation, including
copies of all relevant tax bills for the Tax Year.

 

If the Tax Payment shown on the Year-End Tax Statement for any Tax Year is more
than the Estimated Tax Payment shown on the Estimated Tax Statement for such Tax
Year, then Tenant shall pay the balance to Landlord within thirty (30) days of
receipt. If the Tax Payment shown on the Year-End Tax Statement for any Tax Year
is less than the Estimated Tax Payment shown on the Estimated Tax Statement for
such Tax year, Landlord shall pay the balance to Tenant with such Year-End Tax
Statement. Landlord shall pay such balance by issuance of a rent credit against
installments or Fixed Rent next coming due, or if there are insufficient
installments to offset such balance or at Landlord’s discretion by cash payment
payable within thirty (30) days of delivery of the Year-End Tax Statement.
Should Landlord fail to issue a credit or pay cash to Tenant for such

 

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balance within thirty (30) days of finalization of the Year-End Tax Statement,
Tenant may offset such amount against the installments of Fixed Rent and
Additional Rent next coming due under this Lease.

 

In the event that Landlord fails timely to issue a Year-End Tax Statement for
any Tax Year and such failure continues for thirty (30) days after notice of
such failure, referring specifically to this Section 28.2.1.3, is given by
Tenant to Landlord, then if the Year-End Tax Statement for such Tax Year, when
finally issued, indicates a balance due Tenant, the same shall be paid with
interest at the Default Rate from the date of the giving of Tenant’s notice
until the date paid. In the event Landlord fails to pay such balance to Tenant
by credit or cash within thirty (30) days of the delivery of the Year-End Tax
Statement, Tenant may offset such amounts against the installments of Fixed Rent
and Additional Rent next coming due under this Lease.

 

28.2.1.4 Adjusted Year-End Tax Statement.

 

If Landlord shall receive a refund of any portion of the Taxes for a Tax Year in
respect of which Tenant shall have made a Tax Payment, then, regardless of
whether this Lease shall have terminated, Landlord, within thirty (30) days
after its receipt of such refund, shall issue an Adjusted Year-End Tax Statement
for such Tax Year reflecting the same and any expenses includable in Taxes under
Section 28.1.3(iii) for such Tax Year and not therefore reflected in the
Year-End Tax Statement or an earlier Adjusted Year-End Tax Statement for such
Tax Year. Landlord shall pay Tenant’s share of such refund by issuance of a rent
credit against the installments of Fixed Rent next coming due or if there are
insufficient installments to offset Tenant’s share of such refund or at
Landlord’s discretion by cash payment within thirty (30) days. Should Landlord
fail to issue a credit or pay cash to Tenant with thirty (30) days of receipt of
such refund, Tenant may offset Tenant’s Proportionate Share thereof from the
installment of Fixed Rent and Additional Rent next coming due under this Lease.
If it shall ever come (or be brought by Tenant or otherwise) to Landlord’s
attention that the Tax Payment made by Tenant for any Tax Year (as theretofore
adjusted Pursuant to the provisions of this Article 28, if such be the case)
differs from the correct Tax Payment for such Tax Year because of an error or
inaccuracy in the computation of Taxes or otherwise, then, regardless of whether
this Lease shall have terminated, Landlord shall promptly furnish Tenant with an
Adjusted Year-End Tax Statement for such Tax Year reflecting the correct Tax
Payment; provided, however, that Landlord shall not issue any Adjusted Year-End
Tax Statement pursuant to

 

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this paragraph later than the fourth anniversary of the end of the Tax Year to
which the same relates unless prior to such anniversary Tenant shall demand that
Landlord do so.

 

If Landlord shall incur any expenses includable in Taxes under
Section 28.1.3(iii) for any Tax Year and not theretofore reflected in the
Year-End Statement or an earlier Adjusted Year-End Tax Statement for such Tax
Year, then, regardless of whether this Lease shall have terminated, Landlord may
issue an Adjusted Year-End Tax Statement for such Tax Year reflecting the same.

 

28.2.1.5 Adjustment of Tax Payment. As used in this Article 28, the term
“Adjusted Year-End Tax Statement” shall mean a statement for any Tax Year
reflecting the : facts and circumstances giving rise to the same being issued
and setting forth an adjusted statement of Taxes and an adjusted Tax Payment for
such Tax Year.

 

If any Adjusted Year-End Tax Statement reflects an increase in the Tax Payment,
Tenant shall pay the amount thereof to Landlord within thirty (30) days of
receipt. If any Adjusted Year-End Tax Statement reflects a decrease in the Tax
Payment, Landlord shall pay to Tenant, at its election by rent credit or cash
within thirty (30) days, the amount thereof to Tenant with such Adjusted
Year-End Tax Statement. In the event Landlord fails to issue such credit or make
such payment within said thirty (30) days, Tenant may offset the amount of the
payment to have been made from Fixed Rent and Additional Rent next coming due
under this Lease.

 

Each adjusted Year-End Tax Statement shall be accompanied by copies of all
relevant supporting documentation, including copies of all relevant tax bills
for the Tax Year.

 

28.2.1.6 Tax Contests. Upon the written request of Tenant, Landlord shall
institute and prosecute tax reduction or other proceedings to reduce the
assessed valuation of the Real Property unless Landlord has determined, acting
reasonably and in good faith, that any such proceeding would not result in a
reduction, or would result in an increase, in Taxes.

 

28.2.2 Payments in Respect of Changes in Operating: Expenses.

 

28.2.2.1 Operating Expense Payment. If the Operating Expenses for any Operating
Expense Year exceed the Base Operating Expenses, then Tenant shall pay Landlord,
as Additional Rent in respect of such Operating Expense Year, an amount equal to
Tenant’s Proportionate Share of such excess (the “Operating Expense Payment”).
This Section 28.2.2 shall not be applicable to any portion of any Operating
Expense Year prior to the Rent Commencement Date or after the expiration or
termination of the Term and the Operating Expense Payment for the Operating
Expense Year in which the Rent

 

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Commencement Date falls or in which this Lease shall expire or be terminated
shall be a prorated amount computed on a per diem basis.

 

28.2.2.2 Estimated Operating Statement. Landlord, no later than sixty (60) days
after the first day of any Operating Expense Year, shall render to Tenant a
statement (the “Estimated Operating Expense Statement”) showing (i) Landlord’s
good faith estimate of the Operating Expenses and the Operating Expense Payment
(the “Estimated Operating Expense Payment”) for such Operating Expense Year, and
(ii) the calculations used to derive such Estimated Operating Expense Payment.

 

Tenant shall pay the Estimated Operating Expense Payment for any Operating
expense Year to Landlord, as follows:

 

On the first day of the first month of such Operating Expense Year which
commences at least twenty (20) days after the date of the giving of such
Estimated Operating Statement, Tenant shall pay an amount equal to the product
of (a) one-twelfth (1/12th) of the Estimated Operating Expense Payment for such
Operating expense Year set forth on such Estimated Operating Statement
multiplied by (b) the number of months, to and including such first month, which
have elapsed or commenced since the commencement of such Operating Expense Year.
On the first day of each month thereafter throughout such Operating Expense
Year, Tenant shall pay an amount equal to one-twelfth (1/12th) of such Estimated
Operating Expense Payment.

 

28.2.2.3 Year-End Operating Statement. Landlord, within one hundred eighty
(180) days after the end of any Operating Expense Year, shall issue a year-end
statement of Operating Expenses for such Operating Expense Year, including a
year-end computation of the Operating Expense Payment for such Operating Expense
Year, if any (the “Year-End Operating Expense Statement”). Each Year-End
Operating expense Statement shall be in substantially the form attached hereto
as Exhibit - and shall be certified by Landlord or Landlord’s managing agent, if
any, as presenting fairly, in all material respects, the Operating Expenses for
such Operating Expense Year in accordance with the provisions of this Lease.

 

If the Operating Expense Payment shown on the Year-End Operating Expense
Statement for any Operating Expense Year is more than the Estimated Operating
Expense Payment shown on the Estimated Operating Expense Statement for such
Operating Expense Year, then Tenant shall pay the balance to Landlord within
thirty (30) days of receipt. If the Operating Expense Payment shown on the
Year-End Operating Expense Statement for any Operating Expense Year is less than
the Estimated Operating Expense Payment

 

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shown on the Estimated Operating Expense Statement for such Operating Expense
Year, Landlord shall pay, at its election by rent credit or cash, in the same
manner as described in Section 28.2.1.3, the balance to Tenant with such
Year-End Operating Expense Statement. In the event Landlord fails to issue such
credit or make such payment within thirty (30) days of issuance of said Year-End
Operating Statement, Tenant may offset the amount of such payment against Fixed
Rent and Additional Rent next coming due under this Lease.

 

28.2.2.4 Adjusted Year-End Operating Statement. If it shall ever come (or be
brought by Tenant or otherwise) to Landlord’s attention that the Operating
Expense Payment made by Tenant for any Operating Expense Year (as theretofore
adjusted pursuant to the provisions of this Article 28, if such be the case)
differs from the correct Operating Expense Payment for such Operating Expense
Year because of an error or inaccuracy in the computation of Operating Expenses
or otherwise, then, regardless of whether this Lease shall have terminated,
Landlord shall promptly furnish Tenant with an Adjusted Year-End Operating
Expense Statement reflecting the correct Operating Expense Payment; provided,
however, that Landlord shall not issue any Adjusted Year-End Operating Expense
Statement pursuant to this paragraph later than the fourth anniversary of the
end of the Operating Expense Year to which the same relates unless prior to such
anniversary Tenant shall demand that Landlord do so.

 

28.2.2.5 Adjustment of Operating Expense Payment. As used in this Article 28,
the term “Adjusted Year-End Operating Expense Statement” shall mean a statement
for any Operating Expense Year reflecting the facts and circumstances giving
rise to the same being issued and setting forth an adjusted statement of
Operating Expenses and an adjusted Operating Expense Payment for such Operating
Expense Year.

 

If any Adjusted Year-End Operating Expense Statement reflects an increase in the
Operating expense Payment, Tenant shall pay the amount thereof to Landlord
within thirty (30) days of receipt. If any Adjusted Year-End Operating expense
Statement reflects a decrease in the Operating Expense Payment, Landlord shall
pay the amount thereof to Tenant with such Adjusted Year-End Operating Expense
Statement in the same manner as set forth in Section 28.2.1.3.

 

Each Adjusted Year-End Operating Expense Statement shall be in substantially the
form attached hereto as Schedule E, and shall be certified by Landlord or
Landlord’s managing agent, if any, as presenting fairly, in all material
respects, the Operating Expenses for such Operating Expense Year in accordance
with the provisions of this Lease.

 

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28.2.3 Tenant’s Objection to Year-End Tax Statement or Year-End Operating
Statement.

 

(a) Tenant may at any time within 180 days of receipt of any Year-End Tax
Statement or Adjusted Year-End Tax Statement or Year-End Operating Expense
Statement or Adjusted Year-End Operating Expense Statement send Landlord a
notice (a “Year-End Statement Tenant Audit Notice”) stating that Tenant desires
to audit the Books and Records of Landlord with respect to the Tax Year or
Operating Expense Year to which such Year-End Tax Statement, Adjusted Year-End
Tax Statement, Year-End Operating Expense Statement or Adjusted Year-End
Operating Expense Statement relates. Landlord shall make such books and records
available to Tenant in Manhattan within thirty (30) days of receipt of Tenant’s
Year-End Statement of Audit Notice.

 

(b) Notwithstanding anything to the contrary herein, Tenant may no later than
180 days of Tenant’s receipt of any Year-End Operating Expense Statement or
Year-End Tax Statement or Adjusted Year-End Tax Statement dispute any such
statement by sending Landlord a notice (a “Year-End Statement Dispute Notice”)
itemizing in reasonable detail the aspects thereof which Tenant disputes.

 

Upon the issuance by Tenant of such a dispute notice in a timely manner, the
dispute shall be determined by arbitration pursuant to Section 28.7.

 

From and after the date of Tenant’s Year-End Statement Tenant Audit Notice until
the expiration of the time period within which Tenant may give a Year-End
Statement Dispute Notice, until resolution of the dispute, Landlord shall afford
Tenant or its representatives the right on as many occasions as shall be
reasonably necessary to examine (and make extracts from and copies of)
Landlord’s Books and Records for the Tax Year or Operating Expense Year in
question and for all earlier Tax Years or Operating Expense Years with respect
to which Landlord continues to retain Landlord’s Books and Records, all of which
will be maintained in the greater New York City area; provided, however, that
after the expiration of the time period within which Tenant may give a Year-End
Statement Dispute Notice, Tenant’s aforesaid right to examine (and extract and
copy) Landlord’s Books and Records shall apply only to such portions of such
Books and Records as are, or might be, applicable to the items in dispute. Each
time Tenant desires to make any such examination, it shall give reasonable
advance notice to Landlord of the date on which it will conduct such
examination. Tenant shall conduct such examination at the business office of
Landlord or its agent in the City of New York during normal business hours.
Tenant shall keep confidential all information obtained in the course of such
examination except for bona fide disclosures made in connection with

 

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Tenant’s evaluation of the same or its dispute thereof, or as required by the
Requirements or as needed or desirable in litigation or other proceedings.

 

No dispute by Tenant shall excuse or abate Tenant’s obligation to make the
payments required by Section 28.2.1 or 28.2.2 pending resolution of Tenant’s
dispute. If, and to the extent that Tenant shall prevail in arbitration, the
award shall be for a sum certain, giving effect to the decrease in Tenant’s Tax
Payment or Tenant’s Operating Expense Payment determined by the arbitrators.

 

Landlord shall pay (at Landlord’s election, by issuance of a credit against
fixed Rent and Additional Rent next coming due or payable) to Tenant the amount
of the award referred to in the two preceding paragraphs (including interest at
the then current prime rate charged by Citibank N.A.) within five (5) Business
Days of the making of the award. In the event Landlord doesn’t issue such credit
or make such payment within said five (5) Business Days, Tenant may offset the
amount or the award against Fixed Rent and Additional Rent next coming due under
this Lease.

 

28.3 Adjusted Statement of Base Taxes. If Landlord shall receive a refund of any
portion of the Taxes for a Tax Year referred to in the relevant definition of
Base Taxes, then, regardless of whether this Lease shall have terminated,
Landlord, within thirty (30) days after its receipt of such refund, may issue an
Adjusted Statement of Base Taxes reflecting the same.

 

28.3.1 Adjustment of Base Taxes.

 

As used in this Article 28, the term “Adjusted Statement of Base Taxes” shall
mean a statement reflecting the facts giving rise to the same being issued and
setting forth an adjusted statement of Base Taxes.

 

If any Adjusted Statement of Base Taxes reflects a decrease in Base Taxes,
Tenant shall pay to Landlord an amount equal to the resulting increase, if any,
in the Tax Payment for all prior Tax Years commencing with the second Tax Year
within thirty (30) days of its receipt.

 

Each Adjusted Statement of Base Taxes shall be accompanied by copies of all
relevant supporting documentation, including copies of all relevant tax bills.

 

28.3.2 Base Operating Expenses.

 

28.3.2.1 Statement of Base Operating Expenses.

 

28.3.2.1.1 Adjusted Statement of Base Operating Expenses. If it shall ever come
(or be brought by Tenant or otherwise) to Landlord’s attention that the Base
Operating Expenses on the basis of which Tenant shall have made any payments
under Section 28.2.2 (as

 

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theretofore adjusted pursuant to the provisions of this Article 28, if such be
the case) differ from the correct Base Operating Expenses, then, regardless of
whether this Lease shall have terminated, Landlord shall promptly furnish Tenant
with an Adjusted Statement of Base Operating Expenses reflecting the correct
Base Operating Expenses; provided, however, that Landlord shall not issue any
Adjusted Statement of Base Operating Expenses pursuant to this paragraph later
than the fourth anniversary of the end of the Initial Operating Expense Year
unless prior to such anniversary Tenant shall demand that Landlord do so.

 

28.3.3 Tenant’s Objection to Statement of Base Taxes or Base Operating Expenses

 

(a) If within 30 days after Tenant’s receipt of any Statement of Base Taxes or
Adjusted Statement of Base Taxes or Statement of Base Operating Expenses or
Adjusted Statement of Base Operating Expenses, Tenant shall send Landlord a
notice (a “Base Statement Tenant Audit Notice”) stating that Tenant desires to
audit the Books and Records of Landlord with respect to the Tax Year(s) or
Operating Expense Year(s) referred to in the relevant definition of Base Taxes
or Base Operating Expenses, and

 

(b) If within 180 days of Tenant’s receipt of any Statement of Base Taxes or
Adjusted Statement of Base Taxes or Statement of Base Operating Expenses or
Adjusted Statement of Base Operating Expenses, Tenant shall send Landlord a
notice (a “Base Statement Dispute Notice”) itemizing in reasonable detail the
aspects thereof which Tenant disputes, then the dispute shall be determined by
arbitration pursuant to Section 28.7.

 

From and after the date of Tenant’s Base Statement Tenant Audit Notice until the
expiration of the time period within which Tenant may give a Base Statement
Dispute Notice or, if Tenant gives a Base Statement Dispute Notice, until
resolution of the dispute, Landlord shall afford Tenant or its representatives
the right on as many occasions as shall be reasonably necessary to examine (and
make extracts from and copies of) Landlord’s Books and Records for the Tax
Year(s) or Operating Expense Year(s) in question; provided, however, that after
the expiration of the time period within which Tenant may give a Base Statement
Dispute Notice, Tenant’s aforesaid right to examine (and extract and copy)
Landlord’s Books and Records shall apply only to such portions of such Books and
Records as are, or might be, applicable to the items in dispute. Each time
Tenant desires to make any such examination, it shall give reasonable advance
notice to Landlord of the date on which it will conduct such examination. Tenant
shall conduct

 

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such examination at the business office of Landlord or its agent in the City of
New York during the normal business hours of such office. Tenant shall keep
confidential all information obtained in the course of such examination except
for bona fide disclosures made in connection with Tenant’s evaluation of the
same or its dispute thereof.

 

No dispute by Tenant shall excuse or abate Tenant’s obligation to make the
payments required by Section 28.2.1 or 28.2.2 pending resolution of Tenant’s
dispute. If, and to the extent that Tenant shall prevail in arbitration, the
award shall set forth the amount by which Base Taxes or Base Operating Expenses
shall be increased, and shall also be for a sum certain reflecting the
recomputation of the Tax Payment or the Operating Expense Payment for all prior
Tax Years or Operating Expense ears for which Tenant shall have made a Tax
Payment or an Operating Expense Payment, as the case may be.

 

Section 28.4 Allocation of Energy Costs.

 

Landlord shall cause a reputable independent consulting firm, selected by
Landlord and approved by Tenant, which approval shall not be unreasonably
withheld, delayed or conditioned, to prepare for each Operating Expense Year a
study (commonly known as a “public light and power study” and hereafter referred
to as “Landlord’s Public Light and Power Study”) setting forth a detailed
computation of the aggregate cost (including sales and use taxes) to the
Landlord of the electricity and fuel (currently steam) used in

 

(a) Lighting the Real Property and the exterior of the Building, the Loading
Dock and the lobby or other common or service areas of the Building;

 

(b) providing HVAC service to the Building, exclusive of Overtime HVAC and any
HVAC service to any leaseable area of the Building in excess of the level
thereof provided to the Premises; and

 

(c) operating Building Systems other than the HVAC System;

 

provided, however, that in no event shall any electric service to any leasable
space including leasable space in the cellar) or semi-common areas in the
Building be included in such computation (such aggregate cost being herein
called the “Includable Energy Costs”) and shall furnish a copy thereof to Tenant
together with the Statement of Base Operating Expenses and with each Statement
of Operating Expenses for such Operating Expense Year.

 

If the Includable Energy Costs as determined by the independent consulting firm
referred to in the preceding paragraph for any Operating Expense Year shall
differ from

 

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the Includable Energy Costs for such Operating Expense Year reflected in the
Year-End Operating Expense Statement for such Operating Expense Year, Landlord
shall promptly issue an Adjusted Year-End Operating Expense Statement for such
Operating Expense Year reflecting as the Includable Energy Costs for such
Operating Expense Year the amount so determined.

 

All independent consulting firms are hereby instructed to base their respective
determinations of the electric portion of Includable Energy Costs on Landlord’s
Average Cost per kwh determined as set forth in Article 29.

 

Section 28.5 Books and Records.

 

Landlord shall retain all books and records (“Books and Records”) relating to
the operation, repair, cleaning, maintenance, management and security of the
Property and to all items included in or excluded from Operating Expenses for
any Operating Expense Year (including the Operating Expense Years referred to in
the relevant definition of Base Operating Expenses) and relating to all items
included in or excluded from Taxes for any Tax Year (including the Tax Years
referred to in the relevant definition of Base Taxes) in Manhattan, until the
seventh anniversary of the last day of such Operating Expense Year or Tax Year,
as the case may be, unless, at such time, a dispute is pending with respect to
the Operating Expenses for such Operating Expense Year (including, with respect
to any Operating Expense Year referred to in the relevant definition of Base
Operating Expenses, a dispute with respect to Base Operating Expenses) or the
Taxes for such Tax Year (including, with respect to any Tax Year referred to in
the relevant definition of Base Taxes, a dispute with respect to Base Taxes), as
the case may be, in which case Landlord shall retain such books and records
until such dispute is resolved. The term “Books and Records” shall not include
leases of space in the Building.

 

Section 28.6 Arbitration.

 

Any dispute under Section 28.2.3 or Section 28.3.3 shall be determined by
arbitration conducted in New York, New York in accordance with the rules of the
American Arbitration Association (or its successor) by a panel of three
(3) arbitrators. Each arbitrator shall be a certified public accountant who is
an employee or member of an accounting firm national in scope. Tenant shall
appoint an arbitrator meeting the foregoing requirement in its written notice
requesting arbitration made pursuant to Section 28.2.3 or 28.3.3. Landlord
shall, by written notice to Tenant, appoint a second arbitrator meeting the
foregoing requirement within thirty (30) days after receipt of Tenant’s notice.
If Landlord shall fail to appoint its arbitrator within the aforesaid thirty

 

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(30) day period, then Tenant shall give a notice to Landlord setting forth such
failure and requesting that Landlord appoint an arbitrator. If, within ten
(10) days after the receipt of such notice, Landlord does not appoint an
arbitrator by notice as aforesaid, then the arbitrator appointed by Tenant alone
shall determine the matter in question. Any arbitrator appointed by a party is
not expected to be impartial.

 

Within twenty (20) days after Landlord’s notice to Tenant approving the second
arbitrator, the two arbitrators so appointed shall select the third arbitrator
and, if they do not timely do so, the third arbitrator shall be selected by the
American Arbitration Association. Landlord and Tenant shall execute all
documents and do all other things necessary to submit the dispute to arbitration
pursuant to this Section 28.6. A judgment or order may be entered in any court
of competent jurisdiction based upon an arbitration award made in an arbitration
pursuant to this Section 28.7. The costs and expenses of such arbitration shall
be shared equally by Landlord and Tenant, but each party shall be responsible
for its own costs and expenses and the fees and expenses of its own witnesses
and counsel and the arbitrator appointed by it. The arbitrators shall have the
right to consult experts in the matter under arbitration, provided that any such
consultation shall be made only after ten (10) days’ prior notice to Landlord
and Tenant and only in their presence, with full right on their part to
cross-examine such experts. The arbitrators’ decision and award shall be in
writing and counterpart copies thereof shall be delivered to Landlord and
Tenant. In rendering their decision and award, the arbitrators shall have no
power to vary, modify or amend any provision of this Lease.

 

29. SERVICES.

 

A. Elevator. Landlord shall provide passenger elevator facilities on business
days from 8:00 A.M. to 6:00 P.M. and shall have one passenger elevator in the
bank of elevators servicing the Premises available at all other times. Landlord
shall provide freight elevator services for Tenant’s use during the performance
of Tenant’s work and on an “as available” basis for incidental use by Tenant.
Any extended use may be arranged with Landlord’s prior consent. Tenant shall pay
as Additional Rent all building charges therefor at rates set forth on Schedule
D annexed hereto (which rates may change from time to time, but if raised will
in no event be higher than rates charged for such services in similar first
class office buildings in Midtown Manhattan).

 

B. Heating. Landlord shall furnish perimeter heat to the Premises in accord with
the HVAC Specification, Schedule C, attached hereto and incorporated herein, on

 

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business days from 8:00 A.M. to 6:00 P.M. Supplemental heating may be supplied
by Tenant at its cost. Landlord shall not be responsible to make repairs if the
normal operation of the heat distribution system serving the Building shall fail
to provide heat at reasonable temperatures or any reasonable volumes or
velocities in any parts of the Premises by reason of any rearrangement of
partitioning or other Alterations made or performed by or on behalf of Tenant or
any person claiming through or under Tenant.

 

C. Cooling. Landlord shall supply perimeter cooling to the Premises in accord
with the HVAC Specification, Schedule C, on business days from 8:00 AM to 6:00
PM. Supplemental air conditioning may be supplied by Tenant at Tenant’s cost.
Landlord shall supply chilled water during regular business hours such
supplemental air conditioning in sufficient quantities to serve twenty-five
(25) tons of supplemental air conditioning per floor. Should Tenant install such
supplemental air conditioning, it shall pay a one-time tap-in charge of $1,500
and an additional charge of $22,500 per annum for such water. Landlord shall not
be responsible to make repairs if the perimeter air conditioning shall fail to
provide reasonable temperatures or any reasonable volume or velocities in any
part of the Premises by reason of any rearrangement or partitioning or other
alterations made or performed on behalf of Tenant or any other person claiming
through or under Tenant.

 

Tenant shall, at Tenant’s sole cost and expense, maintain, repair and operate
such supplemental air conditioning unit in compliance with all Requirements
relating thereto. Tenant shall pay for the cost of the electrical energy
consumed by any such supplemental air conditioning unit in accordance with the
provisions of Article 29, subsection H hereof.

 

D. After Hours and Additional Services. Tenant shall have access to the Premises
twenty-four (24) hours a day, seven (7) days a week, fifty-two (52) weeks a
year. Nevertheless, Rent does not include any charge to Tenant for the
furnishing of any additional passenger elevator facilities (it being understood
that some but not all of the passenger elevators may be shut down during
non-business hours of the Building), any freight elevator facilities (other than
as contemplated in Article 29 subsection A) or for the service of heat,
ventilation or air conditioning to the Premises, to the extent otherwise
provided to Tenant I under the terms of this Lease during periods other than the
hours and days set forth in sections A and B of this Article 29 for the
furnishing and distributing of such facilities or services (referred to as
“Overtime Periods”). Accordingly, if Landlord shall furnish any (i) additional
passenger elevator facilities to Tenant during Overtime Periods or freight
elevator facilities, except as provided in subsection A of this Article 29, or
(ii) heat to the Premises during Overtime Periods, then Tenant shall pay
Landlord for

 

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such facilities or services at the standard rates fixed by the Landlord for the
Building set forth in Schedule D (which rates may be changed by Landlord from
time to time but if any such rate is changed, it will not be greater than the
rates charged for such services in similar first class office buildings in
Midtown Manhattan) or, if no such rates are then fixed, at reasonable rates.
Neither the facilities nor the services referred to in this Article 29D shall be
furnished to Tenant or the Premises if Landlord has not received advance notice
from Tenant specifying the particular facilities or services requested by Tenant
at least in accord with the schedule set forth in the Rules attached hereto as
Schedule A (which schedule is subject to change from time to time); or if Tenant
is in default under or in breach of any of the terms, covenants or conditions of
this Lease; or if Landlord shall determine, in its sole and exclusive
discretion. that such facilities or services are requested in connection with,
or the use thereof shall create or aid in a default under or a breach of any
term, covenant or condition of this Lease. All of the facilities and services
referred to in this Article 29(D) are conveniences and are not and shall not be
deemed to be appurtenances to the Premises, and the failure of Landlord to
furnish any, or all of such facilities or services shall not constitute or give
rise to any claim of an actual or constructive eviction, in whole or in part, or
entitle Tenant to any abatement or diminution of Fixed Rent or Additional Rent,
or relieve Tenant from any of its obligations under this Lease, or impose any
liability upon Landlord or its agents by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant’s business or otherwise. Landlord
may limit the furnishing during Overtime Periods of any of the facilities or
services referred to in this Article 29(D) to a total of twenty (20) hours in
any one week. If more than one tenant utilizing the same system as Tenant
requests the same Overtime Periods for the same services as Tenant, the charge
to Tenant shall be adjusted pro rata. Notwithstanding the foregoing, during the
construction of Tenant’s initial tenant improvements and Tenant’s initial
move-in to each floor of the Premises, Landlord shall use reasonable efforts to
give Tenant priority use of the freight elevator and otherwise facilitate such
construction and move-in, at Tenant’s expense.

 

E. Cleaning. Landlord shall provide the cleaning services described on Schedule
B annexed hereto and made a part hereof. No one other than persons approved by
Landlord shall be permitted to enter the Premises or the Building to provide any
additional cleaning services on behalf of Tenant. Tenant shall independently
contract for the removal of any of Tenant’s refuse and rubbish which is not
required to be removed by Landlord as set forth on said Schedule B. The removal
of Tenant’s refuse and rubbish by

 

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others shall be subject to such rules and regulations, as in the judgment of
Landlord, are necessary for the proper operation of the Building.

 

F. Sprinkler System. If there now is or shall be installed in the Premises a
“sprinkler system” (it being understood that Landlord has or will install and
maintain a central sprinkler tap for the Premises and no more), and such system
or any of its appliances shall be damaged or injured or not in proper working
order by reason of any act or omission of Tenant, Tenant’s agents, servants,
contractors, employees, licensees, invitees or visitors, Tenant shall forthwith
restore the same to good working condition at its own expense; and if the New
York Board of Fire Underwriters or the New York Fire Insurance Rating
Organization or any bureau, department or official of the state or city
government, shall require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of Tenant’s particular use, as distinguished from normal office use,
or the location of the partitions, trade fixtures, or other contents of the
Premises, Tenant shall, at Tenant’s expense, promptly make and supply such
changes, modifications, alterations, additional sprinkler heads or other
equipment (or, if Landlord elects, Tenant shall reimburse Landlord for the cost
thereof to extent said cost is reasonable in amount, reasonably necessary, and
actually paid to independent third (3rd) parties or if performed by Landlord’s
employees or contractors, Tenant shall be charged the charge that would have
been payable to a third (3rd) party contractor).

 

G. Water. If Tenant requires, uses or consumes water for any purpose in addition
to ordinary drinking. cleaning or lavatory purposes, Landlord may install a
water meter and thereby measure Tenant’s water consumption for all purposes. In
such event (a) Tenant shall pay Landlord for the cost of the meter and the cost
of the installation thereof and through the duration of Tenant’s occupancy
Tenant shall keep said meter and installation equipment in good working order
and repair at Tenant’s own cost and expense in default of which Landlord may
cause such meter and equipment to be replaced or repaired and collect the cost
thereof from Tenant; (b) Tenant agrees to pay for water consumed, as shown on
said meter within ten (10) days of rendition of a bill to Tenant and on default
in making such payment Landlord may pay such charges and collect the same from
Tenant; and (c) Tenant covenants and agrees to pay the sewer rent, charge or any
other Tax, Rent, levy or charge which now or hereafter is assessed, imposed or
shall become a lien upon the Premises or the realty of which they are part
pursuant to law, order or regulation made or issued in connection with any such
metered use,

 

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consumption, maintenance or supply of water, water system, or sewage or sewage
connection or system. The bill rendered by Landlord for the above shall be based
upon Tenant’s consumption and shall be payable by Tenant within ten (10) days of
rendition.

 

H. Security. Landlord shall provide Building security at all times.
Notwithstanding the foregoing, in no event will Landlord be responsible, and
Tenant hereby waives any claim against Landlord arising from or relating to any
injury (or death) to person or loss of or damage to property as the result of
any actual or alleged failure of such security services.

 

I. Electricity Service.

 

(1) Landlord shall furnish 8 watts per rentable square foot (including perimeter
HVAC provided by Landlord) electrical energy to or for the use of Tenant in the
Premises. Landlord shall install sub meter(s), at Landlord’s expense, to measure
consumption of electricity on the Premises. Tenant shall pay to Landlord, on
demand, from time to time, but no more frequently than monthly, for its
consumption of electrical energy at Landlord’s cost for such use, plus
Landlord’s charge for overhead and supervision in the amount of six percent
(6%) of such cost. For the purpose of this subsection, the rate to be paid by
Tenant for such sub-metering shall include any taxes or other charges in
connection therewith. If any tax shall be imposed upon Landlord’s receipts from
the sale or resale of electrical energy to Tenant, the pro rata share allocable
to the electrical energy service received by Tenant shall be passed on to,
included in the bill of, and paid by, Tenant if and to the extent permitted by
law.

 

(2) The Premises are currently supplied with sufficient electricity to provide a
demand load of 8 watts per rentable square foot (including perimeter HVAC
provided by Landlord) except as provided in Subsection 29(1)(3) below, Landlord
will through to term continue to supply same. Should Tenant desire to use
additional electricity, it shall only do so through additional feeders or risers
and all other equipment proper and necessary in connection with such feeders or
risers, to be installed by Landlord upon Tenant’s request, at the sole cost and
expense of Tenant and at a cost which is reasonable in amount, reasonably
incurred, reasonably necessary and actually paid to a third (3rd) party
contractor or if performed by Landlord’s employees or contractor, Tenant will
not be charged more than the charge of a third (3rd) party contractor), provided
that, in Landlord’s reasonable judgment, such additional feeders or risers are
necessary and are permissible under applicable Requirements and insurance
regulations and the installation of such feeders or risers will not cause
permanent damage or injury to the Building or the

 

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Premises or cause or create a dangerous or hazardous condition or entail
excessive or unreasonable alterations or interfere with or disturb other tenants
or occupants of the Building. Tenant covenants that at no time shall the use of
electrical energy in the Premises exceed the capacity of the existing feeders or
wiring installations then serving the Premises which will meet the demand load
set forth herein. Tenant shall not make or perform, or permit the making or
performance of, any Alterations to wiring installations or other electrical
facilities in or serving the Premises without the prior consent of Landlord in
each instance, which consent not to be unreasonably withheld, conditioned or
delayed.

 

(3) Landlord reserves the right to discontinue furnishing electricity, to Tenant
in the Premises on not less than thirty (30) days’ notice to Tenant, provided it
similarly discontinues furnishing electricity to all tenants and occupants in
the same elevator bank in the Building and provided Landlord does so at its
costs, without disruption of the availability of service to Tenant. If Landlord
exercises such right to discontinue, or is compelled to discontinue furnishing
electricity to Tenant, this Lease shall continue in full force and effect and
shall be unaffected thereby, except only that from and after the effective date
of such discontinuance, Landlord shall not be obligated to furnish electricity
to Tenant. Landlord shall not discontinue service to Tenant until Tenant has, at
Landlord’s sole cost, arranged to obtain electricity directly from the public
utility or other company servicing the Building. Such electricity may be
furnished to Tenant by means of the then existing electrical facilities serving
the Premises to the extent that the same are available, suitable and safe for
such purposes. All meters and all additional panel boards, feeders, risers,
wiring and other conductors and equipment which may be required to obtain
electricity, of substantially the same quantity, quality and character, shall be
installed by Landlord. Landlord shall not voluntarily discontinue furnishing
electricity to Tenant until and unless Tenant is able to receive electricity
directly from the public utility or other company servicing the Building.

 

(4) Landlord shall not be liable to Tenant in any way for any interruption,
curtailment or failure, or defect in the supply or character of electricity
furnished to the Premises by reason of any requirement, act or omission of
Landlord or of any public utility or other company servicing the Building with
electricity or, for any other reason except Landlord’s negligence or willful
tort.

 

J. Building Directory. The Parties acknowledge that there is currently no
directory of tenants and occupants in the lobby of the Building. Should such
directory be

 

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installed, Tenant will receive its proportionate share of the lines provided for
tenants on such directory unless Landlord provides each Tenant only one (1) line
on such directory.

 

K. Cafeteria. Tenant may utilize the cafeteria currently maintained by Landlord
on the twentieth floor for its employees and invitees without discrimination (as
to cost or otherwise). Notwithstanding the foregoing, Landlord reserves the
right to terminate such cafeteria services, but so long as Landlord provides
services, Tenant may utilize such services.

 

L. Interruption of Services. Landlord reserves the right to stop service of the
heating system or the elevator, electrical, plumbing or other mechanical systems
or facilities in the Building when necessary, by reason of accident or
emergency, or for repairs, additions, alterations, replacements, decorations or
improvements in the reasonable judgment of Landlord desirable or necessary to be
made, until said repairs, alterations, replacements or improvements shall have
been completed. Landlord shall have no responsibility or liability for
interruption, curtailment or failure to supply cooled or outside air, heat,
elevator, plumbing or electricity when prevented by exercising its right to stop
service or by strikes, labor troubles or accidents or by any cause whatsoever
reasonably beyond Landlord’s control, or by failure of independent contractors
to perform or by Requirements of any federal, state, county or municipal
authority, or failure of suitable fuel supply, or inability by exercise of
reasonable diligence to obtain suitable fuel or by reason of governmental
preemption in connection with a National Emergency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency.

 

30. PARTNERSHIP TENANT. If Tenant’s interest in this Lease shall be assigned to
a partnership (or to two (2) or more persons, individually and as co-partners of
a partnership) pursuant to Article 12 (any such partnership and such persons are
referred to in I this Article 30 as a “Partnership Tenant”), the following
provisions of this Article 30 shall apply to such Partnership Tenant: (i) the
liability of each of the parties comprising a Partnership Tenant shall be joint
and several with regard to all matters occurring or accruing while it is a
partner and (ii) each of the parties comprising a Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any written instrument which
may hereafter be executed, changing, modifying or discharging this Lease, in
whole or in part, or surrendering all or any part of the Premises to Landlord,
and by any notices, demands, requests or other communications which may
hereafter be given by a Partnership Tenant or by any of the parties comprising a
Partnership Tenant with

 

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regard to all matters occurring or accruing while it is a partner), and
(iii) any bills, statements, notices, demands, requests or other communications
given or rendered to a Partnership Tenant and to all such parties shall be
binding upon a Partnership Tenant and all such parties, and (iv) if a
Partnership Tenant shall admit new partners, all of such new partners shall, by
their admission to a Partnership Tenant, deemed to have assumed performance of
all of the terms, covenants and conditions of this Lease on Tenant’s part to be
observed and performed, and (v) a Partnership Tenant shall give prompt notice to
Landlord of the admission of any such new partners, and upon demand of Landlord,
shall cause each such new partner to execute and deliver to Landlord an
agreement in form satisfactory to Landlord, wherein each such new partner shall
assume performance of all the terms, covenants and conditions of this Lease on
Tenant’s part to be observed and performed (with regard to all matters occurring
or accruing while it is a partner) (but neither Landlord’s failure to request
any such agreement nor the failure of any such new partner to execute or deliver
any such agreement to Landlord shall vitiate the provisions of subdivision
(iv) of this Article 30).

 

31. VAULT SPACE. Any vaults, vault space or other space outside the boundaries
of the Real Property. Notwithstanding anything contained in this Lease or
indicated on any sketch, blueprint or plan are not included in the Premises.
Landlord makes no representation as to the location of the boundaries of the
Real Property. All vaults and vault space and all other space outside the
boundaries of the Real Property which Tenant may be permitted to use I or occupy
is to be used or occupied under a revocable license, and if any such license
shall be revoked, or if the amount of such space shall be diminished or required
by any Federal, State or Municipal authority or by any public utility company,
such revocation, diminution or requisition shall not constitute an actual
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord. Any fee, tax or charge imposed by
any governmental authority for any such vaults, vault space or other space shall
be paid by Tenant.

 

32. [Intentionally Deleted]

 

33. CAPTIONS. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease nor
the intent of any provision thereof.

 

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34. ADDITIONAL DEFINITIONS.

 

A. The term “office” or “offices”, wherever used in this Lease, shall not be
construed to mean premises used as a store or stores, for the sale or display,
at any time, of goods, wares or merchandise of any kind, or as a restaurant,
shop, booth, bootblack or other stand, barber shop, or for other similar
purposes or for manufacturing.

 

B. The words “reenter” and “reentry” as used in this Lease are not restricted to
their technical legal meaning.

 

C. The term “business days” as used in this Lease shall exclude Saturdays,
Sundays and all days observed by the State or Federal Government as legal
holidays and union holidays for those unions that materially affect the delivery
of services in the Building.

 

35. PARTIES BOUND. The covenants, conditions and agreements contained in this
Lease shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, distributees, executors, administrators, successors, and,
except as otherwise provided in this Lease, their assigns.

 

36. BROKERAGE. Tenant represents and warrants that it has dealt with no broker,
agent or other person in connection with this transaction, other than Cushman &
Wakefield, Inc. and CB Richard Ellis (FIWA CB Commercial Real Estate Group,
Inc.) Tenant agrees to indemnify and hold Landlord harmless from and against any
claims by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with Tenant with regard to this
leasing transaction. Landlord shall be responsible to pay a commission to
Cushman & Wakefield, Inc. pursuant to a separate agreement between them.
Cushman & Wakefield shall be responsible for any portion of such commission
payable to CB Commercial Real Estate Group, Inc. The provisions of this Section
shall survive the termination of this lease.

 

37. INDEMNITY. Tenant shall not do or permit any act or thing to be done upon
the Premises which may subject Landlord to any liability or responsibility for
injury, damages to persons or property or to any liability by reason of any
violation of any Requirement, but shall exercise such control over the Premises
as to fully protect Landlord against any such liability. Tenant agrees to
indemnify and save harmless Landlord from and against (a) all claims of whatever
nature against Landlord arising from any act, omission or negligence of Tenant,
its contractors, licensees, agents, servants, employees, invitees or visitors,
including to the extent of Tenant’s negligence only any claims arising from any
act, omission or negligence of Landlord or

 

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Landlord and Tenant, (b) all claims against Landlord arising from any accident,
injury or damage whatsoever caused to any person or to the property of any
person and occurring during the Term in or about the Premises, (c) all claims
against Landlord arising from any accident, injury or damage occurring outside
of the Premises but anywhere within or about the Real Property, where such
accident, injury or damage results or is claimed to have, resulted from an act
or omission of Tenant or Tenant’s agents, employees, invitees or visitors,
including to the extent of Tenant’s negligence only any claims arising from any
act, omission or negligence of Landlord or Landlord and Tenant, (d) any breach,
violation or nonperformance of any covenant, condition or agreement in this
Lease set forth and contained on the part of Tenant to be fulfilled, kept,
observed and performed and (e) any claim, loss or liability arising or claimed
to arise from Tenant’s or any of its contractors , licensees, agents, servants,
employees, invitees or visitors causing or permitting any Hazardous Substance to
be brought upon, kept or used in or about the Premises or the Real Property or
any seepage, escape or release of such Hazardous Substances. This indemnity and
hold harmless agreement shall include indemnity from and against any and all
liability, fines, suits, demands, costs and expenses of any kind or nature
incurred in or in connection with any such claim or proceeding brought thereon,
and the defense thereof. Notwithstanding the foregoing, in no event shall Tenant
be responsible to indemnify Landlord for the gross negligence or willful
misconduct on Landlord and each such indemnity obligation shall be subject to
the procedures and requirements set forth in Section (3)(D) hereof.

 

38. ADJACENT EXCAVATION SHORING. If an excavation shall be made upon land
adjacent to the Premises, or shall be authorized to be made, Tenant shall afford
to the person causing or authorized to cause such excavation, license to enter
upon the Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rent.

 

39. MISCELLANEOUS.

 

A. No Offer. This Lease is offered for signature by each of Landlord and Tenant
and it is understood that this Lease shall not be binding upon either party
unless and until both parties shall have executed and delivered a fully executed
copy of this Lease to Tenant.

 

B. Certificates. From time to time, within fifteen (15) days next following the
request by either Landlord or Tenant, the other party shall deliver to the
requesting party a written statement executed and acknowledged by it(i) stating
that this Lease is then in full force and effect and has

 

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not been modified (or if modified, setting forth all modifications),
(ii) setting forth the date to which the Fixed Rent and Additional Rent have
been paid, together with the amount of monthly Fixed Rent then payable,
(iii) stating whether or not, to the best knowledge of such party, the
requesting party is in default under this Lease, and, if such party is in
default, setting forth the specific nature of all such defaults, (iv) stating
the amount of the security deposit under this Lease, (v) stating whether there
are any subleases affecting the Premises, (vi) stating the address of such party
to which all notices and communications under the Lease shall be sent, the
Commencement Date and the Expiration Date, and (vii) as to any other matters
reasonably requested by the requesting party. Tenant acknowledges that any
statement delivered pursuant to this subsection C may be relied upon by any
purchaser or owner of the Real Property or the Building, or Landlord’s interest
in the Real Property, or the Building or any Superior Lease, or by any mortgagee
of a Mortgage, or by any assignee of any mortgagee of a Mortgage, or by any
lessor under any Superior Lease. Notwithstanding anything to the contrary
herein, including Landlord complying with a request pursuant to this
Section 39(B), in no event may Tenant take any action which will, or through its
inaction, cause any lien, UCC-1, security agreement or financing statement to be
filed against the Real Estate, the Building or Tenant’s leasehold interest
created herein.

 

C. Authority. If Tenant is a corporation or partnership, each individual
executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and validly existing entity qualified to do business in
the State of New York and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.

 

D. Signage. Tenant shall not exhibit, inscribe, paint or affix any sign, \
advertisement, notice or other lettering on any portion of the Building or the
outside of the Premises without the prior written consent of Landlord in each
instance. A plan of all signage or other lettering proposed to be exhibited,
inscribed, painted or affixed shall be prepared by Tenant in conformity with
reasonable building standard signage requirements, as they may be established
from time to time, and submitted to Landlord for Landlord’s consent (which
consent shall not be unreasonably withheld, conditioned or delayed). If the
proposed signage is acceptable to Landlord, Landlord shall approve such signage
or other lettering by written notice to Tenant. All signage or other lettering
which has been approved Landlord shall thereafter be installed by Landlord at
Tenant’s sole cost and expense (which costs shall be reasonable in amount,
reasonably necessary and reasonably incurred and paid to independent third
party, or if performed by Landlord’s employees or contractor then at third party
rates). Upon installation of any such signage or other lettering,

 

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such signage or lettering shall not be removed, changed or otherwise modified in
any way without Landlord’s prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed. The removal, change or
modification of any signage or other lettering theretofore installed shall be
performed solely by Landlord at Tenant’s sole cost and expense. Tenant shall not
exhibit, inscribe, paint or affix on any part of the Premises or the Building
visible to the general public any signage or lettering including the words
“temporary” or “personnel”. Any signage, advertisement, notice or other
lettering which shall be exhibited, inscribed, painted or affixed or on behalf
of Tenant in violation of the provisions of this section may be removed by
Landlord and the reasonable cost of any such removal shall be paid by Tenant as
Additional Rent. Notwithstanding the foregoing to the contrary, Landlord shall
not unreasonably withhold, delay or condition its consent to the installation of
any signs within the interior of the Premises or in elevator lobbies, provided
it is not in or visible from any windows and once approved it will not remove
any such sign pursuant to this Article 39(D).

 

E. Rules. Attached hereto and incorporated herein as Schedule A are the Rules
and Regulations for conduct in the Building which Tenant hereby agrees to
observe and comply with. Landlord shall have the right from time to time to add
to or amend such Rules and Regulations as it deems appropriate, in its
reasonable judgment, for the operation and management of the Building. All new
and/or amended Rules and Regulations shall be reasonable and shall not (except
in case of security for the Building) materially increase Tenant’s obligations
or materially reduce its rights or benefits hereunder. In the event of any
conflict between the Rules and Regulations and this Lease, the terms of the
Lease shall prevail.

 

F. Landlord’s Withholding of Consent. Tenant’s sole remedy shall be an action or
proceeding to enforce such provision, by specific performance, injunction or
declaratory judgment, except in the case that Landlord has maliciously or
otherwise in bad faith withheld any such consent or approval, in which event
Tenant shall have all remedies available to it at law or equity.

 

40. [INTENTIONALLY DELETED]

 

41. Landlord’s Work; Tenant’s Work: Tenant Allowances.

 

(a) The Landlord shall, prior to the Commencement Date, prepare the Premises to
meet all of the criteria set forth in Exhibit 2 attached hereto and incorporated
herein (“Landlord’s Work”) so that it is ready for Tenant to perform its initial
tenant improvements (the “Initial

 

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Improvements”). All such Initial Improvements shall be performed in a manner
that meets all of the requirements of this lease including Article 3.

 

(b) Subject to the limitations hereinafter set forth, Landlord hereby agrees to
provide tenant with an allowance for construction and design (the “Tenant
Improvement Allowance”). landlord shall pay in the manner hereinafter set forth
an amount equal to $40.00 for each square foot of rentable area of the Premises
for the cost of construction of the Initial Improvements, including all license
and permit fees relating to the construction (the “Construction Allowance”). In
addition, Landlord shall pay an allowance of $16,000 per floor for the
construction of ADA compliant bathrooms. Such allowance shall be payable at
Landlord’s election by issuance of a rent credit or by cash payment, only upon
presentation by Tenant of duly verifiable invoices issued by architects,
engineers, contractors or materialmen clearly identifying in detail the work
done or material supplied specifically for the Initial Improvements together
with proof of payment therefore by Tenant.

 

42. GUARANTY.

 

This Lease is conditioned on Tenant securing and delivering to Landlord the
corporate guaranty of its corporate parent, Learning Tree International, Inc. in
the form attached hereto as Exhibit 3 on or before full execution hereof.

 

IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this Lease as
of the date and year first above written.

 

LEARNING TREE INTERNATIONAL USA INC., Tenant

     

CBS BROADCASTING INC., Landlord

By: 

 

/s/ David C. Collins

     

By: 

 

/s/ Elliot S. Matz

Name: 

 

     David C. Collins

     

Name: 

 

     Elliot S. Matz

Title: 

 

     Vice President

     

Title: 

 

     VP, Dir. Of R.E.

 

Tenant’s Tax ID Number: 54-1577802

 

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GUARANTY OF LEASE

 

THIS GUARANTY OF LEASE (this “Guaranty”) is executed as of this 8th day of July,
1998 by LEARNING TREE INTERNATIONAL, INC., a Delaware corporation (“Guarantor”),
for the benefit of CBS BROADCASTING INC., a New York corporation (“Lessor”),
with reference to the following facts:

 

A. Lessor and Learning Tree International USA, Inc., a Delaware corporation
(“Lessee”) are, concurrently with the execution of this Guaranty, entering into
that certain Lease dated as of JULY 8th , 1998 (“Lease”) for the lease of
certain premises located at 51 West 52nd Street, New York, New York 10019, and
more particularly described in the Lease. All terms capitalized, but not
otherwise defined herein, shall have the same meanings ascribed to them in the
Lease.

 

B. As a condition to Lessor entering into the Lease, Lessor has required that
Guarantor guarantee the obligations of Lessee and its performance under the
Lease in accordance with the terms of this Guaranty.

 

NOW, THEREFORE, in consideration of and as a material inducement to Lessor’s
entering into the Lease, Guarantor, on behalf of itself and its successors and
assigns, does hereby covenant and agree with Lessor for the benefit of Lessor
and its successors and assigns, as follows:

 

1. OBLIGATIONS GUARANTEED. This Guaranty is an absolute, unconditional, and
irrevocable guaranty of Lessee’s full payment and performance under the Lease,
and Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to
Lessor and to Lessor’s successors and assigns, the full and timely performance
by Lessee (and Lessee’s successors and assigns) of each and all of the
provisions (as defined below) of the Lease and any and all amendments,
modifications or extensions thereof, including, without limitation, the
following:

 

(a) the payment of all Fixed Rent and Additional Rent (hereinafter “Rent”) and
all other sums and indebtedness (as defined below) accruing under the Lease, in
the amounts, at the times, and in the manner set forth in the Lease;

 

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(b) to the extent provided under the Lease, any amounts incurred by Lessor as
damages caused by default by Lessee under the Lease (including, without
limitation, attorneys’ fees, late charges, and interest as provided under the
Lease) and any amounts expended by Lessor on account of or to cure any such
default or any other failure by Lessee to perform its obligations under the
Lease and to the extent provided under this Lease;

 

The word “indebtedness” is used herein in its most comprehensive sense and
includes any and all advances, debts, obligations, and liabilities of Lessee
heretofore, now, and hereafter made, incurred, or created, whether voluntary or
involuntary, and however arising, whether or not due, absolute, or contingent,
liquidated or unliquidated, determined or undetermined. The word “provision” is
used herein in its most comprehensive sense and includes any and all terms,
agreements, covenants, conditions, clauses, qualifications, restrictions,
reservations, and any other stipulations in the Lease that define or otherwise
control, establish, or limit the performance required or permitted under the
Lease. The indebtedness, provisions and obligations guaranteed by Guarantor
under this Guaranty, made by Lessee prior to assignment to an unrelated party
(i.e., a party that is not the result of a merger with Lessee or a party not
controlled, controlling or under common control with Lessee), are sometimes
referred to herein as the “Obligations.”

 

2. NATURE OF GUARANTY.

 

(a) The Obligations of Guarantor under this Guaranty are (i) absolute,
regardless of any defenses, counterclaims, set-offs, cross-claims, or other
claims which Guarantor may now have or at any time hereafter may have against
Lessee, (except that this clause (i) shall not constitute a waiver of any
defenses, counterclaims, setoffs, cross claims or other claims of Guarantor
based upon any breach by Lessor of any provision of the Lease), and (ii) joint
and several and independent of and in addition to Lessee’s obligations under the
Lease. Guarantor agrees that the liability under this Guaranty shall be primary
and that in any right or action which may accrue to Lessor or its successors (as
defined in Paragraph 9) or assigns under the Lease or this Guaranty, Lessor or
its successors or assigns, at their option, may bring a separate action against
Guarantor whether the action is brought or prosecuted against any other
guarantor or Lessee, or all of them, or whether any other guarantor or Guarantor
or Lessee, or both of them are joined in the action.

 

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(b) Guarantor authorizes Lessor to perform any or all of the following acts at
any time in its sole discretion, upon any terms and conditions as Lessor may
elect, without notice to or obtaining the consent of Guarantor, and without
affecting the liability of Guarantor under this Agreement:

 

(i) Lessor may take and hold security for the Obligations, accept additional or
substituted security, and subordinate, exchange, enforce, waive, release,
compromise, fail to perfect and sell or otherwise dispose of any such security.

 

(ii) Lessor may enforce any rights or remedies against Lessee that may be
available under the Lease or any other agreement.

 

(iii) Lessor may release Lessee, any other guarantor, lessee, assignee or any
other party of its or their liability for all or any of the Obligations.

 

(c) Guarantor expressly agrees that until each of the Obligations has been fully
paid and performed and until each and every term, covenant, and condition of
this Guaranty is fully performed, Guarantor shall not be released by any act or
event which might, but for this provision of this Guaranty, be deemed a legal or
equitable discharge of a surety, nor shall Guarantor be released because of
(i) any waiver, extension, modification, forbearance or delay, or other act or
omission of Lessor (except as hereinafter set forth), (ii) the failure of Lessor
to proceed promptly or otherwise as against Lessee, Guarantor, or any third
party, (iii) or any exercise or non-exercise by Lessor of any right or privilege
under this Guaranty or the Lease, (iv) any action taken or omitted or
circumstance which might vary the risk or affect the rights or remedies of
Guarantor as against Lessee, or any other party, or (v) any further dealings
between Lessee and Lessor, whether relating to the Obligations or otherwise.
Guarantor hereby expressly waives and surrenders any defense to its liability
under this Guaranty based upon any of the foregoing acts, omissions, agreements,
waivers or any of them, it being the purpose and intent of this Guaranty that
the obligations of Guarantor hereunder are absolute and unconditional under all
circumstances.

 

3. NO LESSOR WAIVERS. No delay or omission in the exercise of any right or
remedy of Lessor upon any default under the Lease by Lessee, or upon any
indebtedness hereunder, shall impair such right or remedy or shall be construed
as a waiver of such right or remedy. The receipt and acceptance by Lessor of
delinquent Rent shall not constitute a waiver of any other default; it shall
constitute only a waiver of timely payment for the particular Rent payment
involved. Any waiver by Lessor of any default must be express and in writing and
shall not be a waiver of any other default concerning the same or any provision
of the Lease. Upon a failure by Lessee to pay or perform any of the Obligations,
Lessor in its sole and absolute discretion, without prior notice to and without
obtaining the consent of Guarantor, may elect to compromise, or adjust any part
of the Obligations, or make any other accommodation with Lessee

 

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or Guarantor, or exercise any other available remedy against Lessee or
Guarantor, or proceed against or exhaust any security. No such action by Lessor
shall release or limit the liability of Guarantor, who shall remain liable under
this Guaranty after the action, even if the effect of the action is to deprive
Guarantor of the right to collect reimbursement from Lessee for any sums paid to
Lessor.

 

4. LEASE MODIFICATIONS. The provisions of the Lease may be altered, affected,
modified, amended, or changed by agreement between Lessor and Lessee at any
time, or by course of conduct, without the consent of Guarantor, and Guarantor
hereby waives and releases any claim that its obligations under this Guaranty
would be modified, abated, reduced or released by any such alteration,
modification, amendment, agreement or extension, regardless of whether
Guarantor’s consent is obtained. This Guaranty shall guaranty the performance.
by Lessee and its successors and assigns, of the Lease as so altered, affected,
modified, amended, or changed in all cases, without the need for notice to or
the consent of Guarantor. An assignment or other transfer of the Guaranty or
Lease, or a Lease of all or any portion of the Premises (whether or not in
compliance with the Law), shall not affect this Guaranty or Guarantor’s
liability and obligations hereunder. This Guaranty shall include any liability
of Lessee and its successors and assigns for Rent or otherwise which shall
accrue under the Lease for any period preceding the termination of the Lease, as
well as any period following the Lease Term. Notwithstanding anything to the
contrary contained in this Guaranty, if the Lease is assigned by Tenant to an
unaffiliated third (3rd) party, Guarantor is entitled to prior written notice of
any modification, amendment or change to the Lease and shall not be liable with
respect to any increased or additional obligations arising out of or resulting
from any such modification amendment or change made with any Tenant other than
Learning Tree International USA, Inc. without consenting thereto.

 

5. DEFAULT UNDER LEASE. If Lessee or any successor of Lessee shall default under
the Lease in the payment of Rent, or any other indebtedness, or in the
performance of any of the provisions of the Lease, and if such default shall not
have been cured within the time specified in the Lease for curing said default,
Guarantor shall to extent Tenant is liable therefore under the Lease, without
relieving Lessee of any additional liability under the Lease, within ten
(10) days after written demand by Lessor to Guarantor, pay such Rent or other
indebtedness, and pay the costs and expenses (including, without limitation,
attorneys’ fees) which may have been incurred by Lessor as a result of any such
default or in the enforcement of Lessee’s obligations

 

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under any provision of the Lease. In the alternative, in the event of any such
default as above described, Lessor may, following ten (10) days’ prior written
notice to Lessee, proceed against Guarantor, or Lessee, or Lessor may enforce
against Guarantor or Lessee, or both of them, any rights that it has under the
Lease or pursuant to applicable law. The words “applicable law” is used herein
in its most comprehensive sense and includes any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal, other governmental
agency or authority having jurisdiction over Lessor, Lessee, Guarantor, the
Building, and/or the Premises, or any or all of them, in effect at the time of
execution of the Lease or at anytime during the Lease Term thereof, including,
without limitation, any regulation or order of a quasi-official entity or body.
A copy of any notice given to Tenant under the Lease shall also be given
simultaneously to Guarantor.

 

6. GUARANTOR WAIVERS. Guarantor unconditionally, irrevocably, and expressly
waives and releases: (a) any right to assert or claim that Guarantor is
exonerated by any action taken by Lessor which impairs Guarantor’s rights to be
subrogated to Lessor’s rights against Lessee, including, without limitation, by
reason of any exercise or non-exercise by Lessor of any right or privilege under
this Guaranty or the Lease; (b) the right to enforce any remedies that Lessor
now has, or later may have, against Lessee until such time as all indebtedness
of Lessee (relative to Lessor) has been satisfied; (c) any right to participate
in, proceed against, or exhaust any security now or later held by Lessor;
(d) all presentments, demands for performance, notices of non-performance,
protests, notices of protest, notices of dishonor, and notices of acceptance of
this Guaranty; (e) all notices of the existence, creation, or incurrence of new
or additional obligations under the Lease; (f) duty of Lessor to advise
Guarantor of any information known to Lessor regarding the financial condition
of Lessee; (h) the right to proceed against Lessee or pursue any particular
remedy in Lessor’s power; (i) any defense by reason of any disability of Lessee
and any other defense based upon the termination of Lessee’s ability to perform
under the Lease from any cause, including, without limitation, by reason of any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation, or other like proceeding relating to Guarantor or Lessee, or any
action taken with respect to the Guaranty by any trustee or receiver or by any
court, whether or not Guarantor shall have had notice or knowledge of any of the
foregoing; and (i) all rights and defenses arising out of an election of
remedies by the creditor; provided, however, that each and all of the foregoing
waivers shall not constitute a waiver of any defenses, counterclaims, setoffs,
cross-claims or other claims of Guarantor based upon any breach by Lessor of any
provision of the Lease.

 

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7. REPRESENTATIONS AND WARRANTIES. Guarantor makes the following representations
and warranties which shall be continuing representations and warranties until
this Guaranty expires in accordance with the provisions contained herein:

 

(a) Guarantor is a corporation duly organized or incorporated under the laws of
Delaware without limitation as to the duration of its existence and is in good
standing. Guarantor has the corporate power and adequate authority to make and
carry out this Guaranty.

 

(b) The execution, delivery, and performance of this Guaranty are duly
authorized and do not require the consent or approval of any governmental body
or other regulatory authority; are not in contravention of, or in conflict with,
any law or regulation, or any term or provision of the Articles of Incorporation
or Bylaws of Guarantor; and this Guaranty is a valid and legally binding
obligation of Guarantor enforceable in accordance with its terms.

 

(c) The execution and delivery of this Guaranty are not, and the performance of
this Guaranty will not be in contravention of. or in conflict with, any
agreement, indenture, or undertaking to which Guarantor is a party or by which
Guarantor or any of Guarantor’s property is or may be bound or affected and do
not, and will not, cause any security interest, lien, or other encumbrance to be
created or imposed upon any such property.

 

(d) Guarantor hereby acknowledges and warrants that Guarantor has derived or
expects to derive a financial or other benefit or advantage from the Lease.

 

8. MISCELLANEOUS GUARANTY MATTERS. Notwithstanding any provision of this
Guaranty to the contrary, Guarantor hereby agrees as follows:

 

(a) If at any time in connection with any sale, transfer or financing of all or
any portion of the Building, any Lease of the Premises, any assignment of the
Lease, any amendment of the Lease, any exercise by the Lessee of any option
under the Lease or any other situation, event or context with respect to which
Lessor, in good faith,-determines may put in issue the validity of any portion
of this Guaranty (if no reaffirmation were obtained), Lessor requests
reaffirmation by Guarantor that this Guaranty remains in full force and effect
in accordance with the terms hereof and with respect to the Lease, as then
modified, extended, altered or assigned, subject to Paragraph 4 above, Guarantor
shall, within fifteen (15) days of Lessor’s written request, execute and deliver
to Lessor such documents of reaffirmation as Lessor may reasonably request;

 

(b) If at any time in connection with any sale, transfer or financing of all or
any portion of the Building, any Lease of the Premises, any assignment of the
Lease, any amendment of the Lease, any exercise by the Lessee of any option
under the Lease or any other situation, event or context with respect to which
Lessor, in good faith, determines may put in issue the validity of

 

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any portion of this Guaranty (if no estoppel were obtained), Guarantor shall,
within fifteen (15) days of Lessor’s written request, execute and deliver to
Lessor such estoppel certificates relating to the Lease, Lessee, this Guaranty
or Guarantor as Lessor shall reasonably request; and

 

(c) Guarantor shall, within ten (10) days of Lessor’s written request, provide
to Lessor financial statements covering the then current fiscal year to date and
its two most recently completed fiscal years. Such financial statements shall be
prepared in accordance with generally accepted accounting principles and shall
be certified or reviewed by an independent certified public accountant.
Notwithstanding the foregoing, provided the stock of Guarantor is publicly
traded, it may comply with its obligation under this Section 8(c) by providing
the most recently published disclosure documents (e.g., annual report, 10K, 8K).

 

9. ADDITIONAL DEFINED TERMS. If Lessor disposes of, sells, transfers, assigns,
hypothecates, or otherwise conveys its interest in the Lease, or any pan
thereof, “Lessor” as used in this Guaranty, shall mean Lessor’s successor. The
word “successor” is used in its most comprehensive sense and includes any
assignee, transferee, personal representative, or other person or entity
succeeding lawfully, and pursuant to the provisions of the Lease to the
respective rights or obligations of either party.

 

10. RECOVERY OF ENFORCEMENT COSTS. If Guarantor elects to enforce Lessor’s
obligations or if Lessor elects to enforce Guarantor’s obligations under this
Guaranty, the non-prevailing party (as determined by non-appealable decision of
court of suitable jurisdiction), or any of them, shall pay to the other all
costs incurred arising out of or relating to such enforcement (including,
without limitation, attorneys’ fees) which obligation by such party to pay such
costs shall begin to accrue upon retention by the prevailing party of attorneys,
and shall be enforceable and payable regardless of whether any suit is actually
filed or prosecuted to judgment.

 

11. APPLICABLE LAW: SEVERABILITY. The provisions under this Guaranty shall be
governed by and construed in accordance with the laws of New York, without
regard to principles of conflicts of laws, and its terns and provisions may not
be waived, altered, modified, or amended except in writing duly signed by the
parties hereto. If any provision of this Guaranty shall for any reason be
determined by a court of competent jurisdiction to be unenforceable by Lessor in
any respect, such unenforceability shall not affect any other provision hereof,
and this Guaranty shall be construed as if such unenforceable provision had not
been contained herein.

 

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12. NOTICES. All notices and other communications hereunder (a) shall be in
writing and delivered by certified mail (return receipt requested) or by
overnight courier and shall be deemed duly received (i) forty-eight (48) (not
including Saturdays, Sundays or holidays) hours after being delivered to the
overnight courier, when delivered by overnight courier, and (ii) ninety-six
(96) (not including Saturdays, Sundays or holidays) hours after being deposited
in the United States mail in accordance with then current certified mail
procedures, in the case of certified mail, and (b) shall be delivered or
addressed to the appropriate address described below or to such other address as
a particular party may From time to time designate in writing to the other
party:

 

Guarantor:

  

Learning Tree International Inc.

6035 W. Century Boulevard

Los Angeles, California 90045

Attn: Vice-President, Administration

Lessor:

  

CBS Broadcasting Inc.

51 West 52nd Street

New York, NY 10019

Attn: Real Estate Department

Lessee:

  

Learning Tree International USA Inc.

1831 Michael Faraday Drive

Reston, Virginia 20190

Attn: Financial Controller

 

13. BINDING. Guarantor’s obligations under this Guaranty shall be binding upon
Guarantor’s successors and shall inure to the benefit of and is enforceable by
Lessor and its successors, assigns, and mortgagees.

 

14. LITIGATION MATTERS. Guarantor and Lessor hereby agree that in any action or
proceeding brought on, under or by virtue of this Guaranty (a) Lessor and
Guarantor I shall and do hereby waive trial by jury, (b) Lessor and Guarantor
agree that any such action or proceeding shall have its venue in New York
County, or the United States District Court having jurisdiction over New York
County, and (c) Lessor and Guarantor each agree to submit to the jurisdiction of
any court described in clause (b).

 

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15. COUNTERPARTS. This Guaranty may be executed in counterparts each of which
shall be deemed as an original, but all of which taken together shall constitute
one and the same document.

 

IN WITNESS WHEREOF, the undersigned Guarantor, and Lessee have executed this
Guaranty as of July 8th, 1998.

 

GUARANTOR: LEARNING TREE INTERNATIONAL, INC.

By:

 

/s/ Eric R. Garen

Name:

 

Eric R. Garen

Title:

 

President

By:

 

/s/ Gary R. Wright

Name:

 

Gary R. Wright

Title:

 

VP, Finance & CFO

LESSEE: LEARNING TREE INTERNATIONAL, USA, INC.

By:

 

/s/ David C. Collins

Name:

 

David C. Collins

Title:

 

Vice President

By:

 

/s/ Mary C. Adams

Name:

 

Mary C. Adams

Title:

 

President

 

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