Exhibit 10.8


 


 


AGREEMENT OF LEASE


BETWEEN


G.T.J. CO., INC., Landlord


AND


AVIS RENT A CAR SYSTEM, INC., Tenant

















 


 


TABLE OF
CONTENTS


	
  ARTICLE 1

  	
   

  	
   

  
	
  DEMISED PREMISES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  TERM

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  RENT

  	
   

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
  USE OF DEMISED
  PREMISES

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  IMPOSITIONS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  CONSTRUCTION OF
  IMPROVEMENTS BY LESSEE

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  REPAIRS AND
  MAINTENANCE OF THE DEMISED PREMISES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  LESSEE’S
  ALTERATIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  UTILITIES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  PRE-EXISTING
  ENVIRONMENTAL CONDITIONS; ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;
  REQUIREMENTS OF LAW

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  INSURANCE

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  
	
  DAMAGE OR
  DESTRUCTION

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  
	
  ASSIGNMENT AND
  SUBLETTING

  	
   

  	
  29

  



 



 i
 






 



 


	
  ARTICLE 14

  	
   

  	
   

  
	
  INDEMNIFICATION

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  	
   

  
	
  CONDEMNATION

  	
   

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
   

  
	
  RIGHT TO
  INSPECT; POSTING SIGNS

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
   

  
	
  ZONING

  	
   

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
   

  
	
  DEFAULT
  PROVISIONS

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  	
   

  	
   

  
	
  ATTORNEYS’ FEES

  	
   

  	
  44

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20

  	
   

  	
   

  
	
  WAIVER OF
  REDEMPTION; COUNTERCLAIM; TRIAL BY JURY

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21

  	
   

  	
   

  
	
  NO WAIVER

  	
   

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22

  	
   

  	
   

  
	
  END OF TERM

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23

  	
   

  	
   

  
	
  BROKER

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24

  	
   

  	
   

  
	
  QUIET ENJOYMENT

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25

  	
   

  	
   

  
	
  NON-LIABILITY OF
  LANDLORD

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26

  	
   

  	
   

  
	
  APPLICABLE LAW
  AND CONSTRUCTION

  	
   

  	
  49

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27

  	
   

  	
   

  
	
  BINDING EFFECT
  OF LEASE

  	
   

  	
  50

  



 



 ii
 






 



 


	
  ARTICLE 28

  	
   

  	
   

  
	
  NOTICES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29

  	
   

  	
   

  
	
  FEE MORTGAGES

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30

  	
   

  	
   

  
	
  ESTOPPEL
  CERTIFICATES

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31

  	
   

  	
   

  
	
  REPRESENTATIONS

  	
   

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
  53

  



 


List of Schedules


Schedule A - Description
of the Real Property


Schedule B – Location of
R-Zone and De-Map Parcels


Schedule C – Letter describing Tenant’s Insurance
Coverage

(including, without limitation, environmental insurance)



 iii















 


AGREEMENT OF LEASE


AGREEMENT OF LEASE (the “Lease”) made as of the
31st day of October, 2003 between G.T.J. CO., INC.,
a corporation organized and existing under the laws of the State of New York,
with offices located at 114-15 Guy R. Brewer Boulevard, Jamaica, New York 11434
(the “Landlord”), and AVIS RENT A CAR SYSTEM, INC., a corporation
organized and existing under the laws of the State of Delaware, with offices at
6 Sylvan Way, Parsippany, New Jersey 07054 (the “Tenant”).


ARTICLE 1

DEMISED PREMISES


Section 1.01 – Description of Demised Premises.  In consideration of and subject to the terms,
covenants, agreements, provisions, conditions and limitations set forth in this
Lease, Landlord has agreed to demise and lease unto Tenant and Tenant has
agreed to hire and take from Landlord those certain parcels of real property
located in East Elmhurst, County of Queens and State of New York, consisting of
the “Building Parcel” and the “Land Parcel,” as more particularly
described on Schedule A annexed hereto and made a part hereof (the “Land”),
together with all buildings and improvements erected or to be erected thereon
(the “Improvements”), and together with all of Landlord’s right, title
and interest in all easements, rights and other matters appurtenant to the Land
or the Improvements and in and to any land lying in the bed of any roads
adjacent to the Land, except that air rights and transferable development
rights shall not be demised or leased to Tenant under this Lease (such Land,
Improvements, easements and rights being hereinafter collectively referred to
as the “Demised Premises”).  Upon
completion of the de-mapping of the De-Map Parcel (as hereinafter defined), the
Demised Premises shall include the De-Map Parcel.


Section 1.02 – Condition of Demised Premises.  (a)  Tenant acknowledges and agrees that
it shall hire and take the Demised Premises from Landlord in its present state
of title, subject to all existing liens, charges, encumbrances and any other
matters affecting title.  Except as
specifically set forth in this Lease, Tenant agrees to accept the Demised
Premises “as is,” in the existing condition and state of repair as of the date
hereof and without recourse to Landlord. 
Tenant further agrees that no representations, statements or warranties,
express or implied, have been made by or on behalf of Landlord and Tenant has
not relied on any representations, statements or warranties, express or
implied, in respect of the Demised Premises or in respect of the condition
thereof or the present or future use or occupation that may be made thereof,
the zoning or other Requirements (as hereinafter defined), transferable
development rights, encumbrances thereon, appurtenances, or title thereto
(except as may be expressly set forth in this Lease).  Without limiting the generality of the
foregoing, Tenant has not









 



 


relied
on any representations or warranties other than as expressly set forth herein
as to (1) the current or future real estate tax liability, assessment or
valuation of the Demised Premises, (2) the potential qualification of the
Demised Premises for any and all benefits conferred by federal, state or
municipal laws, whether for subsidies, special real estate tax treatment,
insurance, mortgages, or any other benefits, whether similar or dissimilar to those
enumerated, (3) the compliance of the Demised Premises, in its current or
any future state, with applicable zoning ordinances and the ability to obtain a
change in the zoning or a variance with respect to the Demised Premises’
non-compliance, if any, with said zoning ordinances, (4) the availability
of any financing for the purchase, alteration or operation of the Demised
Premises from any source, (5) the current or future use of the Demised
Premises, including, but not limited to, the Demised Premises’ use for
residential or commercial purposes, (6) the present or future structural
and physical condition of any building, (7) the presence or absence of any
Requirements and any violations thereof, and (8) the presence or absence
of any Hazardous Materials (as hereinafter defined), and the compliance or
non-compliance with any Environmental Laws (as hereinafter defined).  Landlord shall in no event whatsoever be
liable for any latent or patent defects in the Demised Premises.  Requirements shall mean any and all present
and future laws, rules, orders, ordinances, regulations, statutes and
requirements of any Governmental Authority (as hereinafter defined).


(b)           Except
as hereinafter set forth, (i) the Landlord shall cure all notes or notices
of violations of law or municipal ordinances, and all orders or requirements
issued as of the Commencement Date by any Governmental Authority (“Existing
Violations”), (ii) the Demised Premises shall be leased to Tenant free
of all Existing Violations, and (iii) Landlord’s duty to cure Existing
Violations shall survive delivery of possession of the Demised Premises to the
Tenant.  Notwithstanding anything in this
Lease to the contrary, (A) Landlord shall not be obligated to cure
Existing Violations if same shall be cured by Tenant’s Initial Construction (as
hereinafter defined) and (B) Landlord shall not be obligated to remove of
record prior to delivery of possession of the Demised Premises boiler violation
v1160/77 noted against the Demised Premises; provided, however, that Landlord
shall have taken all required actions to cure such boiler violation noted
against the Demised Premises and pay all fees in connection therewith and shall
take all further necessary actions to remove such boiler violation of record.


(c)           Landlord represents and warrants that
the mortgage loan from American Airlines, Inc. to Varsity Transit, Inc.
(predecessor-in-interest to Landlord), dated May 31, 1977, and recorded on
June 3, 1077, in Reel 991, page 423, in Queens County, in the
original principal amount of $602,082.00 (the “American Airlines Mortgage”),
has been paid in full and covenants to take all commercially reasonable steps
necessary to satisfy the American Airlines Mortgage of record.



 2
 






 



 


ARTICLE 2

TERM


Section 2.01 –Term.  This Lease shall be for a term (the “Term”)
of twenty (20) years, which shall commence on November 1, 2003 (the “Commencement
Date”) and shall end at midnight on October 31, 2023 (the “Expiration
Date”), unless such Term shall sooner cease or expire as hereinafter
provided.  If Landlord is unable to give
possession of the Demised Premises on the Commencement Date for any reason
whatsoever, Landlord shall not be liable for failure to give such possession
and the validity of this Lease shall not be impaired under such circumstances,
nor shall the same be construed in any wise to extend the Term, but the Fixed
Rent and Additional Rent payable hereunder shall be abated until after Landlord
shall have given Tenant written notice that the Landlord is able to deliver
possession of the Demised Premises.  The
provisions of this Section are intended to constitute “an express
provision to the contrary” within the meaning of Section 223-a of the New
York Real Property Law.


ARTICLE 3

RENT


Section 3.01 – Fixed Rent.


(a)           Tenant
covenants to pay to Landlord a minimum fixed annual rent (“Fixed Rent”)
during the Term as follows:


(i)            Subject
to increases in Fixed Rent as provided in this Article and subject to Article 17,
Fixed Rent for the Term shall be One Million Eight Hundred Thousand and 00/100
($1,800,000.00) Dollars per annum, payable for Tenant’s convenience in equal
monthly installments of One Hundred Fifty Thousand and 00/100 ($150,000.00)
Dollars.


(b)           Tenant
shall pay the first month’s Fixed Rent upon its execution of this Lease.


(c)           The
Fixed Rent shall increase as follows:


(i)            The
Fixed Rent for the sixth (6th) through tenth (10th) Lease Years (as hereinafter defined) shall be the
greater of: (A) one hundred five (105%) percent of the Fixed Rent in
effect during the fifth (5th)
Lease Year, or (B) the Fixed Rent in effect during the fifth (5th) Lease Year plus an amount
per annum computed by multiplying the Fixed Rent in effect during the fifth (5th) Lease Year by the Cost of
Living Percentage Increase (as hereinafter defined) for the first (1st) through fifth (5th) Lease Years, up to a maximum
of one hundred fifteen (115%) percent of the Fixed Rent in effect during the
fifth (5th) Lease
Year;



 3
 






 



 


(ii)           The
Fixed Rent for the eleventh (11th) through fifteenth (15th) Lease Years shall be the greater of: (A) one
hundred five (105%) percent of the Fixed Rent in effect during the tenth (10th) Lease Year, or (B) the
Fixed Rent in effect during the tenth (10th) Lease Year plus an amount per annum computed by
multiplying the Fixed Rent in effect during the tenth (10th) Lease Year by the Cost of Living
Percentage Increase for the sixth (6th)
through tenth (10th)
Lease Years, up to a maximum of one hundred fifteen (115%) percent of the Fixed
Rent in effect during the tenth (10th)
Lease Year; and


(iii)          The
Fixed Rent for the sixteenth (16th) through twentieth (20th) Lease Years shall be the greater of: (A) one
hundred five (105%) percent of the Fixed Rent in effect during the fifteenth
(15th) Lease
Year, or (B) the Fixed Rent in effect during the fifteenth (15th) Lease Year plus an amount
per annum computed by multiplying the Fixed Rent in effect during the fifteenth
(15th) Lease Year
by the Cost of Living Percentage Increase for the eleventh (11th) through fifteenth (15th) Lease Years, up to a maximum of one
hundred fifteen (115%) percent of the Fixed Rent in effect during the fifteenth
(15th) Lease
Year.


(d)           For
purposes of this Lease, the term “Lease Year” shall mean for (i) the
first (1st)
Lease Year, the one (1) year period commencing on the Commencement Date
plus, if the Commencement Date is not the first day of a calendar month, the
number of days between the Commencement Date and the end of the month in which
the Commencement Date occurs, and (ii) for each Lease Year thereafter, the
one (1) year period commencing on the day after the expiration of the
preceding Lease Year.


(e)           The
term “Cost of Living Percentage
Increase” shall mean the percentage increase in the “Index” (hereinafter defined) for
the period specified.  Such Cost of
Living Percentage Increase shall be computed for each period under
consideration by subtracting the Index for the earlier date specified in the
Lease from the Index for the later date specified in the Lease and dividing the
difference by the Index in effect for the earlier date.  For example, if the Index for the month of August 2003
is 175, and the Index for the month of August 2008 shall be 225, the Cost
of Living Percentage Increase for such period shall be computed as follows:




	
  Index for August 2008

  	
   

  	
  225

  	
   

  	
   

  
	
  Less Index for
  August 2003

  	
   

  	
  (175

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Difference

  	
   

  	
  50

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Difference
  divided by Index for August 2003

  	
   

  	
  (50/175) = 28.57%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cost of Living
  Percentage Increase =

  	
   

  	
  28.57

  	
  %

  	
   

  






 



 4
 






 



 


(f)            The
term “Index” shall mean
the Consumer Price Index published by the United States Bureau of Labor
Statistics, or its successor, for All Urban Consumers, New York - Northern N.J.
– Long Island, NY-NJ-CT-PA, , All Items (1982-1984 = 100).  If the Index is no longer published by the
United States Bureau of Labor Statistics, or any successor thereto, or if the
reference base for the Index is changed, the Index shall thereafter be any
successor index or method of conversion or re-basing of the index as determined
by the Landlord.  If the United States
Bureau of Labor Statistics or any successor thereto shall publish a means for
converting the base Index of 1982-1984 = 100, such re-basing method shall be
used if annual Index figures are no longer published under the original basing
set forth in this Section.  However, if
Index figures continue to be published by the United States Bureau of Labor
Statistics, or its successor, under the basing method designated in this
Section, such Index figures shall continue to be used.


Section 3.02 – Manner of Payment.  Tenant covenants and agrees to pay Landlord
the Fixed Rent at the principal office of Landlord, or at such place as
Landlord shall from time to time direct in writing without any abatement,
reduction, setoff, counterclaim or deduction whatsoever.  The Fixed Rent shall be paid in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of private and public debts.  For Tenant’s convenience, Fixed Rent shall be
payable by Tenant in equal monthly installments in advance on the first day of
each calendar month included in the Term.


Section 3.03 – Proration of Fixed Rent.  For any portion of a calendar month included
at the beginning or end of the Term, Tenant shall pay 1/30th of the then
applicable monthly installment of Fixed Rent for each day of such portion,
payable in advance at the beginning of such portion.


Section 3.04 – Late Payment.  In any case in which any payment of Fixed
Rent or Additional Rent (as hereinafter defined) or any other sum due Landlord
by Tenant under this Lease is not paid within five (5) days of the day
when same is due, such payment shall bear interest at the rate of eighteen
percent (18%) per annum (the “Default Rate”) from the date such payment
was due and payable.  Tenant agrees that
the Default Rate imposed herein is fair and reasonable, complies with all laws,
regulations and statutes, and constitutes an agreement between Landlord and
Tenant as to the estimated compensation for costs and administrative expenses
incurred by Landlord due to the late payment to Landlord by Tenant.  The Default Rate shall be in addition to any
other right or remedy hereunder and shall be due and payable as Additional
Rent.  Tenant further agrees that the
Default Rate does not constitute a lender or borrower/creditor relationship
between Landlord and Tenant.  In
addition, Tenant shall pay upon demand by Landlord any attorneys’ fees, costs
and disbursements incurred by Landlord in connection with the imposition,
collection or payment of said interest, said amounts to be deemed Additional
Rent.



 5
 






 



 


Section 3.05 – Additional Rent.  Unless another time shall be herein expressly
provided, any additional rent, charges or sums payable by Tenant under this
Lease (collectively, “Additional Rent”) shall be due and payable within
ten (10) business days after written demand by Landlord, and Landlord
shall have the same remedies for failure to pay the Additional Rent as for a
non-payment of Fixed Rent.  Unless
otherwise specifically instructed by Landlord, all Additional Rent shall be
paid in the same currency and, at the same place as is the Fixed Rent required
to be paid hereunder, and shall be paid without any abatement, reduction,
setoff, counterclaim or deduction whatsoever.


Section 3.06 – Landlord Cure Rights.  If Tenant shall default in making any payment
required to be made by Tenant or in performing any obligation of Tenant under
this Lease which shall require the expenditure of money, including, but not
limited to Impositions (as hereinafter defined), Landlord may, but shall not be
obligated to, make such payment on behalf of Tenant or expend such sum as may
be necessary to perform or fulfill such obligation.  Any sums so paid by Landlord shall be deemed
Additional Rent.


Section 3.07 – Net Lease.  The Fixed Rent hereinabove provided for shall
be in addition to all other payments to be made by Tenant as herein
provided.  It is the purpose and intent
of the parties hereto that the Fixed Rent shall be absolutely net to Landlord,
so that this Lease shall yield, net to the Landlord, the Fixed Rent and that
all costs, expenses and obligations of every kind and nature whatsoever
relating to the Demised Premises which may arise or become due during the Term
of this Lease shall be paid by Tenant and that Landlord shall be indemnified
and saved harmless by Tenant from and against the same.


Section 3.08 – Rent Regulations.  If all or any part of the Fixed Rent or
Additional Rent shall at any time become uncollectible, reduced or required to
be refunded by virtue of any Requirements (including rent control or
stabilization laws, however denominated), then for the period prescribed by
said Requirements, Tenant shall pay to Landlord the maximum amounts permitted
pursuant to said Requirements (but in no event to exceed the amounts which
would otherwise be due and payable under this Lease as if such Requirements
were not in effect), and Tenant shall execute and deliver such agreement(s) and
take such other steps as Landlord may reasonably request to permit Landlord to
collect the maximum fixed rent and additional rent which, from time-to-time
during the continuance of such legal rent restriction, may be legally
permissible (and not in excess of the amounts then reserved therefor under this
Lease).  Upon the expiration or other
legal termination of the applicable period of time during which such amounts
shall be uncollectible, reduced or refunded: 
(a) the Fixed Rent and Additional Rent shall become and shall
thereafter be payable in accordance with the amounts reserved herein for the
periods following such expiration or termination, and (b) Tenant 



 6
 






 



 


shall
pay to Landlord as Additional Rent, within ten (10) days after demand or
such longer period as is legally permissible if ten (10) days shall not be
lawful, all uncollected, reduced or refunded amounts that would have been
payable for the above-said period absent such Requirements.


Section 3.09 – Survival.  The provisions of this Article 3 shall
survive the expiration or other termination of this Lease.  Landlord’s failure to bill Tenant for Fixed
Rent or Additional Rent or any sum due under this Lease shall in no way excuse
Tenant from its obligation to pay Fixed Rent or Additional Rent or any sum due
under this Lease, or constitute a waiver of Landlord’s right to thereafter bill
and collect such Fixed Rent or Additional Rent or any sum due under this Lease
from Tenant in accordance with the terms of this Lease.


ARTICLE 4

USE OF DEMISED PREMISES


Section 4.01 – Use.


(a)           Tenant
shall use the Demised Premises (i) for motor vehicle rental and leasing
including the storage and maintenance of passenger motor vehicles, trucks and
buses, fueling, washing and cleaning rental fleet vehicles and buses and for
administrative offices and for all other legal purposes incidental thereto (“Initial
Use”), and (ii) for any other legal purpose with the prior written
consent of the Landlord, not to be unreasonably withheld (together with the
Initial Use, the “Permitted Use”). 
Tenant may not use the Demised Premises for any other purposes.


(b)           In
no event shall the Demised Premises be used for any of the following: (i) a
school or classroom, (ii) gambling activities, (iii) conduct of
obscene, pornographic or disreputable activities, (iv) offices of an
agency, department or bureau of the United States Government, any state or
municipality within the United States or any foreign government, or any
political subdivision of any of them, (v) offices of any charitable,
religious, union or other not-for-profit organization; (vi) offices of any
tax exempt entity within the meaning of Section 168(h)(2) of the
Internal Revenue Code of 1986, as amended, or any successor or substitute
statute, or rule or regulation applicable thereto, (vii) any
manufacturing or industrial use, or (viii)  for any purpose which would constitute a public or private
nuisance (each, a “Prohibited Use”).


Section 4.02 – Compliance with Requirements.  Tenant shall at all times conduct its
activities on the Demised Premises in full compliance with all Requirements of
any or all of the federal, state, city, county and borough governments and
rules, regulations, orders and directives of any and all departments,
subdivisions, bureaus, agencies or offices thereof, and of any other
governmental, public or quasi-public authorities having



 7
 






 



 


jurisdiction
over the Demised Premises, and the direction of any public officer pursuant to
law, whether now or hereafter in force (“Governmental Authority”).


ARTICLE 5

IMPOSITIONS


Section 5.01 – Impositions.  The term “Impositions” shall mean all
real estate taxes, assessments, payments in lieu of taxes, water meter and
water charges, sewer rentals, excises, levies, license and permit fees, charges
for public utilities or other taxes, charges for any easement or agreement
maintained for the benefit of the Demised Premises, charges or burdens
assessed, imposed or becoming a lien upon or with respect to the use or
ownership of the Demised Premises or any other taxable interest therein, or
upon the Improvements and other improvements erected thereupon; whether any
such Impositions are general or special, ordinary or extraordinary, foreseen or
unforeseen and whether same are imposed by a Governmental Authority or any
other taxing authority having jurisdiction over the Demised Premises of every
character, kind and nature whatsoever, but shall not include income,
intangible, franchise, capital stock, estate or inheritance taxes of Landlord
(unless the same shall be in lieu of “Impositions” as herein defined by
whatever name the tax may be designated).


Section 5.02 – Payment of Impositions.  Tenant shall, during the Term of this Lease,
pay and discharge, as Additional Rent, all Impositions when due; provided,
however, that if, by law, any Imposition may at the option of the taxpayer be
paid in installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Tenant may exercise the option to pay the same in
such installments, provided such installment payments are not prohibited by the
terms of any Mortgage (as hereinafter defined). 
Simultaneously with the payment of any of such Impositions directly to
the imposing authority, Tenant shall send to Landlord written evidence of such
timely payment by Tenant.  A copy of the
Imposition invoice or demand from the applicable imposing authority shall be
sufficient evidence of the amount of the subject Impositions.  Tenant shall also pay or cause to be paid, in
the same manner as Impositions are paid, any occupancy taxes arising under or
in connection with this Lease.  Tenant
shall be responsible for and shall pay as Additional Rent all penalties, fees,
fines, interest, late charges and other similar amounts for the late payment of
any Impositions.


Section 5.03 – Landlord’s Demand.  The provisions of this Article 5 shall
survive the expiration or other termination of this Lease.  Landlord’s failure during the term of this
Lease to prepare and deliver any Imposition bill, invoice or demand or Landlord’s
failure to make a demand for Additional Rent due hereunder shall not in any way
waive or cause Landlord to forfeit or surrender its rights to collect any of
the foregoing items of Additional Rent which may have become due during the
Term of this Lease.



 8














 


 


Section 5.04 – Proration of Impositions.  Any Imposition, other than an Imposition
which has been converted into installment payments as referred to in Section 5.02
hereof, relating to a fiscal period of the taxing authority, a part of which
period is included within the Term of this Lease and a part of which is
included in a period of time before the Term and/or after the expiration or
other termination of the Term of this Lease, shall (whether or not such
Imposition shall be assessed, levied, confirmed, imposed upon or in respect of
or become a lien upon the Demised Premises, or shall become payable during the
Term of this Lease) be apportioned between Landlord and Tenant as of the
Commencement Date and/or as of the expiration or other termination of the Term
of this Lease, so that Tenant shall pay that portion of such Imposition which
that part of such fiscal period included in the period of time on and after the
Commencement Date and/or prior to the expiration or other termination of the
Term of this Lease bears to such fiscal period, and Landlord shall pay the
remainder thereof, provided, however, that Tenant shall not be entitled to
receive any apportionment if there be an Event of Default hereunder.


Section 5.05 – Right to Contest.  Landlord and Tenant, on behalf of and with
Landlord’s prior consent, shall be eligible to institute proceedings to reduce
the assessed valuation of the Demised Premises. 
In the event the Landlord shall obtain a tax refund or reduction as a
result of any such tax certiorari
proceedings or as a result of any other litigation or agreement involving the
relevant taxing authorities (collectively, a “Proceeding”), then,
provided Tenant is not then in default under the terms of this Lease and after
all applicable grace periods have expired and after the final conclusion of all
appeals or other remedies, Tenant shall be entitled to the net refund
applicable to any period as to which Tenant has paid Impositions pursuant to
this Article 5.  Tenant’s net refund
may be applied by Landlord to any amounts payable to Landlord under this
Lease.  As used herein the term “net
refund” means the refund plus interest, if any, thereon, paid by the
governmental authority less appraisal, engineering, expert testimony, attorney,
consultant, architect, printing, administrative and filing fees and all other
Landlord costs and expenses of a Proceeding. 
Tenant shall pay to Landlord all appraisal, engineering, expert
testimony, attorney, printing and filing fees and all other reasonable costs
and expenses incurred by Landlord in connection with any Proceeding.


ARTICLE 6

CONSTRUCTION OF IMPROVEMENTS BY LESSEE


Section 6.01 – General.  Tenant covenants and agrees that (a) Tenant
will provide Landlord with detailed plans and specifications (“Plans and
Specifications”) satisfying the requirements of Section 6.09(a), in
accordance with the succeeding Sections of this Article, for the construction
of Tenant’s Initial Construction (as hereinafter defined) and (b) after
Landlord has approved the Plans and Specifications, in accordance with the
succeeding Sections of this Article, Tenant will promptly



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thereafter
proceed diligently and expeditiously to complete the Initial Construction,
using licensed, bonded (by a surety company licensed to do business in New
York) and reputable contractors, architects and engineers, prior to the
expiration of all time frames set forth in any building permit issued in
connection with the Initial Construction. 
Tenant shall provide Landlord with prior notice of the identities of the
contractors, architects and engineers. 
The term “Initial Construction” shall mean (i) the
installation of fueling facilities and other improvements on the Land Parcel, (ii) the
modification, expansion, relocation and/or demolition of the existing fuel
island and a portion of the existing building adjacent thereto on the Building
Parcel, and (iii) the modification and renovation of the existing
improvements on the Building Parcel for Tenant’s use of the Demised Premises in
accordance with the terms of this Lease. 
Tenant reserves the right to modify or alter its plans for the Initial
Construction prior to submitting its Plans and Specifications to Landlord for
Landlord’s approval.


Section 6.02 – Initial Construction.  The Initial Construction shall be erected wholly
within the boundary lines of the Land in compliance with all applicable
Requirements and comply with all zoning laws and ordinances.  Tenant’s Initial Construction shall be done
in a manner which does not create any labor disharmony or dispute at the
Demised Premises.


Section 6.03 – Commencement of Construction.  Tenant shall not commence the Initial
Construction unless and until Tenant shall have delivered to Landlord:


(a)           Copies
of all necessary permits, certificates and authorizations required by any
Governmental Authority in connection with the Initial Construction, together
with evidence that such permits, certificates and authorizations have been paid
for in full.  Landlord shall not
unreasonably refuse to join in the application for such permits, certificates
or authorizations and shall reasonably cooperate with Tenant, without charge
except to the extent Landlord’s participation required is more than de minimus in which case Tenant agrees to
pay to Landlord, upon demand as Additional Rent hereunder, a reasonable fee and
Landlord’s costs paid or incurred in connection therewith.  Landlord shall not be subject to any
liability for the payment of any costs or expenses in connection with any such
applications, and Tenant hereby indemnifies and agrees to defend and hold
Landlord harmless from and against any and all such costs and expenses;


(b)           Plans
and Specifications for the proposed Initial Construction satisfying the
requirements of Section 6.09(a) hereof.  In connection with its approval of such Plans
and Specifications, Landlord is authorized to retain architects of its choice,
at its sole cost and expense, to consult and assist Landlord in its analysis,
review and approval of such Plans and Specifications in order to determine
compliance with the terms of this Lease and of all applicable requirements of
any Governmental Authority.  In the event
Landlord shall not approve such Plans and Specifications, Landlord shall so



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notify
Tenant of such disapproval, together with a memorandum setting forth Landlord’s
required modifications, amendments and corrections.  Tenant shall, within thirty (30) days after
receipt of such notice, resubmit its Plans and Specifications to Landlord for
approval.  Upon approval by Landlord,
Landlord and Tenant shall initial the Plans and Specifications reflecting such
approval.  Thereafter, Tenant may not
materially change the Plans and Specifications without the prior written
consent of Landlord;


(c)           A
contract for the construction of the Initial Construction in accordance with
the Plans and Specifications and satisfying the requirements of Section 6.09(b);
and


(d)           Tenant
shall use its best efforts to obtain an agreement from Tenant’s architect and
general contractor to continue to perform for the benefit of Landlord, if Landlord
so requests, their respective obligations under their contracts with Tenant in
the event of termination of this Lease or upon Landlord’s re-entry upon the
Demised Premises following a default by Tenant prior to completion of the
Initial Construction, provided such architect and/or general contractor are
paid for their respective services in accordance with such contracts.


Section 6.04 – Insurance.  At all times during and until the completion
of the Initial Construction, Tenant shall, at Tenant’s sole cost and expense,
maintain, or cause to be maintained, in addition to the insurance required
under Article 11 hereof, one hundred percent (100%) completed value
builders’ risk insurance; workmen’s compensation insurance covering all persons
employed in connection with the Initial Construction and with respect to whom
death or bodily injury claims could be asserted against Landlord or Tenant; and
general comprehensive commercial liability insurance for the mutual benefit of
Tenant and Landlord expressly covering the additional hazards due to the
construction, with combined single coverage limits of not less than Ten Million
and 00/100 Dollars ($10,000,000.00) in the event of death or bodily injury or
property damage.  The policy of general
comprehensive commercial liability insurance, in so far as it relates to
property damage, shall not contain any restrictive clauses relating to
excavating, sheet piling, moving, shoring, underpinning, removal and rebuilding
of structural supports or subsurface work or any similar restrictive
clauses.  The general comprehensive
commercial liability insurance provided for in this Section may be
affected by an appropriate endorsement, if obtainable, upon the insurance
required to be maintained by Tenant pursuant to Section 11.01(d) hereof.  All insurance of the character in this Subsection described,
shall be effected under valid and enforceable policies issued by insurers of
recognized responsibility and which have been approved in writing by Landlord
as to qualification of insurers and the amounts of insurance to be written by
each, which approval Landlord agrees shall not be unreasonably withheld.  The general comprehensive commercial
liability insurance policy and the builder’s risk insurance policies above
mentioned shall name Landlord and Tenant as the insured as their respective
interests may appear and may also



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include
as the insureds, if required by Landlord, any Mortgagee.  The loss, if any, under any of the builder’s
risk policies above mentioned shall be adjusted by and shall be payable to
Tenant and such proceeds paid to Tenant shall be held in trust and disbursed
only for the purposes of completing the construction.  All such policies or certificates therefor
issued by the respective insurers shall be delivered to Landlord.  Within ten (10) days after the premium
of each such policy shall become due and payable and the amount thereof shall
be determined, Tenant agrees to pay said premium or cause the same to be paid,
and Landlord shall be furnished with evidence satisfactory to it of such
payment.


Section 6.05 –
[Intentionally Omitted].


Section 6.06 – Final Completion of Initial
Construction.  Tenant
covenants and agrees that:


(a)           the
construction of the Initial Construction shall be performed in a good and
workmanlike manner in accordance with (i) the Plans and Specifications as
approved by Landlord; (ii) all applicable permits, certificates and
authorizations and building and zoning laws and ordinances and with all other
Requirements; and (iii) the terms, covenants and conditions of this Lease;
and


(b)           throughout
the course of such construction and at and after Final Completion of the
Initial Construction (as hereinafter defined), Landlord’s fee estate in the
Demised Premises will be free and clear of all liens and encumbrances arising
out of or connection with such construction. 
Upon completion of the Initial Construction, Tenant shall furnish to
Landlord (i) a certificate from Tenant’s architect certifying that the
Initial Construction has been completed in accordance with the Plans and
Specifications; (ii) copies of either the temporary certificates of
occupancy or the permanent certificate of occupancy for the Initial
Construction; (iii) a complete set of “as built” plans within six (6) months
after Final Completion of the Initial Construction; (iv) a survey of the
Land showing the Initial Construction as built thereon certified to Landlord by
a surveyor reasonably acceptable to Landlord; and (v) evidence reasonably
satisfactory to Landlord of proof of payment in full for the Initial
Construction, including, without limitation, lien waivers in recordable form
received from all architects, engineers, contractors, subcontractors,
materialmen and laborers providing supplies and/or performing work in
connection with the Initial Construction. 
“Final Completion of the Initial Construction” shall be deemed to
have occurred on the date when all of the above have been fully satisfied and
delivered to Landlord in accordance with the terms hereof.


Section 6.07 – Title
to Improvements.  Title
to Existing Improvements shall remain in Landlord.  Title to the Improvements erected by Tenant
on the Land shall be vested solely and exclusively in Tenant until the termination
of this Lease, whereupon title shall vest in Landlord in accordance with Section 22.02.  Concurrent with Landlord’s



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approval of the Plans
and Specifications, Landlord shall notify Tenant of those portions of the
Initial Construction that shall be removed by Tenant at the expiration or other
termination of the Lease in accordance with Article 22 of this Lease.  All salvage and proceeds from any salvage
resulting from alterations or demolition of any existing Improvements pursuant
to the provisions of this Article 6 shall be the property of Tenant or its
immediate or remote grantees.


Section 6.08 –
Landlord’s Approval of Plans. 
Landlord’s retention or approval of the Plans and Specifications or any
other action taken with respect thereto by Landlord or any Mortgagee shall not
constitute an opinion or representation by Landlord or the Mortgagee as to the
sufficiency of said Plans and Specifications or impose any responsibility for
the sufficiency thereof upon Landlord or the Mortgagee.


Section 6.09 –
Plans and Specifications; Construction Contract.


(a)           Plans and Specifications shall be
prepared by an architect satisfactory to Landlord and which Plans and
Specifications shall meet with the approval of Landlord, together with the
approval thereof by any Governmental Authority then exercising jurisdiction
with regard to such work and such Plans and Specifications shall be and become
the sole and absolute property of Landlord in the event that, for any reason,
this Lease shall be terminated.


(b)           The Initial Construction contract
shall be made with a contractor satisfactory to Landlord, providing for the
completion of all work, labor and materials necessary for completion of the
Initial Construction in accordance with the Plans and Specifications.


ARTICLE 7

REPAIRS AND MAINTENANCE OF THE DEMISED PREMISES


Section 7.01 – Maintenance of Demised Premises.  Tenant shall, at its sole cost and expense,
take good care of the Demised Premises, including without limitation, the roof,
structure, exterior and interior walls and finishes, foundations, mechanical,
plumbing, electrical and sanitary systems, water and sewage facilities and
drains, drywells, cesspools, pipes, fencing, landscaping, paving, curbing, all
alleyways, passageways, vaults, ramps, sidewalks adjoining the Demised Premises
(“Appurtenances”) and shall keep same in good order and condition and
make all repairs thereto, ordinary and extraordinary, foreseen and unforeseen
as and when needed to keep them in good order and condition. Except as
otherwise provided herein, Landlord shall have no responsibility and shall not
be required to furnish any services, make any repairs or to perform any other
maintenance work in or about the Demised Premises, and Tenant hereby assumes
the full and sole responsibility, at its sole cost



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and
expense for same, and for the condition of the Demised Premises, including, but
not limited to keeping the Demised Premises and Appurtenances, at its own sole
cost and expense, in a clean and orderly condition, free of snow, ice, rubbish
and obstructions.  Tenant covenants to
keep Landlord’s interest in the Demised Premises free of liens and other
foreclosable impositions arising through Tenant and shall have no obligation
with respect to liens arising through Landlord.


Section 7.02 – Landlord Cure Rights.  In the event (a) Tenant fails to
maintain the Demised Premises in accordance with Section 7.01 above to
Landlord’s reasonable satisfaction or (b) repairs to the Demised Premises
or Appurtenances are made necessary by reason of the acts, omissions or
negligence of Tenant, its agents, directors, shareholders, officers, employees,
subtenants, assignees, customers, licensees or invitees, then in any of such
event(s), Landlord may give Tenant thirty (30) days notice within which to make
such repairs, or if such repairs cannot be made within such thirty (30) day
period, to commence such repairs within thirty (30) days and diligently pursue
them to completion thereafter.  In the
event Tenant fails timely to make such repairs as aforesaid, Landlord shall be
entitled, but shall not be obligated, to make such repairs at Tenant’s expense
without incurring any liability to Tenant by reason thereof upon reasonable
notice to Tenant. Notwithstanding anything herein to the contrary, if, in
Landlord’s sole, reasonable discretion, emergency repairs are necessary,
Landlord may, if Landlord so elects to, make such repairs at any time without
notice to Tenant, at Tenant’s expense. 
All sums expended by Landlord under this Section 7.02 shall be
deemed Additional Rent and payable on demand by Landlord.


Section 7.03 – Shoring.  Tenant shall do, or cause others to do, all
necessary shoring of foundations, supporting walls and the walls of the
Improvements and shall comply with all Requirements with respect thereto and
shall do every other act or thing for the safety and preservation of the
Demised Premises (including the Improvements and any and all other improvements
erected thereon) which may be necessary by reason of any excavation, subsurface
construction, remodeling or other building operation upon any adjoining
property or street, avenue, alley or passageway.


ARTICLE 8

LESSEE’S ALTERATIONS


Section 8.01 – Alterations.  During the Term, Tenant shall not have the
right, without Landlord’s prior written consent, which shall not be
unreasonably withheld or delayed, to modify, expand, relocate or demolish the
structures on the Demised Premises (except for the Initial Construction in
compliance with Article 6) or to make any alterations or modifications to
the roof, structure, exterior walls, foundations,



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mechanical, plumbing,
electrical and sanitary systems, water and sewage facilities and drains,
drywells and cesspools of the Demised Premises.


ARTICLE 9

UTILITIES


Section 9.01 – Utilities.  Tenant shall provide, at its own cost and
expense, fuel, heat, water, sewer, electricity, telephone and all other
utilities or services required in connection with its use of the Demised
Premises.  Tenant shall be responsible
for all deposits required by the respective utilities for service.  Tenant shall comply with all requirements of
the utilities supplying said service.


ARTICLE 10

PRE-EXISTING ENVIRONMENTAL CONDITIONS;

ENVIRONMENTAL COMPLIANCE DURING PERIOD OF TENANCY;

REQUIREMENTS OF LAW


Section 10.01 – Pre-Existing Environmental
Conditions.


(a)           Landlord
and Tenant acknowledge and agree that (i) according to a Phase I
Environmental Site Assessment dated August 28, 2003, conducted for Tenant
by MFG, Inc. (“Phase I Study”), a number of recognized environmental
conditions as defined in the Phase I Study (RECs) have been identified at the
Demised Premises; (ii) the Demised Premises have been found to be affected
by petroleum hydrocarbons, including free phase product, in soil and
groundwater; (iii) further characterization of the Demised Premises will
be necessary to more accurately identify the nature and extent of the
contamination, including the extent, if any, of off-site migration; (iv) it
will be necessary to conduct further analysis of remedial options and potential
risks associated with the Demised Premises; and (v) remedial action will
also be required to address the contamination and bring the conditions at the
Demised Premises into compliance with applicable Environmental Law.  “Pre-existing Environmental Conditions” means
(i) any and all RECs identified in the Phase I Study and (ii) the
presence of any Hazardous Materials existing as of the Commencement Date in the
air, soil, surface water or groundwater, and in, on and under any structure on
the Demised Premises in a form, condition or concentration such that removal,
abatement or remediation is required under applicable Environmental Law.  Notwithstanding anything herein to the
contrary, Landlord and Tenant hereby agree that the underground storage tanks
existing on the date hereof at the Demised Premises (the “Existing Tanks”)
shall not be deemed to be a Pre-existing Environmental Condition.


(b)           With
respect to any and all Pre-Existing Environmental Conditions, Landlord, at its
sole expense, shall conduct and complete all investigations, studies,
samplings, and testing, and all remedial, removal, and other response actions



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necessary
to clean up, remove and/or abate all Hazardous Materials, on, from, or
affecting the Demised Premises, including but not limited to any and all
activities necessary and appropriate to follow up on the recommendations of the
Phase 1 Study, (i) in accordance with all applicable federal, state and
local laws, ordinances, rules, regulations, and policies, and (ii) in
accordance with the orders and directives of all federal, state, and local
governmental authorities.  Alternatively,
Landlord may elect to request Tenant, at Landlord’s sole expense, to retain the
response contractors and directly oversee their work.  Without affecting in any way the parties’
obligations under Article 10, Tenant concurs with the recommendations set
forth in the Groundwater Monitoring Program, prepared by P.W. Grosser
Consulting, Inc. for Lighthouse Retail Partners, Inc., dated September 2003.


(c)           For
purposes of this paragraph, “Hazardous Materials” includes, but shall
not be limited to, (i) asbestos in any form, except to the extent such
asbestos in its present condition may remain in place pursuant to and in
compliance with all Environmental Laws; (ii) urea formaldehyde foam
insulation; (iii) transformers or other equipment which contain dialectic
fluid containing levels of polychlorinated byphenyls (PCBs) in excess of 50
parts per million; (iv) any substance deemed hazardous or toxic, or
required to be investigated, disclosed, reported, treated, removed, disposed of
or cleaned up by an applicable Environmental Law; (v) any substance or
mixture which is or shall be listed, defined, or otherwise determined by any
agency or court to be hazardous, toxic, dangerous or otherwise regulated,
affected, controlled or giving rise to liability under any Environmental Law; (vi) polychlorinated
biphenyls (PCBs); (vii) laboratory wastes; (viii) experimental
products, including genetically engineered microbes and other recombinant DNA
products; (ix) petroleum, crude oil, natural gas, natural gas liquid, liquefied
natural gas, other petroleum products, or synthetic gas useable as fuel; and
(x) “source,” “special nuclear” and “by-products” material, as defined in the
Atomic Energy Act of 1954, 42 U.S.C. § 3011 et seq.


(d)           The
term “Environmental Law” shall mean any federal, state or local
environmental or health or safety law, regulation or rules, as the same may be
amended from time to time, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601
et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976, as amended by the Solid and Hazardous Waste
Amendments of 1984, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1251
et seq.; the Toxic Substances Control Act of 1976, 15 U.S.C. § 2601 et
seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
§ 11001 et seq.; the Clean Air Act of 1966, as amended, 42 U.S.C. § 741
et seq.; the National Environmental Policy Act of 1975, 42 U.S.C. § 4321;
the Rivers and Harbors Act of 1899, 33 U.S.C. § 401 et seq.; the
Endangered Species Act of 1973, as amended, 16 U.S.C. § 1531 et seq.; the
Occupational Safety 



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and Health
Act of 1970, as amended, 29 U.S.C. § 651 et seq.; the Safe Drinking Water
Act of 1974, as amended, 42 U.S.C. § 300(f) et seq.; the Hazardous
Materials Transportation Act, 42 U.S.C. §§ 1471, 1472, 1655m 1801 et seq.;
the Federal Insecticide, Fungicide & Rodenticide Act, 7 U.S.C. § 136
et seq.; the Atomic Energy Act, 42 U.S.C. § 3011 et seq., and any other
rule, guidance or common law which relates to (i) the existence and/or
remedy of contamination on property, (ii) the protection of persons,
property, animals, or the environment from any exposure to or contamination by
Hazardous Materials, radiation or other emanations; (iii) the use
generation, storage, removal, recovery, treatment, transport, disposal, and
control of Hazardous Materials, including hazardous wastes and building
materials; (iv) the prevention of, control of, or response to the exposure
of tenants, employees or other persons to any Hazardous Material or radiation; or
(v) the prevention of, control of, or response to the emission or
discharge of Hazardous Materials in the workplace or environment.


(e)           If
Landlord elects to retain the services of response contractors to discharge its
obligations pursuant to Section 10.01(b), above, Tenant shall have the
right, at Tenant’s expense, to retain the services of an environmental
consultant of its choosing to monitor the work conducted by Landlord’s response
contractors in addressing the Pre-Existing Environmental Conditions.


(f)            Tenant
agrees to take occupancy of the Demised Premises on the Commencement Date and
to cooperate with Landlord and its response contractors in addressing the
Pre-Existing Environmental Conditions. 
Landlord shall use commercially reasonable efforts to minimize
interruption with Tenant’s business in performing its obligations
hereunder.  In the event any response
actions taken to address Pre-existing Environmental Conditions materially
interfere with or materially impair Tenant’s Permitted Use of all or any
material portion of the Demised Premises, the Fixed Rent payable hereunder
shall abate equitably based upon the portion of the Demised Premises that is
unusable by Tenant, provided however, if Tenant cannot reasonably operate its
business at the Demised Premises during any period as a result of such work by
Landlord, then all Fixed Rent shall abate until Tenant may reasonably operate
its business at the Demised Premises.  In
the event as a result of any Pre-existing Environmental Conditions or the performance
of Landlord’s obligations hereunder, Tenant is unable to operate its entire
business at the Demised Premises for an uninterrupted period in excess of six (6) months,
then Tenant shall have the one time right to cancel this Lease upon notice to
Landlord within thirty (30) days after the expiration of said period, TIME
BEING OF THE ESSENCE.  Tenant’s failure
to give notice within the time period required herein shall be deemed an
irrevocable waiver of Tenant’s right to terminate this Lease under this Section 10.01(f)


(g)           Notwithstanding
anything stated herein to the contrary, if Tenant shall elect at any time to
remove the Existing Tanks, Tenant shall pay the cost for such removal, which
shall be performed using licensed, bonded (by a surety company



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licensed
to do business in New York) and reputable contractors.  The foregoing option of Tenant to remove the
Existing Tanks shall not limit Landlord’s obligation under this Article 10
to remediate Preexisting Environmental Conditions.  If the removal of the Existing Tanks is
required as part of Landlord’s remediation obligations under this Article 10,
Landlord shall remove the Existing Tanks at its expense.  Landlord shall in no event be obligated to
remove the Existing Tanks if the removal is required as a result of either a
Tenant Environmental Condition (hereinafter defined) or Tenant’s Initial
Construction.


(h)           Notwithstanding
the provisions of Section 10.01(f) hereof, in the event that due to
Tenant’s construction or renovation of the Demised Premises, Tenant’s inability
to use all or any portion of the Demised Premises for the Permitted Use due to
the concurrent remediation of the Demised Premises by Landlord, shall not give
rise to a claim for the abatement of Fixed Rent under Section 10.01(f) hereof,
except to the extent Landlord’s remediation in and of itself materially
interferes with Tenant’s construction or renovation.


(i)            Landlord
covenants and agrees to defend, indemnify and hold harmless Tenant, from and
against, and pay or reimburse Tenant for, any and all claims, liabilities,
obligations, losses, fines, costs, royalties, proceedings, deficiencies or
damages (whether absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims, but excluding consequential, special or
indirect damages and lost profits), including out-of-pocket expenses and
reasonable attorneys,’ consultants’ and accountants’ fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder resulting from or arising out of Pre-existing
Environmental Conditions or the actions, operations, activities, or
non-compliance of Landlord, Landlord’s agents, or Landlord’s invitees, with
Environmental Laws at the Demised Premises. 
The foregoing indemnity shall survive the expiration or other
termination of this Lease.


Section 10.02 – Environmental Compliance During
Period of Tenancy; Requirements of Law.


(a)           In the operation and occupancy of its
business on the Demised Premises, Tenant shall promptly execute and comply with
all statutes, ordinances, rules, orders, regulations and requirements
(including those which require structural alterations) of and permits issued by
the federal, state, county and local government and of any and all their
departments and bureaus applicable to the Demised Premises, including, without
limitation, those for the correction, prevention or abatement of nuisances or
other grievances in, upon, or connected with the Demised Premises during the
Term; and shall also promptly comply with and execute all rules, orders and
regulations of the New York Board of Fire Underwriters for the prevention of
fires at the Tenant’s own cost and expense. 
The Tenant’s obligations pursuant to this provision pertain solely to
conditions that, in whole or in part, arise or develop during the term of



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its
tenancy and which only be first discovered after the expiration or earlier
termination of the term of this Lease. 
Nothing in this paragraph in any way alters the Landlord’s obligations
and responsibilities under Section 10.01 for all Pre-existing
Environmental Conditions that have been identified or are found in place on the
Demised Premises on the Commencement Date.


(b)           Tenant
shall operate and occupy the Demised Premises in compliance with all Environmental
Laws (as defined above).  Without
limiting the foregoing, Tenant shall not cause or permit the Demised Premises
to be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials, except in compliance
with all applicable federal, state and local laws or regulations.  Tenant shall obtain and comply with any and
all approvals, registrations or permits required under applicable Environmental
Laws, including, without limitation, air quality and fuel storage permits.  For as long as the Existing Tanks remain at
the Demised Premises, Tenant shall maintain the tanks in good condition, in
compliance with all Environmental Laws and all other applicable federal, state
and local laws and regulations.


(c)           In
the event a REC and/or Hazardous Material in the air, soil, surface water or
groundwater, or in, on and/or under any structure on the Demised Premises is
identified at the Demised Premises that is not a Pre-existing Environmental
Condition and which occurred, was created or aggravated during the Lease Term
(a “Tenant Environmental Condition”), Tenant shall (i) conduct and
complete all investigations, studies, samplings, and testing, and all remedial,
removal, and other actions necessary to clean up, remove and/or abate all
Tenant Environmental Conditions in accordance with all applicable federal,
state and local laws, ordinances, rules, regulations, and policies, and (ii) in
accordance with the orders and directives of all federal, state, and local
governmental authorities.


(d)           In
the event a Tenant Environmental Condition has been identified, at the
expiration of this Lease or in the event this Lease is terminated, or Tenant is
dispossessed, Tenant shall be responsible with respect to any and all such
Tenant Environmental Conditions to (i) deliver the Demised Premises to
Landlord in a condition that conforms with all applicable federal, state and
local laws, ordinances, rules or regulations affecting the Demised
Premises including, without limitation, Environmental Laws, and (ii) deliver
to Landlord a phase one and, if reasonably necessary, a phase two environmental
report and tank testing reports showing no leaks, prepared by an environmental
consultant reasonably satisfactory to Landlord, or if commercially reasonable,
a no-action letter or closure letter, certifying to Landlord that the Tenant
Environmental Condition or Conditions has been appropriately remediated or
abated.  Nothing in this paragraph,
however, alters or relieves Landlord from its obligations under Section 10.01
to be responsible for any and all Pre-existing Environmental Conditions.



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(e)           In
the event a Tenant Environmental Condition has been identified, including,
without limitation, in connection with the Existing Tanks, Tenant covenants and
agrees to defend, indemnify and hold harmless Landlord, from and against, and
pay or reimburse Landlord for, any and all claims, liabilities, obligations,
losses, fines, costs, royalties, proceedings, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims, but excluding consequential, special and indirect damages
and lost profits), including out-of-pocket expenses and reasonable attorneys,’
consultants’ and accountants’ fees incurred in the investigation or defense of
any of the same or in asserting any of their respective rights hereunder
resulting from or arising out of Tenant Environmental Conditions at the
Premises, including the presence of Hazardous Materials, or the discharge or
release of Hazardous Materials, and liabilities under Environmental Laws that
arise from actions, conditions, or the disposal or release of Hazardous
Materials or the actions, operations, activities, or non-compliance of Tenant,
Tenant’s agents, or Tenant’s invitees, with Environmental Laws at the Demised
Premises. The foregoing indemnity shall survive the expiration or other
termination of this Lease.


(f)            Tenant
shall be permitted, provided it complies with this Article 10, to install
on the Demised Premises underground and above ground fuel storage tanks as well
as car wash and vacuum facilities and overhead reels for automotive fluids,
including, but not limited to, motor oil and windshield washer fluid.


(g)           If
Landlord or Tenant receives any notice of (i) the happening of any event
involving the presence, spill, release, leak, seepage, discharge or cleanup of
any Hazardous Material on, to or from the Demised Premises, or (ii) any
complaint, order, citation or notice with regard to air emissions, water
discharge or any other environmental, health or safety matter affecting Tenant
or the Demised Premises, then such party shall promptly notify the other in
writing of said notice and shall contemporaneously send to the other party a
copy of any notice sent to any governmental agency.


(h)           During
the Term, Landlord or its designee, provided Landlord has a reasonable basis to
believe that the Demised Premises has been affected by Hazardous Materials,
may, at Landlord’s sole cost and expense, and in consultation with Tenant,
conduct such investigations and tests as Landlord reasonably deems necessary to
determine whether the Demised Premises and the operation thereof are in
compliance with all Environmental Laws, provided that any such investigations
and tests do not materially interfere with Tenant’s Permitted Use of the
Demised Premises or the operation of its business thereon.



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Section 10.03 – [Intentionally Omitted].


Section 10.04 – Environmental Insurance.


(a)           Except
as specifically provided in this Lease, neither the maintenance of any
insurance policy required under this Lease nor the minimum limits specified
herein shall be deemed to limit or restrict in any way the Tenant’s or Landlord’s
liability for environmental matters under this Article 10.


(b)           With
respect to third-party claims arising from or related to, directly or
indirectly, in whole or in part: (i) the threatened or actual release of
any Hazardous Materials in, on, under or from the Demised Premises; and (ii) any
environmental liability or remedial action associated with the Demised Premises
for any activities conducted on the Demised Premises; both parties shall be
covered and such losses, costs, expenses, claims, demands, obligations and
liabilities will be satisfied to the extent environmental insurance provides
coverage. This provision shall survive the Lease Term.


(c)           Landlord
shall name Tenant as an additional insured under any environmental insurance
policy that Landlord maintains for the Demised Premises.


Section 10.05 – Additional Remedies of Tenant.


(a)           In
the event Landlord defaults with respect to any provision of this Article 10
after thirty (30) days’ written notice, if performance is reasonably possible
in that time period, then Tenant shall have the right to perform any such
obligation hereunder and offset against the Fixed Rent next coming due
hereunder until the full amount so expended or incurred by Tenant, including
any fines and penalties payable to any Governmental Authority as a direct
result of Landlord’s default under this Section 10, of any such actual,
out-of-pocket, reasonable sum or obligation in default has been recouped by
Tenant.


(b)           The
offset of Fixed Rent, as provided in this Section, shall not be deemed or
construed as a waiver of Landlord’s default or as a waiver of any other rights
and remedies to which Tenant may be entitled under the provisions of this Lease
by reason of such default, it being intended that Tenant’s rights to offset
Fixed Rent shall be in addition to but not in limitation of any such other
rights and remedies; and Tenant may exercise any of such other rights and
remedies independent of or in conjunction with its rights under this Section.



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ARTICLE 11

INSURANCE


Section 11.01 – Insurance.  Tenant shall, at its sole cost and expense,
during the Term of this Lease:


(a)           Keep
all Improvements, building fixtures and equipment (other than Tenant’s trade
fixtures and business equipment) and other property on, in or appurtenant to
the Demised Premises, or used in connection with the operation and maintenance
of the Demised Premises, and all replacements, alterations and additions of or
to the foregoing, insured for the benefit of Tenant (except as otherwise
specifically noted), Landlord and for the benefit of the Mortgagee (under a
standard New York Mortgage Endorsement) and for the benefit of any other party
designated by Landlord who has an insurable interest in the Demised Premises,
as their respective interests may appear, against all risk of loss or damage,
including loss or damage by fire and other perils included in a so-called “extended
coverage endorsement” or “multi-peril endorsement”, vandalism and malicious
mischief, collapse, lightning, windstorm, hail, explosion, riot, riot attending
a strike, civil commotion, aircraft, vehicles, smoke, and water damage and
against such other risks as are normally or customarily insured against by owners
or operators of similar properties as Landlord may from time-to-time reasonably
request, and containing Replacement Cost endorsements. Such coverage shall be
in amounts at all times sufficient to prevent Landlord, Tenant or any
additional insured from becoming a co-insurer under the terms of the applicable
policies, but in any event in amounts not less than the full replacement value
of the Improvements. Tenant shall cause full replacement value to be determined
from time-to-time at the request of Landlord, but not more frequently than once
every three (3) years, by an insurance appraisal or other valuation method
reasonably acceptable to Landlord. Such policies shall name Landlord, and/or
the Mortgagee, and/or any other party having an insurable interest as Landlord
may designate, as loss payee(s).


(b)           If
a sprinkler system is located in the Demised Premises or any Improvement
located thereon, provide sprinkler leakage insurance in amounts reasonably
satisfactory to Landlord, and provide and keep in force a sprinkler
supervisory, maintenance and alarm service contract.


(c)           Provide
boiler and machinery broad form insurance covering fire, damage and explosion
in respect of steam and pressure boilers and similar apparatus, if any, located
in or upon the Demised Premises in the amount of Five Million ($5,000,000.00)
Dollars.


(d)           Provide
comprehensive general liability and broad form property damage insurance,
written on an occurrence basis, including elevator, escalator, machinery and
contractual liability insurance, protecting and indemnifying Landlord, Tenant
and others having an insurable interest against any and all claims (including
all 



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costs and expenses of defending against same) for
personal injury, disease or death and for damage or injury to or destruction of
property (including loss of use) occurring on, in or about the Demised
Premises, sidewalks, gutters, curbs, vaults or vault spaces appurtenant to the
Demised Premises, which insurance shall have a combined single limit of not
less than Ten Million and 00/100 ($10,000,000.00) Dollars. The insurance
carried pursuant to this Section 11.01(d) shall include coverage for
contractual liability, independent contractors’ liability and completed
operations liability with a personal injury endorsement covering claims arising
out of arrest, false imprisonment, libel, slander, wrongful eviction and
invasion of privacy.


(e)           Provide
automobile liability insurance covering all vehicles operated or owned by
Tenant in connection with the Demised Premises.


(f)            Provide
for the benefit of Landlord and any Mortgagee only, business interruption and
rent loss insurance in an amount equal to at least the sum of twelve (12)
months’ Fixed Rent and Additional Rent (including Impositions), plus twelve
(12) months’ insurance premiums and the estimated amount of annual maintenance
costs for the Demised Premises.


(g)           Provide
workers’ compensation insurance to the extent required by applicable law.


(h)           At
any time prior to undertaking and during the duration of any construction or Alteration
of any Improvements on the Demised Premises, including the Initial
Construction, provide Builder’s Risk All Risk Non-Reporting property insurance
for the full replacement value of such Alterations, work and construction of
Improvements, with Replacement Cost and Agreed Amount endorsements.


(i)            Provide
and keep in force such other insurance covering such risks and in such amounts
as may from time-to-time be reasonably required by Landlord or any Mortgagee
against any other insurable hazards as are commonly insured against in cases of
properties similarly situated.


(j)            Provide
garagekeeper’s liability coverage in amounts reasonably satisfactory to
Landlord, if Tenant provides, directly or indirectly, valet parking or in any
other way exercises care, custody or control over vehicles in the parking areas
of the Demised Premises.


(k)           Maintain
environmental insurance throughout the Lease Term in the form and at least in
the amounts as set forth in the letter (the “Insurance Letter”) from
Tenant’s duly licensed insurance broker annexed hereto as Schedule C
and made a part hereof. Tenant shall name Landlord as an additional insured
under Tenant’s environmental insurance policy maintained for the Demised
Premises.



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Tenant agrees that the limits of insurance required by
this Article may be increased at the request of Landlord or any Mortgagee
consistent with limits of coverage for properties similarly situated provided,
however, that in no event shall the limits of insurance be reduced below the
amounts of coverage required at the commencement of the Term of this Lease.


Section 11.02 – Evidence of Insurance.  Contemporaneous with the execution of this
Lease, Tenant shall deliver to Landlord and to any Mortgagee and to any other
party designated by Landlord, duly executed certificates of insurance or
endorsements and the Insurance Letter reflecting Tenant’s maintenance of the
insurance required under Section 11.01 of this Lease, together with proof
of payment of the premiums and shall thereafter furnish to Landlord, at least
ten (10) days prior to the expiration of any insurance policies and any
renewal thereof, evidence of renewal or continued coverage together with
evidence of the payment of premiums thereon. The insurance required under Section 11.01
shall not have any deductible or retention in excess of One Million and 00/100
($1,000,000.00) Dollars and shall provide that the same may not be otherwise
materially changed or cancelled on less than thirty (30) days’ prior written
notice to Landlord and any Mortgagee. Landlord shall have the right, to be
exercised upon prior reasonable notice to Tenant, to review and copy Tenant’s
insurance policies to confirm compliance with Section 11.01. During the
Term, Tenant shall provide, within ten (10) days of Landlord’s written
request, an updated Insurance Letter.


Section 11.03 – Additional Requirements.  Landlord, Landlord’s managing agent and any
Mortgagee shall be named as additional insureds as their interests may appear
in the policies of liability insurance described in Section 11.01, but
shall nevertheless be protected against all liability occasioned by an
occurrence insured against to the same extent and limits as Tenant is protected
and insured under said policies, which policies shall provide primary coverage
for Landlord, Landlord’s managing agent and any Mortgagee. All policies of
insurance shall be: (i) written as “occurrence” policies, (ii) written
as primary coverage and not contributing with or in excess of any coverage
which Landlord or any management agent, or Mortgagee may carry, (iii) issued
in form acceptable to Landlord by insurance companies reasonably acceptable to
Landlord carrying a General Policyholder’s Service Rating of not less than “A/X”
as rated in the most current Best’s Insurance Reports (or any successor rating
guide acceptable to Landlord), and licensed to do business in New York State
and authorized to issue such policy or policies; and (iv) contain an
endorsement that Landlord, Landlord’s managing agent and all Mortgagees,
although named as additional insureds as their interests may appear,
nevertheless shall be entitled to recover under said policies for any loss or
damage occasioned to their respective servants, agents, employees and
contractors by reason of the negligence of Tenant, its servants, agents,
employees and contractors. In addition, the policies referred to in Sections
11.01(a), 11.01(b), 11.01(c), 11.01(f) and 11.01(h) shall name
Landlord and any Mortgagees designated by Landlord as Loss 



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Payee(s) for all losses, claims and insurance proceeds
pertaining to, arising out of, or in connection with the Demised Premises.


Section 11.04 – Payment of Premiums.


(a)           Tenant
shall pay all premiums and charges for all of said policies of insurance and,
if Tenant shall fail to make any payment when due or carry any such policy,
Landlord may but shall not be obligated to, following an uncured Insurance Notice (hereinafter
defined), make such payment or procure such insurance coverage (which may be
maintained under a blanket policy of insurance maintained by Landlord or any
affiliate of Landlord), and the amount paid by Landlord or its affiliate, with
interest thereon at the Default Rate, shall be repaid to Landlord by Tenant on
demand, and all such amounts so repayable, together with such interest, shall
be deemed to constitute Additional Rent hereunder. Payment by Landlord of any
such premium, or the carrying by Landlord or its affiliates of any such policy,
shall not be deemed to waive or release the default of Tenant with respect
thereto.


(b)           As
used herein, the term “Insurance
Notice” shall mean a notice with respect to the Tenant’s failure to
pay any insurance charges or premiums following the giving of which Tenant
shall have ten (10) days to cure such default, provided, however, if the insurance
policy or coverage shall lapse by reason of such non-payment, within said ten (10) day
period, Tenant’s time to cure shall expire ten (10) business days prior to
the lapse of such insurance policy or coverage.


Section 11.05 - Waiver of Subrogation.  Tenant shall cause each
insurance policy carried by Tenant and insuring the Demised Premises and Tenant’s
leasehold improvements, equipment, furnishings, fixtures and contents against
loss, damage, or destruction by fire or other casualty, including business
interruption, and other special coverages, to be written in a manner so as to
provide that the insurer waives all rights of recovery against Landlord in
connection with any loss or damage covered by any such policy, including all
rights of subrogation. Landlord shall not be liable to Tenant and Tenant hereby
releases Landlord from any such liability for the amount of such loss or
damage. If Landlord procures any casualty insurance concurrent with or
supplemental to any casualty insurance procured by Tenant pursuant to this
Lease, such policy or policies shall provide that the insurer waives all rights
of recovery against Tenant in connection with any loss or damage covered by
such policy, including all rights of subrogation.


Section 11.06 - Binding on Subtenants.


(a)           In
the event of any sublease or occupancy by a person other than Tenant of all or
a portion of the Demised Premises, irrespective of whether permitted by this
Lease or made in violation thereof, all of the covenants and obligations on the
part of Tenant set forth in this Article 11 shall bind and be fully
applicable to the subtenant or 



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occupant (as if such subtenant or occupant were Tenant
hereunder) for the benefit of Tenant and Landlord, but nothing contained herein
shall be deemed a consent to such subletting if in contradiction of the terms
of this Lease.


(b)           Notwithstanding
anything in this Section 11.06 to the contrary, if Tenant remains in
compliance with the provisions of Article 11 of this Lease, including, but
not limited to, maintenance of insurance for the benefit of Landlord, any
subtenant shall not be bound by the covenants and obligations of this Article 11.


Section 11.07 - Tenant’s Supplemental Insurance.  The limits of insurance specified in Section 11.01
hereof are the minimum limits of insurance required of Tenant pursuant to this
Lease. Nothing contained herein shall prevent Tenant from maintaining separate
property insurance in respect of Tenant’s personalty, inventory, trade fixtures
and business interruption expenses. Except with respect to the insurance
required by Sections 11.01(d) and 11.01(j) hereof, Tenant shall not take
out separate insurance concurrent in form or contributing in the event of loss
with that required by Sections 11.01(a), 11.01(b), 11.01(c), 11.01(f) and
11.01(h) to be furnished by Tenant unless Landlord is included therein as
the insured, with loss payable as in this Lease, provided Tenant shall promptly
notify the Landlord of the placing of any such separate insurance.


ARTICLE 12

DAMAGE OR DESTRUCTION


Section 12.01 – Damage or Destruction to Improvements.


(a)           If
any Improvements shall be destroyed or damaged by any cause whatsoever, Tenant
shall promptly notify Landlord and shall, at Tenant’s sole cost and expense,
restore, repair, replace or rebuild the same as nearly as possible to their
condition and character immediately prior to the damage or destruction,
reasonable wear and tear excepted (“Casualty Restoration”).


(b)           Casualty Restoration shall be
commenced promptly and prosecuted to completion with reasonable diligence.
Landlord shall join with Tenant in the adjustment and settlement of any
insurance claim. If Tenant is not in default of any of its obligations for the
payment of Fixed Rent or Additional Rent, and no uncured Event of Default has
occurred which is continuing, the net insurance proceeds, if any, payable by
reason of such damage or destruction (other than insurance proceeds for the
loss of Tenant’s personalty and other than insurance proceeds for loss of
Rents, Impositions and/or maintenance, irrespective of whether paid to Tenant
or Landlord) shall be paid to Tenant and used by Tenant for the payment of the
cost of the Casualty Restoration in compliance with Section 12.03.


(c)           Notwithstanding
the provisions of Sections 12.01(a) and 12.01(b) to the contrary, if
all or substantially all of the Improvements are damaged or destroyed at 



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a time when there is fewer than two (2) years
remaining in the Term, then at Tenant’s option, to be exercised by notice given
within fifteen (15) days following the date of such substantial damage or
destruction, this Lease shall be terminated effective as of the date such
notice is given, whereupon, Tenant shall be released from its obligation to
repair or restore the Demised Premises (except as otherwise specifically set
forth in this Section 12.01(c)), any insurance proceeds paid or payable to
Tenant shall be paid to Landlord free of any claim by Tenant, Landlord shall
have the exclusive right to adjust and settle any insurance claim on account of
or relating to any such damage or destruction and Tenant shall pay Landlord the
amount of any deductible or retention limit under the applicable policy or
policies. If Tenant elects to terminate this Lease as aforesaid, Tenant shall,
at its sole cost and expense, promptly remove all remaining portions of the
Improvements, including all debris, and fill in and level the area to proper
grade.


Section 12.02
– No Abatement of Rent.  Except as otherwise set forth in Section 12.01(c),
no destruction of or damage to the Demised Premises, or to any Improvement,
furniture, furnishings, fixtures, equipment or other property, shall permit
Tenant to surrender this Lease or shall relieve Tenant from its liability to
pay the full Fixed Rent or Additional Rent payable under this Lease or from any
of its other obligations under this Lease. This Section shall be deemed to
be an agreement expressly providing otherwise within the meaning of Section 227
of the Real Property Law of the State of New York and any successor law of like
impact.


Section 12.03 – Disbursement of Insurance
Proceeds.


(a)           Prior
to commencement and during the Casualty Restoration, Tenant shall provide
Landlord with the following:


(i)            Lien waivers (following completion
of any portion of the work), title insurance endorsements or such other
evidence, reasonably satisfactory to Landlord, to the effect that all work,
labor and materials installed and completed at the Demised Premises have been
paid for, or shall be paid for, and that there has not been filed with respect
to the Demised Premises, any vendor’s, mechanic’s, laborer’s, materialmen’s or
other lien which has not been discharged or record, except such as will be
discharged by payment of the amount then requested and a waiver of the right to
file any lien in connection with any work or material covered by the
requisition and all prior requisitions (all of the documents referred to in
this clause (i) are individually and collectively referred to as “Lien Waivers”);


(ii)           dual obligee payment and performance
bonds or such other security for the benefit of the Landlord and the Mortgagee
in form and substance reasonably satisfactory to the Landlord and Mortgagee;



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(iii)          the written undertaking of each
architect, engineer, construction manager, general contractor and major
subcontractor to continue performance on Landlord’s behalf under their
respective agreements in the event of a default by the Tenant under this Lease;


(iv)          complete copies of the construction
management agreement, general construction contract, major subcontracts, all
change orders, amendments and modifications to each of the foregoing, all plan
revisions and supplements and all payment requisitions, Lien Waivers, architect’s
certifications and proof of payment for all work, labor and materials and
material notices relating to or incorporated in the Casualty Restoration prior
to the date of such requisition, provided, however, that any of the foregoing
which have been delivered with a prior requisition do not have to be
re-delivered with each subsequent requisition, unless the same have been
modified or amended; and


(v)           such other documentation regarding
the Casualty Restoration (including concrete, soil, steel, welding and other
testing certifications, surveys, engineers certificates, building or other
permits, paid invoices, data sheets and the like) as applicable governmental or
public agencies, the Mortgagee or a construction consultant or engineer engaged
by Landlord or the Mortgagee shall reasonably require.


(b)           Tenant shall, prior to the commencement
of the Casualty Restoration, furnish to Landlord and the Mortgagee an estimate
of the total cost of the Casualty Restoration certified by the architect or
engineer in charge of the Casualty Restoration. If such cost estimate or any
subsequent estimate shall show that the cost of completing the Casualty
Restoration is in excess of the amount of the Casualty Proceeds then available
(a “Shortfall”), Tenant shall contribute the amount of the Shortfall to
complete the Casualty Restoration.


(c)           If prior to the completion of any
Casualty Restoration, this Lease shall terminate or expire for any reason,
including a termination by reason of an Event
of Default (hereinafter defined), then Landlord shall have the right to
receive and retain any Casualty Proceeds to the extent that they shall not have
been applied to the payment of the costs and expenses of the Casualty
Restoration, and if such termination or expiration shall be by reason other
than an Event of Default, Tenant shall thereupon be discharged from any and all
obligations to complete such Casualty Restoration provided said Casualty
Proceeds are paid to Landlord and are sufficient to complete such Casualty
Restoration. If, in such case, the Casualty Proceeds are insufficient to pay
the full cost of the Casualty Restoration, Tenant shall pay the amount of any
shortfall to Landlord. The provisions of this Section 12.03(c) shall
survive the expiration or other termination of this Lease.



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Section 12.04
– Lease Supersedes. 
This Lease shall be considered an express agreement governing any case
of damage to or destruction of the Demised Premises or any part thereof by fire
or other casualty, and Section 227 of the Real Property Law of the State
of New York and any other law of like import now or hereafter in force, are
hereby waived by Tenant and shall have no application in such case.


ARTICLE 13

ASSIGNMENT AND SUBLETTING


Section 13.01
– Landlord Consent. 
Tenant shall not assign, mortgage or encumber this Lease, its interest
hereunder or the estate granted hereby, nor sublet or suffer or permit the
Demised Premises or any part thereof to be used by others, without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld for an assignment or sublease.


Section 13.02 –
Collection of Rent.  If
Tenant should assign its interest in this Lease, or if all or any part of the
Demised Premises be underlet or occupied by anybody other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee, under-tenant or
occupant, as the case may be, and apply the net amount to the Fixed Rent and
Additional Rent herein reserved, but no such assignment, underletting,
occupancy or collection shall be deemed a waiver of this covenant, or the
acceptance of the assignee, under-tenant or occupant as Tenant, or a release of
Tenant from the further performance by Tenant of the covenants on the part of
Tenant contained herein. The consent by Landlord to any assignment 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.


Section 13.03
– Tenant’s Offer Notice. 
If Tenant shall desire to assign this Lease, or to sublet the Demised
Premises, it shall, no later than thirty (30) days prior to the proposed
effective date of the assignment or sublet, submit to Landlord a written
request for Landlord’s consent to such assignment or subletting (“Tenants Offer Notice”), which
shall contain the following information: (i) the name and address of the
proposed assignee or subtenant; (ii) the terms and conditions of the
proposed assignment or subletting; (iii) the nature and character of the
business of the proposed assignee or subtenant and its proposed use of the
Demised Premises; and (iv) current financial information and any other
information Landlord may reasonably request.


Section 13.04
– Landlord Consent. 
Landlord shall not unreasonably withhold its consent to the proposed
assignment or subletting referred to in Tenant’s Offer Notice, provided that
the following further conditions shall be fulfilled:


(a)           Tenant shall not then be in default
hereunder beyond the time herein provided, if any, to cure such default.



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(b)           The proposed assignee or subtenant
shall have a financial standing, be of a character, be engaged in a business,
and propose to use the Demised Premises in a manner consistent with the extent
of the obligations undertaken by the proposed assignee or subtenant.


(c)           No subletting shall end later than
one (1) day before the Expiration Date of this Lease.


(d)           Tenant shall reimburse Landlord on
demand for any costs that may be incurred by Landlord in connection with said
assignment or sublease, including, without limitation, the costs of making
investigations as to the acceptability of the proposed assignee or subtenant,
and reasonable legal costs incurred in connection with the granting of any
requested consent. This Section 13.04(d) shall not apply to any
sublease to Budget (as hereinafter defined) entered into during the first six (6) months
of the Term in accordance with Section 13.12 hereof.


(e)           The proposed assignee or subtenant is
engaged in a business and the Demised Premises will be used in a manner which
is limited to the Permitted Use.


Section 13.05 –
Attornment.  Every
subletting hereunder is subject to the express condition, and by accepting a
sublease hereunder each subtenant shall be conclusively deemed to have agreed,
that if this Lease should be terminated prior to the Expiration Date or if
Landlord should succeed to Tenant’s estate in the Demised Premises, then at
Landlord’s election the subtenant shall either surrender the Demised Premises
to Landlord within sixty (60) days of Landlord’s request therefor, or attorn to
and recognize Landlord as the subtenant’s landlord under the sublease and the
subtenant shall promptly execute and deliver any instrument Landlord may
request to evidence such attornment.


Section 13.06 –
Counterpart.  Tenant
shall furnish Landlord with a counterpart (which may be a reproduced copy) of
each sublease or assignment made hereunder within thirty (30) days after the
date of its execution. No sublease or assignment shall be valid, and no
subtenant or assignee shall take possession of the Demised Premises or any part
thereof, until there has been delivered to Landlord an executed counterpart of
such sublease or assignment.


Section 13.07 –
Tenant Liability. 
Notwithstanding any sublease or any assignment and assumption by the
assignee of all or any part of the obligations of Tenant hereunder, Tenant
herein named, and each immediate or remote successor in interest of Tenant
named herein, shall remain liable jointly and severally (as a primary obligor)
with its assignee and subtenant and all subsequent assignees and subtenants for
the performance of Tenant’s obligations hereunder, and, without limiting the
generality of the foregoing, shall remain liable to Landlord for all acts and
omissions on 



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the part of any assignee and subtenant subsequent to
it in violation of any of the obligations of this Lease.


Section 13.08
– [Intentionally Omitted]


Section 13.09 -
Profit.           If
Tenant shall sublet the Demised Premises to anyone for rents which for any
period shall exceed the Fixed Rent payable under this Lease for the same
period, Tenant shall pay Landlord, as Additional Rent hereunder, fifty percent
(50%) of the amount 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 Demised Premises pursuant to the terms hereof. The sums payable
under this Section 13.09 shall be paid to Landlord as Additional Rent as
and when payable by the subtenant to Tenant.


Section 13.10 –
Transfers of Interests in Tenant.  Any transfer, by operation of law or
otherwise, of Tenant’s interest in this Lease (in whole or in part) or of a
fifty (50%) percent or greater interest in Tenant or of fifty (50%) percent or
more of the assets of Tenant (whether stock, partnership interest or otherwise)
shall be deemed an assignment of this Lease within the meaning of this Article.
If there has been a previous transfer of less than a fifty (50%) percent
interest in Tenant or Tenant’s assets, then any simultaneous or subsequent
transfer of an interest in Tenant or Tenant’s assets which, when added to the
total percentage interest previously transferred, totals a transfer of greater
than a fifty (50%) percent interest in Tenant or Tenant’s assets shall be
deemed an assignment of Tenant’s interest in this Lease within the meaning of
this Article.


Section 13.11 –
Corporate Reorganization. 
Notwithstanding the provisions of Section 13.10 hereof, without the
consent of Landlord, this Lease may be assigned to (i) an entity created
by merger, reorganization or recapitalization of or with Tenant or (ii) a
purchaser of all or substantially all of Tenant’s assets; provided, in
the case of both clause (i) and clause (ii), that (A) Landlord
shall have received a notice of such assignment from Tenant, (B) the
assignee assumes by written instrument satisfactory to Landlord all of Tenant’s
obligations under this Lease, (C) such assignment is for a valid business
purpose and not to avoid any obligations under this Lease, and (D) the
assignee is a reputable entity of good character and shall have, immediately
after giving effect to such assignment, an aggregate net worth (computed in
accordance with GAAP) at least equal to the aggregate net worth (as so
computed) of Tenant immediately prior to such assignment or on the date of this
Lease, whichever is greater.


Section 13.12
– Permitted Subleases. 
Notwithstanding anything in this Lease to the contrary, Tenant shall be
permitted to sublease all or a portion of the Demised Premises to:



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(a)           Budget Rent a Car System (“Budget”)
(provided that at the time of the proposed sublease, Budget is a wholly owned
subsidiary of Cendant Corporation), or


(b)           a wholly owned subsidiary of Cendant;


provided,
that in each instance:


(i)            Tenant shall not then be in default
hereunder beyond the time herein provided, if any, to cure such default;


(ii)           No subletting shall end later than
one (1) day before the Expiration Date of this Lease;


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


(iv)          The Demised Premises will be used in
accordance with Section 4.01; and


(v)           Tenant provides Landlord with thirty
(30) days prior written notice of such sublease.


The provisions of Section 13.07 shall apply to
any sublease permitted under this Section 13.12.


13.13 – Non-Compliance
with Article.  In the
event that (i) Landlord fails to exercise any of its options under this Article 13
and (ii) Tenant fails to execute and deliver the assignment or sublease to
which Landlord consented within forty-five (45) days after the giving of such
consent, then, Tenant shall again comply with all of the provisions and
conditions of this Article 13 before assigning its interest in this Lease
or subletting the Demised Premises.


ARTICLE 14

INDEMNIFICATION


Section 14.01 – Indemnity.
Tenant shall indemnify, defend, save and hold harmless Landlord and its
affiliates, trustees, agents, members, employees, officers, directors,
successors and assigns (each, an “Indemnified Party”) from and against
any and all liability and damages and any and all injury, loss, claim, damage
or suit of every kind and nature, including Landlord’s reasonable counsel fees
and disbursements, to 



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any person, firm, association or corporation or to any
property, arising out of or based upon, related to, or in any way connected
with, a breach of Tenant’s obligations under this Lease, the actions or
omissions of Tenant or any Tenant Party or the use or occupancy of the Demised
Premises.


Section 14.02 – Notice of Proceedings.  An Indemnified Party which becomes entitled
to indemnification under this Agreement shall promptly notify Tenant of any
claim or proceeding in respect of which it is to be indemnified. Such notice
shall be given as soon as reasonably practicable after the Indemnified Party
obligated to give such notice becomes aware of such claim or proceeding and
shall include a complete copy of all notices, pleadings and other papers
related thereto. Failure to give such notice shall not excuse an
indemnification obligation except to the extent failure to provide notice
adversely affects Tenant’s interests.


Section 14.03 – Conduct of Claim.  Tenant shall assume the defense of the claim
or proceeding with counsel designated by Tenant; provided, however, that the
Indemnified Party shall have the right to participate fully in any claim or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel will be at its own expense unless (i) Tenant shall have agreed to
the retention of such counsel for both Tenant and the Indemnified Party or (ii) the
named parties to any action or proceeding include the Tenant and the
Indemnified Party and representation of both such parties has been determined
in the reasonable and good faith judgment of either party to be inappropriate
under applicable standards of professional conduct due to actual or potential
conflicting interests between them. In the event the Tenant is defending or
prosecuting any claim or proceeding, (a) the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge such
claim or proceeding without Tenant’s prior written consent, and (b) the
Indemnified Party will agree to any settlement, compromise or discharge of the
suit, action or proceeding which the Tenant may recommend and which by its
terms obligates Tenant to pay the full amount of liability in connection with
such claim or proceeding; provided, however, that without the Indemnified Party’s
consent, which consent may not be unreasonably withheld or delayed, Tenant may
only consent to the entry of any judgment or enter into any settlement that
does not provide for injunctive or other non-monetary relief affecting the
Indemnified Party. If Tenant fails to assume the defense of a claim, the
indemnification of which is required under this Lease, the Indemnified Party
may, at the expense of Tenant, contest, settle, or pay such claim. Except as
otherwise expressly set forth herein, Tenant shall not compromise or settle a
claim hereunder without the prior written consent of the Indemnified Party



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ARTICLE 15

CONDEMNATION


Section 15.01
– Condemnation/Notice. 
If Landlord receives written notice of a Taking (hereinafter defined) or a proposed Taking, Landlord
shall promptly notify Tenant thereof, but no such notice of intention shall
confer any rights upon Tenant under this Article, all of which rights shall
come into effect only upon the vesting of title in the Taking authority. As
used herein, a “Taking”
shall mean the appropriation, condemnation or taking of all or any portion of
the Demised Premises by any governmental or public authority for public or
quasi-public use under any right of eminent domain, condemnation or other law,
or the giving of a deed in lieu thereof.


Section 15.02
– Material Taking.


(a)           In the event of a
Taking of the entire Demised Premises, this Lease shall automatically cease and
terminate upon the date that possession of the entire Premises is taken by or
given to the Taking authority and all Fixed Rent and Additional Rent shall be
paid up to that date. In the event of a Taking of more than an “Immaterial
Area” (as hereinafter defined) but not of the entire Demised Premises, this
Lease shall, at the option of Tenant, to be exercised only by giving notice of
termination to Landlord no later than thirty (30) days following the date on
which the portion of the Demised Premises is Taken by or given to the Taking
authority, TIME BEING OF THE ESSENCE, cease and terminate on the later of (i) the
date on which Tenant’s notice is given, or (ii) the date on which the
portion of the Demised Premises is Taken by or given to the Taking authority,
and all Fixed Rent, Additional Rent and all other sums due Landlord by Tenant
shall be paid up to the date of such termination. Tenant’s failure to give
notice within the time period required herein shall be deemed an irrevocable
waiver of Tenant’s right to terminate this Lease under this Section 15.02(a).


(b)           If this Lease is
terminated in accordance with Section 15.02(a), Tenant shall be entitled
to receive from Landlord a portion of the net Proceeds (hereinafter defined) of such Taking in accordance with Section 15.02(e).
If this Lease is not terminated in accordance with Section 15.02(a), or if
the Taking is of an Immaterial Area, then this Lease shall continue in full
force and effect as to the portion of the Demised Premises not Taken, and
Tenant shall be entitled to a reduction in the Fixed Rent in accordance with Section 15.03.


(c)           As used herein, the
term “Immaterial Area”
shall mean up to thirty percent (30%) of the Demised Premises.


(d)           In the event of a
Taking, Landlord and any Mortgagee designated by Landlord shall have the
exclusive right to file any claim or to commence any action or proceeding to
collect any Proceeds payable out of or in connection with such Taking, except
for any separate award to which Tenant may be entitled pursuant to Section 



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15.05, and Tenant and everyone claiming by, under or
through Tenant waives all right to assert any claim against Landlord or the
Taking authority in such proceeding. The term “Proceeds” shall mean any award, settlement, compensation or
proceeds payable by reason of or in connection with any Taking, including the
value of the interests of Landlord and Tenant in the Demised Premises and this
Lease, any Improvements made by Tenant and Landlord respectively, the value of
all awards for severance and indirect damage, and the right to receive any
advance payment or interest thereon. Tenant shall, at Tenant’s own cost and
expense, cooperate with Landlord and take all actions and execute all documents
reasonably required by Landlord or required by the Taking authority to collect
such Proceeds, and if Tenant shall fail or refuse to take any act and execute
any document which is reasonably required by Landlord or required by the Taking
authority to collect such Proceeds (or any part thereof), then Tenant shall be
responsible to Landlord for the sum of all Proceeds, including interest at the
Default Rate, which sums shall be Additional Rent under this Lease and which
Landlord may offset from any share of such Proceeds to which Tenant may be
entitled pursuant to Sections 15.02, 15.03 and 15.04.


(e)           In the event of a
Taking (other than a Taking of an Immaterial Area), and a termination of this
Lease, all Proceeds shall be paid to Landlord who shall within forty-five (45)
days thereafter (or within thirty (30) days following any final determination
in any arbitration proceeding pursuant to Section 15.07 hereof, as hereinafter
set forth) disburse the net Proceeds of such Taking to Landlord and Tenant in
proportion to their interests in the Demised Premises, as follows:


(i)            to the Landlord for
the value of the Landlord’s interest in the Demised Premises, giving consideration
to the terms of this Lease as though there had been no Taking, including
Landlord’s reversionary interest, and any consequential damages, including
severance damages, out of which Landlord shall pay any sums due any Mortgagee;
and


(ii)           provided that no
uncured Event of Default has occurred which is then continuing and provided
further that there are at least two (2) years remaining in the Term on the
date on which possession of the Demised Premises is Taken by or given to the
Taking authority to Tenant for the value of Tenant’s leasehold estate, giving
consideration to the terms of this Lease, as though there had been no Taking.
Any dispute between Landlord and Tenant concerning the pro rata portions
of Proceeds payable to Landlord and Tenant in accordance with clauses (i) and
(ii) above shall be promptly submitted to binding arbitration in
accordance with Section 15.07 hereof.



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Section 15.03 –
Immaterial Taking.


(a)           If
a Taking involves an Immaterial Area, this Lease shall terminate as to the area
so Taken from and after the vesting of title in such Taking and shall continue
as to the remainder of the Demised Premises provided, however, from and after
the date on which possession of the portion of the Demised Premises is Taken,
the Tenant shall proceed diligently and in good faith to close in and restore
the Improvements. The Fixed Rent shall be reduced as of the vesting date
proportionally to account for the area of the Demised Premises so taken.


(b)           Landlord
shall be entitled to receive all Proceeds and Tenant shall have no part thereof
or claim thereto nor shall Tenant have any claim for the value of the portion
of the leasehold estate so Taken. Landlord shall pay all fees, costs and
expenses of every character and kind of Landlord incurred in connection with
such Taking and obtaining the Proceeds therefor, and in connection with such
restoration.


Section 15.04
– Temporary Taking. 
If possession of all or any portion of the Demised Premises shall be
Taken for occupancy for a limited period (a “Temporary Taking”), this Lease shall continue in full force
and effect and the Fixed Rent and Additional Rent shall be abated for the time
of the Temporary Taking.


Section 15.05 – Tenant’s Additional Claim.  In any condemnation proceeding, Tenant may
submit a separate claim against the Taking authority for the value of Tenant’s
trade fixtures, the cost of removal or relocation, goodwill, inventory,
equipment, the value of its leasehold improvements and going concern values if
such separate claims are allowable as such and such separate claims do not
reduce the amount of Proceeds otherwise payable to Landlord.


Section 15.06 – Costs of Taking.  Landlord and Tenant shall be solely
responsible for their respective legal, appraisal, engineering and other fees,
costs and expenses arising out of or in connection with any claim allocable or
attributable to any item which each is permitted to separately claim under this
Article 15, provided, however, that the Landlord’s legal, appraisal,
engineering and other fees and expenses incurred in connection with the
collection of any Proceeds pursuant to Section 15.02 shall be allocated
and paid by Landlord and Tenant in proportion to the amount of Proceeds
disbursed to Landlord and Tenant respectively.


Section 15.07 – Arbitration.


(a)           In
the event of a dispute as to the amounts payable under this Article 15
(the “Applicable Amounts”) and Landlord and Tenant are unable to reach a
mutually acceptable determination of the Applicable Amounts within thirty (30)
days after commencement of such negotiation, the matter shall be submitted to
arbitration in 



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accordance with the following terms and provisions of
this Section. The sole issue to be determined by such arbitration shall be the
Applicable Amounts in accordance with this Section. Each party shall appoint an
arbitrator within ten (10) days of the expiration of such thirty (30) day
period, and provide the other party with the name and address of its
arbitrator. Within ten (10) days after the date of the appointment of the
second arbitrator, the two (2) arbitrators will meet. If the two (2) arbitrators
are unable to agree on the Applicable Amounts as provided herein within ten (10) days
after their first meeting, they will immediately select a third arbitrator. If
the two (2) arbitrators are unable to agree upon the selection of the
third arbitrator within ten (10) days, then Landlord and Tenant will
petition the New York State Supreme Court to appoint the third arbitrator. The
third arbitrator will be designated as chairman and will immediately give
Landlord and Tenant written notice of its appointment. The three (3) arbitrators
will meet within ten (10) days after the appointment of the third
arbitrator. The third arbitrator will then select the Applicable Amounts
proposed by one of the first two (2) arbitrators within thirty (30) days
after appointment of the third arbitrator. The arbitrators must be licensed
real estate appraisers with at least fifteen (15) years experience in the
Queens real estate market. No arbitrator may be an active real estate broker.
The arbitration will be governed by the laws of the State of New York and, when
not in conflict with such law, by the general procedures in the commercial
arbitration rules of the American Arbitration Association. The arbitrators
will not have the power to add to, modify, detract from or alter in any way the
provisions of this Lease or any amendments or supplements to this Lease. The
arbitrators will not have any power to decide or consider anything other than
the specific issue of the Applicable Amounts in accordance with the terms of
this Lease. No arbitrator is authorized to make an award for damages of any
kind including, without limitation, an award for punitive, exemplary,
consequential or incidental damages. Landlord and Tenant will pay for the
services of its appointees, attorneys and witnesses plus one-half of all other
proper costs relating to the arbitration. The decision of the arbitrators will
be final and non-appealable and may be enforced according to the laws of the
State of New York.


ARTICLE 16

RIGHT TO INSPECT; POSTING SIGNS


Section 16.01 – Right to Inspect.  Tenant shall permit Landlord or Landlord’s
agents to enter the Demised Premises at all reasonable hours and upon
reasonable notice to Tenant for the purpose of (i) inspecting the same; (ii) confirming
that Tenant is complying with terms of this Lease; (iii) making repairs
which Tenant neglects or refuses to make; (iv) exhibiting the Demised
Premises to prospective mortgagees; and (v) during the two (2) years
preceding the expiration of this Lease, exhibiting the Demised Premises to
brokers and prospective purchasers and lessees (it being understood that
Landlord shall have no obligation to do any of the foregoing acts); provided,
in each and every case, Landlord shall use commercially reasonable efforts not
to unreasonably interfere with the conduct of Tenant’s business at the Demised
Premises. In the event 



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of an emergency, or if Landlord would be subject to
criminal or civil liability, if admission to the Demised Premises for the
aforesaid purposes cannot be obtained, Landlord’s agents may enter the Demised
Premises with reasonable force without rendering Landlord or its agents liable
to Tenant for damages by reason thereof.


ARTICLE 17

ZONING


Section 17.01 – R-Zone Parcel.  Landlord and Tenant acknowledge and agree
that a portion of the Land Parcel, approximately as shown on Schedule B
annexed hereto and made a part hereof ( the “R-Zone Parcel”), is zoned “R3-2.”
To the extent that the R-Zone Parcel is not able to be used for the Initial Use
due to any Requirement, the Fixed Rent then payable shall be reduced by the
number of square feet comprising the R-Zone Parcel unable to be used for the
Initial Use multiplied by the Fixed Rent then payable per square foot for the R-Zone
Parcel. For purposes of the immediately preceding sentence only, Fixed Rent per
square foot for the R-Zone parcel shall be calculated at $5.00 per square foot
for the first five (5) Lease Years and, thereafter, shall be calculated in
accordance with Section 3.01(c) of this Lease. Landlord and Tenant
acknowledge and agree that the R-Zone Parcel totals 43,067 square feet, the
Land Parcel totals 223,911 square feet (inclusive of the R-Zone Parcel) and the
Demised Premises totals 309,142 square feet. Such reduction in Fixed Rent shall
continue only until such time as Landlord or Tenant, each at their own expense,
has satisfied all Requirements necessary to allow the Initial Use of the R-Zone
Parcel. At such time as the R-Zone Parcel is able, pursuant to all
Requirements, to be used for the Initial Use, the Fixed Rent for the R-Zone
Parcel shall automatically and without notice to Tenant increase to then Fixed
Rent payable per square foot of the Land Parcel, which shall be calculated at
$5.00 per square foot as of the Commencement Date and thereafter be adjusted in
accordance with Sections 3.01(c) and 17.02 of this Lease. Landlord, at
Landlord’s cost and expense, shall make commercially reasonable efforts to file
all required applications, permits and filings to allow the Initial Use of the
R-Zone Parcel.


Section 17.02 – De-Map Parcel.  Landlord and Tenant acknowledge and agree
that Landlord is in the process of submitting to The City of New York all
necessary filings to “de-map” that portion of 88th Street between the Land Parcel and the
Building Parcel, approximately as shown on Schedule B (the “De-Map
Parcel”). Landlord shall make commercially reasonable efforts to complete
the de-mapping of the De-Map Parcel. Upon the completion of the de-mapping, the
De-Map Parcel shall automatically and without notice to Tenant become part of
the Demised Premises and all references in this Lease to the Demised Premises
shall be deemed to include the De-Map Parcel.


(a)           Upon
completion of the de-mapping of the De-Map Parcel and provided that the R-Zone
Parcel is able, pursuant to all Requirements, to be used for 



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the Initial Use, the Fixed Rent then payable for the
Demised Premises shall be increased in accordance with Section 17.01 and,
effective as of the first day of the next succeeding calendar month, be
increased by (i) $1.00 per square foot multiplied by the number of square
feet in the Land Parce and (ii) $6.00 per square foot multiplied by the
number of square feet in the De-Map Parcel. Thereafter, Fixed Rent shall be
adjusted in accordance with Section 3.01(c). Landlord shall provide Tenant
with written notice of the increase in Fixed Rent promptly after the completion
of the de-mapping of the De-Map Parcel. Landlord shall measure the De-Map
Parcel upon completion of the de-mapping. Landlord and Tenant shall agree to
the square footage of the De-Map Parcel in a writing signed by both parties.


(b)           If,
upon completion of the de-mapping of the De-Map Parcel, Tenant is not able,
pursuant to all Requirements, to use the R-Zone Parcel for the Initial Use,
then, until such time as the R-Zone Parcel is able, pursuant to all
Requirements, to be used for the Initial Use, the Fixed Rent then payable shall
be increased by $6.00 per square foot in the De-Map Parcel, subject to adjustment
in accordance with Section 3.01(c). Such increase in Fixed Rent shall be
effective as of the first day of the next succeeding calendar month. Landlord
shall provide Tenant with written notice of the increase in Fixed Rent promptly
after the completion of the de-mapping of the De-Map Parcel.


(c)           Solely
for purposes of illustrating this Article 17, the following examples are
provided:


(i)            During
such time as the R-Zone Parcel is allowed to be used for the Initial Use and
the de-mapping of the De-Map Parcel has been completed, (A) Fixed Rent
shall be increased by $1.00 per square foot comprising the Land Parcel, (B) Fixed
Rent shall be increased by $6.00 per square foot comprising the De-Map Parcel,
and (C) Fixed Rent for the R-Zone Parcel shall be payable at the same rate
as the then Fixed Rent payable per square foot of the Land Parcel plus $1.00
per square foot. For this example, assume the R-Zone Parcel is R square feet,
the Land Parcel is L square feet and Tenant is paying $5.00 per square foot of
Fixed Rent for the Land Parcel and the De-Map Parcel is D square feet, the
Fixed Rent for the De-Map Parcel shall be D times $6.00; the Fixed Rent for the
R-Zone Parcel shall be R times $6.00 ($5.00 plus $1.00); and the Fixed Rent for
the Land Parcel shall be L times $6.00 ($5.00 plus $1.00);


(ii)           During such time as the R-Zone Parcel
is not allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has been completed, (A) Fixed Rent shall be increased by $1.00 per
square foot comprising the Land Parcel, (B) Fixed Rent shall be increased
by $6.00 per square foot comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be reduced in accordance with Section 17.01.
For this example, assume the R-Zone Parcel is R square feet, the Land Parcel is
L square feet and Tenant is paying $5.00 per square foot of Fixed Rent for the 



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Land Parcel and the De-Map Parcel is D square feet,
the Fixed Rent for the De-Map Parcel shall be D times $6.00; no Fixed Rent
shall be incurred for the R-Zone Parcel; and the Fixed Rent for the Land Parcel
shall be L times $6.00 ($5.00 plus $1.00);


(iii)          During such time as the R-Zone Parcel
is allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has not been completed, (A) there shall be no increase in the Fixed
Rent for the Land Parcel, (B) there shall be no increase in the Fixed Rent
for the square footage comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be payable at the same rate as the then Fixed Rent
payable per square foot of the Land Parcel. For this example, assume the R-Zone
Parcel is R square feet, the Land Parcel is L square feet and Tenant is paying
$5.00 per square foot of Fixed Rent for the Land Parcel and the De-Map Parcel
is D square feet, the Fixed Rent for the De-Map Parcel shall be D times $0.00;
the Fixed Rent incurred for the R-Zone Parcel shall be R times $5.00; and the
Fixed Rent for the Land Parcel shall be L times $5.00;


(iv)          During such time as the R-Zone Parcel
is not allowed to be used for the Initial Use and the de-mapping of the De-Map
Parcel has not been completed, (A) there shall be no increase in the Fixed
Rent for the Land Parcel, (B) there shall be no increase in the Fixed Rent
for the square footage comprising the De-Map Parcel, and (C) Fixed Rent
for the R-Zone Parcel shall be reduced in accordance with Section 17.01.
For this example, assume the R-Zone Parcel is R square feet, the Land Parcel is
L square feet and Tenant is paying $5.00 per square foot of Fixed Rent for the
Land Parcel and the De-Map Parcel is D square feet, the Fixed Rent for the
De-Map Parcel shall be D times $0.00; no Fixed Rent shall be incurred for the
R-Zone Parcel; and the Fixed Rent for the Land Parcel shall be L times $5.00.


(d)           Notwithstanding anything in this Article 17
to the contrary, until such time as all Requirements necessary to allow the
Initial Use of the R-Zone Parcel have been satisfied, the R-Zone Parcel shall
not be deemed part of the Land Parcel for the purposes of calculating Fixed
Rent for the Land Parcel. At such time as the R-Zone Parcel is able, pursuant
to all Requirements, to be used for the Initial Use, the R-Zone Parcel shall be
deemed to be part of the Land Parcel for purposes of calculating Fixed Rent for
the Land Parcel.


ARTICLE 18

DEFAULT PROVISIONS


Section 18.01 – Events of Default.  If any one or more of the following events
(in this Lease sometimes called “Events of Default”) shall happen:


(a)           if
default shall be made in the due and punctual payment of any Fixed Rent or
Additional Rent payable under this Lease or any part thereof when and as the
same shall become due and payable, and such default shall continue for a period
of five (5) business days after notice from Landlord of such default in
payment;



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(b)           if
default shall be made by Tenant in keeping, observing or performing any of the
terms, covenants, agreements, provisions, conditions or limitations contained
in this Lease on Tenant’s part to be kept, observed or performed, other than
those referred to in the foregoing subdivision (a) of this Section, which
do not expose the Landlord to criminal liability, and such default shall
continue for a period of thirty (30) days after written notice thereof from
Landlord to Tenant, or in the case of such a default or a contingency which
cannot with due diligence and in good faith be cured within thirty (30) days,
and Tenant fails to proceed promptly and with due diligence and in good faith
to cure the same and thereafter to prosecute the curing of such default with
due diligence and in good faith (it being intended that in connection with a
default which does not expose Landlord to criminal liability, and is not
susceptible of being cured with due diligence and in good faith within thirty
(30) days, that the time of the Tenant within which to cure the same shall be
extended for such a period as may be necessary for the curing thereof promptly
with due diligence and in good faith);


(c)           if
Tenant shall file a voluntary petition in bankruptcy and shall be adjudicated a
bankrupt or insolvent, or shall file any petition or answer 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, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of Tenant or of all or any
substantial part of its properties or of the Demised Premises or of Tenant’s
interest therein; or


(d)           if
within ninety (90) days after the commencement of any proceeding against Tenant
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 ninety (90) days after the appointment, without the consent or
acquiescence of Tenant, of any trustee, receiver or liquidator of Tenant or of
all or any substantial part of its properties or of the Demised Premises or of
Tenant’s interest therein, such appointment shall not have been vacated or
stayed on appeal or otherwise, or if, within forty-five (45) days after the
expiration of any such stay, such appointment shall not have been vacated;


then
and in any such event Landlord at any time thereafter during the continuance of
any such Event of Default may give written notice to Tenant, specifying such
Event of Default or Events of Default and stating that this Lease and the term
hereby demised shall expire and terminate on the date specified in such notice,
which shall be at least thirty (30) days after the giving of such notice, and
upon the date specified in such notice, subject to the provisions of Section 18.03,
this Lease and the term hereby demised and all rights of Tenant under this
Lease, including all rights of renewal whether exercised or not, shall expire
and terminate, as if the date specified in such



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notice
were the day herein definitely fixed for the end and expiration of this Lease
and the term thereof.


Section 18.02 – Bankruptcy.  Any such proceeding or action involving
bankruptcy, insolvency, 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, above set forth in subdivisions (c) and (d) of
Section 18.01 of this Article, shall be grounds for the termination of
this Lease pursuant to the terms, covenants, agreements, provisions, conditions
and limitations of this Article 18, only when such proceeding, action or
remedy shall be taken or brought by or against Tenant or any assignee of this
Lease, while such Tenant or such assignee is the owner of this Lease.


Section 18.03 – Termination of Lease.  Upon any expiration or termination of this
Lease, Tenant shall quit and peacefully surrender the Demised Premises to
Landlord, and Landlord, upon or at any time after any such expiration or
termination, may without further notice, enter upon and reenter the Demised
Premises and possess and repossess itself thereof, by force, summary
proceedings, ejectment or otherwise, and may dispossess Tenant and remove
Tenant and all other persons and property from the Demised Premises and may
have, hold and enjoy the Demised Premises and the right to receive all rental
and other income of and from the same.


Section 18.04 – Reletting of Demised Premises.  At any time or from time to time after any
such expiration or termination, Landlord may relet the Demised Premises or any
part thereof, in the name of Landlord or otherwise, for such term or terms
(which may be greater or less than the period which would otherwise have
constituted the balance of the Term of this Lease) and on such conditions
(which may include concessions or free rent) as Landlord, in its uncontrolled
discretion, may determine and may collect and receive the rents therefor.  Landlord shall in no way be responsible or
liable for any failure to relet the Demised Premises or any part thereof, or
for any failure to collect any rent due upon any such reletting.


Section 18.05 – Damages.  No such expiration or termination of the
Lease shall relieve Tenant of its liabilities and obligations under this Lease,
and such liabilities and obligations shall survive any such expiration or
termination.  In the event of any such
expiration or termination, whether or not the Demised Premises or any part
thereof shall have been relet, Tenant shall pay to Landlord a sum equal to the
Fixed Rent and the Additional Rent required to be paid by Tenant up to the time
of such expiration or termination of this Lease, and thereafter Tenant, until the
end of what would have been the Term of this Lease in the absence of such
expiration or termination, shall be liable to Landlord for, and shall pay to
Landlord, as and for liquidated and agreed current damages for Tenant’s
default, at the election of Landlord, either:



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(a)           (i)            the
equivalent of the amount of the Fixed Rent and the Additional Rent which would
be payable under this Lease by Tenant if this Lease were still in effect, less


(ii)           the net proceeds of any reletting
effected pursuant to the provisions of Section 18.04 hereof, after
deducting all Landlord’s expenses in connection with such reletting, including,
without limitation, all repossession costs, brokerage commissions, legal
expenses, reasonable attorneys’ fees, alteration costs, and expenses of
preparation for such reletting.


Tenant
shall pay such current damages (herein called “deficiency”) to Landlord
monthly on the days on which the Fixed Rent would have been payable under this
Lease if this Lease were still in effect, and Landlord shall be entitled to
recover from Tenant each monthly deficiency as the same shall arise.


OR


(b)           a sum which, at the time of such
expiration or termination, represents the present value (employing a discount
rate of four percent (4%) per annum) of the aggregate of the Fixed Rent and all
Additional Rent which would have been payable under this Lease by Tenant had
this Lease not expired or terminated, for the period commencing with the day
following the date of such expiration or termination and ending with the Expiration
Date.  For purposes of this Section 18.05(b),
the amount of Additional Rent which would have been payable by Tenant under
this Lease shall, for each Lease Year ending after such expiration or
termination, be deemed to be an amount equal to the amount of all Additional
Rent payable by Tenant for the Lease Year immediately preceding the Lease Year
in which such expiration or termination shall occur and prorated for any period
less than a full Lease Year.  Tenant
shall pay the amount under this Section 18.05(b) upon demand by
Landlord.


Nothing contained in this Section 18.05 shall
limit or prejudice the right of the Landlord to prove for and obtain as
liquidated damages by reason of such expiration or termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of the
sums referred to above.


Section 18.06 – Tenant’s Waiver of Notice to
Re-Enter.  Tenant
hereby expressly waives, so far as permitted by law, the service of any notice
of intention to enter or re-enter provided for in any statute, or of the
institution of legal proceedings to that end, and Tenant, for and on behalf of
itself and all persons claiming through or under Tenant (including but not
limited to any leasehold mortgagee or other creditor) also waives any and all
right of redemption or re-entry or re-possession or to redeem or to restore the



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operation
of this Lease in case Tenant shall be dispossessed by a judgment or by warrant
of any court or judge or in case of entry, re-entry or re-possession by lessor
or in case of any expiration or termination of this Lease.  Landlord and Tenant, so far as permitted by
law, hereby 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, including
but not limited to, the relationship of Landlord and Tenant, Tenant’s use or
occupancy of the Demised Premises or any claim of injury or damage.  The terms “enter”, “re-enter”, “entry” or
re-entry”, as used in this Lease are not restricted to their technical legal
meaning.


Section 18.07 – Threatened Breach.  In the event of any breach or threatened
breach by Tenant of any of the terms, covenants, agreements, provisions,
conditions or limitations contained in this Lease, Landlord shall be entitled
to enjoin such breach or threatened breach and shall have the right to invoke
any right or remedy allowed at law or in equity or by statute or otherwise as
though entry, re-entry, summary proceedings, and other remedies were not
provided for in this Lease.


Section 18.08 – Remedies Cumulative.  Each right or remedy of Landlord provided for
in this Lease shall be cumulative and shall be in addition to every other right
or remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise, and the exercise or the beginning of the
exercise by Landlord of any one or more of the rights or remedies provided for
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by Landlord of
any or all other rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or other law.


ARTICLE 19

ATTORNEYS’ FEES


Section 19.01 – Attorneys’ Fees.


(a)           If
at any time there shall occur an Event of Default hereunder, and if Landlord
shall institute an action or summary proceedings against Tenant based upon such
Event of Default, or if Landlord or Tenant brings an action against the other
to enforce the terms of this Lease, then the prevailing party to such an action
shall be reimbursed by the other for the expenses of attorneys’ fees and
disbursements incurred.  If Landlord is
the prevailing party, the amount of such expenses shall be deemed to be “Additional
Rent” hereunder.  If the Tenant is the
prevailing party, the amount of such expenses shall be due from Landlord within
ten (10) business days after written demand by Tenant.



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(b)           If
an Event of Default under Section 18.01(a) occurs more than two (2) times
during any consecutive twelve (12) month period, Tenant shall pay to Landlord
as Additional Rent all of Landlord’s fees, costs and expenses in preparing and
serving notices to Tenant during such twelve (12) month period, including, but
not limited to, reasonable attorneys’ fees and expenses.


ARTICLE 20

WAIVER OF REDEMPTION; COUNTERCLAIM; TRIAL BY JURY


Section 20.01 – Waiver.  Tenant hereby expressly (i) waives any
and all rights of redemption granted by or under any present or future laws in
the event of Tenant being evicted or dispossessed for any cause, or in the
event of Landlord obtaining possession of the Demised Premises by reason of the
violation by Tenant of any of the covenants and conditions of this Lease or
otherwise; (ii) waives all rights to stay summary proceedings; and (iii) agrees
that it shall not interpose any counterclaim in any summary proceeding or any
action based on non-payment of Fixed Rent, Additional Rent or any other
payments or charges required to be made by Tenant to Landlord.  Nothing contained herein shall prevent Tenant
from asserting any such counterclaim as a cause of action in a separate action
or proceeding, but Tenant shall not seek a consolidation or joint trial of such
separate action or proceeding with any summary proceeding or other action or
proceeding commenced by Landlord for non-payment of Fixed Rent, Additional Rent
or any other payments or charges required to be made by Tenant to
Landlord.  Landlord and Tenant hereby
waive trial by jury in any action, proceeding or counterclaim brought by either
of them against the other with respect to any matters arising out of or
connected with this Lease, the relationship of Landlord and Tenant, Tenant’s
use or occupancy of the Demised Premises, and/or any claim of injury or damage
and any emergency statutory or any other statutory remedy.


ARTICLE 21

NO WAIVER


Section 21.01 – No Waiver.   No act or thing done by Landlord or Landlord’s
agents during the Term hereby demised shall be deemed an acceptance of a
surrender of the Demised Premises, and no agreement to accept such surrender
shall be valid unless in writing signed by Landlord.  The failure of Landlord to seek redress for
violation of, or to insist upon the strict performance of, any covenant or
condition of this Lease shall not prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation.  The receipt by
Landlord of Fixed Rent or Additional Rent with knowledge of the breach of any
covenant of this Lease shall not be deemed a waiver of such breach.  No provision of this Lease shall be deemed to
have been waived by Landlord unless such waiver be in writing signed by
Landlord.



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ARTICLE 22

END OF TERM


Section 22.01 – Surrender of Demised Premises.


(a)           (i)            Tenant shall, at the expiration or
other termination of this Lease, (A) quit and surrender to Landlord the
Demised Premises broom clean and in good condition and repair, reasonable wear
and tear and casualty excepted, and the roof shall be free of leaks and (B) at
Landlord’s option, restore the Demised Premises to the condition existing on
the date hereof.


(ii)           Tenant shall, at
the expiration or other termination of this Lease, surrender all keys for the
Demised Premises to Landlord at Landlord’s office, and shall inform Landlord of
all combinations of locks, safes, vaults, alarms and other encoded devices or
facilities if any, located in the Demised Premises.


(b)           All personal
property, furniture, furnishings and trade fixtures furnished by or at the
expense of Tenant, other than those affixed to the Demised Premises so that
they cannot be removed without damage, shall remain the property of Tenant and
may be removed by Tenant from time-to-time prior to the expiration or
termination of this Lease.  Tenant shall
notify Landlord in writing not less than sixty (60) days prior to the
expiration of the Term specifying any such items of property which Tenant does
not wish to remove.  If, within thirty
(30) days after the service of such notice, Landlord shall request Tenant to
remove any of said items, Tenant shall, at Tenant’s expense, remove said items
prior to the expiration of the Term.


(c)           In any case where
Tenant removes any property or Alterations pursuant to Sections 22.01(a) and
22.01(b), or otherwise, Tenant shall immediately repair all structural damage
caused by said removal and shall restore the Demised Premises to good condition
at Tenant’s expense, and if Tenant fails to do so, Landlord may do so at Tenant’s
cost and Tenant shall reimburse Landlord therefor upon demand.


(d)           Upon failure of
Tenant to remove any property in accordance with Sections 22.01(a) and
22.01(b), or upon failure of Tenant to notify Landlord of any property it does
not wish to remove from the Demised Premises in accordance with Section 22.01(b),
then, as to such property, upon termination of this Lease, Landlord may, at
Tenant’s expense: (i) remove all such property which Landlord may require
Tenant to remove pursuant  to Sections
22.01(a) and 22.01(b), (ii) cause the same to be placed in storage,
and (iii) repair any damage caused by said removal.  Tenant shall, upon demand, reimburse Landlord
for all of the aforesaid expenses.


(e)           Notwithstanding
anything to the contrary contained in this Section 22.01, any items of
property or Alterations not removed by Tenant may, at the election of Landlord,
be deemed to have been abandoned by Tenant, and Landlord may retain



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and dispose of
said items without any liability to Tenant and without accounting to Tenant for
the proceeds thereof.


Section 22.02 – Ownership of Improvements.  Upon the termination of this Lease, whether
by expiration of the Term or by reason of default on the part of Tenant, or for
any other reason whatsoever, all Improvements then located on the Premises
including all affixed lighting fixtures, heating, ventilating and air
conditioning equipment, pipes, ducts, conduits, wiring, paneling, partitions,
railings, mezzanine floors, galleries and the like, shall remain upon and be
surrendered with the Demised Premises as a part thereof and shall then merge
with the freehold estate and become the property of Landlord as a part of the
realty, free and clear of any liens, encumbrances or burdens placed upon Tenant’s
leasehold estate.


Section 22.03 – Holdover.


(a)           If,
without the Landlord’s prior written consent, the Demised Premises shall not be
surrendered as and when aforesaid and in the condition required hereunder,
Tenant shall pay to Landlord as use and occupancy for each month or fraction
thereof during which Tenant continues to occupy the Demised Premises from and
after the Expiration Date (the “Continued
Occupancy Period”), an amount of money (the “Occupancy Payment”) equal to one
hundred fifty (150%) percent of one-twelfth (1/12th) of the aggregate Fixed Rent and
Additional Rent paid or payable by Tenant during the first twelve (12) months
immediately preceding such holding over. Tenant shall make the Occupancy
Payment, without notice or previous demand therefor, on the first day of each
and every month during the Continued Occupancy Period.


(b)           The
receipt and acceptance by Landlord of the Occupancy Payment shall not be deemed
a waiver or acceptance by Landlord of Tenant’s breach of Tenant’s covenants and
agreements under this Article 22, or a waiver by Landlord of Landlord’s
right to institute any summary holdover proceedings against Tenant, or a waiver
by Landlord of Landlord’s rights to enforce any of Landlord’s rights or pursue
any of Landlord’s remedies against Tenant in such event other than the payment
of Fixed Rent as provided for in this Lease or under law.  This Section shall be deemed to be an
agreement expressly providing otherwise within the meaning of Section 232(c) of
the Real Property Law of the State of New York and any successor law of like
import.


(c)           No
holding over by Tenant shall be deemed nor operate as an extension of the Term
of this Lease.


Section 22.04 – Survival.  Tenant’s obligation to observe or perform
each and every one of the covenants set forth in this Article shall
survive the expiration or other termination of this Lease.



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ARTICLE 23

BROKER


Section 23.01 – Broker.  Tenant and Landlord each represent that it
has dealt with no broker in connection with this Lease other than Lighthouse
Retail Partners, LLC (“Lighthouse”) and Josh Segal Realty Group (“Segal”)
(“Lighthouse” and “Segal” are hereinafter collectively referred to as the “Broker”).  Landlord shall pay Lighthouse any commission
earned pursuant to a separate agreement between Landlord and Lighthouse.  Contemporaneously herewith, Segal has
delivered a letter to Landlord, Tenant and Lighthouse confirming that Segal is
not entitled to a commission.  Tenant
hereby agrees to indemnify and hold Landlord harmless of and from any and all
losses, costs, damages or expense (including, without limitation, attorneys’
fees and disbursements) incurred by Landlord by reason of any claim of or
liability to any broker, other than the Broker, who claims to have dealt with
Tenant in connection with this Lease, which indemnity shall survive the
expiration or other termination of this Lease.


ARTICLE 24

QUIET ENJOYMENT


Section 24.01 – Quiet Enjoyment.  Landlord covenants that if and so long as
Tenant pays the Rent and Additional Rent and other charges reserved by this
Lease, and performs all the terms, covenants and conditions of this Lease on
the part of Tenant to be performed, Tenant shall quietly enjoy the Demised
Premises without hindrance or molestation by anyone claiming by, through or
under the Landlord, subject, however, to the terms of this Lease.


ARTICLE 25

NON-LIABILITY OF LANDLORD


Section 25.01 – Non-Liability of Landlord.


(a)           Landlord
and Landlord’s affiliates, trustees, agents, members employees, officers,
directors, successors and assigns shall not be liable for, and Tenant waives
all claims for, loss or damage to Tenant’s business or damage to person or
property sustained by Tenant resulting from any accident or occurrence,
including, but not limited to, claims for damage resulting from: (i) any
equipment or appurtenances becoming out of repair; (ii) injury done or
occasioned by wind, rain, fire, storm or other occurrence of nature; (iii) any
defect in or failure of plumbing, heating or air conditioning equipment,
electric wiring or installation thereof, gas, water, or steam pipes, stairs,
porches, railings or walks; (iv) broken glass; (v) the backing up of
any sewer pipe or downspout; (vi) the bursting, leaking or running of any
tank, tub, washstand, water closet, waste pipe, drain or other pipe or tank in,
upon or about the Demised Premises; (vii) the escape of steam or hot water;
(viii) water, snow or ice being upon or coming through the roof, skylight,
trapdoor, stairs, doorways, windows, walks or any other place



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upon
or near the Demised Premises or otherwise; (ix) the falling of any
fixture, plaster, tile or stucco; and (x) any act, omission or negligence of
Tenant, any Tenant Party or of any other persons or occupants of the
Improvements or of adjoining or contiguous buildings or improvements or of
owners of adjacent or contiguous property.


(b)           Landlord
shall be under no personal liability with respect to its obligations under this
Lease.  Tenant shall look solely to the
equity of the Landlord in the Land and Improvements constituting the Demised
Premises for the satisfaction of Tenant’s remedies, and in no event shall Tenant
attempt to secure any personal judgment against any individual or any member,
principal, partner, employee, officer, director or agent of Landlord by reason
of such default by Landlord.


(c)           The
word “Landlord” as used herein means only the owner in fee for the time being
of the Demised Premises, and in the event of any sale of the Demised Premises,
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 between the parties and the
purchaser of the Demised Premises, that such purchaser has assumed and agreed
to carry out any and all covenants and obligations of Landlord hereunder.


ARTICLE 26

APPLICABLE LAW AND CONSTRUCTION


Section 26.01 – Applicable Law and Construction.  The laws of the State of New York shall
govern the validity, performance and enforcement of this Lease without giving
effect to any principle of such law as would result in the selection or application
of law of any other jurisdiction.  The
invalidity or unenforceability of any provision of this Lease shall not affect
or impair any other provision.  The
headings of the several articles and sections contained herein are for
convenience only and do not define, limit or construe the contents of such
articles or sections.  Whenever herein
the singular number is used, the same shall include the plural, and the neuter
gender shall include the masculine and feminine genders.  Neither this Lease nor any provision hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.  This Lease shall be given a fair and reasonable
construction in accordance with the intentions of the parties hereto, and
without regard to or aid of canons requiring construction against the party
drafting this Lease.



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ARTICLE 27

BINDING EFFECT OF LEASE


Section 27.01 – Binding Effect of Lease.  The covenants, agreements and obligations
contained in this Lease shall, except as herein otherwise provided, extend to,
bind and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.  Each
covenant, agreement, obligation or other provision herein contained shall be
deemed and construed as a separate and independent covenant of the party bound
by, undertaking or making the same, not dependent on any other provision of
this Lease unless otherwise expressly provided.


ARTICLE 28

NOTICES


Section 28.01 – Notice.  All notices to be given hereunder shall be in
writing and given by hand delivery, by certified or registered mail, or by
recognized overnight courier (e.g. Fed Ex) addressed to either of the parties
at the address hereinabove given or at any other subsequent mailing address
they may indicate by written notice.  Any
notice given hereunder by mail shall be deemed delivered upon receipt or
rejection of delivery by the addressee. 
Any notice to be delivered to Landlord hereunder should be directed to
the attention of Jerome Cooper at Landlord’s address stated above.  Any notice to be delivered to Tenant
hereunder shall be directed to Properties Department, Cendant Car Rental Group, Inc.,
at Tenant’s address stated above.  In
addition, copies of default notices to Landlord shall be delivered to Landlord’s
counsel:  Ruskin Moscou Faltischek, P.C.,
190 EAB Plaza, East Tower, 15th Floor, Uniondale, New York 11556-0190, Attn:
Chairman, Real Estate Department, and copies of notices to Tenant shall be
delivered to Theodore E. Hommel, Regional Director-Properties, Cendant Car
Rental Group, Inc., 90-20 Grand Central Parkway, East Elmhurst, New York
11369.


ARTICLE 29

FEE MORTGAGES


Section 29.01 – Landlord’s Right to Mortgage.  Nothing herein contained shall limit Landlord’s
right to place any mortgage on the interest of Landlord in the Demised Premises
including, without limitation, any modifications, consolidations, extensions,
renewals and replacements thereof (“Mortgage”).


Section 29.02 – Mortgagee’s Right to Cure.  If any act or omission of Landlord would give
Tenant the right, immediately or after lapse of a period of time, to cancel or
terminate this Lease, or to abate the payment of rent or to claim a partial or
total eviction, Tenant shall not exercise such right (a) until it has
given written notice of such act or omission to Landlord and the holder of each
Mortgage; provided the name and address of the holder of any such Mortgage
shall previously have been furnished to



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Tenant,
and (b) until thirty (30) days shall have elapsed following the giving of
such notice if the same can be remedied within such thirty (30) day period or
if the same cannot be remedied within thirty (30) days until a reasonable
period of time has elapsed to cure provided such cure has commenced within the
thirty (30) day period, and, further, provided the holder of such Mortgage
shall with due diligence continue to remedy such act or omission.


Section 29.03 – Tenant’s Attornment.  If the holder of any Mortgage, or any
designee of any such holder, shall succeed to the rights of Landlord under this
Lease, whether through possession or foreclosure action or delivery of a new
lease or deed, then at the request of such party so succeeding to Landlord’s
rights (“Successor Landlord”), Tenant shall automatically attorn to and
recognize such Successor Landlord as Tenant’s landlord under this Lease and
shall promptly execute and deliver any instrument (“Attornment Agreement”)
that such Successor Landlord may reasonably request to evidence such
Attornment.  Upon such Attornment, this
Lease shall continue in full force and effect as a direct lease between the
Successor Landlord and Tenant upon all of the terms, conditions and covenants
as are set forth in this Lease, except that the Successor Landlord, provided,
that such Successor Landlord is not an Affiliate (as hereinafter defined) of
Landlord, shall not (a) be liable for any previous act or omission of
Landlord under this Lease; (b) be subject to any offset, not expressly
provided for in this Lease, which theretofore shall have accrued to Tenant
against Landlord; (c) be bound by any previous modification of this Lease
or by any previous prepayment of more than one (1) month’s rent, unless
such modification or prepayment shall have been expressly approved in writing
by the holder of the Mortgage; or (d) be obligated to make any
improvements to, or perform any work at, or furnish any services to, the
Demised Premises.  For purposes of this Section 29.03,
the term “Affiliate” shall mean any person or entity that controls, is
controlled by, or is under common control with Landlord.  “Control” shall mean the power to direct or
cause the direction of the management and policies of Landlord.


Section 29.04 – Priority of Lease.  This Lease and all rights of Tenant hereunder
are and shall be subject and subordinate to every underlying lease, the rights
of the overlandlord or overlandlords under each underlying lease, all Mortgages
heretofore or hereafter placed on or affecting any underlying lease, alone or
with other property, and to all advances heretofore or hereafter made under
such leasehold mortgage, and to the lien of all renewals, modifications,
consolidations, replacements, substitutions, spreaders, additions and
extensions of any such leasehold mortgage, and (b) any Mortgage now or
hereafter affecting the Demised Premises or any part or parts of such real
property, or such real property and other property, and to each advance made or
hereafter to be made under any such Mortgage and to all renewals,
modifications, consolidations, replacements, substitutions, spreaders,
additions and extensions of any such underlying lease or leases and/or Mortgages.  In confirmation of such subordination, Tenant
shall execute and deliver promptly any certificate reasonably



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approved
by Tenant’s counsel that Landlord or its successors in interest may reasonably
request.  Landlord shall obtain a
non-disturbance and attornment agreement from the holder of any Mortgage and
from the landlord or overlandlord of any underlying lease in form and substance
reasonably acceptable to such holder of a Mortgage and to landlord or
overlandlord, as the case may be, which shall provide that so long as Tenant is
not in default under this Lease beyond any applicable grace periods, Tenant
shall not be disturbed in its possession of the Demised Premises.


ARTICLE 30

ESTOPPEL CERTIFICATES


Section 30.01 – Tenant’s Estoppel Certificate.
 Tenant shall, upon not less than fifteen
(15) days’ prior written request from Landlord, execute and deliver to Landlord
a statement certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as so modified) and stating whether there are any defaults under this
Lease of which Tenant has actual knowledge and specifying such defaults, if
any, and stating such other factual information which Landlord reasonably
requests.


Section 30.02 – Landlord’s Estoppel Certificate.  Landlord shall, upon not less than fifteen
(15) days’ prior written request from Tenant, execute and deliver to Tenant a
statement certifying that this Lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and effect
as so modified) and stating whether there are any defaults under this Lease of
which Landlord has actual knowledge and specifying such defaults, if any, and
stating such other factual information which Tenant reasonably requests.


ARTICLE 31

REPRESENTATIONS


Section 31.01 – Tenant’s Representations.  Tenant represents and warrants that:


(a)           Tenant is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and to execute, deliver
and perform this Lease.  The Lease has
been duly authorized by all necessary action on the part of the Tenant.


(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby will not result in violation of or be in conflict with or constitute a
default under any term or provision of the Certificate of Incorporation or
By-Laws of the Tenant or under any term or condition of any contract,
agreement, lease or instrument to which Tenant is a party or by which Tenant is
bound



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or any term of any judgment,
decree, statute, rule, regulation, ordinance, franchise, certificate, permit or
the like applicable to the Tenant.


(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Tenant
which would question the validity of any of the foregoing representations or
the validity of this Lease.


The foregoing representations
and warranties shall be deemed made as of the Commencement Date.


Section 31.02 – Landlord’s Representations.  Landlord represents and warrants that:


(a)           Landlord is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and subject to Section 1.01(b), has all requisite power and
authority to own and operate properties, to carry on its business as now
conducted, and to execute, deliver and perform this Lease.  The Lease has been duly authorized by all
necessary action on the part of the Landlord.


(b)           The execution, delivery and
performance of the Lease and the consummation of the transactions contemplated
hereby and thereby will not result in violation of or be in conflict with or
constitute a default under any term or provision of the Certificate of
Incorporation or By-Laws of the Landlord or any term of any judgment, decree,
statute, rule, regulation, ordinance, franchise, certificate, permit or the
like applicable to the Landlord.


(c)           There is no action, suit, proceeding
or investigation pending or threatened or any basis therefor known to Landlord
which would question the validity of any of the foregoing representations or
the validity of this Lease.


(d)           Landlord is the fee owner of the
Demised Premises.


(e)           There are no mortgages, other than
the American Airlines Mortgage, or leases encumbering the Demised Premises.


The
foregoing representations and warranties shall be deemed made as of the
Commencement Date.


ARTICLE 32

MISCELLANEOUS


Section 32.01 – Taxes.  Landlord shall be responsible for any taxes,
including, but not limited to, New York State transfer taxes, payable by reason
of the execution of this Lease.  Tenant
shall complete and sign any required tax return.



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Section 32.02
– Venue; Service of Process.  Landlord and Tenant and any subtenant under
this Lease, hereby expressly consent to the jurisdiction of the Supreme Court
of the County of Queens (or any successor thereto), the Supreme Court of the
State of New York and the United States District Court with respect to any
action or proceeding between Landlord and Tenant or such party with respect to
this Lease or any rights or obligations of either party pursuant to or in connection
with this Lease, and each of such subtenant, Landlord and Tenant agree that
venue shall lie in Queens County.  Tenant
and any subtenant further waive any and all rights to commence any such action
or proceeding against Landlord before any other court.  Without limiting any other methods of
obtaining jurisdiction, personal jurisdiction of a party to this Lease in any
action or proceeding may be obtained within and without the jurisdiction of any
court located in the State of New York, and that process or notice of motion or
other application in connection with such action or proceeding may be served
upon such party by registered or certified mail at the last known address of
such party, whether such address be within or without the jurisdiction of any such
court, and service shall be deemed complete three (3) business days after
when mailed even if delivery is refused by the addressee.


Section 32.03
– Lease Not an Offer. 
The submission of this Lease to Tenant shall not be construed as an
offer, nor shall Tenant have any rights with respect thereto or the Demised
Premises unless and until Landlord shall execute a counterpart of this Lease
and deliver the same to Tenant.  Until
such execution and delivery, any action taken or expense incurred by Tenant in connection
with this Lease or the Demised Premises shall be solely at Tenant’s own risk
and account.


Section 32.04 – Memorandum of Lease.  This Lease shall not be recorded by Landlord
or Tenant.  At the request of either
party, Landlord and Tenant shall execute and deliver to the other party a short
form memorandum of lease in form for recording. 
Such memorandum of lease shall not set forth any of the financial terms
of this Lease and shall set forth the Initial Term of this Lease and shall
provide that the memorandum of lease shall automatically expire at the
Expiration Date of the Term.


Section 32.05 – No Waiver.  Except as otherwise expressly provided in
this Lease, the failure of Landlord to enforce its rights for violation of, or
to insist upon the strict performance of any covenant, agreement, term,
provision or condition of this Lease, or any of the rules and regulations,
shall not constitute a waiver thereof, and Landlord shall have all remedies
provided herein and by applicable law with respect to any subsequent act which
would have originally constituted a violation. The receipt by Landlord or the
payment by Tenant, as the case may be, of rent with knowledge of the breach of
any covenant, agreement, term, provision or condition of this Lease shall not
be deemed a waiver of such breach. 
Except as otherwise expressly provided in this Lease, no provision of
this Lease shall be deemed to have been waived by Landlord



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unless
such waiver be in a writing signed by the party against whom enforcement shall be
enforced.  The remedies provided in this
Lease shall be cumulative and shall not in any way abridge, modify or preclude
any other rights or remedies to which Landlord may be entitled under this
Lease, at law or in equity.


Section 32.06
– Landlord’s Consent.


(a)           In any instance in which Landlord’s
consent, approval or other action or exercise of judgment or discretion shall
be made or shall be required by this Lease, or otherwise requested by Tenant,
and Tenant disputes Landlord’s reasonableness in granting, exercising, delaying
or withholding the same, Tenant in no event shall be entitled to make, nor
shall Tenant make, any claim for, and Tenant hereby waives, any claim for
damages or any remedy not specifically authorized herein; nor shall Tenant
claim any damages by way of setoff, counterclaim or defense but Tenant’s sole
remedy shall be an action or proceeding to enforce any such provision, or for
specific performance or declaratory judgment.


(b)           In
any instance where Tenant requests, in the manner set forth in this Lease,
Landlord’s consent, approval or other action or exercise of judgment or
discretion and Landlord does not respond to Tenant’s request within thirty (30)
days after such request, Landlord shall be deemed to have consented, approved
or not objected to Tenant’s request, as the case may be.


Section 32.07 – Counterparts.  This Lease may be executed in multiple
counterparts, each of which shall be an original, and all of which shall
constitute one and the same instrument.


Section 32.08 – Consent.  The Demised Premises do not represent all or
substantially all of the assets of the Landlord.  The Certificate of Incorporation of the
Landlord does not require the consent of the stockholders to the lease of the
Demised Premises.


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]



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IN
WITNESS WHEREOF, the parties have executed this Agreement of Lease as of the
day and year first above written.


	
  

  	
  G.T.J. CO., INC., Landlord

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


 


	
  

  	
  AVIS
  RENT A CAR SYSTEM,
  Tenant

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 



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