Exhibit
10.17


 


BASIC
LEASE INFORMATION


 


Lease dated as of
October 3, 2003


 


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


 


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


 


Commencement Date:                                             October 3,
2003.


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

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

  



 

















 


	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

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

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

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

  



 

















 


	
   

  	
  (v)

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

  
	
   

  	
   

  	
   

  
	
  (w)

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

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

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

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

  
	
   

  	
   

  	
   

  



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


 


Landlord Address for Payment by wire transfer
to:


 


	
   

  	
   

  	
  JPMorgan Chase Bank

  
	
   

  	
   

  	
  ABA # 021000021

  



 

















 


	
   

  	
   

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

  
	
   

  	
   

  	
  Property Account

  
	
   

  	
   

  	
  Acct #
  230-329667

  
	
   

  	
   

  	
   

  
	
  Tenant
  Address:

  	
   

  	
  c/o AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood Dale Road

  
	
   

  	
   

  	
  Wood Dale, Illinois 60191

  



 

















 


LEASE
AGREEMENT


 


 


Between


 


 


iSTAR GARDEN CITY LLC,


 


as Landlord


 


 


and


 


 


AAR ALLEN SERVICES, INC.,


 


as Tenant


 


 


 


Dated as of
October 3, 2003


 


7

















 


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


 


1.                                      DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


“Equipment” means the equipment listed on Exhibit B.


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Permitted Encumbrances” means:


 


(a)                                  Any
of the following, which are not yet due and payable at the time in
question:  (i) liens for water, sewer,
and other utility services; (ii) taxes, assessments and other governmental
charges (whether federal, state, local or foreign); and (iii) any liens of
mechanics, materialmen and laborers, including any construction liens, for work
or services performed or materials furnished in connection with the Premises;


 


(b)                                 The
easements, rights-of-way, encroachments, encumbrances, restrictive covenants
and other matters affecting the title to the Premises or any part thereof set
forth on Exhibit C attached hereto;


 

















 


(c)                                  Any
Subordination, Non-Disturbance, and Attornment Agreement(s) recorded or
otherwise, which are provided to Tenant pursuant to paragraph 17 of this Lease
or as otherwise entered into by and among Landlord, Tenant, and any Mortgagee;


 


(d)                                 Liens
for taxes (whether federal, state, local or foreign) attributable to any
taxable period whether before, on or after the Commencement Date which are
being contested in good faith in accordance with the terms of this Lease by
Tenant and for which Tenant has established adequate reserves; and


 


(e)                                  This
Lease and the rights, privileges and entitlements of Tenant hereunder.


 


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


 


(i)                                     direct
obligations of, and obligations fully guaranteed as to timely payment of
principal and interest by, the United States of America or any agency or
instrumentality of the United States of America, the obligations of which are
backed by the full faith and credit of the United States of America that mature
in thirty (30) days or less after the date of issuance and that does not have a
“r” highlighter affixed to its rating;


 


(ii)                                  time
deposits, unsecured certificates of deposit, or bankers’ acceptances that
mature in thirty (30) days or less after the date of issuance and are issued or
held by any depository institution or trust company incorporated or organized
under the laws of the United States of America or any State thereof and subject
to supervision and examination by federal or state banking authorities, so long
as the commercial paper or other short-term debt obligations of such depository
institution or trust company are rated at least “A1” and “P1” by S&P and
Moody’s, respectively, or such other rating as would not result in the
downgrading, withdrawal or qualification of the then-current Credit Rating to
the pass-through certificates, as evidenced in writing and that does not have a
“r” highlighter affixed to its rating;


 


(iii)                               repurchase
agreements or obligations with respect to any security described in clause
(i) above where such security has a remaining maturity of thirty (30) days
or less and where such repurchase obligation has been entered into with a
depository institution or trust company (acting as principal) described in
clause (ii) above;


 


(iv)                              debt
obligations bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state
thereof which mature in thirty (30) days or less from the date of issuance,
which debt obligations have ratings from Moody’s and S&P in the highest
category possible, or such other rating as would not result in the downgrading,
withdrawal or qualification of the then-current Credit Rating to any
pass-through certificate and that does not have a “r” highlighter affixed to
its rating; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investment
therein will cause the then-outstanding principal


 

















 


amount of securities issued by such
corporation and held in the accounts established hereunder to exceed 10% of the
sum of the aggregate principal balance and the aggregate principal amount of
all Permitted Investments in such accounts; and


 


(v)                                 commercial
paper (including both non-interest-bearing discount obligations and
interest-bearing obligations) payable on demand or on a specified date maturing
in thirty (30) days or less after the date of issuance thereof and which is
rated in the highest category possible by Moody’s and S&P and that does not
have a “r” highlighter affixed to such rating.


 


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


 


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


 


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


 


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


 


“Rent” means Fixed Rent and Additional Rent.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2.                                      DEMISE OF PREMISES


 


(a)                                  Landlord
hereby demises and leases to Tenant and Tenant hereby leases and rents from
Landlord the Premises, IN ITS “AS IS” CONDITION, SUBJECT TO THE EXISTING STATE
OF TITLE (WITHOUT EXPRESS OR IMPLIED WARRANTY OF LANDLORD WITH RESPECT TO THE
CONDITION, QUALITY, REPAIR OR FITNESS OF THE PREMISES FOR A PARTICULAR USE OR
TITLE THERETO, ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED BY LANDLORD AND
WAIVED AND RENOUNCED BY TENANT).  The
“Premises” consists of collectively, Landlord’s interest in the Land, the
Equipment, the Improvements, together with any easements, rights, and
appurtenances in connection therewith or belonging to said Land and
Improvements.  No easement for light,
air or view is included with or appurtenant to the Premises.  The foregoing disclaimer in this
paragraph 2(a) has been negotiated by Landlord and Tenant, each being
represented by independent counsel, and is intended as a complete negation of
any representation or warranty by Landlord, express or implied, with respect to
the condition, quality, repair, or fitness of the Premises for a particular
use, or title thereto.


 


(b)                                 The
Premises includes the Land and Improvements located at the address commonly
known as 747 Zeckendorf Boulevard, Garden City, New York, including
approximately 8.74 acres of land.


 

















 


3.                                      USE


 


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


 


4.                                      TERM


 


(a)                                  The
primary term of this Lease (the “Primary Term”) shall be for a period of
approximately twenty (20) years, beginning on the Commencement Date and ending
on the Lease Expiration Date.


 


(b)                                 Tenant
shall have the right, at its option, to extend the Primary Term of this Lease
for three (3) consecutive extension terms (the “Extension Terms”), each being
five (5) years in length.  Each
Extension Term shall commence on the day after the expiration of the preceding
term and shall expire on October 31, 2028 in the case of the first (1st)
Extension Term, and on October 31, 2033 and October 31, 2038 in the
case of the second (2nd) and third (3rd) Extension Terms,
respectively.  The options to extend the
Term of this Lease as described above shall not be deemed exercised by Tenant
unless at least eighteen (18) months prior to the Lease Expiration Date for the
Primary Term or at least eighteen (18) months prior to the expiration of the
Extension Term for the first (1st) and second (2nd)
Extension Terms, respectively, Tenant shall have delivered written notice to
Landlord of Tenant’s irrevocable decision to so extend this Lease at the end of
the Primary Term or any exercised Extension Term, as applicable.  Tenant’s failure to deliver one (1) such
timely notice to Landlord shall terminate the Extension Term to which such
notice specifically relates and all future Extension Terms, if any.  Subject to the provisions of paragraph 5,
the terms and conditions of this Lease shall apply to each Extension Term with
the same force and effect as if such Extension Term had originally been
included in the Primary Term of the Lease. 
The right of Tenant to the Extension Terms shall be conditioned upon
this Lease being in full force and effect and no Event of Default then existing
as of the Lease Expiration Date (for the first (1st) Extension Term)
or expiration of the first (1st) and


 

















 


second (2nd) Extension Term, as
the case may be for the second (2nd) and third (3rd)
Extension Term, respectively.  The
Primary Term, together with any Extension Term which Tenant properly exercises
its option with respect to, and for which the conditions related thereto are
satisfied, shall constitute the “Term” of this Lease.


 


5.                                      RENTAL; SECURITY DEPOSIT; GUARANTY


 


(a)                                  Tenant
shall pay to Landlord the following amounts as Rent for the Premises:


 


(i)                                     During
the Term of this Lease, Tenant shall pay to Landlord, as fixed monthly rent,
the amount of monthly fixed rent specified in the Basic Lease Information (“Fixed Rent”).


 


(ii)                                  Throughout
the Term of this Lease, Tenant shall pay, as Additional Rent, all other amounts
of money and charges required to be paid by Tenant under this Lease, whether or
not such amounts of money or charges are designated Additional Rent.  As used in this Lease, “Rent” shall mean and include
all Fixed Rent and Additional Rent payable by Tenant in accordance with this
Lease.


 


(b)                                 It
is the intention of Landlord and Tenant that the Fixed Rent payable by Tenant
to Landlord during the entire Term of this Lease shall be absolutely net of all
costs and expenses incurred in connection with the management, operation,
maintenance and repair of the Premises in accordance with this Lease.  Landlord shall have no obligations or
liabilities whatsoever with respect to the management, operation, maintenance
or repair of the Premises during the Term of this Lease, and Tenant shall
manage, operate, maintain and repair the Premises in accordance with this Lease
and shall pay all costs and expenses incurred in connection therewith before
such costs or expenses become delinquent. 
Without limiting the generality of the foregoing, throughout the entire
term of this Lease, Tenant shall pay, as Additional Rent, all premiums for all
property and liability insurance covering the Premises required under this
Lease, all Property Taxes and all Other Taxes that accrue during or are
allocable to the Term of this Lease, and for Property Taxes and Other Taxes,
allocable for any period of time prior to the Term of this Lease.


 


(c)                                  Tenant
shall pay all Fixed Rent to Landlord, in advance, on or before the first
business day of each and every calendar month during the Term of this Lease
(other than the payment due on the Commencement Date which is due as set forth
in the Basic Lease Information) without notice, by wire transfer or other
electronic means (or otherwise so there are collected funds available to
Landlord on the due date).  Interest at
the Overdue Rate shall accrue on unpaid Fixed Rent from the due date thereof to
the date of actual payment.  If the
Fixed Rent is paid more than five (5) Business Days after its due date, a late
charge of 5% of the delinquent amount shall be due and payable.  Tenant shall pay all Additional Rent when
due.  Tenant shall pay all Fixed Rent to
Landlord without notice, demand, deduction or offset, in lawful money of the
United States of America, to the wire transfer address of Landlord specified in
the Basic Lease Information, or to such other accounts and/or Person or Persons
or at such other place or places as Landlord may from time to time designate in
writing.


 


(d)                                 Security
Deposit Requirements are set forth below.


 

















 


(i)                                     Subject
to paragraph 5(d)(v) below, concurrently with the execution of this Lease,
Tenant shall deliver and maintain the Security Deposit Amount (in effect from
time to time) to Landlord as a security deposit (“Security Deposit”) in cash or
other immediately available funds or in the form of an irrevocable standby
letter of credit, in either case meeting the requirements of this
paragraph 5(d), to secure the full and faithful performance of Tenant’s
obligations under this Lease.  If there
is an Event of Default at any time during the Term or any holdover period,
Landlord shall have the right, but not the obligation, in accordance with the
terms of such letter of credit and this Lease, from time to time to draw upon
all or any part of the Security Deposit but only in such amounts as are
necessary to cure or partially cure the Event of Default which can be cured or
partially cured with the payment of money, or to pay itself any Rents then due,
damages or other amounts that Landlord would be entitled to recover and which
are currently due from Tenant on account of the Event of Default.  If Landlord draws upon such Security
Deposit, Landlord shall apply such proceeds to such amounts otherwise due from
Tenant as set forth above.  If Landlord
shall so draw on the Security Deposit and apply all of such proceeds so drawn
as set forth above, upon Landlord’s demand, Tenant shall, within five (5)
Business Days following notice, restore the Security Deposit to its previous
amount and any failure to do so shall be an Event of Default without further
notice.  Tenant may not use the Security
Deposit to pay Rent or otherwise cause Landlord to offset any amounts payable
by Tenant against the Security Deposit (except as provided herein).  The Security Deposit shall be returned to
Tenant within thirty (30) days after the first to occur of (1) the
Investment Grade Criteria being satisfied and the waiver set forth in paragraph
5(d)(v) being applicable, and (2) the expiration or earlier termination of
the Term and Tenant’s surrender of the Premises to Landlord as required by
paragraph 22 of this Lease, in each case less such amounts as may have
been used to cure or partially cure any Events of Default by Tenant.  Tenant’s failure to deposit, maintain and
replenish the Security Deposit as required by this Lease shall constitute an
immediate Event of Default under this Lease.


 


(ii)                                  If
Tenant desires to make the Security Deposit in cash or other immediately
available funds, the Security Deposit shall be held from time to time in an
account in Landlord’s or Mortgagee’s name (in either case with proper notation
by such account institution to indicate that the Security Deposit is Tenant’s
property subject to the lien arising under paragraph 5(d)(v) below), as
determined by Landlord, at a federally insured institution and not operating
under any regulatory or supervisory agreement, and in such state within the
continental United States as the holder thereof shall determine.  Such funds shall not be deemed to be trust
funds but shall not be commingled with the general funds of Landlord and shall
instead be held in a separate escrow account opened and maintained for this
Lease alone; provided, however, to the extent so received, any Mortgagee which
is an entity unaffiliated with Landlord or any affiliate of Landlord, may
commingle such Security Deposit funds. 
Landlord shall cause interest to be earned upon any cash or other
immediately available funds by depositing such cash or funds in a separate
interest-bearing federally insured account at an institution not operating
under any regulatory or supervisory agreement, or investing it in Permitted Investments
(as directed by, or on behalf of, Tenant). 
Any such interest earned on the Security Deposit shall be paid annually
to Tenant.  Tenant shall cooperate with
Landlord to ensure that any tax liability attributed to Landlord for such
interest shall be properly reallocated to Tenant and paid for by Tenant, and
Tenant agrees to indemnify, defend and hold Landlord


 

















 


harmless from all such tax liability.  Such indemnity shall survive the expiration
or earlier termination of the Lease for six (6) years.


 


(iii)                               If
Tenant desires to make the Security Deposit by delivering an irrevocable
standby letter of credit to Landlord, such letter of credit shall meet all of
the following requirements:  (a) it is a
sight draft letter of credit from a financial institution (the “Issuer”)
acceptable to Landlord and Mortgagee, each in their respective sole and
absolute discretion; provided, however, Landlord hereby pre-approves any
financial institution having a Credit Rating of “A1” or higher from Moody’s and
“A+” or higher from S&P, or, as applicable, an approximately equivalent
rating from an Alternative Credit Rating Agency; (b) it has a face amount of
not less than the Security Deposit Amount; (c) it has an expiration date of not
less than one (1) year from the date such letter of credit is delivered to
Landlord or Mortgagee and thereafter renewed annually throughout the Term of
the Lease at least thirty (30) days prior to the expiration date (and may be
drawn on by the holder thereof if not so renewed with such funds then being
placed in an escrow as provided in (ii) above); (d) it is freely assignable by
Landlord and/or Mortgagee, provided that the transferor and transferee shall
have complied with the Issuer’s customary transfer requirements and pay when
due the reasonable costs charged by such Issuer in connection with such
assignment; (e) it may be drawn upon by Landlord or Mortgagee to cure Events of
Default by Tenant under this Lease, but only in accordance with its terms and
the terms of this Lease; (f) it shall provide Landlord and Mortgagee,
respectively, the rights that each would have hereunder and as set forth in the
escrow agreement referred to in (ii) above, and (g) it is otherwise reasonably
satisfactory to Landlord and is substantially similar to the letter of credit
form attached hereto as Exhibit F and incorporated herein by this
reference (a letter of credit satisfying the foregoing requirements is herein
called a “Letter
of Credit”).  If the Issuer
ceases to have a Credit Rating of both “A+” or higher by S&P and “A1” or
higher by Moody’s, Tenant shall, within ten (10) Business Days of the rating
downgrade, replace the Letter of Credit issued by a bank having such
rating.  Tenant shall pay all costs
associated with any change in the Issuer or Letter of Credit, including,
without limitation, in connection with any assignment of proceeds.  Notwithstanding the foregoing, Landlord
hereby approves the form of Letter of Credit attached hereto as Exhibit F-1
and the issuer referred to therein.


 


(iv)                              Tenant
shall execute such documents, instruments, financing statements, and
acknowledgments as Landlord may reasonably request from time to time to grant
and thereafter maintain a first-priority perfected security interest in the
Security Deposit.  Tenant hereby grants
Landlord a security interest in the Security Deposit as it exists from time to
time, and all proceeds and products thereof. 
Landlord and Tenant acknowledge that as of the date of this Lease,
Landlord’s possession of the Security Deposit would not require further
documents, instruments or financing statements to provide Landlord with a
first-priority perfected security interest in the Security Deposit.  Tenant acknowledges and agrees that the
Security Deposit may also be pledged as security to any Mortgagee and Tenant
shall cooperate with, permit, and execute such documents and instruments as may
be required to provide Mortgagee with such security.


 


(v)                                 So
long as no Event of Default then exists (it being agreed that it is a condition
precedent to any waiver in the requirement to maintain a Security Deposit with


 

















 


Landlord as set forth in this paragraph 5(d)
that no Event of Default exists) when the Investment Grade Criteria is
satisfied, the requirements of maintaining the Security Deposit shall be waived
by Landlord upon Tenant’s written request accompanied by evidence satisfactory
to Landlord of such investment grade ratings. 
Such Landlord’s waiver shall cease if Tenant or Guarantor no longer or
at any time does not satisfy the Investment Grade Criteria.  If after being granted a waiver the
Investment Grade Criteria is subsequently no longer met, Tenant’s obligation to
deposit and replenish and thereafter maintain such Security Deposit under this
Lease shall be re-instated, without further act, deed or notice; provided,
however, Tenant shall be afforded ten (10) Business Days after such cessation
of such waiver within which to deposit the Security Deposit with Landlord;
provided, further, Landlord shall again be required to waive Tenant’s
obligation to maintain such Security Deposit when Tenant shall have satisfied
the conditions precedent required for such waiver as set forth in the first
sentence of this subsection (v).


 


(vi)                              If a
transferee of Landlord’s right, title, and interest in and to the Premises,
this Lease, and such Security Deposit (a “Transferee”), shall have assumed in writing
Landlord’s obligations hereunder and recognized Tenant in writing, as tenant
under this Lease; (ii) Landlord, or such Transferee, shall have delivered
written evidence of such Transferee’s assumption and recognition as
aforesaid;  (iii) Landlord shall deliver
the cash Security Deposit (including any accrued but unpaid interest thereon to
which Tenant is entitled under this Lease) and/or the Letter of Credit, as
applicable, to any such Transferee of Landlord’s right, title, and interest as
aforesaid, the then-current landlord delivering such Security Deposit to such
Transferee shall be discharged from further liability therefor; provided,
however, if the immediately preceding conditions (i), (ii), and (iii) are not
satisfied, Tenant shall have no obligations hereunder to such Transferee solely
with respect to the Security Deposit (including any replenishment, replacement,
or transfer obligations) unless and until such conditions shall have been
satisfied and the then-current landlord shall have delivered the Security
Deposit to such Transferee.


 


(e)                                  Tenant
acknowledges and agrees that it was a condition precedent to Landlord entering
into this Lease that Landlord receive a guaranty of Tenant’s payment and
performance of all of Tenant’s obligations under this Lease (in such form as
approved by Landlord, the “Guaranty”) from Guarantor, which Guaranty
is being entered into contemporaneously with the execution of this Lease.  Tenant hereby represents and warrants to
Landlord as of the date hereof and covenants to Landlord that throughout the
Term of this Lease Tenant shall cause Guarantor to be bound by the terms of the
Guaranty to Landlord.


 


6.                                      TAXES


 


(a)                                  Tenant
shall pay, as Additional Rent, all Property Taxes prior to the assessment of
any interest or penalty for late payment (subject to Tenant’s rights under this
paragraph (a) to make payment thereof in installments or under paragraph 6(e)
below to protest Property Taxes); provided, however, if Landlord or Mortgagee
is holding Tenant’s estimated payments thereof pursuant to paragraph 6(f)
below, Landlord or Mortgagee shall instead make such payments timely upon
Tenant’s behalf; provided, further, if any such Property Taxes may legally be
paid in installments, Tenant may, at its option, pay such Property Taxes in
such installments together


 

















 


with any interest due thereon provided that
Tenant shall have paid all such installments, or provided to Landlord or
Mortgagee, such amounts as are necessary for the payment of, all such
installments prior to the expiration or earlier termination of this Lease.  “Property Taxes” shall mean all taxes,
assessments, excises, levies, fees and charges (and any tax, assessment,
excise, levy, municipal service fee, fee or charge levied wholly or partly in
lieu thereof or as a substitute therefor or as an addition thereto) of every
kind and description, general or special, ordinary or extraordinary, foreseen
or unforeseen, secured or unsecured, whether or not now customary or within the
contemplation of Landlord and Tenant, that are levied, assessed, charged,
confirmed or imposed by any public or government authority on or against, or
otherwise with respect to, the Premises or any part thereof or any personal
property used in connection with the Premises, including Landlord’s franchise
taxes based upon gross receipts (or derivatives therof, specifically excluding,
however, net income) but only to the extent that such taxes are in lieu of or a
substitute for any Property Taxes. 
Property Taxes shall not include net income or inheritance taxes,
franchise taxes (to the extent not included in the definition of Property
Taxes), estate taxes of Landlord or any succession or transfer taxes growing
out of or levied in connection with this Lease, in each case, of Landlord,
unless levied or assessed against Landlord as a substitute for any Property
Taxes.


 


(b)                                 Tenant
shall pay, as Additional Rent, all Other Taxes prior to the assessment of any
interest or penalty for late payment (subject to Tenant’s rights under
paragraph 6(e) below to payment in installments or to protest Other Taxes);
provided, however, if Landlord or Mortgagee is holding Tenant’s estimated
payments thereof pursuant to paragraph 6(f) below, Landlord or Mortgagee shall
instead make such payments timely upon Tenant’s behalf; provided, further, if
any such Other Taxes may legally be paid in installments, Tenant may, at its
option, pay such Other Taxes in such installments together with any interest
due thereon provided that Tenant shall have paid, or provided to Landlord or
Mortgagee, such amounts as are necessary for the payment of,  all such installments prior to the
expiration or earlier termination of this Lease.  “Other Taxes” shall mean all taxes, assessments, excises,
levies, fees and charges, including all payments related to the cost or
occupation of providing facilities or services, whether or not now customary or
within the contemplation of Landlord and Tenant, that are levied, assessed,
charged, confirmed or imposed by any public or government authority upon, or
measured by, or reasonably attributable to (i) the Premises, (ii) the cost or
value of Tenant’s equipment, furniture, fixtures and other personal property
located in the Premises or the cost or value of any leasehold improvements made
in or to the Premises by or for Tenant, regardless of whether title to such
improvements is vested in Tenant or Landlord, (iii) any Rent payable under this
Lease, including any gross income tax or excise tax levied by any public or
government authority with respect to the receipt of any such Rent but only to
the extent that such taxes are in lieu of or a substitute for any Property
Taxes, (iv) the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or (v) this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. 
“Other Taxes” shall not include net income, or inheritance taxes of
Landlord unless levied or assessed against Landlord in whole or in part in lieu
of, as a substitute for, or as an addition to any Other Taxes.


 

















 


(c)                                  Except
for any tax on the net income derived from the Fixed Rent, if at any time
during the Term, any method of taxation shall be such that there shall be
levied, assessed or imposed on the Landlord, or on the Fixed Rent or Additional
Rent, or on the Premises, or any portion thereof, a capital levy, gross
receipts tax, occupational license tax or other tax on the Rents received
therefrom, or a franchise tax, or an assessment, gross receipts levy or charge
measured by or based in whole or in part upon such gross Rents, Tenant, to the
extent permitted by law, covenants to pay and discharge the same, it being the
intention of the parties hereto that the Fixed Rent to be paid hereunder shall
be paid to Landlord absolutely net without deduction or charge of any nature
whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or of any
nature, kind, or description, except as otherwise expressly provided in this
Lease.


 


(d)                                 Tenant
covenants to furnish Landlord, within fifteen (15) days after request by
Landlord official receipts of the appropriate taxing authority, if any, or
other appropriate proof reasonably satisfactory to Landlord, evidencing the
payment of all Impositions.  The
certificate, advice or bill of the appropriate official designated by law to
make or issue the same or to receive payment of any Imposition may be relied
upon by Landlord as sufficient evidence that such Imposition is due and unpaid
at the time of making or issuance of such certificate, advice or bill.


 


(e)                                  Tenant
shall have the right to contest the amount or validity, in whole or in part, of
any Property Tax or Other Tax or to seek a reduction in the valuation of the
Premises as assessed for real estate property tax purposes by appropriate
proceedings diligently conducted in good faith (but only after payment of such
Tax).  Landlord shall not be required to
join in any proceeding referred to in this subparagraph (e) unless required by
law, in which event Landlord shall, upon written request by Tenant, join in
such proceedings or permit the same to be brought in its name, all at Tenant’s
expense.  Landlord agrees to provide, at
Tenant’s expense, whatever assistance Tenant may reasonably require in
connection with any such contest. 
Tenant covenants that Landlord shall not suffer or sustain any costs or
expenses (including counsel fees) or any liability in connection with any such
proceeding.  No such consent shall
subject Landlord to any civil liability or the risk of any criminal liability
or forfeiture.


 


(f)                                    During
the continuance of any Event of Default or as required by a Mortgagee, Tenant
shall pay to Landlord on the first day of each calendar month an amount equal
to one twelfth (1/12) of the Property Taxes and Other Taxes thereafter due and
payable, as reasonably estimated by Landlord on the basis of assessments and
bills and estimates thereof.  Such
amounts shall be held by Landlord or Mortgagee, without interest, and shall not
be deemed to be trust funds but shall not be commingled with the general funds
of Landlord and shall instead be held in a separate escrow account of Landlord
or Mortgagee, as applicable, opened and maintained for this Lease alone;
provided, however, to the extent so received, any Mortgagee which is an entity
unaffiliated with Landlord or any affiliate of Landlord, may commingle such
funds.  Landlord shall apply such
amounts paid by Tenant under this paragraph 6(f) (including any amounts
tendered by Tenant which are intended for interest if Tenant shall have elected
to make such payments in installments) to the payment before delinquency of the
Property Taxes and Other Taxes, subject to any rights of the Mortgagee
thereto.  Landlord and Mortgagee shall
make no charge for holding and applying such amounts.  If at any time the amount on deposit pursuant to


 

















 


this paragraph 6(f) shall be less than
the amount reasonably deemed necessary by Landlord to pay such Property Taxes
or Other Taxes as they become due, Tenant shall pay to Landlord the amount
necessary to make the deficiency within five (5) Business Days after notice
from Landlord requesting payment thereof.


 


(g)                                 Landlord
will, within thirty (30) days after receipt, reimburse Tenant for any refund of
Property Tax or Other Tax received by Landlord or Mortgagee as a result of any
tax contest relating to the Term.


 


7.                                      NET LEASE; NON-TERMINABILITY


 


(a)                                  This
is an absolutely net lease and the Fixed Rent, Additional Rent and all other
sums payable hereunder by Tenant shall be paid without notice (except as
expressly provided herein), demand, set-off, counterclaim, abatement,
suspension, deduction or defense.  It is
the intention of the parties hereto that the Fixed Rent shall be an absolutely
net return to Landlord throughout the Term of this Lease.  In order that such Rent shall be absolutely
net to Landlord, Tenant shall pay when due, and save Landlord harmless from and
against, any and all costs, charges and expenses attributable to the Premises,
including each fine, fee, penalty, charge (including governmental charges),
assessments, sewer rent, Impositions, insurance premiums as may be required
from time to time by Landlord or Mortgagee, utility expenses, carrying charges,
costs, expenses and obligations of every kind and nature whatsoever, general
and special, ordinary and extraordinary, foreseen and unforeseen, the payment
for which Landlord or Tenant is, or shall become liable by reason of any rights
or interest of Landlord or Tenant in, to or under the Premises or this Lease or
in any manner relating to the ownership, leasing, operation, management,
maintenance, repair, rebuilding use or occupation of the Premises, or of any
portion thereof; provided, however, that nothing herein contained shall be
construed as imposing upon Tenant any obligation to pay any estate,
inheritance, succession, franchise (to the extent excluded as set forth in
Paragraph 6) or transfer tax of Landlord growing out of, or levied in
connection with, this Lease or the Landlord’s right or interest in the
Premises.


 


(b)                                 This
Lease shall not terminate, nor shall Tenant have any right to terminate this
Lease, except as expressly provided in paragraph 14, nor shall Tenant be entitled
to any abatement or reduction of Rent hereunder except as required by
paragraph 14, nor shall the obligations of Tenant under this Lease be
affected, by reason of (i) any damage to or destruction of all or any part of
the Premises from whatever cause; (ii) subject to paragraph 14, the
taking of the Premises or any portion thereof by condemnation, requisition or
eminent domain proceedings; (iii) the prohibition, limitation or restriction of
Tenant’s use of all or any part of the Premises, or any interference with such
use, (iv) any eviction by paramount title or otherwise, (v) Tenant’s
acquisition or ownership of all or any part of the Premises otherwise than as
expressly provided herein; (vi) any default on the part of Landlord under this
Lease, or under any other agreement to which Landlord and Tenant may be
parties; or (vii) any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding.  It is the intention of the parties hereto
that the obligations of Tenant hereunder shall be separate and independent
covenants and agreements, that the Fixed Rent, the Additional Rent and all
other sums payable by Tenant hereunder shall continue to be payable in all
events and that the


 

















 


obligations of Tenant hereunder shall
continue unaffected unless the requirement to pay or perform the same shall
have been terminated pursuant to any express provision of this Lease.  Tenant agrees that Tenant will not be
relieved of the obligations to pay the Fixed Rent or any Additional Rent in
case of damage to or destruction or a condemnation (except as expressly
provided in paragraph 14) of the Premises.


 


(c)                                  Tenant
agrees that it will remain obligated under this Lease in accordance with its
terms, and that it will not take any action to terminate, rescind or void this
Lease, notwithstanding (i) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution or winding-up or other
proceeding affecting Landlord or its successor in interest, or (ii) any action
with respect to this Lease which may be taken by any trustee or receiver of
Landlord or its successor in interest or by any court in any such proceeding.


 


(d)                                 Tenant
waives all rights which may now or hereafter be conferred by law (i) to quit,
terminate or surrender this Lease or the Premises or any part thereof, or (ii)
to any abatement, suspension, deferment or reduction of the Fixed Rent,
Additional Rent or any other sums payable under this Lease, except as otherwise
expressly provided herein.


 


8.                                      SERVICES


 


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


 


9.                                      REPAIRS AND MAINTENANCE; REPLACEMENT


 


(a)                                  At
all times on and after the Commencement Date to and including the date of the
termination of the Term, by lapse of time or otherwise, Tenant shall, at its
own sole cost and expense, keep the Premises in good order and in a condition
equal to or better than the condition existing as of the date hereof, subject
to ordinary wear and tear, except as repaired, rebuilt or altered as required
or permitted by this Lease (or, in the case of termination pursuant to
paragraph 14, as condemned).  Tenant
shall timely and properly maintain, repair and replace all


 

















 


of the Premises and all its component parts,
including parking lot surface and stripes, all landscaping, mechanical systems,
electrical and lighting systems, plumbing and sewage systems, fixtures and
appurtenances, interior and exterior walls, roof, foundations, floor slabs,
columns and structural steel so as to preserve and protect the useful life,
utility and value of such components, and in all events so as to preserve the
effectiveness of any warranty relating thereto, such repairs and replacements
to be at least equal in quality and class to the original work.  If any building system or component shall
become obsolete, non-functional, or uneconomic to repair, Tenant shall remove
such item from the Premises and, promptly replace it with an item of comparable
initial value and function.  Promptly
upon installation of any equipment which is not Tenant Trade Fixtures, Tenant
shall deliver to Landlord the original warranty relating to such equipment
(which shall specify Landlord as the owner of the equipment and upon Landlord’s
receipt of such original warranty, Landlord shall be deemed to have granted
Tenant a non-exclusive license and authority of Landlord solely to enforce such
warranty during the Term of the Lease). 
Tenant shall deliver to Landlord a written statement showing all
removals and replacements of such systems or components during the preceding
calendar year, including manufacturers, model numbers, and serial numbers.  Except for Site Assessments as provided in
paragraph 26(d), Landlord may, upon ten (10) Business Days’ prior notice cause
independent private inspectors to make inspections of any building and building
systems on the Premises or segments thereof to determine Tenant’s compliance
under this paragraph 9.  Tenant
shall pay the cost of one (1) such inspection on the Premises by or on behalf
of Landlord once every two (2) calendar years; provided, however, if such
inspection by Landlord reveals that the Premises, or any portion thereof,
including any equipment thereon, is not in the condition required by this
Lease, then Tenant shall pay for such additional inspections performed by
Landlord through the inspection approving the condition of such Premises as
being in conformity with the Lease. 
Notwithstanding the foregoing requirements of this paragraph 9, Tenant
shall have no obligation to deliver any warranties for any Trade Fixtures at
the Premises which may and which are subsequently removed by Tenant upon
expiration or earlier termination of this Lease.


 


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


 


(b)                                 It
is intended by Tenant and Landlord that Landlord shall have no obligation, in
any manner whatsoever, to repair or maintain the Premises (or any equipment
therein), whether structural or nonstructural, all of which obligations are
intended, as between Landlord and Tenant, to be those of Tenant.  Tenant expressly waives the benefit of any
statute now or in the future in effect which would otherwise afford Tenant the
right to make repairs at Landlord’s


 

















 


expense or to terminate this Lease because of
Landlord’s failure to keep the Premises in good order, condition and
repair.  Notwithstanding the foregoing,
Landlord shall repair or restore the Premises to the extent such repairs or
restoration is necessitated by any act or omission of Landlord, its agents,
contractors or employees.


 


(c)                                  Tenant
shall maintain on the Premises, and turn over to Landlord upon expiration or
termination of this Lease, then current operating manuals and original
warranties (to the extent applicable) for the equipment then located on the
Premises specifically excluding, in all cases, Tenant’s Trade Fixtures at the
Premises which may be and which are subsequently removed by Tenant upon
expiration or earlier termination of this Lease.


 


10.                               DESTRUCTION OF OR DAMAGE TO PREMISES


 


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


 


For all Casualty Repairs, the following apply:


 


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


 

















 


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


 


(i)                                     No
more frequently than once per calendar month, Tenant may request that Landlord
reimburse Tenant out of such insurance proceeds for costs incurred by Tenant
for work in place to repair and restore the damaged Premises during the
immediately preceding calendar month. 
Tenant’s request shall certify that all work for which reimbursement is
requested was performed in compliance with the plans and specifications
approved by Landlord pursuant to paragraph 23 and all applicable laws, and
shall include reasonably satisfactory evidence of the costs incurred by Tenant
and unconditional partial (as to the amount received compared to percentage
completion) or final lien releases, as applicable, in form and substance
required by applicable law executed by all mechanic’s, materialmen, laborers,
suppliers and contractors who performed any portion of the repair work or
supplied materials; and


 


(ii)                                  Within
fifteen (15) days after receiving Tenant’s request, Landlord shall approve or
disapprove Tenant’s request, which approval shall not be unreasonably withheld,
delayed, or conditioned by written notice to Tenant.  If Landlord approves all or any portion of a request and Landlord
has received (and not previously disbursed) insurance proceeds for such costs,
then Landlord’s approval shall include a check in the amount approved by
Landlord.  If Landlord disapproves all
or any portion of a request, then Landlord’s notice shall state the reasons for
that disapproval.  Landlord’s failure to
deliver a notice approving or disapproving a request shall be conclusively
deemed Landlord’s disapproval of the request.


 


11.                               INSURANCE, HOLD HARMLESS AND INDEMNIFICATION


 


(a)                                  To
the fullest extent permitted by law, Landlord shall not be liable to Tenant for
any damage to or loss or theft of any property or for any bodily or personal
injury, illness or death of any person in, on or about the Premises arising at
any time and from any cause whatsoever, except to the extent such liability
arises out of any act or omission of Landlord, its agents, employees or
contractors.  Tenant waives all claims
against Landlord arising from any liability described in this
paragraph 11(a).


 


(b)                                 Except
to the extent such liability arises out of the acts or omissions of Landlord,
its agents, employees or contractors, Tenant hereby agrees to indemnify and
defend Landlord against and hold Landlord harmless from all claims, demands,
liabilities, damages, losses, costs and expenses, including attorneys’ fees and
disbursements, arising from or related to any use or occupancy of the Premises,
or any condition of the Premises, or any default in the performance of Tenant’s
obligations hereunder, or any damage to any property (including property of
employees and invitees of Tenant) or any bodily or personal injury, illness or
death of any person (including employees and invitees of Tenant) occurring in,
on or about the Premises or any part


 

















 


thereof or any part of the building or the
land constituting a part of the Premises arising at any time and from any cause
whatsoever or occurring outside the Premises when such damage, bodily or
personal injury, illness or death is caused by any act or omission of Tenant or
its agents, officers, employees, contractors, invitees or licensees.  This paragraph 11(b) shall survive the
termination of this Lease with respect to any damage, bodily or personal
injury, illness or death occurring prior to such termination.


 


(c)                                  Tenant
shall, at all times and during the term of this Lease and at Tenant’s sole cost
and expense, obtain and keep in force comprehensive commercial general
liability insurance, including contractual liability (specifically covering
this Lease), cross liability, fire legal liability, and premises operations,
all on an “occurrence” policy form, with a minimum combined single limit in the
amount of Thirty Million Dollars ($30,000,000) per occurrence for bodily or
personal injury to, illness of, or death of persons and damage to property
occurring in, on or about the Premises, and such insurance shall name the
Landlord, any Mortgagee, and any other parties designated by Landlord as
additional insureds.  Tenant shall, at
Tenant’s sole cost and expense, be responsible for insuring Tenant’s furniture,
equipment, fixtures, computers, office machines and personal property.


 


(d)                                 Tenant
shall, at all times during the term of this Lease and at Tenant’s sole cost and
expense, obtain and keep in force worker’s compensation and employer’s
liability insurance in New York State.


 


(e)                                  Tenant
shall, at all times during the Term of this Lease, at Tenant’s sole cost and
expense, obtain and keep in force or reimburse Landlord for the cost of (a)
insurance against loss (including terrorism, earthquake and flood) or damage to
the Premises by fire and all other risks of physical loss (including earthquake
and flood) covered by insurance of the type now known as “all risk,” with
difference in conditions coverage, in an amount not less than the full
replacement cost of the Premises (without deduction for depreciation),
including the cost of debris removal and such endorsements as Landlord may
reasonably require, and containing “Replacement Cost” and “Agreed Amount”
endorsements; (b) boiler and machinery insurance covering pressure vessels, air
tanks, boilers, machinery, pressure piping, heating, ventilation and air
conditioning equipment, and elevator and escalator equipment, provided the
Premises contain equipment of such nature and insurance against loss of
occupancy or use arising from any breakdown of any such items, in such amounts
as Landlord may reasonably determine; (c) business interruption insurance
insuring that the Fixed Rent will be paid to Landlord for up to one year if the
Premises are destroyed or rendered untenantable by any cause insured against
(it being understood that the existence of such insurance does not reduce
Tenant’s obligation to pay Fixed Rent without diminution), and in the event of
termination of this Lease due to any such insured cause, pay to Landlord one
year’s Fixed Rent; and (d)  insurance in amounts and against such
other risks as Landlord or Mortgagee may reasonably require and against such
risks as are customarily insured against by operators of similar properties.


 


(f)                                    All
insurance required to be maintained by Tenant under this paragraph 11 and all
renewals thereof shall be issued by good and responsible companies qualified to
do and doing business in the state where the Premises are located and having an
S&P claims paying ability


 

















 


rating of at least “A” and shall be
reasonably satisfactory to Landlord. 
All deductible amounts shall not exceed $100,000 under each such
insurance policy.  Each policy to be
maintained by Tenant shall expressly provide that the policy shall not be
canceled or altered without thirty (30) days’ prior written notice to Landlord
and Mortgagee and shall remain in effect notwithstanding any such cancellation
or alteration until such notice shall have been given to Landlord and such
period of thirty (30) days shall have expired. 
All insurance under this paragraph 11 to be maintained by Tenant shall
designate Landlord, Mortgagee, and any other parties designated by Landlord as
an additional insured and loss payee, shall be primary and noncontributing with
any insurance which may be carried by Landlord, shall afford coverage for all
claims based on any act, omission, event or condition that occurred or arose
(or the onset of which occurred or arose) during the policy period, and shall
expressly provide that Landlord, although named as an additional insured, shall
nevertheless be entitled to recover under the policy for any loss, injury or
damage to Landlord.  Tenant may carry
such insurance under “blanket” policies, provided such policies expressly
reserve an amount of coverage for the Premises equal to the amount required by
this Lease.  Upon the issuance of each
such policy to be maintained by Tenant, Tenant shall deliver a certificate
thereof (Acord 27 form) to Landlord for retention by Landlord.  Tenant shall pay to Landlord, immediately
upon demand all costs incurred by Landlord, as Additional Rent, to obtain and
maintain in effect the policies of insurance required under this paragraph 11
or otherwise required by Landlord.


 


(g)                                 Landlord
and Tenant, as applicable, either prior to or immediately after the
Commencement Date, procure from each of their respective insurers providing the
insurance required by this paragraph 11, a waiver of all rights of subrogation
which such insurer might otherwise, if at all, have to any claims against
Landlord or Tenant, as applicable.


 


(h)                                 During
the continuance of any Event of Default or as required by a Mortgagee, Tenant
shall pay to Landlord on the first day of each calendar month an amount equal
to one twelfth (1/12) of the premiums for the insurance required by this
paragraph 11, as reasonably estimated by Landlord on the basis of bills and
estimates thereof.  If such premium
payments shall have been made by Tenant, such amounts shall be held by Landlord
or Mortgagee, without interest, and shall not be deemed to be trust funds and
may be commingled with the general funds of Landlord or Mortgagee.  Landlord shall apply such amounts to the
payment of the insurance premiums with respect to which such amounts were paid,
subject to any rights of Mortgagee thereto. 
Landlord and Mortgagee shall make no charge for holding and applying
such amounts.  If at any time the amount
on deposit pursuant to this paragraph 11(h) shall be less than the amount
deemed necessary by Landlord to pay such premiums as they become due, Tenant
shall pay to Landlord the amount necessary to make the deficiency within five
(5) days after notice from Landlord requesting payment thereof.  Upon the expiration or termination of the
term of this Lease (other than as a result of an Event of Default), Landlord
shall promptly refund, and cause its Mortgagee to refund, to Tenant any amount
held by Landlord pursuant to this paragraph.


 

















 


12.                               COMPLIANCE WITH LAWS, COVENANTS


 


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


 


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


 


(i)                                     pay
any Imposition payable by Tenant pursuant to this Lease; or


 


(ii)                                  make
any other payment or perform any other act on Tenant’s part to be paid or
performed hereunder which Tenant shall not have performed within the time
required


 

















 


therefor, except that any time permitted to
Tenant to perform any act required by this paragraph shall be extended for such
reasonable period not to exceed one hundred eighty (180) days as may be
necessary to effectuate such performance, provided throughout such time Tenant
is continuously, diligently and in good faith prosecuting such performance.


 


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


 


13.                               PARTIAL TAKING


 


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


 

















 


14.                               SUBSTANTIAL TAKING


 


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


 


15.                               DEFAULT: 
EVENTS OF DEFAULT


 


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


 


(a)                                  Tenant
fails to pay any Fixed Rent as and when such Fixed Rent becomes due, and such
failure continues for five (5) days after written notice thereof, provided that
if Tenant is more than five (5) days late in the payment of Fixed Rent once in
any twelve (12) consecutive


 


8

















 


month period, only one notice need be given
by Landlord during such 12 month period and any subsequent failure to pay Fixed
Rent on or before its due date within such twelve (12) consecutive months shall
constitute an Event of Default after five (5) days without notice; or


 


(b)                                 Tenant
fails to pay any Additional Rent as and when such Additional Rent becomes due
and payable and such failure continues for more than ten (10) days after
Landlord gives written notice thereof to Tenant; or


 


(c)                                  An
Event of Default occurs under paragraph 25, subletting/assignment; or


 


(d)                                 Tenant
fails to perform or breaches any agreement or covenant of this Lease not
separately covered in this paragraph 15 to be performed or observed by Tenant
as and when performance or observance is due and such failure or breach
continues for more than thirty (30) days after Landlord’s giving written notice
thereof to Tenant; provided, however, that if, by the nature of such agreement
or covenant, such failure or breach cannot reasonably be cured within such
period of thirty (30) days, an Event of Default shall not exist as long as
Tenant commences with due diligence and dispatch the curing of such failure or
breach within such period of thirty (30) days and, having so commenced,
thereafter prosecutes with diligence and dispatch and completes the curing of
such failure or breach within a reasonable time not to exceed one hundred
eighty (180) days; or


 


(e)                                  Tenant
(i) files, or consents by answer or otherwise to the filing against Tenant of,
a petition for relief or reorganization or arrangement or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy,
insolvency or other debtors’ relief law of any jurisdiction, (ii) makes an
assignment for the benefit of Tenant’s creditors, (iii) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of Tenant or of any substantial part of Tenant’s property, or (iv) takes
action for the purpose of any of the foregoing; or


 


(f)                                    A
court or government authority enters an order, and such order is not vacated
within sixty (60) days, (i) appointing a custodian, receiver, trustee or other
officer with similar powers with respect to Tenant or with respect to any
substantial part of Tenant’s property, or (ii) constituting an order for relief
or approving a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, insolvency or other debtors’ relief law of any
jurisdiction, or (iii) ordering the dissolution, winding-up or liquidation of
Tenant; or


 


(g)                                 Any
event occurs which is specifically stated to be an Event of Default under this
Lease; or


 


(h)                                 An
event of default shall occur under any loan agreement or indenture of Tenant or
Guarantor securing an amount in excess of $10,000,000 and which event of
default causes the lenders under such loan agreement or indenture to exercise
the right to accelerate the debt secured thereby.  Tenant shall promptly give notice of any such acceleration to
Landlord; or


 


(i)                                     Any
representation or warranty of Tenant contained in any writing delivered to
Landlord shall have been materially and adversely false as of the date it was
made; or


 

















 


(j)                                     This
Lease or any estate of Tenant hereunder is levied upon under any attachment or
execution and such attachment or execution is not vacated within sixty (60)
days; or


 


(k)                                  Tenant
shall abandon the Premises for one hundred eighty (180) days.  Landlord and Tenant agree that no portion of
the Premises shall be deemed to be abandoned if during such period of
abandonment, Tenant shall continue to pay Rent and maintain the Premises in
accordance with this Lease and if such portion of the Premises (i) is included
in security procedures involving maintaining at least one (1) person at such
portion of the Premises at all times, (ii) daily inspections are made to such
portions of the Premises (which inspections may be made by the security
personnel), and (iii) one (1) such portion of the Premises is otherwise in
compliance with the terms of this Lease; or


 


(l)                                     Any
judgment or order for the payment of money in excess of $10,000,000 shall be
rendered against Tenant or Guarantor and not paid within thirty (30) days after
the rendering of a final non-appealable determination that Tenant or Guarantor
is liable for such payment; or


 


(m)                               Tenant
fails to pay any insurance premiums when due or otherwise fails to continuously
maintain all insurance required to be maintained by Tenant in accordance with
the terms and conditions of this Lease; or


 


(n)                                 Guarantor
defaults in its obligations under the Guaranty.


 


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


 


16.                               REMEDIES


 


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


 


(a)                                  Landlord
shall have the right to terminate Tenant’s right to possession of the Premises
and repossess the Premises by any lawful means without terminating this
Lease.  Landlord shall use good faith
and reasonably prompt efforts, to the extent required by applicable law of the
state where the Premises are located, to re-let the Premises for the account of
Tenant for such rent and upon such terms as may be satisfactory to
Landlord.  For the purposes of that
re-letting, Landlord may repair, and perform normal remodeling and alterations
to the Premises.  If Landlord fails to
re-let the Premises, Tenant shall pay to Landlord the Rent in this Lease for
the balance of the Term as those amounts become due in accordance with the
terms of this Lease.  If Landlord
re-lets the Premises, but fails to realize a sufficient sum from the re-letting
to pay the full amount of Rent in this Lease for the balance of the Term as
those amounts become due in


 

















 


accordance with the terms of this Lease,
after paying all of the costs and expenses of all normal and customary
decoration, repairs, remodeling, alterations and additions and the expenses of
the re-letting and of the collection of the rent accruing from the re-letting,
Tenant shall pay to Landlord the amount of any deficiency upon Landlord’s
demand from time to time made.


 


(b)                                 Landlord
shall have the right at any time to give a written termination notice to Tenant
and, on the date specified in such notice, Tenant’s right to possession shall
terminate and this Lease shall terminate. 
Upon such termination, Landlord shall have the right to recover from
Tenant:


 


(i)                                     The
worth at the time of determination of all unpaid Rent which had been earned at
the time of termination;


 


(ii)                                  The
worth at the time of determination of the amount of all unpaid Rent for the
balance of the then-Term of this Lease after the time of termination excluding
the potential Lease term under any unexercised options for any Extension Terms
reduced only to the extent of net rental proceeds actually received from any
subsequent replacement tenant(s) for the Premises; provided, however, except to
the extent the Premises’ state statutes or common law requires Landlord to
mitigate its damages arising from an Event of Default by Tenant under this
Lease, from and after any such Event of Default, Landlord shall have no duty to
mitigate its damages by re-letting, or attempting to re-let, the Premises to
any replacement tenant(s); and


 


(iii)                               All
other amounts necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform all of Tenant’s obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom.  The “worth at the
time of determination” of the amounts referred to in clause (i) above shall be
computed by allowing interest at the Overdue Rate.  The “worth at the time of determination” of the amount referred
to in clause (ii) above shall be computed by discounting such amount to present
value by using the discount rate equal to the then Treasury Rate.  For the purpose of determining unpaid Rent
under clause (i) and (ii) above, the Rent reserved in this Lease shall be deemed
to be the total Rent payable by Tenant under paragraph 5 hereof.


 


(c)                                  Even
though Tenant has breached this Lease, this Lease shall continue in effect for
so long as Landlord does not terminate Tenant’s right to possession, and
Landlord shall have the right to enforce all its rights and remedies under this
Lease, including the right to recover all Rent as it becomes due under this
Lease.  Acts of maintenance or
preservation or efforts to relet the Premises or the appointment of a receiver
upon initiative of Landlord to protect Landlord’s interest under this Lease
shall not constitute a termination of Tenant’s right to possession unless
written notice of such termination is given by Landlord to Tenant.  Landlord shall have unrestricted rights of
entry for such purposes following an Event of Default.  Landlord shall be entitled to an
administrative fee of five percent (5%) of all amounts expended under this
paragraph 16.


 


(d)                                 All
agreements and covenants to be performed or observed by Tenant under this Lease
shall be at Tenant’s sole cost and expense and without any abatement of Fixed
Rent or


 

















 


Additional Rent.  If Tenant fails to pay any sum of money to be paid by Tenant or
to perform any other act to be performed by Tenant under this Lease as and when
due or required to be performed, Landlord shall have the right, but shall not
be obligated, and without waiving or releasing Tenant from any obligations of
Tenant, to make any such payment or to perform any such other act on behalf of
Tenant in accordance with this Lease. 
All sums so paid by Landlord and all necessary incidental costs shall be
deemed Additional Rent hereunder and shall be payable by Tenant to Landlord on
demand, together with interest on all such sums from the date of expenditure by
Landlord to the date of repayment by Tenant at the Overdue Rate.  Landlord shall have, in addition to all
other rights and remedies of Landlord, the same rights and remedies in the
event of the nonpayment of such sums (plus interest at the Overdue Rate) by
Tenant as in the case of default by Tenant in the payment of Rent.


 


(e)                                  Intentionally
omitted.


 


(f)                                    If
Tenant abandons or surrenders the Premises, or any portion thereof, or an Event
of Default by Tenant pursuant to paragraph 15(k) above shall have occurred, or
Tenant is dispossessed by process of law or otherwise, any movable furniture,
equipment, trade fixtures or personal property belonging to Tenant and left in
the Premises, or any portion thereof, shall be deemed to be abandoned, at the
option of Landlord, and Landlord shall have the right to sell or otherwise
dispose of such personal property in any commercially reasonable manner.  If Tenant abandons the Premises, or any
portion thereof, Landlord shall have the right, but not the obligation, to
sublet the Premises, or any portion thereof, on reasonable terms for the
account of Tenant, and Tenant shall be liable for all costs of such subletting,
including the cost of preparing the Premises, or any portion thereof, for
subtenants and leasing commissions paid to brokers.


 


(g)                                 If
any Event of Default has occurred, then Landlord may serve upon Tenant a
written five-day notice of cancellation and termination of this Lease.  Upon the expiration of such five-day period,
this Lease and the Term shall automatically and without any action by anyone
terminate, expire and come to an end, by the mere lapse of time, as fully and
completely as if the expiration of such five-day period were the Expiration
Date and the last day of the Term as originally defined in this Lease.  The passage of such five-day period
constitutes the limit beyond which Tenant’s tenancy no longer exists.  Upon the mere occurrence of the passage of
five days following Landlord’s notice, this Lease shall automatically expire by
its express terms, and no re-entry or other act shall be necessary to terminate
this Lease.  Tenant shall then quit and
surrender the Premises to Landlord. 
Tenant shall, however, remain liable as this Lease provides.  The termination of this Lease shall in no
way limit Tenant’s liability under this Lease. 
It is a conditional limitation of this Lease that the Term shall
terminate and expire as set forth in this paragraph.  This paragraph is intended to establish a conditional limitation
and not a condition subsequent.  This
paragraph does not limit any other right or remedy of Landlord.


 


(h)                                 Tenant
hereby expressly waives the right of redemption provided for in New York Real
Property Actions and Proceedings Law section 761, and any similar or
successor statute.


 

















 


17.                               SUBORDINATION


 


(a)                                  Subordination,
Non-Disturbance.  Tenant agrees at
any time hereafter, and from time to time within ten (10) days of written
request of Landlord, to execute and deliver to Landlord at Landlord’s election
either (1) an instrument in the form customarily used by any institutional
investor becoming a Mortgagee or (2) a subordination, non-disturbance and
attornment agreement substantially in the form attached hereto as Exhibit D
(in either such case, such instrument, release, document, or agreement is herein
called the “Subordination, Non-Disturbance and Attornment Agreement”), in
either case subjecting and subordinating this Lease to the lien of any
Mortgage, which at any time may be placed upon the Premises, or any portion
thereof, by Landlord, and to any replacements, renewals, amendments,
consolidations, modifications, extensions or refinancing thereof.  It is agreed, nevertheless, that so long as
there exists no Event of Default, such Subordination, Non-Disturbance and
Attornment Agreement shall not interfere with, hinder or reduce Tenant’s right
to quiet enjoyment under this Lease, nor the right of Tenant to continue to
occupy the Premises, and all portions thereof, and to conduct its business
thereon in accordance with the covenants, conditions, provisions, terms and
agreements of this Lease.  The costs of
preparing and recording such document shall be borne by Landlord, but Tenant
shall be responsible for its own counsel fees.


 


(b)                                 Mortgagee
Protection Clause.  In the event of
any act or omission of Landlord constituting a default by Landlord, Tenant
shall not exercise any remedy until Tenant has given Landlord and any Mortgagee
of the Premises written notice of such act or omission, and until a reasonable
period of time (not less than 10 Business Days) to allow Landlord or the
Mortgagee to remedy such act or omission shall have elapsed following receipt
of such notice.  However, if such act or
omission cannot, with due diligence and in good faith, be remedied within such
period or cannot be cured simply by the payment of money, the Landlord and the
Mortgagee shall be allowed such further period of time as may be reasonably
necessary provided that it commences remedying the same with due diligence and
in good faith and thereafter diligently prosecutes such cure, provided such
cure period shall not extend beyond 270 days after the notice of such
default.  Nothing herein contained shall
be construed or interpreted as requiring any Mortgagee receiving such notice to
remedy such act or omission.


 


(c)                                  Attornment.  If any Mortgagee shall succeed to the rights
of Landlord under this Lease or to ownership of the Premises, whether through
possession or foreclosure or the delivery of a deed to the Premises in lieu of
foreclosure, then such Mortgagee shall automatically be deemed to have
recognized this Lease and to assume the obligations of Landlord hereunder
accruing on and after the date such Mortgagee acquired title to the Premises
(including the obligation to cure any Landlord defaults then remaining uncured
under this Lease), and Tenant shall attorn to and recognize such Mortgagee as
Tenant’s landlord under this Lease and shall promptly execute and deliver any
instrument consistent with the Subordination, Non-Disturbance and Attornment
Agreement that such Mortgagee may reasonably request to evidence such
attornment (whether before or after the making of the Mortgage).  In the event of any other transfer of
Landlord’s interest hereunder, such transferee shall automatically be deemed to
have recognized this Lease and to assume the obligations of Landlord hereunder
accruing on and after the date of such transfer, Tenant shall attorn to and
recognize such transferee as Tenant’s landlord under this Lease and shall
promptly execute and deliver any instrument consistent with


 

















 


the Subordination, Non-Disturbance and
Attornment Agreement that such transferee and Landlord may reasonably request
to evidence such attornment.


 


(d)                                 Acknowledgment.  Upon ten (10) days’ advance written notice,
Tenant agrees to execute, acknowledge and deliver a document acknowledging the
assignment by Landlord of this Lease to a Mortgagee, in a form then in use
among institutional lenders, with such changes therein as may be reasonably
requested by the Mortgagee.


 


18.                               LANDLORD’S RIGHT OF ENTRY


 


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


 


19.                               NOTICES


 


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


 


	
  To Landlord:

  	
   

  	
  iStar Garden
  City LLC

  
	
   

  	
   

  	
  1114 Avenue of
  the Americas

  
	
   

  	
   

  	
  27th
  Floor

  
	
   

  	
   

  	
  New York, New
  York  10036

  
	
   

  	
   

  	
  Attention: Chief
  Financial Officer

  
	
   

  	
   

  	
  Telephone: (212)
  930-9400

  
	
   

  	
   

  	
  Facsimile: (212)
  930-9494

  



 

















 


	
  With a copy to:

  	
   

  	
  iStar Financial Inc.

  
	
   

  	
   

  	
  1114 Avenue of
  the Americas

  
	
   

  	
   

  	
  27th
  Floor

  
	
   

  	
   

  	
  New York, New
  York  10036

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Telephone: (212)
  930-9400

  
	
   

  	
   

  	
  Facsimile: (212)
  930-9494

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
  Katten Muchin
  Zavis Rosenman

  
	
   

  	
   

  	
  525 West Monroe
  Street

  
	
   

  	
   

  	
  16th
  Floor

  
	
   

  	
   

  	
  Chicago,
  Illinois  60661-3693

  
	
   

  	
   

  	
  Attention:
  Gregory P. L. Pierce, Esq.

  
	
   

  	
   

  	
  Telephone: (312)
  902-5200

  
	
   

  	
   

  	
  Facsimile: (312)
  902-1061

  
	
   

  	
   

  	
   

  
	
  To Tenant:

  	
   

  	
  AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood
  Dale Road

  
	
   

  	
   

  	
  Wood Dale,
  Illinois 60191

  
	
   

  	
   

  	
  Attention: Tim
  Romenesko

  
	
   

  	
   

  	
  Telephone: (630)
  227-2090

  
	
   

  	
   

  	
  Facsimile: (630)
  227-2101

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
  AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood
  Dale Road

  
	
   

  	
   

  	
  Wood Dale,
  Illinois  60191

  
	
   

  	
   

  	
  Attention: Legal
  Department

  
	
   

  	
   

  	
  Telephone: (630)
  227-2040

  
	
   

  	
   

  	
  Facsimile: (630)
  227-2058

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Schiff Hardin
  & Waite

  
	
   

  	
   

  	
  623 Fifth Avenue

  
	
   

  	
   

  	
  New York, New
  York 10022

  
	
   

  	
   

  	
  Attention:  Christine A. McGuinness

  
	
   

  	
   

  	
  Telephone: (212)
  745-0831

  
	
   

  	
   

  	
  Facsimile: (212)
  753-5044

  



 


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


 

















 


20.                               ESTOPPEL CERTIFICATE; FINANCIAL DATA


 


(a)                                  At
any time and from time to time, Tenant shall, within ten (10) Business Days
after written request by Landlord, execute, acknowledge and deliver to Landlord
a certificate certifying:  (a) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified, and
stating the date and nature of each modification); (b) the Commencement Date
and the Expiration Date determined in accordance with paragraph 4 and the Basic
Lease Information, and the date, if any, to which all Rent and other sums
payable hereunder have been paid; (c) the amount of Fixed Rent currently
payable monthly, (d) that no notice has been received by Tenant of any default
by Tenant hereunder which has not been cured, except as to defaults specified
in such certificate; (e) that Landlord is not in default under this Lease,
except as to defaults specified in such certificate; and (f) such other matters
as may be reasonably requested by Landlord or any actual or prospective
purchaser or mortgage lender.  Any such
certificate may be relied upon by Landlord and any actual or prospective
purchaser or mortgage lender of the Premises or any part thereof.


 


(b)                                 Tenant
shall and shall cause Guarantor to deliver to Landlord and to any Mortgagee,
Lender, or purchaser designated by Landlord the following information within
ninety (90) days after the end of each fiscal year of Guarantor or such longer
period as may be permitted by any nationally recognized stock exchange upon
which Guarantor’s capital stock is listed: 
an audited balance sheet of Guarantor and Guarantor’s consolidated
subsidiaries as at the end of such year, an audited statement of profits and
losses of Guarantor and Guarantor’s consolidated subsidiaries for such year,
and an audited statement of cash flows of Guarantor and Guarantor’s
consolidated subsidiaries for such year, setting forth in each case, in
comparative form, the corresponding figures for the preceding fiscal year in
reasonable detail and scope and certified by independent certified public
accountants of recognized national standing selected by Tenant and Guarantor;
and within forty-five (45) days or such longer period as may be permitted by
any nationally recognized stock exchange upon which Tenant’s or Guarantor’s
stock is listed after the end of each of the first three fiscal quarters of
Guarantor a balance sheet of Guarantor and Guarantor’s consolidated
subsidiaries as at the end of such quarter, statements of profits and losses of
Guarantor and Guarantor’s consolidated subsidiaries for such quarter and a
statement of cash flows of Guarantor and Guarantor’s consolidated subsidiaries
for such quarter, setting forth in each case, in comparative form, the corresponding
figures for the similar quarter of the preceding year (or in the case of an
interim balance sheet, to the end of the prior year), in reasonable detail and
scope, and certified to be complete and accurate by a financial officer of
Guarantor having knowledge thereof; the foregoing financial statements all
being prepared in accordance with generally accepted accounting principles,
consistently applied.  If and so long as
Tenant and Guarantor is a reporting company under the Securities and Exchange
Act of 1934, as amended, the foregoing requirements of this paragraph 20(b)
will be satisfied by the delivery of Tenant’s or Guarantor’s Forms 10-K, 10-Q
and annual reports promptly upon their filing with the Securities and Exchange
Commission.  Together with the annual
financial statements described above, Tenant shall deliver to Landlord an
annual Premises operating expense statements for the Premises in detail
reasonably satisfactory to Landlord and certified to be complete and accurate
by an officer of Tenant or Guarantor.


 


(c)                                  Upon
ten (10) days’ prior notice, Tenant and Guarantor will permit Landlord and its
professional representatives to visit Tenant’s and Guarantor’s offices, and
discuss Tenant’s


 

















 


and Guarantor’s affairs and finances with
appropriate officers, and will make available such information as Landlord may
reasonably request bearing on the Tenant, Guarantor, the Premises or this Lease
as Tenant or Guarantor may maintain in the ordinary course of business.  Landlord shall agree to maintain the
confidentiality of any information designated by Tenant or Guarantor as
“nonpublic”.  Notwithstanding anything
herein to the contrary, and subject to compliance with applicable federal or
state securities laws, each party to this Lease, together with any employee,
representative or other agent of such party, is expressly authorized to
disclose to any and all persons, without limitation of any kind, any
information with respect to the “tax structure” and “tax treatment” (as such
terms are defined under Treasury Regulation § 1.6011-4(c)) of the
transaction contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
structure and tax treatment, provided that with respect to any document or
similar item that in either case contains nonpublic information, this sentence
shall only apply to such portions of such document or similar item that relate
to the tax treatment or tax structure of the transaction contemplated hereby.


 


21.                               MECHANICS’ LIENS


 


(a)                                  Except
for liens created through the act of Landlord, Tenant shall not suffer or
permit any mechanic’s lien or other lien to be filed or recorded against the
Premises, equipment or materials supplied or claimed to have been supplied to
the Premises at the request of Tenant, or anyone holding the Premises, or any
portion thereof, through or under Tenant. 
If any such mechanic’s lien or other lien shall at any time be filed or
recorded against the Premises, or any portion thereof, Tenant shall cause the
same to be discharged of record within thirty (30) days after the date of
filing or recording of the same. 
However, in the event Tenant desires to contest the validity of any lien
it shall (i) on or before thirty (30) days prior to the due date thereof (but
in no event later than 30 days after the filing or recording thereof), notify
Landlord, in writing, that Tenant intends to so contest same; (ii) on or before
the due date thereof, if such lien involves an amount in excess of $50,000 or
if any Mortgagee so requires, deposit with Landlord security (in form and
content reasonably satisfactory to Landlord or Mortgagee) for the payment of
the full amount of such lien, and from time to time deposit additional security
so that, at all times, adequate security will be available for the payment of
the full amount of the lien together with all interest, penalties, costs and
other charges in respect thereof.


 


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


 

















 


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


 


(b)                                 All
materialmen, contractors, artisans, engineers, mechanics, laborers and any
other Person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. 
Notice is hereby given that Landlord shall not be liable for any labor,
services, materials, supplies, skill, machinery, fixtures or equipment
furnished or to be furnished to Tenant upon credit, and that no mechanic’s lien
or other lien for any such labor, services, materials, supplies, machinery,
fixtures or equipment shall attach to or affect the estate or interest of
Landlord in and to the Premises, or any portion thereof.


 


(c)                                  Tenant
shall not create, permit or suffer, and, subject to the provisions of paragraph
21(a) hereof, shall promptly discharge and satisfy of record, any other lien,
encumbrance, charge, security interest, or other right or interest which, as a
result of Tenant’s action or inaction contrary to the provisions hereof, shall
be or become a lien, encumbrance, charge or security interest upon the
Premises, or any portion thereof, or the income therefrom, other than Permitted
Encumbrances.


 


22.                               END OF TERM


 


(a)                                  Upon
the expiration or earlier termination of the Term of this Lease, Tenant shall
surrender the Premises to Landlord in good repair and in a condition equal to
or better than the condition existing as of the date hereof, subject to
ordinary wear and tear, except as repaired, rebuilt or altered as required or
permitted by this Lease (or, in the case of termination pursuant to paragraph
14, as condemned), with the Equipment and Improvements, including all systems
and components thereof listed on Exhibit G attached hereto, in good
working order and condition  as reasonably determined by Landlord, and
Tenant shall surrender all keys to the Premises to Landlord at the place then
fixed for notices to Landlord and shall inform Landlord of all combinations on
locks, safes and vaults, if any.  Except
as otherwise provided herein, Tenant shall at such time remove all of its
property (including Tenant’s Trade Fixtures) therefrom and all alterations and
improvements placed thereon by Tenant and not consented to by Landlord.  Tenant shall repair any damage to the
Premises caused by such removal, and any and all such property not so removed
when required shall, at Landlord’s option, become the exclusive property of
Landlord or be disposed of by Landlord, at Tenant’s cost and expense, without
further notice to or demand upon Tenant.


 


(b)                                 If
the Premises are not surrendered as above set forth, Tenant shall indemnify,
defend and hold Landlord harmless from and against loss or liability resulting
from the delay by Tenant in so surrendering Premises, including any claim made
by any succeeding occupant founded on such delay.  Tenant’s obligation to observe or perform this covenant shall
survive the expiration or other termination of this Lease for three (3)
years.  In addition to the foregoing,
and


 

















 


in addition to the Additional Rent, Tenant
shall pay to Landlord a sum equal to one hundred fifty percent (150%) of the
Fixed Rent payable during the preceding year during each month or portion
thereof for which Tenant shall remain in possession of the Premises or any part
thereof after the termination of the Term or of Tenant’s rights of possession,
whether by lapse of time or otherwise. 
The provisions of this paragraph 22(b) shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided
herein, at law or at equity.


 


(c)                                  All
property of Tenant not removed on or before the last day of the Term of this
Lease shall be deemed abandoned. Tenant hereby agrees that Landlord may remove
all property of Tenant, including Tenant’s Trade Fixtures, from the Premises
upon termination of this Lease and to cause its transportation and storage, all
at the sole cost and risk of Tenant and Landlord shall not be liable for
damage, theft, misappropriation or loss thereof and Landlord shall not be
liable in any manner in respect thereto and Landlord shall be entitled to
dispose of such property, as Landlord deems fit, without the requirement of an
accounting.  Tenant shall pay all costs
and expenses of such removal, transportation and storage.  Tenant shall reimburse Landlord upon demand
for any expenses reasonably and actually incurred by Landlord with respect to
removal or storage of abandoned property and with respect to restoring said
Premises to good order, condition and repair.


 


(d)                                 Except
for surrender upon the expiration or earlier termination of the Term hereof as
expressly provided herein, no surrender to Landlord of this Lease or of the
Premises shall be valid or effective unless agreed to and accepted in writing
by Landlord.


 


23.                               ALTERATIONS


 


(a)                                  Tenant
shall obtain Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned, or delayed so long as the value or utility
of the Premises in its current use is not diminished thereby, before making any
change in the structure of the Improvements or any building system costing at
least or more than $500,000.  Subject to
the terms of the preceding sentence, Tenant may make alterations, additions or
improvements to the Premises costing less than $500,000 without Landlord’s
consent only if (i) such alterations, additions or improvements will be in
compliance with all applicable laws, codes, rules, regulations and ordinances,
(ii) such alterations, additions or improvements will not reduce the fair
market value or utility of the Premises in its permitted use, considered as
unencumbered by this Lease, and (iii) such alterations, additions or
improvements will not affect in any way the structural, exterior or roof
elements of the Premises or mechanical, electrical, plumbing, utility or life
safety systems of the Premises, but Tenant shall give prior written notice of
any such alterations, additions or improvements to Landlord.  In all other cases, Landlord’s prior written
consent shall be required which consent shall not be unreasonably withheld,
conditioned, or delayed so long as the value or utility of the Premises in its
current use is not diminished thereby.  At
Landlord’s option, any improvement made without Landlord’s consent shall be removed
and the area repaired at Tenant’s expense at the termination of the Term.  Notwithstanding the foregoing, Landlord
hereby consents to the construction of certain office space in the southeast
corner of the Premises, which construction has commenced as of the date hereof
and will cost


 

















 


approximately $52,000 to complete such office
space to match the existing office space in the Premises and an additional
$22,000 to install carpeting per Tenant’s specifications.


 


(b)                                 Except
as provided in paragraph 26(f), in no event shall Tenant be permitted to
install underground storage tanks or fuel systems on the Premises, or any
portion thereof.


 


(c)                                  All
alterations, additions or improvements requiring Landlord’s consent shall be
made at Tenant’s sole cost and expense as follows:


 


(i)                                     Tenant
shall submit to Landlord, for Landlord’s written approval, complete plans and
specifications for all work to be done by Tenant.  Such plans and specifications shall be prepared by the licensed
architect(s) and engineer(s) approved in writing by Landlord, shall comply with
all applicable codes, ordinances, rules and regulations, shall not adversely
affect the structural elements of the Premises, shall be in a form sufficient
to secure the approval of all government authorities with jurisdiction over the
Premises, and shall be otherwise satisfactory to Landlord in Landlord’s
reasonable discretion.


 


(ii)                                  Landlord
shall use reasonable efforts to notify Tenant in writing as promptly as
possible, but in no event later than thirty (30) days following Tenant’s
submission of complete plans and specifications for Landlord’s written
approval, whether Landlord approves, approves on condition that Tenant reverse
the alteration at Tenant’s expense at the termination or expiration of this Lease,
or disapproves such plans and specifications. 
Tenant may submit to Landlord revised plans and specifications for
Landlord’s prior written approval, which approval shall not be withheld or
delayed if (a) the work to be done would not, in Landlord’s reasonable
judgment, adversely affect the value, character, rentability or usefulness of
the Premises or any part thereof, or (b) the work to be done shall be required
by any Law (hereinafter defined). 
Tenant shall pay all costs, including the fees and expenses of the
licensed architect(s) and engineer(s), in preparing such plans and
specifications.


 


(iii)                               All
changes (other than field changes for which no change order is proposed and
which will be reflected in the final “as built” plans) in the plans and specifications
approved by Landlord shall be subject to Landlord’s prior written
approval.  If Tenant wishes to make such
change in approved plans and specifications, Tenant shall have such
architect(s) and engineer(s) prepare plans and specifications for such change
and submit them to Landlord for Landlord’s written approval.  Landlord shall notify Tenant in writing
promptly whether Landlord approves, approves on condition that Tenant reverse
the alteration at Tenant’s expense at the termination or expiration of this
Lease, or disapproves such change. 
Tenant may submit to Landlord revised plans and specifications for such
change for Landlord’s written approval. 
After Landlord’s written approval of such change, such change shall
become part of the plans and specifications approved by Landlord.


 


(iv)                              Tenant
shall obtain and comply with all building permits and other government permits
and approvals required in connection with the work.  Tenant shall, through Tenant’s licensed contractor, perform the
work substantially in accordance with the plans and specifications approved in
writing by Landlord.  Tenant shall pay,
as Additional Rent, the entire


 

















 


cost of all work (including the cost of all
utilities, permits, fees, taxes, and property and liability insurance premiums
in connection therewith) required to make the alterations, additions or
improvements.  Under no circumstances
shall Landlord be liable to Tenant for any damage, loss, cost or expenses
incurred by Tenant on account of any plans and specifications, contractors or
subcontractors, design of any work, construction of any work, or delay in
completion of any work.


 


(v)                                 Tenant
shall give written notice to Landlord of the date on which construction of any
work to be done by outside contractors will be commenced at least ten (10) days
prior to such date.  Landlord shall have
the right to post and keep posted on the Premises any notices that may be
provided by law or which Landlord may deem to be proper for the protection of
Landlord and the Premises, or any portion thereof, from liens, and to take any
other action Landlord deems necessary to remove or discharge Liens at the
expense of Tenant.


 


(vi)                              All
alterations, additions, improvements, and fixtures, whether temporary or
permanent in character, made in or to the Premises by Tenant, shall become part
of the Premises and Landlord’s property, except those which are readily
removable with causing material damage to the Premises (which shall be and
remain the property of Tenant).  Upon
termination or expiration of this Lease, Tenant shall, at Tenant’s expense,
remove all movable furniture, equipment, trade fixtures, office machines and
other personal property (including Tenant’s Trade Fixtures) from the Premises
(but not the Improvements or Equipment) and repair all damage caused by such
removal.  Termination of this Lease
shall not affect the obligations of Tenant pursuant to this paragraph 23(c) to
be performed after such termination.


 


(d)                                 Promptly
following the completion of any alteration, addition, or improvement to the
Premises, Tenant shall furnish Landlord with a copy of the complete plans and
specifications for such work (including, if available, so-called “as-built”
plans and specifications).


 


(e)                                  Notwithstanding
anything to the contrary provided herein, Tenant shall cause the repair items
listed on Exhibit H attached hereto to be completed within twelve (12)
months of the Commencement Date.


 


24.                               MEMORANDUM OF LEASE


 


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


 


25.                               SUBLETTING/ASSIGNMENT


 


(a)                                  Tenant
shall not, directly or indirectly, without the prior written consent of
Landlord and Mortgagee, assign this Lease or any interest herein, or any
interest in Tenant, or sublease the Premises or any part thereof, or permit the
use or occupancy of the Premises by any Person other than Tenant.  This Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant involuntarily or by
operation of law without the prior written consent of Landlord and Mortgagee.


 

















 


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


 


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


 


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


 


(b)                                 If
Landlord and Mortgagee consent in writing, Tenant may complete the intended
assignment or sublease subject to the following conditions: (i) no assignment
or sublease shall be valid and no assignee or subtenant shall take possession
of the Premises or any part thereof until an executed duplicate original of
such assignment or sublease, in compliance with paragraph 25(a), has been
delivered to Landlord and Mortgagee, and (ii) no assignee or subtenant
shall have a right further to assign or sublease without the prior written
consent of Landlord and Mortgagee which consents shall not be unreasonably
withheld, delayed, or conditioned.


 


(c)                                  Unless
and until expressly released by Landlord and Mortgagee, no assignment or
sublease whatsoever shall release Tenant from Tenant’s obligations and
liabilities under this Lease (which shall continue as the obligations of a
principal and not of a guarantor or surety) or alter the primary liability of
Tenant to pay all Rent and to perform all obligations to be paid and performed
by Tenant.  The acceptance of Rent by
Landlord from any other Person shall not be deemed to be a waiver by Landlord
of any provision of this Lease.  Consent
to one assignment or sublease shall not be deemed consent to any subsequent
assignment or sublease.  If any
assignee, subtenant or successor of Tenant defaults in the performance of any
obligation to be performed by Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity


 

















 


of exhausting remedies against such assignee,
subtenant or successor.  Landlord may
consent to subsequent assignments or subleases or amendments or modifications
to this Lease with assignees, subtenants or successor of Tenant, without
notifying Tenant or any successor of Tenant and without obtaining any consent
thereto from Tenant or any successor of Tenant, and such action shall not
release Tenant from liability under this Lease.


 


(d)                                 Tenant
shall have no right to mortgage, grant a lien upon, encumber or otherwise
finance Tenant’s interest under this Lease or record a lien upon Tenant’s
interest in the Premises under this Lease, and Tenant shall not permit, cause
or suffer to be recorded in the real estate records of the county in which the
Premises are located any mortgage, deed to secure debt, deed of trust,
assignment, UCC financing statement or any other document granting, perfecting,
or recording a lien upon Tenant’s interest in this Lease or interest in the
Premises under this Lease.  Tenant shall
not give any notice, or permit or cause any other party to give any notice, to
Landlord of any existing lien on or security interest in Tenant’s interest in
this Lease or interest in the Premises under this Lease.  Tenant shall not request that Landlord
execute (nor shall Landlord have any obligation to execute) any non-disturbance,
attornment or any other agreement in favor of any party transacting any
business or transaction with or related to Tenant.


 


(e)                                  If
Tenant shall assign this Lease or sublet the Premises to any Person other than
Landlord, or request the consent of Landlord and Mortgagee to any assignment,
subletting, or other action which requires Landlord’s consent hereunder, Tenant
shall pay (i) Landlord’s reasonable standard processing fee which shall not
exceed Five Thousand Dollars ($5,000) in each instance and (ii) Landlord’s and
Mortgagee’s attorneys’ fees and costs incurred in connection therewith.


 


(f)                                    Tenant
agrees to give notice to Mortgagee of any request for consent to any assignment
or transfer of the Lease or subletting of all or any portion of the Premises
simultaneously with delivery of notice thereof to Landlord.


 


26.                               HAZARDOUS MATERIAL


 


(a)                                  Tenant
(i) shall comply, and cause the Premises to comply, with all Environmental Laws
(as hereinafter defined) applicable to the Premises (including the making of
all submissions to governmental authorities required by Environmental Laws and
the carrying out of any remediation program specified by such authority), (ii)
except as currently existing as of the Commencement Date, shall prohibit the
use of the Premises for the generation, manufacture, refinement, production, or
processing of any Hazardous Material (as hereinafter defined) or for the
storage, handling, transfer or transportation of any Hazardous Material (other
than in connection with the operation, business and maintenance of the Premises
and in commercially reasonable quantities as a consumer thereof and supplier of
consumer products and in compliance with Environmental Laws), (iii) shall not
permit to remain, install or permit the installation on the Premises of any
surface impoundments, underground storage tanks (other than the Underground
Tanks in accordance with the provisions of paragraph 26(f)), pcb-containing
transformers or asbestos-containing materials, and (iv) shall cause any
alterations of the Premises to be done in a way so as to not expose in an
unsafe manner the persons working on or visiting


 

















 


the Premises to Hazardous Materials and in
connection with any such alterations shall remove any Hazardous Materials
present upon the Premises which are not in compliance with Environmental Laws
or which present a danger to persons working on or visiting the Premises.


 


(b)                                 “Environmental
Laws” means the Resource Conservation and Recovery Act of 1976, as
amended, 42 U.S.C. §§6901, et  seq. (RCRA), as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. §§9601 et  seq. (CERCLA), as amended, the Toxic Substance
Control Act, as amended, 15 U.S.C. §§2601 et  seq., the Federal
Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. §§136 et
seq., and all applicable federal, state and local environmental laws,
ordinances, rules and regulations, as any of the foregoing may have been or may
be from time to time amended, supplemented or supplanted, and any other
federal, state or local laws, ordinances, rules and regulations, now or
hereafter existing relating to regulations or control of Hazardous Material or
materials.  The term “Hazardous
Materials” as used in this Lease shall mean substances defined as “hazardous
substances”, “hazardous materials”, “hazardous wastes” or “toxic substances” in
any applicable federal, state or local statute, rule, regulation or
determination, including the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. §§9601, et  seq.;
the Hazardous Materials Transportation Act, 49 U.S.C. §§1801, et  seq.;
the Resource, Conservation and Recovery Act of 1976, 42 U.S.C. §§6901, et
seq.; and, asbestos, pcb’s, radioactive substances, methane, volatile
hydrocarbons, petroleum or petroleum-derived substances or wastes, radon,
industrial solvents or any other material as may be specified in applicable law
or regulations.


 


(c)                                  Except
to the extent the following indemnity arises out of the acts or omissions of
Landlord, its agents, employees or contractors, Tenant agrees to protect,
defend, indemnify and hold harmless Landlord, its members, directors, officers,
employees and agents, and any successors to Landlord’s interest in the chain of
title to the Premises, their direct or indirect members, partners, directors,
officers, employees, and agents (collectively, the “Indemnified Partner”), from
and against any and all liability, including all foreseeable and all
unforeseeable damages including attorney’s and consultant’s fees, fines,
penalties and civil damages, directly or indirectly arising out of Tenant’s
use, generation, storage, treatment, release, threatened release, discharge,
spill, presence or disposal of Hazardous Materials from, on, at, to or under
the Premises prior to or during the Term of this Lease, and including for all
matters disclosed in the Environmental Reports, and the cost of any required or
necessary repair, response action, remediation, investigation, cleanup or
detoxification and the preparation of any closure or other required plans in
connection therewith, whether such action is required or necessary prior to or
following transfer of title to the Premises. 
This agreement to indemnify and hold harmless shall be in addition to
any other obligations or liabilities Tenant may have to Landlord at common law
under all statutes and ordinances or otherwise, and shall survive following the
date of expiration or earlier termination of this Lease for three (3) years,
except where the event giving rise to the liability for which indemnity is
sought arises out of Tenant’s acts, in which case the agreement to indemnify
shall survive the expiration or termination of this Lease without limit of
time.  Tenant expressly agrees that the
representations, warranties and covenants made and the indemnities stated in
this Lease are not personal to Landlord, and the benefits under this Lease may
be


 

















 


assigned to subsequent parties in interest to
the chain of title to the Premises, which subsequent parties in interest may
proceed directly against Tenant to recover pursuant to this Lease.  Tenant, at its expense, may institute
appropriate legal proceedings with respect to environmental matters of the type
specified in this paragraph 26(c) or any lien for such environmental matters,
not involving Landlord or its Mortgagee as a defendant (unless Landlord or its
mortgagee is the alleged cause of the damage), conducted in good faith and with
due diligence, provided that such proceedings shall not in any way impair the
interests of Landlord or Mortgagee under this Lease or contravene the
provisions of any Mortgage.  Counsel to
Tenant in such proceedings shall be reasonably approved by Landlord if Landlord
is a defendant in the same proceeding. 
Landlord shall have the right to appoint co-counsel, which co-counsel
will cooperate with Tenant’s counsel in such proceedings.  The fees and expenses of such co-counsel
shall be paid by Landlord, unless such co-counsel are appointed because the interests
of Landlord and Tenant in such proceedings, in such counsel’s opinion, are or
have become adverse, or Tenant or Tenant’s counsel is not conducting such
proceedings in good faith or with due diligence.


 


(d)                                 Tenant,
upon five (5) days prior notice shall permit such Persons as Landlord or any
assignee of Landlord may designate and (unless an Event of Default has occurred
and is continuing) approved by Tenant, which approval shall not be unreasonably
withheld or delayed (“Site Reviewers”), to visit the Premises
from time to time and perform environmental site investigations and assessments
(“Site
Assessments”) on the Premises for the purpose of determining whether
there exists on the Premises any environmental condition which may result in
any liability, cost or expense to Landlord or any other owner or occupier of
the Premises.  Such Site Assessments may
include both above and below the ground testing for environmental damage or the
presence of Hazardous Material on the Premises and such other tests on the
Premises as may be necessary to conduct the Site Assessments in the reasonable
opinion of the Site Reviewers.  Tenant
shall supply to the Site Reviewers such historical and operational information
regarding the Premises as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments (other than information previously supplied in
writing to Landlord by Tenant) and shall make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters.  The cost of performing and reporting all
Site Assessments shall be paid by Landlord unless an Event of Default has
occurred and is continuing or unless the Site Reviewers discover an
environmental condition causing the Premises not to be in compliance with applicable
Environmental Laws, in either of which events such cost will be paid by Tenant
within ten (10) days after demand by Landlord with interest to accrue at the
Overdue Rate.  Landlord, promptly after
written request by Tenant and payment by Tenant to the extent required as
aforesaid, shall deliver to Tenant copies of reports, summaries or other
compilations of the results of such Site Assessments.  Tenant’s sole remedy for Landlord’s breach of the preceding sentence
shall be a mandatory injunction, and not a termination of this Lease or a
withholding or reduction of Rent.


 


(e)                                  Tenant
shall notify Landlord in writing, promptly upon Tenant’s learning thereof, of
any:


 

















 


(i)                                     notice
or claim to the effect that Tenant is or may be liable to any Person as a
result of the release or threatened release of any Hazardous Material into the
environment from the Premises;


 


(ii)                                  notice
that Tenant is subject to investigation by any governmental authority
evaluating whether any remedial action is needed to respond to the release or
threatened release of any Hazardous Material into the environment from the
Premises;


 


(iii)                               notice
that the Premises are subject to an environmental lien; and


 


(iv)                              notice
of violation to Tenant or awareness by Tenant of a condition which might
reasonably result in a notice of violation of any applicable Environmental Law
that could have a material adverse effect upon the Premises.


 


(f)                                    Tenant
acknowledges that, as of the date hereof, the following two (2) underground
storage tanks (the “Underground Tanks”) are located on the
Premises: (i) one (1) 550-gallon tank used to collect oil/material spills
inside the Premises and (ii) one (1) 10,000-gallon No.2 fuel oil tank.  In connection with the Underground Tanks,
the following provisions shall apply:


 


(i)                                     Tenant
shall at all times during the Term maintain, and shall have furnished Landlord
with evidence of, insurance meeting or exceeding the requirements set forth on Exhibit
I attached hereto, which evidence shall be in the form of certificates of
insurance.  If Landlord shall have not
received such evidence of insurance meeting or exceeding the requirements set
forth on Exhibit I attached hereto by October 20, 2003, Tenant
shall be deemed to have requested that Landlord provide such coverage for
Tenant by including the Premises under such insurance policies maintained by
Landlord or its affiliates and Tenant shall thereafter promptly pay, as
Additional Rent, one hundred and three percent (103%) of Landlord’s cost for
carrying such insurance.  Landlord will
maintain such insurance on Tenant’s behalf until (x) Tenant notifies Landlord
to cease causing such insurance to be so carried and (y) Tenant provides
Landlord with copies of the policies which Tenant obtains to replace such
Landlord’s policies, which Tenant furnished policies must be in conformance
with the requirements of this Lease.


 


(ii)                                  Tenant
shall cause, at Tenant’s sole cost and expense, the Underground Tanks to be
maintained and operated in accordance with all applicable laws, ordinances and
requirements of government authorities including, but not limited to, making
any changes therein as may be required from time to time by such laws,
ordinances or other requirements.


 


(iii)                               Tenant
shall maintain complete and accurate records of all maintenance and testing of
the Underground Tanks, and each portion thereof, and make such records
available upon five (5) days’ prior notice by Landlord.  Additionally, Tenant shall furnish Landlord
with copies of all certification and inspection reports obtained by Tenant for
any purpose, including but not limited to as required for insurance purposes,
within thirty (30) days of Tenant’s receipt of such certification and
inspection reports.


 

















 


(iv)                              Tenant
shall cause the inspection and testing of the Underground Tanks for tightness
within one hundred twenty (120) days of the Commencement Date and thereafter no
less frequently than every five (5) years during the Term.  Tenant shall furnish Landlord with a written
report of the results of all such tightness inspections and testing within
thirty (30) days of Tenant’s receipt of such reports.


 


(v)                                 If
at least one (1) year prior to the Lease Expiration Date, Tenant shall have
received notice from Landlord of Landlord’s request that Tenant remove the
Underground Tanks prior to the Lease Expiration Date, Tenant shall be obligated
to remove the Underground Tanks prior to the Lease Expiration Date in
accordance with all then applicable laws, approvals, regulations and ordinances
applicable thereto.


 


(vi)                              Tenant
agrees that in no manner, expressed or implied, shall Landlord have any
responsibility for the Underground Tanks including the maintenance, operation,
and, as applicable, removal of the Underground Tanks.  Tenant hereby agrees to indemnify, defend and hold harmless
Landlord from any and all claims and damages in any way relating to the
maintenance, operation and, if applicable, removal, of the Underground Tanks,
including claims and damages from subsurface and groundwater conditions
relating to any of the maintenance, operation and, if applicable, removal, of
the Underground Tanks.  Such indemnity
shall survive the termination of this Lease.


 


(g)                                 Tenant
has furnished Landlord with that certain Asbestos Operations and Maintenance
Handbook, OSHA Class III and IV, prepared by PSI in 1995 and shall furnish
Landlord with updates of such plan from time to time throughout the Term to
accurately reflect conditions at the Premises.


 


27.                               FINANCING


 


(a)                                  Landlord
may assign this Lease to any Person, including any Mortgagee.  Tenant shall execute, acknowledge and
deliver any documents reasonably requested by Landlord, any such transferee, or
Mortgagee relating to such assignment of the Lease by Landlord or the Mortgage
financing.


 


(b)                                 If
Landlord proposes to refinance any Mortgage, Tenant shall cooperate in the
process, and shall negotiate in good faith any request made by a prospective
Mortgagee for changes or modifications to this Lease, and shall not
unreasonably withhold its consent to any such proposed change or modification
so long as the same does not adversely affect any significant right of Tenant
under this Lease, shorten any notice or cure period to which Tenant is
entitled, or increase Tenant’s obligations under this Lease and, during the
last twenty-four (24) months of the term of any Mortgage held by Mortgagee,
exhibit the Premises to prospective mortgagees, and permit such potential
mortgagee to examine all materials and records which shall be customary for a
mortgagee’s inspection, subject at all times to Landlord’s indemnity set forth
in Section 18 and the confidentiality requirements set forth in this
Lease.  Tenant agrees to execute,
acknowledge and deliver documents reasonably requested by the prospective
Mortgagee (such as a consent to the financing (without encumbering Tenant’s
assets), a consent to


 

















 


assignment of lease, and a subordination,
non-disturbance and attornment agreement meeting the standards set forth in
paragraph 17) customary for tenants to sign in connection with mortgage
loans to their landlords, so long as such documents are in form then customary
among institutional lenders (provided the same do not adversely change Tenant’s
rights or obligations in a way not previously changed by loan documents
previously executed by Tenant in connection with an earlier Mortgage).


 


(c)                                  Tenant
shall permit Landlord and any Mortgagee or prospective Mortgagee, at their
expense,  to meet with management
personnel of Tenant or Guarantor at Tenant’s or Guarantor’s offices and to
discuss the Tenant’s or Guarantor’s business and finances.  On request of Landlord, Tenant agrees to
provide any Mortgagee or prospective Mortgagee the information to which
Landlord is entitled hereunder. If any such information is non-public each party
requesting such information shall sign a confidentiality agreement in form and
substance satisfactory to Tenant prior to such Mortgagee’s or prospective
Mortgagee’s receiving such information.


 


28.                               MISCELLANEOUS PROVISIONS


 


(a)                                  This
Lease and all of the covenants and provisions hereof shall inure to the benefit
of, and be binding upon, the parties hereto and the heirs, personal
representatives, successors and permitted assigns of the parties.


 


(b)                                 The
titles and headings appearing in this Lease are for reference only and shall
not be considered a part of this lease or in any way to modify, amend or affect
the provisions thereof.


 


(c)                                  This
Lease contains the complete agreement of the parties with reference to the
leasing of the Premises, and may not be amended except by an instrument in
writing signed by Landlord and Tenant and consented by Mortgagee (if any).


 


(d)                                 Any
provision or provisions of this Lease which shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision
hereof, and the remaining provisions hereof shall nevertheless remain in full
force and effect.


 


(e)                                  This
Lease may be executed in one or more counterparts, and may be signed by each
party on a separate counterpart,  each
of which, taken together,  shall be an
original, and all of which shall constitute one and same instrument.


 


(f)                                    The
term “Landlord” as used in this Lease shall mean only the owner or owners at
the time in question of the Premises and in the event of any transfer of such
title or interest, Landlord named in this Lease (and in case of any subsequent
transfers, then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord’s obligations thereafter to be
performed hereunder, provided that any funds in the hands of Landlord or the
then grantor at the time of such transfer, in which Tenant has an interest,
shall be delivered to the grantee. The obligations contained in this Lease to
be performed by Landlord shall, subject as aforesaid, be binding on Landlord’s
successors and assigns, only during their respective periods of ownership.


 

















 


(g)                                 For
all issues which are Site-specific, this Lease shall be governed by and
construed and enforced in accordance with and subject to the laws of the state
where the Site is located, and for all issues which are not Site specific, the
internal laws, without regard to conflicts of laws, of the State of New York.


 


(h)                                 Any
claim based on or in respect of any liability of Landlord under this Lease
shall be enforced only against the Premises and not against any other assets,
properties or funds of (1) Landlord or any director, officer, member,
shareholder, general partner, limited partner, or direct or indirect member,
partner, employee or agent of Landlord or any of its members (or any legal representative,
heir, estate, successor or assign of any thereof), (2) any predecessor or
successor partnership, corporation or limited liability company (or other
entity) of Landlord or any of its members, either directly or through Landlord
or its predecessor or successor partnership, corporation of limited liability
company (or other Person) of Landlord or its general partners, and (3) any
other Person.


 


(i)                                     Without
the written approval of Landlord and Tenant, no Person other than Landlord
(including its direct and indirect partners), Mortgagee, Tenant and their
respective successors and assigns shall have any rights under this Lease.


 


(j)                                     There
shall be no merger of the leasehold estate created hereby by reason of the fact
that the same Person may own directly or indirectly, (1) the leasehold estate
created hereby or any interest in this Lease or such leasehold estate and (2)
the fee estate in the Premises. 
Notwithstanding any such combined ownership, this Lease shall continue
in full force and effect until terminated by an instrument executed by both
Landlord and Tenant.


 


(k)                                  Whenever
in this Lease either party is required to take an action within a particular
time period, delays caused by acts of God, war, major casualty, strike, labor
shortage or other cause beyond the reasonable control of such party shall not
be counted in determining the time in which such performance must be completed
(except in the case of the obligation to pay money) so long as such party
shall, promptly after becoming aware of the commencement of such delay, shall
give the other party notice thereof and estimating the duration thereof.


 


(l)                                     If
at any time a dispute shall arise as to any amount to be paid by one party to
the other hereunder, the obligor may make payment “under protest”, and such
payment shall not be deemed a voluntary payment, and the right of the obligor
to contest its liability for such payment shall survive such payment without
prejudice to the obligor’s position.


 


(m)                               Landlord
and Tenant each represent that they have dealt with no broker, finder or other
Person who could legally charge a commission in connection with Landlord’s
acquisition of the Land or with the Lease; provided, however, Landlord and
Tenant acknowledge and agree that Landlord was introduced to the transaction by
LaSalle Debt Capital Markets which will be compensated by Tenant out of the
sales proceeds funded by Landlord at closing.


 


(n)                                 The
parties hereto specifically acknowledge and agree that, notwithstanding any
other provision contained in this Lease, it is the intent of the parties that
their relationship


 

















 


hereunder is and shall at all times be that
of landlord and tenant, and not that of partners, joint venturers, lender and
borrower, or any other relationship other than that of a landlord and tenant.


 


(o)                                 The
parties hereto specifically acknowledge and agree that time is of the essence
with regard to all obligations under this Lease.


 


(p)                                 Landlord
represents that as of the Commencement Date Landlord is a single purpose entity
wholly owned by iStar Financial Inc. and consolidated for accounting purposes
by iStar Financial Inc.


 


(q)                                 To
the extent permitted by applicable law, Landlord and Tenant hereby waive trial
by jury in any action or proceeding, and with respect to any claim asserted in
any such action or proceeding, brought by either of the parties against the
other on any matter whatsoever arising out of or in any way connected with this
Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of
the Premises, any claim of injury or damage, or any emergency or other
statutory remedy with respect thereto.


 


29.                               PURCHASE PROCEDURE


 


(a)                                  In
the event of the purchase of the Premises or any Site by Tenant pursuant to
paragraphs 14 and 30 of this Lease, Landlord need not transfer and convey to
Tenant or its designee any better title thereto than that which was transferred
and conveyed to Landlord, and Tenant (or its designee) shall accept such title,
subject, however, to all liens, exceptions and restrictions on, against or relating
to the Premises or such Site and to all applicable laws, but free of the lien
of and security interest created by any and all Mortgages (unless expressly
assumed by Tenant) and liens, exceptions and restrictions on, against or
relating to any of the Premises or such Site which have been created by or
resulted from acts of Landlord, Landlord’s Mortgagee or any Person lawfully
acting by or through either of them, unless the same were created with the
consent of Tenant or as a result of a default by Tenant under this Lease or are
otherwise the responsibility of the Tenant hereunder.  Execution by Tenant of a consent to financing and a
nondisturbance agreement pursuant to paragraph 27 shall not constitute the
consent of Tenant to a mortgage or other lien securing such financing for
purposes of this paragraph 29.


 


(b)                                 Upon
the date fixed for any such purchase of the Premises or any Site pursuant to
paragraphs 14 and 30 of this Lease, Tenant shall pay to Landlord or to any
Person to whom Landlord directs payment, at Landlord’s address set forth above,
or at any other place designated by Landlord, the applicable purchase price
therefor specified herein, in federal or other immediately available funds
which at the time of such payment shall be legal tender for the payment of
public or private debts in the United States of America, less any credits of
the net awards or net proceeds allowed against the applicable purchase price
pursuant to the provisions of paragraph 14, and Landlord shall thereupon
deliver to Tenant (i) a special or limited warranty deed which describes any of
the Premises, or such Site, as applicable, then being sold to Tenant and
conveys and transfers the title thereto which is described in paragraph 29(a);
(ii) such other instruments as shall be necessary to transfer to Tenant or its
designee any other property (or rights to any net proceeds or net award not yet
received by Landlord, if applicable) then required


 

















 


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


 


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


 


(c)                                  In
the event of the purchase of the Premises or any Site by Tenant pursuant to any
provision of this Lease, Tenant shall, on the date of the closing of such
purchase, pay to Landlord (in addition to payment of the applicable purchase
price) all Rent and other sums then due and owing by Tenant to Landlord
hereunder relating to the property purchased through the date of the closing of
such purchase.


 


30.                               RIGHT OF FIRST REFUSAL


 


(a)                                  From
August 1, 2012 through October 31, 2012 (“ROFR Period”) and so long as
no Event of Default then exists (unless, solely for the purposes of this
paragraph 30, either (x) such Event of Default is waived in writing by
Landlord, Landlord having no obligation to do so or (y) Tenant remedies such
Event of Default as follows:  (1) with
respect to a monetary Event of Default, Tenant pays all sums then due and
payable to cure such Event of Default and (2) with respect to a non-monetary
Event of Default, Tenant indemnifies Landlord against any and all losses or
claims arising as a result of such non-monetary Event of Default), but subject
to termination as set forth below, Tenant shall have a right of first refusal
to purchase the Premises upon the terms and conditions set forth in this
paragraph 30.  During the ROFR Period
Landlord shall not sell or agree to sell the Premises without first complying
with this paragraph 30.


 


(b)                                 During
the ROFR Period, if Landlord receives an offer to sell the Premises to a Person
that is not a Landlord Affiliate or an Affiliate of Tenant or Guarantor which
Landlord


 

















 


desires to accept, Landlord shall notify (“ROFR Notice”)
Tenant in writing of such event. 
Landlord agrees that if Landlord receives such an offer to sell the
Premises during the ROFR period for a purchase price of $16,280,000.00 or
greater on an all-cash basis, Landlord shall agree to accept such offer solely
for purposes of this paragraph 30 and complying with the provisions of this
paragraph 30.  The date such notice is
given is herein called the “ROFR Notice Date”.  The ROFR Notice shall state that Landlord
intends to sell the Premises to a Person that is not a Landlord Affiliate or an
Affiliate of Tenant or Guarantor, for the specified price in such offer (“ROFR Notice
Price”) on an all-cash basis. 
Tenant shall have the right, at its option, to make an offer (“Tenant’s
ROFR Offer”) to purchase the Premises in accordance with paragraph
29 on November 1, 2013 (notwithstanding any other proposed closing date in
any offer referenced in the ROFR Notice) for the ROFR Notice Price, which offer
shall be an all cash offer.


 


(c)                                  Tenant
shall exercise its right of first refusal to purchase the Premises, if at all,
by delivering in writing Tenant’s ROFR Offer to Landlord on or before the date
which is 30 days following the ROFR Notice Date.  If Tenant makes such Tenant’s ROFR Offer within such 30 day
period, Landlord shall then accept Tenant’s ROFR Offer within 10 Business Days,
and Tenant shall close a purchase of the Premises on an all-cash basis at the
ROFR Notice Price on November 1, 2013, in accordance with paragraph 29
above.


 


(d)                                 If
an Event of Default under this Lease has occurred or is continuing at the time
of the closing date for the sale to Tenant under this paragraph 30, Landlord
may, at Landlord’s option, terminate Tenant’s right and obligation to purchase
the Premises pursuant to this paragraph 30; provided, however, that Tenant may
remedy such Event of Default as follows: 
(1) with respect to a monetary Event of Default, Tenant pays all sums
then due and payable to cure said Event of Default and (2) with respect to a
non-monetary Event of Default, Tenant indemnifies Landlord against any and all
losses or claims arising as a result of such non-monetary Event of
Default.  Tenant’s failure to close the
purchase of the Premises on the closing date shall be an immediate Event of
Default under this Lease.


 


(e)                                  Landlord
shall not accept any unsolicited offers to sell the Premises during the ROFR
Period without first complying with the provisions of this paragraph 30.


 


(f)                                    Tenant’s
right of first refusal pursuant to this paragraph 30 shall not apply to
acquisition of the Premises, or any portion thereof, by a third party in a
condemnation proceeding or a conveyance in lieu of condemnation.


 


[SIGNATURE PAGE FOLLOWS]


 

















 


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


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  iSTAR GARDEN CITY LLC,  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  iStar Financial Inc., a Maryland corporation

  
	
   

  	
  Its:

  	
  Sole Class A Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BARCLAY G. JONES, III

  	
   

  
	
   

  	
  Name:

  	
  Barclay G. Jones, III

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  AAR ALLEN SERVICES, INC.,

  an Illinois corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ TIMOTHY J. ROMENESKO

  	
   

  
	
   

  	
  Name:

  	
  Timothy J. Romenesko

  
	
   

  	
  Title:

  	
  Vice President

  
							



 

















 


	
  STATE OF New York

  	
  )

  
	
   

  	
  )  SS

  
	
  COUNTY OF New York

  	
  )

  



 


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


 


 


	
  /s/ SAMANTHA GARBUS

  	
   

  
	
  Notary Public

  



 

















 


	
  STATE OF Illinois

  	
  )

  
	
   

  	
  )  SS

  
	
  COUNTY OF DuPage

  	
  )

  



 


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


 


	
  /s/ JO-ELLEN KIDDIE

  	
   

  
	
  Notary Public

  



 

















 


TABLE OF CONTENTS


 


	
  1.

  	
  DEFINITIONS

  	
   

  
	
  2.

  	
  DEMISE OF PREMISES

  	
   

  
	
  3.

  	
  USE

  	
   

  
	
  4.

  	
  TERM

  	
   

  
	
  5.

  	
  RENTAL; SECURITY DEPOSIT; GUARANTY

  	
   

  
	
  6.

  	
  TAXES

  	
   

  
	
  7.

  	
  NET LEASE; NON-TERMINABILITY

  	
   

  
	
  8.

  	
  SERVICES

  	
   

  
	
  9.

  	
  REPAIRS AND MAINTENANCE; REPLACEMENT

  	
   

  
	
  10.

  	
  DESTRUCTION OF OR DAMAGE TO PREMISES

  	
   

  
	
  11.

  	
  INSURANCE, HOLD HARMLESS AND
  INDEMNIFICATION

  	
   

  
	
  12.

  	
  COMPLIANCE
  WITH LAWS, COVENANTS

  	
   

  
	
  13.

  	
  PARTIAL
  TAKING

  	
   

  
	
  14.

  	
  SUBSTANTIAL TAKING

  	
   

  
	
  15.

  	
  DEFAULT:  EVENTS OF DEFAULT

  	
   

  
	
  16.

  	
  REMEDIES

  	
   

  
	
  17.

  	
  SUBORDINATION

  	
   

  
	
  18.

  	
  LANDLORD’S RIGHT OF ENTRY

  	
   

  
	
  19.

  	
  NOTICES

  	
   

  
	
  20.

  	
  ESTOPPEL CERTIFICATE; FINANCIAL DATA

  	
   

  
	
  21.

  	
  MECHANICS’
  LIENS

  	
   

  
	
  22.

  	
  END
  OF TERM

  	
   

  
	
  23.

  	
  ALTERATIONS

  	
   

  
	
  24.

  	
  MEMORANDUM OF LEASE

  	
   

  
	
  25.

  	
  SUBLETTING/ASSIGNMENT

  	
   

  
	
  26.

  	
  HAZARDOUS MATERIAL

  	
   

  
	
  27.

  	
  FINANCING

  	
   

  
	
  28.

  	
  MISCELLANEOUS PROVISIONS

  	
   

  
	
  29.

  	
  PURCHASE PROCEDURE

  	
   

  
	
  30.

  	
  RIGHT TO PURCHASE

  	
   

  



 


i

















 


	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  A-1

  	
  LEGAL DESCRIPTION FOR THE PREMISES - REAL
  ESTATE

  	
   

  
	
  A-2

  	
  IMPROVEMENTS

  	
   

  
	
  B

  	
  EQUIPMENT

  	
   

  
	
  C

  	
  PERMITTED ENCUMBRANCES

  	
   

  
	
  D

  	
  FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
  AGREEMENT

  	
   

  
	
  E

  	
  FAIR MARKET VALUE DETERMINATION FOR PREMISES

  	
   

  
	
  F

  	
  FORM OF LETTER CREDIT

  	
   

  
	
  F-1

  	
  APPROVED FORM OF LETTER OF CREDIT

  	
   

  
	
  G

  	
  GOOD WORKING ORDER ITEMS

  	
   

  
	
  H

  	
  REPAIR ITEMS

  	
   

  
	
  I

  	
  INSURANCE REQUIREMENTS FOR UNDERGROUND TANKS

  	
   

  



 


ii

















 


EXHIBIT A-1


 


(Description Of
The Land)


 


 


EXHIBIT A-2


 


Improvements


 


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


 

















 


EXHIBIT B


 


Equipment


 


 


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


 

















 


EXHIBIT C


 


Permitted
Encumbrances


 


 


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


 

















 


EXHIBIT D


 


Form of
Subordination, Non-Disturbance and Attornment Agreement


 


 


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


 


 


RECITALS:


 


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


 


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


 


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


 


 


AGREEMENT:


 


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


 

















 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


	
  If to Tenant:

  	
   

  	
  AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood
  Dale Road

  
	
   

  	
   

  	
  Wood Dale,
  Illinois 60191

  
	
   

  	
   

  	
  Attention:  Tim Romenesko

  
	
   

  	
   

  	
  Telephone:  (630) 227-2090

  
	
   

  	
   

  	
  Facsimile:   (630) 227-2101

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Lender:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 

















 


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


 


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


 


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


 


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


 


 


[NO FURTHER TEXT ON
THIS PAGE]


 

















 


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


 


 


	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  AAR ALLEN SERVICES, INC., an Illinois
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  iSTAR GARDEN CITY LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By: iStar Financial Inc., a Maryland
  corporation

  	
   

  
	
  Its: Sole Class A Member

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 

















 


EXHIBIT E


 


Fair Market Value
Determination For Premises or any Site


 


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


 


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


 


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


 

















 


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


 


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


 


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


 

















 


EXHIBIT F


 


Irrevocable
Standby Letter Of Credit Number
        


 


	
  LETTER OF CREDIT AMOUNT

  	
   

  	
  ISSUE DATE

  	
   

  	
  EXPIRATION
  DATE

  	
   

  
	
  USD
  $                

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
  BENEFICIARY:

  	
  APPLICANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  C/O ISTAR FINANCIAL INC.

  	
   

  
	
  1114 AVENUE OF THE AMERICAS, 27TH
  FLOOR

  	
   

  
	
  NEW YORK, NEW YORK 10036

  	
   

  
	
  ATTN: 
  CHIEF OPERATING OFFICER

  	
   

  
	
   

  	
   

  
	
  WITH A COPY TO:

  	
  WITH A FURTHER COPY TO:

  
	
   

  	
   

  
	
  ISTAR FINANCIAL INC.

  	
   

  
	
  1114 AVENUE OF THE AMERICAS, 27TH
  FLOOR

  	
  3480 PRESTON RIDGE ROAD, SUITE 575

  
	
  NEW YORK, NEW YORK 10036

  	
  ALPHARETTA, GEORGIA 30005

  
	
  ATTN: 
  GENERAL COUNSEL

  	
  ATTN: 
  DIRECTOR OF LEASE

  
	
   

  	
  ADMINISTRATION

  



 


GENTLEMEN:


 


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


 


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


 


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


 


THIS LETTER OF CREDIT IS
SUCCESSIVELY TRANSFERABLE IN ITS ENTIRETY.


 


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


 


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


 


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


 


	
  SINCERELY,

  
	
   

  
	
   

  	
   

  
	
  AUTHORIZED SIGNATURE

  



 

















 


EXHIBIT F-1


 


Approved Letter Of
Credit


 

















 


EXHIBIT G


 


Good Working Order Items


 


Roof


 


•        Flashings


•        No
bubbles or holes on roof surface


•        Drains
free and clear


•        Skylights
and flashings


•        All
vents and stacks


•        Curbs


•        Expansion
joints


 


Asphalt paved area 


 


•        Sealed
and striped within last 12 months


•        No
dips or holes


 


Plumbing


 


•        Bathrooms
– toilets, sinks, urinals


 


Electrical


 


•        Master
switch boxes


•        Transformers


•        Receptacles
and switches


•        Lighting


 


Fire and Safety


 


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


•        Security
System


 


HVAC


 


•        Roof
top unit


•        Controls


•        Filters
replaced within last 6 months


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


 

















 


EXHIBIT H


 


Repair Items


 


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


 


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


 


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


 

















 


EXHIBIT I


 


Insurance Requirements for Underground Tanks


 


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


 


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

  	
   

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

  



 


 


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


 


iStar Garden City LLC


iStar Financial Inc., and its


Subsidiaries, successors and assigns


3480 Preston Ridge Rd., Suite 575


Alpharetta, GA 30005


 

















 


GUARANTY


 


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


 


RECITALS


 


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


 


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


 


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


 


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


 


1.                                      Guaranty.


 


(a)                                  Guarantor,
as a primary obligor and not merely as a surety, hereby absolutely,
unconditionally and irrevocably guarantees to Landlord the prompt and complete
payment and, in the case of non-pecuniary obligations, performance of all of
the Guaranteed Obligations (as defined below) in full, when and as the same
shall become due, whether on any due date or performance date, or upon demand
or otherwise.  This Guaranty constitutes
the agreement to pay money and to act in the first instance and is not to be
construed as a contract of indemnity or a guaranty of collectability.


 


(b)                                 As
used in this Guaranty, “Guaranteed Obligations” means,
collectively, all of the following:


 

















 


(i)                                     all
of the indebtedness, liabilities and obligations of every kind and nature of
Tenant to Landlord relating to the payment of money arising under or in any way
relating to the Lease, howsoever created, incurred or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, due or to
become due, and howsoever owned, held, or acquired by Landlord (collectively,
with the items set forth in (iii) and (iv) below, the “Monetary Obligations”),
including all of Tenant’s payment obligations owed to Landlord under the Lease,
including timely full payment of all Rent and all other amounts payable by
Tenant under the Lease, including, to the extent applicable, all payments
required under Sections 14 and 16 of the Lease;


 


(ii)                                  all
of the covenants, liabilities, and obligations of every kind and nature of
Tenant to Landlord which do not relate to the payment of money arising under or
in any way relating to the Lease, howsoever created, incurred or evidenced,
whether direct or indirect, absolute or contingent, new or hereafter existing,
due or to become due, and howsoever owned, held, or acquired by Landlord;


 


(iii)                               all
interest, fees, costs and expenses due Landlord after the filing of a
bankruptcy petition by or against Tenant regardless of whether such amounts can
be collected during the pendency of the bankruptcy proceedings; and


 


(iv)                              all
Enforcement Costs (as defined herein).


 


2.                                      Representations
and Warranties.  Guarantor
acknowledges and agrees that Landlord’s agreement to enter into the Lease with
Tenant is of substantial and material benefit to Guarantor and further agrees
that the following shall constitute representations and warranties of
Guarantor, and Guarantor acknowledges that Landlord intends to enter into the
Lease in reliance thereon:


 


(a)                                  There
is no existing event of default, and no event has occurred which with the
passage of time or the giving of notice or both will constitute an event of
default, under any agreement to which Guarantor is a party, the effect of which
event of default will impair performance by Guarantor of Guarantor’s
obligations pursuant to and as contemplated by the terms of this Guaranty, and
neither the execution and delivery of this Guaranty nor compliance with the
terms and provisions hereof will (i) violate any presently existing provision
of law or any presently existing regulation, order, writ, injunction or decree
of any court or governmental department, commission, board, bureau, agency or
instrumentality, or (ii) conflict or will be inconsistent with, or will result
in any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, instrument,
document, agreement or contract of any kind that creates, represents, evidences
or provides for any lien, charge or encumbrance upon any of the property or
assets of Guarantor, or any other indenture, mortgage, deed of trust, instrument,
document, agreement or contract of any kind to which Guarantor is a party or by
which Guarantor or any of Guarantor’s property may be subject, or in the
event of any such conflict, the required consent or waiver of the other party
or parties thereto has been validly granted, is in full force and effect, is
valid and sufficient therefor and has been approved in writing by Landlord;


 

















 


 


(b)                                 There
are no actions, suits or proceedings pending or, to Guarantor’s knowledge,
threatened against Guarantor before any court or any governmental,
administrative, regulatory, adjudicatory or arbitrational body or agency of any
kind that will adversely affect performance by Guarantor of Guarantor’s
obligations pursuant to and as contemplated by the terms and provisions of this
Guaranty;


 


(c)                                  Neither
this Guaranty nor any document, financial statement, credit information,
certificate or statement heretofore furnished or required herein to be
furnished to Landlord by Guarantor contains any untrue statement of fact or omits
to state a fact material to this Guaranty; and


 


(d)                                 Guarantor
is a corporation, duly incorporated and in good standing under the laws of the
State of Delaware and has as its principal place of business at One AAR Place,
1100 North Wood Dale Road, Wood Dale, Illinois 60191.


 


3.                                      Covenants.  Guarantor agrees and covenants that:


 


(a)                                  Any
indebtedness of Tenant now or hereafter existing or owing, together with any
interest thereon, to Guarantor, is hereby subordinated to the Rent payments and
any other payments due from Tenant to Landlord under the Lease, and such
indebtedness of Tenant to Guarantor shall be collected, enforced and received
by Guarantor in trust for the benefit of Landlord, and shall be paid over to
Landlord on account of the Rent payments and other payments due from Tenant to
Landlord to the extent Tenant fails to pay the same to Landlord and Guarantor
is obligated under this Guaranty for such Rent payments, but without impairing
or affecting in any manner the liability of Guarantor under the other
provisions of this Guaranty;


 


(b)                                 (1)
No payment by Guarantor under any provision of this Guaranty shall entitle
Guarantor, by subrogation to the rights of Landlord or otherwise, to (i) any
payment by Tenant or out of its property, or (ii) any payment from or rights in
any applicable bonds, title insurance certifications, commitments or
indemnities or other security held by or for the benefit of Landlord in
connection with the Premises; (2) until Tenant’s Guaranteed Obligations are
indefeasibly paid in full and all periods under applicable bankruptcy law for
the contest of any payment by any Guarantor or Tenant as a preferential or
fraudulent payment have expired, Guarantor knowingly, and with advice of
counsel, waives, relinquishes, releases and abandons all rights and claims to
indemnification, contribution, reimbursement, subrogation and payment which
such Guarantor may now or hereafter have by and from Tenant and the successors
and assigns of Tenant, for any payments made by Guarantor to Landlord,
including, without limitation, any rights which might allow Tenant, Tenant’s
successors, a creditor of Tenant, or a trustee in bankruptcy of Tenant to claim
in bankruptcy or any other similar proceedings that any payment made by Tenant
or Tenant’s successors and assigns to Landlord was on behalf of or for the
benefit of Guarantor and that such payment is recoverable by Tenant, a creditor
or trustee in bankruptcy of Tenant as a preferential payment, fraudulent
conveyance, payment of an insider or any other classification of payment which
may otherwise be recoverable from Landlord; and (3) unless and until Tenant’s
Guaranteed Obligations and Guarantor’s obligations under this 


 

















 


Guaranty have been indefeasibly paid and
performed in full, Guarantor will not assign or otherwise transfer any such
claim to any other person or entity.


 


(c)                                  Landlord,
in its sole discretion, may at any time enter into agreements with Tenant to
amend and modify the Lease, and may waive or release any provision or
provisions thereof and, with reference thereto, may make and enter into any
such agreement or agreements as Landlord or Tenant may deem proper or
desirable, without any notice to or further assent from Guarantor and without
in any manner impairing or affecting this Guaranty or any of Landlord’s rights
hereunder;


 


(d)                                 Landlord
may enforce this Guaranty without the necessity at any time of resorting to or
exhausting any other remedy or any other security or collateral and without the
necessity of proceeding against Tenant;


 


(e)                                  Nothing
contained herein or otherwise shall prevent Landlord from pursuing concurrently
or successively all rights and remedies available to Landlord pursuant to any
document or agreement in law or in equity and against any persons, firms or
entities whatsoever (and particularly, but not by way of limitation, Landlord
may exercise any rights available to Landlord under the Lease), and the
exercise of any of Landlord’s rights or the completion of any of Landlord’s
remedies shall not constitute a discharge of any obligation of Guarantor
hereunder, it being the purpose and intent of Guarantor that Guarantor’s
obligations shall be absolute, independent and unconditional under any and all
circumstances whatsoever;


 


(f)                                    The
liability of Guarantor hereunder or any remedy for the enforcement thereof
shall in no way be affected by (i) the release or discharge of Tenant in any
creditors’ receivership, bankruptcy or other similar proceedings, (ii) the
impairment, limitation, modification or termination of the liabilities of
Tenant to Landlord or the estate of Tenant in bankruptcy, or of any lien or
security interest securing said liabilities, or any remedy for the enforcement
of Tenant’s said liability under the Lease, resulting from the operation of any
present or future provision of Title 11 of the United States Code or other
similar statute or from the decision in any court arising from, (iii) the
rejection or disaffirmance of the Lease in any such proceedings, (iv) any
disability or other defense of Tenant, (v) the cessation from any cause
whatsoever of the liability of the Tenant to Landlord, or (vi) any defense,
current or future, of Guarantor to any action, suit or proceeding at law or
otherwise, that may be instituted on this Guaranty;


 


(g)                                 This
Guaranty shall continue to be effective and be deemed to have continued in
existence or be reinstated (as the case may be) if at any time payment of all
or any part of any sum payable pursuant to the Lease is rescinded or otherwise
required to be returned by the payee upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the payor, all as though such
payment to Landlord had not been made, regardless of whether Landlord contested
the order requiring the return of such payment.  The obligations of Guarantor pursuant to the preceding sentence
shall survive any termination, cancellation, or release of this Guaranty;


 

















 


(h)                                 Guarantor
hereby grants Landlord permission to deliver to any party holding a mortgage or
deed of trust on all or any portion of the Premises (each herein a “Mortgagee”)
copies of all financial statements and reports required to be delivered by
Tenant to Landlord under the Lease;


 


(i)                                     Upon
ten (10) days’ prior notice, Guarantor will permit Landlord and its
professional representatives to visit Guarantor’s offices, and discuss
Guarantor’s affairs and finances with appropriate officers, and will make
available such information as Landlord may reasonably request bearing on
Guarantor, the Premises or the Lease, and Landlord shall maintain the
confidentiality of any information designated by Guarantor as “nonpublic” and
Landlord will execute and use its reasonable efforts to cause Landlord’s
professional representatives to execute appropriate confidentiality agreements;
and


 


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


 


4.                                      Continuing
Guaranty.  Guarantor agrees that the
obligations of Guarantor to Landlord hereunder constitute an absolute, present,
primary, continuing, irrevocable, unlimited, unconditional guaranty of payment
and performance and, without limitation, is not conditioned or contingent upon
any effort to attempt to seek payment or performance from any other person or
entity (whether or not pursuant to this Guaranty) or upon any other condition
or contingency.  In addition, the
obligations of Guarantor hereunder shall not be subject to any counterclaim,
set-off, abatement, suspension, deduction, deferment or defense, and shall
remain in full force and effect without regard to, and shall not be released,
discharged or affected in any way by any circumstances or condition (whether or
not Guarantor shall have any knowledge thereof), including:


 


(a)                                  any
lack of validity or enforceability of the Lease;


 


(b)                                 any
termination of the Lease in accordance with its terms or amendment,
modification or other change in the Lease;


 

















 


(c)                                  any
failure, omission or delay on the part of Tenant, Guarantor or Landlord to
conform or comply with any term of any of the Lease;


 


(d)                                 any
waiver, compromise, release, settlement, forbearance or extension of time of
payment or performance or observance of any of the obligations or agreements
contained in the Lease;


 


(e)                                  any
action or inaction by Landlord under or in respect of the Lease, any failure,
lack of diligence, omission or delay on the part of Landlord to enforce, assert
or exercise any right, power or remedy conferred on Landlord in the Lease, or
any other action or inaction on the part of Landlord;


 


(f)                                    the
death or incapacity of Guarantor, as applicable, or any voluntary or
involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment,
assignment for the benefit of creditors, composition, receivership,
liquidation, marshalling of assets and liabilities or similar events or
proceedings with respect to Tenant or Guarantor, as applicable, or any of their
respective properties, or any action taken by any trustee or receiver or by any
court in any such proceeding;


 


(g)                                 any
merger or consolidation of Tenant into or with any other entity, or any sale,
lease or transfer of any of the assets of Tenant or Guarantor to any other
person or entity;


 


(h)                                 any
change in the ownership of the 100% of issued and outstanding stock owned in
Tenant by Guarantor or any other change in the relationship between Tenant and
Guarantor, or any termination of any such relationship;


 


(i)                                     to
the extent permitted by law, any release or discharge by operation of law of
Tenant from any obligation or agreement contained in the Lease;


 


(j)                                     any
conveyance, mortgage, or other transfer of all or any part of Tenant’s interest
in the Premises, or all or part of Guarantor’s interest therein;


 


(k)                                  any
assumption by any person of any or all of Tenant’s obligations under the Lease,
or Tenant’s assignment of any or all of its interest in the Lease (which
assignment is not permitted by the Lease without Landlord’s written consent);


 


(l)                                     the
power or authority or lack thereof of Tenant to execute, acknowledge or deliver
the Lease;


 


(m)                               any
defenses whatsoever that Tenant may or might have to the payment of the
Monetary Obligations, except for the payment thereof;


 


(n)                                 the
existence or non-existence of Tenant as a legal entity;


 

















 


(o)                                 any
sale or assignment by Landlord of the Premises, this Guaranty, and/or the Lease
(including any assignment by Landlord to any Mortgagee consistent with the
provisions of Paragraph 10 of this Guaranty);


 


(p)                                 any
default by Tenant under the Lease or any right of setoff, counterclaim or
defense (other than payment in full of the Monetary Obligations in accordance
with the terms of the Lease) that Guarantor may or might have to its respective
undertaking, liabilities, and obligations hereunder, each and every such
defense being hereby waived by Guarantor; or


 


(q)                                 to
the extent permitted by law, any other occurrence, circumstance, happening or
event, whether similar or dissimilar to the foregoing and whether foreseen or
unforeseen, which otherwise might constitute a legal or equitable defense or
discharge of the liabilities of a guarantor or surety or which otherwise might
limit recourse against Tenant or Guarantor.


 


5.                                      Waivers.  Guarantor irrevocably waives (i) notice of
acceptance of this Guaranty by the Landlord and any and all notices and demands
of every kind that may be required to be given by any statute or rule or law,
(ii) any defense arising by reason of any disability or other defense of
Tenant, (iii) presentment, demand, notice of dishonor, protest and all other
notices whatsoever, (iv) any right to participate in any security now or
hereafter held by Landlord, (v) any right to enforce remedies Landlord now has,
or later may have, against Tenant, Guarantor, or any other party, (vi)
diligence in collection or protection of or realization upon any obligation
hereunder, or any security for or guaranty of any of the foregoing, and any and
all formalities that otherwise might be legally required to charge Tenant,
Guarantor, or any other party with liability, (vii) any right to require
Landlord to proceed against Tenant or any other person at any time or to
proceed against or exhaust any security held by Landlord at any time or to
pursue or exhaust any other remedy whatsoever at any time, (viii) the defense
of any statute of limitations affecting the liability of Guarantor hereunder or
the enforcement thereof, to the extent permitted by law, (ix) any defense
arising by reason of any invalidity or unenforceability of the Lease, or any
defense of Tenant, or any disability of Tenant, or by any cessation of the
liability of Tenant from any cause whatsoever, (x) any duty of
Landlord to advise Guarantor of any information known to Landlord regarding any
and all favorable or unfavorable information, financial or otherwise, about the
Premises learned or acquired by Landlord at any time (it is agreed that
Guarantor assumes the responsibility for being and keeping informed regarding
such information), (xi) all rights at law or in equity to seek subrogation,
contribution, indemnification or any other form of reimbursement or repayment
from Tenant or any other person or entity now or hereafter primarily or
secondarily liable for any of Tenant’s obligations for any disbursements made
by Guarantor under or in connection with this Guaranty and further agrees that
Guarantor shall have no claims of any kind or type against Tenant as a result
of any payment made by Guarantor to Landlord, all such claims being
specifically waived, (xii) any right to enforce any remedy which Landlord now
has or may hereafter have against Tenant and any benefit of, and the right to
participate in, any security now or hereafter held by Landlord, (xiii) any
defense arising by reason of any act or failure to act by Landlord, any
election of remedies made by Landlord or any other election afforded to
Landlord pursuant to applicable law, whether or not pursuant to a bankruptcy,
insolvency, liquidation, reorganization or similar proceeding filed by or
against 


 

















 


Tenant, (xiv) notice of any of the
circumstances or conditions set forth in items (a) through (q), inclusive, of
Paragraph 4 above, and (xv) the requirement of Landlord to mitigate
damages.


 


6.                                      Effect
of Landlord’s Delay or Action.  No
delay on the part of Landlord in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Landlord of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy. 
No action of Landlord permitted hereunder shall in any way affect or
impair the rights of Landlord and the obligation of Guarantor under this
Guaranty.


 


7.                                      Enforcement.  All of the remedies set forth herein or
provided by the Lease or law or equity shall be equally available to Landlord,
and the choice by Landlord of one such alternative over another shall not be
subject to question or challenge by Guarantor, nor shall any such choice be
asserted as a defense, setoff, or failure to mitigate damages in any action,
proceeding, or counteraction by Landlord to recover or seek any other remedy
under this Guaranty, nor shall such choice preclude Landlord from subsequently
electing to exercise a different remedy. The obligations of Guarantor hereunder
are independent of the obligations of Tenant and, in the event of a default
hereunder, a separate action or actions may be brought and prosecuted against
Guarantor whether or not Guarantor is the alter ego of Tenant and whether or
not Tenant is joined therein or a separate action or actions are brought
against Tenant.  Guarantor agrees that
one or more successive actions may be brought against Guarantor, as often as
Landlord deem advisable, until all of the Guaranteed Obligations are paid and
performed in full.


 


8.                                      Enforcement
Costs.  If:  (i) this Guaranty is placed in the hands of
an attorney for collection or is collected through any legal proceeding; (ii)
an attorney is retained to represent Landlord in any bankruptcy,
reorganization, receivership, or other proceedings affecting creditors’ rights
and involving a claim under this Guaranty or the Lease; (iii) an attorney is
retained to protect or enforce the Lease or to provide advice or other
representation with respect to the Premises or the Lease in connection with an
enforcement action or potential enforcement action; or (iv) an attorney is
retained to represent Landlord in any other legal proceedings whatsoever in
connection with this Guaranty or the Lease, then Guarantor shall pay to
Landlord upon demand all actual out of pocket attorney’s fees, costs and
expenses, including, court costs, filing fees, recording costs, expenses of
foreclosure, title insurance premiums, survey costs, minutes of foreclosure,
and all other costs and expenses incurred in connection therewith (all of which
are referred to herein as “Enforcement Costs”),
in addition to all other amounts due hereunder.


 


9.                                      Notices.  Any notice, demand, request, or other
communication which any party hereto may be required or may desire to give
hereunder shall be in writing, addressed as follows, and shall be deemed to
have been properly given, rendered, made and delivered (i) when sent by
certified mail, postage prepaid, return receipt requested, on the fifth (4th)
day after deposit in such mail, or (ii) when received by overnight delivery or
overnight courier delivery (or if such delivery is refused, the date of such
refusal) or (iii) by facsimile transmission with a confirmation copy sent by
overnight delivery or by overnight courier delivery addressed to the other
party as follows:


 

















 


	
  If to Guarantor:

  	
   

  	
  AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood Dale Road

  
	
   

  	
   

  	
  Wood Dale, Illinois 60191

  
	
   

  	
   

  	
  Attention:

  	
  Tim Romenesko

  
	
   

  	
   

  	
  Telephone:

  	
  630.227.2090

  
	
   

  	
   

  	
  Fax:

  	
  630.227.2101

  
	
   

  	
   

  	
   

  
	
  With copies to:

  	
   

  	
  AAR CORP.

  
	
   

  	
   

  	
  One AAR Place

  
	
   

  	
   

  	
  1100 North Wood Dale Road

  
	
   

  	
   

  	
  Wood Dale, Illinois 60191

  
	
   

  	
   

  	
  Attention:

  	
  Legal Department

  
	
   

  	
   

  	
  Telephone:

  	
  630.227.2040

  
	
   

  	
   

  	
  Fax:

  	
  630.227.2058

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Schiff Hardin & Waite

  
	
   

  	
   

  	
  623 Fifth Avenue

  
	
   

  	
   

  	
  New York, New York 10022

  
	
   

  	
   

  	
  Attention:

  	
  Christine A. McGuinness, Esq.

  
	
   

  	
   

  	
  Telephone:

  	
  212.745.0831

  
	
   

  	
   

  	
  Fax:

  	
  212.753.5044

  
	
   

  	
   

  	
   

  
	
  To Landlord:

  	
   

  	
  iStar Garden City LLC

  
	
   

  	
   

  	
  c/o iStar Financial Inc.

  
	
   

  	
   

  	
  1114 Avenue of the Americas

  
	
   

  	
   

  	
  27th Floor

  
	
   

  	
   

  	
  New York, New York  10036

  
	
   

  	
   

  	
  Attention:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  Telephone:

  	
  212.930.9400

  
	
   

  	
   

  	
  Fax:

  	
  212.930.9494

  
	
   

  	
   

  	
   

  
	
  With copies to:

  	
   

  	
  iStar Garden City LLC

  
	
   

  	
   

  	
  c/o iStar Financial Inc.

  
	
   

  	
   

  	
  1114 Avenue of the Americas

  
	
   

  	
   

  	
  27th Floor

  
	
   

  	
   

  	
  New York, New York  10036

  
	
   

  	
   

  	
  Attention:

  	
  General Counsel

  
	
   

  	
   

  	
  Telephone:

  	
  212.930.9400

  
	
   

  	
   

  	
  Fax:

  	
  212.930.9494

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  



 

















 


	
   

  	
   

  	
  Katten Muchin Zavis Rosenman

  
	
   

  	
   

  	
  525 West Monroe Street

  
	
   

  	
   

  	
  16th Floor

  
	
   

  	
   

  	
  Chicago, Illinois  60661-3693

  
	
   

  	
   

  	
  Attention:

  	
  Nina B. Matis, Esq.

  
	
   

  	
   

  	
   

  	
  Gregory P. L. Pierce, Esq.

  
	
   

  	
   

  	
  Telephone:

  	
  312.902.5541

  
	
   

  	
   

  	
  Fax:

  	
  312.902.1061

  



 


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


 


10.                               Assignment
and Modifications.  This Guaranty
shall be assignable by Landlord, its successors and assigns to any assignee of
all or a portion of Landlord’s rights under the Lease, including Mortgagee,
whether directly or by way of a grant of a security interest herein, without
the consent of Guarantor, and Guarantor shall execute, acknowledge and deliver
any documents reasonably requested by Landlord or such assignee in connection
therewith.  No modification, waiver,
amendment, discharge or change of this Guaranty shall be binding upon Landlord
except as expressly set forth in a writing duly signed and delivered on behalf
of Landlord.


 


11.                               Severability.  The parties hereto intend and believe that
each provision in this Guaranty comports with all applicable local, state and
federal laws and judicial decisions. 
However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state, or federal law, statute, ordinance,
administrative or judicial decision, or public policy, and if such court
declares such portion, provision, or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision, or provisions shall be given
force to the fullest possible extent that they are legal, valid and
enforceable, and that the remainder of this Guaranty shall be construed as if
such illegal, invalid, unlawful, void, or unenforceable portion, provision, or
provisions were not contained therein, and that the rights, obligations, and
interests of Guarantor and Landlord under the remainder of this Guaranty shall
continue in full force and effect.


 


12.                               Successors
and Assigns.  This Guaranty shall be
binding upon the heirs, executors, legal and personal representatives,
successors and assigns of Guarantor and shall inure to the benefit of
Landlord’s successors and assigns.


 


13.                               Jurisdiction.  With respect to any suit, action or
proceedings relating to this Guaranty, the Premises or the Lease (“Proceedings”) Guarantor (i) submits to the
non-exclusive jurisdiction of the state and federal courts located in the
County and State where any of the Premises are located or in the State of New
York and (ii) waives any objection which Guarantor may have at any time to the
laying of venue of any proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and further 


 

















 


waives the right to object, with respect to
such Proceedings, that such court does not have jurisdiction over Guarantor.


 


14.                               Use
of Terms.  All personal pronouns
used in this Guaranty, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall include the plural
and vice versa and shall refer solely to the parties signatory thereto except
where otherwise specifically provided. 
The words “include”, “includes”, “including” and any other derivation of “include” means
“including, but not limited to” unless specifically set forth to the contrary.


 


15.                               Material
Inducement.  Guarantor acknowledges
and agrees that Landlord is specifically relying upon the representations,
warranties, agreements and waivers contained herein and that such
representations, warranties, agreements and waivers constitute a material
inducement to Landlord to accept this Guaranty and to enter into the Lease and
the transaction contemplated therein.


 


16.                               Recitals
Incorporated.  The Recitals to this
Agreement are hereby incorporated into this Agreement together with all
exhibits, schedules and appendices hereto.


 


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


 


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


 


19.                               Certificate.                                  Within
fifteen (15) days after request by Landlord, Guarantor shall deliver a
certificate confirming that this Guaranty is in full force and effect and
unamended (or, if amended, specifying such amendment), and whether, to the
knowledge of Guarantor, any default exists under the Lease or this Guaranty.


 


20.                               Refinance
Cooperation.                 If
Landlord proposes to finance or refinance the Premises, Guarantor shall
cooperate in the process, and shall negotiate in good faith any request made by
a prospective Mortgagee for changes or modifications to the Lease and this
Guaranty, and shall not unreasonably withhold its consent to any such proposed
change or modification so long as the same does not adversely affect any
significant right or obligation of Tenant under the Lease, shorten any notice
or cure period to which Tenant is entitled under the Lease or increase Tenant’s
obligations under the Lease or change Guarantor’s rights and obligations under
this Guaranty.  Guarantor agrees to
execute, acknowledge and deliver documents reasonably requested by the
prospective Mortgagee (such as a consent to the financing (without encumbering
Guarantor’s or Tenant’s assets), a consent to assignment of lease and of this 


 

















 


Guaranty, estoppel certificate and a
subordination, non-disturbance and attornment agreement) customary for tenants
and their guarantors to sign in connection with mortgage loans to landlords, so
long as such documents are in form then customary among institutional lenders
(provided the same do not adversely change Tenant’s rights or obligations in a
way not previously changed by loan documents previously executed by Tenant in
connection with an earlier Mortgage or adversely change Guarantor’s rights and
obligations under this Guaranty). 
Guarantor shall permit Landlord and any Mortgagee or prospective
Mortgagee, at their expense, to meet with officers of Guarantor at Guarantor’s
offices and to discuss the Guarantor’s business and finances. On request of
Landlord, Guarantor agrees to provide any Mortgagee or prospective Mortgagee
the information to which Landlord is entitled hereunder, provided that if any
such information is non-public and designated as such by Guarantor, Landlord
will take reasonable steps to assure the confidentiality of such information.


 


[EXECUTION
PAGE FOLLOWS]


 

















 


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


 


	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  AAR CORP., a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ TIMOTHY
  J. ROMENESKO

  
	
   

  	
  Name:

  	
  Timothy J. Romenesko

  
	
   

  	
  Title:

  	
  Vice
  President & Chief Financial Officer

  
					



 

















 


	
  STATE OF Illinois

  	
  )

  
	
   

  	
  )SS

  
	
  COUNTY
  OF DuPage

  	
  )

  



 


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


 


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


 


	
   

  	
  /s/ JO-ELLEN
  KIDDIE

  
	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
  My
  Commission expires: