Document:

Exhibit
10.1

 

SUBLEASE

 

THIS SUBLEASE is
made as of the 14th day of December, 2004, by and between APW NORTH AMERICA INC. (hereinafter the
“Sublessor”) and AMERICAN BANK NOTE
HOLOGRAPHICS, INC. (hereinafter the “Sublessee”).

 

WHEREAS, the
Sublessor is leasing from MORE APPLIED FOUR (DE) LLC (hereinafter the “Master
Landlord”) certain premises located at 2 Applegate Drive, Robbinsville, New
Jersey (the “New Jersey Premises”) pursuant to a certain Deed of Lease
Agreement dated as of May 30, 2000, between Power (DE) QRS 14-34, Inc. (the
“Original Landlord”), as landlord, and the Sublessor, as tenant, as amended by
a First Amendment to Deed of Lease Agreement dated as of July 31, 2000, a
Second Amendment to Deed of Lease Agreement dated October 31, 2001 and a
Third Amendment to Deed of Lease Agreement dated December 14, 2004 and as
assigned to the Master Landlord pursuant to an Assignment and Assumption of
Deed of Lease Agreement between the Original Landlord, as assignor, and the
Master Landlord, as assignee, dated as of October     ,
2001 (collectively, the “Master Lease”), which Master Lease is attached hereto
as Exhibit A and in addition to the New Jersey Premises also covers
premises in Monon, Indiana, Champlin, Minnesota and Radford, Virginia (the
“Other Premises”); and

 

WHEREAS, the
Sublessee desires to sublease the entire New Jersey Premises, and the Sublessor
desires to sublease such space to the Sublessee upon the terms and conditions
stated herein.

 

NOW, THEREFORE, for
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:

 

1.                                       Subleased Premises.  Upon the terms and conditions of this
Sublease, the Sublessor hereby subleases to the Sublessee and the Sublessee
hereby subleases from the Sublessor the entire New Jersey Premises located at 2
Applegate Drive, Robbinsville, New Jersey leased by the Sublessor under the
Master Lease, legally described on attached Exhibit B (the
“Subleased Premises”).  It is understood
and agreed that this Sublease does not include any other premises other than
the New Jersey Premises which is the Subleased Premises under this
Sublease.  It is acknowledged that the
following specified personal property, equipment and/or improvements of the
Sublessor (collectively, the “Personal Property”) remains upon the Subleased
Premises as of the date of this Sublease: (a) all equipment comprising the
paint line, including but not limited to the conveyor, the wash system, the
paint booths, the drying ovens, paint hoppers and a burn-off oven, (b) the AC
motor winder, and (c) all inventory and all movable furniture not purchased by
the Sublessee, except for the furniture, files and lab equipment of the
Sublessor (the “Excluded Property”) which Excluded Property only may be stored
upon the Subleased Premises in an area of 35 feet by 75 feet (2,625
square feet) in the southwest corner of the warehouse, until no later than January 5,
2005.  The Sublessor shall remove the
Personal Property (except the Excluded Property which may remain until no later
than January 5, 2005) and repair any damage caused in connection with such
removal prior to the Commencement Date of this Sublease.  It is understood that the Excluded Property
shall be accessed by the Sublessor only at the time that such Excluded Property
will be relocated to a

 

 

different APW facility.  If the Excluded Property is not removed from
the Subleased Premises on or before January 5, 2005, the Sublessee may
dispose of the Excluded Property as it so desires and the Sublessor shall reimburse
the Sublessee for the reasonable cost of such disposal.  It is understood that the Sublessee shall not
have any liability with respect to the Excluded Property and the Sublessee
shall not be liable for any injury to persons entering the Subleased Premises
relating thereto, and the Sublessor shall indemnify and hold harmless the
Sublessee with respect to any such liability.

 

The Sublessor hereby represents and warrants that no person or entity
other than the Sublessor has any rights to use, occupy, lease, sublease or
possess any portion of the Subleased Premises.

 

2.                                       Term. 
The term of this Sublease and all of the Sublessee’s and the Sublessor’s
rights and obligations hereunder shall commence on the date the last of the
contingencies set forth in Paragraph 8 below has been satisfied (the
“Commencement Date”) and end on May 31, 2017 (the “Term”), provided
however that this Sublease shall sooner terminate in the event of the
expiration or termination of the Master Lease. 
It is understood that in the event that the Sublessee desires to
continue its occupancy of the Subleased Premises for periods subsequent to the
expiration of the original term of the Master Lease, the Sublessee shall enter
into a direct relationship with the Master Landlord on terms to be negotiated
directly between the Sublessee and the Master Landlord; and the Sublessor shall
not be a party to such arrangements.  The
Sublessee shall not have any right to extend the term of this Sublease with the
Sublessor, and the Sublessor shall take no actions to interfere with or
undermine the direct negotiations between the Sublessee and the Master
Landlord, it being understood however that the Sublessor shall not be required
to extend in any way the Master Lease as to any of the properties covered by the
Master Lease.

 

3.                                       Base Rent.  Subject to the abatement provisions set forth
below and the satisfaction of all of the contingencies set forth in Paragraph 8
below, the Sublessee shall pay to the Sublessor base rent in monthly
installments, each installment payable in the amounts set forth below in
advance on the first (1st) day of each month during the term of this
Sublease, commencing on the Commencement Date (the “Base Rent”).  The annual amount of the Base Rent due by the
Sublessee to the Sublessor for the first year of this Sublease shall be
$554,800.00 payable in equal monthly installments of $46,233.33 payable in
advance or before the first (1st) day of each month.  Commencing on the first anniversary of the
first (1st) day of the month occurring immediately following the
Commencement Date and on each anniversary of such date during the term of this
Sublease, the Base Rent shall increase by 1.89% per year in excess of the Base
Rent for the immediately preceding year. 
Base Rent for partial months of this Sublease shall be prorated.

 

All Base Rent and all other amounts due under this Sublease shall be
paid by the Sublessee in advance without notice, set-off or deduction except as
expressly provided in this Sublease, in lawful money of the United States to
the Sublessor, at N22 W23685 Ridgeview Parkway West, Waukesha, Wisconsin
53188-1013 or such other address as the Sublessor may from time to time
designate in writing to the Sublessee. 
The Sublessor hereby irrevocably authorizes the Sublessee, upon receipt
of written notice from the Master Landlord that a default

 

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has occurred under the Master Lease, to make
all Base Rent payments and other payments due hereunder directly to the Master
Landlord pursuant to the terms of the Subordination, Non-disturbance,
Attornment, Renewal and Option to Purchase Agreement between the Master
Landlord and the Sublessee (the “SNDA”), and any such payments made to the
Master Landlord in accordance with such notice shall be credited against all
Base Rent payments and other payments due under this Sublease; provided however
that such payments shall also be applied against and credited to the amounts
due by the Sublessor under the Master Lease so long as the Master Lease remains
in effect.

 

It is understood and agreed that the Sublessee shall also be
responsible for all sales tax or other tax on rentals, if any, due with respect
to the rentals due hereunder, which amounts shall be due along with the
applicable monthly installments of rent hereunder, if such a tax were ever
enacted, provided that such other taxes shall not encompass income, franchise,
estate, or other similar taxes.  The
Sublessor shall forward such taxes as paid by the Sublessee to the applicable
taxing authority and upon request by the Sublessee,
the Sublessor shall provide evidence of such payment to the Sublessee.

 

Notwithstanding any provision to the contrary contained herein, the
Base Rent shall be abated for, and the Sublessee shall not be obligated to pay
the Base Rent due for the seven (7) month period commencing on the date that
all of the contingencies set forth in Paragraph 8 below have been satisfied,
except for the contingency for the Sublessee to obtain the BEIP Grant, and
ending on the date that is seven (7) months immediately following such date;
provided however, that such abatement shall not affect the Sublessee’s
obligation to pay any other amounts or perform any other obligations under this
Sublease; and further provided that if the Sublessee shall default at any time
beyond any applicable notice and cure periods under this Sublease and the
Sublessor exercises its remedies with respect to such default by terminating
this Sublease, terminating the Sublessee’s right to possession, or otherwise, then
the rent abatement provided under this paragraph shall not be effective and the
Sublessee shall be responsible for payment immediately of all amounts due under
this Sublease as though there were no provisions for rent abatement.

 

4.                                       Security Deposit.  The Sublessee shall pay to the Sublessor upon
the execution hereof a security deposit in the amount of $46,233.33 (the
“Security Deposit”) which shall secure the Sublessee’s obligations
hereunder.  In the event of a default by
the Sublessee, the Sublessor may apply the Security Deposit toward the cure of
same, including without limitation reimbursing the Sublessor for amounts
expended by the Sublessor in curing defaults of the Sublessee.  If any part of the Security Deposit is used
to cure a default on the part of the Sublessee, the Sublessee shall replenish
such deposit so that at all times at least $46,233.33
shall be deposited with the Sublessor. 
In the event that any part of the Security Deposit is used to cure a
default of the Sublessee hereunder, the Sublessor shall provide written notice
to the Sublessee specifying the amounts of the Security Deposit so used to cure
said default.  The Sublessor shall return
to the Sublessee any excess amount held by the Sublessor after the termination
of this Sublease to the extent the Sublessor has not used same to cure any
default by the Sublessee under this Sublease. 
Unless the Sublessee has entered into a direct lease with the Master
Landlord commencing immediately following the expiration of the Sublease, the
Sublessor shall not return the Security Deposit (or the balance thereof) to the
Sublessee unless the Sublessee has

 

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vacated the Subleased Premises in
the condition required by this Sublease. 
There shall be no obligation to segregate the security deposit from
other funds of the Sublessor or to accrue interest thereon for the benefit of
the Sublessee.

 

5.                                       Additional Rent Due By and Other Obligations of the
Sublessee.  Commencing on
the Commencement Date, the Sublessee shall be responsible to pay as Additional
Rent the amounts due by the Sublessor as Tenant under the Master Lease with
respect to the Subleased Premises as provided below and perform the obligations
of the Sublessor as Tenant under the Master Lease with respect to the Subleased
Premises as provided below:

 

A.                                   Impositions.  The Sublessee shall be responsible to timely
pay as required by the Master Lease all Impositions arising during the Term of
this Sublease relating to this Sublease, the Subleased Premises and/or the
Sublessee’s use or occupancy of the Subleased Premises, under Section 9(a)
of the Master Lease but only however with respect to the Subleased
Premises (but not as to the Sublessor) or as it relates to the Sublessee and
not the Sublessor (accordingly all references therein to “Tenant” shall be
changed to “Sublessee”); provided however that the Sublessee shall not be
responsible for (1) the mortgage recording tax relating to the Minnesota
Premises referred to in Section 9(a)(v) of the Master Lease, (2) any
transfer taxes due in connection with a sale or transfer of the Subleased
Premises or any of the Other Premises, (3) any mortgage registration tax or
fee; (4) any franchise, income, excess profits or other taxes of the Sublessor
(unless such taxes are in lieu of or a substitute for any other tax, assessment
or other charge upon or with respect to the Subleased Premises, which, if it
were in effect, would be payable by the Sublessee under the provisions hereof
or by the terms of such tax, assessment or charge) and (5) any Impositions due
under Section 9(a)(iv) of the Master Lease which would not customarily be
considered real estate taxes relating to the Subleased Premises.  Sublessee shall also be required to make the
Escrow Payments relating only to the Subleased Premises, if required by Section 9(b)
of the Master Lease, and if the Sublessee makes such Escrow Payments relating
only to the Subleased Premises, then such Escrow Payments made by Sublessee
shall be credited to the obligation of the Sublessee to pay such
Impositions.  Notwithstanding anything
contained herein to the contrary, in the event any Impositions accrue prior to
the Term of this Sublease but are not due and payable until after the Commencement
Date, such Impositions shall be payable by the Sublessor on a prorata basis
based on the number of days such Impositions accrued before the Commencement
Date, it being understood that the Sublessee shall be responsible for the
amounts set forth above accruing after the Commencement Date.  The Sublessor represents and warrants that to
the best of the Sublessor’s knowledge attached hereto as Exhibit E
is a Schedule of all the material expenses that were due and payable by
the Sublessor with respect to the operation of the Subleased Premises for the

 

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past
two (2) years other than Base Rent under the Master Lease and insurance
premiums paid by the Sublessor.

 

B.                                     Compliance with Laws and Easement Agreements;
Environmental Matters. 
The Sublessee shall be responsible for compliance with the matters set
forth in Section 10 of the Master Lease but only however with
respect to the Subleased Premises, provided however that the Sublessee shall
not be responsible for:  (1)
Environmental Violations with respect to the Subleased Premises arising prior
to the commencement of the Term of this Sublease; (2) as to the responsibility
to pay for Site Assessments under Section 10(c) of the Master Lease, any
costs not relating to an Environmental Violation first arising after the
commencement of the Term of this Sublease; (3) any Environmental Violation as
to the Other Premises; and (4) any liability arising from a Default under the
Master Lease in which the Sublessee is not in default under this Sublease.  It is understood that the Sublessor shall be
responsible at the Sublessor’s expense for such remediation and/or correction
required in connection with Environmental Violations and other violations of
law, which relate to conditions existing prior to the commencement date of this
Sublease.  In the event the Sublessor
fails to commence to remediate and or correct Environmental Violations and
other violations for which the Sublessor is responsible under the immediately
preceding sentence, within thirty (30) days after the Sublessor’s receipt
of written notice of such failure from the Sublessee, the Sublessee may, if
such performance is not commenced within ten (10) days after the
Sublessor’s receipt of a written notice after the expiration of such thirty (30)
day period of such continued failure and that the Sublessee elects to exercise
self-help remedies, then the Sublessee may perform such obligations on behalf
of the Sublessor and receive reimbursement as provided below.  If the Sublessor has commenced performance,
it shall diligently continue same until completion.  If the Sublessor fails to diligently continue
performance, the Sublessee may provide written notice to the Sublessor of such
failure to continue performance and if the Sublessor fails to diligently continue
performance within ten (10) days after the Sublessor’s receipt of said
written notice, then the Sublessee may complete performance of such obligations
on behalf of the Sublessor and receive reimbursement as provided below.  The Sublessor agrees to reimburse the
Sublessee for all reasonable costs and expenses incurred by the Sublessee in
performing the Sublessor’s obligations as set forth herein.  If the Sublessor disputes whether the matter
is the Sublessor’s responsibility and/or the reasonableness of the costs
incurred, the Sublessee’s sole recourse shall be to commence an appropriate
action against the Sublessor in a court of competent jurisdiction.  If the Sublessee obtains a final
nonappealable judgment against the Sublessor, such judgment may be satisfied by
offsetting the judgment amount against the Base Rent due under this
Sublease.  The

 

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prevailing
party in any such action shall pay the non-prevailing party’s reasonable legal
fees and expenses in connection with any such action.

 

C.                                     Liens. 
The Sublessee shall not directly or indirectly create or permit to be
created or to remain and shall within thirty (30) days after receipt of
written notice thereof, bond over, discharge or remove any lien, levy or
encumbrance on the Subleased Premises arising from any work to the Subleased
Premises by or for the Sublessee or arising from the Sublessee’s acts.

 

D.                                    Maintenance and Repair.  Subject to the provisions of this
paragraph:  (1) the Sublessee shall
at all times maintain the Subleased Premises in as good repair and appearance
as the Subleased Premises is in on the date hereof and fit to be used for its
intended use in accordance with the practices generally recognized as then
acceptable by other companies in its industry, provided that with respect to
the initial alterations/improvements described on attached Exhibit C,
the Sublessee shall maintain same in the same state of repair as the date such
alterations/improvements are completed; (2) the Sublessee shall take every
other action necessary or appropriate for the preservation and safety of the
Subleased Premises; (3) the Sublessee shall promptly make all repairs of
every kind or nature, whether foreseen or unforeseen, which may be required to
comply with the requirements herein; and (4) the Sublessor and the Master
Landlord shall not be required to make any repair, whether foreseen or
unforeseen, or to maintain any of the Subleased Premises in any way.  Notwithstanding the foregoing, the Sublessor
at the Sublessor’s expense shall complete the work described on attached  Exhibit D,
which work shall be completed no later than the Commencement Date.  Further, notwithstanding any provision to the
contrary, it is understood and agreed: 
(1) that in the event that roof under commercially reasonable
standards needs to be replaced during the term of this Sublease, provided that
the Sublessee at the Sublessee’s expense has performed proper maintenance
thereof during the term of this Sublease, the reasonable cost to replace the
roof on a one-time basis only shall be shared between the Sublessor and the
Sublessee, 35% of such reasonable cost to be paid by the Sublessor and 65% of
such reasonable cost to be paid by the Sublessee; and (2) that in the event
that the parking lot under commercially reasonable standards needs to be
repaved or replaced during the term of this Sublease, provided that the
Sublessee at the Sublessee’s expense has performed proper maintenance thereof
during the term of this Sublease, the reasonable cost to repave or replace the
parking lot on a one-time basis only shall be shared between the Sublessor and
the Sublessee, 30% of such reasonable cost to be paid by the Sublessor and 70%
of such reasonable cost to be paid by the Sublessee.  Further, in the event that there is a failure
of the foundation or load-bearing walls not caused by the acts or omissions of
the Sublessee, then the Sublessor at the Sublessor’s expense shall be

 

6

 

responsible
to remedy such failure.  It is expressly
understood that the Sublessee at the Sublessee’s expense shall be responsible
for all repairs and replacements with respect to mechanical systems.

 

It is
understood and agreed that if the Sublessee shall construct any improvement
during the term of this Sublease and such shall (i) encroach upon any setback
or any property, street or right-of-way adjoining the Subleased Premises, (ii)
violate the provisions of any restrictive covenant affecting the Subleased
Premises, (iii) hinder or obstruct any easement or right-of-way to which the
Subleased Premises is subject or (iv) impair the rights of others in, to or
under any of the foregoing, the Sublessee shall, promptly after receiving a
written demand from a party affected by such encroachment, violation,
hindrance, impairment, or obstruction, either (a) obtain from all necessary
parties waivers or settlements of all claims, liabilities and damages resulting
from each such encroachment, violation, hindrance, obstruction or impairment,
whether the same shall affect Master Landlord, the Sublessor or the Sublessee
or any of such parties, or (b) take such action as shall be necessary to remove
all such encroachments, hindrances or obstructions and to end all such
violations or impairments, including, if necessary, making alterations.

 

With respect
to the amounts due by the Sublessor hereunder, in the event Sublessor disputes
the necessity for the subject work or the cost thereof, the Sublessee’s sole
recourse shall be to commence an appropriate action against the Sublessor in a
court of competent jurisdiction.  If the
Sublessee obtains a final nonappealable judgment against the Sublessor, such
judgment may be satisfied by offsetting the judgment amount against the Base
Rent due under this Sublease.  The
prevailing party in any such action shall pay the non-prevailing party’s
reasonable legal fees and expenses in connection with any such action within
ten (10) days of written demand therefor.

 

E.                                      Alterations and Improvements.  The Sublessee shall be responsible for
compliance with the provisions of Section 13 of the Master Lease, but only
as to the Subleased Premises.

 

F.                                      Permitted Contests.  The Sublessee shall be permitted to make the
contests under Section 14 of the Master Lease but only as to the Subleased
Premises and only to the extent permitted by said Section 14 of the Master
Lease.

 

G.                                     Indemnification.  Except for any amounts payable by the
Sublessor pursuant to Section 23(a)(iii) of the
Master Lease, the Sublessee shall be responsible for the indemnification
obligations under Section 15 of the Master Lease, but only as to
the Subleased Premises and only with respect to matters first arising
after the commencement of the Term of this

 

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Sublease and only
to the extent same are not due to the fault of the Sublessor or the Master
Landlord or their respective agents.

 

H.                                    Insurance.  The Sublessee shall be responsible to
maintain all of the insurance and comply with the provisions of Section 16
of the Master Lease (except to the extent otherwise agreed to in writing by the
Master Landlord pursuant to the terms of the SNDA between the Sublessor and the
Master Landlord or otherwise, provided however that the Master Landlord deems
same to fulfill the obligations of the Sublessor under the Master Lease as to
the Subleased Premises), but only as to the Subleased Premises.  All such insurance obtained by the Sublessee
shall also include the Sublessor as an additional insured during such time as
APW North America Inc. is the Sublessor under this Sublease.  The Sublessee shall also include all other
parties as required under the Master Lease. 
The Sublessor and the Sublessee hereby waive all rights of subrogation
against each other applicable to any insurer.

 

I.                                         Books and Records.  The Sublessee shall be responsible to comply
with Section 28(a) of the Master Lease.

 

Upon the Sublessor’s written request, the
Sublessee shall provide to the Sublessor satisfactory evidence that the
Sublessee has fulfilled said obligations from time to time.

 

6.                                       AS IS. 
Except as expressly set forth in this Sublease, it is understood that
the Sublessee takes the Subleased Premises, “AS IS, WHERE IS, WITH ALL FAULTS”
without any representation or warranty by the Sublessor whatsoever.  The Sublessor shall not be required to make
any improvements, repairs or alterations to the Subleased Premises except that
the Sublessor shall be responsible to complete the work as set forth on
attached Exhibit D.  Except
as expressly set forth in this Sublease, the Sublessor has not made and is not
making any express or implied representations or warranties whatsoever with
respect to the Subleased Premises, including without limitation any
representation or warranty regarding the condition of the Subleased Premises,
state of repair, safety, fitness for any particular purpose, accuracy of
dimensions, whether the improvements are structurally sound, in good condition
or in compliance with applicable laws, codes, ordinances and regulations,
including without limitation, any relating in any way to hazardous substances
or any environmental matters, or ADA compliance.  Except as expressly set forth in this
Sublease, the Sublessee acknowledges and represents that the Sublessee is
entering into this Agreement without relying upon any such statement,
representations or warranty made by the Sublessor or by any agent or by any
other person and made solely upon the Sublessee’s own inspections,
investigations, and financial analysis of the Subleased Premises.  The Sublessor represents and warrants that as
of the date hereof, (i) it has not received written notice from any
governmental authority that the Subleased Premises is in violation of any
environmental laws or in violation of any applicable laws, rules, regulations,
orders, ordinances and requirements of all federal, state and municipal
government departments, commissions, boards, and officers and (ii) to the
Sublessor’s actual knowledge, the Subleased Premises are not in violation of
any environmental laws or in violation of any applicable laws, rules,
regulations, orders, ordinances and requirements of all federal, state and

 

8

 

municipal government departments,
commissions, boards, and officers.  The
Sublessor further represents and warrants that the Sublessor has no actual
knowledge of any defect in the Subleased Premises other than those listed in Exhibit D.  The Sublessor’s representations and
warranties set forth in this Sublease shall survive the Sublessee’s acceptance
of the Subleased Premises. 
Notwithstanding the foregoing, it is understood that the foregoing AS IS
provision is subject to (a) the Sublessor’s obligation to remove the Personal
Property as provided in Paragraph 1 of this Sublease, (b) the other obligations
for which the Sublessor is responsible under the terms of this Sublease, and
(c) any condition upon the Subleased Premises which arose from the Sublessor’s
breach of any of its obligations under the Master Lease prior to the commencement
of this Sublease.

 

7.                                       Relationship to Master Lease.  This Sublease and all of the Sublessee’s
rights hereunder are expressly subject to and subordinate to all of the terms
of the Master Lease.  It is understood,
however, that the Sublessee shall not be bound by any amendments to the Master
Lease made after the date hereof without the Sublessee’s prior written consent,
which shall not be unreasonably withheld, conditioned or delayed.  Subject to the provisions of this Sublease,
all of the covenants, agreements, terms, provisions and conditions of the
Master Lease are incorporated herein as if set forth at length herein, except
those which by their nature or purport are inapplicable or inappropriate to the
subleasing of the Subleased Premises pursuant to this Sublease or are
inconsistent with or modified by any of the terms, covenants or conditions of
this Sublease.  Notwithstanding the
generality of the preceding sentence, it is agreed as follows:  for the purposes of the incorporation of the
terms and provisions of the Master Lease herein, the term “Tenant” in the
Master Lease shall mean and refer to the Sublessee hereunder, the term
“Landlord” in the Master Lease shall mean and refer to the Sublessor hereunder,
the term “Leased Premises” in the Master Lease shall mean and refer only to the
Subleased Premises hereunder, the term “Basic Rent” or words of similar import
in the Master Lease shall mean and refer to the Base Rent hereunder, the term
“Additional Rent” or words of similar import in the Master Lease shall mean and
refer to the Additional Rent hereunder, the term “Monetary Obligation” or words
of similar import in the Master Lease shall mean and refer to the Base Rent,
Additional Rent and all other sums payable hereunder, the term “Lease” or words
of similar import in the Master Lease shall mean and refer to this Sublease,
and the term “Alterations” or words of similar import in the Master Lease shall
mean any alterations, installations, additions and improvements, made pursuant
to and in compliance with this Sublease. 
The Sublessee covenants and agrees to indemnify and to hold the
Sublessor harmless from and against any liabilities arising under the Master
Lease by reason of the Sublessee’s failure to comply fully with and pay and
perform any and all of said duties, covenants and obligations under and
pursuant to this Sublease or by reason of Sublessee’s use and occupancy of the
Subleased Premises or the conduct of the business conducted by the
Sublessee.  Subject to the foregoing
provisions regarding incorporating the Master Lease by reference, it is
understood that in the event of a default by the Sublessee hereunder that
remains uncured beyond any applicable notice and cure periods, the Sublessor
shall be entitled to all of the rights and benefits of the Master Landlord
under the Master Lease (except Section 23(a)(iii) of the Master Lease) and
the Sublessor shall be able to enforce against the Sublessee the obligations
for which the Sublessee is responsible for under this Sublease, and the
Sublessor shall be entitled to all rights and remedies which may be available
to the Master Landlord.  In addition, the
Sublessor shall

 

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also be entitled to all other
rights and remedies available under law or equity.  The Sublessee and the Sublessor acknowledge
that termination of the Master Lease will result in a termination of this
Sublease, provided however it is understood that a separate nondisturbance
agreement will be executed in connection with the Sublease which will provide
in part that in the event of the termination of the Master Lease as a result of
a default by the Sublessor (not arising because of a default of the Sublessee),
then  such Master Landlord will recognize
the rights of the Sublessee under this Sublease as provided in such
nondisturbance agreement entered into between the Sublessor and the Master
Landlord.  It is understood that whenever
the consent or approval of the Master Landlord is required with respect to any
action or omission of the Sublessee, the Sublessee shall be required to first
obtain the prior written approval or consent of the Sublessor which consent
shall not be unreasonably withheld, conditioned or delayed, and if consented to
or approved by the Sublessor, then such matter shall be submitted to the Master
Landlord for its approval or consent.  It
is understood that the Sublessee shall not be responsible for any obligations
of the Sublessor not expressly set forth herein or expressly incorporated
herein by reference.

 

8.                                       Consent of Master Landlord/Contingencies.  The obligations of the Sublessor and the
Sublessee under this Sublease are contingent upon the satisfaction of the
following on or before December 17, 2004 (the “Contingency Date”) of the
following items:  (i) the Master Landlord’s
written approval of this Sublease, (ii) the Master Landlord’s written waiver of
the requirement in the Master Lease for a six (6) month security deposit
arising from this Sublease, (iii) an estoppel certificate in form and substance
reasonably satisfactory to the Sublessee regarding the Master Lease, (iv) the
Sublessee, the Master Landlord, and the fee mortgagee entering into a mutually
acceptable nondisturbance agreement, (v) the Master Landlord’s written consent
to the Sublessee making the alterations shown on the plans attached as Exhibit C,
including an acknowledgment from the Master Landlord that such alterations do
not need to be removed at the end of the term of this Sublease, (vi) the
Sublessee obtaining a Business Employment Incentive Program Grant (the “BEIP
Grant”) from the State of New Jersey, (vii) the removal by the Sublessor
of the Personal Property (except the Excluded Property as provided in
Paragraph 1 above) and the repair by the Sublessor of any damage caused in
connection with such removal, and (viii) the completion of the work
described on attached Exhibit D. 
The Sublessor and the Sublessee represent and warrant that each shall
use good-faith diligent efforts to obtain all such documents and satisfy such
contingencies on or before the Contingency Date.  Notwithstanding the foregoing, if all such
contingencies are not satisfied on or before the Contingency Date (except it is
understood that the contingencies in (vii) and (viii) shall run only
for the benefit of the Sublessee), either party may terminate this Sublease
upon written notice to the other given prior to such contingencies being
satisfied, but only after the Contingency Date. 
It is understood that as to the contingencies in (vii) and
(viii) above, that the Sublessee may at its option waive such
contingency(ies) and permit the term of the Sublease to commence with a punch
list of items to be performed by the Sublessor and reserving the right to sue
for the reasonable cost to complete such work. 
The Sublessor shall reasonably cooperate with the Sublessee in
attempting to obtain the Master Landlord’s consent or approval to any act or
thing requiring the Master Landlord’s consent under the Master Lease, provided
that the Sublessor’s prior written consent thereto has been obtained, which
Sublessor’s consent shall not be unreasonably withheld, conditioned or delayed,
and if consented to or approved by the Sublessor,

 

10

 

then such matter shall be
promptly submitted to the Master Landlord for its approval or consent, to the
extent the Master Landlord’s consent is required under the Master Lease.

 

9.                                       Use and Occupancy.  The Sublessee shall use and occupy the
Subleased Premises for the purpose of manufacturing, printing and coating products
including, but not limited to, holograms and related products and any other
uses permitted by the terms of the Master Lease and in compliance with all
applicable laws and ordinances.  The
Sublessee’s use shall be in compliance with all applicable laws, ordinances,
codes, rules, regulations, and recorded restrictions.  The Sublessee shall be responsible at the
Sublessee’s expense to comply with all applicable laws, ordinances, rules and
regulations, including without limitation environmental laws and regulations
that are not the Sublessor’s responsibility under Paragraph 16 below, in
connection with the Sublessee’s use and occupancy of the Subleased
Premises.  All governmental permits,
licenses and approvals for the Sublessee to occupy the Subleased Premises shall
be obtained by the Sublessee at the Sublessee’s sole cost and expense.

 

10.                                 Assignment and Subletting.  The Sublessee shall not be permitted to
assign or encumber this Sublease or sublease the Subleased Premises in whole or
in part, whether voluntarily or by operation of law, or permit any other
person(s) to occupy the Subleased Premises, without the prior written consent
of the Sublessor, which consent shall not be unreasonably withheld, conditioned
or delayed.  If the Sublessee is a
corporation, partnership or other entity, any transfer or series of transfers
and/or issuances of shares resulting in a transfer of control of the Sublessee
shall be deemed an assignment hereunder, provided however, that if the
Sublessee is a corporation whose shares are publicly traded, the issuance of
and/or transfer of any shares of the Sublessee, regardless of whether such
issuance or transfer results in a change in control of the corporation shall
not be deemed an assignment hereunder and the Sublessor’s consent will not be
required thereto.  Notwithstanding the
foregoing, the Sublessee shall have the right without the Sublessor’s consent,
to assign this Sublease to a business entity that succeeds to the Sublessee as
a result of a merger or consolidation and/or to a business entity that acquires
all or substantially all of the Sublessee’s assets provided that such
assignment is bona fide and is not being made for the purpose of avoiding the
assignment restrictions in this Sublease. 
The term control as used herein means the power to directly or
indirectly direct or cause the direction of the management or policies of the
Sublessee.  The consent of the Master
Landlord and all other approvals and consents required under the Master Lease
shall also be required in connection with any assignment or sublease.  No assignment or subletting shall relieve the
Sublessee of its primary liability under this Sublease.  The consent by the Sublessor and/or the
Master Landlord to any assignment or subletting shall not render unnecessary
consent to any further assignment or subletting.  The Sublessor shall reasonably cooperate with
the Sublessee’s efforts to promptly obtain the Master Landlord’s consent to the
extent required under the Master Lease provided that the Sublessor has consented
to same (which Sublessor’s consent shall not be unreasonably withheld,
conditioned or delayed).  In the event
that the Sublessee desires to assign or sublet and such assignment or sublease
would trigger the payment of a security deposit under Section 21 of the
Master Lease, to the extent such payment has not been waived by the Master
Landlord pursuant to the terms of the SNDA  and provided that the Master Landlord
will not require the payment of same from the Sublessor, then the Sublessee
shall be responsible for the payment thereof.

 

11

 

11.                                 Alterations/Improvements.  The Sublessee shall not be permitted to make
any alterations, improvements or changes to the Subleased Premises without the
Sublessor’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.  The
Sublessor hereby grants its consent to the initial alterations proposed by the
Sublessee pursuant to the plans attached hereto as Exhibit C,
subject to compliance with the other provisions of this Paragraph, and the
Sublessor will not unreasonably withhold, condition or delay its consent to any
modifications made by the Sublessee to such initial alteration plans.  In addition it shall be the Sublessee’s responsibility
(the Sublessor to assist in using reasonable efforts to obtain such consent as
provided in the last sentence of this Section 11) to obtain the approval
of the Master Landlord and obtain all required approvals and comply with the
provisions of the Master Lease with respect to any alterations or improvements,
including without limitation Section 13 of the Master Lease.  It is understood that to the extent the
Sublessee’s use requires modifications to the Subleased Premises in order to
comply with applicable laws, codes, ordinances, rules and regulations,
including without limitation ADA, the Sublessee shall be responsible for such
compliance at the Sublessee’s expense. 
Before any alterations or improvements are made to the Subleased
Premises the Sublessee shall obtain all necessary consents hereunder and the
Master Lease.  It is understood that if
the Master Landlord, to the extent provided in the Master Lease, requires the
removal of any improvements or alterations performed by or for the Sublessee or
any restoration, the Sublessee shall be responsible for such removal and
restoration.  Notwithstanding the
foregoing to the contrary, the Sublessor’s consent shall not be required and
shall be deemed given to any alterations or improvements to which the Master
Landlord consents in writing provided that the Sublessor shall have no
responsibility whatsoever for said alterations and improvements and will not
have any removal or restoration obligations with respect thereto.  The Sublessor represents and warrants to the
Sublessee that there have been no alterations or improvements that were made to
the Subleased Premises prior to the commencement of the Term of this Sublease
that the Sublessor is required to remove and restore upon the expiration or
earlier termination of the Master Lease. 
Prior to the commencement of this Sublease, the Sublessor shall use
reasonable efforts to obtain from the Master Landlord an estoppel certificate
confirming the foregoing representation.  The Sublessor shall reasonably cooperate with
the Sublessee’s efforts to obtain the Master Landlord’s consent, approval or
other action under the Master Lease and Master Landlord’s written agreement
that the alterations need not be removed at the expiration of the Sublease term
relative to any such alterations proposed to be made by the Sublessee, provided
however, it is understood that the Sublessor shall not have liability with
respect thereto.  With respect to any
work required under this Sublease to be completed by the Sublessor, such shall
be subject to obtaining the prior written consent of the Master Landlord to the
extent required by the Master Lease, and the Sublessor shall use reasonable
efforts to obtain from the Master Landlord such consent and agreement that the
alterations need not be removed at the expiration of the Sublease term, to the
extent required by the Master Lease.

 

12.                                 Utilities.  The Sublessee shall arrange for its own
accounts with the utility providers and pay when due directly to the utility
providers the cost of all natural gas, heat, cooling, energy, light, power,
sewer service, telephone, water, refuse disposal and other utilities and
services supplied to the Subleased Premises during the Term of this Sublease.

 

13.                                 Brokerage.  The Sublessee and the Sublessor each
represent and warrant to the other that it has not dealt with any real estate
broker in connection with this transaction, except

 

12

 

Grubb & Ellis (“G&E”) and The Schultz
Organization (“Schultz”) (collectively the “Brokers”).  The Sublessor shall be responsible for the
commission to G&E in the amount set forth in the separate agreement between
the Sublessor and G&E.  Schultz will
be paid a co-broker commission by G&E pursuant to a separate agreement
between G&E and Schultz.  Each party
hereby agrees to indemnify and hold harmless the other with respect to any
costs or expenses incurred by the indemnified party by reason of a breach of
the foregoing representation by the indemnifying party.  This paragraph shall survive any expiration
or earlier termination of this Sublease.

 

14.                                 No Option to Renew.  It is understood that Section 5(b) of
the Master Lease as to Option to Renew shall not be applicable with respect to
this Sublease.  The Sublessee shall not
have any option or right to extend the term of this Sublease.  The Sublessee shall negotiate with the Master
Landlord a direct lease between the Sublessee and the Master Landlord for any
period after the expiration date of this Sublease, and the Sublessor shall have
no liability for periods after said expiration date.  The Sublessor shall not exercise the
extension option contained in Section 5(b) of the Master Lease unless such
may be exercised separately without extending the Master Lease as to the
Subleased Premises.

 

15.                                 Option to Purchase.  The Sublessee shall not have the right to
exercise the Option to Purchase contained in the Master Lease unless the
Sublessee obtains the waiver of the Automatic Renewal Clause in Section 5(b)
of the Master Lease in the event the Option to Purchase is exercised on less
than all of the Leased Premises under the Master Lease.  The Sublessor is not willing to have the term
of the Master Lease extended beyond May 31, 2017.  If the Automatic Renewal is waived by the
Master Landlord, the Sublessee shall (to the extent permitted by the Master
Landlord) have the right to exercise the Option to Purchase as provided under Section 34
of the Master Lease provided that the Sublessee shall be responsible for all
costs and expenses whatsoever with respect to said purchase, and the Sublessor
shall have no liability whatsoever with respect thereto.  The Sublessor shall not exercise the option
to purchase on the Other Premises under the Master Lease unless the automatic
renewal provisions are not applicable as to the Subleased Premises.

 

16.                                 Environmental.  The Sublessee shall not cause or permit any
Hazardous Substance to be brought upon, kept or used in or about the Subleased
Premises except for reasonable amounts of such Hazardous Substance necessary in
the ordinary course of the Sublessee’s business, provided that the Sublessee
complies with all applicable Environmental Laws.  Except to the extent same is the Sublessor’s
responsibility pursuant to the indemnification set forth below, the Sublessee
shall be responsible for compliance with the Master Lease as to environmental
matters.  The Sublessee hereby
indemnifies the Sublessor and agrees to hold the Sublessor harmless from and
against any and all losses, liabilities, damages, injuries, fines, costs,
expenses including without limitation attorneys fees and costs of
investigation, and claims of any and every kind whatsoever paid, incurred or
suffered by, or asserted against the Sublessor for, with respect to, or as a
direct or indirect result of the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or release of any Hazardous
Substance first brought to the Subleased Premises during the Term of this
Sublease (including, without limitation, any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under the Comprehensive
Environmental Response, Compensation and Liability Act, any

 

13

 

so-called
“Superfund” or “Superlien” law, or any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to
or imposing liability or standards of conduct concerning any Hazardous
Substance) upon, within or over the Subleased Premises by the Sublessee, or its
agents, contractors, employees or invitees or arising as a result of the
Sublessee’s use of the Subleased Premises. 
The Sublessor hereby indemnifies the Sublessee and agrees to hold the Sublessee
harmless from and against any and all losses, liabilities, damages, injuries,
fines, costs and expenses, including without limitation reasonable attorney’s
fees and costs of investigation, and claims of any and every kind whatsoever
paid, incurred or suffered by, or asserted against the Sublessee for, with
respect to, or as a direct or indirect result of the presence on or under, or
the escape, seepage, leakage, spillage, discharge, emission, discharging or
release of any Hazardous Substance in violation of applicable Environmental
Laws which was first brought to the Subleased Premises prior to the
commencement of the Term of this Sublease (including, without limitation, any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under the Comprehensive Environmental Response, Compensation and
Liability Act, any so-called “Superfund” or “Superlien” law, or any other
federal, state or local statute, law, ordinance, code, rule, regulation, order
or decrees regulating, relating to or imposing liability or standards on
conduct concerning any Hazardous Substance) upon, within or over the Subleased
Premises by the Sublessor, or its agents, contractors, employees or invitees or
arising as a result of the Sublessor’s use of the Subleased Premises.  For purposes herein, the term “Hazardous
Substance” and “Environmental Law” shall have the meaning given to these terms
in the Master Lease.  The provisions of
this Section shall survive the expiration or termination of this Sublease.

 

17.                                 Notices.  All notices required or permitted under this
Sublease shall be in writing and shall be deemed duly served if and when
delivered by hand or mailed by certified mail, postage prepaid, return receipt
requested, or by recognized overnight courier as follows or to such other
address as either party may designate in writing to the other:

 

	
  If to the Sublessor:

  	
  APW North America Inc.

  
	
   

  	
  N22 W23685 Ridgeview Parkway West

  
	
   

  	
  Waukesha, WI 53202

  
	
   

  	
  Attn:

  	
  Treasurer

  
	
   

  
	
  with copies to:

  	
  Quarles & Brady LLP

  
	
   

  	
  411 East Wisconsin Avenue

  
	
   

  	
  Milwaukee, WI 53202

  
	
   

  	
  Attn:

  	
  Mary Neese Fertl, Esq.

  
	
   

  
	
  If to the Sublessee:

  	
  American Bank Note Holographics, Inc.

  
	
   

  	
  399 Executive Boulevard

  
	
   

  	
  Elmsford, NY 10523

  
	
   

  	
  Attn:

  	
  Kenneth Traub, President and CEO

  

 

14

 

	
  with a copy to:

  	
  Fulbright & Jaworski, LLP

  
	
   

  	
  666 Fifth Avenue

  
	
   

  	
  New York, NY 10103

  
	
   

  	
  Attn:

  	
  Paul Jacobs, Esq.

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Windels Marx Lane & Mittendorf, LLP

  
	
   

  	
  120 Albany Street Plaza

  
	
   

  	
  New Brunswick, NJ 08901

  
	
   

  	
  Attn:

  	
  Anthony R. Coscia, Esq.

  

 

18.                                 Access. 
The Sublessor acknowledges the secure nature of the Sublessee’s
business.  The Sublessor and/or its
agents may enter the Subleased Premises to inspect the same, make repairs or
for any other reasonable purpose, provided however that such access shall be
subject to the Sublessee’s standard security procedures, including, but not
limited to the Sublessor providing reasonable advance notice, the Sublessor’s
representatives’ clearance through the Sublessee’s security department and the
Sublessor’s representatives being escorted by the Sublessee’s representatives
through the Subleased Premises, provided however that compliance with such
procedures shall not be used by the Sublessee to prevent reasonable access to
the Subleased Premises by the Sublessor and its representatives nor access in
case of emergency, provided that the Sublessor uses reasonable efforts to keep
the Subleased Premises secure and to maintain the Sublessee’s confidentiality
during such emergency access.  The Master
Landlord shall have such access rights as provided in the Master Lease.

 

19.                                 Inapplicable Provisions.  It is understood that Articles 1, 3(a), (b),
and (c), 5, 6, 7, 8, 9, 10, 11 (as to Articles 9, 10 and 11, except as
expressly provided in this Sublease), 12, 15 (except as expressly provided in
this Sublease), 17, 18, 19, 20, 21, 22, 23, 24, 26, 29, 30, 31, 34 (except as
expressly provided in this Sublease) and 35 and portions of Exhibit A referring
to premises other than the Subleased Premises and Exhibits D, E and F of the
Master Lease and all provisions relating to the Other Premises contained in the
Master Lease are not applicable to this Sublease.

 

20.                                 Miscellaneous.  This Sublease Agreement may not be amended,
altered or modified, except by an instrument in writing executed by the
Sublessor and the Sublessee.  This
Sublease shall be governed by the laws of New Jersey.  The Sublessee and the Sublessor represent and
warrant to the other that each has full right and authority to enter into this
Sublease and to perform all of its respective obligations hereunder (subject to
obtaining the consent of the Master Landlord to this Sublease) and that all
persons signing this Lease on its behalf are authorized to do so.  All obligations of the Sublessee hereunder
not fully performed as of the expiration or earlier termination of the term of
this Sublease shall survive the expiration or the termination of the term
hereof, including without limitation the payment of any amount due hereunder
that has not been determined or paid as of the expiration or termination of
this Sublease.  The indemnification
obligations of the Sublessee under this Sublease shall survive the expiration
or termination of this Sublease.  If any
clause, phrase, provision or portion of this Sublease or the application
thereof to any persons or circumstances shall be invalid or unenforceable under
applicable law, such event shall not affect, impair or render invalid or

 

15

 

unenforceable
the remainder of this Sublease nor any other clause, phrase, provision or
portion hereof, nor shall it affect the application of any clause, phrase,
provision or portion hereof to other persons or circumstances and it is also
the intention of the parties to this Sublease that in lieu of each such clause,
phrase, provision or portion of this Sublease that is invalid or unenforceable,
there be added as a part of this Sublease a clause, phrase, provision or
portion as similar in terms to such invalid or unenforceable clause, phrase,
provision or portion as may be possible and be valid and enforceable.  The captions inserted in this Sublease are
for convenience only and no way define, limit or otherwise describe the scope
or intent of this Sublease or any provisions hereof.  Capitalized terms not otherwise defined in this
Sublease shall have the meanings as set forth in the Master Lease.

 

21.                                 Late Payment.  In the event any payment due by the Sublessee
required under this Sublease is paid more than five (5) days after the due date
thereof, the Sublessee shall pay to the Sublessor late charges in the amount of
5% of the unpaid amount and interest on such amounts due by the Sublessee that
were not timely paid at the rate of 3% over the Prime Rate from the date due
until paid.  It is expressly confirmed
that any amounts due under the Master Lease relating to late payment by the
Sublessor of amounts due under the Master Lease and not as a result of late
payment by the Sublessee under this Sublease shall be the responsibility of the
Sublessor hereunder.

 

22.                                 Attorney’s Fees.  In the event of any litigation under this
Sublease between the Sublessor and the Sublessee, the prevailing party shall be
permitted to recover its court costs and reasonable attorneys’ fees from the
other.

 

23.                                 Damage and Destruction.  If the Subleased Premises are damaged or
destroyed by fire or other casualty, the Sublessee shall provide the Master
Landlord and the Sublessor prompt notice thereof, and if such damage or
destruction is to the extent of not less than 50% of the value of the
improvements above foundation and such damage could not reasonably be repaired
and restored within 180 days after the date of such damage or destruction, the
Sublessee shall have the right to terminate this Sublease provided that the
Sublessee makes such election by written notice to the Sublessor within thirty
(30) days after the date of the damage or destruction.  In the event the Sublessee has elected to
terminate this Sublease, then the Sublessee shall assign to the Sublessor all of
the Sublessee’s rights to all of the insurance proceeds (except for proceeds
arising from the Sublessee’s insurance on its personal property, tenant
improvements, trade fixtures, inventory and other Sublessee owned personal
property) with respect to said damage, and the Sublessee shall have no
obligation to adjust losses or restore the Subleased Premises.  In the event that the Sublease is not
terminated as provided above, then the Sublessee shall be responsible to cause
the Subleased Premises to be repaired and restored in accordance with Sections
17(a), 17(c) and 19 of the Master Lease, provided that if the Master Landlord
and/or its lender fails to make the proceeds of such insurance available for
repair and restoration, then the Sublessee shall not be required to so repair
and restore.  There shall be no abatement
or reduction of any rent or any Monetary Obligations under this Sublease as a
result of such casualty.  In the event
the Sublease is not terminated, if under the Master Lease the Sublessor is permitted
to hold the insurance proceeds, then such proceeds shall be held only by a
depositary mutually agreed between the Sublessor and the Sublessee.

 

16

 

24.                                 Condemnation.  If any material part of the Subleased
Premises is taken in connection with any eminent domain or condemnation which
in the Sublessee’s reasonable opinion materially adversely impairs the
operation of the Sublessee’s business from the Subleased Premises, then the
Sublessee shall have the right to terminate this Sublease provided that the
Sublessee makes such election by written notice to the Sublessee within thirty
(30) days after the Sublessee’s receipt of a Condemnation Notice.  The Sublessee shall have no right to or
interest in any awards in connection with said condemnation except the
Sublessee may make a separate claim against the condemnor on account of the
Sublessee’s trade fixtures, equipment or other tangible property, moving
expenses or loss of business, if available, so long as such does not reduce the
award(s) payable to the Master Landlord and/or the Sublessor.  If the Sublease is not terminated, there
shall be no reduction or abatement in rent or any Monetary Obligations under
this Sublease.  Further, in the event the
Sublease is not terminated, it shall be the Sublessee’s obligation to repair
and restore the Subleased Premises as provided in the Master Lease and shall be
permitted to have use of the portions of the award made available under the
Master Lease for such repair and restoration. 
The Sublessee shall comply with the provisions in the Master Lease with
respect to repair and restoration, including without limitation Section 19
of the Master Lease if the Sublease is not terminated.  If the Sublease is terminated then all rights
to awards (except for the amounts relating to the Sublessee’s separate claim as
provided above for the Sublessee’s trade fixtures, equipment or other tangible
property, moving expenses or loss of business) shall be assigned to the
Sublessor and/or the Master Landlord as required by the Master Lease and the
Sublessee shall have no obligation to adjust losses or restore the Subleased
Premises.

 

25.                                 Surrender.  Subject to the provisions in the last
sentence of this Paragraph, upon the expiration or earlier termination of this
Sublease, unless the Sublessee has entered into a direct lease with the Master
Landlord, the Sublessee shall peaceably leave and surrender the Subleased
Premises to the Master Landlord and/or the Sublessor, as the case may be, in
the same order and condition as delivered at the time of the commencement of
the Term of this Sublease, ordinary wear and tear and damage by fire and other
casualty not required to be repaired or restored by the Sublessee excepted,
provided that even if a direct lease is entered into between the Master
Landlord and the Sublessee, the Sublessee shall remain liable to cause the
Subleased Premises to be in the aforementioned condition, but shall not be
required to vacate same.  Upon such
surrender, the Sublessee shall remove from the Subleased Premises all property
which is owned by the Sublessee or third parties other than the Master Landlord
and any alterations, if any, which the Sublessee is required to remove pursuant
to the terms of this Sublease, and shall repair any damage caused by such removal.  The Sublessor hereby acknowledges and agrees
that the Sublessee shall not be obligated at the end of the Term to remove any
of the alterations shown on the plans attached hereto as Exhibit C
or any modifications thereto or other alterations approved by the Sublessor in
accordance with this Sublease, provided that if the Master Landlord requires
removal and restoration, the Sublessee shall at the Sublessee’s expense be
responsible for said removal and restoration.

 

26.                                 Default.  The occurrence of any one and more of the
following shall, at the option of the Sublessor, constitute an “Event of
Default” under this Sublease:

 

17

 

A.                                   A
failure by the Sublessee to make any payment of Base Rent when due and such failure
continues for five (5) days after written notice of such failure;

 

B.                                     A
failure by the Sublessee to make any payment of any Monetary Obligation other
than Base Rent within five (5) days after written notice of such failure;

 

C.                                     A
failure by the Sublessee to duly perform and observe, or a violation or breach
of, any other provision of the Sublease not otherwise specifically mentioned in
Paragraph 26 which failure continues for thirty (30) days from the date on
which written notice of such failure is given or, if such default cannot be
cured within such thirty (30) day period and delay in the exercise of a remedy
would not (in the Sublessor’s reasonable judgment) cause any material adverse
harm to the Sublessor or the Subleased Premises, the cure period shall be
extended for the period reasonably required to cure the default provided that
the Sublessee shall commence to cure the default within said thirty (30) day
period and shall actively, diligently and in good faith proceed with and
continue the curing of the default until it shall be fully cured;

 

D.                                    The
Sublessee shall (i) voluntarily be adjudicated as bankrupt or insolvent, (ii)
seek or consent to the appointment of a receiver or trustee for itself or for
the Subleased Premises, (iii) file a petition seeking relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, (iv) make a general assignment for the benefit of creditors or
(iv) be unable to pay its debts as they mature;

 

E.                                      A
court shall enter an order, judgment or decree appointing without the consent
of the Sublessee a petition filed against the Sublessee which seeks relief
under the bankruptcy or other similar laws of the United States, any state or
any jurisdiction, and such order, judgment or decree shall remain undischarged
or unstayed sixty (60) days after it is entered;

 

F.                                      The
Subleased Premises shall have been vacated or abandoned;

 

G.                                     The
Sublessee shall be liquidated or dissolved or shall begin proceedings towards
its liquidation or dissolution; or

 

H.                                    The
estate or interest of the Sublessee in the Subleased Premises shall be levied
upon or attached in any proceeding and such estate or interest is about to be
sold or transferred or such process shall not be vacated or discharged within
sixty (60) days after it is made.

 

If an Event of Default occurs, the Sublessor shall have all rights and
remedies available at law or equity. 
Upon the occurrence of an Event of Default, the Sublessor shall have the
right

 

18

 

(but no obligation) to perform any act
required of the Sublessee hereunder at the Sublessee’s expense, and if
performance of such act requires that the Sublessor enter the Subleased
Premises, the Sublessor’s access to the Subleased Premises for such purpose
shall be governed by the provisions of Paragraph 18.

 

27.                                 Regarding the Master Lease.  The Sublessor represents and warrants that a
true and complete copy of the Master Lease as of the date hereof is annexed
hereto as Exhibit A.  The Sublessor represents to the Sublessee
that, as of the date hereof, (i) the Master Lease is unmodified and is in full
force and effect, (ii) all “Basic Rent,” “Additional Rent” and Impositions (as
such terms are used in the Master Lease) and other amounts, if any, due and
payable by the Sublessor under the Master Lease as of the Commencement Date
have been paid in full, (iii) to the Sublessor’s knowledge, neither Master
Landlord nor the Sublessor is in default under the Master Lease, (iv) no act or
omission of the Sublessor has occurred that would entitle the Master Landlord
to terminate the Master Lease, (v) the Sublessor has not received any notices
of default from Master Landlord that have not been cured and (vi) the Master
Lease evidences the entire written agreement between the Sublessor and Master
Landlord with respect to the Subleased Premises.

 

28.                                 Covenants of the Sublessor.  The Sublessor covenants and agrees (i) to
perform and to observe all of the terms, covenants, provisions, conditions and
agreements of the Master Lease on the Sublessor’s part to be performed and
observed to the extent the Sublessee has not expressly assumed such obligations
under the terms of this Sublease, (ii) that the Sublessor will not do or cause
to be done or suffer or permit any act or thing to be done which would or might
cause the Master Lease or the rights of the Sublessor as tenant thereunder to
be cancelled, terminated or forfeited or which would make the Sublessee liable
for any increase of the Additional Rent payable by the Sublessee pursuant
hereto; and (iii) to indemnify and hold harmless the Sublessee of, from and
against any and all liabilities, losses, damages, suits, penalties, claims and
demands of every kind or nature (including, without limitation, reasonable attorneys’
fees and disbursement and expenses of defense and of enforcing this indemnity)
arising by reason of the Sublessor’s failure to comply with the foregoing or
arising from the use, occupancy or manner of use and/or occupancy of the
Subleased Premises by the Sublessor, its assignees or subtenants (other than
the Sublessee), or their respective employees, agents, servants, contracts,
visitors or licensees or from any business conducted therein, or from any work
or thing whatsoever or any condition created by or any other act or omission of
the Sublessor, its assignees or subtenants (other than the Sublessee), or their
respective employees, agents, servants, contracts, visitors or licensees, in or
about the Subleased Premises, prior to the commencement of the Term of this
Sublease.

 

29.                                 Authority.  Subject to obtaining the Consents of the
Master Landlord referred to in Paragraph 8 of this Sublease, the Sublessor and
the Sublessee each represent and warrant to the other that (i) the Sublessor
and the Sublessee each has full corporate, partnership or company power and
authority to execute and deliver this Sublease and to perform all of the terms
and conditions hereof to be performed by each party and to consummate the
transactions contemplated hereby, (ii) this Sublease has been duly executed and
delivered by the Sublessor and the Sublessee and is the legal, valid and
binding obligation of the Sublessor and is enforceable against each in
accordance with its terms, except as the enforcement thereof may be

 

19

 

limited
by applicable creditors’ rights laws, (iii) the Sublessor and the Sublessee are
not presently subject to any bankruptcy, insolvency, reorganization,
moratorium, or similar proceeding, and (v) the individuals executing this
Sublease on behalf of the Sublessor and the Sublessee have the legal power,
right and actual authority to bind the Sublessor and the Sublessee to the terms
and conditions hereof.

 

30.                                 Early Access.  After the full execution of this Sublease,
the Sublessee shall be permitted to have reasonable access to the Subleased
Premises for the purposes of taking measurements and for the preparation of
construction and/or as-built drawings, but the Sublessee shall not be permitted
to do or cause any construction and the Sublessee shall not be permitted to
move or cause to be moved any of its property into the Subleased Premises until
the Commencement Date, except for minor tools and equipment necessary in the
preparation of the construction and/or as-built drawings, provided that such
property is upon the Subleased Premises at the sole risk of the Sublessee and
the Sublessor shall have no liability with respect to damage or loss
thereof.  Prior to such entry, the
Sublessee shall provide to the Sublessor a certificate of insurance to evidence
that the liability insurance required by this Sublease is in effect, the
remaining insurance to be in effect on or before the Commencement Date.  It is understood, however, that the Sublessee
shall not be given keys to the Subleased Premises until the Commencement
Date.  The Sublessee shall not interfere
with the Sublessor’s activities upon the Subleased Premises.  The Sublessor shall not have any liability to
the Sublessee in connection with such access, the Sublessor shall not be liable
for any injury to persons entering the Subleased Premises by, through or under
the Sublessee or property brought by said persons, and the Sublessee shall
indemnify and hold harmless the Sublessor with respect to any such liability.

 

IN WITNESS WHEREOF,
the parties have executed this Sublease as of the date first above written.

 

 

	
   

  	
  SUBLESSOR:

  
	
   

  	
  APW NORTH AMERICA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Gasick

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBLESSEE:

  
	
   

  	
  AMERICAN BANK NOTE HOLOGRAPHICS,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth H. Traub

  	
   

  

 

20

 

EXHIBIT
A

 

MASTER
LEASE

 

 

THIRD AMENDMENT TO DEED OF LEASE AGREEMENT

 

THIS THIRD AMENDMENT TO DEED OF LEASE AGREEMENT dated as of December 14,
2004 (this “Amendment”) by and between MORE APPLIED FOUR (DE) LLC, a
Delaware limited liability company (“Landlord”) and APW NORTH AMERICA
INC., a Delaware corporation (“Tenant”).

 

BACKGROUND:

 

A.            POWER (DE) QRS
14-34, INC. (“Original Landlord”) and Tenant entered into a Deed of
Lease Agreement dated as of May 30, 2000, as amended by a First Amendment to
Deed of Lease Agreement dated as of July 31, 2000 and a Second Amendment to
Deed of Lease Agreement dated as of October 31, 2001 (said Deed of Lease
Agreement as amended by said First Amendment, the “Lease”).

 

B.            By Assignment and
Assumption of Lease Agreement, dated October    , 2001, Original
Landlord assigned to Landlord all of its right, title and interest in and to
the Lease and Landlord assumed all of the Original Landlord’s obligations and
liabilities thereunder.

 

C.            Landlord and Tenant
desire to amend the Lease as hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, Landlord and
Tenant covenant and agree as follows:

 

1.             Paragraph 5(6) of
the Lease is hereby deleted.

 

2.             All references to
the term “Renewal Term” in the lease are hereby deleted.

 

3.             Notwithstanding
anything to the contrary in Paragraph 34 of the Lease, Tenant shall not have
any option to purchase the New Jersey Premises pursuant to Paragraph 34 of the
Lease.

 

4.             Landlord hereby
gives its consent to Tenant to execute and deliver that certain Sublease (the “ABNH
Sublease”) by and between Tenant and American Bank Note Holographics, Inc.
dated as of December 14, 2004 with respect to the New Jersey Premises and
agrees that, with respect to the execution and delivery by Tenant of the ABNH
Sublease only, the requirement that Tenant deposit with Landlord a Sublease
Security Deposit shall be waived.

 

5.             So long as the ABNH
Sublease is in effect, Paragraph 16 of the Lease shall be modified as follows
(with respect to the insurance carried on the New Jersey Premises only):

 

(a)           Tenant
shall not be required to obtain and maintain (i) Incidental Medical Malpractice
and Host Liquor Liability Insurance, (ii) Excess Liability insurance with
limits greater that $3,000,000 per occurrence/annual aggregate or (iii)
insurance for Off-Premises Service Interruption, Expediting Expenses, Ammonia
Contamination or Hazardous Materials Clean-Up Expense.

 

(b)           The
requirement contained in the last sentence of Paragraph 16(a)(v)
is hereby waived.

 

 

(c)           The
requirement contained in the penultimate sentence of Paragraph 16(b) to name
Landlord as the insured on the insurance required under Paragraph 16(a)(v) of the Lease is hereby modified to name Landlord as the
additional insured

 

(d)           The
requirement contained in the first sentence of Paragraph 16(h) to name Landlord
and its lender as the named insureds with respect to concurrent or contributing
insurance is hereby modified to name Landlord and its lender as the additional
insureds; and

 

(e)           In
conjunction with Paragraph 16(i), Owner hereby waives all of its rights of
subrogation against the Tenant as may be applicable to any insurer and will
enforce such waivers in policy provisions.

 

6.             Except as
specifically amended herein, the terms and conditions of the Lease shall remain
in full force and effect and binding upon the parties hereto.

 

7.             Any capitalized
terms not defined herein shall have the meanings assigned in the Lease.

 

[NO FURTHER TEXT APPEARS ON THIS PAGE]

 

2

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to
be duly executed under seal as of the day first above written.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  MORE APPLIED FOUR (DE) LLC, a

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  APPLIED FOUR (DE) QRS 14-75,

  INC., a Delaware corporation, its

  managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Thomas E. Zacharias

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas E. Zacharias

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  APW NORTH AMERICA INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Gasick

  	
   

  
	
   

  	
  Name:

  	
  Michael Gasick

  	
   

  
	
   

  	
  Title:

  	
  Treasurer

  	
   

  
							

 

3

 

CONSENT OF LENDER

 

 

The undersigned, as the servicer with respect to that certain mortgage
loan made by Morgan Stanley Dean Witter Mortgage Capital Inc. to More Applied
Four (DE) LLC on October 31, 2001 in the original principal amount of
$11,070,524, which loan is secured by the property that is the subject of the
Lease, hereby consents to the execution and delivery by Borrower of the
preceding Third Amendment to Deed of Lease and consents .

 

 

CONSENTED TO:

 

	
  /s/ Sarah J Burns

  
	
  Sarah J. Burns

  
	
  Assistant Vice President

  

 

 

Dated:   December 14, 2004

 

4

 

 

ASSIGNMENT AND ASSUMPTION OF DEED OF LEASE AGREEMENT

 

                THIS ASSIGNMENT AND ASSUMPTION OF DEED OF
LEASE AGREEMENT (the “Assignment”) is made and entered into as of
October __, 2001, by and between POWER (DE) QRS 14-34, INC., a Delaware
corporation (“Assignor”) and
MORE APPLIED FOUR (DE) LLC, a Delaware limited liability company (“Assignee”).

 

                WHEREAS, Assignor is the lessor under that
certain Deed of Lease Agreement (the “Original Lease”), dated May 30,
2000, by and between Assignor and APW NORTH AMERICA INC., a Delaware
corporation, as lessee (“Tenant”), a memorandum of which was recorded in
the County of White, State of Indiana on June 6, 2000 as Document No.
000602934, in the County of Hennepin, State of Minnesota on July 10, 2000 as
Document No. 3294306, and in the County of Mercer, State of New Jersey on June
2, 2000 in Book 3831, Page 50 (collectively, the “Memoranda”), and
thereafter Assignor and Tenant executed a First Amendment to Deed of Lease
Agreement dated as of July 31, 2000 (the “First Amendment”; the Original
Lease, as amended by the First Amendment, collectively the “Lease”)
affecting properties located at Monon, Indiana, Champlin, Minnesota,
Robbinsville, New Jersey and Radford, Virginia (collectively, the “Premises”), as described on Exhibit A
attached hereto and made a part hereof;

 

                WHEREAS, Assignor desires to assign all of
its right, title and interest in and to the Lease and the Memoranda to
Assignee, and Assignee desires to accept the assignment thereof, upon the terms
and conditions set forth herein;

 

                NOW, THEREFORE, in consideration of the
mutual agreements herein contained, and other good and valuable consideration,
the receipt and sufficiency which are hereby acknowledged, Assignor and
Assignee hereby covenant and agree, effective as of
the date hereof, as follows:

 

1.             Assignment.  Assignor hereby assigns, transfers, and
conveys to Assignee all of Assignor’s right, title, and interest as landlord in
and to the Lease and the Memoranda, and all of the rights, benefits and
privileges of the tenant thereunder.

 

2.             Representations
and Warranties.  Assignor represents
and warrants to Assignee that the Lease is in full force and effect and that
Assignor has not previously assigned or encumbered its interest in the
leasehold estate represented by the Lease or the Memoranda.

 

3.             Indemnity
by Assignor.  Assignor shall
indemnify, pay, protect, defend and hold Assignee harmless from any claim,
liability, cost or expense (including without limitation reasonable attorneys’
fees and costs) arising out of any obligation or liability of Assignor as
landlord under the Lease arising or accruing prior to the date hereof.

 

4.             Assumption.  Assignee hereby assumes all liabilities and
obligations of Assignor under the Lease and the Memoranda which arise on or after
the date hereof and agrees 

 

to perform all
obligations of Assignor under the Lease which are to be performed or which
become due on or after the date hereof.

 

5.             Indemnity by Assignee.  Assignee shall indemnify, pay, protect,
defend and hold Assignor harmless from any claim, liability, cost or expense
(including without limitation reasonable attorneys’ fees) arising out of (a)
any obligation or liability of the landlord under the Lease which is to be
performed or which becomes due after the date hereof or (b) any obligation or
liability of the landlord under the Lease relating to acts or omissions of
Assignee occurring after the date hereof.

6.             Further Assurances.  Assignor covenants with Assignee and Assignee
covenants with Assignor that each will execute or procure any additional
documents necessary to establish the rights of the other party hereunder.

7.             Governing Law. 
This Assignment shall be governed by the laws of the States where the
Premises are located, without giving effect to its principles of conflicts of
law.

8.             Binding Effect. 
The provisions of this Assignment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives, successors and assigns.

9.             Counterparts. 
This Assignment may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement.

 

[signature page follows immediately]

 

IN WITNESS WHEREOF, Assignor and Assignee
have executed this Assignment and Assumption of Deed of Lease Agreement as of
the date and year first written above.

 

	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNOR:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POWER (DE) QRS 14-34, INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward LaPuma

  	
   

  
	
   

  	
  Name:

  	
  Edward LaPuma

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MORE APPLIED FOUR (DE) LLC,

  	
   

  
	
   

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  APPLIED FOUR (DE) QRS 14-75, INC.,

  	
   

  
	
   

  	
   

  	
  a Delaware corporation, its managing member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edward LaPuma

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Edward LaPuma

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Director

  	
   

  
								

 

EXHIBIT A

 

 

PROPERTY
DESCRIPTIONS

 

INDIANA

TRACT 1

That part of the West Half of the Northwest Quarter of Section 21,
Township 28 North, Range 4 West in Monon Township,
White County, Indiana, described by:

COMMENCING at the Northwest corner of the above said Section 21;

THENCE South 86 degrees 27 minutes East along
the Section line 253.5 feet;

THENCE South 02 degrees 42 minutes West 331.2 feet to the Point of
Beginning;

THENCE South 85 degrees 47 minutes East 341.85 feet;

THENCE South 02 degrees 30 minutes West 315.53 feet;

THENCE South 85 degrees 54 minutes East  438.48 feet;

THENCE South 05 degrees 13 minutes West 745.30 feet to the North
right-of-way line of the L. and N. Railroad;

THENCE along said line North 62 degrees 09 minutes West 222.37 feet,
South 67 degrees 48 minutes West 119.02 feet, North 63 degrees 36 minutes West
100.09 feet and North 61 degrees 08 minutes West 357.00 feet;

THENCE North 00 degrees 51 minutes East 838.26 feet to the Point of
Beginning.

 

TRACT II

That part of the Northwest Quarter of the Northwest Quarter of Section
21, Township 28 North, Range 4 West in Monon Township,
White County, Indiana, described by:

COMMENCING at the Northwest corner of the above said Section 21;

THENCE South 86 degrees 27 minutes East 253.5 feet to the Point of
Beginning;

THENCE South 85 degrees 45 minutes East 340.7 feet;

THENCE South 02 degrees 30 minutes West 331.0 feet;

THENCE North 85 degrees 47 minutes West 341.85 feet;

THENCE North 02 degrees 42 minutes East 331.2 feet to the Point of
Beginning.

This parcel of land also described as followed:

A parcel of land, beginning at a point Sixteen (16) Rods East of the
Northwest corner of Section Twenty-one (21), Township Twenty-eight (28) North,
Range Four (4) West, White County, Indiana, on the section line between Section
Sixteen (16) and Twenty-one (21);

 

RUNNING THENCE East Twenty (20) Rods;

THENCE South Three Hundred Thirty (330) feet;

THENCE West Twenty (20) Rods;

THENCE North Three Hundred Thirty (330) feet to the place of BEGINNING;
this tract being out of the Northwest Quarter of the Northwest Quarter of
Section Twenty-one (21), Township Twenty-eight (28) North, Range
Four (4) West, and in the above said County and State,

EXCEPT that part of the above described lands
as has been sold to the county and state for right-of-way for a State Road.

 

MINNESOTA

Lot 1, Block 1, Westwood North 3rd Addition, excepting that
part thereof lying northerly of the following described line:

BEGINNING at a point on the North line of Section 31, Township 120
North, Range 21 West, Distant 237.03 feet Easterly of the North Quarter corner
thereof;

THENCE run Southerly at an angle of 90 degrees
00 minutes 00 seconds from said North Section line for 45 feet;

THENCE run Westerly parallel with said North Section line of 150 feet
and there terminating, Hennepin County, Minnesota.

Torrens Property

Certificate of Title No. 811285.

The above property is situated in Hennepin County, State of Minnesota.

Address:  11611 Business Park
Blvd. N., Champlin, MN 55316

Tax Map or Parcel ID No.:  31-120-21 12 0073

 

NEW JERSEY

All that certain lot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Township of
Washington, County of Mercer, State of New Jersey:

BEGINNING at a point in the proposed Easterly right of way line of West
Manor Way (40 feet from centerline) said point being located the following two
(2) courses from the intersection of the southeasterly right of way line of New
Jersey Turnpike (300 feet wide) with the Easterly right of way line of West
Manor Way (50 feet wide) and from said intersection running;

a.             Southerly distant
3202.78 feet along the Easterly right of way line of West Manor Way (50 feet
wide) to a point; thence

b.             South 54 degrees 52
minutes 51 seconds East along the common line between Tax Map Lots 19 and 20 in
Block 41, 15.00 feet to the point and place of beginning and running thence;

 

1.             North 34 degrees 24
minutes 41 seconds East along the proposed Easterly
right of way line of West Manor Way, 820.19 feet to a point of curvature;
thence

2.             Northeasterly along
a new line through Lot 19 in Block 41, along a curve to the right having a
radius of 40.00 feet and an arc length of 62.83 feet to a point of tangency;
thence

3.             South 55 degrees 35
minutes 19 seconds East along same, 245.00 feet to a point; thence

4.             South 57 degrees 44
minutes 10 seconds East still along same, 200.14 feet
to a point; thence

5.             South 55 degrees 35
minutes 19 seconds East still along same, 168.13 feet
to a point; thence

6.             South 34 degrees 24
minutes 41 seconds West still along same, 875.76 feet
to a point; thence

7.             North 54 degrees 52
minutes 51 seconds West along the common line between
Tax Map Lots 19 and 20 in Block 41, 653.18 feet to the true point and place of
BEGINNING.

Being known as Lot 19.02 in Block 41 on the Tax Map.

TOGETHER WITH the benefits as contained in
that certain Cross Easement Agreement recorded in Deed Book 3186, page 024.

 

 

VIRGINIA

Parcel containing 14.771 acres
as shown on plat entitled “Plat of Survey of 14.771 acres to be acquired by
Aspen Motion Technologies, Inc., from the City of Radford Industrial
Development Authority,” dated November 11, 1998, and revised November 25, 1998
and January 5, 1999, made by Anderson and Associates, Inc.,
Engineers-Surveyors-Planners, of record in the Clerk’s Office of the Circuit
Court of the City of Radford, Virginia, in Plat Book 4, Page 76.

 

 

 

SECOND AMENDMENT TO DEED OF LEASE AGREEMENT

 

THIS SECOND AMENDMENT TO DEED OF LEASE AGREEMENT dated as of October 31,
2001 (the “Second Amendment”) by and between MORE APPLIED FOUR (DE) LLC,
a Delaware limited liability company (“Landlord”) and APW NORTH AMERICA
INC., A Delaware corporation (“Tenant”).

 

BACKGROUND:

 

A.            POWER (DE) QRS
14-34, INC. (“Original Landlord”) and Tenant entered into a Deed of
Lease Agreement dated as of May 30, 2000, as amended by a First Amendment to
Deed of Lease Agreement dated as of July 31, 2000 (said Deed of Lease Agreement
as amended by said First Amendment, the “Lease”).

 

B.            By Assignment and
Assumption of Lease Agreement, dated October    , 2001, Original
Landlord assigned to Landlord all of its right, title and interest in and to
the Lease and Landlord assumed all of the Original Landlord’s obligations and
liabilities thereunder..

 

C.            Landlord and Tenant
desire to amend the Lease as hereinafter set forth.

 

NOW, THEREFORE, for good and valuable consideration, Landlord and
Tenant covenant and agree as follows:

 

1.             Paragraph 34 Option
to Purchase is hereby deleted in its entirety and the following is inserted
in lieu thereof:

 

“34.  Option to Purchase.

 

(a)           Landlord
does hereby give and grant to Tenant the option (the “Option”) to
purchase the Leased Premises or any one or more of the Related Premises (any
such Related Premises, the “Sale Premises”) (i) for a purchase price
(the “Purchase Price”) equal to the Offer Amount and (ii) from time to
time on any date (the “Option Purchase Date”) (A) within the thirty (30)
day period prior to December 1, 2011 (the “First Option”) or, (B) if the
First Option is not exercised with respect to all of the Leased Premises,
within the thirty (30) day period prior to December 1, 2014 and/or June 1, 2017
(each, a “Remaining Option”), in any case if and only if this Lease is
then in full force and effect and with respect to the exercise of any Remaining
Option only if Tenant provides to Landlord such documentation as Landlord shall
reasonably require to evidence the exercise of the Automatic Renewal. Any
Option Purchase Date shall be mutually agreeable to Landlord and Tenant.  If Tenant intends to exercise either the
First Option or either Remaining Option, Tenant shall give written notice (“Option
Exercise Notice”) to Landlord that it is making an irrevocable exercise not
later than six (6) months prior to the applicable Option Purchase Date.  Promptly upon receipt of the Option Exercise
Notice by Landlord (which shall identify the Sale Premises or Leased Premises
to be purchased), the parties shall commence to determine Fair Market Value of
the Leased Premises or Sale Premises, as applicable.

 

(b)           If
Tenant shall exercise the Option to purchase the Leased Premises or Sale
Premises, then, if on the applicable Option Purchase Date Tenant has paid the
Purchase Price and has satisfied all other Monetary Obligations that have
accrued prior to the Option Purchase Date, Landlord shall convey title to the
Leased Premises or the Sale Premises, as applicable, to Tenant in accordance
with Paragraph 20 hereof; provided that if an Event of Default has occurred and
is continuing on the Option Purchase Date, Landlord, at its sole option, may
terminate the First Option and, if

 

 

applicable, the
Remaining Options.  IF THIS LEASE SHALL
TERMINATE FOR ANY REASON PRIOR TO THE DATE ORIGINALLY FIXED HEREIN FOR THE
EXPIRATION OF THE TERM, OR IF TENANT SHALL FAIL TO GIVE THE AFORESAID OPTION
EXERCISE NOTICE WITH RESPECT TO THE FIRST OPTION AND, IF APPLICABLE, THE
REMAINING OPTIONS BY THE REQUIRED DATE, TIME BEING OF THE ESSENCE, THE FIRST
OPTION OR, IF APPLICABLE, THE REMAINING OPTIONS PROVIDED IN THIS PARAGRAPH 34
AND ANY EXERCISE THEREOF BY TENANT SHALL CEASE AND TERMINATE AND SHALL BE NULL
AND VOID.  IN SUCH EVENT TENANT SHALL
EXECUTE A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LANDLORD SHALL REASONABLY
REQUEST EVIDENCING THE TERMINATION OF THE FIRST OPTION AND, IF APPLICABLE, THE
REMAINING OPTION.

 

(c)           If
Tenant shall purchase fewer than all of the Leased Premises, this Lease shall
remain in full force and effect with respect to the Remaining Premises;
provided that the Basic Rent for the Remaining Premises to be paid after
termination of this Lease with respect to the Sale Premises shall be the Basic
Rent otherwise payable with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages for each of the Remaining
Premises set forth on Exhibit “F” attached hereto.”

 

3.             Upon the funding of
the initial Loan, the Initial Annual Basic Rent as adjusted by the Initial
Adjustment shall be One Million Nine Hundred Thirty-four Thousand Three Hundred
Thirty-five and 07/100 ($1,934,335.07) and the Initial Monthly Installment
shall be One Hundred Sixty-one Thousand One Hundred Ninety-four and 59/100
($161,194.59) Dollars.

 

4.             Except as specifically
amended herein, the terms and conditions of the Lease shall remain in full
force and effect and binding upon the parties hereto.

 

5.             Any capitalized
terms not defined herein shall have the meanings assigned in the Lease.

 

2

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this Second
Amendment to be duly executed under seal as of the day first above written.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  MORE APPLIED FOUR (DE) LLC, a

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  APPLIED FOUR (DE) QRS 14-75,

  INC., a Delaware corporation, its

  managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edward La Puma

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Edward La Puma

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  APW NORTH AMERICA INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd A. Adams

  	
   

  
	
   

  	
  Name:

  	
  Todd A. Adams

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
								

 

3

 

FIRST AMENDMENT TO DEED OF LEASE AGREEMENT

 

 

THIS FIRST AMENDMENT TO DEED OF LEASE
AGREEMENT (“Amendment”) is made and executed as of July
31, 2000 by and between POWER (DE) QRS 14-34, INC. (“Landlord”), a
Delaware corporation, with an address of c/o W. P. Carey & Co. LLC, 50
Rockefeller Plaza, 2nd Floor, New York, New York 10022, and APW
NORTH AMERICA INC., a Delaware corporation (“Tenant”), with an address
at N22 W23685 Ridgeview Parkway West, Waukesha, Wisconsin  53188-1013.

 

WITNESSETH:

 

WHEREAS, pursuant to
the terms of that certain Deed of Lease Agreement dated May 30, 2000 (the “Lease”),
Landlord leased to Tenant and Tenant leased from Landlord certain properties
situate in Monon, Indiana, Champlin, Minnesota, Robbinsville, New Jersey, and
Radford, Virginia; and

 

WHEREAS, pursuant to
the terms of that certain Guaranty and Suretyship Agreement dated May 30, 2000
(the “Guaranty”), Applied Power Inc. and Wright Line Inc. guaranteed to and
became surety for all of the obligations of Tenant under the Lease;

 

WHEREAS, Paragraph
4.14 of the Guaranty provides for the execution and delivery by APW LTD. of a
new guaranty and suretyship agreement upon the closing of the contemplated
spin-off (the “Spin-Off”) of the electronics and enclosure business from
Applied Power Inc., which guaranty shall replace the Guaranty of Wright Line
Inc. and shall bind APW LTD. to all of the terms and conditions set forth in
the Guaranty;

 

WHEREAS, in
connection with the Spin-Off, APW LTD. has executed a guaranty of even date
herewith whereby APW LTD. shall be the guarantor and surety for all of the
obligations of Tenant under the Lease; and

 

WHEREAS,
Landlord and Tenant desire to modify and amend the Lease to reflect the
foregoing.

 

NOW, THEREFORE,
incorporating the recitals hereinabove set forth by reference and intending to
be legally bound hereby, and in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto covenant and agree as follows:

 

1.             The defined term “Guarantor”
in Paragraph 2 of the Lease is hereby deleted in its entirety and the following
is inserted in lieu thereof:

 

“‘Guarantor’ shall mean APW LTD., a Bermuda corporation.”

 

2.             The defined term “Guaranty”
in Paragraph 2 of the Lease is hereby deleted in its entirety and the following
is inserted in lieu thereof:

 

“‘Guaranty’ shall mean the Guaranty and Suretyship Agreement, dated                    ,
2000, from Guarantor to Landlord guaranteeing the payment and performance by
Tenant of all of Tenant’s obligations under the Lease.”

 

 

3.             Except as expressly
set forth herein, nothing herein is intended to or shall be deemed to modify or
amend any of the other terms or provisions of the Lease.

 

4.             All undefined
capitalized terms used herein shall have the same meanings as set forth in the
Lease.

 

5.             This Amendment may
be executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement.

 

6.             This Consent to
Sublease and the Lease together contain the entire understanding between the
parties hereto and supersedes all prior agreements and understandings, if any,
relating to the subject matter hereof or thereof.  Any promises, representations, warranties or
guarantees not herein or therein contained and hereinafter made shall have no
force and effect unless in writing, and executed by the party or parties making
such representations, warranties or guarantees. 
Neither this Amendment nor the Lease nor any portion or provisions
hereof or thereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged.

 

[THE REMAINDER OF THIS PAGE LEFT
INTENTIONALLY BLANK]

 

2

 

IN WITNESS WHEREOF,
the Parties hereto intending to be legally bound and to so bind their
respective representatives, successors and assigns, set their hands and seals
the day and year first above written.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POWER (DE) QRS 14-34, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  APW NORTH AMERICA INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard D. Carroll

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Treasurer

  	
   

  
					

 

3

 

DEED OF
LEASE AGREEMENT

 

by
and between

 

 

POWER (DE) QRS 14-34, INC.,

a Delaware corporation

 

as
LANDLORD

 

and

 

APW NORTH AMERICA INC.,

 

a
Delaware corporation,

 

as
TENANT

 

 

Premises: Monon, Indiana

 

Champlin, Minnesota

 

Robbinsville/Washington
Township, New Jersey

 

Radford, Virginia

 

 

Dated as of:  May 30, 2000

 

 

TABLE OF
CONTENTS

 

 

	
  Parties

  	
   

  
	
  1. Demise
  of Premises

  	
   

  
	
  2.
  Certain Definitions

  	
   

  
	
  3. Title
  and Condition

  	
   

  
	
  4. Use of
  Leased Premises; Quiet Enjoyment

  	
   

  
	
  4. Term

  	
   

  
	
  6. Basic Rent

  	
   

  
	
  7. Additional
  Rent

  	
   

  
	
  8. Net Lease;
  Non-Terminability

  	
   

  
	
  8.
  Payment of Impositions

  	
   

  
	
  9.
  Compliance with Laws and Easement Agreements; Environmental Matters

  	
   

  
	
  10. Liens;
  Recording

  	
   

  
	
  11.
  Maintenance and Repair

  	
   

  
	
  12. Alterations and
  Improvements

  	
   

  
	
  14.
  Permitted Contests

  	
   

  
	
  15.
  Indemnification

  	
   

  
	
  15. Insurance

  	
   

  
	
  16. Casualty and
  Condemnation

  	
   

  
	
  18.
  Termination Events

  	
   

  
	
  19. Restoration

  	
   

  
	
  20. Procedures Upon Purchase

  	
   

  
	
  21.
  Assignment and Subletting; Prohibition against Leasehold Financing

  	
   

  
	
  22. Events
  of Default

  	
   

  
	
  23. Remedies and
  Damages Upon Default

  	
   

  
	
  24. Notices

  	
   

  
	
  25.
  Estoppel Certificate

  	
   

  
	
  26. Surrender

  	
   

  
	
  27. No
  Merger of Title

  	
   

  
	
  28. Books
  and Records

  	
   

  
	
  29.
  Determination of Value

  	
   

  
	
  30. Non-Recourse as to
  Landlord

  	
   

  
	
  31. Financing

  	
   

  
	
  32.
  Subordination, Non-Disturbance and Attornment

  	
   

  
	
  33. Tax Treatment; Reporting

  	
   

  
	
  34.
  Option to Purchase

  	
   

  
	
  35. Security
  Deposit

  	
   

  
	
  36 Miscellaneous

  	
   

  

 

 

EXHIBITS

 

	
  Exhibit “A”

  	
  -

  	
  Premises

  
	
  Exhibit “B”

  	
  -

  	
  Machinery and Equipment

  
	
  Exhibit “C”

  	
  -

  	
  Schedule of Permitted Encumbrances

  
	
  Exhibit “D”

  	
  -

  	
  Rent Schedule

  
	
  Exhibit “E”

  	
  -

  	
  Acquisition Costs

  
	
  Exhibit “F”

  	
  -

  	
  Percentage Allocation of Basic Rent

  

 

 

                DEED OF LEASE
AGREEMENT, made as of this 30th day of May, 2000, between POWER (DE) QRS 14-34,
INC., a Delaware corporation (“Landlord”), with an address c/o W.P.
Carey & Co., Inc., 50 Rockefeller Plaza, 2nd Floor, New York, New York
10020, and APW NORTH AMERICA INC., a Delaware corporation (“Tenant”),
with an address at N22 W23685 Ridgeview Parkway West, Waukesha, Wisconsin
53188-1013..

 

In consideration of the rents and provisions
herein stipulated to be paid and performed, Landlord and Tenant hereby covenant
and agree as follows:

 

1.             Demise
of Premises.  Landlord hereby
demises and lets to Tenant, and Tenant hereby takes and leases from Landlord,
for the term and upon the provisions hereinafter specified, the following
described property (hereinafter referred to collectively as the “Leased
Premises” and individually as the “Indiana Premises”, “Minnesota Premises”,
“New Jersey Premises” and “Virginia Premises” each of which premises shall
include the portions of items (a), (b) and (c) of this Paragraph 1 located
thereon or therein and appertaining thereto): 
(a) the premises described in Exhibit “A” hereto, together with
the Appurtenances (collectively, the “Land”); (b) the buildings,
structures and other improvements now or hereafter constructed on the Land (collectively,
the “Improvements”); and (c) the fixtures, machinery, equipment and
other property described in Exhibit “B” hereto (collectively, the “Equipment”).

 

2.             Certain
Definitions.

 

“Acquisition Cost” of each of
the Related Premises shall mean the amount set forth opposite such premises on Exhibit
“E” hereto.

 

“Additional Rent” shall mean
Additional Rent as defined in Paragraph 7.

 

“Adjoining Property” shall mean
all sidewalks, driveways, curbs, gores and vault spaces adjoining any of the
Leased Premises.

 

“Affected Premises” shall mean
the Affected Premises as defined in Paragraph 18.

 

“Alterations” shall mean all
changes, additions or improvements to, all alterations, reconstructions,
renewals, replacements or removals of and all substitutions or replacements for
any of the Improvements or Equipment, both interior
and exterior, structural and non-structural, and ordinary and extraordinary.

 

“Appurtenances” shall mean all
tenements, hereditaments, easements, rights-of-way, rights, privileges in and
to the Land, including (a) easements over other lands granted by any Easement
Agreement and (b) any streets, ways, alleys, vaults, gores or strips of land
adjoining the Land.

 

“Assignment” shall mean any
assignment of rents and leases from Landlord to a Lender which (a) encumbers
any of the Leased Premises and (b) secures Landlord’s obligation to repay a
Loan, as the same may be amended, supplemented or modified from time to time.

 

“Assignment Security Deposit”
shall mean Assignment Security Deposit as defined in Paragraph 35(f).

 

“Authority” shall mean
Authority as defined in Paragraph 22(a).

 

 

“Automatic Renewal” shall mean
Automatic Renewal as defined in Paragraph 5(b).

 

“Basic Rent” shall mean Basic
Rent as defined in Paragraph 6.

 

“Basic Rent Payment Dates”
shall mean the Basic Rent Payment Dates as defined in Paragraph 6.

 

“Casualty” shall mean any
injury to or death of any person or any loss of or damage to any property
(including the Leased Premises) included within or related to the Leased
Premises or arising from the Adjoining Property.

 

“Commencement Date” shall mean
Commencement Date as defined in Paragraph 5

 

“Condemnation” shall mean a
Taking and/or a Requisition.

 

“Condemnation Notice” shall
mean notice or knowledge of the institution of or intention to institute any
proceeding for Condemnation.

 

“Costs” of a Person or
associated with a specified transaction shall mean all reasonable costs and
expenses incurred by such Person or associated with such transaction, including
without limitation, attorneys’ fees and expenses, court costs, brokerage fees,
escrow fees, title insurance premiums, mortgage commitment fees, mortgage
points, recording fees and transfer taxes, as the circumstances require.

 

“CPI” shall mean CPI as defined
in Exhibit “D” hereto.

 

“Default Rate” shall mean the
Default Rate as defined in Paragraph 7(a)(iv).

 

“Default Termination Amount”
shall mean the Default Termination Amount as defined in Paragraph 23(a)(iii).

 

“Easement Agreement” shall mean
any conditions, covenants, restrictions, easements, declarations, licenses and
other agreements listed as Permitted Encumbrances or as may hereafter affect
any Related Premises.

 

“Environmental Law” shall mean
(i) whenever enacted or promulgated, any applicable federal, state, foreign and
local law, statute, ordinance, rule, regulation, license, permit,
authorization, approval, consent, court order, judgment, decree, injunction,
code, requirement or agreement with any governmental entity, (x) relating to
pollution (or the cleanup thereof), or the protection of air, water vapor,
surface water, groundwater, drinking water supply, land (including land surface
or subsurface), plant, aquatic and animal life from injury caused by a
Hazardous Substance or (y) concerning exposure to, or the use, containment,
storage, recycling, reclamation, reuse, treatment, generation, discharge,
transportation, processing, handling, labeling, production, disposal or
remediation of any Hazardous Substance or Hazardous Condition, in each case as
amended and as now or hereafter in effect, and (ii) any common law or equitable
doctrine (including, without limitation, injunctive relief and tort doctrines
such as negligence, nuisance, trespass and strict liability) that may impose
liability or obligations or

 

2

 

injuries or
damages due to or threatened as a result of the presence of, exposure to, or
ingestion of, any Hazardous Substance. 
The term Environmental Law includes, without limitation, the federal
Comprehensive Environmental Response Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act, the federal Water Pollution
Control Act, the federal Clean Air Act, the federal Clean Water Act, the
federal Resources Conservation and Recovery Act of 1976 (including the
Hazardous and Solid Waste Amendments to RCRA), the federal Solid Waste Disposal
Act, the federal Toxic Substance Control Act, the federal Insecticide,
Fungicide and Rodenticide Act, the federal Occupational Safety and Health Act
of 1970, the federal National Environmental Policy Act and the federal
Hazardous Materials Transportation Act, each as amended and as now or hereafter
in effect and any similar state or local Law.

 

“Environmental Violation” shall
mean (a) any direct or indirect discharge, disposal, spillage, emission,
escape, pumping, pouring, injection, leaching, release, seepage,  filtration or transporting of any Hazardous
Substance at, upon, under, onto or within the Leased Premises, or from the
Leased Premises to the environment, in violation of any applicable
Environmental Law or in excess of any reportable quantity established under any
Environmental Law and with respect to such excess quantity would require
remediation under any applicable Environmental Law or which is likely to result
in any liability to Landlord, Tenant or Lender, any Federal, state or local
government or any other Person for the costs of any removal or remedial action
or natural resources damage or for bodily injury or property damage,
(b) any deposit, storage, dumping, placement or use of any Hazardous
Substance at, upon, under or within the Leased Premises or which extends to any
Adjoining Property in violation of any applicable Environmental Law or in
excess of any reportable quantity established under any applicable
Environmental Law and with respect to such excess quantity would require
remediation under any applicable Environmental Law or which is likely to result
in any liability to any Federal, state or local government or to any other
Person for the costs of any removal or remedial action or natural resources
damage or for bodily injury or property damage, (c) the abandonment or
discarding of any barrels, containers or other receptacles containing any
Hazardous Substances in violation of any applicable Environmental Laws, (d) any
activity, occurrence or condition which is likely to result in any liability,
cost or expense to Landlord or Lender or any other owner or occupier of the
Leased Premises, or which could result in a creation of a lien on any Related
Premises under any applicable Environmental Law or (e) any violation of or
noncompliance with any applicable Environmental Law.

 

“Equipment” shall mean the
Equipment as defined in Paragraph 1.

 

“Escrow Payments” shall mean
Escrow Payments as defined in Paragraph 9(b).

 

“Event of Default” shall mean
an Event of Default as defined in Paragraph 22(a).

 

“Fair Market Value” of either
the Leased Premises, any Related Premises, or any Sale Premises, as the case
may be, and the context may require, shall mean the higher of (a) the fair
market value of the Leased Premises, any Related Premises or any Sale Premises,
as the case may be, as of the Relevant Date as if unaffected and unencumbered
by this Lease or (b) the fair market value of the Leased Premises, Related
Premises or Sale Premises, as the case may be, as of the Relevant Date as
affected and encumbered by this Lease including any exercised

 

3

 

Renewal Term.  For all purposes of this Lease, Fair Market
Value shall be determined in accordance with the procedure specified in
Paragraph 29.

 

“Fair Market Value Date” shall
mean the date when the Fair Market Value is determined in accordance with
Paragraph 29.

 

“Federal Funds” shall mean
federal or other immediately available funds which at the time of payment are
legal tender for the payment of public and private debts in the United States
of America.

 

“First Option” shall mean the
First Option as defined in Paragraph 34.

 

“Guarantor” shall mean Applied
Power Inc. a Wisconsin corporation, Wright Line Inc., and any other person that
after the date hereof that executes a Guaranty.

 

“Guaranty” shall mean the
Guaranty and Suretyship Agreement dated as of the date hereof from Guarantor to
Landlord guaranteeing the payment and performance by Tenant of all of Tenant’s
obligations under the Lease.

 

“Hazardous Condition” means any
condition which would support any claim or liability under any Environmental
Law, including the presence of underground storage tanks in violation of any
applicable Environmental Law.

 

“Hazardous Substance” means (i)
any substance, material, product, petroleum, petroleum product, derivative,
compound or mixture, mineral (including asbestos), chemical, gas, medical
waste, or other pollutant, in each case whether naturally occurring, man-made
or the by-product of any process, that is toxic, harmful or hazardous or
acutely hazardous to the environment or public health or safety or (ii) any
substance supporting a claim under any Environmental Law, whether or not
defined as hazardous as such under any Environmental Law.  Hazardous Substances include, without
limitation, any toxic or hazardous waste, pollutant, contaminant, industrial
waste, petroleum or petroleum-derived substances or waste, radon, radioactive
materials, asbestos, asbestos containing materials, urea formaldehyde foam
insulation, lead, polychlorinated biphenyls.

 

“Impositions” shall mean the
Impositions as defined in Paragraph 9(a).

 

“Improvements” shall mean the
Improvements as defined in Paragraph 1.

 

“Indemnitee” shall mean an
Indemnitee as defined in Paragraph 15.

 

“Insurance Requirements” shall
mean the requirements of all insurance policies maintained in accordance with
this Lease.

 

“Land” shall mean the Land as
defined in Paragraph 1.

 

“Law” shall mean any
constitution, statute, rule of law, code, ordinance, order, judgment, decree,
injunction, rule, regulation, policy, requirement or administrative or judicial
determination, even if unforeseen or extraordinary, of every duly constituted
governmental authority, court or agency, now or hereafter enacted or in effect.

 

4

 

“Lease” shall mean this Lease
Agreement.

 

“Lease Year” shall mean, with
respect to the first Lease Year, the period commencing on the Commencement Date
and ending at midnight on the last day of the twelfth (12th) consecutive
calendar month following the month in which the Commencement Date occurred, and
each succeeding twelve (12) month period during the Term.

 

“Leased Premises” shall mean
the Leased Premises as defined in Paragraph 1.

 

“Legal Requirements” shall mean
the requirements of all present and future Laws (including but not limited to
Environmental Laws and Laws related to accessibility to, usability by, and discrimination
against, disabled individuals) and all covenants, restrictions and conditions
now or hereafter of record which may be applicable to Tenant or to any of the
Leased Premises or Related Premises, or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or restoration of any of
the Leased Premises or Related Premises, even if compliance therewith
necessitates structural changes or improvements or results in interference with
the use or enjoyment of any of the Leased Premises or Related Premises.

 

“Lender” shall mean any person
or entity (and their respective successors and assigns) which may, after the
date hereof, make a Loan to Landlord or is the holder of any Note.

 

“Loan” shall mean any loan made
by one or more Lenders to Landlord, which loan is secured by a Mortgage and an
Assignment and evidenced by a Note.

 

“Monetary Obligations” shall
mean Rent and all other sums payable by Tenant under this Lease to Landlord, to
any third party on behalf of Landlord or to any Indemnitee.

 

“Mortgage” shall mean any
mortgage or deed of trust from Landlord to a Lender which (a) encumbers any of
the Leased Premises and (b) secures Landlord’s obligation to repay a Loan, as
the same may be amended, supplemented or modified.

 

“Net Award” shall mean
(a) the entire award payable to Landlord or Lender by reason of a
Condemnation whether pursuant to a judgment or by agreement or otherwise, or
(b) the entire proceeds of any insurance required under clauses (i), (ii)
(to the extent payable to Landlord or Lender), (iv), (v) or (vi) of Paragraph
16(a), as the case may be, less any reasonable expenses incurred by Landlord
and Lender in collecting such award or proceeds.

 

“Note” shall mean any
promissory note evidencing Landlord’s obligation to repay a Loan, as the same
may be amended, supplemented or modified.

 

“Offer Amount” shall mean the
greater of (a) the sum of the Fair Market Value of the Leased Premises or the
Sale Premises, as applicable, as of the Relevant Date and the applicable Prepayment
Premium which Landlord will be required to pay in prepaying any Loan, in whole
or in part, with proceeds of any such Offer Amount or (b) the sum of the
Acquisition Cost of the Leased Premises or Sale Premises, as applicable, and
the applicable Prepayment

 

5

 

Premium which Landlord will be required to
pay in prepaying any Loan, in whole or in part, with proceeds of any such Offer
Amount.

 

“Option Exercise Notice” shall
mean Option Exercise Notice as defined in Paragraph 34.

 

“Partial Casualty” shall mean
any Casualty which does not constitute a Termination Event.

 

“Partial Condemnation” shall
mean any Condemnation which does not constitute a Termination Event.

 

“Permitted Encumbrances” shall
mean those covenants, restrictions, reservations, liens, conditions and
easements and other encumbrances, other than any Mortgage or Assignment, listed
on Exhibit “C” hereto (but such listing shall not be deemed to revive
any such encumbrances that have expired or terminated or are otherwise invalid
or unenforceable).

 

“Person” shall mean an
individual, partnership, association, corporation or other entity.

 

“Prepayment Premium” shall mean
any payment (other than a payment of principal and/or interest which Landlord is
required to make under a Note or a Mortgage) by reason of any prepayment by
Landlord of any principal due under a Note or Mortgage, and which may be (in
lieu of such prepayment premium or prepayment penalty) a (i) “make whole” or
yield maintenance clause requiring a prepayment premium or (ii) a defeasance
payment (such defeasance payment to be an amount equal to the positive
difference between (a) the total amount required to defease a Loan and (b) the
outstanding principal balance of the Loan as of the date of such defeasance, in
the case of either (i) or (ii) either case in an amount sufficient to
compensate the Lender for the loss of the benefit of the Loan due to
prepayment.

 

“Present Value” of any amount
shall mean such amount discounted by a rate per annum which is the lower of
(a) the Prime Rate at the time such present value is determined or (b)
seven percent (7%) per annum.

 

“Prime Rate” shall mean the
interest rate per annum as published, from time to time, in The Wall Street
Journal as the “Prime Rate” in its column entitled “Money Rate”.  The Prime Rate may not be the lowest rate of
interest charged by any “large U.S. money center commercial banks” and Landlord
makes no representations or warranties to that effect.  In the event The Wall Street Journal
ceases publication or ceases to publish the “Prime Rate” as described above,
the Prime Rate shall be the average per annum discount rate (the “Discount
Rate”) on ninety-one (91) day bills (“Treasury Bills”) issued from
time to time by the United States Treasury at its most recent auction, plus
three hundred (300) basis points.  If no
such 91-day Treasury Bills are then being issued, the Discount Rate shall be
the discount rate on Treasury Bills then being issued for the period of time
closest to ninety-one (91) days.

 

“Redevelopment Contract” shall
mean Redevelopment Contract as defined in Paragraph 22(a).

 

“Related Premises” shall mean
any one of the Indiana Premises, Minnesota Premises, New Jersey Premises and
Virginia Premises.

 

6

 

“Relevant Amount” shall mean
the Termination Amount, the Default Termination Amount, the Offer Amount, or
the MN Required Purchase Amount, as the case may be.

 

“Relevant Date” shall mean
(a) the date immediately prior to the date on which the applicable
Condemnation Notice is received, in the event of a Termination Notice under
Paragraph 18 which is occasioned by a Taking, (b) the date
immediately prior to the date on which the applicable Casualty occurs, in the event
of a Termination Notice under Paragraph 18 which is occasioned by a
Casualty, (c) the date when Fair Market Value is redetermined, in the
event of a redetermination of Fair Market Value pursuant to
Paragraph 20(c), (d) the date immediately prior to the Event of Default
giving rise to the need to determine Fair Market Value in the event Landlord
provides Tenant with notice of its intention to require Tenant to make a
termination offer under Paragraph 23(a)(iii) or (e) the date on which Landlord
receives an Option Exercise Notice.

 

“Remaining Premises” shall mean
the Related Premises which are not the Affected Premises under Paragraph 18,
the Sale Premises under Paragraph 34 or the Minnesota Premises in the event the
Minnesota Premises are purchased by the Tenant pursuant to Paragraph 18 (e).

 

“Renewal Term” shall mean
Renewal Term as defined in Paragraph 5.

 

“Rent” shall mean,
collectively, Basic Rent and Additional Rent.

 

“Restoration Fund” shall mean
Restoration Fund as defined in Paragraph 19(a).

 

“Sale Premises” shall mean the
Sale Premises as defined in Paragraph 34.

 

“Security Deposit” shall mean
the Security Deposit as defined in Paragraph 35.

 

“Site Assessment” shall mean a
Site Assessment as defined in Paragraph 10(c).

 

“State” shall mean the state in
which the applicable Related Premises is located.

 

“Sublet Security Deposit” shall
mean Sublet Security Deposit as defined in Paragraph 35(f).

 

“Surviving Obligations” shall
mean any obligations of Tenant under this Lease, actual or contingent, which
arise on or prior to the expiration or prior termination of this Lease or which
survive such expiration or termination by their own terms.

 

“Taking” shall mean (a) any
taking or damaging of all or a portion of any Related Premises (i) in or by
condemnation or other eminent domain proceedings pursuant to any Law, general
or special, or (ii) by reason of any agreement with any condemnor in settlement
of or under threat of any such condemnation or other eminent domain proceeding,
or (iii) by any other means, or (b) any de facto condemnation.  The Taking shall be considered to have taken

 

7

 

place as of the
later of the date actual physical possession is taken by the condemnor, or the
date on which the right to compensation and damages accrues under the law
applicable to such Related Premises.

 

“Term” shall mean the Term as
defined in Paragraph 5.

 

“Termination Amount” shall mean
the greater of (a) the sum of the Fair Market Value and the applicable
Prepayment Premium which Landlord will be required to pay in prepaying any Loan
in whole or in part with proceeds of the Termination Amount or (b) the sum
of the Acquisition Cost and the applicable Prepayment Premium which Landlord
will be required to pay in prepaying any Loan in whole or in part with proceeds
of the Termination Amount.

 

“Termination Date” shall mean
the Termination Date as defined in Paragraph 18.

 

“Termination Event” shall mean
a Termination Event as defined in Paragraph 18.

 

“Termination Notice” shall mean
Termination Notice as defined in Paragraph 18(a).

 

“Third Party Purchaser” shall
mean the Third Party Purchaser as defined in Paragraph 21(h).

 

3.             Title
and Condition.

 

(a)           The
Leased Premises are demised and let subject to (i) the rights of any Persons in
possession of the Leased Premises, (ii) the existing state of title of any of
the Leased Premises, including any Permitted Encumbrances, (iii) any state of
facts which an accurate survey or physical inspection of the Leased Premises
might show, (iv) all Legal Requirements, including any existing violation of
any thereof, and (v) the condition of the Leased Premises as of the
commencement of the Term, without representation or warranty by Landlord.

 

(b)           Tenant
acknowledges that the Leased Premises are in good condition and repair at the
inception of this Lease. LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND
WILL TAKE THE LEASED PREMISES AS IS. 
TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER
OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE
DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION
AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE,
(ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF
ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO, (v) VALUE, (vi)
COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv)
OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, OR (xvi) COMPLIANCE
OF THE LEASED PREMISES WITH ANY LAW OR LEGAL REQUIREMENT; AND ALL RISKS
INCIDENT THERETO ARE TO BE BORNE BY TENANT. 
TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS

 

8

 

SELECTION AND TO ITS SPECIFICATIONS AND THAT THE LEASED PREMISES HAVE
BEEN INSPECTED BY TENANT AND ARE SATISFACTORY TO IT.  IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN
ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD
SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT).  THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE
BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF
ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
LEASED PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER
LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

 

(c)           Tenant
represents to Landlord that Tenant has examined the title to the Leased
Premises prior to the execution and delivery of this Lease and has found the
same to be satisfactory for the purposes contemplated hereby.  Tenant acknowledges that (i) fee simple
title (both legal and equitable) to the Leased Premises is in Landlord and that
Tenant has only the leasehold right of possession and use of the Leased
Premises as provided herein, (ii) this Lease is a single Lease for
multiple properties and shall not be terminable with respect to less than all
of the Leased Premises or severable with respect to any one or more Related
Premises except as specifically provided herein, (iii) to its knowledge after
due inquiry, the Improvements conform to all material Legal Requirements and
all Insurance Requirements, (iv) to its knowledge after due inquiry, all
easements necessary or appropriate for the use or operation of the Leased Premises
have been obtained, (v) to its knowledge after due inquiry, all
contractors and subcontractors who have performed work on or supplied materials
to the Leased Premises have been fully paid, and all materials and supplies
have been fully paid for, (vi) the Improvements have been fully completed
in all material respects in a workmanlike manner, and (vii) to its
knowledge after due inquiry, all Equipment necessary or appropriate for the use
or operation of the Leased Premises has been installed and is presently fully
operative in all material respects.

 

(d)           Landlord
hereby assigns to Tenant, without recourse or warranty whatsoever, all
assignable warranties, guaranties, indemnities and similar rights (collectively
“Warranties”) which Landlord may have against any manufacturer, seller,
engineer, contractor or builder in respect of any of the Leased Premises.  Such assignment shall remain in effect until
the expiration or earlier termination of this Lease,
whereupon such assignment shall cease and all of said Warranties, guaranties,
indemnities and other rights shall automatically revert to Landlord.  Tenant shall enforce all Warranties in
accordance with their respective terms.

 

4.             Use of Leased Premises; Quiet
Enjoyment.

 

(a)           Tenant
may occupy and use the Leased Premises for manufacturing, office, and/or
warehouse/distribution, and for no other purpose without the written consent of
Landlord which shall not be unreasonably withheld or delayed; provided,
however, that Tenant shall not use or occupy or permit any of the Leased
Premises to be used or occupied, nor do or permit anything to be done in or on
any of the Leased Premises, in a manner which would or might (i) violate any
Law or Legal Requirement, (ii) make void or voidable or cause any insurer to
cancel any insurance required by this Lease, or make it difficult or impossible
to obtain any such insurance at commercially reasonable rates, (iii) make void
or voidable, cancel or cause to be cancelled or release any warranty, guaranty
or indemnity, (iv)

 

9

 

 

cause structural
injury to any of the Improvements or (v) constitute a public or private
nuisance or waste.

 

(b)                                 Subject to the
provisions hereof, so long as no Event of Default has occurred and is
continuing, Tenant shall quietly hold, occupy and enjoy the Leased Premises
throughout the Term, without any hindrance, ejection or molestation by Landlord
or those claiming by, through or under Landlord, with respect to matters that
arise after the date hereof,  provided that
Landlord or its agents may enter upon and examine any of the Leased Premises at
such reasonable times as Landlord may select and upon reasonable notice to
Tenant (except in the case of any emergency, in which event no notice shall be
required) for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof.

 

5.                                       Term.

 

(a)                                  Subject to the
provisions hereof, Tenant shall have and hold the Leased Premises for an
initial term (such term, as extended or renewed in accordance with the
provisions hereof, being called the “Term”) commencing on the date
hereof (the “Commencement Date”) and ending on May 31, 2017 (the “Expiration
Date”).

 

(b)                                 Provided that if, on
or prior to the Expiration Date or any other Renewal Date (as hereinafter
defined) this Lease shall not have been terminated pursuant to any provision
hereof, then Tenant shall have the option to extend this Lease for two (2) additional
and consecutive terms of five (5) years each (each such extension, a “Renewal
Term”).  Tenant shall exercise its
option to extend the Term for each Renewal Term only by giving written notice
to Landlord no later than eighteen (18) months prior to the then-scheduled
expiration of the Term, provided, however, that if Tenant exercises any
Remaining Option for less than all of the Leased Premises, the Term shall ipso
facto be extended through the first Renewal Term (the “Automatic Renewal”).  Any such extensions of the Term shall be
subject to all of the provisions of this Lease, as the same may be amended,
supplemented or modified.

 

(c)                                  If Tenant fails to
exercise its option pursuant to Paragraph 5(b) to have the Term extended, or if
an Event of Default occurs, then Landlord shall have the right during the
remainder of the Term then in effect and, in any event, Landlord shall have the
right during the last year of the Term, to (i) advertise the availability
of any of the Leased Premises for sale or reletting and to erect upon any of
the Leased Premises signs indicating such availability and (ii) show any
of the Leased Premises to prospective purchasers or tenants or their agents at
such reasonable times as Landlord may select upon reasonable prior notice to
Tenant.  In the exercise of said rights,
Landlord shall not unreasonably interfere with the operation of Tenant’s
business at any of the Leased Premises.

 

6.                                       Basic Rent. 
Tenant shall pay or cause to be paid to Landlord, as annual rent for the
Leased Premises during the Term, the amounts determined in accordance with Exhibit
“D” hereto (“Basic Rent”), commencing on the first day of June,
2000, and continuing on the first day of each calendar month thereafter during
the Term (each such day being a “Basic Rent Payment Date”).  Each such rental payment shall be made, at
Landlord’s sole discretion, (a) to Landlord at its address set forth above
and/or to such one or more other Persons, at such

 

10

 

addresses and in
such proportions as Landlord may direct by fifteen (15) days’ prior written
notice to Tenant (in which event Tenant shall give Landlord notice of each such
payment concurrent with the making thereof), and (b) in Federal Funds.  Pro rata Basic Rent for the period from the
date hereof through the last day of the month hereof shall be paid on the date
hereof.

 

7.                                       Additional Rent.

 

(a)                                  Tenant shall pay and
discharge, as additional rent (collectively, “Additional Rent”):

 

(i)                                     all costs and
expenses of Landlord specifically referenced herein which are incurred in
connection or associated with (A) the performance of any of Tenant’s
obligations under this Lease, (B) any sale or other transfer of the Leased
Premises or any Related Premises to Tenant under this Lease, (C)  the
prosecution, defense or settlement of any litigation involving or arising from
any of the Leased Premises, this Lease, or the sale of the Leased Premises to
Landlord (unless there is a judgment arising from a third-party claim based solely
on the gross negligence or willful misconduct of Landlord), (D) the
exercise or enforcement by Landlord, its successors and assigns, of any of its
rights under this Lease, (E) any amendment to or modification or
termination of this Lease made at the request of Tenant, (F) Costs of
Landlord’s counsel incurred in connection with any act undertaken by Landlord
(or its counsel) at the request of Tenant, or incurred in connection with any
act of Landlord performed on behalf of Tenant, and (G) any other items
specifically required to be paid by Tenant under this Lease;

 

(ii)                                  after the date all or
any portion of any installment of Basic Rent is due and not paid, an amount
equal to five percent (5%) of the amount of such unpaid installment or portion
thereof, provided, however, that with respect to the first two late payments of
all or any portion of any installment of Basic Rent in any Lease Year, the Late
Charge shall not be due and payable unless the Basic Rent has not been paid
within five (5) days’ following the due date thereof;

 

(iii)                               a sum equal to any
additional sums (including any late charge, default penalties, interest and
reasonable fees of Lender’s counsel) which are payable by Landlord to any
Lender under any Note by reason of Tenant’s late payment or non-payment of
Basic Rent or by reason of an Event of Default; and

 

(iv)                              interest at the rate (the
“Default Rate”) of three percent (3%) over the Prime Rate per annum on
the following sums until paid in full: 
(A) all overdue installments of Basic Rent not paid within ten (10) days
after the respective due dates thereof, and (B) all amounts of Additional Rent
relating to obligations which Landlord shall have paid on behalf of Tenant not
paid within fifteen (15) days of the respective due dates.

 

(b)                                 Tenant shall pay and
discharge (i) any Additional Rent referred to in Paragraph 7(a)(i) when the same shall become due, provided that amounts
which are billed to Landlord or any third party, but not to Tenant, shall be
paid within fifteen (15) days after Landlord’s written demand for payment
thereof, and (ii) any other Additional Rent, within fifteen (15) days
after Landlord’s written demand for payment thereof.

 

(c)                                  In no event shall
amounts payable under Paragraph 7(a)(ii), (iii) and
(iv) exceed the maximum amount permitted by applicable Law.

 

11

 

8.                                       Net Lease; Non-Terminability.

 

(a)                                  This is a net lease
and all Monetary Obligations shall be paid without notice or demand and, except
as set forth in Paragraphs 17 (c) and 34 of this Lease, without set-off,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense (collectively, a “Set-Off”).

 

(b)                                 Except as otherwise
expressly provided herein, this Lease and the rights of Landlord and the
obligations of Tenant hereunder shall not be affected by any event or for any
reason or cause whatsoever foreseen or unforeseen.

 

(c)                                  The obligations of
Tenant hereunder shall be separate and independent covenants and agreements,
all Monetary Obligations shall continue to be payable in all events (or, in
lieu thereof, Tenant shall pay amounts equal thereto), and the obligations of
Tenant hereunder shall continue unaffected unless the requirement to pay or
perform the same shall have been terminated pursuant to an express provision of
this Lease.  All Rent payable by Tenant
hereunder shall constitute “rent” for all purposes (including Section 502(b)(6) of the Federal Bankruptcy Code).

 

(d)                                 Except as otherwise
expressly provided herein, Tenant shall have no right and hereby waives all
rights which it may have under any Law (i) to quit, terminate or surrender
this Lease or any of the Leased Premises, or (ii) to any Set-Off of any
Monetary Obligations.

 

9.                                       Payment of Impositions.

 

(a)                                  Tenant shall, before
interest or penalties are due thereon, pay and discharge all taxes (including
real and personal property, franchise, sales, gross receipts and rent taxes),
all charges for any easement or agreement maintained for the benefit of any of
the Leased Premises, all assessments and levies, all permit, inspection and
license fees, all rents and charges for water, sewer, utility and communication
services relating to any of the Leased Premises, and all other public charges
whether of a like or different nature, even if unforeseen or extraordinary,
imposed upon or assessed against (i) Tenant, (ii) Tenant’s possessory
interest in the Leased Premises, (iii) any of the Leased Premises,
(iv) Landlord as a result of or arising in respect of the acquisition, ownership,
occupancy, leasing, use, possession or sale of any of the Leased Premises, any
activity conducted on any of the Leased Premises, or the Rent or (v) following
an Event of Default, any mortgage recording tax payable in order to permit
Landlord to exercise its rights to collect subrents with respect to the
Minnesota Premises (collectively, the “Impositions”); provided, that
nothing herein shall obligate Tenant to pay (A) income, excess profits or
other taxes of Landlord (or Lender) which are determined on the basis of
Landlord’s (or Lender’s) net income or net worth (unless such taxes are in lieu
of or a substitute for any other tax, assessment or other charge upon or with
respect to the Leased Premises which, if it were in effect, would be payable by
Tenant under the provisions hereof or by the terms of such tax, assessment or
other charge), (B) any estate, inheritance, succession, gift or similar
tax imposed on Landlord (C) any capital gains tax imposed on Landlord in
connection with the sale of the Leased Premises to any Person, (D) any transfer
taxes or fees due in connection with a sale or transfer of any of the Leased
Premises to any person other than Tenant or (E) other than in connection with
the initial Loan, any mortgage registration tax or fee with respect to a
Loan.  If any Imposition may be paid in
installments without interest or penalty, Tenant shall have the option to pay
such Imposition in installments; in such event, Tenant shall be liable only for
those

 

12

 

installments
which accrue or become due and payable during the Term.  Tenant shall prepare and file all tax reports
required by governmental authorities which relate to the Impositions.  Tenant shall deliver to Landlord
(1) copies of all settlements and notices pertaining to the Impositions
which may be issued by any governmental authority within ten (10) days after
Tenant’s receipt thereof, (2) receipts for payment of all taxes required
to be paid by Tenant hereunder within thirty (30) days after the due date
thereof and (3) receipts for payment of all other Impositions within ten (10)
days after Landlord’s request therefor.

 

(b)                                 Landlord shall have
the right following the occurrence of an Event of Default ,
or if required by Lender, to require Tenant to pay to Landlord an additional
monthly sum (each an “Escrow Payment”) sufficient to pay the Escrow
Charges (as hereinafter defined) as they become due.  As used herein, “Escrow Charges” shall
mean real estate taxes on the Leased Premises or payments in lieu thereof and
premiums on any insurance required by this Lease and any reserves for capital
improvements, deferred maintenance or repair required by any Lender.  Landlord shall determine the amount of the
Escrow Charges and of each Escrow Payment. 
The Escrow Payments may be commingled with other funds of Landlord or
other Persons and no interest thereon shall be due or payable to Tenant.  Landlord shall apply the Escrow Payments to
the payment of the Escrow Charges in such order or priority as Landlord shall
determine or as required by law.  If at
any time the Escrow Payments theretofore paid to Landlord shall be insufficient
for the payment of the Escrow Charges, Tenant, within ten (10) days after Landlord’s
demand therefor, shall pay the amount of the deficiency to Landlord.

 

10.                                 Compliance with Laws and Easement
Agreements; Environmental Matters.

 

(a)                                  Tenant shall, at its
expense, comply with and conform to, and cause the Leased Premises and any
other Person occupying any part of the Leased Premises to comply with and
conform to, Insurance Requirements and Legal Requirements (including all
applicable Environmental Laws).  Tenant
shall not at any time (i) cause, permit or suffer to occur any Environmental
Violation or (ii) permit any sublessee, assignee or other Person occupying
the Leased Premises under or through Tenant to cause, permit or suffer to occur
any Environmental Violation and, at the request of Landlord or Lender, Tenant
shall promptly remediate or undertake any other appropriate response action to
correct any existing Environmental Violation, however immaterial.  Any and all reports prepared for or by
Landlord with respect to the Leased Premises shall be for the sole benefit of
Landlord and Lender and no other Person shall have the right to rely on any
such reports.

 

(b)                                 Tenant, at its sole
cost and expense, will at all times promptly and faithfully abide by, discharge
and perform all of the covenants, conditions and agreements contained in any
Easement Agreement on the part of Landlord or the occupier to be kept and
performed thereunder.  Tenant will not
alter, modify, amend or terminate any Easement Agreement, give any consent or
approval thereunder, or enter into any new Easement Agreement without, in each
case, prior written consent of Landlord, which consent shall not be
unreasonably withheld.

 

(c)                                  Upon prior written
notice from Landlord, Tenant shall permit such persons as Landlord may
designate (“Site Reviewers”) to visit any Related Premises and perform
environmental site investigations and assessments (“Site Assessments”)
on such Related Premises (i) for the purpose of determining whether there
exists on such Related Premises any Environmental Violation or any condition
which could result in any Environmental Violation (ii)

 

13

 

in connection with any sale, financing or refinancing of the Leased
Premises, (iii) within the six month period prior to the expiration of the
Term, (iv) if required by Lender or the terms of any credit facility to which
Landlord is bound, (v) if an Event of Default exists, or (vi) at any other time
that, in the opinion of Landlord or Lender, a reasonable basis exists to
believe that an Environmental Violation exists. 
Such Site Assessments may include both above and below the ground
testing for Environmental Violations and such other tests as may be necessary,
in the opinion of the Site Reviewers, to conduct the Site Assessments. Tenant
shall supply to the Site Reviewers such historical and operational information
regarding the Leased Premises as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments, and shall make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. The cost of performing and reporting Site Assessments shall be paid by
Landlord, unless it is determined that Tenant is in violation of any applicable
Environmental Law, in which event Tenant shall pay the reasonable cost thereof.

 

(d)                                 If an Environmental
Violation occurs or is found to exist and, in Landlord’s reasonable judgment,
the cost of remediation of, or other response action with respect to, the same
is likely to exceed $100,000, Tenant shall provide to Landlord, within ten (10)
days after Landlord’s request therefor, adequate assurances that Tenant has the
financial wherewithal to and will promptly effect such remediation in
accordance with applicable Environmental Laws.

 

(e)                                  Notwithstanding any
other provision of this Lease, if an Environmental Violation occurs or is found
to exist and the Term would otherwise terminate or expire, then, at the option
of Landlord, the Term shall be automatically extended beyond the date of
termination or expiration and this Lease shall remain in full force and effect
beyond such date until the earlier to occur of (i) the completion of all
remedial action in accordance with applicable Environmental Laws or (ii) the
date specified in a written notice from Landlord to Tenant terminating this
Lease.

 

(f)                                    If Tenant fails to
comply with any requirement of any applicable Environmental Law in connection
with any Environmental Violation which occurs or is found to exist, Landlord
shall have the right (but no obligation) to take any and all actions as
Landlord shall deem reasonably necessary or advisable in order to cure such
Environmental Violation.

 

(g)                                 Tenant shall notify
Landlord immediately after becoming aware of any Environmental Violation (or
alleged Environmental Violation) or noncompliance with any of the covenants
contained in this Paragraph 10 and shall forward to Landlord promptly within
ten (10) business days of receipt thereof copies of all orders, reports,
notices, permits, applications or other communications relating to any such
violation or noncompliance.

 

(h)                                 All future leases,
subleases or concession agreements relating to the Leased Premises entered into
by Tenant shall contain covenants of the other party thereto which are
identical to the covenants contained in Paragraphs 10(a) and 10(g) with respect
to the portion of the Leased Premises subject to such leases, subleases or
concession agreements.

 

11.                                 Liens; Recording.

 

(a)                                  Other than in
connection with the granting of a leasehold mortgage pursuant to Paragraph
21(g) of this Lease, Tenant shall not, directly or indirectly, create or permit
to be created or to remain and shall promptly discharge or remove any lien,
levy or encumbrance on any of the Leased Premises or on any Rent or any other
sums payable by Tenant under this

 

14

 

Lease, other than any Mortgage or Assignment,
the Permitted Encumbrances and any mortgage, lien, encumbrance or other charge
created by or resulting solely from any act or omission of Landlord.  NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL
NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED
TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH
OR UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND
TO ANY OF THE LEASED PREMISES.  LANDLORD
MAY AT ANY TIME POST ANY NOTICES ON THE LEASED PREMISES REGARDING SUCH
NON-LIABILITY OF LANDLORD.

 

(b)                                 Tenant shall execute,
deliver and record, file or register (collectively, “record”) all such
instruments as may be required or permitted by any present or future Law in
order to evidence the respective interests of Landlord and Tenant in any of the
Leased Premises, and shall cause a memorandum of this Lease (or, if such a
memorandum cannot be recorded, this Lease), and any supplement hereto or
thereto, to be recorded in such manner and in such places as may be required or
permitted by any present or future Law in order to protect the validity and
priority of this Lease.

 

12.                                 Maintenance and Repair.

 

(a)                                  Tenant shall at all
times maintain each Related Premises and the Adjoining Property in as good
repair and appearance as each is in on the date hereof and fit to be used for
their intended use in accordance with the better of the practices generally
recognized as then acceptable by other companies in its industry or observed by
Tenant with respect to the other real properties owned or operated by it, and,
in the case of the Equipment, in as good mechanical condition as it was on the
later of the date hereof or the date of its installation, except for ordinary
wear and tear. Tenant shall take every other action necessary or appropriate
for the preservation and safety of each Related Premises.  Tenant shall promptly make all repairs of
every kind and nature, whether foreseen or unforeseen, which may be required to
comply with the foregoing requirements of this Paragraph 12(a).  Such repairs shall include repairs required
in order to insure that the Improvements are “year 2000” compliant (that is
capable of correctly and accurately processing, providing and/or receiving date
data from, into and between the 20th and 21st centuries,
and the years 1999 and 2000 and beyond, including recognizing that the year
2000 is a leap year; and does not operate abnormally or inaccurately or cease
to operate as a result of the inability to correctly and accurately process,
provide and/or receive date data from, into, and between the 20th
and 21st centuries and the years 1999 and 2000 and beyond).  Landlord shall not be required to make any
repair, whether foreseen or unforeseen, or to maintain any of the Related
Premises or Adjoining Property in any way, and Tenant hereby expressly waives
any right which may be provided for in any Law now or hereafter in effect to
make repairs at the expense of Landlord or to require Landlord to make
repairs.  Any repairs made by Tenant
pursuant to this Paragraph 12 shall be made in conformity with the provisions
of Paragraph 13.

 

(b)                                 If any Improvement,
now or hereafter constructed, shall (i) encroach upon any setback or any
property, street or right-of-way adjoining any of the Leased Premises,
(ii) violate the provisions of any restrictive covenant affecting any of
the Leased Premises, (iii) hinder or obstruct any easement or right-of-way
to which any of the Leased Premises is subject or (iv) impair the rights
of others in, to or under any of the foregoing, Tenant shall, promptly after
receiving a written demand from a party affected by such encroachment, violation,
hindrance, impairment, or obstruction, either (A) obtain from all
necessary parties

 

15

 

waivers or settlements of all claims, liabilities and damages resulting
from each such encroachment, violation, hindrance, obstruction or impairment,
whether the same shall affect Landlord, Tenant or both, or (B) take such
action as shall be necessary to remove all such encroachments, hindrances or
obstructions and to end all such violations or impairments, including, if
necessary, making Alterations.

 

13.                                 Alterations and Improvements.

 

(a)                                  Tenant shall have the
right, without having obtained the prior written consent of Landlord and Lender
and provided that no Event of Default then exists, (i) to make non-structural
Alterations or a series of related non-structural Alterations that, as to any
such Alterations or series of related Alterations, do not cost in excess of
$250,000 with respect to any Related Premises in any Lease Year and (ii) to
install Equipment in the Improvements or accessions to the Equipment that, as
to such Equipment or accessions, do not cost in excess of $250,000 with respect
to any Related Premises in any Lease Year, so long as at the time of
construction or installation of any such Equipment or Alterations no Event of
Default exists and the value and utility of the Leased Premises is not
diminished thereby.  If the cost of any
non-structural Alterations, series of related non-structural Alterations,
Equipment or accessions thereto is in excess of $250,000 with respect to any
Related Premises in any Lease Year, or if Tenant desires to make structural
Alterations to any Related Premises, the prior written approval of Landlord and
Lender shall be required, which approval shall not be unreasonably withheld.  Tenant shall not construct upon the Land any
additional buildings without having first obtained the prior written consent of
Landlord and Lender which consent shall not be unreasonably withheld.  Landlord shall have the right to require
Tenant to remove any Alterations except for those Alterations required by Law
or for which Landlord has agreed in writing that removal will not be required.
At the time Tenant requests Landlord’s consent to construct an Alteration,
Landlord shall, if requested by Tenant, address whether the Alteration must be
removed or not at the end of the Term, which removal shall be at Tenant’s sole
cost and expense.

 

(b)                                 If Tenant makes any
Alterations pursuant to this Paragraph 13 or as required by
Paragraph 12 or 17 (such Alterations and actions being hereinafter
collectively referred to as “Work”), then (i) the market value of
the Leased Premises shall not be lessened by any such Work or its usefulness
impaired, (ii) all such Work shall be performed by Tenant in a good and
workmanlike manner, (iii) all such Work shall be expeditiously completed
in compliance with all Legal Requirements, (iv) all such Work shall comply
with the requirements of all insurance policies required to be maintained by
Tenant hereunder, (v) if any such Work involves the replacement of
Equipment or parts thereto, all replacement Equipment or parts shall have a
value and useful life equal to the greater of (A) the value and useful
life on the date hereof of the Equipment being replaced or (B) the value
and useful life of the Equipment being replaced immediately prior to the
occurrence of the event which required its replacement (assuming such replaced
Equipment was then in the condition required by this Lease), (vi) Tenant
shall promptly discharge or remove all liens filed against any of the Leased
Premises arising out of such Work, (vii) Tenant shall procure and pay for
all permits and licenses required in connection with any such Work,
(viii) all such Work shall be the property of Landlord and shall be
subject to this Lease, and Tenant shall execute and deliver to Landlord any
document requested by Landlord evidencing the assignment to Landlord of all
estate, right, title and interest (other than the leasehold estate created
hereby) of Tenant or any other Person thereto or therein, and (ix) Tenant
shall comply, to the extent requested by Landlord or required by this Lease,
with the provisions of Paragraphs 12(a) and 19(a), whether or not such Work
involves restoration of the Leased Premises.

 

16

 

14.                                 Permitted Contests.  Notwithstanding any other provision of this
Lease, Tenant shall not be required to (a) pay any Imposition, (b) discharge or
remove any lien referred to in Paragraph 11 or 13 or (c) take any action with
respect to any encroachment, violation, hindrance, obstruction or impairment
referred to in Paragraph 12(b) (such non-compliance with the terms hereof being
hereinafter referred to collectively as “Permitted Violations”), so long
as at the time of such non-compliance no Event of Default exists and so long as
Tenant shall contest, in good faith, the existence, amount or validity thereof,
the amount of the damages caused thereby, or the extent of its or Landlord’s
liability therefor by appropriate proceedings which shall operate during the
pendency thereof to prevent or stay (i) the collection of, or other
realization upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of any of the Leased Premises or any Rent to satisfy or to
pay any damages caused by any Permitted Violation, (iii) any interference
with the use or occupancy of any of the Leased Premises, (iv) any
interference with the payment of any Rent, or (v) the cancellation or
increase in the rate of any insurance policy or a statement by the carrier that
coverage will be denied.  Tenant shall
provide Landlord security or other evidence of Tenant’s financial wherewithal
which is satisfactory, in Landlord’s reasonable judgment, to assure that such
Permitted Violation is corrected, including all Costs, interest and penalties
that may be incurred or become due in connection therewith.  While any proceedings which comply with the
requirements of this Paragraph 14 are pending and the required security is held
by Landlord or satisfactory evidence of Tenant’s financial wherewithal has been
provided, Landlord shall not have the right to correct any Permitted Violation
thereby being contested unless Landlord is required by law to correct such
Permitted Violation and Tenant’s contest does not prevent or stay such
requirement as to Landlord.  Each such
contest shall be promptly and diligently prosecuted by Tenant to a final
conclusion, except that Tenant, so long as the conditions of this Paragraph 14 are
at all times complied with, has the right to attempt to settle or compromise
such contest through negotiations. 
Tenant shall pay any and all losses, judgments, decrees and Costs in
connection with any such contest and shall, promptly after the final determination
of such contest, fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein or in
connection therewith, together with all penalties, fines, interest and Costs
thereof or in connection therewith, and perform all acts the performance of
which shall be ordered or decreed as a result thereof.  No such contest shall subject Landlord to the
risk of any civil or criminal liability.

 

15.                                 Indemnification.

 

(a)                                  Except with respect
to the gross negligence or willful acts or omissions of Landlord, Tenant shall
pay, protect, indemnify, defend, save and hold harmless Landlord, Lender and
all other Persons described in Paragraph 30 (each an “Indemnitee”) from
and against any and all liabilities, losses, damages (including punitive damages),
penalties, Costs (including attorneys’ fees and costs), causes of action,
suits, claims, demands or judgments of any nature whatsoever, howsoever caused,
without regard to the form of action and whether based on strict liability,
gross negligence, negligence or any other theory of recovery at law or in
equity, arising from (i) any matter pertaining to the ownership, leasing,
use, non-use, occupancy, operation, management, condition, design,
construction,  maintenance, repair or
restoration of any of the Leased Premises or Adjoining Property, (ii) any
casualty in any manner arising from any of the Leased Premises or Adjoining
Property, whether or not Indemnitee has or should have knowledge or notice of
any defect or condition causing or contributing to said casualty,
(iii) any violation by Tenant of any provision of this Lease, any contract
or agreement to which Tenant is a party and which affects the Leased Premises
or Landlord, any Legal Requirement or any Permitted Encumbrance or any encumbrance
Tenant consented to or the Mortgage or Assignment

 

17

 

or (iv) any alleged, threatened or actual Environmental Violation,
including (A) liability for response costs and for costs of removal and
remedial action incurred by the United States Government, any state or local
governmental unit or any other Person, or damages from injury to or destruction
or loss of natural resources, including the reasonable costs of assessing such
injury, destruction or loss, incurred pursuant to Section 107 of CERCLA,
or any successor section or act or provision of any similar state or local
Law, (B) liability for costs and expenses of abatement, correction or
clean-up, fines, damages, response costs or penalties which arise from the
provisions of any of the other Environmental Laws and (C) liability for
personal injury or property damage arising under any statutory or common-law
tort theory, including damages assessed for the maintenance of a public or
private nuisance or for carrying on of a dangerous activity.

 

(b)                                 In case any action or
proceeding is brought against any Indemnitee by reason of any such claim, (i)
Tenant may, except in the event of a conflict of interest or a dispute between
Tenant and any such Indemnitee or during the continuance of an Event of
Default, retain its own counsel and defend such action (it being understood
that Landlord may employ counsel of its choice to monitor the defense of any
such action, the cost of which shall be paid by Landlord) and (ii) such Indemnitee
shall notify Tenant to resist or defend such action or proceeding by retaining
counsel reasonably satisfactory to such Indemnitee, and such Indemnitee will
cooperate and assist in the defense of such action or proceeding if reasonably
requested to do so by Tenant.  In the
event of a conflict of interest or dispute or during the continuance of an
Event of Default, Landlord shall have the right to select counsel, and the
reasonable cost of such counsel shall be paid by Tenant.

 

(c)                                  The obligations of
Tenant under this Paragraph 15 shall survive any termination, expiration or
rejection in bankruptcy of this Lease.

 

16.                                 Insurance.

 

(a)      
Subject to the provisions of Paragraph 16(k) below, Tenant shall
maintain the following insurance on or in connection with the Leased Premises:

 

(i) Insurance against physical loss or damage
to the Improvements and Equipment as provided under a standard “All Risk”
property policy including but not limited to flood (to the extent that a
Related Premises is in a flood zone) and earthquake coverage (to the extent any
Related Premises is in an earthquake zone) in amounts not less than the actual
replacement cost of the Improvements and Equipment.  Such policies shall contain Replacement Cost
and Agreed Amount Endorsements and shall contain deductibles not more than
$50,000 per occurrence.

 

(ii) Commercial General Liability Insurance
(including but not limited to Incidental Medical Malpractice and Host Liquor
Liability) and Business Automobile Liability Insurance (including Non-Owned and
Hired Automobile Liability) against claims for personal and bodily injury,
death or property damage occurring on, in or as a result of the use of the
Leased Premises, in an amount not less than $1,000,000 per occurrence with
excess liability coverage of not less than $10,000,000 per occurrence/annual
aggregate and all other coverage extensions that are usual and customary for
properties of this size and type provided, however, that the Landlord shall
have the right to require such higher limits as may be reasonable and customary
for properties of this size and type.

 

18

 

(iii) Worker’s compensation insurance
covering all persons employed by Tenant in connection with any work done on or
about any of the Leased Premises for which claims for death, disease or bodily
injury may be asserted against Landlord, Tenant or any of the Leased Premises
or, in lieu of such Workers’ Compensation Insurance, a program of
self-insurance complying with the rules, regulations and requirements of the
appropriate agency of the State or States in which the Leased Premises are
located.

 

(iv)  Comprehensive
Boiler and Machinery Insurance on any of the Equipment or any other equipment
on or in the Leased Premises in an amount not less than $1,000,000 per accident
for damage to property.  Either such
Boiler and Machinery policy or the All-Risk policy required in (i) above shall
include at least $3,000,000 per incidence for Off-Premises Service
Interruption, Expediting Expenses, Ammonia Contamination, and Hazardous
Materials Clean-up Expense and may contain a deductible not to exceed $50,000.

 

(v)  
Business Interruption and Extra Expense Insurance at limits to cover
100% of losses and/or expenses incurred over the period of indemnity not less
than one year from time of loss.  Such
insurance shall name Landlord as loss payee solely with respect to Rent payable
to or for the benefit of the Landlord under this Lease.

 

(vi) 
During any period in which substantial Alterations at any Related
Premises are being undertaken, builder’s risk insurance covering the total
completed value including any “soft costs” with respect to the Improvements
being altered or repaired (on a completed value, non-reporting basis),
replacement cost of work performed and equipment, supplies and materials
furnished in connection with such construction or repair of Improvements or
Equipment, together with such “soft cost” endorsements and such other
endorsements as Landlord may reasonably require and general liability, workers’
compensation and automobile liability insurance with respect to the
Improvements being constructed, altered or repaired.

 

(vii) 
Such other insurance (or other terms with respect to any insurance
required pursuant to this Paragraph 16,  including without limitation amounts
of coverage, form of mortgagee clause) on or in connection with any of the
Leased Premises as Landlord or Lender may reasonably require, which at the time
is usual and commonly obtained in connection with properties similar in type of
building size, use and location to the Leased Premises.

 

(b)  
To the extent Tenant is required to carry the insurance required by
Paragraph 16(a), such insurance shall be written by companies which have a
Best’s rating of B+:VIII or above or a comparable
claims paying ability assigned by Standard & Poor’s Corporation or
equivalent rating agency approved by Landlord and Lender and are admitted in,
and approved to write insurance policies by, the State Insurance Department for
the States in which the Leased Premises are located.  Provided Tenant is required to maintain such
insurance, the insurance policies (i) shall be for such terms as Landlord may
reasonably approve and (ii) shall be in amounts sufficient at all times to
satisfy any coinsurance requirements thereof. 
To the extent Lessee is required to carry the insurance required under
Paragraph 16(a), the insurance referred to in Paragraphs 16(a)(i), 16(a)(iv)
and 16(a)(vi) shall name Landlord as Owner and Lender as loss payee and Tenant
as its interest may appear, and the insurance referred to in
Paragraph 16(a)(ii) (except for the Business Automobile Liability
Insurance) shall name Landlord and Tenant as additional insureds, and the
insurance referred to in Paragraph 16(a)(v) shall name Landlord as insured
and Lender and Landlord as loss payee. 
With respect to the insurance Tenant is required to carry, if said
insurance or any part thereof shall expire, be withdrawn, become void,
voidable, unreliable or unsafe for any reason, including a breach of any
condition thereof by Tenant or the

 

19

 

failure or
impairment of the capital of any insurer, or if for any other reason whatsoever
said insurance shall become reasonably unsatisfactory to Landlord, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to
Landlord.

 

(c)  
Each insurance policy referred to in clauses (i), (iv),
(v) and (vi) of Paragraph 16(a) shall contain standard non-contributory
mortgagee clauses in favor of and acceptable to Lender.  Each policy required by any provision of
Paragraph 16(a), except clause (iii) thereof, shall provide that it may not be
cancelled substantially modified or allowed to lapse on any renewal date except
after thirty (30) days’ prior notice to Landlord and Lender.  Each such policy shall also provide that any
loss otherwise payable thereunder shall be payable notwithstanding (i) any act
or omission of Landlord or Tenant which might, absent such provision, result in
a forfeiture of all or a part of such insurance payment, (ii) the occupation or
use of any of the Leased Premises for purposes more hazardous than those
permitted by the provisions of such policy, (iii) any foreclosure or other
action or proceeding taken by Lender pursuant to any provision of the Mortgage,
Note, Assignment or other document evidencing or securing the Loan upon the
happening of an event of default therein or (iv) any change in title to or
ownership of any of the Leased Premises.

 

(d)  
Tenant shall pay as they become due all premiums for the insurance
required by Paragraph 16(a), shall renew or replace each policy and deliver to
Landlord evidence of the payment of the full premium therefor or installment
then due at least ten (10) days prior to the expiration date of such policy,
and shall promptly deliver to Landlord original certificates evidencing such
insurance or, if required by Lender, certified copies of such policies.

 

(e) Any insurance which Tenant is required to
obtain pursuant to Paragraph 16(a) may be carried under a “blanket” or umbrella
policy or policies covering other properties or liabilities of Tenant, provided
that such “blanket” or umbrella policy or policies otherwise comply with the
provisions of this Paragraph 16 and provided further that Tenant shall provide
to Landlord a Statement of Values which shall be reviewed annually and amended
as necessary based on Replacement Cost Valuations.  A certificate evidencing such insurance or,
if requested by Lender, a certified copy of each such “blanket” or umbrella
policy shall promptly be delivered to Landlord.

 

(f)  
Tenant shall have the replacement cost and insurable value of the
Improvements and Equipment determined from time to time as required by the
replacement cost and agreed amount endorsements and shall deliver to Landlord
the new replacement cost and agreed amount endorsement or certificate
evidencing such endorsement promptly upon Tenant’s receipt thereof.

 

(g) 
Tenant shall promptly comply with and conform in all material respects
to (i) all provisions of each insurance policy required by this Paragraph 16
and (ii) all reasonable requirements of the insurers thereunder applicable to
Landlord, Tenant or any of the Leased Premises or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration or repair of any of
the Leased Premises, even if such compliance necessitates Alterations or
results in interference with the use or enjoyment of any of the Leased
Premises.

 

(h)  
Tenant shall not carry separate insurance concurrent in form or
contributing in the event of a Casualty with that required in this Paragraph 16
unless (i) Landlord and Lender are included therein as named insureds, with
loss payable as provided herein, and (ii) such separate insurance complies with
the other provisions of this Paragraph 16. 
Tenant shall

 

20

 

immediately
notify Landlord of such separate insurance and shall deliver to Landlord
certified copies thereof.

 

(i) Tenant waives all rights of subrogation
against the Landlord as may be applicable to any insurer and will enforce such
waivers in policy provisions.

 

(j) 
All proceeds of any insurance required under Paragraph 16(a) shall be
payable as follows:

 

(i)  
Proceeds payable under clauses (ii), (iii) and (iv) of Paragraph 16(a)
and proceeds attributable to the general liability coverage of Builder’s Risk
insurance under clause (vi) of Paragraph 16(a) shall be payable to the Person
entitled to receive such proceeds.

 

(ii)  
Proceeds of insurance required under clause (i) of Paragraph 16(a) and
proceeds attributable to Builder’s Risk insurance (other than its general
liability coverage provisions) under clause (vi) of Paragraph 16(a) shall be
payable by Landlord or Lender and applied as set forth in Paragraph 17 or,
if applicable, Paragraph 18.  Tenant
shall apply the Net Award to restoration of the Leased Premises in accordance
with the applicable provisions of this Lease unless a Termination Event shall
have occurred and Tenant has given a Termination Notice.

 

(k)  
Notwithstanding any provision to the contrary, it is understood that so
long as the Guarantor maintains a net worth of at least $100,000,000, then
Tenant shall be permitted to self-insure any of the coverages required by
Paragraph 16(a) above, shall be permitted to decline to carry any of said
coverages and shall not be bound by the deductible limits set forth
therein.  The remaining provisions of
Paragraphs 16(b)-(j) shall only be applicable to the insurance policies as
required under Paragraph 16(a) above in the event that the Guarantor fails to
maintain a net worth of at least $100,000,000, provided, however, that to the
extent that Tenant does maintain insurance policies with respect to any of the
risks described in Paragraph 16(a), the provisions of Paragraph 16(b) as to the
naming of loss payees and additional insureds, and Paragraphs 16(c), 16(d),
16(g), 16(h), 16(i) and 16(j) shall be applicable thereto.  It is understood that with respect to any
losses which are self-insured or for which there is not insurance coverage,
Tenant shall be responsible for the payment of such losses.  In the event that any Casualty shall occur at
such time as Tenant shall not be required to maintain third-party insurance
coverage, if the Restoration Fund is held by Lender, Tenant shall deposit into
the Restoration Fund the amount of the proceeds that would have been payable
into the Restoration Fund had such a third-party insurance program been in
effect.

 

17.                                 Casualty and Condemnation.

 

(a)                                  If any Casualty
occurs to any Related Premises, Tenant shall give Landlord and Lender prompt
notice thereof.  So long as no Event of
Default exists Tenant is hereby authorized to adjust, collect and compromise
all claims under any of the insurance policies required by Paragraph 16(a)
(except public liability insurance claims payable to a Person other than
Tenant, Landlord or Lender) and to execute and deliver on behalf of Landlord
all necessary proofs of loss, receipts, vouchers and releases required by the
insurers and Landlord shall have the right to join with Tenant therein.  Any final adjustment, settlement or
compromise of any claim in excess of Two Hundred Fifty Thousand ($250,000)
Dollars shall be subject to the prior written approval of Landlord, and Landlord
shall have the right to prosecute or contest, or to require Tenant to prosecute
or contest, any such claim, adjustment, settlement or compromise.

 

21

 

If an Event of Default exists, Tenant shall not be entitled to adjust,
collect or compromise any such claim or to participate with Landlord in any
adjustment, collection and compromise of the Net Award payable in connection
with a Casualty.  Tenant agrees to sign,
upon the request of Landlord, all proper proofs of loss, receipts, vouchers and
releases.  Each insurer is hereby
authorized and directed to make payment under said policies directly to
Landlord or, if required by the Mortgage, to Lender instead of to Landlord and
Tenant jointly.  The rights of Landlord
under this Paragraph 17(a) shall be extended to Lender if and to the extent
that any Mortgage so provides.

 

(b)                                 Tenant, promptly upon
receiving a Condemnation Notice, shall notify Landlord and Lender thereof.  So long as no Event of Default exists, Tenant
is authorized to collect, settle and compromise the
amount of any Net Award and Landlord shall have the right to join with Tenant
herein.  If an Event of Default exists,
Landlord shall be authorized to collect, settle and compromise the amount of
any Net Award and Tenant shall not be entitled to participate with Landlord in
any Condemnation proceeding or negotiations under threat thereof or to contest
the Condemnation or the amount of the Net Award therefor.  No agreement with any condemnor in settlement
or under threat of any Condemnation shall be made by Tenant without the written
consent of Landlord.  Subject to the
provisions of this Paragraph 17(b) Tenant hereby irrevocably assigns to
Landlord any award or payment to which Tenant is or may be entitled by reason
of any Condemnation, whether the same shall be paid or payable for Tenant’s
leasehold interest hereunder or otherwise; but nothing in this Lease shall
impair Tenant’s right to any award or payment on account of Tenant’s trade
fixtures, equipment or other tangible property which is not part of the
Equipment, moving expenses or loss of business, if available, to the extent
that and so long as (i) Tenant shall have the right to make, and does make, a
separate claim therefor against the condemnor and (ii) such claim does not in
any way reduce either the amount of the award otherwise payable to Landlord for
the Condemnation of Landlord’s fee interest in the Leased Premises or the
amount of the award (if any) otherwise payable for the Condemnation of Tenant’s
leasehold interest hereunder.  The rights
of Landlord under this Paragraph 17(b) shall also be extended to Lender and if
and to the extent that any Mortgage so provides.

 

(c)                                  If any Partial
Casualty (whether or not insured against) or Partial Condemnation shall occur
to any Related Premises, this Lease shall continue, notwithstanding such event,
and there shall be no abatement or reduction of any Monetary Obligations except
to the extent of any insurance proceeds received by Landlord under Paragraph
16(a)(v).   Promptly after such Partial
Casualty or Partial Condemnation, Tenant, as required in Paragraph 12(a), shall
commence and diligently continue to restore the Leased Premises as nearly as
possible to their value, condition and character immediately prior to such
event (assuming the Leased Premises to have been in the condition required by
this Lease).  So long as no Event of
Default exists, any Net Award up to and including $250,000 shall be paid by
Landlord to Tenant, to the extent actually received by Landlord,
and Tenant and shall restore the Leased Premises in accordance with the
requirements of Paragraph 13(b) of this Lease. 
Any Net Award in excess of $250,000 shall (unless such Casualty
resulting in the Net Award is a Termination Event) be made available by
Landlord (or Lender if the terms of the Mortgage so require) to Tenant, to the
extent actually received by Lender or Landlord as the case may be, for the
restoration of any of the Leased Premises pursuant to and in accordance with
and subject to the provisions of Paragraph 19 hereof.  Tenant’s obligation to restore hereunder
shall not be affected by any failure of the Authority to make available any
insurance proceeds held by the Authority pursuant to the Redevelopment
Contract.  If any Casualty or
Condemnation which is not a Partial Casualty or Partial Condemnation shall
occur, Tenant shall comply with the terms and conditions of Paragraph 18.

 

22

 

18.                                 Termination Events.

 

(a)                                  If (i) all of
any Related Premises shall be taken by a Taking or (ii) any substantial portion
of any Related Premises shall be taken by a Taking or all or any substantial
portion of any Related Premises shall be totally damaged or destroyed by a
Casualty and, in any such case, Tenant certifies and covenants to Landlord that
it will forever abandon operations at the Related Premises, (any one or all of
the Related Premises described in the above clauses (i) and (ii) above being
hereinafter referred to as the “Affected Premises” and each of the
events described in the above clauses (i) and (ii) shall hereinafter be
referred to as a “Termination Event”), then (x) in the case of (i)
above, Tenant shall be obligated, within sixty (60) days after Tenant receives
a Condemnation Notice and (y) in the case of (ii) above, Tenant shall have the
option, within sixty (60) days after Tenant receives a Condemnation Notice or
sixty (60) days after the Casualty, as the case may be, to give to Landlord
written notice (a “Termination Notice”) in the form described in
Paragraph 18(b) of the Tenant’s election to terminate this Lease as to the
Affected Premises.

 

(b)                                 A Termination Notice
shall contain (i) notice of Tenant’s intention to terminate this Lease as
to the Affected Premises on the first Basic Rent Payment Date which occurs at
least ninety (90) days after the Fair Market Value Date (the “Termination
Date”), (ii) a binding and irrevocable offer of Tenant to pay the
Termination Amount and (iii) if the Termination Event is an event described
in Paragraph 18(a)(ii), the certification and covenant described therein
and a certified resolution of the Board of Directors of Tenant authorizing the
same.  Promptly upon the delivery to
Landlord of a Termination Notice, Landlord and Tenant shall commence to
determine Fair Market Value.

 

(c)                                  If Landlord shall
reject such offer to terminate this Lease as to the Affected Premises pursuant
to Paragraph 18(b) above by written notice to Tenant (a “Rejection”),
which Rejection shall contain the written consent of Lender, not later than
thirty (30) days following the Fair Market Value Date, then this Lease shall
terminate as to the Affected Premises on the Termination Date;  provided that, if Tenant has not satisfied all
Monetary Obligations and all other obligations and liabilities under this Lease
which have arisen as to the Affected Premises (collectively, “Remaining
Obligations”) on or prior to the Termination Date, then Landlord may, at
its option, extend the date on which this Lease may terminate as to the
Affected Premises to a date which is no later than the first Basic Rent Payment
Date after the Termination Date on which Tenant has satisfied all Remaining
Obligations.  Upon such termination (i)
all obligations of Tenant hereunder as to the Affected Premises shall terminate
except for any Surviving Obligations, (ii) Tenant shall immediately vacate and
shall have no further right, title or interest in or to any of the Affected
Premises and (iii) the Net Award shall be retained by Landlord.  Notwithstanding anything to the contrary
hereinabove contained, if Tenant shall have received a Rejection and, on the
date when this Lease would otherwise terminate with respect to the Affected
Premises as provided above, Landlord shall not have received the full amount of
the Net Award payable by reason of the applicable Termination Event, then the
date on which this Lease is to terminate with respect to the Affected Premises
shall be automatically extended to the first Basic Rent Payment Date after the
receipt by Landlord of the full amount of the Net Award provided that, if
Tenant has not satisfied all Remaining Obligations on such date, then Landlord
may, at its option, extend the date on which this Lease may terminate as to the
Affected Premises to a date which is no later than the first Basic Rent Payment
Date after such date on which Tenant has satisfied all such Remaining
Obligations.

 

23

 

(d)                                 Unless Tenant shall
have received a Rejection not later than the thirtieth (30th) day following the
Fair Market Value Date, Landlord shall be conclusively presumed to have
accepted such offer.  If such offer is
accepted by Landlord then, on the Termination Date, Tenant shall pay to Landlord
the Termination Amount and all Remaining Obligations and, if requested by
Tenant, Landlord shall convey to Tenant or its designee the Affected Premises
or the remaining portion thereof, if any, all in accordance with
Paragraph 20.

 

(e)                                  In the event that (i)
the Landlord enters into to a bona fide contract of sale (the “Contract of
Sale”) for the purchase of the Leased Premises with a Third Party Purchaser
(the “Proposed Transaction”) and (ii) consent to the Proposed
Transaction from the Authority, if required pursuant to the Redevelopment Contract,
cannot be obtained within a time period or in a form reasonably acceptable to
Landlord or if Tenant is unable to cause the Redevelopment Contract to be
terminated, then, Tenant shall purchase the Minnesota Premises from Landlord
under terms identical in all material respects to the Contract of Sale,
including but not limited to the purchase price, date of closing and fees due
Lender.  In addition, if the Minnesota
Premises is transferred to the Tenant pursuant to this Paragraph 18(e) and a
Prepayment Premium is due Lender as a result of such a transfer to Tenant that
would not have been due in connection with the Proposed Transaction to the
Third Party Purchaser, then said Prepayment Premium shall be paid by Tenant at
the time of the transfer of the Minnesota Premises to Tenant.  All sums due to Landlord or Lender from
Tenant arising from the Purchase of the Minnesota Premises pursuant to this
Paragraph 18(e) shall be defined as the “MN Required Purchase Amount.”  Upon the transfer of the Minnesota Premises
to the Tenant pursuant to this Paragraph 18(e), this Lease shall be terminated
as to the Minnesota Premises.

 

(f)                                    In the event of the
termination of this Lease as to the Affected Premises or Minnesota Premises as
hereinabove provided, this Lease shall remain in full force and effect as to
the Remaining Premises; provided, that the Basic Rent for the Remaining
Premises to be paid after such termination shall be the Basic Rent otherwise
payable hereunder with respect to the Leased Premises multiplied by a
percentage equal to the sum of the percentages set forth on Exhibit “F”
for the Remaining Premises.

 

19.                                 Restoration.

 

(a)                                  Landlord (or Lender
if required by any Mortgage) shall hold any Net Award in excess of $250,000 in
a fund (the “Restoration Fund”) and disburse amounts from the
Restoration Fund only in accordance with the following conditions:

 

(i)                                     prior to
commencement of restoration, (A) the architects, contracts, contractors,
plans and specifications for the restoration shall have been approved by Landlord,
(B) unless the total net worth of the Guarantor is greater than One
Hundred million ($100,000,000) Dollars, Landlord and Lender shall be provided
with mechanics’ lien insurance (if available) and acceptable performance and
payment bonds which insure satisfactory completion of and payment for the
restoration, are in an amount and form and have a surety acceptable to
Landlord, and name Landlord and Lender as additional dual obligees, and
(C) if available under State law, appropriate waivers of mechanics’ and
materialmen’s liens shall have been filed;

 

(ii)                                  at
the time of any disbursement, no Event of Default shall exist and no mechanics’
or materialmen’s liens shall have been filed against any of the Leased Premises
and remain undischarged;

 

24

 

(iii)                               disbursements shall be
made from time to time in an amount not exceeding the cost of the work
completed since the last disbursement, upon receipt of (A) satisfactory
evidence, including architects’ certificates, of the stage of completion, the
estimated total cost of completion and performance of the work to date in a
good and workmanlike manner in accordance with the contracts, plans and
specifications, (B) waivers of liens, (C) contractors’ and subcontractors’
sworn statements as to completed work and the cost thereof for which payment is
requested, (D) a satisfactory bringdown of title insurance and (E) other
evidence of cost and payment so that Landlord and Lender can verify that the
amounts disbursed from time to time are represented by work that is completed,
in place and free and clear of mechanics’ and materialmen’s lien claims;

 

(iv)                              each request for
disbursement shall be accompanied by a certificate of Tenant, signed by an
officer of Tenant, describing the work for which payment is requested, stating
the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work,
also stating that the work has been fully completed and complies with the
applicable requirements of this Lease;

 

(v)                                 Landlord may retain
ten percent (10%) of each advance until the restoration is fifty (50%) percent
completed;

 

(vi)                              the
Restoration Fund shall not be commingled with Landlord’s other funds and shall
bear interest at a rate agreed to by Landlord and Tenant; and

 

(vii)                           such
other reasonable conditions as Landlord or Lender may impose.

 

(b)                                 Prior to commencement
of restoration and at any time during restoration, if the estimated cost of
completing the restoration work free and clear of all liens, as determined by
Landlord, exceeds the amount of the Net Award available for such restoration,
the amount of such excess shall, upon demand by Landlord, be paid by Tenant to
Landlord to be added to the Restoration Fund. 
Any sum so added by Tenant which remains in the Restoration Fund upon
completion of restoration shall be refunded to Tenant.  For purposes of determining the source of
funds with respect to the disposition of funds remaining after the completion
of restoration, the Net Award shall be deemed to be disbursed prior to any
amount added by Tenant.

 

(c)                                  If any sum remains in
the Restoration Fund after completion of the restoration and any refund to
Tenant pursuant to Paragraph 19(b), such sum shall be retained by Landlord
or, if required by a Note or Mortgage, paid by Landlord to a Lender.

 

20.                                 Procedures Upon Purchase.

 

(a)                                  If the Leased
Premises, any of the Related Premises or any of the Sale Premises are purchased
by Tenant pursuant to any provision of this Lease, Landlord need not convey any
better title thereto than that which was conveyed to Landlord, and Tenant or
its designee shall accept such title, subject, however, to the Permitted
Encumbrances and to all other liens, exceptions and restrictions on, against or
relating to any of the Leased Premises or the applicable Related Premises or
Sale Premises and to all applicable Laws, but free of the lien of and security
interest created by any Mortgage or Assignment and liens, exceptions and restrictions
on, against or relating to the Leased Premises or the applicable Related
Premises or Sale Premises which have been created by or resulted solely from
acts of Landlord after the date

 

25

 

of this Lease, unless the same are Permitted Encumbrances or customary
utility easements benefiting the Leased Premises or were created with the
concurrence of Tenant or as a result of a default by Tenant under this Lease.

 

(b)                                 Upon the date fixed
for any such purchase of the Leased Premises, any of the Related Premises or
any Sale Premises pursuant to any provision of this Lease (any such date the “Purchase
Date”), Tenant shall pay to Landlord, or to any Person to whom Landlord
directs payment, the Relevant Amount therefor specified herein, in Federal
Funds, less any credit of the Net Award received and retained by Landlord or a
Lender allowed against the Relevant Amount, and Landlord shall deliver to
Tenant (i) a special warranty deed which describes the premises being conveyed
and conveys the title thereto as provided in Paragraph 20(a), (ii) such
other instruments as shall be necessary to transfer to Tenant or its designee
any other property (or rights to any Net Award not yet received by Landlord or
a Lender) then required to be sold by Landlord to Tenant pursuant to this Lease
and (iii) any Net Award received by Landlord, not credited to Tenant
against the Relevant Amount; provided, that if any Monetary Obligations
accruing prior to the Purchase Date remain outstanding on such date, then
Landlord may deduct from the Net Award the amount of such Monetary
Obligations.  If on the Purchase Date any
Monetary Obligations accruing prior to the Purchase Date remain outstanding and
no Net Award is payable to Tenant by Landlord or the amount of such Net Award
is less than the amount of said Monetary Obligations, then Tenant shall pay to
Landlord on the Purchase Date the amount of such Monetary Obligations.  Upon the completion of such purchase, this
Lease and all obligations and liabilities of Tenant hereunder with respect to
the applicable Related Premises or Sale Premises, as the case may be (but not
with respect to the Remaining Premises), shall terminate, except any Surviving
Obligations.

 

(c)                                  If the completion of
such purchase shall be delayed after (i) the Termination Date, in the
event of a purchase pursuant to Paragraph 18 or, (ii) the date
scheduled for such purchase, in the event of a purchase under any other
provision of this Lease then (x) Rent shall continue to be due and payable
until completion of such purchase and (y) at Landlord’s sole option, Fair
Market Value shall be redetermined and the Relevant Amount payable by Tenant
pursuant to the applicable provision of this Lease shall be adjusted to reflect
such redetermination.

 

(d)                                 Any prepaid Monetary
Obligations, including Escrow Payments, paid to Landlord shall be prorated as
of the Purchase Date, and the prorated unapplied balance shall be deducted from
the Relevant Amount due to Landlord; provided, that no apportionment of any
Impositions shall be made upon any such purchase.

 

(e)                                  If Tenant at any time
or from time to time defaults in its obligation to purchase the Minnesota
Premises or any portion thereof pursuant to any provision of this Lease,
Landlord may at its option terminate Tenant’s right and obligation to purchase
the Minnesota Premises or any portion thereof by notice to Tenant pursuant to
Minnesota Statutes Section 559.21 or successor provision without
terminating this Lease or any of Tenant’s obligations hereunder, and if such
right is terminated, this Lease and all of its provisions shall remain in
effect as though the purchase right and obligation in question had never arisen
and without prejudice to Landlord’s right to require purchase at any time thereafter
under any applicable provision of this Lease.

 

26

 

21.                                 Assignment and Subletting;
Prohibition against Leasehold Financing.

 

(a)                                  Tenant shall not have
the right to assign this Lease or sublet any portion of the Leased Premises
except as otherwise expressly set forth in this Paragraph 21.

 

(b)                                 Tenant shall have the
right upon thirty (30) days prior written notice to Landlord and Lender, with
no consent of Landlord or Lender being required, to assign this Lease provided
that as a condition to any such assignment to any Person that is not a
Preapproved Assignee (as defined below) Tenant shall provide to Landlord the
Assignment Security Deposit no later than the date on which such assignment
shall become effective.

 

The term “Preapproved Assignee” shall mean
any Person (A) that is, and all times during the Term continues to be, a
wholly-owned subsidiary of Guarantor or (B) that immediately following such
assignment will have a publicly traded unsecured senior debt rating (“Required
Rating”) of “BBB” or better from Moody’s Investors Services, Inc. (“Moody’s”)
or a rating of “Baa” or better from Standard & Poor’s Corporation
(“S&P”) or in the event all of such rating agencies cease to furnish such
ratings, a comparable rating by any rating agency reasonably acceptable to
Landlord and Lender or (C) so long as such Person’s obligations under this
Lease are guaranteed by a Person that has, immediately following such
assignment, the Required Rating and such Person executes and delivers to
Landlord a guaranty substantially in the form of the Guaranty.

 

(c)                                  Tenant shall have the
right to sublease all or any portion of any Related Premises to any one or more
subtenants without the prior written consent of Landlord provided, however, if
Tenant desires to sublease all or any part of any Related Premises to any
Person that is not a Preapproved Assignee then, as a condition to each
sublease, Tenant shall provide to the Landlord, in the event that an Assignment
Security Deposit has not already been provided, a Sublet Security Deposit no
later than the date on which such sublease shall become effective.  In the event that more than one portion of
any Related Premises is subject to a sublease and a Sublet Security Deposit is
currently being held by Landlord for such Related Premises, no additional
Sublet Security Deposit shall be required.

 

(d)                                 If Tenant assigns all
its rights and interest under this Lease, the assignee under such assignment
shall expressly assume all the obligations of Tenant hereunder, actual or
contingent, including obligations of Tenant which may have arisen on or prior
to the date of such assignment, by a written instrument delivered to Landlord
at the time of such assignment. Each sublease of any of the Related Premises
shall be subject and subordinate to the provisions of this Lease.  Except in the case of an assignment to a
Person with a publicly traded unsecured senior debt rating of “AA” or better
from Moody’s or “Aa2” or better from S&P (either such rating, a “Release
Rating”), no assignment or sublease shall affect or reduce any of the
obligations of Tenant hereunder or the Guarantor under the Guaranty, and all
such obligations of the Tenant and Guarantor shall continue in full force and
effect as obligations of a principal and not as obligations of a guarantor, as
if no assignment or sublease had been made. 
In the event of an assignment to a Person meeting the Release Rating,
the Tenant shall be released from liability under the Lease and the Guarantor
shall be released from liability under the Guaranty.  No assignment or sublease shall impose any
additional obligations on Landlord under this Lease.

 

(e)                                  Tenant shall, within
ten (10) days after the execution and delivery of any assignment or sublease,
deliver a duplicate original copy thereof to Landlord which, in the event of an
assignment, shall be in recordable form.

 

27

 

(f)                                    As security for
performance of its obligations under this Lease, Tenant hereby grants, conveys
and assigns to Landlord all right, title and interest of Tenant in and to all
subleases now in existence or hereafter entered into for any or all of the
Leased Premises, any and all extensions, modifications and renewals thereof and
all rents, issues and profits therefrom. 
Landlord hereby grants to Tenant a license to collect and enjoy all
rents and other sums of money payable under any sublease of any of the Leased
Premises, provided, however, that Landlord shall have the absolute right at any
time upon notice to Tenant and any subtenants to
revoke said license and to collect such rents and sums of money and to retain
the same.  Tenant shall not accept any
rents under any sublease more than thirty (30) days in advance of the accrual
thereof.

 

(g)                                 Tenant shall have the
right to grant a first lien leasehold mortgage on, or to pledge its leasehold
interest in, the Leased Premises to its senior lender, but shall not have the
power to otherwise mortgage, pledge or otherwise encumber its interest under
this Lease or any sublease of the Leased Premises, and any other such mortgage,
pledge or encumbrance made in violation of this Paragraph 21 shall be
void. Any entity that becomes a successor tenant under this Paragraph 21(g)
shall be required to be in compliance with all of the terms of this Lease.

 

(h)                                 Landlord may sell or
transfer the Leased Premises at any time without Tenant’s consent to any third
party (each a “Third Party Purchaser”). 
In the event of any such transfer, Tenant shall attorn to any Third
Party Purchaser as Landlord so long as such Third Party Purchaser and Landlord
notify Tenant in writing of such transfer. 
At the request of Landlord, Tenant will execute such documents
confirming the agreement referred to above.

 

22.                                 Events of Default.

 

(a)                                  The occurrence of any
one or more of the following (after expiration of any applicable cure period as
provided in Paragraph 22(b)) shall, at the sole option of Landlord,  constitute an “Event
of Default” under this Lease:

 

(i)                                     (A)                              a failure by Tenant to
make any payment of Basic Rent, regardless of the reason for such failure; or

 

(B)                                a
failure by Tenant to make any payment of any Monetary Obligation other than
Basic Rent;

 

(ii)                                  a
failure by Tenant duly to perform and observe, or a violation or breach of, any
other provision hereof not otherwise specifically mentioned in this Paragraph
22(a);

 

(iii)                               any representation or
warranty made by Tenant herein or in any certificate, demand or request made
pursuant hereto proves to be incorrect, now or hereafter, in any material
respect;

 

(iv)                              Tenant shall (A)
voluntarily be adjudicated a bankrupt or insolvent, (B) seek or consent to the
appointment of a receiver or trustee for itself or for any of the Related
Premises, (C) file a petition seeking relief under the bankruptcy or other
similar laws of the United States, any state or any jurisdiction, (D) make a
general assignment for the benefit of creditors, or (E) be unable to pay its
debts as they mature;

 

28

 

(v)                                 a court shall enter an
order, judgment or decree appointing, without the consent of Tenant, a receiver
or trustee for it or for any of the Related Premises or approving a petition
filed against Tenant which seeks relief under the bankruptcy or other similar
laws of the United States, any state or any jurisdiction, and such order,
judgment or decree shall remain undischarged or unstayed sixty (60) days after
it is entered;

 

(vi)                              any
Related Premises shall have been vacated or abandoned;

 

(vii)                           Tenant shall be liquidated
or dissolved or shall begin proceedings towards its liquidation or dissolution;

 

(viii)                        the estate or interest of
Tenant in any of the Related Premises shall be levied upon or attached in any
proceeding and such estate or interest is about to be sold or transferred or
such process shall not be vacated or discharged within sixty (60) days after it
is made;

 

(ix)                                a failure by Tenant to
perform or observe, or a violation or breach of, or a misrepresentation by
Tenant under, any provision of any Assignment or any other document between
Tenant and Lender, if such failure, violation, breach or misrepresentation
gives rise to a default beyond any applicable cure period with respect to any
Loan;

 

(x)                                   an
Event of Default (as defined in the Guaranty) beyond any applicable cure period
shall occur under the Guaranty;

 

(xi)                                Tenant shall fail
provide to Landlord the Security Deposit if required pursuant to Paragraph 21
within the time period provided therein or to otherwise maintain the Security
Deposit as required under Paragraph 35; or

 

(xii)                             an Event of Default (as
that term is defined in the Contract for Private Redevelopment (the
“Redevelopment Contract”) by and between Champlin Economic Development
Authority (the “Authority”) and McLean Midwest Corporation (“McLean”) dated as
of May 23, 1994 as same has been amended by a First Amendment to Contract for
Private Redevelopment by and between the Authority and McLean dated as of July 14,
1994) beyond any applicable cure period shall occur under the Redevelopment
Contract.

 

(b)                                 No notice or cure
period shall be required in any one or more of the following events:  (A) the occurrence of an Event of
Default under clause (i)(A) or (i)(B) (except as otherwise set forth below),
(iv), (v), (vii), (viii), (ix), (x), (xi), (xii) of Paragraph 22(a) or
(B) the default is such that any delay in the exercise of a remedy by
Landlord could reasonably be expected to cause irreparable harm to
Landlord.  If the default consists of the
failure to pay any Basic Rent under clause (i)(A) of
Paragraph 22(a), the applicable cure period shall be three (3) days from the
date on which notice is given, but Landlord shall not be obligated to give
notice of, or allow any cure period for, any such default more than two times
within any consecutive twelve (12) month period.  If the default consists of the failure to pay
any Monetary Obligation under clause (i)(B) of
Paragraph 22(a), the applicable cure period shall be ten (10) days from the
date on which notice is given.  If the
default consists of a default under clause (ii) or (iii) of Paragraph 22(a),
other than the events specified in clause (B) of the first sentence of this
Paragraph 22(b), the applicable cure period shall be thirty (30) days from the
date on which notice is given or, if the default cannot be cured within such
thirty (30) day period and delay in the exercise of a

 

29

 

remedy would not (in Landlord’s reasonable judgment) cause any material
adverse harm to Landlord or any of the Leased Premises, the cure period shall
be extended for the period reasonably required to cure the default provided
that Tenant shall commence to cure the default within the said thirty day
period and shall actively, diligently and in good faith proceed with and
continue the curing of the default until it shall be fully cured.  If the default consists of a vacation under
clause (vi) of Paragraph 22(a), the applicable cure period shall be twelve (12)
months from the date of the default so long as Tenant actively, diligently and
in good faith proceeds and continues the curing of the default by seeking to
sublet the applicable Related Premises that has been vacated or abandoned.

 

23.                                 Remedies and Damages Upon Default.

 

(a)                                  If an Event of
Default shall have occurred and is continuing, Landlord shall have the right,
at its sole option, then or at any time thereafter during which the Event of
Default is continuing, to exercise its remedies and to collect damages from
Tenant in accordance with this Paragraph 23, subject in all events to
applicable Law, without demand upon or notice to Tenant except as otherwise
provided in Paragraph 22(b) and this Paragraph 23.

 

(i)                                     Landlord may give
Tenant notice of Landlord’s intention to terminate this Lease on a date
specified in such notice.  Upon such
date, this Lease, the estate hereby granted and all rights of Tenant hereunder
shall expire and terminate. Upon such termination, Tenant shall immediately
surrender and deliver possession of the Leased Premises to Landlord in accordance
with Paragraph 26.  If Tenant does
not so surrender and deliver possession of all of the Leased Premises, Landlord
may re-enter and repossess any of the Leased Premises not surrendered, with or
without legal process, by peaceably entering any of the Leased Premises and
changing locks or by summary proceedings, ejectment or any other lawful means
or procedure.  Upon or at any time after
taking possession of any of the Leased Premises, Landlord may, by peaceable means
or legal process, remove any Persons or property therefrom.  Landlord shall be under no liability for or
by reason of any such entry, repossession or removal.  Notwithstanding such entry or repossession,
Landlord may (A) exercise the remedy set forth in and collect the damages
permitted by Paragraph 23(a)(iii) or
(B) collect the damages set forth in Paragraph 23(b)(i) or 23(b)(ii).

 

(ii)                                  After repossession of
any of the Leased Premises pursuant to clause (i) above, Landlord shall have
the right to relet any of the Leased Premises to such tenant or tenants, for
such term or terms, for such rent, on such conditions and for such uses as
Landlord in its sole discretion may determine, and collect and receive any
rents payable by reason of such reletting. 
Landlord may make such Alterations in connection with such reletting as
it may deem advisable in its sole discretion. 
Notwithstanding any such reletting, Landlord may collect the damages set
forth in Paragraph 23(b)(ii).

 

(iii)                               Landlord may, upon
notice to Tenant, require Tenant to make an irrevocable offer to terminate this
Lease in its entirety for an amount (the “Default Termination Amount”)
specified in the next sentence.  The
“Default Termination Amount” shall be the greatest of (A) the sum of the
Fair Market Value of the Leased Premises and the applicable Prepayment Premium
which Landlord will be required to pay in prepaying any Loan with proceeds of
the Default Termination Amount or (B) the sum of the Acquisition Cost and
the applicable Prepayment Premium which Landlord will be required to pay in
prepaying any Loan with proceeds of the Default Termination Amount or
(C) an amount equal to the Present Value of the entire Basic Rent from the
date of such purchase to the date on which the then Term would

 

30

 

expire, including
any exercised Renewal Term.  Upon such
notice to Tenant, Tenant shall be deemed to have made such offer and shall, if
requested by Landlord, within ten (10) days following such request, deposit
with Landlord as payment against the Default Termination Amount the amount
described in (B) above, Landlord and Tenant shall promptly commence to
determine Fair Market Value.  Within
thirty (30) days after the Fair Market Value Date, Landlord shall accept or
reject such offer.  If Landlord accepts
such offer then, on the tenth (10th) business day after such acceptance, Tenant
shall pay to Landlord the Default Termination Amount and, at the request of
Tenant, Landlord will convey the Leased Premises to Tenant or its designee in
accordance with Paragraph 20.  Any
rejection by Landlord of such offer shall have no effect on any other remedy
Landlord may have under this Lease.

 

(iv)                              Landlord
may declare by notice to Tenant the entire Basic Rent (in the amount of Basic
Rent then in effect) for the remainder of the then current Term to be
immediately due and payable.  Tenant
shall immediately pay to Landlord all such Basic Rent discounted to its Present
Value, all accrued Rent then due and unpaid, all other Monetary Obligations
which are then due and unpaid and all Monetary Obligations which arise or
become due by reason of such Event of Default (including any Costs of
Landlord).  Upon receipt by Landlord of
all such accelerated Basic Rent and Monetary Obligations, this Lease shall
remain in full force and effect and Tenant shall have the right to possession
of the Leased Premises from the date of such receipt by Landlord to the end of
the Term, and subject to all the provisions of this Lease, including the
obligation to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that (A) no Basic Rent which has been prepaid
hereunder shall be due thereafter during the said Term, and (B) Tenant shall
have no option to extend or renew the Term.

 

(b)                                 The following constitute
damages to which Landlord shall be entitled if Landlord exercises its remedies
under Paragraph 23(a)(i) or 23(a)(ii):

 

(i)                                     If Landlord
exercises its remedy under Paragraph 23(a)(i) but not its remedy under
Paragraph 23(a)(ii) (or attempts to exercise such remedy and is
unsuccessful in reletting the Leased Premises) then, upon written demand from
Landlord, Tenant shall pay to Landlord, as liquidated and agreed final damages
for Tenant’s default and in lieu of all current damages beyond the date of such
demand (it being agreed that it would be impracticable or extremely difficult
to fix the actual damages), an amount equal to the Present Value of the excess,
if any, of (A) all Basic Rent from the date of such demand to the date on
which the Term is scheduled to expire hereunder in the absence of any earlier
termination, re-entry or repossession over (B) the then fair market rental
value of the Leased Premises for the same period.  Tenant shall also pay to Landlord all of
Landlord’s Costs in connection with the repossession of the Leased Premises and
any attempted reletting thereof, including all brokerage commissions, legal
expenses, reasonable attorneys’ fees, employees’ expenses, costs of Alterations
and expenses and preparation for reletting.

 

(ii)                                  If Landlord exercises
its remedy under Paragraph 23(a)(i) or its remedies under
Paragraph 23(a)(i) and 23(a)(ii), then Tenant shall, until the end of what
would have been the Term in the absence of the termination of the Lease, and
whether or not any of the Leased Premises shall have been relet, be liable to
Landlord for, and shall pay to Landlord, as liquidated and agreed current
damages all Monetary Obligations which would be payable under this Lease by
Tenant in the absence of such termination less the net proceeds,  if any, of any reletting pursuant to
Paragraph 23(a)(ii), after deducting from such proceeds all of Landlord’s
Costs (including the items listed in the last sentence of Paragraph 23(b)(i)
hereof) incurred in

 

31

 

 

connection with such repossessing and reletting; provided, that if
Landlord has not relet the Leased Premises, such Costs of Landlord shall be
considered to be Monetary Obligations payable by Tenant.  Tenant shall be and remain liable for all
sums aforesaid, and Landlord may recover such damages from Tenant and institute
and maintain successive actions or legal proceedings against Tenant for the
recovery of such damages.  Nothing herein
contained shall be deemed to require Landlord to wait to begin such action or
other legal proceedings until the date when the Term would have expired by its
own terms had there been no such Event of Default.

 

(c)                                  Notwithstanding
anything to the contrary herein contained, in lieu of or in addition to any of
the foregoing remedies and damages, Landlord may exercise any remedies and
collect any damages available to it at law or in equity.  If Landlord is unable to obtain full
satisfaction pursuant to the exercise of any remedy, it may pursue any other
remedy which it has hereunder or at law or in equity.

 

(d)                                 Landlord shall not be
required to mitigate any of its damages hereunder unless required to by
applicable Law.  If any Law shall validly
limit the amount of any damages provided for herein to an amount which is less
than the amount agreed to herein, Landlord shall be entitled to the maximum
amount available under such Law.

 

(e)                                  No termination of
this Lease, repossession or reletting of any of the Leased Premises, exercise
of any remedy or collection of any damages pursuant to this Paragraph 23
shall relieve Tenant of any Surviving Obligations.

 

(f)                                    WITH RESPECT TO ANY
REMEDY OR PROCEEDING OF LANDLORD OR TENANT HEREUNDER, LANDLORD AND TENANT HEREBY WAIVE THE SERVICE OF NOTICE WHICH MAY BE
REQUIRED BY ANY APPLICABLE LAW AND ANY RIGHT TO A TRIAL BY JURY.

 

(g)                                 Upon the occurrence of
any Event of Default, Landlord shall have the right (but no obligation) to
perform any act required of Tenant hereunder and, if performance of such act
requires that Landlord enter the Leased Premises, Landlord may enter the Leased
Premises for such purpose.

 

(h)                                 No failure of Landlord
(i) to insist at any time upon the strict performance of any provision of this
Lease or (ii) to exercise any option, right, power or remedy contained in this
Lease shall be construed as a waiver, modification or relinquishment
thereof.  A receipt by Landlord of any
sum in satisfaction of any Monetary Obligation with knowledge of the breach of
any provision hereof shall not be deemed a waiver of such breach, and no waiver
by Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.

 

(i)                                     Tenant hereby
waives and surrenders, for itself and all those claiming under it, including
creditors of all kinds, (i) any right and privilege which it or any of them may
have under any present or future Law to redeem any of the Leased Premises or to
have a continuance of this Lease after termination of this Lease or of Tenant’s
right of occupancy or possession pursuant to any court order or any provision
hereof, and (ii) the benefits of any present or future Law which exempts
property from liability for debt or for distress for rent.

 

(j)                                     Except as
otherwise provided herein, all remedies are cumulative and concurrent and no
remedy is exclusive of any other remedy. 
Each remedy may be exercised

 

32

 

at any time an
Event of Default has occurred and is continuing and may be exercised from time
to time.  No remedy shall be exhausted by
any exercise thereof.

 

24.                                 Notices.  All notices, demands, requests, consents,
approvals, offers, statements and other instruments or communications required
or permitted to be given pursuant to the provisions of this Lease shall be in
writing and shall be deemed to have been given and received for all purposes
when delivered in person or by Federal Express or other reliable 24-hour
delivery service or five (5) business days after being deposited in the United
States mail, by registered or certified mail, return receipt requested, postage
prepaid, addressed to the other party at its address stated above or when
delivery is refused.  A copy of any
notice given by Tenant to Landlord shall simultaneously be given by Tenant to
Reed Smith Shaw & McClay LLP, One Liberty Place, Philadelphia, PA 19103, Attention:  Chairman,
Real Estate Department.    A copy of any
notice given by Landlord to Tenant shall simultaneously be given by Landlord to
Quarles & Brady LLP, 411 E. Wisconsin Avenue, Milwaukee, WI 53202
Attn:  Anthony W. Asmuth, III, Esq.  For the purposes of this Paragraph, any party
may substitute another address stated above (or substituted by a previous
notice) for its address by giving fifteen (15) days’ notice of the new address
to the other party, in the manner provided above.

 

25.                                 Estoppel Certificate.  At any time upon not less than ten (10) days’
prior written request by either Landlord or Tenant (the “Requesting Party”)
to the other party (the “Responding Party”), the Responding Party shall
deliver to the Requesting Party a statement in writing, executed by an
authorized officer of the Responding Party, certifying (a) that, except as
otherwise specified, this Lease is unmodified and in full force and effect, (b)
the dates to which Basic Rent, Additional Rent and all other Monetary
Obligations have been paid, (c) that, to the knowledge of the signer of such
certificate and except as otherwise specified, no default by either Landlord or
Tenant exists hereunder, (d) such other matters as the Requesting Party may
reasonably request, and (e) if Tenant is the Responding Party that, except as
otherwise specified, there are no proceedings pending or, to the knowledge of
the signer, threatened, against Tenant before or by an court or administrative
agency which, if adversely decided, would materially and adversely affect the
financial condition and operations of Tenant. 
Any such statements by the Responding Party may be relied upon by the
Requesting Party, any Person whom the Requesting Party notifies the Responding
Party in its request for the Certificate is an intended recipient or
beneficiary of the Certificate, any Lender or their assignees, by any
prospective purchaser or mortgagee of any of the Leased Premises and by an
assignee of Tenant’s interest in this Lease or any sublessee.

 

26.                                 Surrender. 
Upon the expiration or earlier termination of this Lease, Tenant shall
peaceably leave and surrender the Leased Premises to Landlord in the same
condition in which the Leased Premises was at the commencement of this Lease,
except as repaired, rebuilt, restored, altered, replaced or added to as
permitted or required by any provision of this Lease, and except for ordinary
wear and tear.  Upon such surrender,
Tenant shall (a) remove from the Leased Premises all property which is owned by
Tenant or third parties other than Landlord and (b) repair any damage caused by
such removal.  Property not so removed
shall become the property of Landlord, and Landlord may thereafter cause such
property to be removed from the Leased Premises.  The reasonable cost of removing and disposing
of such property and repairing any damage to any of the Leased Premises caused
by such removal shall be paid by Tenant to Landlord upon demand.  Landlord shall not in any manner or to any extent
be obligated to reimburse Tenant for any such property which becomes the
property of Landlord pursuant to this Paragraph 26.

 

33

 

27.                                 No Merger of Title.  There shall be no merger of the leasehold
estate created by this Lease with the fee estate in any of the Leased Premises
by reason of the fact that the same Person may acquire or hold or own, directly
or indirectly, (a) the leasehold estate created hereby or any part thereof
or interest therein and (b) the fee estate in any of the Leased Premises
or any part thereof or interest therein, unless and until all Persons having
any interest in the interests described in (a) and (b) above which are sought
to be merged shall join in a written instrument effecting such merger and shall
duly record the same.

 

28.                                 Books and Records.

 

(a)                                  Tenant shall keep
adequate records and books of account with respect to the finances and business
of Guarantor generally and with respect to the Leased Premises, in accordance
with generally accepted accounting principles (“GAAP”)  consistently applied, and shall permit
Landlord and Lender by their respective agents, accountants and attorneys, upon
reasonable notice to Tenant, to visit and inspect the Leased Premises and
examine (and make copies of) the records and books of account and to discuss
the finances and business with the officers of Tenant, at such reasonable times
as may be requested by Landlord.  Upon
the request of Lender or Landlord (either telephonically or in writing), Tenant
shall provide the requesting party with copies of any information to which such
party would be entitled in the course of a personal visit.

 

(b)                                 Tenant shall deliver
to Landlord and to Lender within ninety (90) days of the close of each fiscal
year, annual audited financial statements of Guarantor prepared by nationally
recognized independent certified public accountants.  Tenant shall also furnish to Landlord within
sixty (60) days after the end of each of the three remaining quarters unaudited
financial statements and all other quarterly reports of Guarantor, certified by
Guarantor’s chief financial officer, and all filings, if any, of Form 10-K,
Form 10-Q and other required filings with the Securities and Exchange
Commission pursuant to the provisions of the Securities Exchange Act of 1934,
as amended, or any other Law.  All
financial statements of Guarantor shall be prepared in accordance with GAAP
consistently applied.  All annual
financial statements shall be accompanied (i) by an opinion of said
accountants stating that (A) there are no qualifications as to the scope
of the audit and (B) the audit was performed in accordance with GAAP and
(ii) by the affidavits of an officer of Tenant, dated within five (5) days
of the delivery of such statement, stating that (C) the affiant knows of
no Event of Default, or event which, upon notice or the passage of time or
both, would become an Event of Default which has occurred and is continuing
hereunder or, if any such event has occurred and is continuing, specifying the
nature and period of existence thereof and what action Tenant has taken or
proposes to take with respect thereto and (D) except as otherwise
specified in such affidavit, that Tenant has fulfilled all of its obligations
under this Lease which are required to be fulfilled on or prior to the date of
such affidavit.

 

29.                                 Determination of Value.

 

(a)                                  Whenever a
determination of Fair Market Value is required pursuant to any provision of
this Lease, such Fair Market Value shall be determined in accordance with the
following procedure:

 

(i)                                     Landlord and
Tenant shall endeavor to agree upon such Fair Market Value within thirty (30)
days after the date (the “Applicable Initial Date”) on which (A) Tenant
provides Landlord with notice of its intention to terminate this Lease and
purchase the

 

34

 

Affected Premises pursuant to Paragraph 18, (B) Landlord provides
Tenant with notice of its intention to redetermine Fair Market Value pursuant
to Paragraph 20(c), (C) Landlord provides Tenant with notice of
Landlord’s intention to require Tenant to make an offer to purchase the Leased
Premises pursuant to Paragraph 23(a)(iii) or (D)
Landlord receives an Option Exercise Notice. 
Upon reaching such agreement, the parties shall execute an agreement
setting forth the amount of such Fair Market Value.

 

(ii)                                  If the parties shall
not have signed such agreement within thirty (30) days after the Applicable
Initial Date, Tenant shall within fifty (50) days after the Applicable Initial
Date select an appraiser and notify Landlord in
writing of the name, address and qualifications of such appraiser.  Within twenty (20) days following Landlord’s
receipt of Tenant’s notice of the appraiser selected by Tenant, Landlord shall
select an appraiser and notify Tenant of the name, address and qualifications
of such appraiser.  Such two appraisers
shall endeavor to agree upon Fair Market Value based on a written appraisal
made by each of them as of the Relevant Date (and given to Landlord by Tenant).  If such two appraisers shall agree upon a
Fair Market Value, the amount of such Fair Market Value as so agreed shall be
binding and conclusive upon Landlord and Tenant.

 

(iii)                               If such two appraisers
shall be unable to agree upon a Fair Market Value within twenty (20) days after
the selection of an appraiser by Landlord, then such appraisers shall advise
Landlord and Tenant of their respective determination of Fair Market Value and
shall select a third appraiser to make the determination of Fair Market
Value.  The selection of the third
appraiser shall be binding and conclusive upon Landlord and Tenant.

 

(iv)                              If such two appraisers
shall be unable to agree upon the designation of a third appraiser within ten
(10) days after the expiration of the twenty (20) day period referred to in
clause (iii) above, or if such third appraiser does not make a determination of
Fair Market Value within twenty (20) days after his selection, then such third
appraiser or a substituted third appraiser, as applicable, shall, at the
request of either party hereto (with respect to the other party), be appointed
by the President or Chairman of the American Arbitration Association in New
York, New York.  The determination of
Fair Market Value made by the third appraiser appointed pursuant hereto shall
be made within twenty (20) days after such appointment.

 

(v)                                 If a third appraiser
is selected, Fair Market Value shall be the average of the determination of
Fair Market Value made by the third appraiser and the determination of Fair
Market Value made by the appraiser (selected pursuant to Paragraph 29(a)(ii)
hereof) whose determination of Fair Market Value is nearest to that of the
third appraiser.  Such average shall be
binding and conclusive upon Landlord and Tenant.

 

(vi)                              All appraisers selected
or appointed pursuant to this Paragraph 29(a) shall (A) be independent
qualified MAI appraisers (B) have no right, power or authority to alter or
modify the provisions of this Lease, (C) utilize the definition of Fair
Market Value hereinabove set forth above, and (D) be registered in the State if
the State provides for or requires such registration.

 

(vii)                           The Cost of the procedure
described in this Paragraph 29(a) above shall be paid by Tenant.

 

35

 

 

(b)                                 If, by virtue of any
delay, Fair Market Value is not determined by the expiration or termination of
the then current Term, then the date on which the Term would otherwise expire
or terminate shall be extended with respect to the Leased Premises or the
Affected Premises, as applicable, to the date specified for termination in the
particular provision of this Lease pursuant to which the determination of Fair
Market Value is being made.

 

(c)                                  In determining Fair
Market Value as defined in clause (b) of the definition of Fair Market Value,
the appraisers shall add (a) the present value the Rent of the remaining Term,
assuming the Term including any exercised Renewal Term (with assumed increases
in the CPI to be determined by the appraisers) using a discount rate (which may
be determined by an investment banker retained by each appraiser) based on the
creditworthiness of Tenant and Guarantor and (b) the present
value of the Leased Premises, Sale Premises or Affected Premises, as
applicable, as of the end of such Term including any exercised Renewal
Term.  The appraisers shall further
assume that no default then exists under the Lease, that Tenant has complied
(and will comply) with all provisions of the Lease, and that Guarantor has
complied (and will comply) with all of the provisions of the Guaranty.

 

30.                                 Non-Recourse as to Landlord.

 

Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (a) Landlord,
(b) any director, member, officer, general partner, limited partner,
employee or agent of Landlord, or any general partner of Landlord, any of its
general partners or shareholders (or any legal representative, heir, estate,
successor or assign of any thereof), (c) any predecessor or successor
partnership or corporation (or other entity) of Landlord, or any of its general
partners, either directly or through Landlord or its general partners or any
predecessor or successor partnership or corporation or their shareholders,
officers, directors, employees or agents (or other entity), or (d) any
other Person (including Carey Property Advisors, Carey Fiduciary Advisors,
Inc., W. P. Carey & Co., Inc., Carey Management LLC, Carey Diversified LLC
and any Person affiliated with any of the foregoing, or any director, officer,
employee or agent of any thereof).

 

31.                                 Financing.

 

(a)                                  Tenant agrees to pay
all costs and expenses incurred by Landlord in connection with the purchase,
leasing and initial financing of the Leased Premises including, without
limitation, the cost of appraisals, environmental reports, title insurance,
surveys, legal fees and expenses and Lender’s commitment fee, except that
Tenant’s obligation to pay Landlord’s legal fees and expenses and costs
associated with the initial Loan shall be limited to $185,000 in the aggregate
relating to this Lease and that certain Lease Agreement by and between Power
(DE) QRS 14-35, Inc. and Tenant for property situate in North Salt Lake City,
Utah.

 

(b)                                 If Landlord desires to
obtain or refinance any Loan, Tenant shall agree, upon request of Landlord, to
supply any such Lender with such notices and information as Tenant is required
to give to Landlord hereunder and to extend the rights of Landlord hereunder to
any such Lender and to consent to such financing if such consent is requested
by such Lender.  Tenant shall provide any
other consent or statement and shall execute any and all other documents that
such Lender requires in connection with such financing, including any
subordination, non-disturbance and attornment agreement, so long as the same do
not adversely 

 

36

 

affect any right,
benefit or privilege of Tenant under this Lease in any material respect or
increase Tenant’s obligations under this Lease in any material respect.  Such subordination, non-disturbance and
attornment agreement may require Tenant to confirm that (a) Lender and its
assigns will not be liable for any misrepresentation, act or omission of
Landlord and (b) Lender and its assigns will not be subject to any
counterclaim, demand or offsets which Tenant may have against Landlord.

 

32.                                 Subordination, Non-Disturbance and
Attornment.  This Lease and
Tenant’s interest hereunder shall be subordinate to any Mortgage or other
security instrument hereafter placed upon the Leased Premises by Landlord, and
to any and all advances made or to be made thereunder, to the interest thereon,
and all renewals, replacements and extensions thereof, provided that any such
Mortgage or other security instrument (or a separate instrument in recordable
form duly executed by the holder of any such Mortgage or other security
instrument and delivered to Tenant) shall provide for the recognition of this
Lease and all Tenant’s rights hereunder (including the right to purchase one or
more Sale Premises) unless and until an Event of Default exists or Landlord
shall have the right to terminate this Lease pursuant to any applicable
provision hereof.

 

33.                                 Tax Treatment; Reporting.  Landlord and Tenant each acknowledge that
each shall treat this transaction as a true lease for state law purposes and
shall report this transaction as a Lease for Federal income tax purposes.  For Federal income tax purposes each shall
report this Lease as a true lease with Landlord as the owner of the Leased
Premises and Equipment and Tenant as the lessee of such Leased Premises and Equipment
including:  (1) treating Landlord as the
owner of the property eligible to claim depreciation deductions under Section 167
or 168 of the Internal Revenue Code of 1986 (the “Code”) with respect to
the Leased Premises and Equipment, (2) Tenant reporting its Rent payments as
rent expense under Section 162 of the Code, and (3) Landlord reporting the
Rent payments as rental income.

 

34.                                 Option to Purchase.

 

(a)                                  Landlord does hereby
give and grant to Tenant the option (the “Option”) to purchase the
Leased Premises or any one or more of the Related Premises (any such Related
Premises, the “Sale Premises”) (i) for a purchase price (the “Purchase
Price”) equal to the Offer Amount and (ii) from time to time on any date
(the “Option Purchase Date”) (A) within the thirty (30) day period prior
to June 1, 2010 (the “First Option”) or, (B) if the First Option is
not exercised with respect to all of the Leased Premises, within the thirty
(30) day period prior to June 1, 2013, June 1, 2014, June 1,
2015, June 1, 2016, and/or June 1, 2017 (each, a “Remaining Option”),
in any case if and only if this Lease is then in full force and effect and with
respect to the exercise of any Remaining Option only if Tenant provides to
Landlord such documentation as Landlord shall reasonably require to evidence
the exercise of the Automatic Renewal. Any Option Purchase Date shall be
mutually agreeable to Landlord and Tenant. 
If Tenant intends to exercise either the First Option or any Remaining
Option, Tenant shall give written notice (“Option Exercise Notice”) to
Landlord that it is making an irrevocable exercise not later than six (6)
months prior to the applicable Option Purchase Date.  Promptly upon receipt of the Option Exercise
Notice by Landlord (which shall identify the Sale Premises or Leased Premises
to be purchased), the parties shall commence to determine Fair Market Value of
the Leased Premises or Sale Premises, as applicable.

 

(b)                                 If Tenant shall
exercise the Option to purchase the Leased Premises or Sale Premises, then, if
on the applicable Option Purchase Date Tenant has paid the

 

37

 

Purchase Price and has satisfied all other Monetary Obligations that
have accrued prior to the Option Purchase Date, Landlord shall convey title to
the Leased Premises or the Sale Premises, as applicable, to Tenant in
accordance with Paragraph 20 hereof; provided that if an Event of Default has
occurred and is continuing on the Option Purchase Date, Landlord, at its sole
option, may terminate the First Option and, if applicable, the Remaining
Options.  IF THIS LEASE SHALL TERMINATE
FOR ANY REASON PRIOR TO THE DATE ORIGINALLY FIXED HEREIN FOR THE EXPIRATION OF
THE TERM, OR IF TENANT SHALL FAIL TO GIVE THE AFORESAID OPTION EXERCISE NOTICE
WITH RESPECT TO THE FIRST OPTION AND, IF APPLICABLE, THE REMAINING OPTIONS BY
THE REQUIRED DATE, TIME BEING OF THE ESSENCE, THE FIRST OPTION OR, IF
APPLICABLE, THE REMAINING OPTIONS PROVIDED IN THIS PARAGRAPH 34 AND ANY
EXERCISE THEREOF BY TENANT SHALL CEASE AND TERMINATE AND SHALL BE NULL AND
VOID.  IN SUCH EVENT TENANT SHALL EXECUTE
A QUITCLAIM DEED AND SUCH OTHER DOCUMENTS AS LANDLORD SHALL REASONABLY REQUEST
EVIDENCING THE TERMINATION OF THE FIRST OPTION AND, IF APPLICABLE, THE
REMAINING OPTION.

 

(c)                                  If Tenant shall
purchase less than all of the Leased Premises, this Lease shall remain in full
force and effect with respect to the Remaining Premises; provided that the
Basic Rent for the Remaining Premises to be paid after termination of this
Lease with respect to the Sale Premises shall be the Basic Rent otherwise
payable with respect to the Leased Premises multiplied by a percentage equal to
the sum of the percentages for each of the Remaining Premises set forth on
Exhibit “F” attached hereto.

 

35.                                 Security Deposit.

 

(a)                                  In the event that the
Tenant is required to post a Security Deposit under Paragraph 21(b) or
Paragraph 21(c) hereof the following shall apply:

 

(i)                                     Each time that the
Tenant is required to post a Security Deposit under Paragraph 21(b) hereof,
Tenant shall deliver to Landlord either (A) an Assignment Letter of Credit or
(B) an Assignment Cash Security Deposit

 

(ii)                                  If there has not
already been deposited an Assignment Security Deposit, each time that the
Tenant is required to post a Security Deposit under Paragraph 21(c) hereof,
Tenant shall deliver to Landlord either (A) a Sublet Letter of Credit or (B) a
Sublet Cash Security Deposit.

 

(b)                                 The Security Deposit
shall be security for the payment by Tenant of the Rent and all other charges
or payments to be paid hereunder and the performance of the covenants and
obligations contained herein.  If a
Security Deposit is in the form of a Letter of Credit, such Letter of Credit
shall be renewed at least thirty (30) days prior to any expiration thereof.  If Tenant fails to renew any Letter of Credit
by such date, TIME BEING OF THE ESSENCE, Landlord shall have the right at any
time after the thirtieth (30th) day before such expiration date to draw on each
Letter of Credit and to deposit the LC Proceeds in any account for the benefit
of Landlord or to declare an Event of Default. 
Any Cash Security Deposit or the LC Proceeds shall not be commingled
with other funds of Landlord or other Persons and shall be held in an interest
bearing account.

 

38

 

(c)                                  If at any time an
Event of Default shall have occurred and be continuing, Landlord shall be
entitled, at its sole discretion, to draw on each Letter of Credit or to
withdraw the LC Proceeds or Cash Security Deposit, as the case may be, from the
above-described account and to apply the proceeds in payment of (i) any
Rent or other charges for the payment of which Tenant shall be in default, (ii)
any expense incurred by Landlord in curing any default of Tenant, and/or
(iii) any other sums due to Landlord in connection with any default or the
curing thereof, including, without limitation, any damages incurred by Landlord
by reason of such default, including any rights of Landlord under Paragraph 23
or to do any combination of the foregoing, all in such order or priority as
Landlord shall so determine in its sole discretion and Tenant acknowledges and
agrees that such proceeds shall not constitute assets or funds of Tenant or its
estate, or be deemed to be held in trust for Tenant, but shall be, for all
purposes, the property of Landlord (or Lender, to the extent assigned).  Tenant further acknowledges and agrees that
(1) Landlord’s application of the proceeds of the Security Deposit towards the
payment of Basic Rent, Additional Rent or the reduction of any damages due Landlord
in accordance with Paragraph 23 of this Lease, constitutes a fair and
reasonable use of such proceeds, and (2) the application of such proceeds by
Landlord towards the payment of Basic Rent, Additional Rent or any other sums
due under this Lease shall not constitute a cure by Tenant of the applicable
default, provided that an Event of Default shall not exist if Tenant restores
the Security Deposit to its full amount within five (5) days following its
application and in accordance with the requirements of this Paragraph 35, so
that the original amount of the Security Deposit shall be again on deposit with
Landlord.

 

(d)                                 At the expiration of
the Term and so long as no Event of Default
exists the Security Deposit shall be returned to Tenant.  In addition, so long as no Event of Default
exists, upon the expiration or the termination of any sublease that caused the
deposit of a Sublet Security Deposit, the amount of the Sublet Security Deposit
(along with any interest earned thereon) deposited for such sublease, shall be
returned to Tenant unless such Sublet Security Deposit has been applied to and
constitutes a part of the Assignment Security Deposit.

 

(e)                                  Landlord shall have
the right to designate Lender or any other holder of a Mortgage as the
beneficiary of the Letter of Credit or holder of the Cash Security Deposit or
LC Proceeds, as the case may be, during the term of the applicable Loan shall
have all of the rights of Landlord under this Paragraph 35.  Tenant covenants and agrees to execute such
agreements, consents and acknowledgments as may be requested by Landlord from
time to time to change the holder of the Security Deposit as hereinabove
provided.

 

(f)                                    For the purposes of
this Paragraph 35, the following definitions shall apply:

 

“Assignment Letter of Credit” shall mean an
irrevocable letter of credit issued by a bank acceptable to Landlord and in
form and substance satisfactory to Landlord in an amount equal to six months of
the Basic Rent at the time such letter of credit is issued or if at the time an
Assignment Letter of Credit is posted Landlord is holding a Sublet Letter of
Credit, then in an amount equal to the positive difference between six (6)
months of such Basic Rent and the amount of the Sublet Letter of Credit.

 

“Assignment Security Deposit” shall mean the
Assignment Letter of Credit or the Assignment Cash Security Deposit, as
applicable.

 

39

 

“Assignment Cash Security Deposit” shall mean
cash in immediately available funds equal to six months of the Basic Rent at
the time such cash is deposited with Landlord or if at the time an Assignment
Cash Security Deposit is posted Landlord is holding a Sublet Cash Security
Deposit, then in an amount equal to the positive difference between six (6) months
of such Basic Rent and the amount of the Sublet Cash Security Deposit.

 

“Cash Security Deposit” shall mean the
Assignment Cash Security Deposit or each Sublet Cash Security Deposit, as
applicable.

 

“LC Proceeds” shall mean the proceeds of any
draw of any Letter of Credit by the Landlord or Lender.

 

“Letter of Credit” shall mean collectively
the Assignment Letter of Credit or each Sublet Letter of Credit, as applicable.

 

“Security Deposit” shall mean each Sublet
Security Deposit or the Assignment Security Deposit.

 

“Sublet Letter of Credit” shall mean an
irrevocable letter of credit issued by a bank acceptable to Landlord and in
form and substance satisfactory to Landlord in an amount equal to six (6)
months of the Basic Rent at the time such letter of credit is issued allocated
to the Related Premises being sublet pursuant to Exhibit “F”.

 

“Sublet Cash Security Deposit” shall mean
cash in immediately available funds equal to six (6) months of the Basic Rent
at the time the cash is deposited with the Landlord allocated the Related
Premises being sublet pursuant to Exhibit “F”.

 

“Sublet Security Deposit” shall mean
collectively, the Sublet Letter of Credit and each Sublet Cash Security
Deposit.

 

36.                                 Miscellaneous.

 

(a)                                  The paragraph
headings in this Lease are used only for convenience in finding the subject
matters and are not part of this Lease or to be used in determining the intent
of the parties or otherwise interpreting this Lease.

 

(b)                                 As used in this Lease,
the singular shall include the plural and any gender shall include all genders
as the context requires and the following words and phrases shall have the
following meanings: (i) “including” shall mean “including without limitation”;
(ii) “provisions” shall mean “provisions, terms, agreements, covenants and/or
conditions”; (iii) “lien” shall mean “lien, charge, encumbrance, title
retention agreement, pledge, security interest, mortgage and/or deed of trust”;
(iv) “obligation” shall mean “obligation, duty, agreement, liability, covenant
and/or condition”; (v) “any of the Leased Premises” shall mean “the Leased
Premises or any part thereof or interest therein”; (vi) “any of the Land” shall
mean “the Land or any part thereof or interest therein”; (vii) “any of the
Improvements” shall mean “the Improvements or any part thereof or interest
therein”; (viii) “any of the Equipment” shall mean “the Equipment or any part
thereof or interest therein”; and (ix) “any of the Adjoining Property” shall
mean “the Adjoining Property or any part thereof or interest therein”.

 

40

 

(c)                                  Any act which
Landlord is permitted to perform under this Lease may be performed at any time
and from time to time by Landlord or any person or entity designated by
Landlord.  Landlord shall not
unreasonably withhold or delay its consent whenever such consent is required
under this Lease.  Time is of the essence
with respect to the performance by Tenant of its obligations under this Lease.

 

(d)                                 Landlord shall in no
event be construed for any purpose to be a partner, joint venturer or associate
of Tenant or of any subtenant, operator, concessionaire or licensee of Tenant
with respect to any of the Leased Premises or otherwise in the conduct of their
respective businesses.

 

(e)                                  This Lease and any documents
which may be executed by Tenant on or about the effective date hereof at
Landlord’s request constitute the entire agreement between the parties and
supersede all prior understandings and agreements, whether written or oral,
between the parties hereto relating to the Leased Premises and the transactions
provided for herein.  Landlord and Tenant
are business entities having substantial experience with the subject matter of
this Lease and have each fully participated in the negotiation and drafting of
this Lease. Accordingly, this Lease shall be construed without regard to the
rule that ambiguities in a document are to be construed against the drafter.

 

(f)                                    This Lease may be
modified, amended, discharged or waived only by an agreement in writing signed
by the party against whom enforcement of any such modification, amendment,
discharge or waiver is sought.

 

(g)                                 The covenants of this
Lease shall run with the land and bind the parties hereto and their respective
successors and assigns and all present and subsequent encumbrancers and
subtenants of any of the Leased Premises, and shall inure to the benefit of the
parties hereto and their respective successors and assigns.  If there is more than one Tenant, the
obligations of each shall be joint and several.

 

(h)                                 Notwithstanding any
provision in this Lease to the contrary, all Surviving Obligations of Tenant
shall survive the expiration or termination of this Lease with respect to any
Related Premises.

 

(i)                                     If any one or more
of the provisions contained in this Lease shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Lease, but
this Lease shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

(j)                                     All exhibits
attached hereto are incorporated herein as if fully set forth.

 

(k)                                  This Lease shall be
governed by and construed and enforced in accordance with the Laws of the
State.

 

(l)                                     Deed
Of Lease/Landlord’s Agent for Service of Process.  As to the Virginia Premises only, for
purposes of Section 55-2, Code of Virginia (1950), as amended, this Lease
is and shall be deemed to be a deed of lease. 
For purposes of Section 55-218.1, Code of

 

41

 

Virginia (1950), as amended, Landlord’s resident agent for service of
process is:  Reed Smith Hazel &
Thomas LLP, 3110 Fairview Park Drive, Suite 1400, Falls Church, VA 22042.

 

42

 

IN WITNESS WHEREOF, Landlord and Tenant have
caused this Lease to be duly executed under seal as of the day and year first
above written.

 

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  POWER (DE) QRS 14-34, INC.,

  
	
   

  	
   

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward La Puma

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  APW NORTH AMERICA INC.,

  
	
   

  	
   

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard D. Carroll

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Treasurer

  
					

 

[Signature page of Deed of
Lease Agreement - MN, IN, NJ & VA]

 

43

 

EXHIBIT A

 

 

PREMISES

 

EXHIBIT A

 

Parcel containing 14.771 acres as shown on plat entitled “Plat of
Survey of 14.771 acres to be acquired by Aspen Motion Technologies, Inc., from
the City of Radford Industrial Development Authority,” dated November 11, 1998,
and revised November 25, 1998 and January 5, 1999, made by Anderson and
Associates, Inc., 
Engineers-Surveyors-Planners, of record in the Clerk’s Office of
the Circuit Court of the City of Radford, Virginia, in Plat Book 4, Page 76.

 

 

TRACT I

 

That part of the West Half of
the Northwest Quarter of Section 21, Township 28 North, Range
4 West in Monon Township, White County, Indiana, described by:

 

COMMENCING at the Northwest
corner of the above said Section 21;

 

THENCE South 86 degrees 27
minutes East along the Section line 253.5 feet;

 

THENCE South 02 degrees 42
minutes West 331.2 feet to the Point of Beginning;

 

THENCE South 85 degrees 47
minutes East 341.85 feet;

 

THENCE South 02 degrees 30
minutes West 315.53 feet;

 

THENCE South 85 degrees 54
minutes East 438.48 feet;

 

THENCE South 05 degrees 13
minutes West 745.30 feet to the North right-of-way line of the L. and N.
Railroad;

 

THENCE along said line North 62
degrees 09 minutes West 222.37 feet, South 67 degrees 48 minutes West 119.02
feet, North 63 degrees 36 minutes West 100.09 feet and North 61 degrees 08
minutes West 357.00 feet;

 

THENCE North
00 degrees 51 minutes East 838.26 feet to the Point of Beginning.

 

 

TRACT II

 

That part of the NorthWest
Quarter of the Northwest Quarter of Section 21, Township 28 North, Range 4 West in Monon Township, White County, Indiana,
described by:

 

COMMENCING at the Northwest
corner of the above said Section 21;

 

THENCE South 86 degrees 27
minutes East 253.5 feet to the Point of the Beginning;

 

THENCE South 85 degrees 45
minutes East 340.7 feet;

 

THENCE South 02 degrees 30
minutes West 331.0 feet;

 

THENCE North 85 degrees 47
minutes West 341.85 feet;

 

THENCE North
02 degrees 42 minutes East 331.2 feet to the Point of Beginning.

 

This Parcel of land also
described as follows:

 

A parcel of land beginning at a
point Sixteen (16) Rods East of the Northwest corner of Section Twenty-one
(21), Township Twenty-eight (28) North, Range Four (4) West, White County,
Indiana, on the section line between Section (16) and Twenty-one (21);

 

RUNNING THENCE East Twenty (20)
Rods;

 

THENCE South Three Hundred
Thirty (330) feet;

 

THENCE West Twenty (20) Rods;

 

THENCE North Three Hundred
Thirty (330) feet to the place of BEGINNING; this tract being out of the
Northwest Quarter of the Northwest Quarter of Section Twenty-one (21), Township
Twenty-eight (28) North, Range Four (4) West, and in
the above said County and State;

 

EXCEPT that
part of the above described lands as has been sold to the county and state for
right-of-way for a State Road.

 

 

All that certain lot, piece or
parcel of land, with the buildings and improvements thereon erected, situate,
lying and being in the Township of Washington, County of Mercer, State of New Jersey:

 

BEGINNING at a point in the
proposed Easterly right of way line of West Manor Way (40 feet from centerline)
said point being located the following two (2) courses from the intersection of
the southeasterly right of way line of New Jersey Turnpike (300 feet wide) with
the Easterly right of way line of West Manor Way (50 feet wide) and from said
intersection running;

 

a.             Southerly distant
3202.78 feet along the Easterly right of way line of West Manor Way (50 feet
wide) to a point; thence

 

b.             South 54 degrees 52
minutes 51 seconds East along the common line between Tax Map Lots 19 and 20 in
Block 41,15.00 feet to a point and place of beginning and running thence;

 

1.             North 34 degrees 24
minutes 41 seconds East along the proposed Easterly
right of way line of West Manor Way, 820.19 feet to a point of curvature;
thence

 

2              Northeasterly along
a new line through Lot 19 in Block 41, along a curve to the right having a
radius of 40.00 feet and an arc length of 62.83 feet to a point of tangency;
thence

 

3.             South 55 degrees 35
minutes 19 seconds East along same, 245.00 feet to a point; thence

 

4.             South 57 degrees 44
minutes 10 seconds East still along same, 200.14 feet
to a point; thence

 

5.             South 55 degrees 35
minutes 19 seconds East still along same, 168.13 feet
to a point; thence

 

6.             South 34 degrees 24
minutes 41 seconds West still along same, 875.76 feet
to a point; thence

 

7.             North 54 degrees 52
minutes 51 seconds West along the common line between Tax Map Lots 19 and 20 in
Block 41,653.18 feet to the true point and place of BEGINNING.

 

Being known as
Lot 19.02 in Block 41 on the Tax map.

 

TOGETHER WITH the benefits as
contained in that certain Cross Basement Agreement recorded in Deed Book 3186,
page 024.

 

 

Lot 1, Block 1, Westwood North
3rd Addition, excepting that part thereof lying
northerly of the following described line:

 

BEGINNING at a point on the
North line of Section 31, Township 120 North, Range 21 West, Distant 237.03
feet Easterly of the North Quarter corner thereof;

 

THENCE run Southerly
at an angle of 90 degrees 00 minutes 00 seconds from said North Section line
for 45 feet;

 

THENCE run Westerly parallel
with said North Section line of 150 feet and there terminating, Hennepin
County, Minnesota.

 

Torrens Property

 

Certificate of
Title No.811285.

 

The above property is situated
in Hennepin County, State of Minnesota.

 

Address: 11611 Business Park
Blvd. N, Champlin, MN 55316

 

Tax Map or Parcel ID No.:
31-120-21 12 0073

 

 

EXHIBIT B

 

 

MACHINERY AND EQUIPMENT

 

 

All fixtures, machinery, apparatus, equipment, fittings and appliances
of every kind and nature whatsoever now or hereafter affixed or attached to or
installed in any of the Leased Premises (except as hereafter provided),
including all electrical, anti-pollution, heating, lighting (including hanging
fluorescent lighting), incinerating, power, air cooling, air conditioning,
humidification, sprinkling, plumbing, lifting, cleaning, fire prevention, fire
extinguishing and ventilating systems, devices and machinery and all engines,
pipes, pumps, tanks (including exchange tanks and fuel storage tanks), motors,
conduits, ducts, steam circulation coils, blowers, steam lines, compressors,
oil burners, boilers, doors, windows, loading platforms, lavatory facilities,
stairwells, fencing (including cyclone fencing), passenger and freight
elevators, overhead cranes and garage units, together with all additions
thereto, substitutions therefor and replacements thereof required or permitted
by this Lease, but excluding all personal property and all trade fixtures,
machinery, office, manufacturing and warehouse equipment which are not
necessary to the operation of the buildings which constitute part of the Leased
Premises for the uses permitted under Paragraph 4(a) of this Lease.

 

 

EXHIBIT C

 

 

PERMITTED ENCUMBRANCES

 

FIDELITY
NATIONAL TITLE INSURANCE COMPANY OF NEW YORK

 

	
  Policy
  No.:

  	
   

  	
  Pro
  Forma

  
	
  File
  No.:

  	
   

  	
  NYN00-4811NJ

  
	
  Order
  No.:

  	
   

  	
  00-65422458

  

 

SCHEDULE B

EXCEPTIONS FROM COVERAGE

 

This
policy does not insure against loss or damage (and the Company will not pay
costs, attorneys’ fees or expenses) which arise by reason of:

 

1.     The lien of all taxes and assessments for the
3rd quarter of 2000 and hereafter, a lien not yet due and payable.

 

2.     Subject to proposed 20 foot wide drainage
easement area, proposed 25 foot wide utility easement dedicated to Washington
Township MUA, proposed 50 foot wide strip of land reserved for future right of
way, AT&T Easement, 15 foot land dedicated to Washington Township for road
widening purposes, proposed 200' by 200' sight triangle easement, proposed 10
foot wide underground utility easement all as shown on filed plan, and as shown
on survey prepared by Control Point Associates, Inc., dated May 19, 2000 as Job
No. C00183.

 

3.     Subject to an 80 food wide front set back
line as shown on filed plan, and as shown on survey prepared by Control Point
Associates, Inc., dated May 19, 2000 as Job No. C00183.

 

4.     Rights, public and private, in that part of
subject premises included within the lines of Applegate Drive and Manor Way,
and as shown on survey prepared by Control Point Associates, Inc., dated May
19, 2000 as Job No. C00183.

 

5.     Utility Easement granted to American
Telephone and Telegraph Company of New Jersey as contained in Deed Book 1760,
Page 324, and re-recorded in Deed Book 1788 page 219.

 

6.     Terms and conditions of those certain
Declaration of Restrictive Covenants, Agreements and Easements by Mercrock
Associates, L.P., as contained in Deed Book 3182 page 1; assumed in that
certain Assumption Agreement and Right of Reconveyance recorded in Deed Book 3193
page 78, and as shown on survey prepared by Control Point Associates, Inc.,
dated May 19, 2000 as Job No. C00183.

 

The Policy affirmatively
insures the Insured that a violation of said restrictions will not cause a
forfeiture or reversion of title.

 

The Company insures the Insured against loss or damage sustained by
reason of any final court order or judgment denying the right to maintain any
existing improvements on the land because of any violation of covenants,
conditions or restrictions or building setback lines shown on a plat of
subdivision recorded or filed in the public records.

 

 

FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK

 

	
  Policy No.:

  	
   

  	
  Pro Forma

  
	
  File
  No.:

  	
   

  	
  NYN00-4682NJ

  
	
  Order
  No.:

  	
   

  	
  00-65422284

  

 

SCHEDULE B

EXCEPTIONS FROM COVERAGE

 

7.     Terms and condition of that certain Cross
Easement Agreement between Mercrock Associates, L.P. and Zero Corporation as
contained in Deed Book 3186, page 24, and as shown on survey prepared by
Control Point Associates, Inc., dated May 19, 2000 as Job No. C00183.

 

8.     Terms and condition of the certain Deed of
Sight Triangle Easement between Zero Corporation and The Township of Washington
as contained in Deed Book 3186, Page 51, and as shown on survey prepared by
Control Point Associates, Inc., dated May 19, 2000 as Job No. C00183.

 

9.     Survey prepared by Control Point Associates,
Inc., dated May 19, 2000 as Job No. C00183 shows the following variations and
mislocations:

a.     5 foot wide sidewalk easement per map
entitled “Soil Erosion and Sediment Control Plan, Plan and Profile for
Northeast Business Park Section 2, Block 41, Lot 19.01, Applegate Drive,
Washington Township, Mercer County, New Jersey” dated February 1997, last
revised 9-4-97, file no. 1112-001.

b.     Underground drainage pipes crossing the
northeast portion of the premises and the southeast portion of the premises.

 

10.   Unrecorded Lease Agreement by and between
POWER (DE) QRS 14-34, Inc. and APW North America, Inc., a Delaware corporation
dated May 30, 2000, as evidenced by a Memorandum of Lease between the same
parties dated as of May      , 2000, recorded May     ,
2000 in Deed Book     , Page     .

 

 

FIDELITY NATIONAL TITLE INSURANCE COMPANY

 

	
  Policy
  No.:

  	
   

  	
  Pro
  Forma

  
	
  File
  No.:

  	
   

  	
  NYN00-4810IN

  
	
  Order
  No.:

  	
   

  	
  200004160

  

 

SCHEDULE B

EXCEPTIONS FROM COVERAGE

 

This
policy does not insure against loss or damage (and the Company will not pay
costs, attorneys’ fees or expenses) which arise by reason of:

 

1.     Second installment of taxes for 1999 and
subsequent years, a lien, not yet due or payable. Taxes for Key Number
010-19600-00

 

2.     Second installment of taxes for 1999 and
subsequent years, a lien, not yet due or payable. Taxes for Key Number
010-19610-00

 

3.     Right of Way Grant to State of Indiana for
Highway #16 dated October 23, 1935 recorded January 24, 1977 in Easement and
Right of Way Record 1977 Page 476-477, and as shown on survey prepared by R.E.
Deake & Associates dated May 15, 2000 last revised May 24, 2000 as Job No. 2816
(MONON.DWG).

 

4.     Terms and conditions of the Subdivision
Ordinance of White County, Indiana, as recorded May 19, 1988 in Miscellaneous
Record 1988 Page 439-485 in the White County Recorder’s Office.

 

5.     Matters as shown on Plat recorded in Plat
Book 5, Page 35, and as shown on survey prepared by R.E. Deake & Associates
dated May 15, 2000 last revised May 24, 2000 as Job No. 2816 (MONON DWG).

 

6.     Survey prepared by R.E. Deake &
Associates dated May 15, 2000 last revised May 24, 2000 as Job No. 3816 (MONON.DWG).
discloses the following variances or mislocations:

 

a.     Fence varies along southern and western and eastern record lines of
title.

 

b.     Fence tye 0.42 feet east of eastern property line.

 

c.     Overhead power lines cross through Tract II.

 

7.     Unrecorded Lease Agreement by and between
POWER (DE) QRS 14-34, Inc. and APW North America, Inc., a Delaware corporation
dated May 30, 2000, as evidenced by a Memorandum of Lease between the same
parties dated as of May 30, 2000, recorded May     , 2000
in Dated Book     , Page    .

 

 

Virginia

 

1.     Taxes and Assessments for the 1st Half of
2000, which are due by June 5, 2000 and subsequent taxes  Tax Map No.: 20-(1)-3. Account No.:
020003066.

 

2.     Sanitary sewer easement granted to City of
Radford, Virginia by Alice L. Weeks, by Instrument dated September 16, 1987,
recorded in Deed Book 129, page 60.

 

3.     Easement granted to The Chesapeake and
Polomac Telephone Company of Virginia, by H.B. Ingles and Mrs. Fannie M. Ingles
by instrument dated May 27, 1937, recorded in Montgomery County Deed Book 106,
page 495.

 

4.     Rights of upper and lower riparian owners in
and to the flow and water of that certain unnamed stream following along and
over the easterly and southerly sides of the insured land, as shown on plat of
survey made by Anderson and Associates, Inc., dated November 11, 1998, last
revised January 5, 1999, recorded in Deed Book 4, page 76.

 

5.     The following matters shown on plat of survey
by Anderson and Associates, Inc., dated November 11, 1998, last revised January
5, 1999, recorded in Plat Book 5, page 76:

 

a.     Existing 29-foot sewer easement on westerly portion of insured land
(Deed Book 129, page60);

b.     Overhead telephone line, with associated poles, crossing southwesterly
portion of insured land (Deed Book 106, page 495);

c.     Limits of 500 year flood hazard zone (Zone B) extending into southerly
and southeasterly portion of insured land;

d.     15-inch drainage pipe extending from the northwesterly portion of
insured land into Rock Road right of way;

e.     Stormwater detention pond, with associated drainage facilities, in
west-central portion of insured land;

f.      Underground electric line located in northerly portion of insured land;
and

g.     6-inch water line located in northerly portion of insured land.

 

 

FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK

 

	
  Policy
  No.:

  	
   

  	
  Pro
  Forma

  
	
  File
  No.:

  	
   

  	
  NYN00-4809MN

  
	
  Order
  No.:

  	
   

  	
  T000-803162

  

 

SCHEDULE B

EXCEPTIONS FROM COVERAGE

 

This policy does not insure
against loss or damage (and the Company will not pay costs, attorneys’ fees or
expenses) which arise by reason of:

 

1.               Taxes for the second half of the year
2000, now due and payable, not yet delinquent.

 

2.               Drainage and Utility Easement as shown
on the recorded plat recorded in Plat Book
            , page
            , and
as shown on survey prepared by Westwood Professional Services, Inc. dated May
15, 2000 has revised May 26, 2000.

 

3.               Declaration of Covenants and
Restrictions dated December 31, 1987, filed January 26, 1988, as Document No.
1904430 which contain no forfeiture provisions.

 

4.               Declaration of Covenants and
Restrictions (Elm Creek Industrial and Commercial Community Sub-association)
dated March 6, 1989, filed April 6, 1989, as Document No. 2004263 which contain no forfeiture provisions.

 

5.               Terms
and conditions of that certain Contract for Private Redevelopment by and
between Champlin Economic Development Authority
and McLean Midwest Corporation, dated May 23, 1994 and
recorded July 15, 1994 as Document No. 2533188. 
Amended by First Amendment to Contract for Private
Redevelopment recorded as Document No. 2539195.

 

6.               Terms
and conditions of that certain Assessment Agreement and Assessor’s
Certification by and among Champlin Economic Development Authority, McLean
Midwest Corporation, and County Assessor of the County of Hennepin, dated July
14, 1994 and recorded July 15, 1994, as Document No. 2533189.  The Company affirmatively insures the Insured
that there are no deliquent
amounts due pursuant to said Assessment Agreement.

 

7.               Terms and conditions of that certain
Assessment Agreement and Assessor’s Certification by and among Champlin
Economic Development Authority, McLean Midwest Corporation, and City Assessor
of the City of Champlin, dated July 14, 1994 and recorded October 14, 1994 as
Document No. 2558616. The Company affirmatively insures the Insured that there
are no deliquent amounts due pursuant to said Assessment Agreement.

 

8.               Right
of Access easement granted in Document No. 1965585 by Cowles Media Company in
Document dated August 22, 1988 and recorded October 11, 1988, and granted in
Document No. 2680998 by McLean Midwest Corporation in Document dated February
15.

 

 

FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK

 

	
  Policy
  No.:

  	
   

  	
  Pro
  Forma

  
	
  File
  No.:

  	
   

  	
  NYN00-4809MN

  
	
  Order
  No.:

  	
   

  	
  T000-803162

  

 

SCHEDULE B

(continued)

 

9.     Survey prepared by Westwood Professional
Services, Inc. for Smith-Roberts National Corporation dated May 15, 2000 last
revised May 26, 2000 designated as Job No.          discloses the following variations or mislocations:

 

        a. parking spaces located in northwest portion
of subject property encroaches over 15' parking setback.

 

10.   Unrecorded Lease Agreement by and between
POWER (DE) QRS 14-34, Inc. and APW North America, Inc., a Delaware corporation
dated May 30, 2000, as evidenced by a Memorandum of Lease between the same
parties dated as of May 30, 2000, recorded May     , 2000
in Deed Book     , Page     .

 

 

EXHIBIT D

 

 

BASIC RENT PAYMENTS

 

1.                                       Basic
Rent.  (a)  Subject to the adjustments provided for in
the following Paragraph 1 (b) and Paragraphs 2, 3 and 4 below, Basic Rent
payable in respect of the Term shall be $1,809,225 per annum (“Initial
Annual Basic Rent”), payable monthly in advance on
each Basic Rent Payment Date, in equal installments of $150,768.75 each (“Initial
Monthly Installment”); except that on June 1, 2000 Tenant shall pay to
Landlord, in addition to the Initial Monthly Installment due, the amount of
$301,537.51 as prepaid rent which shall be applied to Basic Rent due for the
last two (2) months of the Term.

 

(b) 
Concurrently with the funding of the initial Loan the Initial Annual
Basic Rent shall be changed (the “Initial Adjustment”) to the sum of (i)
the annual debt service (principal and interest) payable on such Loan and (ii)
the product of 11.92% times the difference between $19,350,000 and the original
principal amount of such Loan.  Upon the
Initial Adjustment each Initial Monthly Installment shall be increased or
decreased, as the case may be, by one-twelfth of the Initial Adjustment.  If the Initial Adjustment occurs between
Basic Rent Payment Dates the next occurring Initial Monthly Installment shall
be adjusted accordingly.  By way of
example:

 

	
  Purchase Price:

  	
   

  	
  $

  	
  19,350,000

  
	
   

  	
   

  	
   

  
	
  Principal Amount of Loan:

  	
   

  	
  $

  	
  13,425,000

  
	
   

  	
   

  	
   

  
	
  Total Equity:

  	
   

  	
  $

  	
  5,925,000

  
	
   

  	
   

  	
   

  
	
  Equity Return (11.92%) after debt closing:

  	
   

  	
  $

  	
  706,260

  

 

Total Rent = $658,580 + Debt Service

 

Debt Service Assumptions:  $13,425,000 7.70%, 30 year amortization

 

Example #1 - Rent
would adjust down.

 

Debt closed: 
$13,425,000 7.50%, 30 year amortization

 

 

Example #2 - Rent
would adjust up.

 

Debt closed: 
$13,425,000 7.90%, 30 year amortization

 

2.                                       CPI
Adjustments to Basic Rent.  The Basic
Rent shall be subject to adjustment, in the manner hereinafter set forth, for
increases in the index known as United States Department of Labor, Bureau of
Labor Statistics, Consumer Price Index, All Urban Consumers, United States City
Average, All Items, (1982-84=100) (“CPI”) or the successor index that
most closely approximates the CPI.  If
the CPI shall be discontinued with no successor or comparable successor index,
Landlord and Tenant shall attempt to agree upon a substitute index or formula,
but if they are unable to so agree, then the matter shall be determined by
arbitration in accordance with the rules of the American Arbitration
Association then prevailing in New York City. 
Any

 

 

decision or award
resulting from such arbitration shall be final and binding upon Landlord and
Tenant and judgment thereon may be entered in any court of competent
jurisdiction.  In no event will the Basic
Rent as adjusted by the CPI adjustment be less than the Basic Rent in effect
for the three (3) year period immediately preceding the first adjustment of
Basic Rent and the one (1) year period immediately preceding each subsequent
adjustment of Basic Rent.

 

3.                                       Effective
Dates of CPI Adjustments.  Basic Rent
shall not be adjusted to reflect changes in the CPI until the third (3rd)
anniversary of the Basic Rent Payment Date on which the first full monthly
installment of Basic Rent shall be due and payable (the “First Full Basic
Rent Payment Date”).  As of the third
(3rd) anniversary of the First Full Basic Rent Payment Date (the “Initial
Adjustment Date”) and on each anniversary of the Initial Adjustment Date
thereafter during the term, Basic Rent shall be adjusted to reflect increases
in the CPI during the three (3) year period immediately preceding the Initial
Adjustment Date and during the most recent one (1) year period immediately
preceding each anniversary of the Initial Adjustment Date (the Initial
Adjustment Date and each subsequent adjustment date being hereinafter referred to
as the “Basic Rent Adjustment Date”).

 

4.                                       Method
of Adjustment for CPI Adjustment.

 

(a)                                  As
of each Basic Rent Adjustment Date when the average CPI determined in clause
(i) below exceeds the Beginning CPI (as defined in this Paragraph 4(a)), the
Basic Rent in effect immediately prior to the applicable Basic Rent Adjustment
Date shall be multiplied by a fraction, the numerator of which shall be the
difference between (i) the average CPI for the three (3) most recent calendar
months (the “Prior Months”) ending prior to such Basic Rent Adjustment
Date for which the CPI has been published on or before the forty-fifth (45th)
day preceding such Basic Rent Adjustment Date and (ii) the Beginning CPI, and
the denominator of which shall be the Beginning CPI.

 

On the Initial Adjustment Date, an amount equal to the lesser of (x)
the product of such multiplication or 5.78% of the Basic Rent in effect
immediately prior to the Initial Adjustment Date shall be added to the Basic
Rent in effect immediately prior to the Initial Adjustment Date.

 

On each Basic Rent Adjustment Date after the Initial Adjustment Date,
an amount equal to the lesser of the product of such multiplication or 1.89% of
the Basic Rent in effect immediately prior to such Basic Rent Adjustment Date
shall be added to the Basic Rent in effect immediately prior to such Basic Rent
Adjustment Date.

 

As used herein, “Beginning CPI” shall mean the average CPI for
the three (3) calendar months corresponding to the Prior Months, but occurring
three (3) years earlier with respect to the first adjustment of Basic Rent and
one (1) year earlier with respect to each subsequent adjustment of Basic Rent.

 

If the average CPI determined in clause (i) is the same or less than
the Beginning CPI, the Basic Rent will remain the same for the ensuing three
(3) year period or one (1) year period, as applicable.  If any CPI adjustment would result in an
annual increase of less than 1.89%, then, the positive difference between an
annual increase of 1.89% and the actual annual increase resulting from such CPI
adjustment shall be carried forward and added to any annual increase of Basic
Rent that is less than 1.89% of the prior year’s Basic Rent.  By way of example:

 

	
   

  	
   

  	
  Year 5

  	
   

  	
  Year 6

  	
   

  	
  Year 7

  	
   

  	
  Year 8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CPI:

  	
   

  	
  4

  	
  %

  	
  1.2

  	
  %

  	
  3

  	
  %

  	
  2

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Increase:

  	
   

  	
  1.89

  	
  %

  	
  1.2

  	
  %

  	
  2.59

  	
  %

  	
  1.89

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Carry
  Forward:

  	
   

  	
  0

  	
   

  	
  .69

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

2

 

(b)                                 Effective
as of a given Basic Rent Adjustment Date, Basic Rent payable under this Lease until
the next succeeding Basic Rent Adjustment Date shall be the Basic Rent in
effect after the adjustment provided for as of such Basic Rent Adjustment Date.

 

(c)                                  Notice
of the new annual Basic Rent shall be delivered to Tenant on or before the
tenth (10th) day preceding each Basic Rent Adjustment Date, but any failure to
do so by Landlord shall not be or be deemed to be a waiver by Landlord of
Landlord’s rights to collect such sums. 
Tenant shall pay to Landlord, within ten (10) days after a notice of the
new annual Basic Rent is delivered to Tenant, all amounts due from Tenant, but
unpaid, because the stated amount as set forth above was not delivered to
Tenant at least ten (10) days preceding the Basic Rent Adjustment Date in
question.

 

3

 

EXHIBIT E

 

 

ACQUISITION COST

 

	
  Monon,
  Indiana

  	
   

  	
  $

  	
  1,675,392.67

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Champlin,
  Minnesota

  	
   

  	
  $

  	
  5,968,586.39

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Robbinsville
  / Washington Township, New Jersey

  	
   

  	
  $

  	
  9,057,591.62

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Radford,
  Virginia

  	
   

  	
  $

  	
  3,560,209.42

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  20,261,780.10

  	
   

  

 

 

EXHIBIT F

 

 

PERCENTAGE ALLOCATION OF BASIC
RENT

 

	
  Monon,
  Indiana

  	
   

  	
  8.26

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Champlin,
  Minnesota

  	
   

  	
  29.47

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Robbinsville,
  New Jersey

  	
   

  	
  44.70

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Radford,
  Virginia

  	
   

  	
  17.57

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  100

  	
  %

  

 

 

If any of the Related Premises ceases to be subject to this Lease
pursuant to Paragraphs 17 or 34 an amount equal the percentage of the Basic
Rent allocated to such Related Premises shall no longer be payable and, the
percentage shown on this Exhibit F for each of the Related Premises

 

 

which continue to
remain subject to this Lease shall be adjusted proportionately so that the
total of such percentages shall be 100%.

 

2

 

EXHIBIT B

 

LEGAL DESCRIPTION

 

All that certain lot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Township of
Washington, County of Mercer, State of New Jersey:

 

BEGINNING at a point in the proposed Easterly right of way line of West
Manor Way (40 feet from centerline) said point being located the following two
(2) courses from the intersection of the southeasterly right of way line
of New Jersey Turnpike (300 feet wide) with the Easterly right of way line of
West Manor Way (50 feet wide) and from said intersection running;

 

a.                             Southerly
distant 3202.78 feet along the Easterly right of way line of West Manor Way (50
feet wide) to a point; thence

 

b.                            South
54 degrees 52 minutes 51 seconds East along the common line between Tax Map
Lots 19 and 20 in Block 41, 15.00 feet to a point and place of beginning and
running thence;

 

1.                             North
34 degrees 24 minutes 41 seconds East along the
proposed Easterly right of way line of West Manor Way, 820.19 feet to a point
of curvature; thence

 

2.                             Northeasterly
along a new line through Lot 19 in Block 41, along a curve to the right having
a radius of 40.00 feet and an arc length of 62.83 feet to a point of tangency;
thence

 

3.                             South
55 degrees 35 minutes 19 seconds East along same, 245.00 feet to a point; thence

 

4.                             South
57 degrees 44 minutes 10 seconds East still along
same, 200.14 feet to a point; thence

 

5.                             South
55 degrees 35 minutes 19 seconds East still along
same, 168.13 feet to a point; thence

 

6.                             South
34 degrees 24 minutes 41 seconds West still along
same, 875.76 feet to a point; thence

 

7.                             North
54 degrees 52 minutes 51 seconds West along the common line between Tax Map
Lots 19 and 20 in Block 41,653.18 feet to the true point and place of
BEGINNING.

 

Being known as Lot 19.02 in Block 41 on the
Tax map.

 

TOGETHER WITH the benefits as contained in that certain Cross Easement
Agreement recorded in Deed Book 3186, page 024.

 

 

EXHIBIT
C

 

ALTERATIONS
TO

SUBLEASED PREMISES BY SUBLESSEE

 

 

 

 

 

 

 

 

Narrative to accompany Exhibit C

 

 

Drawing Overview:

 

Note: The shaded
areas in Drawing SF1.1 represent office space that is to be newly constructed
or modified.  The modifications to the
Second Floor offices are represented in Drawing SF1.2.  There is a legend on each drawing that
provides information regarding the architectural items to be added or
removed.  Drawing SF1.3 shows the wall
types for each proposed area, and how high they are to be built.  All wall construction to be metal studs and
sheetrock unless otherwise noted. 
Miscellaneous network wiring, electrical, plumbing, and HVAC not yet
detailed.  All Office
construction materials to match existing materials.

 

•                  (A1 to C7): General Office and Factory
Employee Entrance (SF1.2)

•                  (A5.5 to B6.5): Mechanical Room and
Employee Lunch Seating (SF1.2)

•                  (B5.75 to B0.5-6.25): Employee Pantry
(SF1.2)

•                  (A4.5 to C5.75): R&D (SF1.2)

•                  (A6.5 to C7): Security Corridor / Factory
Employee Entrance (SF1.2)

•                  (C1 to F2): Laser Labs (SF1.3)

•                  (C7 to E8): Quality Assurance (SF1.3)

•                  (F0.5-8 to G11): Manufacturing Offices  (SF1.3)

•                  (C1 to F10)+(A7 to C10):
General Manufacturing (SF1.1)

 

(A1 to C4.5) General Office:
Reference SF1.2

B1.5 to B2:  Corridor added.

B0.5-1.5 to B0.5-2:  Room added,
Area 118 on SF1.2

B0.5-3.5 to C4: Office space added, Area 125 & 126 on SF1.2

 

(A4.5 to C5.75) R&D:  Reference SF1.2

Area 129: Removable systems furniture, Lab Benches, and Production
display area added.

Area 130 to 133: Lower large offices divided into 4 equal size offices.

Area 134: Converted to Laboratory.

Corridor 128 to 141 added.

 

(A5.5 to C7) 
Mechanical Room, Factory Employee Cafeteria, and Factory

Employee Entrance:
Reference SF1.2

Area 142: Mechanical room reduced in size.

Corridor 141: added

Area 140: Lunch Room added.

Area 139: Pantry added

Area 144: Security Office Added

Area 145: Men’s Locker Room Added

Area 146: Women’s Locker Room Added

Area 147: Security Office and Turnstile Added

 

 

Narrative to accompany Exhibit C

 

(A1 to C6.5) Office Mezzanine Level:
Reference SF1.2

Area 203: Product showroom added

Area 202: Office added

Area 201: Office added

Area 201A: Closet Added

Area 212:  Wall and doorway
removed

 

(C1 to F2.5) Laser Labs:
Reference SF1.3

Area L00 to L11:  Concrete cut
and caulked to provide vibration isolation. 
Individual Labs, Offices, and Dark Room added.

Area L13, 14 & 15: Area added.

Area L15: Pre-constructed Clean room that will be relocated.

 

(F0.5-8 to G11) Manufacturing Office:
Reference SF1.3

Area M03: Wall and door relocated

Area M07: Door relocated

Area M08: Conference room added

 

(C7 to E8) QA Office:
Reference SF1.3

Area Q01 to Q05: Office space and Quality Lab added.

 

(C1 to F10)+(A7 to
C10) General Manufacturing: General subdivision of
this area into rooms designated on SF1.1

Note:  Network, Phone,
Electrical, Plumbing, HVAC, and Sanitary sewer drain connections to be added
and / or modified to various areas and have not yet been detailed.  Concrete floor to be Epoxy coated.  Epoxy type has not yet been determined.

 

Area 013, 014: Step and Repeat: 
Clean Room added

Area 017, 018, 019, 020: Added. 
This area will have a concrete containment boarder and ramps leading
into and out of the South East or rear portion of the room.

Area 021, 022, 024, 030 to 037: Added

Area 045 to 047: No planned structural changes

 

(A10 to G13) Warehouse:  Reference SF1.1

Area 049: Security Vault added: 
Wall construction Concrete or Cinder block not yet detailed.

Area 048: added

Area 038: added

Area 041: Warehouse - Should be Shipping / Receiving; Some security
fencing, a small guard booth, and an external fenced in truck trap with a
motorized gate will be added.  Not yet
shown on drawings.

 

 

EXHIBIT
D

 

SUBLESSOR’S
WORK

 

	
   

  	
   

  	
  Category

  	
   

  	
  Deficiencies & Issues

  	
   

  	
  How to Fix

  
	
  1

  	
   

  	
  Site drainage

  	
   

  	
  Open inlet at rear of property near loading
  dock presents a serious hazard and must be filled.

  	
   

  	
  Concrete contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Site drainage

  	
   

  	
  Sink hole at inlet at the front corner of
  parking lot must be filled.

  	
   

  	
  Frank S. to repair

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Site-general

  	
   

  	
  Debris, mostly pallets, need
  to be removed from dumpster area, loading dock and lunch area.

  	
   

  	
  Frank S. to address

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Exterior service walks

  	
   

  	
  Unsafe gap between joints at side entrance
  must be corrected. (entire length of sidewalk; between slabs and between
  sidewalk and curb)

  	
   

  	
  Concrete contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Exterior service walks

  	
   

  	
  Walk has settled about 1 inch along front
  of building. Curb has not settled, leaving a 1” differential in elevation
  which must be corrected (Limit to 3 areas, 25’ of sidewalk).

  	
   

  	
  Concrete contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Building exterior

  	
   

  	
  Pre-cast coping must be re-grouted or
  sealed.

   

  Trees block access door to the transformer.

  	
   

  	
  Concrete contractor Frank S. to trim tree

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  Building exterior

  	
   

  	
  Windows-building had approximately 11
  operable hopper windows. Gasketting in these windows has either come off or
  is in the process of coming off and must be replaced.

  	
   

  	
  Contact window mfgr Window contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  Building exterior

  	
   

  	
  Curtain Wall Windows-new caulking required
  at base of windows.

  	
   

  	
  Window contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  Building exterior

  	
   

  	
  Pre-Cast Panels-minor cracks in sealant
  between some pre-cast panels will need repair (Areas around 3 door frames).

  	
   

  	
  Window contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Building interior

  	
   

  	
  Stained ceiling tile just inside front
  corner window. Possible water leak and stained ceiling tile must be
  investigated and repaired.

  	
   

  	
  Roofing contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Building Interior – Second Floor

  	
   

  	
  Significant water stain to ceiling tile,
  possible due to clogged drain pan on rooftop HVAC unit (Note: the HVAC unit
  in the general area of this leak is not discharging condensate
  water).Possible water leak, HVAC clog and stained ceiling tile must be
  investigated and repaired.

  	
   

  	
  HVAC contractor

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  Building-Exterior

  	
   

  	
  Broken window on side of Building near
  transformer-replace window

  	
   

  	
  Window Conductor

  

 

In addition, the Sublessor shall repair any additional damage which
occurs after Sublease signing, but prior to the Commencement Date of the
Sublease.

 

EXHIBIT
E

SCHEDULE OF
PROPERTY EXPENSES

 

Expenses
Related to Robbinsville Facility/Operations over the Last 2 Years (200?, 2004)

Accounting
[ILLEGIBLE]

 

	
  Category

  	
   

  	
  Supplier

  	
   

  	
  Amount

  Paid

  	
   

  	
  Month

  Paid

  	
   

  	
  Annual
  Amount

  	
   

  	
  Description

  	
   

  	
  Detail

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  170,510.00

  	
   

  	
   

  	
   

  	
  170,510.00

  	
   

  	
  Taxes for 2002

  	
   

  	
  Total of a Quarterly Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  42,652.50

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  1st Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  42,652.50

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  2nd Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  48,037.50

  	
   

  	
  Jul-03

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  3rd Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  48,037.50

  	
   

  	
  Oct-03

  	
   

  	
  181,420.00

  	
   

  	
  Taxes

  	
   

  	
  4th Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  45,358.00

  	
   

  	
  Jan-04

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  1st Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  45,358.00

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  2nd Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  38,382.12

  	
   

  	
  Jul-04

  	
   

  	
   

  	
   

  	
  Taxes

  	
   

  	
  3rd Qtr Property Taxes

  	
   

  
	
  BR

  	
   

  	
  TAX COLLECTOR, WASHINGTON TWP

  	
   

  	
  38,382.12

  	
   

  	
  Oct-04

  	
   

  	
  109,474.24

  	
   

  	
  Taxes (Estimate)

  	
   

  	
  4th Qtr Property Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  APPLEGATE ROAD OWNERS ASSOCIATION

  	
   

  	
  5,212.55

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Assoc Service Fees

  	
   

  	
  2003 Est. Park Maint Rec & 2002 Park Maint Rec

  	
   

  
	
  BR

  	
   

  	
  APPLEGATE ROAD OWNERS ASSOCIATION

  	
   

  	
  4,480.75

  	
   

  	
  Mar-04

  	
   

  	
   

  	
   

  	
  Assoc Service Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4,4?0.75

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  NEW JERSEY DIVISION OF FIRE SAFETY

  	
   

  	
  1,180.00

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Annual Life Hazard Line Reg Fee

  	
   

  	
  Required annual registration fee (uniform fire safety
  act)

  	
   

  
	
  BR

  	
   

  	
  NEW JERSEY DIVISION OF FIRE SAFETY

  	
   

  	
  1,41?.?0

  	
   

  	
  Jan-04

  	
   

  	
   

  	
   

  	
  Annual Life Hazard Line Reg Fee

  	
   

  	
  Required annual registration fee (uniform fire safety
  act)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,415.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS DIVISION
  OF CODES AND STANDARDS

  	
   

  	
  292.00

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Annual Assoc dues

  	
   

  	
  Annual Inspection Fee for Elevator Safety

  	
   

  
	
  BR

  	
   

  	
  NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS DIVISION
  OF CODES AND STANDARDS

  	
   

  	
  292.00

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  Annual Assoc dues

  	
   

  	
  Annual Inspection Fee for Elevator Safety

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  202.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  TREASURER - STATE OF NEW JERSEY

  	
   

  	
  40.00

  	
   

  	
  May-04

  	
   

  	
   

  	
   

  	
  Hazardous Waste Compliance Monitoring Fees (Assessed
  annually)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  40.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  548.30

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  2/1/03 to 4/30/03

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  548.30

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  5/1/03 to 7/31/03

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  584.23

  	
   

  	
  Aug-03

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  8/1/03 to 10/31/03

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  584.23

  	
   

  	
  Oct-03

  	
   

  	
  2,265.00

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  11/1/03 to 1/31/04

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  584.23

  	
   

  	
  Feb-04

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  2/1/04 to 4/30/04

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  584.23

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  5/1/04 to 7/31/04

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  ??.14

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract

  	
   

  	
  8/1/04 to 10/31/04

  	
   

  
	
  BR

  	
   

  	
  OTIS ELEVATOR COMPANY

  	
   

  	
  ??.14

  	
   

  	
  Oct-04

  	
   

  	
   

  	
   

  	
  City Elevator Service Contract (Estimated)

  	
   

  	
  11/1/04 to 1/31/05

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2,420.74

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  JAMES & HUNT MFG CO

  	
   

  	
  307.50

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Fire Extinguishers Serviced

  	
   

  	
  Service call & Inspection

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  397.50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BR

  	
   

  	
  TOTAL ANNUAL EXPENSES RELATED TO THE BUILDING

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ??

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  BOC GASES

  	
   

  	
  12.29

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Gas [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  BOC GASES

  	
   

  	
  12.??

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Gas [ILLEGIBLE]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  410.01

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Fire Service Charge

  	
   

  	
  Dec 1 to Dec 31, 1-8? sprinkler
  w/o ?? & hydrant

  	
   

  
	
  D

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  410.01

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Fire Service Charge

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  BRUSHELL NURSERY & LANDSCAPING

  	
   

  	
  1,245.50

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Building Maintenance/Landscaping

  	
   

  	
  [ILLEGIBLE]

  	
   

  
	
  D

  	
   

  	
  WINDSOR LAWN SPRINKLER INC

  	
   

  	
  111.30

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Building Maintenance/Landscaping

  	
   

  	
  [ILLEGIBLE] Sprinkler System

  	
   

  
	
  D

  	
   

  	
  BRUSHELL NURSERY & LANDSCAPING

  	
   

  	
  318.00

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Building Maintenance/Landscaping

  	
   

  	
  Snow Removal

  	
   

  
	
  D

  	
   

  	
  BRUSHELL NURSERY & LANDSCAPING

  	
   

  	
  1,245.50

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Building Maintenance/Landscaping

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  851.?2

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
  1st quarter monitoring

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  1,708.84

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
  4th qtr, 2nd qtr monitoring

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Sep-03

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Dec-03

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Mar-04

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Jun-04

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  SONITROL SECURITY SYSTEMS OF CENTRAL NJ

  	
   

  	
  887.43

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Security

  	
   

  	
   

  	
   

  

 

BR      Building
Related - Payable regardless of who owns or occupies
the building

  D      Discretionary
- A function of who occupies the building and the [ILLEGIBLE] that the [ILLEGIBLE]

 

 

	
  Category

  	
   

  	
  Supplier

  	
   

  	
  Amount

  Paid

  	
   

  	
  Month

  Paid

  	
   

  	
  Annual

  Amount

  	
   

  	
  Description

  	
   

  	
  Detail

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  91.89

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  410.01

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  410.01

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  62.32

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  59.??

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  59.??

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  472.33

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  472.33

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  472.33

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Jul-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  ?72.?3

  	
   

  	
  Aug-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  469.37

  	
   

  	
  Sep-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  469.37

  	
   

  	
  Oct-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  466.41

  	
   

  	
  Nov-03

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Dec-03

  	
   

  	
  4,621.80

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Jan-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  466.41

  	
   

  	
  Feb-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Mar-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  CONSUMERS NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  May-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  AQUA NEW JERSEY WATER CO

  	
   

  	
  4??.37

  	
   

  	
  Jun-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  AQUA NEW JERSEY WATER CO

  	
   

  	
  466.54

  	
   

  	
  Jul-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  AQUA NEW JERSEY WATER CO

  	
   

  	
  473.54

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Water

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  7,???.0?

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  7,859.49

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  6,022.67

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  5,849.00

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  13,165.04

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
   

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  2,900.09

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  5,739.63

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  4,932.40

  	
   

  	
  Jul-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  5,445.81

  	
   

  	
  Aug-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  5,15?.??

  	
   

  	
  Sep-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  2,787.14

  	
   

  	
  Oct-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  2,820.14

  	
   

  	
  Nov-03

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
   

  	
   

  	
  Dec-03

  	
   

  	
  53,618.90

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  7,827.47

  	
   

  	
  Jan-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
   

  	
   

  	
  Feb-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  8,549.60

  	
   

  	
  Mar-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  3,833.39

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  3,315.16

  	
   

  	
  May-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  4,039.97

  	
   

  	
  Jun-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  4,044.3?

  	
   

  	
  Jul-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  JERSEY CENTRAL POWER & LIGHT

  	
   

  	
  4,508.00

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Electric

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  ?,320.63

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  35.00

  	
   

  	
  Nov-02

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  Monthly Charge

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  593.40

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  35.00

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  Monthly Charge

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  713.57

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  40 Yd Comp Pull & [ILLEGIBLE]

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  413.40

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  Equipment Rental

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  414.37

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  413.40

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  Equipment Rental

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
  37.00

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
  Feb Monthly 
  [ILLEGIBLE]

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  Jul-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  MIDCO WASTE SYSTEMS

  	
   

  	
   

  	
   

  	
  Aug-03

  	
   

  	
   

  	
   

  	
  Waste Disposel

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  2,323.32

  	
   

  	
  Dec-02

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  5,4??.79

  	
   

  	
  Jan-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  3,373.64

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  3,?75.54

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  3,187.65

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  664.90

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  281.51

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  ?26.20

  	
   

  	
  Jul-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  116.85

  	
   

  	
  Aug-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  111.64

  	
   

  	
  Sep-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  112.68

  	
   

  	
  Oct-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  148.66

  	
   

  	
  Nov-03

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  898.64

  	
   

  	
  Dec-03

  	
   

  	
  18,?33.30

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  2,27?.86

  	
   

  	
  Jan-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  3,592.09

  	
   

  	
  Feb-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  3,409.?1

  	
   

  	
  Mar-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  2,240.24

  	
   

  	
  Apr-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  11,226.15

  	
   

  	
  May-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  159.60

  	
   

  	
  Jun-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  120.13

  	
   

  	
  Jul-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  PSE&G CO

  	
   

  	
  116.05

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Gas

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
  183.55

  	
   

  	
  Feb-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  Mar-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
  160.00

  	
   

  	
  Apr-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
  360.00

  	
   

  	
  May-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  Jun-03

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
  721.58

  	
   

  	
  Feb-04

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  WASHINGTON TOWNSHIP MUNICIPAL UTILITIES

  	
   

  	
   

  	
   

  	
  Aug-04

  	
   

  	
   

  	
   

  	
  Sewer

  	
   

  	
   

  	
   

  

 

	
  U

  	
   

  	
  [ILLEGIBLE] - The amount
  of water, electricity, water [ILLEGIBLE] is a function of the type of
  activity in the Building; It is likely to be different for each occupantExhibit 10.2

 

SUBORDINATION, NON-DISTURBANCE, ATTORNMENT, 

RENEWAL AND OPTION TO PURCHASE AGREEMENT

 

THIS AGREEMENT, made as of the
14th day of December, 2004, by and between MORE APPLIED FOUR (DE)
LLC, a Delaware limited liability company, and its successors and/or
assigns (hereinafter referred to as the “Owner”), having an address at
c/o W.P. Carey & Co., LLC, 50 Rockefeller Plaza, 2nd Floor, New
York, New York 10020, and AMERICAN BANK NOTE
HOLOGRAPHICS, INC., a Delaware corporation (hereinafter referred to
as the “Tenant”), having an address at 
399 Executive Boulevard, Elmsford, New York  10523.

 

W I T N E S S E T H:

 

WHEREAS, APW
North America, Inc. (“Sublandlord”) is leasing from Owner certain
premises located at 2 Applegate Drive, Robbinsville, New Jersey and more
specifically described on Exhibit “A”
attached hereto (the “Premises”) pursuant to a certain Deed of Lease
Agreement dated as of May 30, 2000 between Power (DE) QRS 14-34, Inc. (the “Original
Landlord”), as landlord, and the Sublandlord, as tenant, as amended by a
First Amendment to Deed of Lease Agreement dated as of July 31, 2000 and Second
Amendment to Deed of Lease Agreement dated October 31, 2001 and Third Amendment
to Deed of Lease Agreement dated as of the date hereof and as assigned to the
Owner pursuant to an Assignment and Assumption of Deed of Lease Agreement
between the Original Landlord, as assignor, and the Owner, as assignee, dated
as of October    , 2001 (collectively, the “Master Lease”),
which Lease in addition to the Premises also covers premises in Monon, Indiana,
Champlin, Minnesota and Radford, Virginia; and

 

WHEREAS,
the Tenant has entered into a certain Sublease (the “Sublease”) with
Sublandlord dated as of the date hereof with respect to the Premises, which
Sublease expires on May 31, 2017 (the “Expiration Date”); and

 

WHEREAS,
Sublandlord and Tenant have requested Owner’s consent to the Sublease and Owner
has agreed to consent to the Sublease provided that the Sublease is
subordinated to the lien of the Master Lease and Tenant agrees to recognize
Owner as its landlord under the Sublease if the Master Lease is terminated
prior to the expiration of the Sublease with an automatic increase in rent due
under the Sublease; and

 

NOW,
THEREFORE, in consideration of the premises and other
valuable consideration, the receipt of which is hereby acknowledged, it is
agreed as follows:

 

1.             SUBORDINATION:

 

The Sublease, as the same may heretofore and hereafter be
modified, amended or extended, and all rights and options of the Tenant thereunder,
are and shall be subject, subordinate and inferior to the Lease.  Tenant expressly agrees that it shall comply
with and be bound by the terms of the Master Lease to the extent incorporated
by reference in the Sublease, including, but not limited to, the provisions of
Paragraph 21(f) of the Master Lease.

 

 

2.             NON-DISTURBANCE:

 

Owner agrees that in the event of a default by Sublandlord
under the Master Lease or a termination of the Master Lease prior to the
scheduled expiration of the Master Lease, provided that Tenant is not then in
default, beyond all applicable notice, grace and cure periods, in the payment
of rent or in the performance of any of the other terms of the Sublease, (i)
Tenant’s occupancy of the Premises will not be disturbed by Owner, (ii) Owner
shall not name or join Tenant as a party defendant to any action to terminate
the Master Lease by reason of a default thereunder by Sublandlord, unless
Tenant is a necessary party thereto under law (and, in any event, such naming
or joinder shall not terminate the Sublease), and (iii) the Sublease shall not
be terminated in connection with, or by reason of, the termination of the
Master Lease, but rather the Sublease shall continue in full force and effect
as a direct lease between Owner, as landlord, and Tenant, as tenant, upon all
the executory terms, covenants and conditions of the Sublease for the balance
of the term thereof, subject, however, to the modifications specifically set
forth in this Agreement.

 

3.             ATTORNMENT:

 

Without limitation of any of
the provisions of the Sublease, in the event that, by reason of any default on
the part of the Sublandlord under the Master Lease, the Master Lease is
terminated prior to its scheduled expiration (the date of such early
termination, the “Attornment Date”), then, subject to the provisions of
this Agreement, the Sublease shall nevertheless continue in full force and
effect and the Tenant shall attorn to Owner and shall recognize Owner as its
landlord and Owner shall recognize Tenant as its tenant.  Upon request of Owner, the Tenant shall
execute and deliver to Owner a separate agreement of attornment.  Nothing herein contained shall be construed,
however, to obligate Owner to cure any default by the Sublandlord under the
Sublease occurring prior to the Attornment Date, it being expressly agreed that
under no circumstances shall Owner be obligated to remedy any such
default.  Nothing herein contained shall
be construed, however, to obligate Tenant to cure any default by the
Sublandlord under the Sublease or the Master Lease, it being expressly agreed
that under no circumstances shall Tenant be obligated to remedy any such
default.

 

4.             MODIFICATIONS TO SUBLEASE AS OF
ATTORNMENT DATE:

 

Owner and Tenant agree that
as of the Attornment Date, the Sublease shall be automatically modified as
follows, without any further agreements or confirmations required:

 

(a)           Modification to Paragraph 1 (Subleased Premises).  Landlord
shall have no obligation to remove any Excluded Property and Sublessee, not
Sublessor, shall be responsible to repair any and all damage caused by such
removal.

 

(b)           Modification to Paragraph 3 (Base Rent).The Base Rent set forth in Paragraph 3
of the Sublease shall automatically be deemed deleted and the following Base
Rent schedule shall be automatically deemed inserted in lieu thereof:

 

2

 

	
  Lease
  Year

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Base Rent Installment

  	
   

  
	
  December 1, 2004 – November
  30, 2005

  	
   

  	
  $

  	
  639,525.75

  	
   

  	
  $

  	
  53,293.81

  	
   

  
	
  December 1, 2005 – November 30, 2006

  	
   

  	
  $

  	
  651,612.79

  	
   

  	
  $

  	
  54,301.07

  	
   

  
	
  December 1, 2006 – November 30, 2007

  	
   

  	
  $

  	
  663,928.27

  	
   

  	
  $

  	
  55,327.36

  	
   

  
	
  December 1, 2007 – November 30, 2008

  	
   

  	
  $

  	
  676,476.51

  	
   

  	
  $

  	
  56,373.04

  	
   

  
	
  December 1, 2008 – November 30, 2009

  	
   

  	
  $

  	
  689,261.92

  	
   

  	
  $

  	
  57,438.49

  	
   

  
	
  December 1, 2009 – November 30, 2010

  	
   

  	
  $

  	
  702,288.97

  	
   

  	
  $

  	
  58,524.08

  	
   

  
	
  December 1, 2010 – November 30, 2011

  	
   

  	
  $

  	
  715,562.23

  	
   

  	
  $

  	
  59,630.19

  	
   

  
	
  December 1, 2011 – November 30, 2012

  	
   

  	
  $

  	
  729,086.36

  	
   

  	
  $

  	
  60,757.20

  	
   

  
	
  December 1, 2012 – November 30, 2013

  	
   

  	
  $

  	
  742,866.09

  	
   

  	
  $

  	
  61,905.51

  	
   

  
	
  December 1, 2013 – November 30, 2014

  	
   

  	
  $

  	
  756,906.26

  	
   

  	
  $

  	
  63,075.52

  	
   

  
	
  December 1, 2014 – November 30, 2015

  	
   

  	
  $

  	
  771,211.79

  	
   

  	
  $

  	
  64,267.65

  	
   

  
	
  December 1, 2015 – November 30, 2016

  	
   

  	
  $

  	
  785,787.69

  	
   

  	
  $

  	
  65,482.31

  	
   

  
	
  December 1, 2016 – May 31, 2017

  	
   

  	
  $

  	
  800,639.08

  	
   

  	
  $

  	
  66,719.92

  	
   

  
	
   

  	
   

  	
  (this amount shall be prorated
  for the partial year)

  	
   

  	
   

  	
   

  	
   

  

 

(c)           Modification to Paragraph 5 (Additional Rent Due By and Other Obligations of Sublessee).  Paragraph 5 shall
be automatically amended as follows:

 

(i)            Paragraph 5(B).  With respect to the first paragraph of
Paragraph 5(B), except with respect to the first sentence of Paragraph 5(B),
all of Paragraph 5(B) shall be automatically deleted.

 

(ii)           Paragraph 5(D).  Except with respect to the first and last
sentences of the first paragraph of Paragraph 5(D), all of Paragraph 5(D) shall
be automatically deleted.  With respect
to the third paragraph of Paragraph 5(D), the second sentence thereof shall be
automatically deleted.

 

(iii)          Paragraph 5(I).  Tenant shall also be required to comply with
the terms of Paragraph 28(b) of the Master Lease except that all references to “Guarantor”
in Paragraph 28 of the Master Lease shall instead refer to “Tenant”.

 

(d)           Modification to Paragraph 16 (Environmental).  The penultimate sentence to Paragraph 16 of
the Sublease shall be automatically deleted.

 

(e)           Modification to Paragraph 19 (Inapplicable Provisions).  Paragraph 19
shall be automatically amended to omit the references to Paragraphs 3(a), 3(b),
3(c), 8, 21 and 30 as Paragraphs that are not incorporated by reference into
the Sublease.

 

The foregoing
modifications shall apply as between tenant and owner (or its successors in
interest to the Premises including any mortgages of the Premises) only and
shall not apply to Sublandlord or in any way release Sublandlord from any of
Sublandlord’s obligations under the Sublease, including but not limited to any
indemnity obligations, in existence prior to such amendments.

 

5.             LIMITATION OF LIABILITY:

 

(a)           If Owner shall succeed to the interest of
the Sublandlord, Owner shall have no personal liability as successor to the
Sublandlord, and the Tenant shall look only to the interest of Owner in the
Premises or the proceeds thereof for the satisfaction of the Tenant’s remedies
for the collection of a judgment (or other judicial process) requiring the
payment of money in the event of any default by Owner as landlord under the
Sublease.  No other assets of Owner shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of the Tenant’s remedies under or with respect to the

 

3

 

Sublease, the relationship of the Sublandlord and the tenant thereunder
or the Tenant’s use or occupancy of the Premises.

 

(b)           No prepayment of rent or additional rent due
under the Sublease of more than one (1) month in advance of the due date
thereof shall be binding upon Owner, as landlord under the Sublease if Owner
succeeds to that position, unless consented to in writing by Owner or actually
received by Owner, and no amendment, modification, surrender or cancellation of
the Sublease shall be binding upon Owner as landlord under the Sublease if
Owner succeeds to that position, unless such amendment, modification, surrender
or cancellation is consented to in writing by Owner.  In addition, Owner, as landlord under the
Sublease, if it succeeds to that position, shall in no event (a) be liable to
the Tenant for any act or omission of any prior landlord unless such act or
omission continues after the Attornment Date, (b) be subject to any offset or
defense which the Tenant might have against any prior landlord, (c) be liable
to the Tenant for any liability or obligation of any prior landlord occurring
prior to the Attornment Date unless such obligation continues after the Attornment
Date, or (d) be liable to the Tenant for any security or other deposits given
to secure the performance of the Tenant’s obligations under the Sublease,
except to the extent that Owner shall have received such security or other
deposits.

 

6.             NOTICES:

 

The
Tenant shall give Owner copies of all notices and other communications given by
the Tenant to the Sublandlord relating to (a) defaults on the part of the
Sublandlord or the Tenant under the Sublease, and (b) any violations of any
ordinances, statutes, laws, rules, codes, regulations or requirements of any
governmental agency concerning the Premises. 
In the event of any act or omission by the Sublandlord which would give
the Tenant the right, either immediately or after the lapse of a period of time,
to terminate the Sublease, or to claim a partial or total eviction, the Tenant
will not exercise any such right (i) until it has sent written notice of such
act or omission to Owner as provided herein, and (ii) unless Owner shall have
failed within sixty (60) days after receipt of such notice to cure such default
and the expiration of Sublandlord cure period if any, or if such default cannot
be cured within such period, Owner shall not have commenced within such sixty
(60) days and thereafter diligently pursued any action necessary to cure such
default.  All notices and other
communications by Tenant to Owner shall be sent by certified or registered mail
or by reputable overnight courier for overnight delivery to Owner at the
address set forth above with a copy to Reed Smith LLP, One Liberty Place,
Philadelphia, PA  19103, Attention:  Chair, Real Estate Department, or to such
other address or person as may be specified in a notice sent by Owner to Tenant
at the address set forth in the Sublease in accordance with the provisions of
this Section 6, and shall be deemed given on the third (3rd) business day after
being deposited with the United States Postal Service or the first (1st)
business day after being deposited with a reputable overnight courier for overnight
delivery.

 

7.             OWNER’S ESTOPPEL:

 

Owner hereby certifies, represents, warrants and
agrees as follows:

 

(a)           A true and complete copy of the Master
Lease is attached to the Sublease.  The
Master Lease contains all of the understandings and agreements between
Sublandlord and Owner with respect to the Premises, and the Master Lease is in
existence and in full force and effect without modification, addition,
extension or renewal on the date hereof, except as specifically noted above.

 

(b)           Sublandlord has paid rent and all other
charges due under the Master Lease through November 30, 2004.

 

(c)           To Owner’s knowledge, as of the date of
this Agreement:  (a) neither Sublandlord
nor Owner is in default under any of the terms of the Master Lease; (b) all
obligations and conditions under the Master Lease to be performed to date by
Owner and Sublandlord have been satisfied; (c) no event has occurred which,
with the passage of time or the giving of notice or both, would constitute an
event of default by Owner or Sublandlord under the Master Lease; and (d)
Sublandlord has no current defenses or

 

4

 

claims against Owner or rights of offset against any rents payable to
Owner under the Master Lease or otherwise.

 

(d)           To Owner’s knowledge, Sublandlord has not
assigned the Lease nor sublet, licensed, mortgaged or otherwise encumbered all
or any portion of the Premises other than to Tenant.

 

(e)           No improvements or alterations have been
made to the Premises as of the date hereof that will be required to be removed
or otherwise remedied at the end of the term of the Master Lease.

 

(f)            Owner is the fee title owner to the
property and, to Owner’s knowledge, there are no liens or encumbrances filed
against the property other than the permitted encumbrances listed on Exhibit “B” attached hereto (the “Permitted
Encumbrances”).

 

(g)           Owner acknowledges and agrees that Tenant
shall not be bound by any modifications made to the Master Lease after the date
hereof without Tenant’s prior written consent.

 

8.             OPTION TO PURCHASE:

 

(a)         Subject to the provisions of Paragraph
13(e), Tenant shall have the right to purchase the Premises from Owner on or
within three (3) months after the Expiration Date. provided that:

 

i)              Tenant shall give Owner notice
(hereinafter called the “Purchase Notice”) of its desire to purchase the
Premises at least eighteen (18) months prior to the Expiration Date; and

 

(i)            Tenant is not in default beyond all
applicable notice and grace periods under the Sublease as of the time of the
giving of the Purchase Notice.

 

(b)         The purchase price payable by Tenant to
Owner for the Premises (the “Purchase Price”) shall be determined as of
the date Tenant gives the Purchase Notice (such date is hereinafter called the “Purchase
Price Determination Date”) which Purchase Price shall be the Offer Amount
set forth in Paragraph 2 of the Master Lease and incorporating all provisions
of the Master Lease required to determine the Offer Amount, including, but not
limited to the definition of Fair Market Value thereunder, Paragraphs 20 and 29
and Exhibit “E” thereof; provided, however, that (i) the present value of the
remaining rent due under the Sublease or Master Lease shall not be included in
determining the Fair Market Value thereunder, (ii) any provisions relating to
any property other than the Premises shall be excluded and (iii) any references
to “Monetary Obligations” shall refer to Tenant’s rental and other monetary
obligations under the Sublease.

 

(c)         Tenant shall have until the later of (i)
May 31, 2016 or (ii) of twenty (20) days after the determination of the
Purchase Price to irrevocably exercise its option to purchase the Premises in
accordance with this Section 8.  If
Tenant fails to make such election within such period, the purchase option
contained herein shall be deemed waived.

 

9.             ENVIRONMENTAL LIABILITY:

 

Notwithstanding
anything contained in the Master Lease to the contrary, Owner acknowledges and
agrees that Tenant shall not be liable for any environmental conditions
existing on the Premises prior to the commencement of the Sublease and Tenant
shall not be obligated to defend, indemnify or hold harmless Owner with respect
to any claims, liabilities, costs, expenses or damages relating to or arising
from any such pre-existing environmental conditions on the Premises.

 

10.           OWNER’S ACCESS TO THE PREMISES:

 

Notwithstanding
anything contained in the Master Lease to the contrary, Owner acknowledges and
agrees that given the secure nature of Tenant’s business, Owner’s access to the
Premises shall be subject to Tenant’s standard security procedures, including,
but not limited to Owner providing reasonable

 

5

 

advance notice, Owner’s representatives’ clearance through Tenant’s
security department, and Owner’s representatives being escorted by Tenant’s
representatives through the Premises.

 

11.           INITIAL ALTERATIONS:

 

Notwithstanding
anything contained in the Master Lease to the contrary, Owner hereby approves
the initial alterations that Tenant intends to make to the Premises (the “Initial
Alterations”) as shown on the Plans and Specifications attached hereto as Exhibit “C” (the “Plans”) and Owner
acknowledges and agrees that Tenant shall not be obligated to remove the
Initial Alterations, and will not be charged for such Initial Alterations, at
the end of the term of the Sublease, as the same may be extended
hereunder.  In addition, Owner will not
unreasonably withhold, condition or delay its consent to any modifications to
the Plans nor require removal of any Initial Alterations approved by Owner on
such modified Plans.

 

12.           INSURANCE:

 

Notwithstanding
anything contained in the Master Lease to the contrary, Owner acknowledges and
agrees that (a) Tenant shall not be required to obtain and maintain (i)
Incidental Medical Malpractice and Host Liquor Liability Insurance, (ii) Excess
Liability insurance with limits greater that $3,000,000 per occurrence/annual
aggregate or (iii) insurance for Off-Premises Service Interruption, Expediting
Expenses, Ammonia Contamination or Hazardous Materials Clean-Up Expense, (b)
the requirement contained in the last sentence of Paragraph 16(a)(v) is hereby
waived, (c) the requirement contained in the penultimate sentence of Paragraph
16(b) to name Owner as the insured on the insurance required under Paragraph
16(a)(v) of the Master Lease is hereby modified to name Owner as the additional
insured, (d) the requirement contained in the first sentence of Paragraph 16(h)
to name Owner and its lender as the named insureds with respect to concurrent
or contributing insurance is hereby modified to name Owner and its lender as
the additional insureds, and (e) in conjunction with Paragraph 16(i), Owner
hereby waives all of its rights of subrogation against the Tenant as may be applicable
to any insurer and will enforce such waivers in policy provisions.

 

13.           RIGHT OF FIRST OFFER:

 

(a)           If at any time after the date hereof,
Owner decides to offer the Premises for sale to any third party unless such
offer is for the collective portfolio sale of all four of the premises demised
under the Master Lease), Landlord shall first offer by written notice (the “Offer”)
to sell the Premises to Tenant for a specific purchase price (the “ROFO
Purchase Price”) and, upon such terms and conditions as Landlord, in
Landlord’s sole discretion, would otherwise intend to offer to sell the
Premises, prior to Owner’s offering to sell the Premises to any such third
party except that the terms and conditions of any such sale to Tenant shall be
(i) consistent with the terms and provisions of this Paragraph 13 and
(ii) the sale to Tenant shall be “AS IS”, “WHERE IS”, without
representation or warranty by Owner.  If
Owner shall make the Offer, then, whether or not Tenant has accepted the Offer,
Owner shall have the unilateral right, in Owner’s sole discretion, to revoke
the Offer if an Event of Default exists under the Sublease on the date on which
Owner shall give, or would otherwise be required to give, Tenant the Offer.

 

(b)           Tenant shall have the right to accept the
Offer only by giving Owner written notice of such acceptance (the “ROFO
Notice”) within thirty (30) days after delivery by Owner to Tenant of
the Offer.  Time shall be of the essence
with respect to said thirty (30) day period and delivery of the ROFO Notice
by Tenant.  If Tenant shall accept the
Offer, Tenant shall execute any documentation reasonably required by Owner to
reflect Tenant’s acceptance of the Offer. 
Notwithstanding anything to the contrary contained in this Agreement or
the Sublease, upon the delivery of the ROFO Notice by Tenant, no event or
circumstances affecting the Premises including, but not limited to, a
condemnation or casualty, shall give Tenant any right or option of Tenant to
cancel, surrender or otherwise terminate the Sublease, provided that the
condemnation or casualty proceeds are delivered to Tenant (less any amounts due
under the Sublease or any expenses incurred by Owner in connection with such
casualty or condemnation).

 

(c)           If Tenant does not accept, or fails to
accept, the Offer in accordance with the provisions herein, Owner shall be
under no further obligation with respect to such Offer pursuant to the terms

 

6

 

contained herein, and Tenant shall have forever waived and relinquished
its right to such Offer, and Owner shall at any and all times thereafter be
entitled to market the Premises to others upon such terms and conditions as
Owner in its sole discretion may determine, except that if the price (“Third
Party Price”) for which Owner enters into a binding contract (“Third
Party Contract”) to sell the Leased Premises is less than ninety five
percent (95%) of the ROFO Purchase Price, Tenant shall have
fifteen (15) days in which to accept the Third Party Price.  Tenant shall, within five (5) days after
Owner’s request therefor, deliver an instrument in form reasonably satisfactory
to Owner confirming the aforesaid waiver, but no such instrument shall be
necessary to make the provisions hereof effective.

 

(d)           If Tenant does not timely deliver the
ROFO Notice and the Premises are transferred to a third party on or after the
Attornment Date, Tenant will attorn to such third party as the Owner and such
party shall not disturb Tenant’s occupancy of the Premises.  Tenant and such third party will execute such
documents confirming the agreement referred to above and such other agreements
as either may reasonably request, provided that such agreements do not increase
the liabilities and obligations of either Tenant or such other party hereunder.

 

(e)           If Tenant does not timely deliver the
ROFO Notice and the Premises are transferred to a third party, Tenant hereby
waives the option to purchase contained in Section 8 hereof.

 

(f)            Notwithstanding anything to the contrary
contained herein, the provisions of this Paragraph 8 shall not apply to or
prohibit (i) any mortgaging, subjection to deed of trust or other
hypothecation of Owner’s interest in the Premises, (ii) any sale of the
Premises pursuant to a private power of sale under or judicial foreclosure of
any mortgage or other security instrument or device to which Owner’s interest
in the Premises is now or hereafter subject, (iii) any transfer of Owner’s
interest in the Premises to a mortgage lender, beneficiary under deed of trust
or other holder of a security interest therein or their designees by deed in
lieu of foreclosure, (iv) any transfer of the Premises to any governmental
or quasi-governmental agency pursuant to a condemnation of the Premises,
(v) any transfer of the Premises or any interest therein or in Owner to
any affiliate of Corporate Property Associates 12 Incorporated (“CPA:12”)
or Corporate Property Associates 14 Incorporated (“CPA:14”), Corporate
Property Associates 15 Incorporated (“CPA:15”), Corporate Property
Associates 16-Global Incorporated (“CPA:16”) or to any entity for whom
W.P. Carey & Co. LLC or any of its affiliates provides
management or advisory services or investment advice (any of the foregoing, a “Carey
Affiliate”), (vi) a transfer to any person or entity to whom CPA:14
sells all or substantially all of its assets, (vii) any transfer of the
interest of CPA-14 in Owner to any Carey Affiliate.

 

(g)           If the Premises is purchased by Tenant
pursuant to this Paragraph 13, Owner need not convey any better title thereto
than that which was conveyed to Owner, and Tenant shall accept such title,
subject, however, to the Permitted Encumbrances (as defined in the Master
Lease) and to all other liens, exceptions and restrictions on, against or
relating to any of the Premises and to all applicable laws, but free of the
lien of and security interest created by any mortgage or assignment of leases
and rents and liens, exceptions and restrictions on, against or relating to the
Premises which have been created by or resulted solely from acts of Owner after
the date of the Master Lease, unless the same are Permitted Encumbrances or
customary utility easements benefiting the Premises or were created with the
concurrence of Tenant or Sublandlord or as a result of a default by Tenant
under the Sublease or Sublandlord under the Master Lease.

 

(h)           Upon the date fixed for a purchase of the
Premises pursuant to this Paragraph 13 which shall be a date mutually
acceptable to Owner and Tenant which shall be no later than either
sixty (60) days following acceptance of the Offer or the date specified in
the Third Party Contract, if applicable, (the “Purchase Date”), Tenant
shall pay to Owner, or to any Person to whom Owner directs payment, the ROFO
Purchase Price and all other sums payable by Tenant under the Offer by wire
transfer and Owner shall deliver to Tenant or its designee (i) a deed with
covenant against grantor’s acts which describes the Premises being conveyed and
conveys the title thereto as provided in Paragraph 13(f) above and (ii) such
other instruments as shall be necessary to transfer the Premises to Tenant or
its designee.  If on the Purchase Date
any monetary obligations remain outstanding under the Sublease, Tenant shall
pay to Owner on the Purchase Date the amount of such monetary obligations.  Upon the completion of such

 

7

 

purchase by Tenant or its designee, the Sublease and all obligations
and liabilities of Tenant thereunder shall terminate, except any undischarged
obligations of Tenant under the Sublease, actual or contingent, which arise on
or prior to the expiration or termination of the Sublease or which survive such
expiration or termination by their own terms. 
Any prepaid monetary obligations under the Sublease paid to Owner shall
be prorated as of the Purchase Date, and the prorated unapplied balance shall
be deducted from the ROFO Purchase Price due to Owner; provided, that no
apportionment of any Impositions (as defined in the Sublease) shall be made
upon any such purchase.

 

(i)            If the completion of the purchase by
Tenant or its designee pursuant to this Paragraph 13 shall be delayed after the
date scheduled for such purchase, Base Rent and Additional Rent shall continue
to be due and payable under the Sublease until completion of such purchase.

 

14.           INTENTIONALLY DELETED.

 

15.           SUCCESSORS AND ASSIGNS:

 

This Agreement shall apply to, bind and inure to the
benefit of the Owner, the Lender and the Tenant and their respective successors
and assigns.  As used herein, the term “Tenant”
shall mean and include the present subtenant under the Sublease, any permitted
sub-subtenant under the Sublease, any permitted assignee of Tenant under the
Sublease and any successor of any of them. 
The term “Owner” as used herein shall include the Owner and the
successors and/or assigns of Owner and any person, party or entity which shall
become the owner of the Premises.  The
term “Lender” as used herein shall include the Lender and the successors and/or
assigns of Lender and any person, party or entity which shall become a
mortgagee of the Premises

 

16.           RENEWAL:

 

(a)  If, on or
prior to the Expiration Date or any other Renewal Date (as hereinafter defined)
the Sublease shall not have been terminated pursuant to any provision thereof,
then on the Expiration Date and on the fifth (5th) anniversary and
the tenth (10th) anniversary of the Expiration Date (the Expiration
Date and each such anniversary being referred to herein as a “Renewal Date”),
the Term of the Sublease shall be deemed to have been automatically extended
for an additional period of five (5) years (each such extension, a “Renewal
Term”) as a direct lease between Owner and Tenant (regardless of whether the
Attornment Date has occurred), unless Tenant shall notify Owner that Tenant is
terminating the Sublease as of the next Renewal Date in writing on or before
the later of (i) the date that is twelve (12) months prior to the next Renewal
Date or (ii) the date that is twenty (20) days after the Adjusted FMVR (as
hereinafter defined) is determined for the applicable Renewal Term.  Any such extension of the Term shall be
subject to all of the provisions of the Sublease, as the same may be amended,
supplemented or modified (except that Sublessee shall not have the right to any
additional Renewal Terms after the third Renewal Term.  Base Rent for each five (5) year Renewal Term
shall be as follows (payable in equal monthly installments on the first of each
month):

 

8

 

	
  Period

  	
   

  	
  Annual Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2017 through
  May 31, 2018

  	
   

  	
  Adjusted FMRV

  
	
   

  	
   

  	
   

  
	
  June 1, 2018 through
  May 31, 2019 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2019 through
  May 31, 2020 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2020 through
  May 31, 2021 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2021 through
  May 31, 2022 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  If the Term is further
  extended:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  June 1, 2022 through
  May 31, 2023

  	
   

  	
  Adjusted FMRV

  
	
   

  	
   

  	
   

  
	
  June 1, 2023 through
  May 31, 2024 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2024 through
  May 31, 2025 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2025 through
  May 31, 2026 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2026 through
  May 31, 2027 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  If the Term is further
  extended:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  June 1, 2027 through
  May 31, 2028

  	
   

  	
  Adjusted FMRV

  
	
   

  	
   

  	
   

  
	
  June 1, 2028 through
  May 31, 2029 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2029 through
  May 31, 2030 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2030 through
  May 31, 2031 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  
	
   

  	
   

  	
   

  
	
  June 1, 2031 through
  May 31, 2032 increased by 1.89%

  	
   

  	
  Prior year’s Base Rent

  

 

(b)  As used
herein, the term “Adjusted FMRV” shall mean the greater of (i) 97% of the Fair
Market Rental Value (as defined herein) of the Premises per annum or (ii) the
Prior Bumped Rent (as defined herein). 
The “Prior Bumped Rent” as used herein shall mean the lesser of (1)
amount that is 1.89% greater than the per annum rent payable under the Sublease
immediately prior to the applicable Renewal Term (which, notwithstanding
anything contained herein to the contrary, shall be deemed to be

 

9

 

$707,696.03 per annum for the purposes of calculating the Fair Market
Rental Value for the first Renewal Term) or (2) 110% of the Fair Market Rental
Value of the Premises per annum.

 

(c)  ”Fair
Market Rental Value” shall be determined as of the date occurring sixteen (16) months
prior to the applicable Renewal Date (such date is hereinafter called the “Determination
Date”) and which determination shall be made in accordance with this
subparagraph and subparagraphs “(d)” and “(e)” below and shall be determined by
comparing the prevailing fixed or base rental rate payable under leases
(collectively, “Comparable Leases”) that have actually been entered into (the “Prevailing
Rental Rate”) as of the Determination Date, for space in buildings within a
twenty-five (25) mile radius of the Premises of comparable quality and age to
the Premises (collectively, “Comparable Buildings”).  The entire Premises shall be taken into
account in determining Fair Market Rental Value, irrespective of whether Tenant
utilizes or intends to utilize such space, including but not limited to any
mezzanine space.  In determining the
Prevailing Rental Rate appropriate consideration shall be given to the 1.89%
annual rent increases hereunder during the applicable Renewal Term and the
economic terms of Comparable Leases, including but not limited to, lease term,
base years, escalations, operating expenses, taxes, and distinctions between “gross”
and “net” leases, the date the particular rent rate under consideration became
or is to become effective, and all other terms and conditions of this Sublease
which are applicable to the applicable Renewal Term.  In addition in the event that any
improvements made by Tenant increase the square footage of the building on the
Premises, an appropriate reduction shall be made to the Fair Market Rental
Value as if such square footage had not been added to the building on the
Premises.  All of the foregoing matters
shall constitute the criteria (the “Criteria”) for determining the Fair Market
Rental Value.  When applying the Criteria,
only leases, renewals and expansions which have been executed within the 12
months prior o the Determination Date shall be taken into consideration.

 

(d)  Owner and
Tenant shall endeavor to agree as to the amount of the Fair Market Rental Value
for the Premises pursuant to the provisions of subparagraph (c) above, during
the fifteen (15) day period following the Determination Date.  In the event that Owner and Tenant cannot
agree as to the amount of the Fair Market Rental Value within such fifteen (15)
day period following the Determination Date, then Owner or Tenant may initiate
the appraisal process provided for herein by giving notice to that effect to
the other, and the party so initiating the appraisal process (such party
hereinafter referred to as the “Initiating Party”) shall specify in such notice
the name and address of the person designated to act as an arbitrator on its
behalf.  Within fifteen (15) days after
the designation of such arbitrator, the other party (hereinafter referred to as
the “Other Party”) shall give notice to the Initiating Party specifying the
name and address of the person designated to act as an appraiser on its
behalf.  If the Other Party fails to
notify the Initiating Party of the appointment of its appraiser within the time
above specified, then the appointment of the second appraiser shall be made in
the same manner as hereinafter provided for the appointment of a third
appraiser in a case where the two appraisers appointed hereunder and the
parties are unable to agree upon such appointment.  The two appraisers so chosen shall meet
within twenty (20) days after the second appraiser is appointed hereunder and
the parties are unable to agree upon such appointment.  The two appraisers so chosen shall meet
within twenty (20) days after the second appraiser is appointed and attempt to
reach an agreement on the Fair Market Rental Value for the Premises and if,
within twenty (20) days after the second appraiser is appointed, the two
appraisers shall not agree, they shall together appoint a third appraiser.  In the event they are unable to agree upon
such appointment within thirty (30) days after the appointment of the second
appraiser, the third appraiser shall be selected by the parties themselves if
they can agree thereon within a further period of ten (10) days.  If the parties do not so agree on the
appointment of the third appraiser, then either party, on behalf of both and on
notice to the other, may request such appointment by the American Arbitration
Association (or organization successor thereto) in accordance with its rules
then prevailing or if the American Arbitration Association (or such successor
organization) shall fail to appoint said third appraiser within twenty (20)
days after such request is made, then either party may apply on notice to the
other, to the Superior Court, Mercer County, New Jersey (or any other court
having jurisdiction and exercising functions similar to those now exercised by
said Court) for the appointment of such third appraiser.  The determination of Fair Market Value made
by the third appraiser appointed pursuant hereto shall be made within twenty
(20) days after such appointment.

 

10

 

(e)  If a third
appraiser is selected, Fair Market Rental Value shall be the average of the
determination of Fair Market Rental Value made by the third appraiser and the
determination of Fair Market Rental Value made by the appraiser whose
determination of Fair Market Value is nearest to that of the third appraiser.  Such average shall be binding and conclusive
upon Owner and Tenant.

 

(f)  Each party
shall pay the fees and expenses of the one of the two original appraisers
appointed by or for such party, and the fees and expenses of the third
appraiser and all other expenses (not including the attorneys fees, witness
fees and similar expenses of the parties which shall be borne separately by
each of the parties) of the appraisal process shall be borne by the parties
equally.

 

(g)  All
appraisers selected or appointed pursuant to this Section 16 shall (A) be
independent qualified MAI appraisers (B) have no right, power or authority to
alter or modify the provisions of this Agreement, (C) utilize the definition of
Fair Market Rental Value hereinabove set forth above, (D) be registered in the
State of New Jersey if such State provides for or requires such registration,
and (E) have at least ten (10) years experience in the leasing and renting of
industrial/office space in similar properties in Central New Jersey.

 

17.           ASSIGNMENT AND SUBLETTING:

 

Notwithstanding anything
contained in the Master Lease to the contrary, with respect to any period prior
to the Attornment Date or the Commencement of any Renewal Term, Owner hereby
waives, for the benefit of Sublandlord and Tenant, any requirement in the
Master Lease requiring the deposit with Owner of an Assignment Security Deposit
or Sublet Security Deposit (as such terms are defined in the Master Lease) or
the consent of Owner to any assignment of the Sublease or further sub-subletting
of the Premises.  Effective as of any
Attornment Date or the commencement of any Renewal Term, if Tenant has so
assigned the Sublease or further sub-sublet the Premises, or if Tenant
thereafter desires to assign the Sublease or further sub-sublet the Premises,
Tenant shall be required to deposit with Owner an Assignment Security Deposit
or Sublet Security Deposit to the extent same would be required under the
Master Lease, provided, however, that the amount of such Assignment Security
Deposit or Sublet Security Deposit, as applicable, shall be only based upon the
then current base rent under the Sublease and not on the full Basic Rent set
forth in the Master Lease.

 

[REMAINDER OF PAGE IS INTENTIONALLY BLANK]

 

11

 

EXECUTED
AS OF THE DATE FIRST SET FORTH ABOVE.

 

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  BANK NOTE HOLOGRAPHICS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Kenneth
  Traub

  	
   

  
	
   

  	
  Kenneth Traub, President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  MORE
  APPLIED FOUR (DE) LLC

  
	
   

  	
    By:
  Applied Four (DE) QRS 14-75, INC., its managing member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Thomas E. Zacharias

  	
   

  
	
   

  	
  Thomas E. Zacharias,

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  
						

 

12

 

STATE OF NY)

COUNTY OF WESTCHESTER)

 

On the 6 day of December,
in the year 2004 before me, the undersigned, personally appeared Kenneth Traub
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.

 

 

	
   

  	
  /s/ Nancy Borst

  
	
   

  	
  Notary Public

  
	
   

  	
  Nancy A. Borst

  
	
   

  	
  Notary Public State of
  NY

  
	
   

  	
  No. 01B05057933

  
	
   

  	
  Qualified in
  Westchester County

  
	
   

  	
  Commission Expires
  4/1/06

  

 

 

STATE OF NEW YORK)

COUNTY OF NEW YORK)

 

On the 6 day of December,
in the year 2004 before me, the undersigned, personally appeared Thomas
Zacharias personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.

 

 

	
   

  	
  /s/ Heather Coleman

  
	
   

  	
  Notary Public

  
	
   

  	
  Heather L. Coleman

  
	
   

  	
  Notary Public State of
  NY

  
	
   

  	
  No. 01C06087715

  
	
   

  	
  Qualified in New York
  County

  
	
   

  	
  Commission Expires 2/24/07

  

 

 

EXHIBIT A

Premises

 

All
that certain lot, piece or parcel of land, with the buildings and improvements
thereon erected, situate, lying and being in the Township of Washington, County
of Mercer, State of New Jersey:

 

BEGINNING
at a point in the proposed Easterly right of way line of West Manor Way (40
feet from centerline) said point being located the following two (2) courses
from the intersection of the southeasterly right of way line of New Jersey
Turnpike (300 feet wide) with the Easterly right of way line of West Manor Way
(50 feet wide) and from said intersection running;

 

a.             Southerly
distant 3202.78 feet along the Easterly right of way line of West Manor Way (50
feet wide) to a point; thence

 

b.             South
54 degrees 52 minutes 51 seconds East along the common line between Tax Map
Lots 19 and 20 in Block 41, 15.00 feet to a point and place of beginning and
running thence;

 

1.             North
34 degrees 24 minutes 41 seconds East along the proposed Easterly right of way
line of West Manor Way, 820.19 feet to a point of curvature; thence

 

2.             Northeasterly
along a new line through Lot 19 in Block 41, along a curve to the right having
a radius of 40.00 feet and an arc length of 62.83 feet to a point of tangency;
thence

 

3.             South
55 degrees 35 minutes 19 seconds East along same, 245.00 feet to a point;
thence

 

4.             South
57 degrees 44 minutes 10 seconds East still along same, 200.14 feet to a point;
thence

 

5.             South
55 degrees 35 minutes 19 seconds East still along same, 168.13 feet to a point;
thence

 

6.             South
34 degrees 24 minutes 41 seconds West still along same, 875.76 feet to a point;
thence

 

7.             North
54 degrees 52 minutes 51 seconds West along the common line between Tax Map
Lots 19 and 20 in Block 41,653.18 feet to the true point and place of
BEGINNING.

 

Being
known as Lot 19.02 in Block 41 on the Tax map.

 

TOGETHER
WITH the benefits as contained in that certain Cross Easement Agreement
recorded in Deed Book 3186, page 024.

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