LEASE AGREEMENT

Exhibit 10.9

LEASE AGREEMENT

between

OLDS PROPERTIES CORPORATION

and

JOHN H.O. La GATTA

as Landlord,

and

WARNER ELECTRIC COMPANY

as Tenant

Date: January 29, 2003

TABLE OF CONTENTS

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LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made effective as of the 29th day of January, 2003 by and between OLDS PROPERTIES CORPORATION, a Delaware corporation (“Olds”), and JOHN H.O. La GATTA (“La Gatta”) (collectively, “Landlord”), and WARNER ELECTRIC COMPANY, a Delaware corporation, its successors and assigns and any successor thereto by consolidation, merger or acquisition of all or substantially all of its assets (“Tenant”).

RECITALS:

A.                                    Olds is the owner of certain real property containing approximately 13 acres located at 701 I-85 North in the City of Charlotte, Mecklenburg County, North Carolina, identified by Tax Parcel ID #039-053-16, and further described on Exhibit A attached hereto and incorporated herein by this reference (the “Land”), upon which is located an industrial building (the “Building”) and certain other improvements, which Building and other improvements are owned by La Gatta, and all appurtenances thereto (the Land, Building, other improvements and appurtenances are hereinafter collectively referred to as the “Property”).

B.                                      Subject to and upon the terms, provisions and conditions hereinafter set forth, Landlord does hereby lease, demise and let to Tenant, and Tenant does hereby lease and take from Landlord, the Property on the terms and conditions set forth in this Lease.

AGREEMENT:

NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Lease and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby covenant and agree as follows:

ARTICLE I
BASIC LEASE TERMS AND DEFINITIONS

SECTION 1.1                                              Basic Lease Terms .

The terms set out and defined in this Section, whenever used in this Lease with the first letter of each word capitalized, shall have only the meanings set forth in this section, unless such meanings are expressly modified, limited or expanded elsewhere in this Lease.

1.1.1                         “Additional Rental” shall mean all sums payable by Tenant pursuant to this Lease, except Annual Basic Rental.

1.1.2                         “Affiliate” is any individual, corporation, limited liability company, trust or other entity which directly or indirectly controls or is directly or indirectly controlled by or is under common control with Tenant. For purposes of this definition, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation, limited liability company or other entity, whether through the ownership of voting securities or by contract or otherwise.

1.1.3                         The “Annual Basic Rental” for the Property shall be as follows for the Initial Term of the Lease:

The Annual Basic Rental for the Property shall be as follows for the First Renewal Term of the Lease, if exercised:

The Annual Basic Rental for the Property shall be as follows for the Second Renewal Term of the Lease, if exercised:

The Annual Basic Rental for the Property shall be as follows for the Third Renewal Term of the Lease, if exercised:

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1.1.4                         “Default Rate” shall be an annual rate of interest equal to the lesser of (i) the maximum rate of interest which may lawfully be charged or collected, or (ii) twelve percent (12%) per annum.

1.1.5                         “Event of Default” shall have the meaning set forth in Section 15.1 .

1.1.6                         “Force Majeure” shall mean any event the occurrence of which prevents or delays the performance by Landlord or Tenant of any obligation imposed upon it hereunder (other than the payment of money) and the prevention or cessation of which event is beyond the reasonable control of the obligor.

1.1.7                         “GAAP” shall mean Generally Accepted Accounting Principles.

1.1.8                         “Hazardous Substances” shall have the meaning set forth in Section 20.17 .

1.1.9                         “Improvements” shall mean any and all buildings, structures, and other improvements now or hereafter located on the Property.

1.1.10                   “Initial Termination Date” shall mean 11:59 P.M. on February 28, 2013.

1.1.11                   “Lease Termination Date” shall mean the earlier to occur of (i) 11:59 P.M. on the Initial Termination Date, as that date may be extended by Tenant in accordance with Section 3.2 and (ii) the date that this Lease is terminated pursuant to the express terms hereof.

1.1.12                   “Mortgage” shall have the meaning set forth in Section 16.1 .

1.1.13                   “Mortgagee” shall have the meaning set forth in Section 16.1 .

1.1.14                   “Permitted Uses” shall mean office and manufacturing related to the manufacturing of gears, clutches and power transmission devices, heat treating and painting, including the use of floor mounted hoists and related warehousing, assembly and distribution activities.  Notwithstanding the foregoing, any use prohibited by any applicable law, regulation or ordinance (including zoning laws) shall not be a Permitted Use under this Lease.

1.1.15                   “Premises” shall mean the Property.

1.1.16                   “Property” shall have the meaning set forth in the Recitals.

1.1.17                   “Renewal Terms” shall have the meaning set forth in Section 3.2 .

1.1.18                   “Rent Commencement Date” shall be the date that is one (1) month following the Turnover Date.

1.1.19                   “Rental” shall mean the Annual Basic Rental plus all Additional Rental hereunder.

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1.1.20                   “Rental Year” shall mean a period of one (1) calendar year; provided, however, the first Rental Year shall commence on the Rent Commencement Date and expire on February 29, 2004.  Each subsequent Rental Year shall commence on March l ^st and expire on February 28 ^th (or February 29 ^th if applicable) of the following calendar year.

1.1.21                   “Taking” shall have the meaning set forth in Section 13.1 .

1.1.22                   “Taxes” shall have the meaning set forth in Section 6.1 .

1.1.23                   “Tenant Notice Address” shall mean 997 Lenox Drive, Suite 111, Lawrenceville, New Jersey 08648, Attention: General Counsel.

1.1.24                   “Term” shall mean the period of time during this Lease between the Rent Commencement Date and the Lease Termination Date.

1.1.25                   “Turnover Date” shall mean the date on which exclusive possession of the Premises is tendered to Tenant as provided in this Lease, whether or not Tenant actually takes possession.

SECTION 1.2                                              Terms Generally .

All accounting terms not specifically defined herein shall be construed in accordance with GAAP.  The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  All references to Articles, Sections and Exhibits shall be deemed references to Articles and Sections of, and Exhibits to, this Lease unless the context shall otherwise require.

SECTION 1.3                                              Attachments .

All of the attachments to this Lease, as well as all drawings and documents prepared pursuant thereto, are incorporated herein and shall be deemed to be a part hereof for all purposes.

ARTICLE II
AGREEMENT; DEMISE

SECTION 2.1                                              Agreement .

This Lease shall be effective on the date hereof as a valid and binding agreement and contract between Landlord and Tenant.

SECTION 2.2                                              Demise .

Landlord hereby leases, rents and demises to Tenant, and Tenant hereby leases, rents, demises and accepts from Landlord, the Premises on the terms and conditions contained herein.

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ARTICLE III
TERM

SECTION 3.1                                              Initial Term .

(a)                                   The initial term of the Lease shall commence on the Rent Commencement Date and shall terminate on the Initial Termination Date (the “Initial Term”), without the necessity of any notice from either Landlord or Tenant.

(b)                                  Within ten (10) days following the Turnover Date, Landlord shall provide to Tenant copies in Landlord’s possession or control of all available operating manuals and repair and maintenance guidelines and brochures, warranties and guaranties, if any, relating to equipment and machinery serving or comprising a portion of the Improvements.

(c)                                   During the period after the Turnover Date but before the Rent Commencement Date (and concurrent commencement of the Term) all terms and conditions of this Lease shall apply except the payment of Annual Basic Rental.

SECTION 3.2                                              Renewal Terms .

Subject to the terms and conditions of this Section 3.2, Tenant shall have three (3) options (the “Renewal Options”) to extend the term of this Lease, as to not less than the entire Premises, each for four (4) years (the “Renewal Terms”).  The first Renewal Term shall commence upon the date following the date the Initial Term would expire, the second Renewal Term shall commence upon the date following the date the first Renewal Term would expire, and the third Renewal Term shall commence upon the date following the date the second Renewal Term would expire, each upon the same terms and conditions previously applicable, except that (i) the Annual Basic Rental will be adjusted as provided in Section 1.1.3 above, and (ii) Tenant shall have no further extension options.  Each Renewal Option may be validly exercised only by written notice to Landlord from Tenant no later than twelve (12) months prior to commencement of the respective Renewal Term.  If Tenant does not exercise a Renewal Option during the exercise period set forth above in accordance with the provisions hereof, such Renewal Option and each succeeding Renewal Option shall forever terminate and be of no further force and effect.  The Initial Term, together with any exercised Renewal Terms, shall hereinafter be referred to as the “Term”.  Tenant’s right to exercise each of the Renewal Options is subject to the following condition which may be exercised or waived solely by Landlord in Landlord’s sole discretion: both at the time of Tenant’s exercise of each Renewal Option and at the time of the commencement of each Renewal Term, no Event of Default (as defined in Section 15.1 of this Lease) shall exist.

SECTION 3.3                                              Holding Over .

Subject to the terms of Article XIX of this Lease, if Tenant shall be in possession of the Premises after the Lease Termination Date with Landlord’s acquiescence but in the absence of an express agreement extending the Term hereof, the tenancy under this Lease shall become a lease from month to month, terminable by either party upon thirty (30) days prior written notice.  Such tenancy shall be subject to all other conditions, provisions and obligations of this Lease, and the Annual Basic rental shall be equal to 110% of the amount paid during the immediately preceding

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Rental Year.  If Tenant shall be in possession of the Premises after the Lease Termination Date without Landlord’s acquiescence, the tenancy under this Lease shall become a tenancy at will, terminable by either party upon fifteen (15) days prior written notice.  Such tenancy shall be subject to all other conditions, provisions and obligations of this Lease, except that the Annual Basic Rental shall be 125% of the amount paid during the previous Rental Year.  Nothing herein shall be deemed to permit Tenant to retain possession of the Premises without Landlord’s acquiescence after the expiration or termination of this Lease, and Tenant shall be liable for all damage, cost and expense, including consequential damages, that may arise from or be caused by the retention by Tenant of possession after the termination or expiration hereof.

ARTICLE IV
USE

SECTION 4.1                                              Use .

The Premises shall only be used for the Permitted Uses and for no other purpose without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

SECTION 4.2                                              Cessation of Tenant Operations .

Tenant shall have no obligation to operate its or any business from the Premises and shall have the right at any time and from time to time to cease operating its or any business at the Premises. Tenant acknowledges and agrees that its right to cease operating its business at the Premises shall in no way discharge Tenant from its obligations hereunder, including without limitation its obligation to pay Rental and its maintenance obligations set forth in Article IX hereof.

ARTICLE V
RENTAL AND SECURITY DEPOSIT

SECTION 5.1                                              Rentals Payable .

Tenant covenants and agrees to pay to Landlord as Rental for the Premises, the following:

(a)                                   The Annual Basic Rental specified in Section 1.1.3 , commencing on the Rent Commencement Date; plus

(b)                                  all Additional Rental due from time to time hereunder.

SECTION 5.2                                              Annual Basic Rental.

Subject to the terms of Section 9.2(c) of this Lease, Annual Basic Rental shall be paid without prior demand in equal monthly installments in advance, commencing on the Rent Commencement Date, and thereafter on the first day of each full calendar month during the Term of this Lease.  If the Rent Commencement Date or the Lease Termination date occurs on a date other than on the first or the last day of a calendar month, as applicable, then the first and last

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monthly installment of Annual Basic Rental shall be prorated for such fractional calendar month based upon the actual number of days in such month.

SECTION 5.3                                              Payment of Rental .

For all purposes hereof, payment of Rental payable to Landlord hereunder shall be made and effective when, and not until, the Rental funds are received by Landlord and are in a form readily and immediately available for expenditure by Landlord, including without limitation wire transfer to Landlord’s account or checks payable to Landlord after payment thereon by Tenant’s bank upon which the check is drawn.  Tenant shall pay all Rental when due and payable, and, except as provided herein, without any offset, counterclaim, deduction or prior demand therefor. If Tenant shall fail to pay any Rental within five (5) days following the date such payment is due, Tenant shall be obligated to pay a late payment charge (a “Late Fee”) of four percent (4%) of the payment due; provided, however, that if Tenant becomes obligated to pay a Late Fee hereunder, the Late Fee shall be payable on all other Rental payments payable during the same Rental Year if such other Rental payment or payments are not made on the date such other payment or payments are due.  In addition, any Rental or other amounts payable hereunder which is not paid within fifteen (15) days after the same is due, including without limitation money advanced by Landlord on behalf of Tenant to pay amounts payable by Tenant hereunder, shall bear interest at the Default Rate from the first day due until paid.  Any Additional Rental which shall become due shall be payable, unless otherwise expressly provided herein, shall be paid with the next monthly installment of Annual Basic Rental.  Rental and statements required of Tenant shall be paid and delivered to Landlord at its notice address set out in Section 17.1 , or at such other place as Landlord may, from time to time, designate in a notice to Tenant.  Any payment by Tenant or acceptance by Landlord of a check for a lesser amount than shall be due from Tenant to Landlord shall be treated as a payment on account.

SECTION 5.4                                              Security Deposit .

A deposit in the amount of $37,000.00 (the “Security Deposit”) shall be paid by Tenant to Landlord together with the first monthly installment of Annual Basic Rental.  The Security Deposit shall be held by Landlord as security for the full and faithful performance by Tenant of all the terms, covenants and conditions of this Lease by Tenant to be kept and performed, provided that Tenant shall not be excused from payment of any Rental or any other charge herein provided.  If an Event of Default occurs with respect to any provision of this Lease, Landlord may, at its election, use or apply all or any part of the Security Deposit to compensate Landlord for any obligation of Tenant or loss or damage reasonably suffered by Landlord as a result of such Event of Default, including but not limited to, the payment of Rental or other sums due hereunder, the reimbursement of amounts Landlord spends by reason of such Event of Default, and compensation to Landlord for any other loss or damage that Landlord may reasonably suffer by reason of the Event of Default.  If any portion is so used or applied, Tenant, upon demand, will deposit with Landlord an amount sufficient to restore the Security Deposit to its original amount. Landlord shall be required to keep the Security Deposit separate from its general funds and shall invest the Security Deposit in a federally insured deposit account or other account approved by Tenant, and Tenant shall be entitled to all interest earned thereon.  If Tenant materially performs every provision of this Lease, the Security Deposit or the balance thereof will be returned to Tenant within thirty (30) days after the later of (i) the expiration of this Lease

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or any Renewal Terms of this Lease and (ii) delivery of possession of the Premises to Landlord in the condition required under this Lease. In no event will Tenant have the right to apply any part of the Security Deposit to any Rental or other amount payable under this Lease.  In the event of sale or transfer of the Premises, if Landlord transfers the Security Deposit to the vendee or transferee, or if such vendee or transferee assumes in writing liability with respect to such Security Deposit, Landlord shall be considered released by Tenant from all liability for the return of such Security Deposit, and Tenant agrees to look solely to such vendee or transferee for the return of the Security Deposit.  Tenant agrees that this Section 5.4 shall apply to every transfer or assignment to all subsequent vendees or transferees.  The Security Deposit shall not be assigned, transferred or encumbered by Tenant, and any attempt to do so by Tenant shall not be binding upon Landlord.

ARTICLE VI
TAXES

SECTION 6.1                                              Payment by Lessee .

Subject to the provisions of Section 6.2 , in addition to the Annual Basic Rental, Tenant shall pay to the applicable taxing authorities (with a copy or receipt to Landlord), no later than ten (10) days prior to the due date therefor, all real property, personal property and ad valorem taxes and assessments, general and special, water taxes and all other impositions, ordinary and extraordinary of every kind and nature whatsoever, which, during the Term of this Lease, may be levied or assessed against the Premises.  Landlord agrees to deliver copies of statements received by Landlord for all of the foregoing to Tenant within ten (10) days following the date Landlord receives such statements from applicable taxing authorities.  Tenant shall be responsible for all delinquencies and penalties if the same are incurred because Tenant did not timely remit Taxes to the applicable taxing authorities or because the amount Tenant remitted was insufficient to pay all Taxes.  Tenant shall also be solely responsible for and pay within the time provided by law all taxes imposed on its inventory, trade fixtures, apparatus, leasehold improvements (installed by or on behalf of Tenant), equipment and other personal property.  All taxes, assessments and other costs to be paid by Tenant pursuant to this Section 6.1 are collectively referred to herein as the “Taxes”; provided, however, “Taxes” shall in no event include (i) any federal, state, or other tax on the income of Landlord, (ii) any franchise, estate, inheritance or similar tax imposed upon Landlord, (iii) any tax, assessment, recording fee, charge, or other levy imposed in connection with the sale or mortgage of the Premises, or any portion thereof or (iv) any increases in ad valorem taxes resulting from an increase in the appraised or assessed value thereof following the sale or conveyance of the Premises to an Affiliate of Landlord.  To the extent Tenant fails to pay any of the Taxes when required pursuant to the terms hereof, Landlord shall have the right to do so and upon Landlord’s payment thereof the same, together with interest thereon at the Default Rate, shall become Additional Rental hereunder payable by Tenant on demand by Landlord.

SECTION 6.2                                              Proration of Taxes .

During the first and last years of the Term, all such taxes and assessments which shall become payable during each of the calendar or fiscal, tax or assessment years, as applicable, shall be ratably adjusted on a per diem basis between Landlord and Tenant in accordance with the respective portions of such calendar, fiscal, tax, or assessment year.  To the extent permitted

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by applicable law, Tenant may pay any such assessments or taxes in annual installments.  In the event any such assessment shall be payable in a lump sum or on an installment basis, Tenant shall have the sole right to elect the basis of payment.  If Tenant shall elect to pay any such assessment on the installment basis, then Tenant shall pay only those installments which shall become due and payable during the Term.  Any such installments due and payable in the years in which this Lease commences and terminates shall be prorated proportionally.

SECTION 6.3                                              Taxes on Rental .

In addition to the Taxes payable by Tenant pursuant to Section 6.1 above, Tenant shall pay to the appropriate agency any and all sales, excise and other taxes (not including, however, Landlord’s income taxes) levied, imposed or assessed by the State of North Carolina or any political subdivision thereof or other taxing authority upon any Rental payable hereunder, except to the extent the same are in substitution for income taxes.

SECTION 6.4                                              Tenant’s Right to Contest Taxes .

Tenant shall have the right to participate in all negotiations of tax assessments.  Tenant shall have the right, at Tenant’s cost, to contest the validity or the amount of any tax or assessment levied against the Premises by such appellate or other proceedings as may be appropriate in the jurisdiction, and may defer payment of such obligations, pay same under protest, or take such other steps as Tenant may deem appropriate; provided, however, Tenant hereby agrees (i) to indemnify and hold Landlord harmless from and against any cost, expense or liability arising out of such contest, (ii) to pursue any such contest in good faith and (iii) to post any bond or other security required by applicable law or necessary to protect title to the Premises from the remedies of the taxing authority in connection with such contest.  Tenant also agrees to notify Landlord promptly of any such contest and Landlord agrees, at the sole cost of Tenant, to reasonably cooperate in any such contest or proceedings and execute any documents which Landlord may be required to execute in connection with such proceedings.  To the extent based on taxes originally paid by Tenant, Tenant shall be entitled to all refunds paid by taxing authorities resulting from any such contest or otherwise paid to Landlord and attributable to the Term.

ARTICLE VII
PREMISES IMPROVEMENTS

SECTION 7.1                                              Mechanics’ Liens .

No work performed by Tenant pursuant to this Lease, whether in the nature of erection, construction, alteration or repair, shall be deemed to be for the immediate use and benefit of Landlord so that no mechanics’ or other lien shall be allowed against the estate of Landlord by reason of any consent given by Landlord to Tenant to improve the Premises.  Tenant shall pay promptly all persons furnishing labor or materials with respect to any work performed by Tenant or its contractors on or about the Premises. [Jim: Please note the following sentence] Prior to the commencement of any work on the Premises, Tenant shall exercise reasonable efforts to obtain unconditional lien waivers from all suppliers of services or materials to the Premises and shall notify in writing all suppliers of services or materials to the Premises that the improvements

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to be constructed are solely for the benefit of Tenant, that Landlord shall not be liable for any costs related thereto and that the Premises shall not be subject to any mechanics’ or materialmens’ liens in connection therewith.  In the event any mechanics’ or other lien shall at any time be filed against the Premises by reasons of work, labor, services or materials performed or furnished, or alleged to have been performed or furnished, to Tenant or to anyone holding the Premises through or under Tenant, Tenant shall cause the same to be discharged of record or bonded to the satisfaction of Landlord within forty-five (45) days of filing.  If Tenant shall fail to cause such lien forthwith to be so discharged or bonded within forty-five (45) days after being notified of the filing thereof, then, in addition to any other right or remedy of Landlord, Landlord may bond or discharge the same by paying the amount claimed to be due, and the amount so paid by Landlord including reasonable attorneys’ fees incurred by Landlord either defending against such lien or in procuring the discharge of such lien, together with interest thereon at the Default Rate, shall be due and payable by Tenant to Landlord as Additional Rental.

SECTION 7.2                                              Tenant’s Trade Fixtures .

All manufacturing, shipping, warehousing and other trade fixtures, signs, equipment and apparatus owned by Tenant and installed in the Premises by Tenant, at its expense, shall remain the property of Tenant, and Tenant may remove such fixtures and apparatus at any time prior to the expiration of the Term.  Notwithstanding the foregoing, Tenant shall repair any damage to the Premises caused by the removal of its personally, inventory, trade fixtures, equipment and apparatus.

SECTION 7.3                                              Risk of Loss .

Landlord shall bear all risk of loss to the Premises prior to the Turnover Date, except loss caused by Tenant or Tenant’s agents, consultants, contractors, employees, licensees or invitees. In no event shall Tenant be liable to Landlord for any claims for injury to persons or property resulting from or arising out of the Premises prior to the Turnover Date, unless caused by Tenant or Tenant’s agents, consultants, contractors, employees, licensees or invitees.

ARTICLE VIII
OPERATIONS

SECTION 8.1                                              Operations by Tenant .

Throughout the Term, and in addition to the requirements of Section 9.2(b) below, Tenant will at its expense:

(a)                                   keep the inside and outside of all glass in the doors and windows of the Premises clean;

(b)                                  keep all exterior building surfaces of the Premises clean;

(c)                                   replace promptly any cracked or broken glass of the Premises with glass of like grade and quality;

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(d)                                  maintain the Premises in a clean, orderly and sanitary condition and free of insects, rodents, vermin and other pests, including cleaning, repairing or replacing all floor covering, if any, within the Premises as needed;

(e)                                   keep any garbage, trash, rubbish or other refuse in containers within the Premises until removed;

(f)                                     have such garbage, trash, rubbish and refuse removed on a timely basis;

(g)                                  keep all mechanical apparatus free of vibration and noise which may be transmitted beyond the Premises;

(h)                                  keep and maintain all landscaping in a neat and orderly condition; and

(i)                                      comply with all laws, ordinances, rules and regulations of governmental authorities applicable to the Premises and all recommendations of any fire and liability insurance rating organization now or hereafter in effect.

SECTION 8.2                                              Signs and Advertising .

Tenant may modify any existing signs or install new signs used to identify Tenant on the exterior walls of the Premises and/or on the Land, provided Tenant shall be responsible for and repair any damage caused to the Improvements by such modification, installation or the removal of the signs.  Tenant will, at its sole cost and expense, maintain all signs and other advertising devices in good condition and repair at all times.  Tenant may not install any signs on the roof of the Premises, including the flashing, without the express written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  All signs and other advertising on the exterior of the Premises shall be in compliance with all applicable laws, rules and regulations.

ARTICLE IX
IMPROVEMENT ALLOWANCE; MAINTENANCE AND REPAIRS

SECTION 9.1                                              Improvement Allowance .

Landlord shall provide to Tenant a tenant improvement allowance (“Allowance”) in the amount of up to Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00) (“Maximum Allowance”), to be used by Tenant to upfit and upgrade the Premises, in Tenant’s discretion, including, but not limited to, floor coverings, painting, lighting and installation of a compressed air system, but excluding any expenditures for Tenant’s equipment, personal property or trade fixtures; except that that Tenant shall be entitled to install and receive reimbursement from the Allowance for trade fixtures, provided that Tenant agrees in writing at the time of disbursement to Tenant of funds from the Allowance for such trade fixture that Landlord, at Landlord’s option, shall be entitled at the expiration or termination of the Lease to elect whether to retain or cause the Tenant to remove such trade fixtures as provided for non-structural alterations in Section 9.3 hereof (collectively, the “Tenant Improvements”).  All Tenant Improvements funded with the Allowance shall be completed on or before the end of the twelfth (12th) full calendar month of the Term (“Completion Deadline”).  No construction of Tenant Improvements funded with the

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Allowance shall occur after the Completion Deadline.  The Allowance shall be in the form of an abatement of Basic Annual Rental commencing the thirteenth month of the Term in an amount equal to the Allocated Portion of the Qualified Allowance (each as defined below), which shall be deducted from each of the ensuing monthly payments of Basic Annual Rental until the Qualified Allowance is depleted.  The Allocated Portion of the Allowance shall be equal to the amount expended by Tenant for Tenant Improvements completed on or before the Completion Deadline (“Qualified Allowance”) divided by 13.  On or before the Completion Deadline, Tenant shall provide to Landlord copies of receipts for all expenditures to be charged against the Allowance, and Landlord shall be entitled to rely on the accuracy of all invoices and fee statements for labor performed or materials furnished in connection with the Tenant Improvements.  Tenant shall be solely responsible for payment of that portion of a) the costs of Tenant Improvements that exceed the Maximum Allowance and b) the cost of any Tenant Improvements which are completed after the Completion Deadline.  If and to the extent the Tenant Improvements completed during the first Rental Year are less than the Maximum Allowance (the difference between the Maximum Allowance and the cost of the Tenant Improvements completed during the first Rental Year being the “Unused Allowance”), Tenant shall be entitled only to the portion of the Maximum Allowance used during the first Rental Year and shall forfeit and not be entitled to the Unused Allowance.  Tenant shall be responsible for coordinating and managing the Tenant Improvements and shall ensure that all Tenant Improvements are performed in a good and workmanlike manner and in accordance with all applicable laws, rules and codes.

SECTION 9.2                                              Maintenance and Repairs .

(a)                                   To Landlord’s knowledge, as of the Turnover Date and except as disclosed to Tenant in writing, all electrical, mechanical, plumbing, heating, ventilation and air conditioning systems will be in good working order, connected, and providing the services intended.  If within ninety (90) days following the Turnover Date Tenant discovers that any of the foregoing systems were not in good working order, connected and providing the services intended as of the Turnover Date, Tenant shall provide written notice thereof to Landlord, and Landlord shall promptly commence and diligently prosecute to completion the repair or replacement of such systems.  In addition, Landlord shall: (i) repair or replace when reasonably necessary, the roof of the Building (including without limitation the 1983 section of the roof), (ii) commence within three (3) months after the Turnover Date and diligently prosecute to completion the service of the rooftop HVAC units and mechanical room compressors, including belt and filter replacement, so that each is in good working condition; (iii) on or before the Turnover Date, ensure that all restrooms are in good working condition; and (iv) within six (6) months after the Turnover Date, commence and diligently prosecute to completion the removal of all vegetation from, re-sealing and re-striping of all parking lots and re-painting of all automobile stops yellow.  Except as otherwise expressly provided in this Section 9.2 and Sections 10.1, 20.6 and 20.17(d) hereof, Tenant accepts the Premises in their “as is” condition and without warranty of any kind.

During the Term, Landlord will maintain and repair (or replace, if necessary), at its sole cost (except as otherwise provided herein) the roof, load-bearing walls, and foundations of the Premises in a good condition and state of repair, except for casualty and repairs Tenant is obligated to make pursuant to Section 9.2(b).  Tenant agrees to reasonably cooperate in the coordination and supervision of such maintenance and repairs and by Landlord. Landlord shall

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also be responsible for replacement and overlays of driveways and parking lots.  Except as expressly required by this Section 9.2, Landlord shall not be required to furnish any services or facilities or to make any repairs or alterations of any kind in or on the Premises.  Except for the repair and maintenance items specified in Section 9.2(a)(i), (ii), (iii) and (iv), it is an express condition precedent to all obligations of Landlord to repair, maintain or replace any portion of the Premises that Tenant notify Landlord in writing of the need for such maintenance, repair or replacement.

(b)                                  The provisions of this Article IX are subject to the provisions of Article XII and Article XIII hereof.  At all times during the Term of this Lease, Tenant shall keep and maintain all portions of the Premises in a good condition and state of repair, excepting only ordinary wear and tear, and repairs and replacements Landlord is obligated to make pursuant to Section 9.2(a) hereof.  Tenant shall make any and all additions to and all alterations and repairs in, on and about the Premises which may be required by, and shall otherwise observe and comply with, all public laws, ordinances and regulations from time to time applicable to the Premises.  Except for the negligence or willful misconduct of Landlord and without limiting the generality of the foregoing, Tenant will (i) keep the interior and exterior of the Premises, together with all electrical, plumbing, heating, ventilating, air-conditioning, and other mechanical systems and installations therein, and all nonload-bearing walls, in good order and repair, including normal and customary preventive maintenance, and, except as required of Landlord pursuant to Section 9.2(a) hereof, will make all replacements from time to time required at its expense, (ii) maintain the grounds around the Improvements, including the mowing of grass, care of shrubs and general landscaping, (iii) notwithstanding anything herein to the contrary, except for Landlord’s repair obligations and normal wear and tear, repair any damage to the roof, load bearing walls and foundations of the Premises, to the driveways and parking lots and to Building Systems (as defined below) caused or permitted by Tenant or its employees, invitees, contractors and agents and (iv) take no action to invalidate any warranty relating to the roof or any other portion of the Improvements.

The cost of maintenance, repairs and replacements to be performed by Tenant pursuant to this Section 9.2(b) shall be borne by Tenant, except that with respect to the maintenance, repair and replacement of any plumbing, HVAC, mechanical, electrical and fire protection systems existing within the Building as of the Turnover Date (“Premises Systems”), Landlord shall bear the costs thereof to the extent such costs exceed a cumulative total of $10,000.00 per Rental Year (“Tenant’s Annual Systems Cost”).  Any portion of the Tenant’s Annual Systems Cost not expended during any Rental Year shall be carried over and added to the Tenant’s Annual Systems Cost for subsequent Rental Years (such combined total being the “Tenant’s Total Systems Cost”).  In the event the cost of maintenance, repair and replacement of the Premises Systems in any Rental Year exceeds the then-current Tenant’s Total Systems Cost, Landlord shall promptly pay such excess (“Landlord’s Systems Cost”).  At the end of each subsequent Rental Year, Tenant shall repay Landlord for such Landlord’s Systems Cost incurred, in an amount not to exceed the unexpended portion of the Tenant’s Total Systems Cost, if any, for such subsequent Rental Year.  Any such repayment by Tenant to Landlord of Landlord’s Systems Costs incurred shall be made within fifteen (15) days after the end of each subsequent Rental Year until the earlier of full repayment to Landlord or the expiration of the Term (or Renewal Term, if applicable).  If the Term or any Renewal Term expires and Landlord shall not be fully reimbursed, Tenant shall have no further obligation for repayment of any remaining

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balance of Landlord’s Systems Costs.  Tenant and Landlord each acknowledge that any individual maintenance, repair or replacement of a Premises System, the cost of which is equal to or less than $500.00, shall not be included in the $10,000.00 Tenant’s Annual System Costs.

Tenant shall not be entitled to reimbursement from Landlord for maintenance, repair or replacement of a Premises System unless such maintenance, repair or replacement is reasonably necessary and in accordance with prudent and reasonable commercial standards to maintain such systems in good working condition (“Qualified Maintenance”).  For any maintenance, repair or replacement to any Premises Systems which Tenant intends to include in the $10,000.00 Tenant’s Annual System Costs, Tenant shall deliver to Landlord written notice thereof, together with a reasonably detailed description (or plans and specifications, if available) of such maintenance, repairs or replacements.  Landlord shall have twenty (20) days following the date of receipt of such notice and description (or plans and specifications) to notify Tenant in writing whether Landlord agrees that the proposed maintenance, repair or replacement constitutes Qualified Maintenance.  If Landlord fails to timely provide such notice, the improvements shall be deemed Qualified Maintenance.  If Landlord timely objects to all or any portion of the maintenance, repair or replacement as being Qualified Maintenance (“Disapproval Notice”), and if Landlord and Tenant cannot agree within ten (10) days after receipt by Tenant of the Disapproval Notice regarding whether the improvements constitute Qualified Maintenance, Tenant shall be entitled, within ninety (90) days after the expiration of such (10) day period, to commence arbitration to determine whether the maintenance, repairs or replacement constitutes Qualified Maintenance.  The arbitration shall be conducted under the Commercial Arbitration Rules of the American Arbitration Association.

(c)                                   Tenant will surrender the Premises at the expiration of the Term or at such other time as it may vacate the Premises in as good condition as when received, excepting only ordinary wear and tear, damage by insured casualty and repairs and replacements  Landlord is obligated to make pursuant hereto.  In the event Tenant fails to perform its maintenance and repair obligations as set forth in Section 9.2(b) , Landlord may, but shall not be obligated to, after providing Tenant with thirty (30) days written notice and the right to cure, do so and the cost of same shall be Additional Rental payable to Landlord within thirty (30) days following demand therefor.

(d)                                  Within thirty (30) days following receipt of notice from Tenant to Landlord under Section 9.2(a) that maintenance or repair by Landlord is required, Landlord shall either commence the maintenance, repair or replacement or shall notify Tenant of Landlord’s objections thereto (“Objection Notice”).  If Tenant disagrees with Landlord’s object