Document:

Exhibit 10.23

 

LEASE AGREEMENT BETWEEN

 

760-24 WESTCHESTER AVENUE, LLC

AND 800-60 WESTCHESTER AVENUE, LLC,

 

AS LESSOR,

 

AND

 

IT&E INTERNATIONAL GROUP,

 

AS LESSEE.

 

 

Premises:

 

800 Westchester Avenue

Rye Brook, New York

 

 

Prepared By:

 

The Law Offices of

HIRSCH & GIBALDI, LLP

585 Stewart Avenue

Suite 530

Garden City, New York 11530

(516) 227-1117

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 - DEMISE AND TERM OF DEMISE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 - RENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 - TAXES AND COMMON AREA MAINTENANCE CHARGES

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 - USE OF DEMISED PREMISES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5- POSSESSION AND CONDITION OF DEMISED PREMISES

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6- UTILITIES, CLEANING, ETC.

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7- REPAIR AND MAINTENANCE

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8- LESSOR’S WORK; LESSEE’S ALTERATIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9- COMPLIANCE WITH LAWS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10- RIGHTS RESERVED TO LESSOR

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11- INSURANCE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 - DAMAGE OR DESTRUCTION

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 - CURING DEFAULTS; FEES AND EXPENSES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14 - DEFAULT PROVISIONS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15 - MEASURE OF DAMAGES IN EVENT OF DEFAULT

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16 - INDEMNIFICATION

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17 - MECHANIC’S AND OTHER LIENS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18 - CONDEMNATION

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19 - COVENANT OF QUIET ENJOYMENT

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20 - WAIVER OF COUNTERCLAIM AND JURY TRIAL

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21 - NOTICES

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22 - WAIVERS AND SURRENDERS TO BE IN WRITING

  	
   

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23- RIGHTS CUMULATIVE

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24- CONVEYANCE; LIABILITY OF PARTIES

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25- CHANGES AND ALTERATIONS BY LESSEE

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26 - CERTIFICATE OF LESSEE

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE- 27 ASSIGNMENTS, SUBLEASES AND MORTGAGES

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 28 - SUBORDINATION

  	
   

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29 - SURRENDER; REMOVAL OF LESSEE’S PROPERTY

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30 - RENEWAL TERM

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31- EARLY TERMINATION RIGHT

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32- BROKERS

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 33- SECURITY DEPOSIT

  	
   

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 34- DEFINITIONS

  	
   

  	
  33

  

 

 

	
  ARTICLE 35- MISCELLANEOUS

  	
   

  	
  36

  

 

LIST OF EXHIBITS TO LEASE

 

	
  EXHIBIT ”A”

  	
   

  	
  THE
  METES AND BOUNDS DESCRIPTION OF THE PROPERTY

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”B”

  	
   

  	
  THE
  FLOOR PLANS OF DEMISED PREMISES

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”C”

  	
   

  	
  BUILDING
  RULES AND REGULATIONS

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”D”

  	
   

  	
  THE
  CLEANING SPECIFICATIONS

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”E”

  	
   

  	
  THE
  COMMENCEMENT DATE AGREEMENT

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”F-1”

  	
   

  	
  THE
  PLANS AND SPECIFICATIONS FOR LESSOR’S WORK

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”F-2”

  	
   

  	
  LESSOR’S
  STANDARD WORK LETTER

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”G”

  	
   

  	
  STANDARD
  REQUIREMENTS FOR ALTERATIONS

  
	
   

  	
   

  	
  TO
  BE PERFORMED BY LESSEES

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”H”

  	
   

  	
  THE
  HEALTH CLUB WAIVER

  
	
   

  	
   

  	
   

  
	
  EXHIBIT ”I”

  	
   

  	
  THE
  SUBORDINATION, NON-DISTURBANCE AGREEMENTS

  

 

 

AGREEMENT OF LEASE, dated as of February 2006 between 760-24 WESTCHESTER AVENUE, LLC and 800-60 WESTCHESTER AVENUE, LLC
both having an office in care of RPW Group, Inc., 120 Bloomingdale Road,
White Plains, New York 10605 (hereinafter referred to collectively as “Lessor”)
and IT&E INTERNATIONAL GROUP,
having an office at 800 Westchester Avenue, Rye Brook, New York 10573  (hereinafter referred to as “Lessee”);

 

W I T N E S S E T H

 

WHEREAS, Lessor, is owner of the land and all the improvements erected thereon
located in the Town of Rye Brook, County of Westchester, State of New York and
more particularly described in EXHIBIT ”A” annexed hereto (the “Property”);

 

WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to hire from Lessor,
a portion of the Third (3rd) floor in the building commonly known as
and located at 800 Westchester Avenue, Rye Brook, New York and located on the
Property and which the parties hereto agree shall be deemed to consist of
Fifteen Thousand, Eight Hundred and Seventy-Four (15,874) rentable square feet
(hereinafter referred to as the “Demised Premises”) and as more particularly
described on the floor plans annexed hereto as EXHIBIT ”B” and made a part
hereof;

 

NOW, THEREFORE, in consideration of the foregoing and of the covenants, conditions
and agreements hereinafter set forth, Lessor and Lessee agree as follows:

 

ARTICLE 1 - DEMISE AND TERM OF DEMISE

 

SECTION 1.01.A.  Lessor, in consideration of the rents
hereinafter reserved and of the terms, covenants, conditions and agreements
herein contained on the part of Lessee to be paid, observed and fulfilled, does
hereby demise and lease the Demised Premises to Lessee and Lessee hereby hires
the same from Lessor; subject to all present and future zoning ordinances,
laws, regulations, requirements and orders, including building restrictions and
regulations, and all other present and future ordinances, laws, regulations,
requirements and orders of all departments, boards, bureaus, commission and
bodies, of any municipal, county, state or federal governments now or hereafter
having or acquiring jurisdiction of the Demised Premises; Taxes (as hereinafter
defined) not yet due and payable; all other present and future covenants,
easements and restrictions affecting the Property and the Demised Premises and
the revocable nature of any restriction, easement, agreement, ordinance or
right affecting the Property and the Demised Premises.

 

B.  The Demised Premises are demised and leased
unto Lessee, for a term (“Term”) commencing on the Commencement Date (as
hereinafter defined) and expiring at noon on the last day of the first full
month in which the Fifth (5th) Anniversary of the Rent Commencement
Date (as hereinafter defined) falls (the “Expiration Date”), unless the same
shall sooner terminate pursuant to any of the terms, covenants, conditions or
agreements of this Lease or pursuant to law.

 

SECTION 1.02.A.  As used herein, the term “Commencement Date”
shall mean the date which is the sooner of: (i) the date that Lessor’s
Work (as hereinafter defined) is substantially completed (in accordance with
the provisions of Section 34.02(e) hereof), and (ii) the date
which is such number of days prior to the Commencement Date as shall equal the
number of days, if any, by which commencement or performance of Lessor’s Work
shall have been delayed by reason of Lessee’s Delays (as hereinafter defined),
or (iii) the date upon which Lessee takes possession of all or any part of
the Demised Premises.

 

B.  Lessor represents that the common corridor on
the Third (3rd) floor of the Building shall be complete on or before
the Commencement Date using materials and finishes consistent with the other
newly refurbished common corridors in the Building.

 

SECTION 1.03.  As used herein, the term “Rent Commencement Date”
shall mean the date which is Four (4) months subsequent to the Commencement
Date.

 

SECTION 1.04.  Upon determination of the date which is the
Commencement Date, Rent Commencement Date and/or the Expiration Date, as
provided in this Section, Lessee, upon the request of Lessor, shall execute and
deliver to Lessor a certificate setting forth the Commencement Date, Rent
Commencement Date and/or the Expiration Date in the form annexed hereto as EXHIBIT ”E,”
but the failure of Lessee to execute and deliver such certificate shall not
detract from the effectiveness of any of the provisions of this Lease.

 

ARTICLE 2 - RENT

 

SECTION 2.01.  Lessee shall pay to Lessor, or to such other
person as Lessor may from time to time designate, at the address specified in
or pursuant to Section 2.04, during the Term, fixed rent (“Fixed Rent”),
over and above the other and additional payments to be made by Lessee as
hereinafter provided, as follows:

 

1

 

A.  During and in respect of the
period from the Rent Commencement Date to the day preceding the Second (2nd)
Anniversary of the Rent Commencement Date (both dates inclusive) an amount each
year equal to Four Hundred and Twelve Thousand, Seven Hundred and Twenty-Four
and 04/100 ($412,724.04) Dollars (exclusive of electric) payable in equal
monthly installments of Thirty-Four Thousand, Three Hundred and Ninety-Three
and 67/100 ($34,393.67) Dollars (exclusive of electric); and

 

B.  During and in respect of the
period from the Second (2nd) Anniversary of the Rent Commencement
Date to the Expiration Date (both dates inclusive) an amount each year equal to
Four Hundred and Twenty-Eight Thousand, Five Hundred and Ninety-Eight and
00/100 ($428,598.00) Dollars (exclusive of electric) payable in equal monthly
installments of Thirty-Five Thousand, Seven Hundred and Sixteen and 50/100
($35,716.50) Dollars (exclusive of electric).

 

SECTION 2.02.A.  Fixed Rent shall be paid in equal monthly
installments on the first day of each and every month during the Term without
any set off or deduction whatsoever; provided
however, that if Fixed Rent shall be payable for any period prior to
the first day of the first full month during the Term, then such Fixed Rent
shall be paid in a proportionate amount for the number of days in such period
and paid as and when the first equal monthly installment is payable as
aforesaid. Notwithstanding the foregoing, Lessee shall pay the first (1st)
monthly installment of Fixed Rent upon execution of this Lease.

 

B.  In the event that Lessor is unable or fails
to provide Critical Services (as hereinafter defined) which it is obligated to
provide under this Lease solely as a result of Lessor’s negligence or wilful
acts, and the loss of such services causes all or part of the Demised Premises
to become unusable or access to the Demised Premises is barred for more than
three (3) consecutive business days, or if such condition is caused by any
other reason other than as provided for herein and such condition continues for
thirty (30) consecutive days, and the Demised Premises are in fact not used for
the purposes for which they were leased, during such period, then in such
event, Lessee shall be entitled to a pro rata abatement of Rent (as hereinafter
defined) commencing with the fourth (4th) consecutive business day,
or the thirty-first (31st) consecutive day that same are unusable,
as the case may be; provided however,
that Lessee shall not be entitled to any abatement of Rent if such unusability
is (a) caused by any act or omission of Lessee or any of Lessee’s
servants, employees, agents, or licensees; or (b) where such condition
arises in connection with work performed by Lessor at the request of Lessee to
make a decoration, alteration, improvement or addition; or (c) where the repair
in question are those which Lessee is obligated to make or furnish under any of
the provisions of this Lease.  The
provisions of this paragraph B shall not apply in the event of a condition
caused by fire or other casualty or condemnation as provided for in Articles 12
and 18, respectively.

 

C.  As used herein the term “Critical Services”
shall mean electricity, heating, ventilating, air conditioning, and elevators
to the Demised Premises.

 

SECTION 2.03.  If Lessee shall fail to pay as and when due
under this Lease any Additional Rent (as hereinafter defined), and such failure
shall not be remedied within the grace period (if any) applicable thereto under
this Lease, Lessor shall have all of the rights and remedies provided in this
Lease as in the case of default in the payment of the Fixed Rent, including any
rights available to Lessor at law or in equity and shall be entitled interest
on any unpaid Fixed Rent and Additional Rent at the Maximum Legal Rate from and
after the end of the grace period following the date such payments where due.
Except as otherwise specifically provided in this Lease, the Fixed Rent and
Additional Rent shall be paid without notice, demand, credit, abatement,
deduction or setoff of any kind whatsoever. 
The Fixed Rent and Additional Rent are sometimes referred to
collectively herein as “Rent.”

 

SECTION 2.04.  Lessee shall pay the Rent to Lessor in lawful
money of the United States of America which shall be legal tender for all
debts, public and private, at the time of payment, at the office of Lessor set
forth above, or to such other person or persons and/or at such other place or
places as Lessor may designate from time to time by notice to Lessee.  Such payments may be by check of Lessee,
subject to collection, payable to the order of Lessor or to such other person
or persons as Lessor may designate from time to time by notice to Lessee; any
such payment shall be deemed made upon receipt thereof, subject to collection.

 

SECTION 2.05.  Any obligation of Lessee for payment of Rent
which shall have accrued with respect to any period during or prior to the Term
shall survive the expiration or termination of this Lease.

 

ARTICLE 3 - TAXES AND COMMON AREA MAINTENANCE
CHARGES

 

SECTION 3.01.  As used herein:

 

A.  “Lessor’s Statement” shall mean an instrument
containing a computation of any Additional Rent payable by Lessee to Lessor
pursuant to this Article.

 

2

 

B.1.  “Common Area Maintenance Charges” shall mean
all costs and expenses of whatever kind or nature, whether or not herein
specifically mentioned or now contemplated, which are incurred by Lessor or
Lessor’s agents in connection with the use, operation, repair or maintenance of
the Building and/or Property, including, but not limited to the following: (1) premiums
and other charges for insurance which Lessor is required or permitted to
maintain hereunder including, but not limited to, general comprehensive
liability insurance covering bodily injury, personal injury (including death),
property damage, public liability, non-hired automobile insurance, sign
insurance, plate glass insurance and any other insurance incurred by Lessor for
the Building and/or Property;  (2) costs
and expenses of performing repairs in or to the Building and/or Property and
the sidewalks and curbs adjacent thereto; (3) costs and expenses of
performing repairs or resurfacing of the parking lots and any adjacent
facilities;  (4) costs and expenses
of landscaping and maintaining the grounds of the Building and/or Property; (5) costs
and expenses of snow and ice removal and/or treatment; (6) costs and
expense of rubbish, garbage and other refuse removal; (7) fees and
disbursements payable to any person to furnish management, repair or other
services regarding the Building and/or Property, except that, in the case of
any such person who is affiliated with Lessor, such fees shall not exceed that
which is customary or reasonable in the industry for similar buildings in
Westchester County; (8) cost and expenses of performing repairs to all
structural walls, roofs, and plate glass doors and windows, if any, which are
expressly made part of the Building, Property or the Demised Premises; (9) cost
of refurbishing the common areas and modernizing and replacing equipment servicing
the common areas, including but not limited to regular painting of non-tenanted
areas at the Building and/or Property; (10) cost and expense of repairs,
as opposed to replacements, to portions of the structural elements of the
Building and/or Property as opposed to repairs to entire systems or structural
elements of the Building and/or Property] ; (11) costs and expenses of
performing repairs and maintenance of common area lighting and lighting
fixtures; (12) repair and maintenance of all or any part of the sprinkler
system installed in any part of the Building and/or Property; (13) cost of
utilities, such as electricity, water and sewer; depreciation of the capital
cost of all items required to be capitalized pursuant to this Lease, including
but not limited to, machinery, equipment (including on-site sewage, lighting
and power facilities) and vehicles used in connection with the operation and
maintenance of the common areas as determined by Lessor for federal income tax
purposes but utilizing the straight-line method of computing depreciation and
the normal useful lives; (14) costs and expenses of performing repairs and
maintenance of all heating, ventilating and air conditioning equipment
installed in any part of the Building, including but not limited to that
portion contained within the Demised Premises; (15) cost and expense of
performing repairs and maintenance of utility lines, sanitary and storm sewer
lines and culverts and drainage facilities; (16) costs and expenses of
providing and maintaining security, if any; (17) costs and expenses of
providing and maintaining traffic control, if any; (18) labor costs and
expenses of part and/or full time personnel employed at the Property in
connection with the operation of the Building at or below the grade of building
manager; (19) costs and expenses of providing holiday and other decorations to
the Building and/or Property; (20) costs and expenses of performing repairs and
maintenance of all elevators in any part of the Building and/or Property; (21)
cost and expense of providing and performing cleaning and related services;
(22) cost and expense of providing window washing; (23) cost and expense of all
supplies; (24) wages, salaries, disability benefits, pensions, hospitalization,
retirement plans and group insurance respecting service and maintenance
employees of Lessor to the extent employed at the Building and/or Property
below the grade of property manager; (25) cost and expense of all uniforms and
working clothes for such employees and the cleaning thereof; (26) cost and
expense imposed on Lessor pursuant to law or to any collective bargaining
agreement with respect to such employees; (27) cost and expense of providing
and maintaining worker’s compensation insurance, payroll, social security,
unemployment and other taxes now in effect or hereinafter imposed with respect
to such employees; (28) cost of all sales, utility and use taxes and other
taxes of like import now in effect or hereinafter imposed; (29) cost and
expense of all maintenance and service contracts for the Building and/or
Property; (30) cost of all other normal operating expenses of repair,
operation, and maintenance of the Building and/or Property; (31) cost and
expense of providing and maintaining loading dock and mail personnel, if any;
(32) cost and expense of all professional and consulting fees, including legal
and audit fees and all costs and disbursements incurred in connection
therewith; (34) cost and expense of providing, operating and maintaining the
cafeteria and/or food service facility and fitness center; and (35) the cost of
any capital equipment or capital expenditures only to the extent specifically
provided for in Section 3.01.C. hereof;

 

provided, however, that the following items shall be excluded from Common Area Maintenance
Charges: (1) leasing commissions; (2) cost of repairs or replacements
incurred by reason of fire or other casualty (to the extent the same is or
would have been covered by insurance required to be maintained by Lessor
herein), or caused by the exercise of the right of eminent domain (to the
extent same is covered by any condemnation award) less any cost incurred by
Lessor in obtaining such insurance proceeds or condemnation award; (3) costs
incurred in performing work or furnishing services to or for individual tenants
(including Lessee) at such tenant’s expense; (4) debt service on any
mortgages now or hereafter encumbering the Building and/or Property; (5) the
cost of attorneys’ fees incurred in connection with negotiating and drafting
leases with other tenants, or in connection with disputes with other tenants; (6) costs
incurred in the sale or refinancing of the Building and/or Property; (7) interest
or penalties due to Lessor’s violations of law; (8) advertising and
promotional expenses; (9) depreciation; (10) leasehold improvements
made for other tenants; (11) Taxes; (12) salaries of officers of Lessor; (13)
leasehold improvements made for new tenants of the Building; (14) capital
expenditures except as otherwise specifically provided for in Section 3.01.C.
hereof; (15) any ground lease

 

3

 

rental;
(16) rentals for items which if purchased, rather than rented, would constitute
a capital expenditure, except as otherwise specifically provided for in Section 3.01.C
hereof; (17) costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant improvements made in leasable areas
for new tenants or existing tenants in the Building or incurred in renovating
or otherwise improving, decorating painting or redecorating vacant leasable
space of tenants or other occupants of the Building; (18) the cost of
furnishing electricity to any leasable areas of the Building; (19) marketing
costs including leasing commissions, attorneys’ fees in connection with the
negotiation and preparation of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs, and other costs and
expenses incurred in connection with the lease, sublease and/or assignment
negotiations and transactions with present or prospective tenants or other
occupants of the Building; (20) all costs and expenses of providing any service
to any tenant or occupant of, or to any leasable space in, the Building (or
level or amount of any service) in excess of that required by this Lease to be
provided to Lessee free of separate additional charge; (21) amounts paid to
Lessor or to subsidiaries or affiliates of Lessor for goods and/or services to
the extent the same exceeds the costs of such goods and/or services rendered by
unaffiliated third parties on a competitive basis; (22) Lessor’s general
corporate overhead and general and administrative expenses; (23)  costs of signs in or on the Building
identifying the owner of the Building or other tenants’ signs, other than the
Building directories; (24) taxes and tax penalties incurred as a result of
Lessor’s negligence, inability or unwillingness to make payments and/or to file
any income tax or informational returns when due; (25) costs arising solely
from the negligence, intentional act or fault of Lessor or its agents, or any
vendors, contractors, or providers of materials or services selected, hired or
engaged by Lessor or their agents; (26) all costs and expenses attributable to
any hazardous waste, substances or materials or any testing, investigation,
management, maintenance, remediation or removal thereof, (27) costs arising
from Lessor’s charitable or political contributions; (28) costs for sculpture,
paintings or other subjects of art (other than normal repair or maintenance)
thereof in excess of Five Thousand ($5,000.00), in the aggregate; (29) costs
covered by any guarantees; (30) all cost and expenses attributable to complying
with all Legal Requirements, Insurance Requirements and Environmental Laws to
the extent that same would be considered a capital expenditure under generally
accepted accounting rules.

 

2.  Common Area Maintenance Costs shall be
apportioned between the buildings located on the Property, if, and only if, the
Building utilizes facilities of an adjacent building located on the Property.

 

C.1.  If Lessor shall purchase any item of capital
equipment or make any capital expenditure intended to result in savings or
reductions in the Common Area Maintenance Charges and which Lessor reasonably
believes shall provide Lessee with the benefit of a savings or reduction in
such Common Area Maintenance Charges based upon the advice of Lessor’s
consultants, then the costs for same shall be included in the Common Area
Maintenance Charges, to the extent hereinafter set forth.  Lessor shall deliver to Lessee, promptly
following Lessee’s request, a copy of any concluded studies conducted by Lessor
which show anticipated savings or reductions in such Common Area Maintenance
Charges as a result of any planned capital expenditure or purchase of capital
equipment.  The costs of capital
equipment or capital expenditures are so to be included in the Common Area
Maintenance Charges in which the costs are incurred and in any subsequent
years, on a straight-line basis, to the extent that such items are amortized
over such period of time as reasonably can be estimated at the time in which
such savings or reductions in such Common Area Maintenance Charges are expected
to equal Lessor’s costs for such capital equipment or capital expenditure, with
an interest factor equal to two percent (2%) above the interest rate payable on
United States Treasury securities having a maturity comparable to the period of
amortization at the time Lessor incurred said costs.  If Lessor shall lease any such item of
capital equipment designed to result in savings or reductions in any Common
Area Maintenance Charges, then the rentals and other costs paid pursuant to
such leasing shall be included in such Common Area Maintenance Charges for the
year in which they were incurred.

 

2.  If Lessor shall purchase any item of capital
equipment or make any other capital expenditure in order to benefit or increase
the safety and security of the Building or Property tenants and/or invitees,
then the costs for same shall be included in Common Area Maintenance Charges
for the year in which the costs are incurred and subsequent years, on a
straight-line basis, amortized over the useful life of such items, with an
interest factor equal to two percent (2%) above the interest rate payable on
United States Treasury securities having a maturity comparable to the useful
life of such items at the time Lessor incurred said costs.  If Lessor shall lease any such item of
capital equipment to increase safety and security then the rentals and other
costs paid pursuant to such leasing shall be included in common area
maintenance charges for the year in which they were incurred.  Notwithstanding the foregoing, in no event
shall the amount included in Common Area Maintenance Charges for any year
pursuant to the provisions of Section 3.01.C hereof exceed the projected
savings for such year.

 

D.  If during all or part of any year, including
calendar year 2007, (i) less than ninety-five percent (95%) of the leasable
space in the Building is occupied by tenants or occupants or (ii) Lessor
shall furnish any particular item(s) of work or service (which would constitute
a common area maintenance charge hereunder) to less than ninety-five percent
(95%) of the leasable portions of the Building or to only a portion of the
Property, due to the fact that less than ninety-five percent (95%) of the
leasable portions of the Building are occupied, or because such item of work or
service is not required or desired by the tenant of such portion, or

 

4

 

such
tenant is itself obtaining and providing such item of work or service, or for
other reasons, then, for the purposes of computing the Additional Rent payable
hereunder, the amount of Common Area Maintenance Charges or the amount of the
expenses attributable to such item, as the case may be, for such period shall
be deemed to be increased by an amount equal to the additional costs and
expenses which would reasonably have been incurred during such period had the
Building been at least ninety-five percent (95%) occupied or had Lessor
furnished such item of work or services to such other portions of the Building
or the Property.

 

E.  Lessor shall have the absolute right, at all
times during the Term to increase, reduce, alter or otherwise modify the way in
which it uses, operates, repairs, or maintains the Building and/or the Property
and the cost thereof provided that Lessor shall maintain the Building and
Property as first class office building in the White Plains, New York
metropolitan area.  Nothing contained
herein shall require Lessor to incur or provide any particular service or
charge in connection with its use, operation, repair or maintenance of the
Building and/or Property, it being agreed and understood that the items
described in Section 3.01.B. are by way of illustration only and shall not
obligate Lessor thereto, except that Lessor shall maintain the Building and
Property as a first class office building in the White Plains, New York
metropolitan area.

 

F.  The term “Taxes” shall mean all such taxes,
assessments, use and occupancy taxes in respect of this Lease and any subleases
made hereunder, water and sewer charges, rates and rents, water and other meter
charges and all such other charges, taxes, levies and sums of every kind or
nature whatsoever, general and special, extraordinary as well as ordinary,
whether or not now within the contemplation of the parties, as shall or may
during or in respect of the Term (or any period prior to the Term for which
Fixed Rent is payable) be assessed, levied, charged or imposed upon or become a
lien on the Property, Building, or Demised Premises, or any part thereof, or
anything appurtenant thereto, or the sidewalks, streets or roadways in front
of, adjacent to or appurtenant to the Property, Building or Demised Premises
(and which have a basis related in any way to the Property, Building, or
Demised Premises and/or the use or manner of use thereof), or which, if imposed
on Lessee or in respect of the Property, Building or Demised Premises and if
not paid by Lessee, would be collectible from Lessor, or which have been so
assessed, levied, charged or imposed prior to the Term (but, in the
last-mentioned case, only with respect to a period falling within the Term); provided, however, that, except if and to
the extent otherwise provided in the succeeding sentence, “Taxes” shall not
mean federal, state or local income taxes, franchise, excise, gift, transfer,
capital stock, estate, succession or inheritance taxes or penalties or interest
for late payment of any tax in respect of which Lessee shall have duly made
payment of Additional Rent as herein provided. 
If, at any time during the Term, the methods of taxation prevailing at
the commencement of the Term shall be altered so that, in lieu of or as a
substitution in whole or in part for the taxes, assessments, levies,
impositions or charges now or hereafter levied, assessed or imposed on real
estate and the improvements thereon, shall be levied, assessed or imposed any
tax or other charge on or in respect of the Property, Building and/or Demised
Premises or the rents, income or gross receipts of Lessor therefrom (including
any county, town, municipal, state or federal levy), then such tax or charge
shall be deemed a Tax, but only to the extent that such Tax would be payable if
the Property, Building or Demised Premises, or the rent, income or gross
receipts received therefrom, were the only property of Lessor subject to such
Tax, and Lessee shall pay and discharge the same as herein provided in respect
of the payment of Taxes.

 

G.  The term “School/Village Tax Base” shall mean
the amount of Taxes as hereinabove defined, imposed, levied, assessed and/or
collected on the Property, for the 2006/2007 School Tax and “Town/County Tax
Base” shall mean the amount of Taxes as hereinabove defined, imposed, levied,
assessed and/or collected on the Property for the 2007 Town and County Tax.

 

H.  The term “School/Village Tax Year” shall mean
each period of twelve (12) consecutive months commencing as of the first day of
July of each such period for the School Tax and each twelve (12)
consecutive months commencing as of the first of June of each such period
for the Village Tax; and “Town/County Tax Year” shall mean each period of
twelve (12) consecutive months commencing as of the first day of January of
each such period, in which any part of the term of this Lease shall occur, or
such other periods of twelve (12) months as may be adopted as the fiscal year
for real estate tax purposes.

 

SECTION 3.02.A.  Lessee shall pay to Lessor, as Additional
Rent, during or in respect of the period from the Rent Commencement Date to the
Expiration Date (both dates inclusive) for each School/Village Tax Year and
Town/County Year or portion thereof, its proportionate share (“Lessee’s
Proportionate Share”, as hereinafter defined) of increases in Taxes which will
be imposed, levied, assessed or collected on the Property, and/or Building of
which the Demised Premises are a part, for such School/Village Tax Year and/or
Town/County Tax Year, as the case may be, over the respective tax bases
regardless of whether such increase results from a higher tax rate and/or an
increase in the assessed valuation of either the Property or Building or any
other tax.  Reasonable fees and expenses,
if any, incurred in obtaining any reduction in assessed valuation from the
tentative assessment to the final assessment shall also be considered an
increase in Taxes for the purpose of this provision.  Such payments shall be made by Lessee as
Additional Rent in equal monthly installments during the applicable tax year
together with the payment of Fixed Rent. 
Copies of tax bills applicable to the School/Village Tax Base and the
Town/County Tax Base, as the case may be, and to any such applicable tax year
shall be provided by Lessor to Lessee upon written request therefor during

 

5

 

normal
business hours.  In the event of any
reduction in Taxes after final assessment and with respect to which Lessee has
paid its proportionate share, any such reduction, less fees and expenses
incurred to obtain such reduction shall be refunded in proportionate amounts to
Lessee.

 

B.  If Lessor obtains a reduction of either the
School/Village Tax Base or Town/County Tax Base by final determination of legal
proceedings or otherwise, then: (i) the School/Village Tax Base or
Town/County Tax Base shall be correspondingly revised, (ii) all Tax
payments theretofore paid or payable hereunder shall be recomputed on the basis
of such reduction, (iii) Lessee shall pay to Lessor as Additional Rent,
within thirty (30) days after receipt of a bill therefor, any deficiency
between the amount of such Tax payments theretofore computed and the amount
thereof due as a result of such recomputations and (iv) all future Tax
payments shall be computed using the revised School/Village Tax Base and
Town/County Tax Base.

 

SECTION 3.03.A.  Lessee shall pay to Lessor, as Additional
Rent, during or in respect of the period from the Rent Commencement Date to the
Expiration Date (both dates inclusive) for each calendar year or portion
thereof, Lessee’s Proportionate Share of the increases in the Common Area
Maintenance Charges over the over the Base Common Area Maintenance Charges (as
hereinafter defined).  Such payments
shall be made by Lessee as Additional Rent in equal monthly installments during
the applicable calendar year together with the payment of Fixed Rent.

 

B.  The term “Base Common Area Maintenance
Charges” shall mean the Common Area Maintenance Charges in effect for the
calendar year ending December 31, 2007.

 

SECTION 3.04.A.  At any time hereafter and from time to time,
Lessor may furnish to Lessee a Lessor’s Statement setting forth (i) Lessor’s
actual Common Area Maintenance Charges (or any one or more items thereof)
and/or actual Taxes for a period which shall have expired only if a final
statement has not been previously rendered, and/or (ii) Lessor’s
reasonable estimate of Common Area Maintenance Charges and/or Taxes for a
succeeding period.  Within Thirty (30)
days next following rendition of each such Lessor’s Statement, Lessee shall pay
to Lessor the entire amount, if any, shown on such Lessor’s Statement as being
due with respect to any period which shall have expired.  In addition, Lessee shall pay to Lessor, on
the first day of each month following rendition of each such Lessor’s
Statement, on account of the estimated Additional Rent thereafter payable, a
proportionate sum of the total Additional Rent shown upon such Lessor’s
Statement as being Lessor’s reasonable estimate for a succeeding period on an
annual basis (it being agreed that Lessor’s estimate shall in any event be
deemed reasonable if it is based on actual Common Area Maintenance Charges (or
any one or more items thereof) and/or actual Taxes for a period which shall
have expired immediately prior thereto, so that one month prior to the end of
such period, Lessee’s Proportionate Share of the increase shall be paid in
full, and Lessee shall continue to pay Additional Rent on such basis until
receipt of a subsequent Lessor’s Statement. 
Such Additional Rent shall be due and payable at the same time as each
monthly installment of Fixed Rent.

 

B.  A reconciliation shall be made upon each
Lessor’s Statement as follows: Lessee shall be debited with any Common Area
Maintenance Charges and/or Taxes payable as shown on such Lessor’s Statement,
and credited with the aggregate of the total amount, if any, paid by Lessee in
accordance with the provisions of the preceding paragraph on account of the
estimated Additional Rent, for the period or item in question, and, within
thirty (30) days next following rendition of such Lessor’s Statement, Lessee
shall pay Lessor the amount of any net debit balance shown thereon or Lessor
shall apply against the next ensuing installments of Fixed Rent the net credit
balance shown thereon.

 

C.  Without limiting the preceding provisions of Section 3.04,
it is understood that Lessor shall furnish a Lessor’s Statement, for each
calendar year falling wholly or partially within the Term.

 

SECTION 3.05.  A. 
Lessor’s failure to render Lessor’s Statements with respect to any
period shall not prejudice Lessor’s right to render a Lessor’s Statement with
respect to that or any subsequent period, provided,
however, that failure to provide such Lessor’s Statement within two (2) years
after any such period shall be deemed a waiver thereof, except for any item for
which Lessor is billed after such two (2) year period.  The obligations of Lessor and Lessee under
the provisions of this Article with respect to Additional Rent shall
survive the expiration or any sooner termination of the Term.  Lessor agrees to use reasonable efforts to
furnish Lessor’s Statement within One Hundred and Twenty (120) days after the
end of each calendar year.

 

B.  Each Lessor’s Statement shall be conclusive
and binding upon Lessee unless within one hundred and eighty (180) days after
receipt of such Lessor’s Statement, Lessee shall notify Lessor that it disputes
the reasonableness or correctness of Lessor’s Statement, specifying to the
extent known by Lessee the respects in which Lessor’s Statement is claimed to
be unreasonable or incorrect.  Pending
the determination of such dispute by agreement or otherwise, Lessee shall pay
Additional Rent in accordance with the applicable Lessor’s Statement, and such
payment will be without prejudice to Lessee’s position.  If the dispute shall be finally determined in
Lessee’s favor by a court of competent jurisdiction, Lessor shall forthwith pay
Lessee the amount of Lessee’s overpayment of Additional Rent resulting from
compliance with Lessor’s Statement together with interest thereon at the legal
rate.

 

6

 

C.  Provided that Lessee substantially complies
with the provisions of this Section 3.05, Lessee shall have the right, at
its sole cost and expense, to retain an independent firm of certified public
accountants (“Lessee’s Accountants”), to review supporting data and/or
documentation for any portion of Lessor’s Statement that Lessee disputes.  Lessee’s right under the provisions of this Section 3.05
may be exercised only once for any Lessor’s Statement.

 

D.1.  Lessee acknowledges that Lessor maintains its
records for the Property at the offices of its managing agent as it may change
from time to time, and Lessee agrees that any review of records as provided for
in this Section 3.05 shall take place at the offices of Lessor’s managing
agent, which may change from time to time. 
Lessee acknowledges and agrees that any records reviewed by it shall
constitute confidential information of Lessor which shall not be disclosed to
anyone other than the Lessee’s Accountants, attorneys and other professionals
on a need to know basis,]  and the principals
of Lessee who receive the results of the review and disclosure or dissemination
of such information shall be deemed a material breach of this Lease and Lessor
shall be entitled to all its remedies at law or in equity.

 

2.  In the event that Lessee’s Accountants find
an error in Lessor’s Statement, such error shall be: (i) promptly
corrected in the event that Lessor agrees with Lessee’s Accountant, or (ii) resolved
by agreement between Lessor and Lessee in the event that Lessor does not agree
with Lessee’s Accountants.  In the event
that Lessor and Lessee are unable to resolve such error, then in such event the
error shall be determined by arbitration pursuant to the provisions
hereof.  If the Disputed Item (as
hereinafter defined) is agreed upon by Lessor and Lessee, or found by the
arbitrators, to be greater or lesser than the amount set forth in Lessor’s
Statement, then in such event: (i) if Lessee has overpaid its obligations
for a preceding period, the amount of such overpayment shall be credited against
Lessee’s subsequent installments obligations to pay its Proportionate Share of
Common Area Maintenance Costs; or (ii) if Lessee has underpaid its
obligations for a preceding period, the amount of such underpayment shall be
paid to Lessor with Lessee’s next installment obligation of Common Area
Maintenance Costs or refunded to Lessee.

 

3.A.  In the event that Lessor and Lessee are
unable to resolve a dispute concerning the reasonableness and/or correctness of
any specific item on Lessor’s Statement (hereinafter referred to as the “Disputed
Item”), then either Lessor or Lessee (hereinafter referred to as the “Initiating
Party”) may give the other party (hereinafter called the “Responding Party”) a
notice designating the name and address of the arbitrator designated by the
Initiating Party to act on its behalf in the arbitration process hereinafter
described (the “Review Notice”).

 

B.  If the Initiating Party gives a Review
Notice, then within twenty (20) days after giving of such Review Notice, the
Responding Party shall give notice to Initiating Party specifying in such
notice the name and address of the arbitrator designated by the Responding
Party to act on its behalf.  In the event
the Responding Party shall fail to give such notice within such twenty (20) day
period, then the appointment of such arbitrator shall be made in the same
manner as hereinafter provided for the appointment of a third arbitrator in a
case where two arbitrators are appointed hereunder and the parties are unable
to agree to such appointment.  The two
arbitrators so chosen shall meet within thirty (30) days after the second
arbitrator is appointed and shall exchange sealed envelopes each containing
such arbitrators written determination as to the reasonableness and/or
correctness of the Disputed Item. The reasonableness and/or correctness of any
Disputed Item submitted by Lessor’s arbitrator shall be called the “Lessor’s
Submitted Value” and reasonableness and/or correctness of any Disputed Item
submitted by Lessee’s arbitrator shall be called the “Lessee’s Submitted Value”.  Copies of such written determinations shall
promptly be sent to both Lessor and Lessee. 
Any failure of either such arbitrator to meet and exchange such
determinations shall be acceptance of the other party’s arbitrator’s
determination as to the reasonableness and/or correctness of the Disputed Item
if, and only if, such failure persists for five (5) days after notice to
the party for whom such arbitrator is acting, and, provided that such five (5) day
period shall be extended by reason of any Unavoidable Delay.  If the higher determination as to the
reasonableness and/or correctness of the Disputed Item is not more than one
hundred and five (105%) percent of the lower determination as to the
reasonableness and/or correctness of the Disputed Item, then the reasonableness
and/or correctness of the Disputed Item shall be deemed to be the average of
the two determinations.  If, however, the
higher determination is more than one hundred and five (105%) percent of the
lower determination, then within ten (10) days of the date the arbitrators
submitted their respective determinations, the two arbitrators shall appoint a
third arbitrator.  In the event of their
being unable to agree upon such appointment within ten (10) days after the
exchange of the sealed envelopes, the third arbitrator 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, then either
party, on behalf of both and on notice to the other, may request such an
appointment by the American Arbitration Association (or any successor
organization) in accordance with its rules then prevailing or if the
American Arbitration Association (or any successor organization) shall fail to
appoint said third arbitrator within fifteen (15) days after such request is
made, then either party may apply for such appointment, on notice to the other,
to the President of the Westchester County Bar Association (who may consult
with the Chairman of the Real Property Law Committee of the Westchester County
Bar Association).  Within ten (10) days
after the appointment of such third arbitrator, the Lessor’s arbitrator shall
submit Lessor’s Submitted Value to such third arbitrator and the Lessee’s arbitrator
shall submit Lessee’s Submitted Value to such third arbitrator.  Such third arbitrator shall, within thirty
(30)

 

7

 

days
after the end of such fifteen (15) day period, make his own determination as to
the reasonableness and/or correctness of the Disputed Item, and send copies of
his determination promptly to both Lessor and Lessee specifying whether Lessor’s
Submitted Value or Lessee’s Submitted Value was closer to the determination by
such third arbitrator as to the reasonableness and/or correctness of the
Disputed Item.  Whichever of Lessor’s
Submitted Value or Lessee’s Submitted Value shall be closer to the
determination by such third arbitrator shall conclusively be deemed correct.

 

C.
In no event shall the arbitrators enlarge upon, or alter or amend, this Lease
or Lessor’s or Lessee’s rights as provided in this Lease, it being understood
that the sole issue for determination by the arbitrators shall be the single
issue of fact as to the reasonableness and/or correctness of the Disputed
Item.  The arbitrators shall be certified
public accountants who are disinterested and are currently practicing in the
Westchester County, New York area with at least ten (10) years experience
in evaluating and auditing common area maintenance charges.

 

D.
Except as otherwise provided in the following sentence, the fees and expenses
of an arbitration proceeding shall be borne by the parties equally.  The fees of respective counsel engaged by the
parties the fees and expenses of expert witnesses and other witnesses called
and the cost of transcripts shall be borne by the parties engaging such counsel
or calling such witness or ordering such transcripts.

 

SECTION 3.06.  Lessee shall pay and discharge, or cause to
be paid and discharged, the following items, regardless of to whom or how
incurred, all taxes and assessments, if any, which shall or may during the Term
be charged, levied, assessed or imposed upon, or become a lien upon, the
personal property of Lessee used in the operation of the Demised Premises and
which, if not paid by Lessee, would be collectible from Lessor.

 

ARTICLE 4 - USE OF DEMISED PREMISES

 

SECTION 4.01.A.  Subject to the provisions of this Article,
Lessee shall have the right to use the Demised Premises for general and
executive office purposes and for no other purposes.

 

B.  From and after the Commencement Date, Lessor
does hereby grant unto Lessee the privilege and a license to Forty-Eight (48)
non-reserved parking space in the parking area located on the Property for a
period to be coterminous with the Term of this Lease.  Lessee agrees that Lessor shall have the
right, in its sole and absolute discretion, upon thirty (30) days written
notice to Lessee, to change the location of all parking spaces in the event
that Lessor determines to change the area, level, location and arrangement of
parking areas and other facilities; to build multistory parking facilities; to
temporarily restrict parking by lessees, their officers, agents and employees;
and to close all or any portion of said areas or facilities to such extent as
may be legally sufficient to prevent a dedication thereof or the accrual of any
right to any person or the public therein; to close temporarily all or any
portion of the parking areas or facilities to discourage non-tenant parking, provided, however, that in the event such
closure is during Normal Working Hours (as hereinafter defined) Lessor shall
provide Lessee with no less than the number of parking spaces required to be
provided under this Lease at a location within a reasonable distance of the
Demised Premises and at no charge to Lessee. 
The license and privilege hereby granted shall apply only to those duly
registered and operating private passenger motor vehicle(s) owned and operated
by Lessee or Lessee’s employees, invitees and contractors and shall not be
transferable to any other person or used for any other purpose other than as
herein provided.  Lessee and its
employees, officers, partners, directors, agents, and contractors, covenant and
agree that they shall park their vehicles in legal parking spaces designated by
Lessor on the Property and shall not park their vehicles in any other location
on the Property, or on any roadway or property adjacent to the Property.

 

SECTION 4.02.  Lessee shall not knowingly use or occupy the
Demised Premises in any manner or suffer or permit the Demised Premises or any
part thereof to be used in any manner, or do or suffer or permit anything to be
done in the Demised Premises, or bring anything into the Demised Premises or
suffer or permit anything to be brought into the Demised Premises, which would
in any way do any of the following: (a) violate any of the provisions of
the Mortgage (as hereinafter defined) or Superior Lease (as hereinafter defined);
(b) violate any Legal Requirements, Insurance Requirements or
Environmental Laws (as such terms are hereinafter defined); (c) make void
or voidable any insurance policy then in force with respect to the Demised
Premises, Building or Property; (d) make unobtainable from insurance
companies authorized to do business in the State of New York and rated by Best’s
Insurance Rating Service with a rating at least equal to A:XII, at standard
rates without any special premium or charge, any fire or other casualty
insurance with extended coverage, or rental, liability or boiler insurance, or
other insurance provided for in Section 11.01 or otherwise may be required
to be furnished by Lessor under the terms of the Mortgage or Superior Lease
with respect to the Demised Premises; (e) cause physical damage to the
Demised Premises, Building or Property, or any part thereof; (f) constitute
a public or private nuisance; (g) substantially impair the appearance or
character of the Demised Premises, Building or Property; (h) discharge or
cause the discharge of objectionable substances, fumes, vapors or odors from
the Demised Premises not otherwise in compliance with Legal Requirements,
Insurance Requirements and Environmental Laws; (i) cause Lessee to default
in the observance and performance of any of its other obligations to be
observed and performed under this Lease;

 

8

 

(j)
unreasonably interfere with the effectiveness or accessibility of the utility,
mechanical, electrical and other systems installed or located anywhere at the
Demised Premises, or (k) violate any of the Building’s Rules and
Regulations annexed hereto as EXHIBIT ”C,” as same may be reasonably
amended from time to time.

 

SECTION 4.03.  If any governmental license or permit shall
be required for the proper and lawful conduct of Lessee’s business in the
Demised Premises or any part thereof, then Lessee, at its sole cost and
expense, shall duly procure and thereafter maintain such license or permit and
submit the same to inspection by Lessor. 
Lessee shall, at all times, comply with the terms and conditions of each
such license or permit, but in no event shall failure to procure and maintain
same by Lessee affect Lessee’s obligations hereunder.  Lessee shall not knowingly use or occupy the
Demised Premises, or suffer or permit anyone to use or occupy the Demised
Premises, in violation of any certificate of occupancy issued for the Building
or Property.

 

SECTION 4.04.  Lessor shall obtain the appropriate
certificate(s) required for Lessee’s occupancy of the Demised Premises.  Lessor represents that on the Commencement
Date, Lessee shall be entitled to legally occupy the Demised Premises.

 

SECTION 4.05.  Lessee shall not place, or suffer, or permit
anyone to place a load upon any floor of the Building that exceeds the floor
load per square foot that such floor was designed to carry and which is allowed
by certificate, rule, regulation, permit or law, nor shall Lessee overload, or
suffer, or permit anyone to overload any wall, roof, land surface, pavement,
landing or equipment on the Demised Premises. 
The floor load for the Demised Premises is 50 pounds per square foot,
live load.

 

SECTION 4.06.  Lessee shall not use, or suffer, or permit
anyone to use, on or across the Demised Premises, Building or Property, any
equipment having caterpillar-type tracks or tires, or any other equipment which
would be damaging to the Demised Premises, Building or Property or any road
surface or blacktopping thereon.

 

SECTION 4.07.  A.  Lessee
shall not release, discharge or dispose of, or permit, or suffer any release,
discharge or disposal of any Hazardous Material at the Demised Premises in
violation of any Environmental Law (as hereinafter defined).  Lessee shall not permit or suffer the
manufacture, generation, storage, transmission or presence of any Hazardous
Material over or upon the Demised Premises in violation of any Environmental
Law.

 

B.  Lessee shall: (i) promptly, upon
learning thereof, notify Lessor of any violation of, or non-compliance with,
potential violation of or non-compliance with, or liability or potential
liability under, any Environmental Law concerning the Demised Premises, (ii) promptly
make (and deliver to Lessor copies of) all reports or notices that Lessee is required
to make under any Environmental Law concerning the Demised Premises and
maintain in current status all permits and licenses required under any
Environmental Law concerning the Demised Premises, (iii) promptly comply
with any orders, actions or demands of any Governmental Authority (as herein
defined) with respect to the discharge, clean-up or removal of Hazardous
Materials at or from the Demised Premises due to a breach of a covenant set
forth in Section 4.07.A, (iv) pay when due the cost of removal of,
treatment of, or the taking of remedial action with respect to, any Hazardous
Material on the Demised Premises which is required by an Environmental Law due
to a breach of a covenant set forth in Section 4.07.A, (v) keep the
Demised Premises free of any lien imposed pursuant to any Environmental Law in
respect of a breach of a covenant set forth in Section 4.07.A, (vi) from
time to time, upon the request of Lessor, execute such affidavits, certificates
and statements concerning Lessee’s knowledge and belief concerning the presence
of Hazardous Materials on the Demised Premises and (vii) otherwise comply
with all Environmental Laws concerning the Demised Premises.

 

C.
Lessor shall not release, discharge or dispose of, or permit, or suffer any
release, discharge or disposal of any Hazardous Materials at the Demised
Premises and/or the Property in violation of any Environmental Law.  Lessor shall not permit or suffer the
manufacture, generation, storage, transmission or presence of any Hazardous
Material over or upon the Demised Premises and/or Property in violation of any
Environmental Law.  If the presence of
any Hazardous Materials exists on the Property in excess of the amount
permitted by Environmental Laws, and to the extent the presence thereof is caused
by Lessor, or a third party (other than Lessee, its agents, contractors,
subcontractors, invitees or licensees), or is a pre-existing condition, Lessor
shall, at Lessor’s sole cost and expense, promptly take all actions necessary
to comply with such Environmental Laws.

 

SECTION 4.08  Lessor shall, at Lessor’s sole cost and
expense, include Lessee’s name on any internal Building directory located in
the lobby, on the floor directional signs and on the entrance door to the
Demised Premises.  Other than the
foregoing, Lessee shall not place or suffer to be placed or maintain any sign,
awning or canopy upon or outside the Demised Premises or in the Building; nor
shall Lessee place at the store front any sign, decoration, lettering or
advertising matter of any kind without first obtaining Lessor’s written
approval and consent in each instance, which consent shall not be unreasonably
withheld, conditioned or delayed.  In the
event that Lessor gives its consent hereunder, all signs shall be of a size,
color and design as is approved in writing by Lessor and shall be installed
where designated by Lessor and maintained in good

 

9

 

condition,
repair and appearance at all times, according to Lessor’s standards and the laws
of the municipality having jurisdiction over such signs. If Lessor shall deem
it necessary to remove any sign in order to paint or to make any repairs,
alterations or improvements in or upon the Demised Premises or any part
thereof, Lessor shall have the right to do so, provided the same be removed and
replaced at Lessor’s cost and expense unless having been occasioned by fault of
Lessee.  Lessor shall have the right,
with notice to Lessee, to remove any signs (paper or otherwise) installed by
Lessee in violation of this paragraph and to charge Lessee the cost of such
removal without liability to Lessee for such removal.

 

SECTION 4.09  No property, other than such as might
normally be brought upon or kept in the Demised Premises as incidental to the
reasonable use of the Demised Premises for the purposes herein permitted, will
be brought upon or kept in the Demised Premises.

 

ARTICLE 5- POSSESSION AND CONDITION OF DEMISED
PREMISES

 

SECTION 5.01.  Lessee has inspected the Demised Premises and
the state of title thereto and Lessee accepts the Demised Premises in their “AS
IS” state and condition on the Commencement Date and without any representation
or warranty (except as expressly set forth herein), express or implied, in fact
or by law, by Lessor, and without recourse to Lessor, as to title thereto, the
nature, condition or usability thereof or as to the use or occupancy which may
be made thereof, except as expressly set forth herein.

 

SECTION 5.02.  If delivery of possession to the Demised
Premises to Lessee is delayed by reason of Unavoidable Delays (as hereinafter
defined), then this Lease and the validity thereof shall not be affected
thereby and Lessee shall not be entitled to terminate this Lease, to claim
actual or constructive eviction, partial or total, or to be compensated for
loss or injury suffered as a result thereof, nor shall the same be construed in
any way to extend the Term, provided, however,
that, notwithstanding the provisions of Article 1, the Commencement Date
shall be deemed to occur only if and when possession of the Demised Premises is
made available to Lessee.

 

SECTION 5.03.  The provisions of this Article shall be
considered an express provision to the contrary pursuant to New York Real Property Law
Section 223-(a) governing delivery of possession of the Demised
Premises and any law providing for such a contingency in the absence of such
express agreement now or hereafter enacted shall have no application is such
case to the extent inconsistent with this Lease.

 

ARTICLE 6- UTILITIES, CLEANING, ETC.

 

SECTION 6.01.A.  During the Term hereof, Lessor shall furnish
to Lessee, during Normal Working Hours (as hereinafter defined: (i) necessary
elevator facilities; (ii) heat to the Demised Premises when and as
required by law; (iii) water for ordinary lavatory, kitchen/pantry and
drinking purposes for the Demised Premises, but if Lessee uses or consumes
water for any other purposes or in unusual quantities (of which fact Lessor
shall be the reasonable judge), Lessor may install a water meter at Lessor’s
expense in good working order and repair to register such water consumption and
Lessee shall pay for water consumed as shown on said meter as Additional Rent
as and when bills are rendered; (iv) air conditioning and/or cooling for
the Demised Premises through the Building’s air conditioning and/or cooling
system (the “Building’s AC System”); (v) ventilation for the Demised
Premises; (vi) electricity for Building lighting and normal Building
equipment and other incidental equipment (hereinafter collectively referred to
as the “Utility Service”).

 

B.  Except as otherwise specifically provided for
in this Lease, Lessor represents and warrants that Lessee shall have access (by
elevator) to the Demised Premises Twenty-Four (24) hours a day, Seven (7) days
a week.

 

C.1.  The Building’s AC System shall be capable of
substantially meeting the following maximum performance specifications:

 

	
   

  	
   

  	
  Inside Condition

  	
   

  	
  Outside Condition

  
	
   

  	
   

  	
  (Degrees)

  	
   

  	
  (Degrees)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cooling
  Season

  	
   

  	
  78°F dry bulb

  	
   

  	
  95°F dry bulb

  
	
   

  	
   

  	
  50%
  RH

  	
   

  	
  75°F wet bulb

  
	
  Heating
  Season

  	
   

  	
  72°F dry bulb

  	
   

  	
  0°F

  

 

2.  The foregoing performance standards shall be
inapplicable where the Demised Premises are occupied by more than an average of
one person for each 150 square feet of Lessee’s floor space or if Lessee
installs and operates machines and appliances, the installed electrical load of
which when combined with the load of all lighting fixtures and all occupancy
factors exceeds six watts per square foot of Lessee’s floor space in any one
room or other area or in any area used other than for offices exclusive of
HVAC.  If due to use of the Demised
Premises in a manner exceeding the aforementioned occupancy and electrical load
criteria, or

 

10

 

due
to rearrangement of partitioning after the initial preparation of the Demised
Premises, interference with normal operation of the air conditioning in the
Demised Premises results, necessitating changes in the air conditioning system
servicing the Demised Premises, such changes shall be made by Lessor upon
written notice to Lessee and Lessee’s sole cost and expense.  Lessee shall use commercially reasonable
efforts to keep all windows closed, and to lower and close window coverings
when necessary because of the sun’s position whenever the said air conditioning
system is in operation, and Lessee agrees at all times to cooperate fully with
Lessor and to abide by all the regulations and requirements which Lessor may
reasonably prescribe with notice for the proper functioning and protection of
the said air conditioning system. 
Lessor, throughout the Term, shall have free and unrestricted access to
any and all air conditioning facilities in the Demised Premises.

 

SECTION 6.02.  During the Term hereof and any Renewal Term,
Lessor shall furnish to Lessee cleaning services for the Demised Premises,
Monday through Friday, in accordance with the Cleaning Specifications annexed
hereto as EXHIBIT ”D.”

 

SECTION 6.03.A.  If Lessee requests air cooling, heat or
ventilation in the Demised Premises outside Normal Working Hours (the “Overtime
Services”), Lessee agrees to pay to Lessor the Overtime Charge (as hereinafter
defined) to cover Lessor’s expenses for providing such Overtime Services.

 

B.1  Lessor shall furnish such Overtime Service to
Lessee provided that (i) Lessee pays to Lessor as Additional Rent special
Overtime Charge (as hereinafter defined) therefore, which Overtime Charge will
be billed to Lessee along with Lessee’s next monthly installment of Fixed Rent
if such service shall have been furnished to Lessee prior to the fifteenth (15th)
day of the month or along with the subsequent monthly installment of Fixed Rent
if such service shall have been furnished to Lessee after the fifteenth (15th)
day of the month, (ii) that Lessee’s request shall be received by Lessor
by not later than 2:00 P.M. on the day for which after hours service is
requested (and by not later than 2:00 P.M. on the day preceding any
requested before-hours service), and (iii) that Lessor shall not be
required to furnish such Overtime Services to Lessee for more than twenty (20)
hours in any one (1) week.   In no
event, however, shall Lessor be obligated to supply Overtime Service to Lessee
unless Lessee shall request and pay for the same as provided in this Article 6.  In the event that Lessee and any other tenant
in the Building shall request Overtime Services, then, to the extent that the
Building Equipment permits same, Lessee and such other tenants shall pay their
proportionate share of the Overtime Charges.

 

2.  As used herein, the “Overtime Charges” shall
be an amount per hour equal to the sum of: (i) One Hundred and Fifty and
00/100 ($150.00) Dollars for Lessor’s employee overtime and (ii) the
Utility Consumption Charges (as hereinafter defined).  As used herein, the “Utility Consumption
Charges” shall be determined by adding Lessor’s actual cost of providing all
electric service, natural gas service and/or oil consumed in the Building, as
the case may be, during the month in which such Overtime Service is requested
and dividing that total amount by the total number of Normal Working Hours
during the month in which such Overtime Service is requested.  Lessor agrees that the Overtime Charges shall
be the same for all tenants in the Building. 
In the event, Lessor offers any other tenant in the Building a discount
on or a reduction in Overtime Charges, then Lessee shall be entitled to the
receive the same discounts or reductions.

 

3.  Lessee agrees that the Overtime Charges, may
from time to time, be increased by Lessor, with not less than thirty (30) days
prior written notice to Lessee, if the rates at which Lessor purchases
electrical energy from the public utility corporation supplying electrical
current to the Building of which the Demised Premises are a part shall be
increased, or any tax is imposed upon Lessor’s receipt from the sale or resale
of electrical energy by any Federal, State or Municipal Authority, or any
charges incurred or taxes payable by Lessor in connection therewith shall be
increased.  The Overtime Charges shall be
increased by an amount equal to the product of the respective hourly rate times
the percentage increase in the rates at which Lessor purchases electrical
energy from the public utility corporation as aforesaid.

 

SECTION 6.04.A.  During the Term hereof, or any Renewal Term,
Lessor shall also provided Lessee with the necessary facilities to furnish
electricity (“Electric Service”) to the Demised Premises, including any
supplemental heating, ventilating and air conditioning systems.

 

B.  Lessee agrees that it shall purchase or
receive such Electric Service directly from Lessor and to pay directly to
Lessor all charges for Electric Service rendered or supplied to the Demised
Premises throughout the Term hereof, or any Renewal Term.

 

C.
 Lessee’s consumption of Electric Service
shall be measured by means of separate flow meters (hereinafter referred to as
the “Meters”) installed by Lessor as part of Lessor’s Work, and Lessee shall
pay, during the entire Term of this Lease, or any Renewal Term, all costs and
expenses including the payments of any taxes and/or penalties in connection
therewith for all Electric Service used, consumed or provided to the Demised
Premises, including electricity for any auxiliary heating, ventilating and air
conditioning systems servicing the Demised Premises but excluding Building
Equipment.

 

11

 

D.  Lessee shall pay for all Electric Service
consumed, used or provided to the Demised Premises as hereinabove provided within
twenty (20) days after rendition of a bill for same by Lessor (the “Utility
Statement”).  Lessor shall bill Lessee at
Lessor’s cost for all Electric Service and there shall be no fee payable to
Lessor to read the Meters and prepare the Utility Statement.  All Electric Service billed by Lessor to
Lessee shall be deemed Additional Rent. 
Each Utility Statement shall be conclusive and binding upon Lessee
unless within thirty (30) days after receipt of such Utility Bill Lessee shall
notify Lessor that it disputes the reasonableness or correctness of the Utility
Statement, specifying the respects in which the Utility Statement is claimed to
be unreasonable or incorrect.  Pending
the determination of such dispute by agreement or otherwise, Lessee shall pay for
Electric Service in accordance with the applicable Utility Statement, and such
payment will be without prejudice to Lessee’s position.

 

E.  Lessee shall make no substantial alterations
or additions to the initial lighting, electrical appliances or office equipment
if the connected electrical load, when combined with the load of all lighting
fixtures and all occupancy factors exceeds six (6) watts of connected load
per rentable square, exclusive of the Building’s AC System, without first
obtaining written consent from Lessor in each instance.  Lessor warrants that the electrical
facilities servicing the Demised Premises is in good working order and can
accommodate a normal office installation with associated office machinery and
equipment, provided, however, that
the connected electrical load, when combined with the load of all lighting
fixtures and all occupancy factors does not exceed six (6) watts of
connected load per rentable square, exclusive of the Building’s AC System.  Lessee agrees that at all times its use of
Electric Service shall not exceed the capacity or overload any of the central
and appurtenant installations for Electric Service including, but not limited
to all wires, feeders, risers, electrical boxes, switches, outlets,
connections, and cables located in the Property, Building, or Demised Premises
or any other mechanical equipment spaces located therein.  Lessee’s use of Electric Service shall not
interfere with the use thereof by other occupants of the Property, or Building
and shall be of such a nature, as determined by Lessor in its reasonable
judgment and discretion, so as not cause permanent damage or injury to the
Demised Premises or the Building of which the Demised Premises are a part, or
cause or create a dangerous or hazardous condition or entail excessive or
unreasonable alterations, repairs or expense, or interfere with or disturb
other tenants or occupants.

 

SECTION 6.05.A.  Provided that Lessee substantially complies
with the provisions of this Section 6.05, Lessee shall have the right, at
its sole cost and expense, to retain an independent engineering firm or
electrical contractor (“Lessee’s Engineers”), to review supporting data and/or
documentation for any portion of the Utility Statement that Lessee disputes.

 

B.  Lessee acknowledges and agrees that any
records reviewed by it shall constitute confidential information of Lessor
which shall not be disclosed to anyone other than the Lessee’s Engineers and
the principals of Lessee and its agents, consultants, and employees on a need
to know basis, or in a court of competent jurisdiction who receive the results
of the review and disclosure or dissemination of such information shall be
deemed a material breach of this Lease and Lessor shall be entitled to all its
remedies at law or in equity.

 

C.  In the event that Lessee’s Engineers find an
error in the amount of Electric Service consumed by Lessee in the Demised
Premises as stated in the Utility Statement (hereinafter referred to as “Electric
Consumption”), such error shall be: (i) promptly corrected in the event
that Lessor agrees with Lessee’s Engineers, or (ii) resolved by agreement
between Lessor and Lessee in the event that Lessor does not agree with Lessee’s
Engineers.  In the event that Lessor and
Lessee are unable to resolve such error, then in such event, the error shall be
determined by arbitration as provided for in this Section 6.05.  If the amount of Electric Consumption is
agreed upon by Lessor and Lessee, or found by the arbitrators, to be greater or
lesser than the amount set forth in the Utility Statement, then in such event: (i) if
Lessee has overpaid its obligations for a preceding period, the amount of such
overpayment shall be credited against Lessee’s subsequent obligation to pay its
Utility Statement; or (ii) if Lessee has underpaid its obligations for a
preceding period, the amount of such underpayment shall be paid to Lessor with
Lessee’s next Utility Statement or refunded to Lessee.

 

D.  In the event that Lessor and Lessee are
unable to resolve a dispute concerning the amount of Electric Consumption in
the Demised Premises, then either Lessor or Lessee (hereinafter referred to as
the “Initiating Party”) may give the other party (hereinafter called the “Responding
Party”) a notice designating the name and address of the arbitrator designated
by the Initiating Party to act on its behalf in the arbitration process
hereinafter described (the “Review Notice”).

 

E.  If the Initiating Party gives a Review
Notice, then within twenty (20) days after giving of such Review Notice, the
Responding Party shall give notice to Initiating Party specifying in such
notice the name and address of the arbitrator designated by the Responding
Party to act on its behalf.  In the event
the Responding Party shall fail to give such notice within such twenty (20) day
period, then the appointment of such arbitrator shall be made in the same
manner as hereinafter provided for the appointment of a third arbitrator in a
case where two arbitrators are appointed hereunder and the parties are unable
to agree to such appointment.  The two
arbitrators so chosen shall meet within thirty (30) days after the second
arbitrator is

 

12

 

appointed
and shall exchange sealed envelopes each containing such arbitrators written
determination of the amount of Electric Consumption.  The amount of the Electric Consumption
specified by Lessor’s arbitrator shall be called the “Lessor’s Submitted Value”
and the amount of Electric Consumption specified by Lessee’s arbitrator shall
be called the “Lessee’s Submitted Value”. 
Copies of such written determinations shall promptly be sent to both
Lessor and Lessee.  Any failure of either
such arbitrator to meet and exchange such determinations shall be acceptance of
the other party’s arbitrator’s determination as to the Electric Consumption,
if, and only if, such failure persists for five (5) days after notice to
the party for whom such arbitrator is acting, and, provided that such five (5) day
period shall be extended by reason of any Unavoidable Delay.  If the higher determination of the Electric
Consumption for the Demised Premises is not more than one hundred and five
(105%) percent of the lower determination of the Electric Consumption, then the
Electric Consumption for the Demised Premises shall be deemed to be the average
of the two determinations.  If, however,
the higher determination is more than one hundred and five (105%) percent of
the lower determination, then within ten (10) days of the date the
arbitrators submitted their respective Electric Consumption determinations, the
two arbitrators shall appoint a third arbitrator.  In the event of their being unable to agree
upon such appointment within ten (10) days after the exchange of the
sealed envelopes, the third arbitrator 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, then either
party, on behalf of both and on notice to the other, may request such an
appointment by the American Arbitration Association (or any successor
organization) in accordance with its rules then prevailing or if the
American Arbitration Association (or any successor organization) shall fail to
appoint said third arbitrator within fifteen (15) days after such request is
made, then either party may apply for such appointment, on notice to the other,
to the President of the Westchester County Bar Association (who may consult
with the Chairman of the Real Property Law Committee of the Westchester County
Bar Association).  Within ten (10) days
after the appointment of such third arbitrator, the Lessor’s arbitrator shall
submit Lessor’s Submitted Value to such third arbitrator and the Lessee’s
arbitrator shall submit Lessee’s Submitted Value to such third arbitrator.  Such third arbitrator shall, within thirty
(30) days after the end of such fifteen (15) day period, make his own
determination of the Electric Consumption in the Demised Premises, and send
copies of his determination promptly to both Lessor and Lessee specifying
whether Lessor’s Submitted Value or Lessee’s Submitted Value was closer to the
determination by such third arbitrator of the Electric Consumption in the
Demised Premises.  Whichever of Lessor’s
Submitted Value or Lessee’s Submitted Value shall be closer to the
determination by such third arbitrator shall conclusively be deemed to be the
Electric Consumption in the Demised Premises.

 

F.
In no event shall the arbitrators enlarge upon, or alter or amend, this Lease
or Lessor’s or Lessee’s rights as provided in this Lease, it being understood
that the sole issue for determination by the arbitrators shall be the single
issue of fact of the Electric Consumption in the Demised Premises. The
arbitrators shall be licensed engineers or electrical contractors who are
disinterested and are currently practicing in the Westchester County, New York
area with at least ten (10) years experience in evaluating and auditing
electric consumption.

 

G.
Except as otherwise provided in the following sentence, the fees and expenses
of an arbitration proceeding shall be borne by the parties equally.  The fees of respective counsel engaged by the
parties the fees and expenses of expert witnesses and other witnesses called
and the cost of transcripts shall be borne by the parties engaging such counsel
or calling such witness or ordering such transcripts.

 

SECTION 6.06.  Lessor reserves the right to stop, interrupt
and/or suspend Utility Service and/or Electric Service when necessary by reason
of accident or for repairs, alterations, replacements or improvements necessary
or desirable in the judgement of Lessor for as long as may be reasonably
required by reason thereof.  The repairs,
alterations, replacements or improvements shall be done with a minimum of
inconvenience to Lessee and upon reasonable notice to Lessee (except that no
notice shall be required in the event of an emergency) and Lessor shall pursue
same with due diligence.

 

SECTION 6.07.  The Lessor shall in no way be liable for any
loss, damage, or expense which Lessee may incur as a result of the change, at
any time, of the character or quality of Electric Service or Utility Service or
any failure of or defect in Electric Service or Utility Service by reason of
any public or private utility company then supplying such service to the
Property, Building or the Demised Premises

 

ARTICLE 7- REPAIR AND MAINTENANCE

 

SECTION 7.01.A.  Subject to the provisions of Section 7.02
hereof, Lessee shall, during the Term of this Lease and any Renewal Term, at
Lessee’s sole cost and expense, take good care of, maintain and make all
repairs, (other than structural) in the Demised Premises, and the fixtures and
equipment therein and appurtenances thereto, including but not limited to,
internal doors and entrances, door checks, internal signs, floor covering,
interior walls, columns and partitions; and lighting, heating, hot water,
plumbing and sewerage facilities, sprinkler system and sprinkler heads; and
supplemental air conditioning units, if any, located within the Demised Premises
and serving only the Demised Premises from the point after which they are
connected to the Building Equipment and only to the extent located in the
Demised Premises.  Notwithstanding the
foregoing, Lessee shall not be required to repair the Building AC System or the
Building

 

13

 

Equipment
which serves the Demised Premises, except to the extent caused by the negligent
acts or omissions of Lessee, or Lessee’s agents, employees, contractors and/or
sub-contractors.

 

B.  If Lessee refuses or neglects to clean,
maintain or make repairs or otherwise fails to perform any of Lessee’s repairs
or maintenance obligations hereunder, Lessor shall have the right, but shall
not be obligated, to make such repairs or perform on behalf of and for the
account of Lessee.  All sums so paid by
Lessor in connection with the payment or performance by it or any of the
obligations of Lessee hereunder and all actual and reasonable costs, expenses
and disbursements paid in connection therewith or enforcing or endeavoring to
enforce any right under or in connection with this Lease, or pursuant to law,
together with interest thereon at the Maximum Legal Rate from the respective
dates of the making of such payment, shall constitute Additional Rent payable
by Lessee under this Lease and shall be paid by Lessee to Lessor upon demand by
Lessor.  The provisions of this Section shall
survive the expiration or other termination of this Lease.

 

SECTION 7.02.  Except to the extent caused by the acts or
omissions of Lessee, or Lessee’s agents, contractors, subcontractors,
employees, or invitees, Lessor shall be required to make all necessary
structural repairs to the Demised Premises and/or Building, repairs to the
Building Equipment (as hereinafter defined) and for damage caused by a casualty
or Lessor’s negligent acts, excluding Lessee’s property.  Lessor shall during the Term of this Lease
and any Renewal Term, operate, maintain and repair all common areas and other
facilities in or about the Property and/or the Building, exclusive of interior
doors, interior door frames, interior door checks, interior windows and
interior window frames.  Lessor shall
construct, maintain and operate the common areas of the Building and Property
as a first class office building in the White Plains, New York metropolitan
area, and Lessor shall have full right and authority to employ and discharge
all personnel with respect thereto.  If
Lessor shall designate an employee or lessee parking area or areas, Lessee and
its employees shall use only such areas for parking and Lessee shall cooperate
fully with Lessor in enforcing this covenant.

 

SECTION 7.03.  “Repairs” as used herein shall mean all
repairs, replacements, renewals, alterations, additions and betterments.  All contracts between Lessee and others for
installations, maintenance, and repairs and alterations involving the Demised
Premises, including maintenance agreements, shall be subject to the prior
written approval of Lessor, not to be unreasonably withheld, conditioned or
delayed.

 

SECTION 7.04.  Lessor shall not be required to make any
repairs or replacements to the common areas occasioned by the act or negligence
of Lessee, its agents, employees, invitees, customers, licensees, or
contractors, except to the extent that Lessor is reimbursed therefor under any
policy of insurance permitting waiver of liability and containing a waiver of
subrogation, except as otherwise provided in this Lease and Article 12 of
this Lease.

 

ARTICLE 8- LESSOR’S WORK; LESSEE’S ALTERATIONS

 

SECTION 8.01.A.  Lessor (which term as used herein may be
deemed to mean Lessor and/or Lessor’s affiliated or non-affiliated general
contractor) shall act as general contractor with respect to the build-out of
the Demised Premises and, in such capacity, shall perform, at Lessor’s sole
cost and expense, all the quantity of work as described in Lessor’s Standard
Work Letter annexed hereto as EXHIBIT ”F-1” at the Demised Premises in
accordance with the plans and specifications (the “Plans”) which Lessor and Lessee
have approved and which are annexed hereto as EXHIBIT ”F-2” hereto (the “Work”)
and in a good and workmanlike manner.

 

B.  Any increase in the scope of Work to be
performed by Lessor beyond that contained in the Plans (“Extra Work”) shall be
approved as follows: (i) a written request for any such Extra Work
(including any and all change orders) defining the scope of such Extra Work
plus any possible time delay and containing an “Extra Work Cost Estimate” shall
within a reasonable period of time be prepared by Lessor for review and
acceptance by Lessee; and (ii) upon execution by Lessee of such written
request of Lessor, Lessor shall pursue completion of the Extra Work stipulated
therein at Lessee’s sole cost and expense. 
Lessee shall pay to Lessor the cost of the Extra Work to the extent it
exceeds Lessor’s Allowance as follows: (i) one half of the cost upon the
commencement of such Extra Work; and (ii) the balance upon completion of
such Extra Work.

 

C.  To the extent (i) Lessor may be or is
required to or actually does perform Work pursuant to this Article 8,
and/or (ii) Lessor performs other build-out or similar work or alterations
to the Demised Premises of any kind or any other demolition, renovation or
construction on Lessee’s behalf during the term of this Lease, pursuant to Article 25
of this Lease and otherwise, same shall be on a Cost basis.

 

SECTION 8.02.A.  Provided that the Lease is executed and
delivered on or before February 17, 2006 together with the Plans and all
finishes selected by Lessee by no later than February 20, 2006, Lessor
shall use reasonable efforts to substantially complete the Work by May 1,
2006, subject to Unavoidable Delays, but failure to complete the Work by said
date shall not effect the validity of this Lease.  Lessor has not made, and makes, no
representations as to the date when the Work will be substantially complete,
and notwithstanding any date specified in this Lease, the same is merely an
estimate.  Lessee’s failure to deliver
the Lease and

 

14

 

Plans
by February 24, 2006 and/or finish selections shall on or before February 24,
2006 shall be deemed a Lessee Delay.

 

B.  Lessee shall submit to Lessor, on or before
the tenth (10th) day following notice of substantial completion of
the Work, a punch list setting forth such details provided for in the Plans as
remain to be completed and, except as noted therein, Lessee shall be deemed to
have accepted the Work as of the date of substantial completion.  Except for items which are seasonal in
nature, Lessor shall complete the punch list items within thirty (30) days.

 

C.1.  Except as provided herein, Lessee hereby
waives any right to terminate, cancel or rescind this Lease by reason of Lessor’s
failure to complete the Work, to deliver possession of the Demised Premises or
otherwise perform its obligations under this Article, which Lessee might
otherwise have pursuant to any law now or hereafter in force or otherwise.  Lessee further waives the right to recover
any damages which may result from Lessor’s failure to complete the Work, to
deliver possession of the Demised Premises or otherwise to perform its
obligations under this Article. 
Notwithstanding the foregoing and except for Lessee Delays, in the event
that the Work is not substantially complete by May 1, 2006 (the “Penalty
Date”), then in such event, and in lieu of any other remedies at law or in
equity, Lessee shall be entitled to a credit against Fixed Rent in the Penalty
Amount (as hereinafter defined) for each and every day after the Penalty Date
until the Work is substantially complete (the “Rent Credit”) as and for
liquidated damages.  Lessor and Lessee
agree that this Section 8.02.C. is an express provision to the contrary as
to the time when Lessor shall substantially complete Lessor’s Work and as to
the delivery of possession of the Demised Premises.

 

2.  As used herein, the “Penalty Amount” shall be
the actual amount that Lessee is required to pay it current landlord as
holdover rent under its existing lease, provided,
however, that Lessor’s obligation hereunder shall in no event exceed
Seventeen Thousand and 00/100 ($17,000.00) Dollars per month, or portion
thereof.

 

SECTION 8.03.  Lessee shall have the right, prior to the
Commencement Date to enter into the Demised Premises for the purposes of
installing its telephone and data communication lines and cables (the “DAT
Cables”) in the Demised Premises, provided,
however, that the DAT Cables be: (i) installed and maintained
at the sole cost and expense of Lessee and in a location reasonably acceptable
to Lessor, (ii) be installed and maintained in a good and workmanlike
manner, and in compliance with all applicable Legal Requirements (including
existing zoning requirements), Insurance Requirements and Environmental Laws, (iii) be
consistent with the use of the Demised Premises provided for herein, (iv) be
performed in accordance with plans and specifications approved prior to the
commencement of any work by the appropriate Governmental Authorities and by
Lessor, which approval by Lessor will not be unreasonably withheld, conditioned
or delayed, and (v) be of such nature so as not to lessen the fair market
value of the Building or Property.  All
trade and operating fixtures and equipment permanently affixed to the Demised
Premises shall not be subject to liens, conditional sales contracts, security
agreements or chattel mortgages.  Lessee
shall work compatibly, and not interfere, in Lessor’s reasonable judgment, with
Lessor in the completion of the Work. 
Lessee shall at all times comply with all of the terms of this Lease.

 

SECTION 8.04.  Other than as specifically provided for in Section 8.03
hereof, Lessee shall not do any construction, work or alterations to the
Demised Premises, nor shall Lessee install any items other than Lessee’s trade
fixtures without first: (1) obtaining Lessor’s written consent and (2) complying
with all of the terms, covenants and conditions contained in Lessor’s Standard Requirements For Alterations To Be Performed
by Lessees’, annexed hereto as EXHIBIT ”G,” as may be
amended from time to time.

 

ARTICLE 9- COMPLIANCE WITH LAWS

 

SECTION 9.01.  Lessor represents that the Demised Premises,
the Building and Property will comply with all Legal Requirements,
Environmental Laws and Insurance Requirements as of the Commencement Date.

 

SECTION 9.02.
Throughout the Term of this Lease, Lessee shall promptly comply with all Legal
Requirements, Environmental Laws and Insurance Requirements whether or not such
compliance involves structural repairs or changes or be required on account of
any particular use to which the Demised Premises, or any part, may be put by
Lessee other than general office use, and whether or not any such Legal
Requirements, Environmental Laws, or Insurance Requirements be of a kind not now
within the contemplation of the parties hereto. 
Compliance by Lessee with Legal Requirements, Environmental Laws, and
Insurance Requirements shall be at Lessee’s sole cost and expense.  Lessee shall not contest the application or
validity of any such Legal Requirements, Environmental Laws, or Insurance
Requirements without the prior written consent of Lessor in each such instance,
which consent shall not be unreasonably withheld, conditioned or delayed, provided, however, that (i) such
contest shall not result in Lessor being in default under any Superior
Mortgages or Leases; (ii) does not impose any civil or criminal liability
on Lessor’s officers, directors, shareholders or partners; (iii) Lessee
agrees to pay any and all fines and/or penalties incurred, assessed or levied
in connection with such contest; and (iv) Lessee shall and does hereby
indemnify

 

15

 

and
hold harmless Lessor, and Lessor’s agents, officers, directors, and employees,
from and against any and all loss, liability, fines, suits, claims,
obligations, damages, penalties, demands and actions, and costs and reasonable
expenses of any kind or nature (including reasonable architects’ and attorneys’
fees) due to or arising out of such contest]. 
Any repair or change required under this Section shall be deemed a
repair for the purposes of Article 7. 
With respect to actions necessary to comply with Legal Requirements,
Insurance Requirements and Environmental Laws which due to their nature, can only
be taken by Lessor, Lessor, at Lessee’s expense, will cooperate with Lessee in
facilitating such compliance.

 

ARTICLE 10- RIGHTS RESERVED TO LESSOR

 

SECTION 10.01.  Lessee shall permit Lessor, Lessor’s agents,
and its invitees to enter the Demised Premises, or any part thereof, at all
reasonable times and on reasonable notice provided same does not unreasonably
interfere with Lessee’s business and a representative of Lessee is present for
the purposes of (a) inspecting the same, (b) curing Events of Default
of Lessee (after Ten (10) days notice to Lessee, except that no notice
shall be required in case of an emergency), (c) showing the same to
mortgagees, appraisers, or prospective lenders, purchasers or showing the same
to prospective lessees during the last six (6) months of the Term or any
Renewal Term, (d) observing the performance by Lessee of its obligations
under this Lease, (e) performing any act or thing which Lessor may be
obligated or have the right to do under this Lease or otherwise, and (f) any
other reasonable purpose.  Lessor and any
providers of Utility Services or other services shall have the right to
maintain existing utility, mechanical, electrical and other systems and to
enter upon the Demised Premises to make such repairs and alterations therein or
in or to the Demised Premises as may, in the opinion of Lessor, be deemed
necessary or advisable.  Lessor shall not
be liable for inconvenience, annoyance, disturbance or loss of business to
Lessee or any sublessee by reason of making any repairs or the performance of
any work, or on account of bringing materials, tools, supplies and equipment
into or through the Demised Premises during the course thereof and the
obligations of Lessee under this Lease shall not be affected thereby.  The rights provided in this Article shall
be exercised so as to minimize interference with the use and occupancy of the
Demised Premises by Lessee. Nothing contained in this Article shall
impose, or shall be construed to impose on Lessor any obligation to maintain
the systems referred to in this Article or the Demised Premises or
anything appurtenant thereto, or to make repairs or alterations thereof or
thereto, or to create any liability for any failure to do so.

 

SECTION 10.02.A.  Without abatement or diminution in rent,
Lessor reserves and shall have the following additional rights: (a) to
change the street address and/or the name of the Building of which the Demised
Premises are a part and/or the Property and/or the locations of entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets, or other
public parts of the Building and/or Property without liability to Lessee, (b) to
erect, use and maintain pipes and conduits in and through the Demised Premises,
(c) to charge to Lessee any expense including overtime cost incurred by
Lessor in the event that repairs, alterations, decorating or other work in the
Demised Premises performed by Lessor or Lessor’s contractors are made or done
after ordinary business hours at Lessee’s request, (d) to immediately
enter and alter, renovate, and redecorate the Demised Premises (without
reduction or abatement of rent or incurring any liability to Lessee for
compensation), if during the last five (5) months of the term or of a
renewal term Lessee shall have removed all or substantially all of Lessee’s
property therefrom, and (e) to grant to anyone the exclusive right to
conduct any particular business or undertaking in the Building of which the
Demised Premises are a part, provided same does not violate this Lease.

 

B.
Lessor may exercise any or all of the foregoing rights hereby reserved to
Lessor without being deemed guilty of an eviction, actual or constructive, or
disturbance or interruption of Lessee’s use or possession and without being
liable in any manner toward Lessee and without limitation or abatement of rent
or other compensation, and such acts shall have no effect on this Lease.

 

ARTICLE 11- INSURANCE

 

SECTION 11.01.
A. Lessee shall obtain and keep in full force and effect during the Term, and
during any earlier period of time when Lessee or Lessee’s agents, employees, or
contractors may enter the Demised Premises at its own cost and expense:

 

(1) commercial general liability insurance (with a contractual
liability endorsement covering the matters set forth in Article 16) having
a combined single limit of not less than One Million ($1,000,000.00) Dollars
protecting Lessor, any Lessor’s agent which is acting as a property manager for
the Property, the holder of any Mortgage, or lessor under any Superior Lease
and Lessee as insureds (and naming each such person as an insured party or as
an additional insured) against any and all claims for bodily injury, death or
property damage occurring, during the Term and during any earlier period of
time when Lessee or Lessee’s agents, employees, or contractors may enter the
Demised Premises;

 

(2) comprehensive liability umbrella policy of not less that Four
Million ($4,000,000.00) Dollars;

 

16

 

(3) insurance (herein sometimes referred to as “Lessee’s fire
(casualty) insurance”) against loss or damage by any and all risks and hazards
to Lessee’s Property (as hereinafter defined) for the full replacement value
thereof (including coverages which are currently sometimes referred to as “all
risk” with coverage written on a replacement cost basis);

 

(4)  workers’ compensation and employees liability insurance in
accordance with the laws of the State of New York and all Governmental
Authorities having jurisdiction over the Demised Premises and/or the Property;
and

 

(5)   If there is a steam
boiler, steam generator, or any other combustible device, mechanism or
appliance in, on, adjoining or beneath the Demised Premises, for the exclusive
use of the Lessee, Lessee shall insure and keep insured in the name of Lessee,
with the name of Lessor included as an additional insured, at Lessee’s expense
with a broad form boiler insurance in the amount of at least Five Hundred
Thousand ($500,000.00) Dollars.  Lessee
shall further insure, at Lessor’s request, against any other peril generally
insured against by a business of Lessee’s type.

 

B.
Said insurance is to be written in form and substance reasonably satisfactory
to Lessor by an insurance company, licensed to do business in the State of New
York, which shall be rated by Best’s Insurance Rating Service with at least a
rating equal to A:XII.  Lessee shall
procure, maintain and place such insurance and pay all premiums and charges
therefor and upon failure to do so Lessor may, but shall not be obligated to,
procure, maintain and place such insurance or make such payments, and in such
event Lessee agrees to pay the amount thereof plus interest at the Maximum
Legal Rate then prevailing, to Lessor on demand as Additional Rent. If Lessee
has other locations that it owns or leases, said policy shall include an
aggregate per location endorsement. 
Lessee shall cause to be included in all such insurance policies (i) a
provision to the effect that the same will not be canceled or modified except
upon not less than thirty (30) days prior written notice to the Lessor, and (ii) a
provision to the effect that the naming of any person other than Lessee as an
insured shall not obligate such person to pay any premium.  Each such Lessee’s fire (casualty) insurance policy
shall contain an agreement by the insurer that the act or omission of one
insured will not invalidate the policy as to any other insured. Not less than
ten (10) days prior to the Commencement Date the original insurance
policies or appropriate certificates and paid receipts therefor, (together with
a photocopy of the policy, if Lessor shall so request) shall be deposited with
Lessor. Any renewals or endorsements thereto shall also be deposited with
Lessor, not less than ten (10) days prior to the expiration date of the
policy being renewed, replaced or endorsed, to the end that said insurance
shall be in full force and effect at all times during the Term.

 

SECTION 11.02.  Lessee agrees to use reasonable efforts to
include in each of its insurance policies (insuring the Demised Premises and
Lessor’s property therein, against loss occasioned by fire or other casualty) a
waiver of the insurer’s right of subrogation against the Lessor, or if such
waiver should be unobtainable or unenforceable, (a) an express agreement
that such policy shall not be invalidated if the insured waives or has waived
before the casualty the right of recovery against any party responsible for a
casualty covered by the policy, or (b) any other form of permission for
the release of the other party, or (c) the inclusion of the Lessor as an
additional insured.  Lessee, upon request
from Lessor from time to time, will furnish evidence of the nature of the
insurance arrangements made concerning the subject matter of this Section.

 

SECTION 11.03.  As long as both parties’ fire (casualty)
insurance policies then in force include the waiver of subrogation or agreement
or permission to release liability referred to in Section 11.02 or name
the other party as an additional insured, each party hereby waives (and agrees
to cause any other permitted occupants of the Demised Premises to execute and
deliver to the other party written instruments waiving) any right of recovery
against the other party, the holder of the Mortgage, or Superior Lease, and any
servants, employees, agents or contractors of the other party, or of any such
lessor or holder, or of any such other tenants or occupants, for any loss
occasioned by fire or other casualty, that is an insured risk under Lessee’s
fire (casualty) insurance policies.  In
the event that at any time either party’s fire (casualty) insurance carriers
shall not include such or similar provisions in the other party’s fire
(casualty) insurance policies, the waivers set forth in the foregoing sentence
shall be deemed of no further force and effect. 
During any period when either party fails to maintain such fire
(casualty) insurance, for the purposes of the first sentence of this Section there
shall be deemed to be in effect such fire (casualty) insurance meeting the
requirements of such sentence.

 

SECTION 11.04.  Nothing contained in this Lease shall (i) relieve
Lessee of any liability to Lessor or to its insurance carriers which Lessee may
have under law or the provisions of this Lease in connection with any damage to
the Demised Premises by fire or other casualty; (ii) impose upon Lessor
any duty to procure or maintain any kinds of insurance or any particular
amounts or limits of any such kinds of insurance.

 

17

 

SECTION 11.05.  Lessor shall insure the Building with all
risk insurance coverage in such amounts so as to avoid co-insurance and Lessor
agrees that such policies shall contain a waiver of subrogation in favor of
Lessee.

 

ARTICLE 12 - DAMAGE OR DESTRUCTION

 

SECTION 12.01.  If the Demised Premises or any part thereof
shall be damaged by fire or other casualty, Lessee shall give prompt notice
thereof to Lessor and Lessor shall proceed (subject to the provisions of this
Article) with reasonable diligence to repair or cause to be repaired such
damage.  Except as provided in Section 12.05,
the Fixed Rent shall be abated proportionately to the extent that the Demised
Premises shall have been rendered Untenantable (as hereinafter defined), such
abatement to be from the date of such damage or destruction to the date the
Demised Premises shall no longer be Untenantable.

 

SECTION 12.02.  If the Demised Premises shall be totally
damaged or the whole of the Demised Premises shall be rendered Untenantable by
fire or other casualty, and Lessor has not terminated this Lease pursuant to Section 12.03
and Lessor has not completed the making of the required repairs and restored
and rebuilt the Demised Premises and/or access thereto within one (1) year
from the date of such damage or destruction to the condition the Demised
Premises were in on the date preceding such casualty (except for Lessee’s
Property), Lessee may serve notice on Lessor of its intention to terminate this
Lease and if within thirty (30) days thereafter, Lessor shall not have
substantially completed the making of the required repairs and restored and
rebuilt the Demised Premises to the condition the Demised Premises were in on
the date preceding such casualty (except for Lessee’s Property), then in such
events, this Lease shall terminate on the expiration of such thirty (30) day
period as if such termination date were the Expiration Date, and the Fixed Rent
and Additional Rent shall be apportioned as of such date of sooner termination
and any prepaid portion of Fixed Rent and Additional Rent for any period after
such date shall be refunded by Lessor to Lessee.

 

SECTION 12.03.A.  If the Demised Premises shall be totally
damaged or the whole or substantially all of the Demised Premises shall be
rendered Untenantable by fire or other casualty or if the Demised Premises
shall be so damaged by fire or other casualty that substantial alteration or
reconstruction shall, in Lessor’s reasonable opinion, be required, then and in
such events Lessor may, at its option, terminate this Lease and the Term and
estate hereby granted by giving Lessee not less than thirty (30) days, nor more
than sixty (60) days, notice of such termination, within ninety (90) days after
the date of such damage. In the event that such notice of termination shall be
given, this Lease and the Term and estate hereby granted shall terminate as of
the date provided in such notice of termination (whether or not the Term shall
have commenced) with the same effect as if that were the Expiration Date, and
the Fixed Rent and Additional Rent shall be apportioned as of such date of
sooner termination, and any prepaid portion of Fixed Rent and Additional Rent
for any period after such date shall be refunded by Lessor to Lessee.

 

B.  If the Demised Premises shall be totally
damaged or the whole or substantially all of the Demised Premises shall be
rendered untenantable by fire or other casualty, and Lessor has not terminated
this Lease as provided in Section 12.03.A., Lessor shall notify Lessee,
within ninety (90) days after such fire or other casualty, as to the estimated
period of time necessary to complete the required repairs and restore and
rebuild the Demised Premises to the condition the Demised Premises were in on
the date preceding such casualty (except for Lessee’s Property).  If such Lessor’s estimate exceeds one (1) year,
from the date of such notice, or if Lessor falls to deliver such notice, then
in such events, Lessee may serve on Lessor, within thirty (30) days of its
receipt of Lessor’s notice, or the expiration of the ninety (90) days after
such fire or other casualty, as the case may be, (time being of the essence
with respect thereto), notice of its intention to terminate this Lease on a
date which shall be not more than thirty (30) days from the date of Lessee’s
notice.  If Lessee gives notice of its
intention to cancel this Lease as provided herein, then in such events, this
Lease shall terminate on the expiration of such thirty (30) day period as if
such termination date were the Expiration Date, and the Fixed Rent and
Additional Rent shall be apportioned as of such date of sooner termination and
any prepaid portion of Fixed Rent and Additional Rent for any period after such
date shall be refunded by Lessor to Lessee. 
Lessee’s failure to notify Lessor within the thirty (30) day period
shall be deemed a waiver of the right to terminate this Lease.

 

SECTION 12.04.  Lessor shall not be liable for any
inconvenience or annoyance to Lessee or injury to the business of Lessee
resulting in any way from such damage by fire or other casualty or the repair
thereof.

 

SECTION 12.05.  Nothing herein contained shall relieve Lessee
from any liability to the Lessor or to its insurers in connection with any
damage to the Property, Building or Demised Premises by fire or other casualty
if Lessee shall be legally liable in such respect.  Notwithstanding any of the foregoing
provisions of this Article, if by reason of some action or inaction on the part
of Lessee or any of its employees, agents, officers, directors or contractors,
Lessor or the holder of the Mortgage or Superior Lease shall be unable to
collect all of the insurance proceeds (including rent insurance proceeds)
applicable to damage or destruction of the Demised Premises by fire or other
cause, then, without prejudice to any other remedy which may be available
against Lessee, the abatement of Fixed Rent provided for in this Article shall
not be effective to the extent of the uncollected insurance proceeds.

 

18

 

 

SECTION 12.06.  This Lease shall be considered an express
agreement to the contrary pursuant to New York Real Property Law Section 227
governing any case of damage to or destruction of the Demised Premises or any
part thereof by fire or other casualty, and any law providing for such a
contingency in the absence of such express agreement, now or hereafter enacted,
shall have no application in such case to the extent inconsistent with this
Lease.

 

SECTION 12.07.  Lessee shall, at its own cost and expense, remove
all of Lessee’s property from the Demised Premises as Lessor shall require in
order to repair and restore the Demised Premises and Lessor shall not be
obligated to commence repairs or restoration of the Demised Premises until such
property has been removed by Lessee from the damaged portion of the Demised
Premises. Should Lessee neglect, fail, or refuse to remove its aforesaid
property within thirty (30) days after such damage or destruction, the
provisions for abatement of Fixed Rent contained herein shall be suspended and
of no force and effect whatsoever until Lessee has completed such removal.  In no event shall the Lessor be required to
repair or replace Lessee’s merchandise, trade fixtures, furniture, furnishings,
inventory and equipment.

 

ARTICLE 13 - CURING DEFAULTS; FEES AND
EXPENSES

 

SECTION 13.01.  If Lessee shall default in the full and
prompt performance of any covenant contained herein and to be performed on
Lessee’s part, Lessor, after thirty (30) days written notice to Lessee (except
that a lesser notice appropriate to the circumstances shall be required in case
of an emergency), without being under any obligation to do so and without
thereby waiving such default may perform such covenant for the account and at
the expense of Lessee and may enter upon the Demised Premises for any such
purpose and take all action thereon as may be necessary therefor.  All sums so paid by Lessor in connection with
the payment or performance by it of any of the obligations of Lessee hereunder
and all actual and reasonable costs, expenses and disbursements paid in
connection therewith or enforcing or endeavoring to enforce any right under or
in connection with this Lease, or pursuant to law, together with interest
thereon at the Maximum Legal Rate from the respective dates of the making of
each such payment, shall constitute Additional Rent payable by Lessee under
this Lease and shall be paid by Lessee to Lessor upon demand by Lessor.  The provisions of this Section shall
survive the expiration or other termination of this Lease.

 

ARTICLE 14 - DEFAULT PROVISIONS

 

SECTION 14.01.  A.  If
any one or more of the following events shall happen and shall not have been
cured within any applicable grace period herein provided:

 

(1)  if default shall be made in the due and punctual payment of
Fixed Rent or Additional Rent payable by Lessee under this Lease when and as
the same shall become due and payable, and such default shall continue for a
period of five (5) days after written notice thereof from Lessor to Lessee
(provided that no such notice shall be required if, during the period of one (1) year
immediately preceding the date of default, there shall have been two (2) or
more defaults in the due and punctual payment of Fixed Rent or Additional Rent
payable by Lessee under this Lease when and as the same shall have been due and
payable); or

 

(2) if default shall be made by Lessee in performance of, or
compliance with, any of the covenants, agreements or conditions contained in
this Lease and either (i) in the case of a default or a contingency which
can with due diligence be cured within thirty (30) days, such default shall
continue for a period of thirty (30) days after written notice thereof from
Lessor to Lessee, or (ii) in the case of a default or a contingency which
cannot with due diligence be cured within thirty (30) days, Lessee shall fail,
after written notice thereof from Lessor, to proceed promptly and with all due
diligence to commence to cure the same and thereafter to prosecute the curing
of such default with all due diligence (it being intended that, in connection
with a default which is not susceptible of being cured with due diligence
within thirty (30) days the time of Lessee within which to cure the same shall
be extended for such period as may be necessary for the curing thereof with all
due diligence); or

 

(3) if Lessee shall file a voluntary petition seeking an order or
relief under Title 11 of the United States Code or similar law of any
jurisdiction applicable to Lessee, or Lessee shall be adjudicated a debtor,
bankrupt or insolvent, or shall file any petition or answer seeking, consenting
to or acquiescing in any order for relief, reorganization, arrangement,
composition, adjustment, winding-up, liquidation, dissolution or similar relief
with respect to Lessee or its debts under the present or any future bankruptcy
act or any other present or future applicable federal, state or other statute
or law, or shall file an answer admitting or failing to deny the material
allegations of a petition against it for any such relief or shall generally
not, or shall be unable to, pay its debts as they become due or shall admit in
writing in any filing with any court or Governmental Authority its insolvency
or its inability to pay its debts as they become due, or shall make a general
assignment for the benefit of creditors or shall seek or consent or acquiesce
in the appointment of any trustee, receiver, examiner,

 

19

 

assignee,
sequestrator, custodian or liquidator or similar official of Lessee or of all
or any part of Lessee’s property or if Lessee shall take any action in
furtherance of or authorizing any of the foregoing; or if Lessee shall call a
meeting of, or propose any form of arrangement, composition, extension or
adjustment with, its creditors holding a majority in amount of Lessee’s
outstanding indebtedness; or

 

(4) if any case, proceeding or other action shall be commenced or
instituted against Lessee, seeking to adjudicate lessee a bankrupt or
insolvent, or seeking an order for relief against Lessee as debtor, or
reorganization, arrangement, composition, adjustment, winding-up, liquidation,
dissolution or similar relief with respect to Lessee or its debts under the
present or any future bankruptcy act or any other present or future applicable
federal, state or other statute or law, or seeking appointment of any trustee,
receiver, examiner, assignee, sequestrator, custodian or liquidator or similar
official of Lessee or of all or part of Lessee’s property, which either (i) results
in the entry of an order for relief, adjudication of bankruptcy or insolvency
or such an appointment or the issuance or entry of any other order having
similar effect or (ii) remains undismissed for a period of ninety (90)
days; or if any case, proceeding or other action shall be commenced or
instituted against Lessee seeking issuance of a warrant of execution,
attachment restraint or similar process against Lessee or any of Lessee’s
property which results in the taking or occupancy of the Demised Premises or an
attempt to take or occupy the Demised Premises which shall not have been
vacated, discharged, or stayed or bonded pending appeal within ninety (90) days
after the entry thereof; or

 

(5) if any event shall occur or any contingency shall arise
whereby this Lease or the estate hereby granted to the unexpired balance of the
Term would, by operation of law or otherwise, devolve upon or pass to any
person other than Lessee, except as is expressly permitted under Article 27,
or if default shall be made by Lessee in the performance of, or compliance
with, the covenants, agreements and conditions set forth in Article 27; or

 

(6) if Lessee’s (other than Lessee herein named) obligations under
this Lease shall have been guaranteed by any person other than Lessee and such
person shall default in observance or performance of any term, covenant or
condition to be observed or performed by such person under the instrument or
agreement containing such guarantee; or

 

(7) if any financial statement or other information furnished to
Lessor by Lessee in connection with this Lease is materially false or
misleading; or

 

(8) if Lessee shall default in the observance or performance of
any term, covenant or condition on Lessee’s part to be observed or performed
under the provisions of Section 35.09; or

 

(9) if Lessee is the subject of a Chapter 11 reorganization under
the Bankruptcy Reform Act of 1978 and such reorganization is not confirmed
within eighteen (18) months from the time of filing of a voluntary or involuntary
petition thereunder (it being understood that in such event Lessee consents to
the termination of the automatic stay provisions of Section 362 of such
Act);

 

then
and in any such event (hereinafter sometimes called an “Event of Default”)
Lessor may give written notice (“Termination Notice”) to Lessee specifying such
Event of Default or Events of Default and stating that this Lease and the Term
shall expire and terminate on the date specified in the Termination Notice,
which shall be at least seven (7) days after the giving of the Termination
Notice, and on the date specified therein this Lease and the Term and all
rights of Lessee under this Lease shall expire and terminate, it being the
intention of the Lessor and Lessee hereby to create conditional limitations,
and Lessee shall remain liable as provided in Article 15 and in accordance
with those provisions of this Lease which are specifically stated herein to
survive the expiration or other termination of this Lease.

 

B.
Notwithstanding the provisions of Section 14.01.A, if there shall be an
Event of Default at any time or from time to time under the provisions of
subdivision (1) of Section 14.01.A, Lessor may, in lieu of giving a
Termination Notice, at any time after the occurrence of any such Event of
Default and during the continuance thereof, institute an action for the
recovery of the Fixed Rent and/or Additional Rent in respect of which an Event
of Default shall have occurred and be continuing.  Neither the commencement of any such action
for the recovery of Fixed Rent and/or Additional rent nor the prosecution
thereof shall be deemed a waiver of Lessor’s right to give a Termination Notice
in respect of any such Event of Default during the continuance thereof and
Lessor may, notwithstanding the commencement and prosecution of any such
action, give a Termination Notice and terminate this Lease pursuant to Section 14.01.A
at any time during the continuance of such Event of Default.

 

C.  If, at any time, (i) Lessee shall be
comprised of two or more persons, or (ii) Lessee’s obligations under this
Lease shall have been guaranteed by any person other than Lessee, or (iii) Lessee’s
interest in this Lease shall have been assigned, the word “Lessee”, as used in
subdivisions (4), (5) and (9) of Section 14.01.A, shall be
deemed to mean any one or more of the persons primarily or secondarily liable
for Lessee’s

 

20

 

obligations
under this Lease.   Any monies received
by Lessor from or on behalf of Lessee during the pendency of any proceeding of
the types referred to in said subdivisions (4), (5) and (9) of Section 14.01.A
shall be deemed paid as compensation for the use and occupation of the Demised
Premises and the acceptance of any such compensation by Lessor shall not be
deemed an acceptance of rent or a waiver on the part of Lessor of any rights
under Section 14.01.

 

SECTION 14.02.  In the event that this Lease shall be
terminated as provided in this Article, Lessor or Lessor’s agents may,
immediately, or at any time thereafter, without further notice, enter upon and
re-enter the Demised Premises and possess and repossess itself thereof, by
summary proceedings, ejectment or otherwise, and have, hold and enjoy the
Demised Premises and the right to receive all income of and from the same.  No re-entry by Lessor pursuant to this Article shall
be deemed an acceptance of a surrender of this Lease nor shall it absolve or
discharge Lessee from any liability under this Lease.

 

SECTION 14.03.  In the event that this Lease shall be
terminated as provided in this Article, Lessor may, at any time or from time to
time thereafter, relet the Demised Premises or any part thereof, for such term
or terms (which may be greater or less than the period which would otherwise
have constituted the balance of the Term) and on such conditions (which may
include concessions or free rent, which shall, however, be amortized over the
entire term for the purpose of determining damages under Article 15) as
Lessor may determine, to any tenant which it may deem suitable and satisfactory
and for any use and purpose it may deem appropriate and may collect and receive
the rents therefor.  Lessor shall use
commercially reasonable methods in making such reletting.  Lessor, at its option, may make such repairs,
alterations, additions, improvements, decorations and other physical changes in
and to the Demised Premises as Lessor considers in its commercially reasonable
judgment advisable or necessary in connection with any such reletting or
proposed reletting, without relieving Lessee of any liability under this Lease
or otherwise affecting any such liability. 
Lessor shall in no way be responsible or liable for any failure to relet
the Demised Premises, or any part thereof, or for any failure to collect any
rent due upon such reletting.  Lessor
shall not in any event be required to pay Lessee (but shall credit Lessee, to
the extent set forth in Article 15, with) any sums received by Lessor on a
reletting of the Demised Premises, or any part thereof,  whether or not in excess of the rent reserved
in this Lease.

 

SECTION 14.04.  Lessee, on its own behalf and on behalf of
all persons claiming through or under Lessee including all creditors, does
hereby waive any and all rights and privileges, so far as is permitted by law,
which Lessee and all such persons might otherwise have under any present or
future law, to (i) the service of any notice of intention to re-enter or
institute legal proceedings to that end, excluding service of process, (ii) redeem
the Demised Premises, (iii) re-enter or repossess the Demised Premises, or
(iv) restore the operation of this Lease, after Lessee shall have been
dispossessed by a judgment or by warrant of any court or judge, or after any
re-entry by Lessor or after any expiration or termination of this Lease and the
Term, whether such dispossess, re-entry, expiration or termination shall be by
operation of law or pursuant to the provisions of this Lease.  The words “re-enter,” “re-entry” and “re-entered”
as used in this Lease shall not be deemed to be restricted to their technical
legal meanings.

 

SECTION 14.05.  In the event the Lessee shall dispute the
validity or amount, or the time or manner of payment of, any rent claimed by
Lessor to be due from Lessee under this Lease, Lessee shall nevertheless pay
the same and such payment may be without prejudice to Lessee’s position if
Lessee so requests at the time of payment. If the dispute shall be finally
determined in Lessee’s favor by a court of competent jurisdiction, Lessor shall
within a reasonable period of time not to exceed sixty (60) days pay Lessee the
amount of Lessee’s overpayment of such rent together with interest thereon at
the Maximum Legal Rate.  Lessee’s failure
to observe and perform the provisions of this Section shall be deemed a
default under subdivision (1) of Section 14.01.A.

 

ARTICLE 15 - MEASURE OF DAMAGES IN EVENT OF
DEFAULT

 

SECTION 15.01.  A.  In
the event that this Lease be terminated pursuant to Article 14 as a result
of an Event of Default on the part of the Lessee and whether or not the Demised
Premises be relet, Lessor shall be entitled to retain all monies, if any, paid
by Lessee to Lessor, whether as advance rent or otherwise, but such monies
shall be credited by Lessor against any rent due at the time of such
termination, or at Lessor’s option, against any damages payable by Lessee, and
Lessor shall be entitled to recover from Lessee, and Lessee shall pay to Lessor
the following:

 

(a) 
All rent to the date upon which this Lease and the Term shall have terminated,
and

 

(b) 
All expenses reasonably incurred by Lessor in recovering possession of the
Demised Premises (including summary proceedings), restoring the Demised
Premises to good order and condition, maintaining the Demised Premises in good
order and condition while vacant, altering or otherwise preparing the same for
reletting, and in reletting the Demised Premises (including brokerage
commissions and legal expenses), the same to be paid by Lessee to Lessor on
demand, and

 

21

 

(c) 
The amount by which the rent which, but for the termination of this Lease,
would have been payable under this Lease from the date of termination to the
Expiration Date exceeds the rental and other income, if any, collected by Lessor
in respect of the Demised Premises, or any part thereof, subject nevertheless
to the provisions of Section 14.03, said amount to be due and payable by
Lessee to Lessor on the several days on which the rent reserved in this Lease
would have become due and payable for the period which otherwise would have
constituted the unexpired portion of the Term (that is to say, upon each of
such days Lessee shall pay to Lessor the amount of deficiency then existing).

 

B.  If Lessor shall have not collected any monthly
deficiencies aforesaid, Lessor shall be entitled to recover from Lessee on
demand, as and for liquidated damages, a lump sum payment equal to the amount
by which the Fixed Rent and Additional Rent payable hereunder for the period
which otherwise would have constituted the unexpired portion of the Term (due
account being taken of amounts, if any, collected under clause [c] of Section 15.01.A,
and conclusively presuming the Additional Rent to be the same as was payable
for the year immediately preceding such termination or re-entry) exceeds the
then rental value of the Demised Premises for the same period both discounted
at a rate equal to then applicable Treasury Rate to present value.  If the Demised Premises or any part thereof
be relet by Lessor for the unexpired portion of the Term, or any part thereof,
before presentation of proof of such liquidated damages to any court,
commission or tribunal, the amount of rent reserved upon such reletting shall
be deemed prima facie to be the
fair and reasonable rental value for the part or the whole of the Demised
Premises so relet during the term of the reletting.  Nothing herein contained shall limit or
prejudice the right of the Lessor to prove for and obtain as damages by reason
of such termination an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater or less than
the amount of liquidated damages referred to above (due account to be taken,
however, of the amounts, if any, collected under this Article 15).

 

SECTION 15.02.  In no event shall Lessee be entitled to
receive any excess of the rental and other income collected by Lessor in
respect of the Demised Premises over the sums payable by Lessee to Lessor
hereunder.  In no event shall Lessee be
entitled in any suit for the collection of damages pursuant to this Article to
a credit in respect of any such rental and other income, except to the extent
that such rental and other income is allocable to the portion of the Term in
respect of which such suit is brought and is actually received by Lessor prior
to the entry of judgment in such suit.

 

SECTION 15.03.  Separate actions may be maintained by Lessor
against Lessee from time to time to recover any damages which, at the
commencement of any such action, have then or theretofore become due and
payable to Lessor under Article 14, without waiting until the end of the
Term and without prejudice to Lessor’s right to collect damages thereafter.

 

ARTICLE 16 - INDEMNIFICATION

 

SECTION 16.01.  Notwithstanding that joint or concurrent
liability may be imposed upon either party by statute, ordinance, rule,
regulation, order or court decision, and notwithstanding any insurance furnished
by either party pursuant hereto or otherwise, Lessee shall and does hereby
indemnify and hold Lessor and its agents, officers, directors, and employees,
harmless from and against any and all loss, liability, fines, suits, claims,
obligations, damages, penalties, demands and actions, and costs and reasonable
expenses of any kind or nature (including architects’, engineers’ and attorneys’
fees) due to or arising out of any of the following:

 

(a)  any work or thing done in, on or about the Demised Premises,
Building or the Property or any part thereof or any use, possession,
occupation, condition, operation, maintenance, repair or management of the
Demised Premises, Building or the Property or any part thereof, by Lessee or
anyone claiming through or under Lessee or the respective employees, agents,
licensees, contractors, servants or sublessees of Lessee or any such person;

 

(b) any act or omission on the part of Lessee or any person
claiming through or under Lessee, or the respective employees, agents,
licensees, invitees, contractors, servants or sublessees of Lessee or any such
person; or

 

(c) any accident or injury to any person (including death) or
damage to property (including loss of property) occurring in, on, or about the
Demised Premises, Building or the Property or any part thereof, due to the act
or omission by Lessee, its employees, agents, licensees, invitees, contractors
or servants.

 

The
provisions of this Section 16.01 shall survive the expiration or
termination of this Lease.  Any sums payable
by Lessee to Lessor under this Section 16.01 shall be due and payable on
demand.

 

SECTION 16.02.  Lessor and Lessor’s agents, officers,
directors, and employees shall not be liable for any of the following, however
caused, other than by negligent or wilful acts: (a) failure of any Utility
Service, (b) damage to Lessee’s property on the Demised Premises caused by
or resulting from any cause whatsoever,

 

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including
explosion, falling plaster, vermin, smoke, gasoline, oil, Hazardous Materials,
steam, gas electricity, earthquake, subsidence of land, hurricane, tornado,
flood, wind or similar storms or disturbances or water, rain, ice or snow which
may be upon, or leak or flow from, any street, road, parking lot, sewer, gas
main or subsurface area, or from any part of the Property, or leakage of
gasoline, oil or other substances from pipes, pipelines, appliances, storage
tanks, sewers or plumbing works in or at the Property, or from any other place,
or from the breaking of any electrical wire or the breaking, bursting or
leaking of water or Hazardous Materials from any plumbing or sprinkler system,
or any other pipe or storage tanks in, on, under or about the Property, (c) interference
with light or other incorporeal hereditaments, and (d) loss by theft or
otherwise of Lessee’s Property or the property of any person claiming through
or under Lessee.  Any employees of Lessor
to whom any property shall be entrusted by or on behalf of Lessee shall be
deemed to be acting as Lessee’s agents with respect to such property and
neither Lessor nor Lessor’s agents shall be liable for any loss or for damage
to any such property by theft or otherwise. 
This Section 16.02 shall not be construed as a provision for
indemnification.

 

SECTION 16.03.  Except as otherwise provided for in this
Lease, Lessor shall and does hereby indemnify and hold harmless Lessee and
Lessee’s agents from and against any and all loss, liability, fines, suits,
claims, obligations, damages, penalties, demands and actions, and costs and
reasonable expenses of any kind or nature (including architects’ and attorneys’
fees) due to or arising out of the negligence or willful misconduct of Lessor,
its agents, officers, directors and employees. 
In case of any obligation of Lessor to indemnify Lessee pursuant to this
Section, such obligation shall be subject to and conditioned upon (x) the
receipt by Lessor of prompt written notice of the claim with respect to which
indemnification is sought and (y) Lessor’s having had reasonable opportunity to
conduct the defense of such claim in such manner as it deems appropriate, with
the full cooperation of Lessee, and using counsel reasonably acceptable to
Lessor.

 

ARTICLE 17 - MECHANIC’S AND OTHER LIENS

 

SECTION 17.01.  If any mechanic’s, laborer’s or materialman’s
lien shall be at any time be filed against the Demised Premises, Building or
Property, or any part thereof with respect to any work done, or caused to be
done, or labor or materials furnished, or caused to be furnished, by Lessee or
anyone claiming through or under Lessee, Lessee, within thirty (30) days after
notice of the filing thereof, shall cause the same to be discharged of record
by payment, deposit, bond, order of a court of competent jurisdiction or otherwise.  If Lessee shall fail to cause such lien to be
discharged within the thirty (30) day period, then, in addition to any other
right or remedy, Lessor may, but shall not be obligated to, discharge the same
by bonding proceedings, if permitted by law (and if not so permitted, by
deposit in court).  Any amount so paid by
Lessor, including all costs and expenses paid by Lessor in connection
therewith, together with interest thereon at the Maximum Legal Rate from the
respective dates of Lessor’s so paying any such amount, cost or expense, shall
constitute Additional Rent payable by Lessee under this Lease and shall be paid
by Lessee to Lessor on demand.

 

ARTICLE 18 - CONDEMNATION

 

SECTION 18.01.
If the whole of the Demised Premises, or such part thereof as will render the
remainder Untenantable, shall be acquired or condemned for any public or
quasi-public use or purpose, this Lease and the Term shall end as of the date
of vesting of title in the condemning authority with the same effect as if said
date were the Expiration Date.  If only a
part of the Demised Premises shall be so acquired or condemned then, except as
otherwise provided in this Article, this Lease and the Term shall continue in
force and effect but, from and after the date of the vesting of title, the
Fixed Rent shall be an amount which bears the same ratio to the Fixed Rent
payable immediately prior to such condemnation pursuant to this Lease as the
value of the untaken portion of the Demised Premises (appraised after taking
and repair of any damage to the Demised Premises pursuant to this Section)
bears to the value of the entire Demised Premises immediately before the
taking.  The value of the Demised
Premises before and after the taking shall be determined for the purposes of
this Section by an independent licensed appraiser chosen by Lessor.  If more than sixty (60%) percent of the total
area of the Building included in the Demised Premises immediately prior to
acquisition or condemnation is so acquired or condemned, or if by reason of
such acquisition or condemnation, Lessee no longer has reasonable means of
access to the Demised Premises, then in such event, either party, may give
notice to the other party within sixty (60) days next following the date upon
which Lessee have received notice of vesting of title, thirty (30) days notice
of termination of this Lease.  In the
event any such thirty (30) day notice of termination is given by Lessor or
Lessee, this Lease and the Term shall terminate upon the expiration of said
thirty (30) days with the same effect as if that date were the Expiration
Date.  If a part of the Demised Premises
shall be so acquired or condemned, and the Term shall not be terminated
pursuant to the provisions of this Section, Lessor, at Lessor’s expense, shall
restore that part of the Demised Premises not so acquired or condemned to a
self-contained unit.  In the event of any
termination of this Lease and the Term pursuant to the provisions of this
Section, the Fixed Rent and Additional Rent shall be apportioned as of the date
of sooner termination and any prepaid portion of the Fixed Rent and Additional
Rent for any period after such date shall be refunded by Lessor to Lessee,
subject to the claims, if any, of Lessor against Lessee hereunder or otherwise.

 

23

 

SECTION 18.02.  In the event of any acquisition or
condemnation of all or part of the Demised Premises for any public or
quasi-public use or purpose, Lessor shall be entitled to receive the entire
award for such acquisition or condemnation, Lessee shall have no claim against
Lessor or the condemning authority for the value of any unexpired portion of
the Term and Lessee hereby expressly assigns to Lessor all of its right, title
and interest in and to any such award, and also agrees to execute any and all
further documents that may be required in order to facilitate the collection
thereof by Lessor.  Nothing contained in
this Section shall be deemed to prevent Lessee from making a separate
claim in any condemnation proceeding for moving expenses and for the value of
any Lessee’s Property which would be removable at the end of the Term pursuant
to the provisions hereof, directly against any governmental authority
authorized to exercise the power of eminent domain, provided that applicable
statutes permit such awards and any award to Lessor is not diminished or
adversely affected thereby.

 

SECTION 18.03.  The terms “condemnation” and “acquisition” as
used in this Article shall include any agreement in lieu of or in
anticipation of the exercise of the power of eminent domain between Lessor
and/or any Superior Mortgage and any governmental authority authorized to
exercise the power of eminent domain.

 

ARTICLE 19 - COVENANT OF QUIET ENJOYMENT

 

SECTION 19.01.  If and so long as no Event of Default shall
have occurred and be continuing, Lessor covenants and agrees that Lessee may
peaceably and quietly enjoy the Demised Premises and Lessee’s possession of the
Demised Premises will not be disturbed by Lessor, its successors and assigns,
subject, however, to the terms of this Lease (including those set forth in
Sections 24.01 and 24.02), the Mortgage, Superior Lease and any and/or all
other agreements and any amendments thereto, to which this Lease is
subordinated.

 

ARTICLE 20 - WAIVER OF COUNTERCLAIM AND JURY
TRIAL

 

SECTION 20.01.  In the event that Lessor shall commence any
summary or other proceedings or action for non-payment of rent hereunder,
Lessee shall not interpose any counterclaim of any nature or description in
such proceeding or action, other than a compulsory counterclaim, unless such
non-interposition would effect a waiver of Lessee’s right to assert such claim
against Lessor in a separate action or proceeding.  The parties hereto waive a trial by jury on
any and all issues arising in any action or proceeding between them or their
successors under or in any way connected with this Lease or any of its
provisions, any negotiations in connection therewith, the relationship of
Lessor and Lessee, or Lessee’s use or occupation of the Demised Premises,
including any claim of injury or any emergency or other statutory remedy with
respect thereto.  The provisions of this Article shall
survive the expiration or other termination of this Lease.

 

ARTICLE 21 - NOTICES

 

SECTION 21.01.
A.  Except as otherwise expressly
provided in this Lease, any bills, statements, notices, demands, requests,
consents or other communications given or required to be given under this Lease
shall be effective only if rendered or given in writing and

 

(a) If to Lessee, then, at the option of Lessor, (i) addressed
to Lessee’s address as set forth in this Lease, with copies thereof to IT&E
International Group, 505 Lomas Santa Fe Drive, Suite 200, Solana Beach,
California 92075, Attention: Chief Financial Officer, and to such other address
as Lessee may designate as its new address for such purpose by notice given to
Lessor in accordance with the provisions of this Section, or (ii) delivered
personally to Lessee, or (iii) by overnight courier,

 

(b) If to Lessor, then at the option of Lessee, sent by personal
delivery or overnight courier, addressed to Lessor at Lessor’s address as set
forth in this Lease, with copies thereof to Hirsch & Gibaldi, LLP, 585
Stewart Avenue, Suite 530, Garden City, New York 11530, Attention: Steven
C. Hirsch, Esq., or to such other address as Lessor may designate as its
new address for such purpose by notice given to Lessee in accordance with the
provisions of this Section.

 

B.
Any such bill, statement, notice, demand, request, consent or other
communication shall be deemed to have been rendered or given: (i) on the
date delivered, if delivered to Lessee personally, or by overnight courier and (ii) on
the expiration of five (5) days after mailing, if mailed to Lessor or
Lessee as provided in this Section.  Any
notice by a party signed by counsel for such party shall be deemed a notice
signed by such party.

 

ARTICLE 22 - WAIVERS AND SURRENDERS TO BE IN
WRITING

 

SECTION 22.01.  The receipt of full or partial rent by Lessor
with knowledge of any breach of this Lease by Lessee or of any default on the
part of the Lessee in the observance or performance of any of the provisions or
covenants of this Lease shall not be deemed to be a waiver of any such
provision, covenant or

 

24

 

breach
of this Lease provided, however,
that acceptance of a payment of rent shall be valid pro tanto.  No waiver
or modification by Lessor, unless in writing, and signed by Lessor, shall
discharge or invalidate any provision or covenant or affect the right of Lessor
to enforce the same in the event of any subsequent breach or default.  The failure on the part of Lessor to insist
in any one or more instances upon the strict performance of any of the
provisions or covenants of this Lease, or to enforce any covenant or provision
herein contained or to exercise any right, remedy or election herein contained
consequent upon a breach of any provision of this Lease, shall not affect or
alter this Lease or be construed as a waiver or relinquishment for the future
of such one or more provisions or covenants or of the right to insist upon
strict performance or to exercise such right, remedy or election, but the same
shall continue and remain in full force and effect with respect to any existing
or subsequent breach, act or omission, whether of a similar nature or
otherwise.  The receipt by Lessor of any
rent or any other sum of money or any other consideration hereunder paid by
Lessee after the termination, in any manner, of the Term, or after the giving
by Lessor of the Termination Notice, shall not reinstate, continue or extend
the Term, or destroy, or in any manner impair the efficacy of any such
Termination Notice, as may have been given hereunder by Lessor to Lessee prior
to the receipt of any such rent, or other sum of money or other consideration,
unless so agreed to in writing and signed by Lessor.  Neither acceptance of the keys or any other
act or thing done by Lessor or any agent or employee shall be deemed to be an
acceptance of a surrender of the Demised Premises, or any part thereof,
excepting only an agreement in writing signed by Lessor.  No payment by Lessee or receipt by Lessor of
a lesser amount than the correct rent shall be deemed to be other than a
payment on account, nor shall any endorsement or statement on any check, as
distinguished from any letter accompanying such check or payment, be deemed to
effect or evidence an accord and satisfaction, and Lessor may accept such check
or payment without prejudice to Lessor’s right to recover the balance or pursue
any other remedy in this Lease provided.

 

ARTICLE 23- RIGHTS CUMULATIVE

 

SECTION 23.01.  Each right and remedy of Lessor shall be
cumulative and to the extent permitted by law, the exercise or beginning of the
exercise by Lessor of any one or more of the rights or remedies of such party
shall not preclude the simultaneous or later exercise by Lessor of any or all
other rights or remedies; provided, however,
that this sentence shall not be construed to entitle Lessor to satisfaction of
more than one remedy in respect of a particular breach.  In the event of any breach or threatened
breach by Lessee or any persons claiming through or under Lessee of any of the
agreements, terms, covenants or conditions contained in this Lease, Lessor
shall be entitled to enjoin such breach or threatened breach (if entitled to do
so at law or in equity or by statue or otherwise) and shall have the right to
invoke any right or remedy allowed by law or in equity or by statute or
otherwise as if re-entry, summary proceedings or other specific remedies were
not provided for in this Lease.

 

ARTICLE 24- CONVEYANCE; LIABILITY OF PARTIES

 

SECTION 24.01.  The term “Lessor” as used herein shall mean
and include only the owner or owners at the time in question of the Lessor’s
interest in this Lease so that in the event of any transfer or transfers (by
operation of law or otherwise) of Lessor’s entire interest in this Lease,
Lessor herein named (and in the case of any subsequent transfers or
conveyances, the then transferor) shall be and hereby is automatically freed
and relieved, from and after the date of such transfer or conveyance, of all
liability in respect of the performance of any covenants or obligations on the
part of the Lessor contained in this Lease thereafter to be performed, provided
that the transferee shall have assumed and agreed to perform subject to the
limitation of this Article (and without further agreement between or among
the parties or their successors in interest, and/or the transferee) and only
during and in respect of the transferee’s period of ownership, all of the
terms, covenants and conditions in this Lease contained on the part of Lessor
to be performed, which terms, covenants, and conditions shall be deemed to “run
with the land”, it being intended hereby that the terms, covenants and
conditions contained in this Lease on the part of the Lessor to be performed
shall, subject as aforesaid, be binding on Lessor, its successors and assigns,
only during and in respect of their respective successive periods of ownership.

 

SECTION 24.02.  In the event of a breach by Lessor of any
provisions, covenants or obligations of this Lease to be performed by Lessor,
the monetary liability of Lessor in relation to any such breach shall be
limited to the equity of Lessor in the Demised Premises, including all sales
and insurance proceeds, and Lessee shall look only to Lessor’s equity in the
Demised Premises, including all sales and insurance proceeds, for the
performance and observance of the terms, covenants, conditions and obligations
of this Lease to be performed or observed by Lessor and for the satisfaction of
Lessee’s remedies for the collection of any award, judgment or other judicial
process requiring the payment of money by Lessor in the event of a default in
the full and prompt payment and performance of any Lessor’s obligations
hereunder and in no event shall any of the partners constituting Lessor (the “Partners”),
nor the partners, shareholders, officers or directors of Lessor or the Partners
shall be liable for the performance of Lessor’s obligations under this Lease,
nor shall any of the Partners assets be liable to any levy, execution,
restraint, award, claim of any kind whatsoever arising out of, or in any way
related to this Lease.

 

25

 

SECTION 24.03.  The term “Lessee” as used in this Lease shall
mean and include Lessee named herein and, during and in respect of their
respective successive periods of ownership, each subsequent owner or owners of
the leasehold estate created by this Lease. 
For all purposes of this Lease and without affecting the rights of, and
obligations between, Lessee herein named and any transferee, notwithstanding
any transfer (by operation or law or otherwise) of title to the leasehold
estate created by this Lease by Lessee herein named or by any subsequent owner
of such estate and notwithstanding the assumption by any transferee of the
obligations of the Lessee hereunder, Lessee herein named, as between Lessor and
Lessee herein named, shall remain primarily liable as primary obligor and not
as a surety, for the full and prompt payment and performance of Lessee’s
obligations hereunder and, without limiting the generality of the foregoing or
of Article 28, shall remain fully and directly responsible and liable to
Lessor for all acts and omissions on the part of any transferee subsequent to
it in violation of any obligation of this Lease.

 

ARTICLE 25- CHANGES AND ALTERATIONS BY LESSEE

 

SECTION 25.01.A.  Lessee shall have no right to make any
alteration, change, additions or improvement, structural or otherwise, to the
Demised Premises or any appurtenances thereto which affect the Building
Equipment or require a permit and/or appropriate certificates from the
Governmental Authority (an “Alteration”) without the prior written consent of
Lessor in each instance, which consent shall not be unreasonably withheld,
conditioned or delayed.  With respect to
any alterations, changes, additions, or improvements which are considered cosmetic
and not constituting an Alteration, and do cost in excess of Seventy-Five
Thousand and 00/100 ($75,000.00) Dollars, no consent of the Lessor shall be
required, provided, however, that
Lessee shall notify Lessor of same at least five (5) days prior to
performing such an alteration, change, addition or improvement.

 

B.  If Lessor shall grant its consent to the
making of an Alteration, then the same shall (i) be performed at the sole
cost and expense of Lessee, (ii) be performed in a good and workmanlike
manner, and in compliance with all applicable Legal Requirements (including
existing zoning requirements), Insurance Requirements and Environmental Laws, (iii) be
consistent with the use of the Demised Premises provided for herein, (iv) not
in any way render the Demised Premises other than a complete, self containing
operating unit, (v) in the case of a structural alteration, be performed
in accordance with plans and specifications approved prior to the commencement
of any work by the appropriate Governmental Authorities and by Lessor, (vi) be
of such nature so as not to lessen the fair market value of the Demised
Premises, and (vii) be performed under the supervision of a licensed
architect approved by Lessor and in accordance with Lessor’s Standard Requirements
For Alterations To Be Performed By Lessees’, as may be amended from time to
time.

 

SECTION 25.02.A.  Any and all Alterations made in accordance
with Section 25.01 shall immediately become the property of Lessor, provided, however, that if, in accordance
with the provisions of Sections 25.02.B and 29.02, Lessee shall have the option
to and shall remove its trade fixtures, provided that same are not affixed to
or such removal would otherwise damage the Demised Premises, then the same
shall cease to be property of the Lessor upon removal.

 

B.  Unless Lessor shall otherwise expressly
indicate in writing at the time of granting its consent to the making of a
proposed Alteration, Lessee shall, as and when provided in Section 29.02,
restore the affected portion of the Demised Premises to the state or condition
thereof existing prior to the making of such Alteration.

 

C.  Any and all contractors to be involved in
performing work shall be subject to Lessor’s prior approval, which shall not be
unreasonably withheld, conditioned or delayed, provided, however, that all construction and transportation of
construction material in connection with the performance of Lessee’s
Alterations, shall be performed only by contractors and/or subcontractors
having collective bargaining agreements with unions affiliated with the
Building and Construction Trades Department of the AFL-CIO.  Thirty (30) days prior to commencement of
Lessee’s Alterations, Lessee shall provide Lessor with a list of names of the
general contractor and subcontractors for submission by the holder of the
Mortgage to the local Building Trades Council for verification as to their
current status with the Building Trades Department.  All construction contracts in connection with
Lessee’s Alterations must require that the contractor and all subcontractors
affirmatively agree to pay prevailing wages and fringe benefits to the
appropriate employee benefit plan in accordance with the collective bargaining
agreement in force on the construction site.

 

D.  Prior to commencing any work at the Demised
Premises,  Lessee shall furnish Lessor
with evidence reasonably satisfactory to Lessor of such insurance as Lessor may
require and such insurance shall be in full force and effect during such work
and will cover, by endorsement or otherwise, the risk during the course of such
work.

 

E.  In the event of any Alteration as provided
for in this Article, the Rent payable hereunder shall not be reduced or abated
in any manner whatsoever.

 

26

 

F.  No Alterations shall involve the removal of
any fixtures, equipment or other property in the Demised Premises which are not
Lessee’s property, unless Lessor’s prior written consent is first obtained and
unless such fixtures, equipment or other property shall be promptly replaced,
at Lessee’s expense and free of superior title, liens and claims, with
fixtures, equipment or other property (as the case may be) of like utility and
at least equal value (which replaced fixtures, equipment or other property
shall thereupon become the property of Lessor), unless Lessor shall otherwise
expressly consent in writing.

 

ARTICLE 26 - CERTIFICATE OF LESSEE

 

SECTION 26.01.  Lessee agrees at any time and from time to
time, within twenty (20) days after request by Lessor, to execute, acknowledge
and deliver a statement prepared by Lessor certifying (i) the Commencement
Date hereunder, (ii) that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the Lease is in full force
and effect as modified and stating the modifications), (iii) the dates to
which the Fixed Rent and Additional Rent have been paid, and (iv) whether
or not to the knowledge of the signer of such statement (a) Lessor is in
default in keeping, observing or performing any term, covenant, agreement,
provision, condition or limitation contained in this Lease and, if in default,
specifying each such default, (b) either party is holding any funds under
this Lease in which the other has an interest (and, if so, specifying the party
holding such funds and the nature and amount thereof), and (c) there is
any amount then due and payable to Lessee by Lessor, it being intended that any
such statement delivered pursuant to this Section may be relied upon by
Lessor, any mortgagee, superior lessor or any person who may and does become a
mortgagee, superior lessee, any person who may and does become a purchaser or
assignee of Lessor’s interest in this Lease or the mortgagee’s interest in any
mortgage or the lessor’s interest in the Superior Lease.

 

ARTICLE- 27 ASSIGNMENTS, SUBLEASES AND MORTGAGES

 

SECTION 27.01.A.  Except as otherwise specifically provided in
this Article, neither this Lease, nor the Term and estate hereby granted, nor
any part thereof, nor the interest of Lessee in any sublease or the rental
thereunder, shall be assigned, mortgaged, pledged, encumbered or otherwise
transferred by Lessee or Lessee’s legal representatives or successors in
interest, by operation of law or otherwise, and neither the Demised Premises,
nor any part thereof, nor any Lessee’s Property, shall be encumbered in any
manner by reason of any act or omission on the part of Lessee or anyone
claiming under or through Lessee, or shall be sublet or be used or occupied or
permitted to be used or occupied or utilized for desk or storage space by
anyone other than Lessee or for any purpose other than as specifically
permitted by this Lease, without the prior written consent of Lessor in each
case, which consent shall not be unreasonably withheld, conditioned or delayed.
If Lessee is other than a public company, a transfer (including any issuance of
stock) of an aggregate of fifty (50%) percent or more stock, partnership
interest or other equity interest in Lessee by any party or parties in interest
shall be deemed an assignment of this Lease.

 

B.  If Lessee herein named is a corporation or
other entity, upon at least thirty (30) days prior notice to Lessor, this Lease
in its entirety may be assigned without Lessor’s consent to a corporation or
other entity into which Lessee merges or consolidates, or which controls, is
controlled by or under common control with Lessee, or to an entity which is
purchasing all or substantially all of the assets or stock of Lessee herein
named, or to sublease all or a portion of the Demised Premises to an affiliated
or successor company or entity (hereinafter referred to collectively as the “Related
Transactions”), so long as the Demised Premises continue to be used for the use
described in Article 4 of this Lease; the transfer is not principally for
the purpose of transferring the leasehold estate created hereby; the net worth
of the assignee is at least equal to or in excess of the net worth of Lessee at
the time of execution of this Lease or immediately prior to such assignment the
assignee can otherwise secure and guaranty the payment to Lessor of all rent
and any other amounts due from Lessee pursuant to this Lease in a manner
reasonably satisfactory to Lessor; the assignee assumes by documents
satisfactory to Lessor all of Lessee’s obligations to be performed under this
Lease, and; provided such assignment shall be subject to all of the other terms
and conditions of this Lease.

 

C.  Notwithstanding the foregoing, Lessee shall
have the right, upon ten (10) days notice to Lessor, without Lessor’s
consent, to sublease individual offices and secretarial areas in the Demised
Premises, provided that same do not exceed in the aggregate, more than Twenty
(20%) percent of the rentable square footage of the Demised Premises, so long
as the Demised Premises continue to be used for the use described in Article 4
of this Lease and provided such sublease shall be subject to all of the other
terms and conditions of this Lease (the “Permitted Subleases”).

 

SECTION 27.02.A.  Except for Related Transactions and Permitted
Subleases, if this Lease be assigned, whether or not in violation of the
provisions of this Lease, Lessor may collect rent from the assignee, and Lessor
shall be entitled to receive, as Additional, Rent, Fifty (50%) percent of all
of the excess consideration paid to Lessee in connection with such assignment
as shall for any period exceed the aggregate of the Rents payable under this
Lease (the “Excess Consideration”).  Such
Excess Consideration shall be reduced by the reasonable cost of tenant
improvements, brokerage commissions and attorneys’ fees and

 

27

 

disbursements
actually incurred by Lessee for such assignment, and the net amount thereof
shall be paid to Lessor promptly after receipt thereof by Lessee.  The provisions of the preceding sentence
shall be in full force and effect notwithstanding that Lessee has sought the
protection of any provisions of the bankruptcy law (as hereinafter defined) or
if a petition has been filed against Lessee under such bankruptcy law.  If the Demised Premises or any part thereof
be sublet or be used or occupied by anybody other than Lessee, whether or not
in violation of this Lease, Lessor may, after default by Lessee and expiration
of Lessee’s time to cure such default, if any, collect rent from the sublessee
or occupant.  In either event, Lessor may
apply the net amount collected to the rents herein reserved, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of any
of the provisions of Section 27.01, or the acceptance of the assignee,
sublessee or occupant as tenant, or a release of Lessee from the further
performance by Lessee of Lessee’s obligations under this Lease.  The consent by Lessor to an assignment,
mortgaging or subletting pursuant to any provision of this Lease shall not in
any way be considered to relieve Lessee from obtaining the express consent of
Lessor for any other or further assignment, mortgaging or subletting.  References in this Lease to use or occupancy
by anyone other than Lessee shall not be construed as limited to sublessees and
those claiming under or through sublessees but as including also licensees and
other claiming under or through Lessee, immediately or remotely.  The listing of any name other than that of
Lessee on any door of the Demised Premises or on any sign on the Demised
Premises, or otherwise, shall not operate to vest in the person so named any
right or interest in this Lease or in the Demised Premises, or be deemed to
constitute, or serve as a substitute for, any prior consent of Lessor required
under this Article, and it is understood that any such listing shall constitute
a privilege extended by Lessor which shall be revocable at Lessor’s will by
notice to Lessee.  Lessee agrees to pay
to Lessor any reasonable counsel fees incurred by Lessor in connection with any
proposed assignment of Lessee’s interest in this Lease or any proposed
subletting of the Demised Premises or any part thereof.  Neither any assignment of Lessee’s interest
in this Lease nor any subletting, occupancy or use of the Demised Premises or
any part thereof by any person other than Lessee as provided in this Article,
nor any application of any such rent as provided in this Article shall,
under any circumstances, relieve Lessee herein named of its obligations fully
to observe and perform the terms, covenants and conditions of this Lease on
Lessee’s part to be observed and performed.

 

B.  Except for Related Transactions and Permitted
Subleases, Lessor, however, shall not in any event be obligated to consent to
the assignment of this Lease unless: (i) in the reasonable judgment of
Lessor the proposed assignee is of a character and financial worth such as is
in keeping with the standards of Lessor in those respects for the Demised
Premises, or the assignee can otherwise secure and guaranty the payment to
Lessor or all Rent and any other amounts due from Lessee pursuant to this Lease
in a manner reasonably satisfactory to Lessor; (ii) the nature of the proposed
assignee’s business and its reputation are in keeping with the character of the
Demised Premises and the use thereof, (iii) the purpose for which the
proposed assignee intends to use the Demised Premises assigned to it are uses
expressly permitted by and not expressly prohibited by this Lease; (iv) the
proposed assignment shall prohibit any further assignment except in accordance
with the provisions of this Lease; (v) no Event of Default shall have
occurred and be continuing; and (vi) Lessee shall reimburse Lessor for all
reasonable costs that may be incurred by Lessor in connection with the said
assignment, including the costs of making investigations as to the
acceptability of a proposed assignee and legal costs incurred in connection
with the granting of any requested consent.

 

SECTION 27.03.
A.  Except for Related Transactions and
Permitted Subleases, notwithstanding anything contained in Sections 27.01 and
27.02, in the event that, at any time or from time to time during the Term,
Lessee desires to sublet all or any part of the Demised Premises, Lessee shall
notify Lessor of such desire and shall: (i) submit to Lessor in writing
the name and address of the proposed subtenant, a reasonably detailed statement
of the proposed subtenant’s business, reasonably detailed financial references
for the proposed subtenant and any other information reasonably requested by
Lessor, and (ii) submit to Lessor a copy of the proposed sublease.

 

B.
If within five (5) business days after Lessee shall have requested the
consent of Lessor to any assignment or subletting under this Article, and shall
have submitted all items required hereby, the term of the proposed assignment
or sublease may commence upon Lessor’s consent, which consent may not be
unreasonably withheld, conditioned or delayed, it being agreed that if within
such five (5) business day period Lessor does not advise Lessee that such
consent is granted, such consent shall be deemed granted by Lessor.  Lessor, however, shall not in any event be
obligated to consent to the proposed sublease or the commencement of the term
unless: (i) in the reasonable judgment of Lessor the proposed subtenant is
of a character and financial worth such as is in keeping with the standards of
Lessor in those respects for the Demised Premises, and the nature of the
proposed subtenant’s business and its reputation are in keeping with the
character of the Demised Premises and the use thereof, (ii) the purpose
for which the proposed subtenant or assignee intends to use the portion of the
Demised Premises sublet or assigned to it are uses expressly permitted by and
not expressly prohibited by this Lease; (iii) the proposed sublease shall
prohibit any assignment or subletting except in accordance with the provisions
of this Lease; (iv) no Event of Default shall have occurred and be
continuing and (v) Lessee shall reimburse Lessor for all reasonable costs
that may be incurred by Lessor in connection with the said sublease, including
the costs of making investigations as to the acceptability of a proposed
subtenant and legal costs incurred in connection with the granting of any
requested consent.

 

28

 

D.  With respect to each and every subletting
authorized by the provisions of this Article it is further agreed and
understood between Lessor and Lessee that: (i) the subletting shall be,
and each such sublease shall expressly provide that is, subject and subordinate
at all times and in all respects, to this Lease, (ii) no subletting shall
be for a term ending later than one day prior to the Expiration Date originally
provided for herein and that part, if any, of the proposed term of any sublease
which shall extend beyond a date one day prior to the Expiration Date
originally provided for herein (or any sooner date of the expiration of the
term or termination of this Lease) is hereby deemed to be a nullity, (iii) there
shall be delivered to Lessor, within ten (10) days after the commencement
of the term of the proposed sublease, notice of such commencement and a fully
executed copy of the proposed sublease (unless previously submitted) and (iv) Lessee
shall pay to Lessor, as Additional Rent, Fifty (50%) percent of all of the
Excess Consideration as and when received by Lessee.

 

E.  Anything herein contained to the contrary
notwithstanding: (i)  Lessee shall not advertise but may list its space
for subletting or assignment, and may list its space at a rental rate lower
than the rental rate then being paid by Lessee to Lessor only with respect to
subletting (but not assignment) and (ii) unless Lessor does not have
comparable space, no assignment or subletting shall be made to any person or
entity which shall at that time otherwise be a tenant, sub-tenant or other
occupant of any part of the Property or which shall within the prior Five (5) months
have been negotiating with Lessor as evidenced by a written exchange to become
such a tenant, sub-tenant or occupant of the Property.

 

ARTICLE 28 - SUBORDINATION

 

SECTION 28.01.A.
This Lease, and all rights of Lessee hereunder, are and shall be subject and
subordinate in all respects to (a) the IDA Lease (as hereinafter defined)
and all present and future ground leases, overriding leases and underlying
leases and/or grants of term of the Property, the Building, the Building
Equipment and/or any appurtenance thereto of which Lessor has notified Lessee
(collectively, the “Superior Lease”), (b) all mortgages and building loan
agreements, including leasehold mortgages, deeds of trust, and building loan
agreements, which may now or hereafter affect the Property, the Building, the
Building Equipment and/or any appurtenance thereto, of which Lessor has
notified Lessee (collectively, the “Mortgage”), whether or not the Mortgage
shall also cover other land and/or buildings, and (c) each and every
advance made or hereafter to be made under the Mortgage and to all renewals,
modifications, replacements, substitutions and extensions of any Superior Lease
and the Mortgage and spreaders and consolidations of the Mortgage.  The provisions of this Section shall be
self-operative and no further instrument of subordination shall be required. In
confirmation of such subordination, Lessee shall promptly execute and deliver,
at its own cost and expense, an instrument in recordable form to evidence such
subordination.  If, in connection with
the obtaining, continuing or renewing of financing for which the Demised
Premises or the interest of the lessee under the Superior Lease represents
collateral in whole or in part, a bank, insurance company or other lender shall
request reasonable modifications of this Lease as a condition of such
financing, Lessee will not unreasonably withhold or delay its consent thereto,
provided that such modifications do not increase the monetary obligations of
Lessee under this Lease or materially increase the other obligations of Lessee
hereunder or materially and adversely affect the rights of Lessee under this
Lease.

 

B.  Within thirty (30) days from the execution of
this Lease, Lessor shall deliver to Lessee a Subordination and Non-Disturbance
Agreement from The Union Labor Life Insurance Company, Lessor’s current
mortgagee, and The Westchester County Industrial Development Agency in the
forms annexed hereto collectively as EXHIBIT ”I.”

 

C.
In addition to the provisions of Section 28.01.B of this Lease, during the
Term of this Lease, Lessor agrees to provide Lessee ]with an agreement from the
holder of the Mortgage or the lessor under the IDA Lease and/or a Superior
Lease, providing in substance, that if and so long as no Event of Default shall
be continuing, this Lease shall continue upon its then executory terms and
conditions and possession of the Demised Premises held by Lessee, and any
permitted sublessee or assignee, will not be disturbed by such person in the event
of a default under the Mortgage, IDA Lease, or Superior Lease, as the case may
be (the “NDA”).  The form of the NDA
shall be the holder of the Mortgage, IDA Lease or Superior Lease, as the case
may be, current standard form of non-disturbance agreement, provided, however, that such NDA will not
increase the monetary obligations of Lessee under this Lease or increase the
other obligations of Lessee hereunder more than to a de minimus extent or
adversely affect the rights of Lessee under this Lease or reduce Lessor’s
obligations hereunder.

 

SECTION 28.02.
If at any time prior to the expiration of the Term, the holder of the Mortgage
shall become the owner of the Property as a result of foreclosure of its
mortgage or by reason of an assignment of the lessee’s interest under any such
lease or conveyance of the Demised Premises, Lessee agrees, at the election and
upon demand of any owner of the Demised Premises, or of the holder of any
Mortgage or Superior Lease (including a leasehold mortgage) in possession of
the Demised Premises, to attorn, from time to time, to any such owner, or
lessee, upon the then executory terms and conditions of this Lease, provided

 

29

 

that
such owner, holder or lessee, as the case may be, shall then be entitled to
possession of the Demised Premises.  No
such owner,  holder or lessee shall be
liable for any previous acts or omission of Lessor under this Lease (except
that this provision shall not be construed to relieve such person from any
obligation thereafter to be performed), nor shall such owner holder or Lessee
be subject to any offset which shall have theretofore accrued to Lessee against
Lessor, or be bound by any previous modification of this Lease, not expressly
provided for in this Lease, entered into after the date of the Mortgage, or
Superior Lease, or by any previous prepayment of more than one month’s Fixed
Rent. The foregoing provisions of this Section shall enure to the benefit
of any such owner, holder or lessee, shall apply notwithstanding that, as a
matter of law, this Lease may terminate upon the termination of the Superior
Lease, or the foreclosure (including judgment of foreclosure and sale) of the
Mortgage, shall be self-operative upon any such demand, and no further
instrument shall be required to give effect to said provisions.  Lessee, however, upon demand of any such
owner, holder or lessee, agrees to execute, from time to time, instruments in
confirmation of the foregoing provisions of this Section, acknowledging such
attornment and setting forth the terms and conditions of its tenancy. Nothing
contained in this Section shall be construed to impair any right otherwise
exercisable by any such owner, holder or lessee.

 

ARTICLE 29 - SURRENDER; REMOVAL OF LESSEE’S PROPERTY

 

SECTION 29.01.
On the last day of the Term or on the earlier termination of the Term, Lessee
shall peaceably and quietly leave, surrender and deliver the Demised Premises
to Lessor, together with (a) all alterations, changes, additions and
improvements, which may have been made upon the Demised Premises (except for
Lessor’s Work), and (b) except for Lessee’s Property, all fixtures and
articles of personal property of any kind or nature which Lessee may have
installed or affixed on, in, or to the Demised Premises for use in connection
with the operation and maintenance of the Demised Premises (whether or not said
property be deemed to be fixtures), all of the foregoing to be surrendered in
good, substantial and sufficient repair, order and condition, reasonable use,
wear and tear, and damage by fire or other casualty, excepted, and free of
occupants and sublessees.

 

SECTION 29.02.
On or prior to the Expiration Date or any earlier termination of this Lease,
Lessee shall remove Lessee’s Property, and any items referred to in clauses (a) or
(b) of Section 29.01, which Lessor shall request Lessee to remove
(unless Lessor shall have waived such right as to any item referred to in
clause (a) of Section 29.01 at the time of the granting of consent
with respect thereto under Article 25), and Lessee shall pay or cause to
be paid the cost of repairing or remedying any damage caused thereby, provided
that no item of Lessee’s Property may be removed if its removal would impair
the integrity (structural or otherwise) of the Building or Building
Equipment.  All property not so removed
shall be deemed abandoned and may either be retained by Lessor as its property
or disposed of, without accountability, at Lessee’s sole cost, expense and
risk, in such manner as Lessor may see fit.

 

SECTION 29.03.  If the Demised Premises are not surrendered
in accordance with the provisions of this Article upon the expiration or
termination of this Lease, Lessor shall have all rights given at law or in
equity, in the case of holdovers, to remove Lessee and anyone claiming through
or under Lessee.  In any event, Lessee
shall and does hereby indemnify Lessor against all loss or liability arising
from delay by Lessee in so surrendering the Demised Premises, including any
claims made by any succeeding lessees founded on such delay.  Lessee expressly waives, for itself and for
any person claiming through or under Lessee (including creditors), any rights
which lessee or any such person may have under the provisions of any law in
connection with any holdover summary proceedings which Lessor may institute to
enforce the provisions of this Article. 
Lessee’s obligations under this Article shall survive the
expiration or termination of this Lease.

 

SECTION 29.04.  Lessee acknowledges the extreme importance to
Lessor that possession of the Demised Premises be surrendered at the expiration
or sooner termination of this Lease.  In
the event that Lessee fails to vacate the Demised Premises at the expiration or
sooner termination of this Lease, Lessee shall be obligated to pay Lessor
damages in an amount equal to One Hundred and Fifty (150%) percent of the
Annual Fixed Rent and Additional Rent provided for on the day preceding the
Expiration Date for such period of time that Lessee holds over on a per diem basis.

 

ARTICLE 30 - RENEWAL TERM

 

SECTION 30.01.  Lessee named herein, shall have the right, at
its option, to extend this Lease for one (1) term (a “Renewal Term”) of
five (5) years to commence on the Expiration Date originally provided for
herein and to end at noon on the Fifth (5th) anniversary of such
Expiration Date originally provided for herein, by giving Lessor notice of such
election at any time but not less than nine (9) months prior to the
Expiration Date originally provided for herein (time being of the essence with
respect thereto), and upon the giving of such notice this Lease thereupon
shall, subject to the provisions of Section 30.02, be automatically
extended for the Renewal Term with the same force and effect as if the Renewal
Term had been originally included in the Term, without the execution of any
further instrument.

 

30

 

SECTION 30.02.  Any notice of election to exercise the option
to extend as hereinbefore provided must be in writing and sent to Lessor as
provided in Article 21.  Neither the
option granted to Lessee in this Article to extend the Term, nor the
exercise of such option by Lessee, named herein shall prevent Lessor from
exercising any option or right granted or reserved to Lessor in this Lease to
terminate this Lease with respect to all or a portion of the Demised Premises,
and the effective exercise of any such right of termination by Lessor shall
terminate any such renewal or extension and any right of Lessee to any such renewal
or extension with respect to that portion of the Demised Premises so
terminated, whether or not Lessee shall have exercised any such option to
extend the Term.  Any such option or
right on the part of Lessor to terminate this Lease pursuant to the provisions
hereof shall continue during any Renewal Term.

 

SECTION 30.03.  All of the terms, covenants and conditions of
this Lease shall continue in full force and effect during the Renewal Term
except that (i) the Fixed Rent for the Renewal Term shall be as provided
in Section 30.04 (all other rent and charges payable by Lessee remaining
unaffected), and (ii) there shall be no further privilege of extension of
this Lease beyond the Renewal Term.

 

SECTION 30.03.  All of the terms, covenants and conditions of
this Lease shall continue in full force and effect during the Renewal Term
except that (i) the Fixed Rent for the Renewal Term shall be as provided
in Section 30.04 (all other rent and charges payable by Lessee remaining
unaffected), and (b) there shall be no further privilege of extension of
this Lease beyond the Renewal Term.

 

SECTION 30.04.
A. During the Renewal Term, Lessee shall pay to Lessor annual Fixed Rent, at
the same times and in the same manner as in the Term originally provided for,
at the annual rate equal to the annual fair rental value of the Demised
Premises (without deduction for the cash value of free rent and leasehold
improvements), which renewing, non-equity tenants are then receiving in
connection with a lease for comparable space in a building of the same age,
quality, size, location, services, amenities, quality of construction and
appearance to that of the Building on the date of the commencement of the
Renewal Term with a term equal to each such Renewal Term and otherwise
containing the same provisions as this Lease contains, as determined by
agreement between Lessor and Lessee.  If,
prior to the commencement of either Renewal Term, Lessor and Lessee are unable
to agree on the amount of the annual Fixed Rent during the Renewal Term, then
in such event, the determination of such annual fair rental value shall be made
by arbitration pursuant to the provisions of Section 30.04. B.
hereof.  If either Renewal Term, shall
commence prior to determination of the amount of annual Fixed Rent payable
during the Renewal Term, either by agreement or by decision of the arbitrators,
Lessee, in the meantime, shall pay the monthly installments of Fixed Rent at
the annual rate payable under this Lease for the year ending on the Expiration
Date, or the Fifth (5th) anniversary of the Expiration Date
originally provided for herein, as the case may be.  If monthly installments of the amount agreed
upon by Lessor and Lessee, or found by the arbitrators, shall be greater than
such amount, then Lessee, forthwith after such agreement or arbitrators’
decision, shall pay to Lessor, for the period from the commencement of the
Renewal Term to the last day of the calendar month in which the agreement or
the arbitrators’ decision takes effect, the difference between the monthly
installments actually paid and the monthly installments which should have been
paid in accordance with such agreement or arbitrator’s decision, and,
thereafter, Lessee shall pay the monthly installments at the new rate.  In no event shall the Fixed Rent for the
Demised Premises during the Renewal Term be less than the Fixed Rent in effect
on the day preceding the commencement of the Renewal Term.

 

B.
(1)  In the event that Lessor and Lessee are unable to agree on the amount
of the annual Fixed Rent during either Renewal Term, then either Lessor or
Lessee (hereinafter referred to as the “Initiating Party”) may give the other
party (hereinafter called the “Responding Party”) a notice designating the name
and address of the arbitrator designated by the Initiating Party to act on its
behalf in the arbitration process hereinafter described (the “Review Notice”).

 

(2) 
If the Initiating Party gives a Review Notice, then within twenty (20) days
after giving of such Review Notice, the Responding Party shall give notice to
Initiating Party specifying in such notice the name and address of the
arbitrator designated by the Responding Party to act on its behalf.  In the event the Responding Party shall fail
to give such notice within such twenty (20) day period, then the appointment of
such arbitrator shall be made in the same manner as hereinafter provided for
the appointment of a third arbitrator in a case where two arbitrators are
appointed hereunder and the parties are unable to agree to such appointment.  The two arbitrators so chosen shall meet
within thirty (30) days after the second arbitrator is appointed and shall
exchange sealed envelopes each containing such arbitrators written
determination of the fair market rent of the Demised Premises based on the criteria
set forth in Section 30.04.A.  The
fair market rent specified by Lessor’s arbitrator shall be called the “Lessor’s
Submitted Value” and the fair market rent specified by Lessee’s arbitrator
shall be called the “Lessee’s Submitted Value”. 
Copies of such written determinations shall promptly be sent to both
Lessor and Lessee.  Any failure of either
such arbitrator to meet and exchange such determinations shall be acceptance of
the other party’s arbitrator’s determination as to fair market rent, if, and
only if, such failure persists for ten (10) business days after notice to
whom such arbitrator is acting, and, provided that such ten (10) business
day period shall be extended by reason of any Unavoidable Delay.  If the higher determination of the fair market
rent for the Demised Premises is not more than one hundred and five (105%)
percent of the lower determination of the fair market rent, then the fair

 

31

 

market
rent for such space shall be deemed to be the average of the two
determinations.  If, however, the higher
determination is more than one hundred and five (105%) percent of the lower
determination, then within ten (10) days of the date the arbitrators
submitted their respective fair market rent determinations, the two arbitrators
shall appoint a third arbitrator.  In the
event of their being unable to agree upon such appointment within ten (10) days
after the exchange of the sealed envelopes, the third arbitrator 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, then either party, on behalf of both and on notice to
the other, may request such an appointment by the American Arbitration
Association (or any successor organization) in accordance with its rules then
prevailing or if the American Arbitration Association (or any successor
organization) shall fail to appoint said third arbitrator within fifteen (15)
days after such request is made, then either party may apply for such
appointment, on notice to the other, to the President of the Westchester County
Bar Association (who may consult with the Chairman of the Real Property Law
Committee of the Westchester County Bar Association).  Within ten (10) days after the
appointment of such third arbitrator, the Lessor’s arbitrator shall submit
Lessor’s Submitted Value to such third arbitrator and the Lessee’s arbitrator
shall submit Lessee’s Submitted Value to such third arbitrator.  Such third arbitrator shall, within thirty
(30) days after the end of such fifteen (15) day period, make his own
determination of the fair market rent of the Demised Premises using the
criteria set forth in Section 30.04.A. hereof, and send copies of his
determination promptly to both Lessor and Lessee specifying whether Lessor’s
Submitted Value or Lessee’s Submitted Value was closer to the determination by
such third arbitrator of the fair market rent of the Demised Premises.  Whichever of Lessor’s Submitted Value or
Lessee’s Submitted Value shall be closer to the determination by such third
arbitrator shall conclusively be deemed to be the fair market rent of the
Demised Premises.

 

(3) In
no event shall the arbitrators enlarge upon, or alter or amend, this Lease or
Lessor’s or Lessee’s rights as provided in this Lease, it being understood that
the sole issue for determination by the arbitrators shall be the single issue
of fact of the annual fair rental value of the Demised Premises as provided in
paragraph A of this Section 30.01.

 

(4) Except
as otherwise provided in the following sentence, the fees and expenses of an
arbitration proceeding shall be borne by the parties equally.  The fees of respective counsel engaged by the
parties the fees and expenses of expert witnesses and other witnesses called
and the cost of transcripts shall be borne by the parties engaging such counsel
or calling such witness or ordering such transcripts.

 

(5) 
The arbitrators selected by either party shall have a minimum of ten (10) years
experience as an appraiser of commercial real property in Westchester County
and who is not related directly or indirectly to either party.  In the event that a third arbitrator is
required, such third arbitrator shall not have any prior business relationship
with either party hereto.

 

SECTION 30.05.  The rights provided to Lessee to extend this
Lease as provided in Section 30.01 is conditioned in all respects upon
there being no Event of Default in the observance or performance of any term,
covenant, condition or agreement of Lessee’s part to be observed or performed
under this Lease both at the time the notice of exercise is given and
immediately prior to commencement of the Renewal Term.  Any termination, cancellation or surrender of
this Lease shall terminate any right of extension hereunder for either Renewal
Term.

 

SECTION 30.06.  If Lessee shall effectively exercise its
option to extend this lease for either Renewal Term, Lessor and Lessee, upon
demand of either, shall execute and deliver to each other duplicate originals of
an instrument, duly acknowledged, setting forth (i) that the Term has been
extended, (ii) the period of such extension, (iii) the annual Fixed
Rent payable during each Renewal Term and (iv) that such extension is upon
and subject to all of the terms, covenants, conditions and limitations
contained herein.

 

ARTICLE 31- EARLY TERMINATION RIGHT

 

SECTION 31.01.  Lessor hereby agrees that Lessee herein named
shall have a one time right, to terminate this Lease as of the day preceding
the date on which the Third (3rd) Anniversary of the Rent
Commencement Date falls (the “Termination Date”) with respect to the entire
Demised Premises, provided, however,
that Lessee has notified Lessor of its intention to terminate this Lease (“Lessee’s
Termination Notice”) at least nine (9) months prior to the Termination
Date, time being of the essence with respect to said notice.

 

B.
Lessee’s Termination Notice must be in writing and sent to Lessor as provided
for in this Lease.  Lessee agrees to
surrender the Demised Premises in accordance with the provisions of this Lease
on the Termination Date.

 

C.  The right provided to Lessee herein named to
terminate this Lease with respect to the entire Demised Premises as provided in
this Section 31.01 is conditioned in all respects upon (i) there
being no Event of Default in the observance or performance of any term,
covenant, condition or agreement of Lessee’s part to be observed or performed
under this Lease both at the time Lessee’s Termination Notice is given and

 

32

 

immediately
prior to the Termination Date; and the payment by bank or certified check together with
Lessee’s Termination Notice of the Termination Fee (as hereinafter defined).

 

D.  As used herein, the “Termination Fee” shall
be an amount equal to the unamortized portion of Lessor’s Work, brokerage fees,
architectural fees and legal fees in connection with this Lease.

 

ARTICLE 32- BROKERS

 

SECTION 32.01.  Lessee represents that in connection with
this Lease it dealt with no broker other than Cushman & Wakefield of
Connecticut, Inc. and McCarthy and Associates, Inc. (the “Brokers”)
nor has Lessee had any correspondence or other communication in connection with
this Lease with any other person who is a broker, and that so far as Lessee is
aware the Brokers are the only brokers who negotiated this Lease.  Each party hereby indemnifies the other party
and holds it harmless from any and all loss, cost, liability, claim, damage, or
expense (including court costs and attorneys’ fees) arising out of any
inaccuracy of the above representation. 
Lessor agrees to pay the Brokers all commissions due for its services
pursuant to a separate written agreement.

 

ARTICLE 33- SECURITY DEPOSIT

 

SECTION 33.01.  Lessee shall deposit with Lessor, upon
execution of this Lease, the sum of One Hundred and Three Thousand, One Hundred
and Eighty-One and 01/100/100 ($103,181.01) Dollars in cash as security (the “Security
Deposit”) for the faithful performance and observance by Lessee of the terms,
provisions, conditions and covenants of this Lease and shall be returned to
Lessee as provided for in Section 33.05. hereof.  Lessee agrees that, in the Event of Default
(including the payment of Fixed and Additional Rent), Lessor may use, apply or
retain the whole or any part of the Security Deposit to the extent required for
the payment of Fixed Rent, Additional Rent, or any other sums as to which
Lessee is in default, or for any sum that Lessor may expend or may be required
to expend by reason of Lessee’s default, in respect of the terms, provisions,
conditions and covenants of this Lease (including any damages or deficiency
accrued before or after summary proceedings or other re-entry by Lessor).  In the event that Lessor applies or retains
any portion or all of such Security Deposit, Lessee shall forthwith restore the
amount so retained or applied.

 

SECTION 33.02.A.  Provided that no Event of Default shall have
occurred and be continuing on the appropriate anniversary of the Rent
Commencement Date, the Security Deposit, shall be reduced as follows:

 

(1) on the First (1st) Anniversary of the Rent
Commencement Date, the Security Deposit shall be reduced by an amount equal to
Thirty-Four Thousand, Three Hundred and Ninety-Three and 67/100 ($34,393.67)
Dollars, so that Lessor shall have on deposit the sum of Sixty-Eight Thousand,
Seven Hundred and Eighty-Seven and 34/100 ($68,787.34) Dollars as and for the
Security Deposit; and

 

(2) on the Second (2nd) Anniversary of the Rent
Commencement Date, the Security Deposit shall be reduced by an amount equal to
Thirty-Four Thousand, Three Hundred and Ninety-Three and 67/100 ($34,393.67)
Dollars, so that Lessor shall have on deposit the sum of Thirty-Four Thousand,
Three Hundred and Ninety-Three and 67/100 ($34,393.67) Dollars as and for the
Security Deposit.

 

SECTION 33.03.  In the event of a sale of the Property, or
Lessor’s interest therein, or of a leasing of the Property, Lessor shall have
the right to transfer the Security Deposit hereunder to the vendee or lessee,
upon prior notice to Lessee and Lessor shall thereupon be released by Lessee
from all liability for the return of such Security Deposit to a new lessor.

 

SECTION 33.04.  Lessee covenants that it will not assign or
encumber, or attempt to assign or encumber the Security Deposit, and that
neither Lessor nor its successors and/or assigns shall be bound by any such
assignment, or attempted encumbrance.

 

SECTION 33.05.  In the event that Lessee shall fully and
faithfully comply with all of the terms, provisions, conditions and covenants
of this Lease, and provided further, that no Event of Default shall have
occurred or be continuing, the Security Deposit shall be returned to Lessee
within thirty (30) days after Lessee delivers possession of the Demised
Premises to Lessor as provided for in this Lease.

 

ARTICLE 34- DEFINITIONS

 

SECTION 34.01  For the purposes of this Lease and all
agreements supplemental to this Lease, unless the context otherwise requires:

 

(a)  “Additional Rent” shall mean all sums of money, other than
Fixed Rent, as shall become due from and payable by Lessee hereunder.

 

33

 

(b)  “Building” shall mean the building commonly known as and
located at 800 Westchester Avenue, Rye Brook, New York and all structures and
improvements, and related facilities, including paved areas and all parking
lots adjacent and/or appurtenant thereto (other than “Building Equipment,” as
such term is herein defined), now or hereafter erected, constructed or situated
on the Property, underlying or appurtenant to the Building or any part thereof,
together with all alterations, additions and improvements thereto and all
restorations and replacements thereof.

 

(c)  “Building Equipment” shall mean all machinery, systems,
apparatus, facilities, equipment and fixtures of every kind whatsoever now or
hereafter belonging, attached to and used exclusively (whether or not same
constitute fixtures), or procured for exclusive use, in connection with the
operation or maintenance of the Building and/or Property, including water,
sewer and gas connections, all heating, electrical, lighting, and power
equipment, engines, furnaces, boilers, pumps, tanks, dynamos, motors,
generators, conduits, plumbing, cleaning, fire prevention, refrigeration, ventilating,
air cooling, air conditioning equipment and apparatus, cranes, elevators,
escalators, ducts and compressors and any and all replacements thereof and
additions thereto; but excluding, however, (i) Lessee’s Property, (ii) property
of any sublessee which sublessee may be authorized to remove from the Building
upon and subject to the terms and conditions of its sublease and this Lease, (iii) property
of contractors servicing the Building, and (v) improvements for water,
gas, and electricity and other similar equipment or improvements owned by any
public utility company or any governmental agency or body.

 

(d)  “Cost” shall mean that Lessor will perform all such services
on a “cost plus” basis, whereby Cost shall include, but not be limited to, the
cost of sub-contractors, material, equipment rental, transportation and
delivery items, permits, fees, taxes, insurance’s, debris removal, demolition,
safety protection, labor, purchasing, expediting and material handling, and
shall also include a contingency, based on the complexity of the work to be
performed, of up to five percent (5%) of the total of all such items otherwise
included within such definition (the “Trades”). 
Lessee agrees that the same shall be collectible as Additional Rent
pursuant to the Lease, and in default of payment thereof Lessor shall, in
addition to all other remedies, have the same rights as in the event of default
of payment of rent.

 

(e)  “Environmental Laws” shall mean any and all Federal, state,
local, or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or requirements of any Governmental Authority regulating,
relating to or imposing liability or standards of conduct concerning
environmental conditions at the Demised Premises, Building or Property as now
or may at any time hereafter be in effect, including but not limited to and
without limiting the generality of the foregoing, The Clean Water Act also
known as the Federal Water Pollution Control Act, 88 U.S.C. §§1251 et  seq.,
the Toxic Substance Control Act, 15 U.S.C. §§2601 et  seq., the
Clean Air Act, 42 U.S.C. §§7401 et  seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. §§186 et  seq., the Safe
Drinking Water Act, 42 U.S.C. §§300f et  seq., the Surface Mining
Control and Reclamation Act, §1201 et  seq., 80 U.S.C. §1201 et
seq., the Comprehensive Environmental Response, Compensation and
Liability Act (“CERCLA”), 42 U.S.C. §§9601 et  seq., the Superfund
Amendment and Reauthorization Act of 1986 (“SARA”), Public Law 99-499, 100
Stat. §1818, the Emergency Planning and Community Right to Know Act, 42 U.S.C.
§§1101 et  seq., the Resource Conservation and Recovery Act (“RCRA”),
42 U.S.C. §§6901 et  seq., and the Occupational Safety and Health
Act as amended (“OSHA”), 29 U.S.C. §655 and §657, together with any amendments
thereto, regulations promulgated thereunder and all substitutions thereof.

 

(f)  “Hazardous Material” shall mean (i) Any hazardous, toxic
or dangerous waste, substance or material defined as such in (or for the
purpose of) CERCLA, SARA, RCRA, or any other Environmental Law as now or at any
time hereafter in effect; (ii) any other waste, substance or material that
exhibits any of the characteristics enumerated in 40 C.F.R. §§261.20 through
261.24, inclusive, and those extremely hazardous substances listed under Section 902
of SARA that are present in threshold planning or reportable quantities as
defined under SARA and toxic or hazardous chemical substances that are present
in quantities that exceed exposure standards as those terms are defined under Section 6
and 8 of OSHA and 29 C.F.R. Part 1910; (iii) any asbestos or asbestos
containing substances whether or not the same are defined as hazardous, toxic,
dangerous waste, a dangerous substance or dangerous material in any Environmental
Law; (iv) ”Red Label” flammable materials; (v) all Laboratory Waste
and by-products; and (vi) all biohazardous materials.

 

(g)  “IDA Lease” shall mean that certain lease by and between
Lessor, as landlord, and The County of Westchester Industrial Development
Agency, as tenant, dated September 10, 2004 and that certain sublease by
and between The County of Westchester Industrial Development Agency, as
sublessor and Lessor, as sublessee, dated September 10, 2004, and all
renewals, modifications, replacements, substitutions and extensions thereof.

 

34

 

(h)  “Insurance Requirements” shall mean the rules, regulations,
orders and other requirements of any insurance rating or regulatory
organization having jurisdiction of, and which are applicable to, the Demised
Premises and of any liability, casualty, or other insurance policy which either
Lessor or Lessee is required hereunder to maintain or may maintain hereunder.

 

(i)  “Legal Requirements” shall mean the requirements of every
statute, law, ordinance, regulation, rule requirement, order or directive,
now or hereafter made by any Federal, state or local government or any
department, political subdivision, bureau, agency, office or officer thereof,
or any other governmental authority having jurisdiction (a “Governmental
Authority”) with respect to and applicable to (i) the Demised Premises and
appurtenances thereto, and/or (ii) the condition, equipment, maintenance,
use or occupation of the Demised Premises, including the making of an
alteration or addition in or to any structure upon, connected with or
appurtenant to the Demised Premises.

 

(j)  “Lessee’s Delays” shall mean
any and all delays caused by or attributable to any action or failure or
refusal of Lessee to perform a duty of, Lessee or any person claiming through
or under Lessee, or any agent, servant, employee, director, shareholder,
contractor or invitee of Lessee or any such person.

 

(k)   “Lessee’s Property” shall
mean all articles of personal property and fixtures and other property, which
have been installed or affixed on, in or to, or brought into, the Demised
Premises, at the expense of Lessee or any permitted sublessee of Lessee or
other permitted occupant of the Demised Premises and without any credit or
allowance by Lessor, which are not replacements or any property of Lessor
(whether any such replacement is made at Lessee’s expense or otherwise), and
which do not constitute alterations, changes, additions, or improvements to the
Demised Premises or any appurtenances thereto.

 

(l)  “Lessee’s Proportionate
Share” shall mean a fraction the numerator of which is equal to the rental
square footage that Lessee occupies in the Demised Premises, and the
denominator of which is equal to the total rental square footage of the
Building located on the Property, as it presently exists or may hereinafter be
increased or enlarged.  As of the
Commencement Date, the total rentable square footage of all of the buildings
located on the Property, shall be deemed to consist of Four Hundred and Seventy
Thousand (470,000), the total rentable square footage of the Demised Premises
shall be deemed to consist of Fifteen Thousand, Eight Hundred and Seventy-Four
(15,874) rentable square feet, and Lessee’s Proportionate Share shall be deemed
to be Three and Thirty-Eight Hundredths (3.38%) percent.  Lessee and Lessor agree that Lessee’s
Proportionate Share is not based upon any particular method of measuring the
Demised Premises, the Building or any other buildings on the Property and
represents an agreed upon percentage and shall not be contestable by Lessee at
a future date.

 

(m)  “Lessor’s Agents” shall be
deemed to include agents, servants, employees, directors, officers,
shareholders and contractors of Lessor.

 

(n)  “Normal Working Hours” shall
mean only those between the hours of 8:00 A.M. and 6:00 P.M., Monday
through Friday, exclusive of New Years Day, the day designated as the legal
holiday for the celebration of Washington’s Birthday, Memorial Day, Fourth of
July, Labor Day, Thanksgiving Day and Christmas Day and all union holidays.

 

(o)  “Unavoidable Delays” shall
mean any and all delays beyond Lessor’s reasonable control, including Lessee’s
Delays, governmental restrictions, governmental preemption, strikes, labor
disputes, lockouts, shortages of labor and materials, enemy action, civil
commotions, riot, insurrection and fire, other casualty and other acts of God.

 

(p)  “Untenantable” shall mean
actual inability to use space in the Demised Premises for the purposes
permitted by Section 4.01.

 

SECTION 34.02.  For the purposes of this Lease and all
agreements supplemental to this Lease, unless the context otherwise requires:

 

(a)  The terms “include”, “including”, and “such as” shall be
construed as if followed by the phrase “without being limited to”.

 

(b)  Whenever this Lease provides that Lessee shall pay Lessor
interest at the “Maximum Legal Rate” then interest shall be payable at the
lesser of the Prime Rate established by JP Morgan Chase Bank plus five (5%)
percent or the highest rate of interest permitted at the relevant time by
applicable law to be paid by Lessee without impairing the validity or
enforceability of this Lease and without incurring any civil or criminal
penalty.

 

35

 

(c)  The term “obligations of this Lease” and words of similar
import, shall mean the covenants to pay Fixed Rent and Additional Rent and all
of the other covenants and conditions contained in this Lease.  Any provision in this Lease that one party or
the other or both shall do or not do or shall cause or permit or not cause or
permit a particular act, condition or circumstance shall be deemed to mean that
such party so covenants or both parties so covenant, as the case may be.

 

(d)  The term “repair” shall be deemed to include restoration and
replacement as may be necessary to achieve and/or maintain good working order
and condition.

 

(e)  Reference to “substantially complete” and words of similar
import shall be deemed to mean, with regard to construction work, completion
but for such minor details of work, the non-completion of which would not
materially interfere with the utility of the affected space and a certificate
of occupancy has been issued by the Governmental Authority having jurisdiction over
the Demised Premises.

 

(f)  Reference to “termination of this Lease” includes expiration
or earlier termination of the Term or cancellation of this Lease pursuant to
any of the provisions of this Lease or to law. 
Upon the termination of this Lease, the Term and estate hereby granted
by this Lease shall end at noon on the date of termination as if such date were
the date of expiration of the Term and neither party shall have any further
liability or obligation to the other after such termination (i) except as
shall be expressly provided for in this Lease, and (ii) except for such
obligations as by their nature or under the circumstances can only be, or by
the provisions of this Lease, may be, performed after such termination, and, in
any event, unless expressly otherwise provided in this Lease, any liability for
a payment which shall have accrued to or with respect to any period ending at
the time of termination shall survive the termination of this Lease.

 

ARTICLE 35- MISCELLANEOUS

 

SECTION 35.01.  This Lease shall be governed in all respects
by the laws of the State of New York applicable to leases made and to be
performed wholly therein.

 

SECTION 35.02.  All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, single or plural, as the
identity of the person or persons or entity or entities in question may
require.  The term “person” shall be
deemed to include individuals, corporations, partnerships, joint ventures,
firms, associations and other entities.

 

SECTION 35.03.  All provisions of this Lease shall be deemed
and construed to be “conditions” as well as “covenants”, as though the words
specifically expressing or importing covenants and conditions were used in each
separate provision hereof.

 

SECTION 35.04.  If any provision of this Lease or application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected thereby,
and every provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.

 

SECTION 35.05.  The article headings in this Lease are inserted
only as a matter of convenience and reference and are not to be given any
effect whatsoever in construing this Lease.

 

SECTION 35.06.  This Lease contains the entire agreement
between the parties regarding the Demised Premises and shall not be modified in
any manner except by an instrument in writing executed by the parties or their
respective successors in interest.  No
waiver or modification by either party or any provision or covenant of this
Lease shall be deemed to have been made unless such waiver is expressed in
writing and signed by the party against whom such waiver or modification is
sought.

 

SECTION 35.07.  Lessee agrees with Lessor that Lessee will
not record this Lease or any memorandum of this Lease without the prior written
consent of Lessor.

 

SECTION 35.08.  The covenants, agreements, terms, provisions
and conditions contained in this Lease shall apply to and inure to the benefit
of and be binding upon Lessor and Lessee and their respective successors and
assigns, except as otherwise provided for herein.

 

SECTION 35.09.  Upon request of Lessor, but not more often
than once each fiscal or calendar year, as the case may be, Lessee and any such
person shall submit to Lessor true, correct, current and complete financial
statements of Lessee and its affiliates, if any.

 

36

 

SECTION 35.10.  Solely for the purposes of a proceeding under
the present or future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law (a “bankruptcy law”), the
following terms and conditions have been agreed upon by Lessor and Lessee:

 

(a)  In the event of a default by Lessee under this Lease
continuing after the filing of a voluntary or involuntary petition (a “pre-petition
default”) under any bankruptcy law, a period exceeding thirty (30) days for
curing such default shall in no event be deemed reasonable.

 

(b)  In order to be deemed adequate assurance by Lessee for the
cure of any pre-petition default, Lessee, or the trustee, as the case may be,
must (i) deposit with a banking institution selected by Lessor securities,
in negotiable form, issued by the United States of America, with a fair market
value, at all relevant times, equal to twice the amount of rent due or the cost,
as estimated by Lessor of curing the pre-petition default, as the case may be,
or (ii) grant to Lessor a security interest or lien, which shall be
superior to any and all claims and liens, on any of Lessee’s property that is
valued at liquidation at twice the amount of such rent or cost.

 

(c)  In order to be deemed adequate assurance by Lessee, with
respect to the payment of rent due after the filing of a voluntary or
involuntary petition under any bankruptcy law, Lessee must (i) deposit
with a banking institution selected by Lessor securities in negotiable form,
issued by the United States of America, with a fair market value, at all
relevant times, of not less than six (6) months’ rent, or (ii) grant
a security interest or lien, which shall be superior to any and all claims and
liens, in any of Lessee’s property that is valued at liquidation at not less
than six (6) months’ rent.

 

SECTION 35.11.  Lessee represents and warrants: (i) that
it is a corporation duly formed under laws of the state of its formation and is
authorized to do business in the State of New York; (ii) that it has all
requisite authority to execute and to enter into this Lease and that the
execution of this Lease will not constitute a violation of any internal by-law,
agreement or other rule of governance, and (iii) that the individual
executing this Lease on behalf of Lessee is so authorized and Lessee shall
supply Lessor with written documentation evidencing such authority upon or
prior to Lessee’s execution of this Lease.

 

SECTION 35.12.A.  Lessor covenants that during the Term or
Renewal Term of this Lease, it shall open and maintain a cafeteria on the
Property for use by Lessee and other tenants of the Property on or before
Commencement Date.  Notwithstanding the
foregoing, nothing contained herein shall be construed as a representation or
warranty that any such cafeteria, after it has been opened, will remain open at
all times during the Term or any Renewal Term of this Lease, provided, however, that in the event that
the cafeteria closes at any time during the Term or any Renewal Term, Lessor
shall use commercially reasonable efforts to obtain a new operator and/or
concessionaire for the cafeteria within a reasonable period of time from the
date the cafeteria closes so as to provide cafeteria service in the Building
during all or substantially all of the Term or Renewal Term of this Lease.  Lessor further agrees that in the event such
closure shall be for more than ten (10) business days, Lessor shall: (i) provide
self service food vending machines and microwave oven in the Building for use
by Lessee and other tenants of the Building; and/or (ii) use commercially
reasonable efforts to arrange to have a catering truck visit the Building on a
daily basis during Normal Working Hours. 
The cost for all such food shall be paid for by the person utilizing
such services.

 

B.  Lessor hereby agrees that Lessee’s officers,
directors and employees Lessee shall have, as appurtenant to the Demised
Premises, the non-exclusive right to use exercise facility located in the
Building of which the Demised Premises are part and the cafeteria and executive
cafeteria, provided, however,
that: (i) such officers, directors, and employees each pay Lessor the
monthly charges therefor (the “Exercise Fee”); and (ii) each such officer,
director, and employee signs the health care waiver in the form annexed hereto
as EXHIBIT ”H.”  Lessee hereby
agrees that Lessee shall have the right to change the Exercise Fee, from time
to time, with not less than thirty (30) days prior written notice to Lessee,
and such increased amount shall be paid by Lessee, provided, however, that such increase shall not exceed the
then current fair market value for similar exercise facilities in first class
office building located in Westchester County, New York.  Lessor represents that the current Exercise
Fee is Thirty-Five and 00/100 ($35.00) Dollars per person per month, subject to
change as otherwise specifically provided for herein.

 

C.  Lessor agrees that the Exercise Fee and the
prices being charged in the cafeteria shall be the same for all tenants in the
Building.  In the event, Lessor offers
any other tenant in the Building a discount on or a reduction in the Exercise
Fee and/or cafeteria prices, then Lessee shall be entitled to the receive the
same discounts or reductions.  Lessor
acknowledges that as of the Commencement Date, the Exercise Fee for groups of
ten (10) or more will be Twenty and 00/00 ($20.00) Dollars per person per
month, subject, however, to increases as otherwise specifically provided for in
this Lease.

 

SECTION 35.13.A.  Lessor acknowledges that during the Term or
Renewal Term of this Lease, it shall provide free shuttle service to and from
the Rye train station (“Shuttle Service”). 
Notwithstanding the foregoing, nothing contained herein shall be
construed as a representation or warranty that such Shuttle Service will always
be available during the Term or any Renewal Term of this Lease, provided, however, that in the event that
Shuttle Service becomes unavailable at any time during the Term or any Renewal
Term, Lessor shall use all commercially reasonable efforts to obtain a new
operator and/or concessionaire to

 

37

 

provide
Shuttle Service within a commercially reasonable period of time so as to
provide Shuttle Service in the Building during all or substantially all of the
Term or Renewal Term of this Lease.

 

B.  Lessor currently acknowledges that it intends
to provide the following amenities at the Building: (i) indoor parking, (ii) limousine
service; (iii) conference center facilities; (iv) concierge services;
(v) exercise facility; (vi) full service beauty salon; (vii) sundry
shop; (viii) ATM machines; (ix) dry cleaning services; and (x) car
wash services (hereinafter referred to collectively as the “Amenities”).  Notwithstanding the foregoing, nothing
contained herein shall be construed as a representation or warranty that all or
any of the Amenities will actually be provided during the Term or Renewal Term,
or if all or any of the Amenities have been provided, that all or any of such
Amenities, will remain or continue to be provided during the Term or any
Renewal Term of this Lease.  Lessee
agrees and understands that in the event that all or any of Amenities are not
provided during Term or any Renewal Term, that Lessor shall not be in default
under this Lease and shall have no liability to Lessee by reason thereof.

 

IN WITNESS WHEREOF, the parties to this Lease have executed the same on the day and in
the year first above written.

 

	
   

  	
  760-24 WESTCHESTER AVENUE, LLC, (Lessor)

  
	
   

  	
  By:
  24 South Third Avenue Corp., its sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert P. Weisz

  	
   

  
	
   

  	
  Name:

  	
  Robert
  P. Weisz

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  800-60 WESTCHESTER AVENUE, LLC, (Lessor)

  
	
   

  	
  By:
  60-3RD Ave. Corp., its sole member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/ Robert P. Weisz

  	
   

  
	
   

  	
  Name:

  	
  Robert
  P. Weisz

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  
	
   

  	
  IT&E INTERNATIONAL GROUP 
  (Lessee)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gene
  Resnick, MD

  	
   

  
	
   

  	
  Name:
  

  	
  Gene
  Resnick, M.D.

  
	
   

  	
  Title:
  

  	
  President
  Millennix

  Senior Vice President, IT&E International
  Group, Inc.

  
									

 

38

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  )ss.:

  
	
  COUNTY OF WESTCHESTER

  	
  )

  

 

On
this                day of February,
2006, before me, the undersigned, personally appeared ROBERT P. WEISZ,
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 on behalf of which the individual(s) acted,
executed the instrument.

 

 

 

Notary
Public

 

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  )ss.:

  
	
  COUNTY OF WESTCHESTER

  	
  )

  

 

On
this                               day of
February, 2006, before me, the undersigned, personally appeared                                      
                               ,
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 on behalf of which the individual(s) acted,
executed the instrument.

 

 

 

Notary
Public

 

39Exhibit
10.1

 

MORNINGSTAR, INC. 2004

 

STOCK INCENTIVE PLAN

 

FORM OF RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS RESTRICTED STOCK
UNIT AWARD AGREEMENT (including
Schedule 1 hereto, the “Award Agreement”) is made under the Morningstar, Inc.
2004 Stock Incentive Plan (the “Plan”) as of the Grant Date specified in
Schedule 1 to this Award Agreement (“Schedule 1”). Any term capitalized but not
defined in this Award Agreement will have the meaning set forth in the Plan.

 

BETWEEN:

 

(1)           MORNINGSTAR, INC., an Illinois corporation (the “Company”); and

 

(2)           The Participant identified in Schedule 1.

 

1              GRANT OF RESTRICTED STOCK UNITS

 

1.1           In accordance with the
terms of the Plan and subject to the terms and conditions of this Award
Agreement, the Company hereby grants to the Participant the number of Restricted
Stock Units specified in Schedule 1.

 

1.2           Each Restricted Stock Unit
is a notional amount that represents one unvested share of common stock, no par
value, of the Company (a “Share”). Each Restricted Stock Unit constitutes the
right, subject to the terms and conditions of the Plan and this Award Agreement,
to distribution of a Share if and when the Restricted Stock Unit vests.

 

1.3           The Participant hereby
agrees to be bound by the terms of this Award Agreement and the Plan.

 

1.4           Further details of the
Restricted Stock Units granted to the Participant under the terms of this Award
Agreement are set forth in Schedule 1.

 

1.5           In the case of conflict
between the terms contained in this Award Agreement and those contained in the
Plan, the Plan shall prevail, unless and to the extent otherwise expressly
stated in this Award Agreement.

 

2              RIGHTS
AS A SHAREHOLDER

 

2.1           Unless and until a
Restricted Stock Unit has vested and the Share underlying it has been
distributed to the Participant, the Participant will not be entitled to vote
that Share.

 

 

2.2           If the Company declares a
cash dividend on the Shares, then, on the payment date of the dividend, the
Participant will be credited with dividend equivalents equal to the amount of
cash dividend per Share multiplied by the number of Restricted Stock Units
credited to the Participant through the record date for the dividend. The
dividend equivalents credited to the Participant under the preceding sentence
will be deemed to be reinvested in additional Restricted Stock Units and
credited to the Participant’s Restricted Stock Unit account. The Restricted
Stock Units credited as a result of such dividend equivalents will be subject
to the same terms regarding vesting and forfeiture as the Participant’s
Restricted Stock Units awarded hereunder, and, subject to the following
sentence, will be distributed in Shares at the same time and in the same
proportion that the Shares associated with the Participant’s Restricted Stock
Units are delivered (or forfeited at the time that the Participant’s Restricted
Stock Units are forfeited). Fractional Shares may be settled in cash or
otherwise, including by rounding up or down to the nearest whole number, as the
Committee determines.

 

3              TERMINATION
OF SERVICE AND OTHER CHANGES IN SERVICE STATUS

 

3.1           If the Participant’s
Service (as defined in Section 3.3) terminates for any reason other than
Disability or death, the Participant will forfeit the right to receive Shares
underlying any Restricted Stock Units that have not vested at that time. Notwithstanding
anything in the Plan to the contrary, for purposes of this Award Agreement, “Disability”
shall mean the condition of being “disabled” as provided in Code Section
409A(a)(2)(C) or a determination of the United States Social Security
Administration with respect to the existence of a disability.

 

3.2           If the Participant’s
Service terminates on account of the Disability or death of the Participant,
the Participant or the Participant’s beneficiary under the Plan will be
entitled to receive the Shares underlying all of the Restricted Stock Units
awarded hereunder, including those that have not then vested.

 

3.3           For purposes of this Award
Agreement “Service” means the provision of services to the Company or its Affiliates
in the capacity of an Employee or a Director but not as a Consultant. For
purposes of this Award Agreement, the transfer of an Employee from the Company
to an Affiliate, from an Affiliate to the Company or from an Affiliate to
another Affiliate shall not be a termination of Service. However, if the
Affiliate for which an Employee is providing services ceases to be an Affiliate
of the Company due to a sale, transfer or other reason, and the Employee ceases
to perform services for the Company or any Affiliate, the Employee shall incur
a termination of Service.

 

3.4           Notwithstanding anything to
the contrary in this Award Agreement, the vesting periods described in Schedule
1 will be suspended while the Participant is on unpaid leave of absence or
serving as a part-time Employee and the vesting dates will be extended by the
length of time that the Participant 

 

2

 

is on unpaid leave of absence or serving as a
part-time Employee, as the case may be. The Company shall have the sole
discretion to determine whether a Participant is on unpaid leave of absence or
serving as a part-time Employee.

 

4              ELECTION
TO DEFER

 

4.1           The Participant may elect
to defer delivery of any or all Shares due to him or her under this Award Agreement
to a date beyond the applicable vesting date, by making a timely deferral
election. In his or her election to defer, the Participant may choose to defer
to a particular anniversary of the Grant Date, beginning with the fourth and
ending with the tenth anniversary of the Grant Date. If a Participant’s Service
terminates for any reason before the anniversary of the Grant Date specified in
a deferral election, he or she will be deemed to have elected to defer delivery
to the next occurring anniversary of the Grant Date following his or her
termination of Service or, if the Participant is then an executive officer of
the Company, if later, following the expiration of the six-month period
following his or her termination of Service. If the Participant dies prior to a
termination of Service, any Shares remaining to be paid under this Award Agreement
will be paid to his or her beneficiary designated under the Plan as soon as
practicable, regardless of any outstanding election to defer. The Board or the
Committee may cause Shares subject to an outstanding election to defer to be
delivered in advance of the date contemplated by such election to defer in
connection with a change in control event (as defined in regulations
promulgated under Section 409A of the Code and as permitted in such regulations
in connection with a plan termination) or in connection with any other event
for which the Board or the Committee is permitted, at the time of such event,
to provide for accelerated distributions under Section 409A of the Code. An
election to defer will be considered timely only if it is filed within the first
30 days of the Grant Date. Notwithstanding anything in this Section 4 to the
contrary, an election to defer hereunder shall comply with the requirements of
Section 409A of the Code or it will not be a valid election.

 

5              TIMING
AND FORM OF PAYMENT

 

5.1           Except as otherwise
provided herein, once a Restricted Stock Unit vests, the Participant will be
entitled to receive a Share in its place. Delivery of the Share will be made as
soon as administratively feasible after its associated Restricted Stock Unit
vests, but no later than 21⁄2 months from the end of the calendar year in which
such vesting occurs, or at a later date elected by the Participant under Section
4.

 

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6              WITHHOLDING
OBLIGATIONS

 

6.1           Without limiting the
Company’s power or rights pursuant to Article 16 of the Plan and subject to
Section 6.2, amounts required by tax law or regulation to be withheld by the
Company with respect to any taxable event arising under this Award Agreement
will be satisfied by having Shares withheld in accordance with the first
sentence of Section 16.2 of the Plan. In addition, the Participant may elect to
deliver to the Company the necessary funds to satisfy the withholding
obligation, in which case there will be no reduction in the Shares otherwise
distributable to the Participant.

 

6.2           Without limiting the
Company’s power or rights pursuant to Article 16 of the Plan, amounts required
by tax law or regulation to be withheld by the Company with respect to the
vesting of a Restricted Stock Unit subject to an effective deferral election
will be satisfied by having the Participant deliver to the Company the
necessary funds to satisfy the withholding obligation, it being understood that
to the extent permitted by law, the Company may elect to withhold such amounts
from amounts it would otherwise distribute to the Participant.

 

7              NOTICES

 

7.1           Any notice or other
communication required or permitted under this Award Agreement must be in
writing and must be delivered personally, sent by certified, registered or
express mail, or sent by overnight courier, at the sender’s expense. Notice
will be deemed given when delivered personally or, if mailed, three days after
the date of deposit or, if sent by overnight courier, on the regular business
day following the date sent. Notice to the Company should be sent to
Morningstar, Inc., 225 West Wacker Drive, Chicago, Illinois, 60606, Attention:
General Counsel. Notice to the Participant should be sent to the address of the
Participant contained in the Company’s records. Either party may change the
person and/or address to whom the other party must give notice by giving such
other party written notice of such change, in accordance with the procedures
described above.

 

8              CONSTRUCTION

 

8.1           The Restricted Stock Units
granted hereunder are subject to any rules and regulations promulgated by the
Committee pursuant to the Plan, now or hereafter in effect.

 

8.2           The Company and the
Participant may amend this Award Agreement only by a written instrument signed
by both parties, provided, that the Company may amend this Award Agreement
without further action by the Participant if (i) such amendment is deemed by the
Company to be advisable 

 

4

 

or necessary to comply with applicable law,
rule, or, regulation, including Section 409A of the Code, or (ii) if such
amendment is not to the detriment of the Participant.

 

8.3           The parties may execute
this Award Agreement in one or more counterparts, all of which together shall
constitute but one Award Agreement.

 

IN WITNESS whereof the
parties have executed this Restricted Stock Unit Award Agreement as of the
Grant Date specified in Schedule 1.

 

 

	
  Participant

  
	
   

  
	
   

  	
   

  
	
  (Participant’s signature)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Morningstar, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  
	
   

  
	
  PLEASE
  RETURN BY: «DATE»

  	
   

  
				

 

5

 

SCHEDULE 1

 

DETAILS
OF RESTRICTED STOCK UNIT GRANTED TO THE PARTICIPANT

 

	
  Participant’s
  name:

  	
   

  	
  «First» «Name»

  	
   

  	
   

  
	
  Grant
  Date:

  	
   

  	
  «Grant_date»

  	
   

  	
   

  
	
  Number
  of Restricted Stock Units:

  	
   

  	
  «Total_RSU_Grant»

  	
   

  	
   

  
	
  Vesting
  of Restricted Stock Units:

  	
   

  	
  Subject
  to, and except as otherwise provided by, the Award Agreement, including
  Sections 3.2 and 3.4 thereof, the Restricted Stock Units subject to the Award
  Agreement vest in installments, with each installment becoming vested on the
  “Vesting Date” shown below, if the Participant has remained in continuous
  Service until that Vesting Date. Notwithstanding the foregoing, the Board or
  the Committee may cause the Restricted Stock Units granted hereby to vest at
  an earlier date pursuant to its authority under the Plan.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Restricted Stock Units

  	
   

  	
  Vesting Date

  
	
   

  	
   

  	
  «Year1Vest»

  	
   

  	
  «VestDateY1»

  
	
   

  	
   

  	
  «Year2Vest»

  	
   

  	
  «VestDateY2»

  
	
   

  	
   

  	
  «Year3Vest»

  	
   

  	
  «VestDateY3»

  
	
   

  	
   

  	
  «Year4Vest»

  	
   

  	
  «VestDateY4»

  
							

 

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