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OFFICE LEASE

Office Lease Agreement

OFFICE LEASE | Document Parties: JOHN B SANFILIPPO & SON, INC | PANASONIC CORPORATION You are currently viewing:
This Office Lease Agreement involves

JOHN B SANFILIPPO & SON, INC | PANASONIC CORPORATION

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Title: OFFICE LEASE
Date: 4/19/2005

OFFICE LEASE, Parties: john b sanfilippo & son  inc , panasonic corporation
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EXHIBIT 10.1

OFFICE LEASE

1707 NORTH RANDALL ROAD

ELGIN, ILLINOIS

DATE: April 15, 2005

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TABLE OF CONTENTS

             
          Introductory Article        
ARTICLE 1
  DEMISED PREMISES; TERM     2  
ARTICLE 2
  RENT     3  
ARTICLE 3
  RENT ADJUSTMENTS     3  
ARTICLE 4
  USE     7  
ARTICLE 5
  SERVICES     9  
ARTICLE 6
  POSSESSION     12  
ARTICLE 7
  CONDITION OF PREMISES     12  
ARTICLE 8
  REPAIRS     13  
ARTICLE 9
  ALTERATIONS     13  
ARTICLE 10
  COVENANT AGAINST LIENS     15  
ARTICLE 11
  DAMAGE OR DESTRUCTION BY FIRE OR CASUALTY     15  
ARTICLE 12
  INSURANCE     16  
ARTICLE 13
  DELETED     18  
ARTICLE 14
  CONDEMNATION     18  
ARTICLE 15
  WAIVER OF CLAIMS     19  
ARTICLE 16
  NONWAIVER     19  
ARTICLE 17
  WAIVER OF NOTICE     20  
ARTICLE 18
  LANDLORD’S REMEDIES     20  
ARTICLE 19
  SURRENDER OF POSSESSION     21  
ARTICLE 20
  HOLDING OVER     23  
ARTICLE 21
  COSTS, EXPENSES AND ATTORNEYS’ FEES     23  
ARTICLE 22
  COMPLIANCE WITH LAWS     23  
ARTICLE 23
  CERTAIN RIGHTS RESERVED BY LANDLORD     23  
ARTICLE 24
  ESTOPPEL     25  
ARTICLE 25
  RULES AND REGULATIONS     26  
ARTICLE 26
  PARKING     26  
ARTICLE 27
  ASSIGNMENT AND SUBLETTING     27  
ARTICLE 28
  NOTICE     28  
ARTICLE 29
  DEFAULT UNDER OTHER LEASE     29  
ARTICLE 30
  CONVEYANCE BY LANDLORD     29  
ARTICLE 30
  SUBORDINATION OF LEASE     30  
ARTICLE 32
  BROKERS     30  
ARTICLE 33
  SIGNAGE     30  
ARTICLE 34
  MISCELLANEOUS     31  
ARTICLE 35
  EXCULPATION     33  
ARTICLE 36
  LATE PAYMENT     33  
ARTICLE 37
  COVENANT OF QUIET ENJOYMENT     34  
ARTICLE 38
  OPTIONS TO EXTEND     34  

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ARTICLE 39
  OPTIONS TO EXPAND AND REDUCE PREMISES     35  

EXHIBITS

     
EXHIBIT A
  PLAN OF PREMISES
 
EXHIBIT B
  LEGAL DESCRIPTION OF PROPERTY
 
EXHIBIT C
  BUILDING RULES AND REGULATIONS

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OFFICE LEASE

     THIS OFFICE LEASE, made as of April15, 2005, between JOHN B. SANFILIPPO & SON, INC., a Delaware corporation (“Landlord”) and PANASONIC CORPORATION OF NORTH AMERICA, a Delaware corporation (“Tenant”).

      WITNESSETH THAT, in consideration of the covenants and agreements hereinafter set forth, Landlord hereby lets to Tenant and Tenant hereby leases from Landlord the Premises described herein, on the following terms and conditions contained in this Lease:

INTRODUCTORY ARTICLE:
BASIC LEASE PROVISIONS

AND ENUMERATION OF EXHIBITS

      A. Basic Lease Provisions. The provisions of this Introductory Article are intended to be in outline form and are addressed in detail in other Articles of this Lease.

LEASE TERM (Also see Article 1): Thirty-six (36) months

COMMENCEMENT DATE (Also see Article 1): April 15, 2005

TERMINATION DATE (Also see Article 1): April 14, 2008

RENTABLE SQUARE FOOTAGE: 164,691 square feet (hereinafter referred to as the
“Premises” and depicted on Exhibit A)

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     RENT (Also see Article 2):

                         
    Rate     Annualized     Monthly Installment  
Period   PSF     Rent     of Rent  
 
Commencement Date -
  $ 9.23     $ 1,535,634.60     $ 127,969.55  
Termination Date
                       

     (The rental amount set forth above shall be hereinafter referred to as “Rent”.)

     TENANT’S PROPORTIONATE SHARE (Also see Article 3): 41.47%

     ADDITIONAL BROKER (Also see Article 32): Paine Wetzel Associates, Inc.

      B. Enumeration of Exhibits. The following exhibits and schedules are attached hereto and incorporated herein by this reference, as though set forth in full herein:

     
EXHIBIT A
  Plan of Premises.
 
   
EXHIBIT B
  Legal Description of Property
 
   
EXHIBIT C
  Rules and Regulations
 
   
SCHEDULE I
  Removable Equipment

ARTICLE 1

DEMISED PREMISES; TERM

     Landlord does hereby demise and lease to Tenant, and Tenant hereby accepts, that certain space as shown on the plan attached hereto and made a part hereof as Exhibit A, located on a portion of the first and second floors and consisting of 164,691 rentable square feet (the “Premises”) in the building known as 1707 North Randall Road (the “Building”), situated on certain property (including all easements appurtenant thereto) in Elgin, Illinois (the “Property”) as described on Exhibit B attached hereto for a term commencing on the 15th day of April, 2005 and ending on the 14 th day of April, 2008 (the “Term”), unless sooner terminated or extended as provided herein, subject to the terms, covenants, and agreements herein contained.

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ARTICLE 2

RENT

     Tenant shall pay to Landlord or Landlord’s agent at the office of Landlord or at such other place as Landlord may from time to time designate, monthly Rent in the amount set forth in the Introductory Article, payable in advance on the first day of each and every calendar month during the Term. If the Term commences on a day other than the first day of a calendar month, or ends on a day other than the last day of a calendar month, then the Rent for such fractional month shall be prorated on the basis of 1/365th of the annual Rent for each day of such fractional month. Rent shall be payable without any prior notice or demand therefor and without any deductions or set-offs whatsoever, except as expressly set forth herein. The obligation for the timely and full payment of Rent and additional Rent (defined herein) is independent of all the obligations of Landlord under this Lease, and no offset, deduction or setoff shall be allowed or permitted unless otherwise specifically provided for in this Lease.

ARTICLE 3

RENT ADJUSTMENTS

     Landlord and Tenant agree that the following rent adjustments described below shall be made with respect to each calendar year of the Term after the Base Year commencing with the calendar year 2008, or portion thereof, including the calendar year in which the Lease terminates. The Base Year for purposes of calculating Tenant’s rent adjustments shall be the year 2007:

     (A) Tenant shall pay to Landlord as additional Rent an amount equal to Tenant’s Proportionate Share of the amount of the increases in Ownership Taxes payable by Landlord for each calendar year of the Term over the Base Year. Tenant’s Proportionate Share of such Ownership Taxes is agreed to be as set forth in Introductory Article A, being the percentage calculated by dividing the rentable area contained in the Premises (164,691) by the rentable area of the Building (397,085).

     Ownership Taxes shall mean all taxes and assessments of every kind and nature which Landlord shall be obligated to pay with respect to any calendar year or portion thereof during the Term, regardless of when such taxes or assessments are payable, because of or in any way connected with the ownership, leasing, and operation of the Building and the Property subject to the following:

     (i) the amount of ad valorem real and personal property taxes against Landlord’s real and personal property to be included in Ownership Taxes shall be the amount payable with respect to such calendar year, notwithstanding that such taxes are payable in a later calendar year. The amount of any tax refunds received by Landlord with respect to Ownership Taxes payable hereunder shall be deducted from such Ownership Taxes regardless of when received by Landlord, less the Landlord’s cost of obtaining any such reduction or refund;

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     (ii) the amount of special taxes and special assessments to be included shall be limited to the amount of the installments (plus any interest, other than penalty interest, payable thereon) of such special tax or special assessment payable during the calendar year in respect of which Ownership Taxes are being determined;

     (iii) the amount of any tax or excise levied by the State of Illinois or the City of Elgin, any political subdivision of either, or any other taxing body, on rents or other income from the Property (or the value of the leases thereon) to be included shall not be greater than the amount which would have been payable on account of such tax or excise by Landlord during the calendar year in respect of which Ownership Taxes are being determined had the income received by Landlord from the Building been the sole taxable income of Landlord for such calendar year;

     (iv) there shall be excluded from Ownership Taxes all income, excess profits taxes, franchise, capital stock, and inheritance or estate taxes; and

     (v) notwithstanding anything set forth herein to the contrary, in the event the Building and a reasonable allocation of land value are not taxed separately and tax bills for Ownership Taxes payable hereunder include such taxes for the entire Property, Ownership Taxes payable with respect to the Premises shall be determined as hereinafter set forth. Such real estate tax bill or bills for the entire Property as described above shall be allocated to the Building and the existing warehouse/industrial building located on the Property (the “Industrial Building”) per rentable square foot on the basis of the total rentable square feet in the Industrial Building and double the total rentable square feet in the Building (the “Property Allocation”). For example, if the Building had one hundred (100) rentable square feet and the Industrial Building had two hundred (200) rentable square feet, each would be allocated an equal one-half of such taxes. Tenant will then be obligated to pay Tenant’s Proportionate Share of such Ownership Taxes allocated to the Building in accordance with the other terms and provisions of this Section 3(A). In no event shall Tenant be required to pay any part of real estate taxes and assessments imposed as a result of any expansion by Landlord of the Building or the Industrial Building or the construction of new improvements on the Property and any such taxes shall be excluded from any computation to be made hereunder.

     (B) Tenant shall pay to Landlord as additional Rent an amount equal to Tenant’s Proportionate Share of the amount of the increases in Operating Expenses for each calendar year of the Term after the Base Year over the Base Year. Tenant’s Proportionate Share of such Operating Expenses is agreed to be 41.47% (calculated as set forth in Article 3(A) herein).

     Operating Expenses shall mean all reasonable and customary expenses, incurred or paid on behalf of Landlord for the ownership, management, operation, maintenance and repair of, and necessary replacements in, the Building and the Property which, in accordance with generally accepted accounting practice as applied to the operation and maintenance of office buildings, are properly chargeable to the ownership, management, operation, maintenance and repair of, and necessary replacements in, the Building. Operating Expenses include, without limitation and except

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as limited elsewhere in this Article, management fees, landscaping, the cost of up to two (2) window washings in any year, scavenger service, maintenance or repair of the roof, façade, parking lot, walkways, detention areas and of any heating, ventilation and air conditioning equipment and other Building systems and improvements, non-capital expenditures required under any governmental law or regulation, installation, maintenance and repair of fire safety systems, including sprinkler and smoke detection systems, wages and benefits of janitors, cleaning personnel, engineers and other employees (including the amount of any social security taxes, unemployment insurance contributions and “fringe benefits”), insurance premiums, fuel costs and utility costs, legal and accounting expenses, and amortization of the costs of any capital improvement to the Property not excluded as set forth below, with interest at two percent (2%) over the corporate base rate of interest from time to time published by Bank One, Illinois, N.A. on the unamortized amount of such costs. All such capital costs shall be amortized over the shortest of (i) the reasonable life of the capital improvement items, (ii) if applicable, the economic payback period of the items, with the reasonable life/economic payback period and amortization schedule being determined in accordance with sound management accounting principles or (iii) the remaining Term of the Lease. To the extent any item of expense is incurred with respect to the entire Property, such expense shall be allocated to the Building and the Industrial Building in accordance with the Property Allocation, provided, however, no item of expense shall be included in Operating Expenses if it is incurred solely with respect to the Industrial Building or other improvements on the Property other than the Building. Notwithstanding the foregoing, Operating Expenses shall not include:

  (i)   costs of alterations of tenant spaces or space occupied by Landlord or its affiliates;
 
  (ii)   depreciation, interest and principal payments on mortgages, and other debt costs, and rental payments under any superior, underlying or ground lease, if any;
 
  (iii)   costs of capital improvements, except for such costs including interest thereon, as set forth above, where (a) the purpose of such capital improvements is to reduce Operating Expenses, or (b) such capital improvement is required due to any rule, regulation, ordinance or statute of any applicable governmental body not in effect as of the date hereof;
 
  (iv)   real estate brokers’ leasing commissions or compensation;
 
  (v)   payments to affiliates of the Landlord for goods and/or services in excess of what would be paid to non-affiliated parties for such goods and/or services in an arm’s length transaction;
 
  (vi)   costs of other services or work performed for the singular benefit of another tenant or occupant;
 
  (vii)   legal, space planning, construction, building permit and code compliance fees and costs and other expenses incurred in procuring tenants for the Building, preparing space for occupancy or renewing or amending leases with existing tenants or occupants of the Building;

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  (viii)   costs of advertising and public relations and promotional costs and attorneys’ fees associated with the leasing of the Building;
 
  (ix)   any costs, fines or penalties incurred due to the violation by Landlord of any governmental rule or authority (and not caused by Tenant), any negligence of Landlord or its agents or any default by Landlord hereunder;
 
  (x)   any expense for which Landlord is entitled to receive reimbursement from insurance, condemnation awards, other tenants or any other source;
 
  (xi)   costs incurred in connection with the sale, financing, refinancing, mortgaging, or other change of ownership of the Building;
 
  (xii)   costs, fines, interest, penalties, legal fees or costs of litigation incurred due to the late payment of taxes, utility bills and other costs incurred as a result of Landlord’s failure to make such payments when due, so long as Tenant has been timely in the payment of its bills to Landlord;
 
  (xiii)   salaries and wages and other benefits paid to or on behalf of employees above the level of Property Manager;
 
  (xiv)   legal and other expenses incurred in administering or enforcing leases with third parties;
 
  (xv)   cost of window washing in excess of two (2) times per year;
 
  (xvi)   costs of electricity used by other tenants or occupants of the Building; and
 
  (xvii)   costs of repair to and replacement of the Building required because of any casualty damage or eminent domain.

     (C) In order to provide for payments on account of Ownership Taxes and Operating Expenses payable for each calendar year during the Term of this Lease commencing with the calendar year 2008, Tenant agrees, at Landlord’s request, to pay, as additional Rent, Tenant’s Proportionate Share of Ownership Taxes and Operating Expenses due for any such calendar year, as reasonably estimated by Landlord and set forth in a reasonably detailed budget delivered no later than November 30 of the prior calendar year, in twelve (12) monthly installments, each in an amount equal to 1/12th of Tenant’s Proportionate Share commencing on the first day of the succeeding January, commencing January 1, 2008. If, for whatever reason, the detailed budget for any given year beginning 2009 is not forthcoming, Tenant shall continue to pay under the previous year’s budget until such time as the applicable budget has been prepared and delivered to Tenant. If, as finally determined in the succeeding calendar year at the time of delivery of the annual statements provided for in subparagraph (D) hereof, Tenant’s Proportionate Share of Operating Expenses or Ownership Taxes shall be greater than or be less than the aggregate of all installments so paid on

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account to the Landlord (and which are applicable to such calendar year) prior to receipt of an invoice from Landlord, then Tenant within thirty (30) days of such invoice shall pay to Landlord the amount of such underpayment, or the Landlord shall credit Tenant for the amount of such overpayment, or, in the case of the last calendar year, pay to Tenant the amount of such overpayment within thirty (30) days, as the case may be.

     (D) Landlord shall deliver to Tenant within ninety (90) days after the close of each applicable calendar year (including the calendar year in which this Lease terminates), a statement containing the amount of the Operating Expenses for such calendar year. Landlord shall deliver to Tenant within ten (10) days after Landlord’s receipt for the final bill for Ownership Taxes for the prior calendar year (including the year in which the Lease terminates) a statement containing Ownership Taxes for such calendar year. Failure or delay in delivering any such statement or invoice, or failure or delay in computing the Rent adjustments pursuant to this Article 3, shall not be deemed a waiver by Landlord of its right to deliver such items nor shall any such failure or delay be deemed a release of Tenant’s obligations with respect to any such statement or invoice, or constitute a default hereunder. All Rent adjustments payable hereunder shall be made without any deductions or set-offs whatsoever except as expressly set forth herein.

     (E) The obligation of the Tenant with respect to the payment of Rent and Rent adjustments due hereunder and the obligation of Landlord with respect to the determination of Rent adjustments and refund of overpayments thereof shall survive the expiration or termination of this Lease. Any payment, refund, or credit made pursuant to this Article shall be made without prejudice to any right of the Landlord to correct any items as billed pursuant to the provisions hereof. In the event that this Lease shall have been in effect for less than the full calendar year immediately preceding Tenant’s receipt of the invoices provided for in subparagraphs (C) and (D) hereof, the Rent adjustment shall be pro rata. In no event shall any Rent adjustment result in a decrease in the Rent payable hereunder.

     (F) Landlord shall maintain books and records showing Ownership Taxes and Operating Expenses in accordance with generally accepted accounting principles as applied to the real estate industry, which are consistently applied (including, without limitation, as to categories of expenses incurred in the Base Year), and its customary management practices. Tenant or its representative shall have the right to examine Landlord’s books and records showing Ownership Taxes and Operating Expenses upon reasonable prior notice provided to Landlord, during Landlord’s normal business hours at Landlord’s normal place of business at any time within ninety (90) days following the furnishing by Landlord to Tenant of Landlord’s statement provided for in Section 3(D) above. Unless, within ninety (90) days of receipt of any such Landlord’s statement, Tenant shall provide Landlord with notice of its intention to inspect Landlord’s books and records pursuant to this Section and provide Landlord with a written statement of its objection to any item in such Landlord’s statement, Landlord’s statement shall be considered as final and conclusively binding on Tenant.

ARTICLE 4

USE

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     (A) Tenant may use and occupy the Premises for general office use and equipment and appliance repair and testing and any other similar lawful purposes, provided, however, such equipment and appliance repair shall be conducted only on the first floor of the Building and such equipment and appliances shall be delivered to the Building only by Tenant’s employees or commercial delivery service through the existing docks servicing the Building. Tenant may also use the Premises for any other similar lawful purposes to those stated above with the prior written approval of Landlord. Tenant shall not use or permit upon the Premises any retail sales or retail warranty service operation or anything that will invalidate any policies of insurance now or hereafter carried on the Building, materially impair the value of the Building and Premises or any part thereof or materially increase the dangers, or pose unreasonable risk of harm, to third parties (on or off of the Premises) arising from activities thereon. Tenant will pay all extra insurance premiums which may be caused by the use which Tenant shall make of the Premises. Tenant will not in any manner deface or injure the Building or any part thereof or overload the floors of the Premises. Tenant will not do anything or permit anything to be done upon the Premises in any way tending to create a public or private nuisance, or tending to disturb any other tenant in the Building or the occupants of neighboring property or tending to injure the reputation of the Building or commit waste thereon. Tenant will promptly and fully comply with all governmental, health and police requirements and regulations respecting its use of the Premises. Tenant will not use the Premises for lodging or sleeping purposes or for any immoral or illegal purposes. Tenant shall not conduct nor permit to be conducted on the Premises any business which is contrary to any of the laws of the United States of America or of the State of Illinois or which is contrary to the ordinances of the City of Elgin. Tenant shall not at any time manufacture, sell, or give away, and shall not at any time permit the manufacture, sale, or gift of any spirituous, fermented, intoxicating or alcoholic liquors or controlled substances on the Premises, except that the foregoing shall not be deemed to prohibit the occasional use of alcoholic beverages for entertainment purposes, so long as Tenant has in full force and effect (and delivered to Landlord a certificate of insurance therefor) a policy of host liquor liability or dram-shop insurance in form and amounts at all times reasonably satisfactory to Landlord. Tenant shall not at any time sell, purchase or give away, or permit the sale, purchase or gift of, food in any form on the Premises, except for coffee service and vending machines for its employees or as otherwise permitted by rules and regulations. The foregoing use prohibitions shall be deemed to apply to any subtenant or assignee of Tenant without requirement of further or additional notice.

     (B) Tenant agrees that it will not use, handle, generate, treat, store or dispose of, or permit the handling, generation, treatment, storage or disposal of any Hazardous Materials in, on, under, around or above the Premises now or at any future time during the Term of the Lease in violation of applicable laws and will indemnify, defend and save Landlord harmless from any and all actions, proceedings, claims, costs, expenses and losses of any kind, including, but not limited to, those arising from injury to any person, including death, damage to or loss of use or value of real or personal property, and costs of investigation and cleanup arising as a result of the use of Hazardous Materials on the Premises by Tenant or its subtenants and assigns during the Term hereof. The term “Hazardous Materials”, when used herein, shall include, but shall not be limited to, any substances, materials or wastes to the extent quantities thereof are regulated by the City of Elgin or any other local governmental authority, the State of Illinois, or the United States of America because of toxic, flammable, explosive, corrosive, reactive, radioactive or other properties that may be hazardous to human health or the environment, including asbestos and including any materials or substances that

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are listed in the United States Department of Transportation Hazardous Materials Table, as amended, 49 C.F.R. 172.101, or in the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. subsections 9601 et seq., or the Resources Conservation and Recovery Act, as amended, 42 U.S.C. subsections 6901 et seq., or any other applicable governmental regulation imposing liability or standards of conduct concerning any hazardous, toxic or dangerous substances, waste or material, now or hereafter in effect. Tenant does hereby indemnify, defend and hold harmless the Landlord and its agents and their respective officers, directors, beneficiaries, shareholders, partners, agents and employees and Landlord’s lender or lenders holding a mortgage on the Property from all fines, suits, procedures, claims and actions of every kind, and all costs associated therewith (including reasonable attorneys’ and consultants’ fees) arising by, through or under Tenant, its agents, subtenants, assigns, employees, contractors, servants and invitees and out of or in any way connected with any deposit, spill, discharge or other release of Hazardous Materials that occurs during the Term of this Lease, at or from the Premises, or which arises at any time from Tenant’s use or occupancy of the Premises, or from Tenant’s failure to provide all information, make all submissions, and take all steps required by all applicable governmental authorities. Landlord agrees and acknowledges that the foregoing indemnity by Tenant does not apply to any liability arising from the acts or omissions of Landlord or other Tenants or occupants of the Building or the agents or employees of any of the foregoing. Tenant’s obligations and liabilities under this paragraph shall survive the expiration of the Term of this Lease. Tenant acknowledges that it has had ample opportunity to inspect the Premises and perform any environmental assessments it considers appropriate to determine the environmental condition of the Premises, that Tenant has not relied on any representation of the Landlord regarding such condition, and that Tenant has consulted its own experts and independently satisfied itself regarding the environmental condition of the Premises.

ARTICLE 5

SERVICES

     Landlord shall provide, except as otherwise provided herein and subject to applicable government codes, rules, regulations, and guidelines applicable thereto, and further subject to Landlord’s inability to provide due to circumstances beyond Landlord’s reasonable control whether mandatory or voluntary, the following services:

     (A) Air-cooling and heat to provide a temperature condition consistent with office buildings in the northwest suburban Chicago area, daily from 7:00 A.M. to 6:00 P.M. (Saturdays to 1:00 P.M.), Sundays and holidays excepted. Whenever heat-generating machines or equipment installed by Tenant affect the temperature otherwise maintained by Landlord in the Premises, Landlord shall be relieved of responsibility for maintaining the air conditioning standards applicable to the Building, and in such event Tenant shall (1) discontinue use of such heat-generating machines or equipment, or (2) install supplementary air conditioning units in the Premises, the cost, installation, operation and maintenance of which shall be paid by Tenant. Tenant agrees that at all times it will cooperate with Landlord and abide by all reasonable regulations and requirements which Landlord may prescribe for the proper functioning of the ventilating and air conditioning systems.

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     (B) Water for drinking, lavatory and toilet purposes drawn through fixtures installed by the Landlord, or by Tenant with Landlord’s written consent, from regular Building supply at the prevailing temperature. Tenant shall pay Landlord at rates fixed by Landlord for water furnished for any other purpose. Tenant shall not waste or permit the waste of water.

     (C) Janitor service in and about the Premises, Saturdays, Sundays and holidays excepted. Tenant shall not provide any janitor services without Landlord’s written consent and then only subject to supervision of Landlord and at Tenant’s sole responsibility and by a janitor, contractor or employees at all times reasonably satisfactory to Landlord, but not as agent or servant of Landlord.

     (D) Adequate operatorless passenger elevator service at all times and freight elevator service subject to reasonable scheduling by Landlord.

     (E) Electrical service to the Premises. Tenant agrees that if it purchases any lamps, bulbs, ballasts and starters used in the Premises from anyone other than Landlord, all such items shall be of the same type as those used in the Building. Landlord agrees that it shall provide Tenant use of the existing supplemental electrical generator serving the Building reasonably adequate to operate life safety systems such as, but not limited to, emergency lighting and security/fire prevention controls, in the event standard electrical service to the Building becomes unavailable, but Tenant acknowledges and agrees that Landlord shall not be responsible for repairing, replacing or installing any new generator equipment except to the extent required to comply with any applicable ordinances, codes or government regulations.

     (F) Security service including, without limitation, manned security desk in the Building from 6:30 am. to 6:30 p.m. Monday through Saturday, with key card or similar secured entry system at all other times, with Tenant being responsible for the cost of any keys or identification cards necessary for Tenant’s use of such system in excess of four hundred fifty (450) keys or cards (including the keys or cards furnished to Tenant pursuant to the Lease of the Industrial Building by and between Landlord and Tenant).

     (G) Access to (1) the rooftop of the Building and such other parts thereof as may be necessary for the installation and use, at Tenant’s sole cost and expense, of a satellite dish and/or antenna at locations to be agreed upon by the parties, such agreement not to be unreasonably withheld, delayed or conditioned, (2) the Property and the Building as may be necessary for the installation of a cable communications distribution system, at Tenant’s sole cost and expense, at locations to be agreed upon by the parties, such agreement not to be unreasonably withheld, delayed or conditioned, and (3) cabling and conduit and rooftop satellite dishes and antennae now or hereafter installed as may be reasonably necessary in connection with Tenant’s use and occupancy of the Premises, including, without limitation, such reasonable access to all of the foregoing as may be necessary for the repair, maintenance or replacement thereof by Tenant or its agents. Tenant hereby indemnifies and holds Landlord harmless for any and all work conducted pursuant to this subparagraph (G) and agrees to promptly repair the Building to the extent it is damaged by any such work. Tenant shall provide to Landlord the names of the contractors that it employs to conduct such work and shall provide any other information reasonably requested by Landlord including, but not limited to, insurance from the contractors naming Landlord as additional insured

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     (H) Life safety systems, telecommunications equipment and cabling, and natural gas distribution system, all as currently installed on the Building and the Property or upgraded by Landlord.

     (I) Such additional services on such terms and conditions as may be mutually agreed upon by Landlord and Tenant.

     So long as Landlord or any other entity operates a cafeteria, health club, conference center, central mail/package receiving room or other similar amenity in the Building for use by employees of Landlord or any affiliate of Landlord or other tenants of the Building, Landlord agrees that Tenant’s employees shall have full access to such facilities and, if a cost is charged therefor, at the lowest cost offered to any other users thereof. In the event Landlord elects not to operate a cafeteria in the Building, Landlord agrees that Tenant may operate a cafeteria at Tenant’s sole cost and expense and at no additional rent in such location as it is currently located pursuant to an agreement reasonably acceptable to Landlord. If Tenant operates the cafeteria in the Building, Tenant agrees that Landlord’s employees or any other tenant of the Building shall have full access to such facilities and, if a cost is charged therefor, at the lowest cost offered to any other users thereof.

     Tenant agrees that neither Landlord nor any company, firm, or individual operating, maintaining, repairing, managing or supervising the plant or facilities furnishing any of the above services, nor any of their respective agents or employees shall be liable to Tenant, or any of Tenant’s subtenants, assigns, employees, agents, customers or invitees or anyone claiming through, by or under Tenant, for any damages, injuries, losses, expenses, claims or causes of action, because of any interruption, diminution, delay or discontinuance at any time for any reason in the furnishing of any of the above services, except solely if caused by the gross negligence or recklessness of Landlord or its agents; nor shall any such interruption, diminution, delay or discontinuance relieve Tenant from full performance of Tenant’s obligations under this Lease. Notwithstanding the foregoing, in the event that any interruption or discontinuance is caused by the gross negligence or recklessness of Landlord or its agents and such interruption or discontinuance continues beyond ten (10) consecutive business days in the Premises, or any portion thereof, and on account of such interruption or disturbance the Premises becomes substantially untenantable, Rent and additional charges shall abate proportionately for so long as Tenant remains unable to conduct its business in the Premises or such portion thereof. Landlord agrees to use reasonable efforts to restore any such interrupted or discontinued service as soon as reasonably practicable. Landlord shall not be responsible for any interruption or discontinuance described above caused by third parties (other than its agents as set forth above) or by an act of God.

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ARTICLE 6

POSSESSION

     Landlord shall deliver possession of the Premises on the Commencement Date. If Tenant shall enter possession of all or any part of the Premises prior to the date fixed above for the first day of the Term, all of the covenants and conditions of this Lease shall be binding upon the parties hereto in respect of such possession the same as if the first day of the Term had been fixed as of the date when Tenant entered such possession except that Tenant shall not pay Rent for the period prior to the first day of the Term of this Lease.

ARTICLE 7

CONDITION OF PREMISES

     Tenant’s taking possession of any portion of the Premises shall be conclusive evidence as against Tenant that such portion of the Premises were in good order and satisfactory condition when the Tenant took possession. Tenant acknowledges that it owned the Building prior to the commencement of the Term of this Lease, that Tenant has had ample opportunity to inspect the Premises and perform any inspections or assessments it considers appropriate to determine the condition of the Premises, that Tenant has not relied on any representation of Landlord regarding such condition, that Tenant has consulted its own experts and independently satisfied itself regarding the condition of the Premises, and that Tenant has accepted the Premises “ AS-IS, WHERE-IS” with all faults. No promise of the Landlord to alter, remodel, repair or improve the Premises or the Building and no representations respecting the condition of the Premises or the Building have been made by Landlord to Tenant.

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ARTICLE 8

REPAIRS

     Except as may otherwise be provided in Article 11 of this Lease, and subject to the provisions of Article 9 of this Lease, Tenant shall, at its sole cost and expense, keep the Premises in good order, repair and tenantable condition at all times during the Term, ordinary wear and tear excepted, provided, however, that Tenant shall not be required to repair or replace broken or damaged exterior window glass unless such replacement or repair is necessitated by the act, failure to act, or neglect of Tenant, its subtenants, assigns, servants, employees, agents, invitees or guests. If Tenant does not make such repairs and replacements as described above within a reasonable time, Landlord may, but need not, make such repairs and replacements and the costs paid or incurred by Landlord for such repairs and replacements (including Landlord’s overhead and profit, and the cost of general conditions) shall be deemed additional Rent reserved under this Lease due and payable within thirty (30) days after Tenant’s receipt of an itemized invoice and supporting documentation. Landlord may, but shall not be required so to do, enter the Premises at all reasonable times upon prior written notice to Tenant (except in the event of any emergency) to make any repairs, alterations, improvements or additions, including, but not limited to, ducts and all other facilities for heating and air conditioning service, as Landlord shall desire or deem necessary for the safety, maintenance, repair, preservation or improvement of the Building, or as Landlord may be required or requested to do by the City of Elgin or by the order or decree of any court or by any other proper authority.

     In the event Landlord or its agents or contractors shall elect or be required to make repairs, alterations, improvements or additions to the Premises or the Building, Landlord shall be allowed to take into and upon the Premises all material that may be required to make such repairs, alterations, improvements or additions and, during the continuance of any of said work, to temporarily close doors, entryways, public space and corridors in the Building and to interrupt or temporarily suspend any services and facilities without being deemed or held guilty of an eviction of Tenant or for damages to Tenant’s property, business or person, and the Rent reserved herein shall in no way abate while said repairs, alterations, improvements or additions are being made, and Tenant shall not be entitled to maintain any set-off or counterclaim for damages of any kind against Landlord by reason thereof. Landlord may, at its option, make all such repairs, alterations, improvements or additions in and about the Building and the Premises during ordinary business hours, but if Tenant desires to have the same done at any other time, Tenant shall pay for all overtime and additional expenses resulting therefrom. Landlord agrees to use all reasonable efforts to minimize any interference with Tenant’s business operations in the Premises and shall remain liable for its or its agents’ gross negligence.

ARTICLE 9

ALTERATIONS

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     Tenant shall not, without the prior written consent of Landlord in each instance obtained, which consent shall not be unreasonably withheld, delayed or conditioned, make any repairs, replacements, alterations, improvements or additions to the Premises, provided, however, no such consent shall be required with respect to cosmetic alterations or any separate security system for the Premises installed by Tenant, in which case Tenant shall deliver to Landlord all system codes, contact information for the applicable security company, and a copy of any keys to such system. In the event Tenant desires to make any alterations, improvements or additions pursuant to this Article 9, or any repairs or replacements pursuant to Article 8 of this Lease, Tenant shall prior to commencing any such work:

     (a) In the event such work is structural or affects mechanical systems, submit to Landlord for review plans and specifications showing such work in reasonable detail;

     (b) Furnish Landlord with the names and addresses of all contractors and copies of all contracts with such contractors;

     (c) Furnish commercially reasonable certificates of insurance from all contractors performing such work evidencing commercial general liability, automobile liability, employer’s liability and worker’s compensation insurance, the last in statutory amounts; and

     (d) Provide Landlord with copies of all necessary permits evidencing compliance with all ordinances and regulations of the City of Elgin or any department or agency thereof, and with the requirements of all statutes and regulations of the State of Illinois or any department or agency thereof.

     Tenant hereby agrees to protect, defend, indemnify and hold Landlord, the Building and the Property harmless from and against any and all liabilities of every kind and description which may arise out of or in connection with such repairs, replacements, alterations, improvements or additions by Tenant or any subtenant or assign of Tenant.

     Upon completing any of such repairs, replacements, alterations, improvements or additions, Tenant shall furnish Landlord with contractors’ affidavits, sworn statements, full and final waivers of lien and receipted bills covering all labor and material expended and used and, in the event such work is structural or affects mechanical systems or is of a type for which such plans and specifications are customarily prepared, two (2) sets of final as-built plans and specifications. All repairs, replacements, alterations, improvements and additions shall comply with all reasonable insurance requirements and with all ordinances and regulations of the City of Elgin or any department or agency thereof and with the requirements of all statutes and regulations of the State of Illinois or of any department or agency thereof. All repairs, replacements, alterations, improvements and additions shall be constructed in a good and workmanlike manner and only good grades of material shall be used.

     Landlord agrees to inform Tenant at the time any such alterations are approved or, if such approval is not required, upon the request of Tenant, if such alterations will be required to be

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removed upon expiration or early termination hereof. All alterations, improvements, additions, repairs, or replacements, whether temporary or permanent in character, including, without limitation, wall coverings, carpeting and other floor coverings, special lighting installations, built-in or attached shelving, cabinetry, and mirrors, made by Landlord or Tenant in or upon the Premises and not required to the removed as aforesaid shall become Landlord’s property and shall remain upon the Premises at the termination of this Lease by lapse of time or otherwise without compensation to Tenant (excepting only Tenant’s movable office furniture, trade fixtures, office equipment and the equipment listed on Schedule I attached hereto).

ARTICLE 10

COVENANT AGAINST LIENS

     Nothing contained in this Lease shall authorize or empower Tenant to do any act which shall in any way encumber Landlord’s title to the Building, Property or Premises, nor in any way subject Landlord’s title to any claims by way of lien or encumbrance whether claimed by operation of law or by virtue of any expressed or implied contract of Tenant, and any claim to a lien upon the Building, Property or Premises arising from any act or omission of Tenant shall attach only against Tenant’s interest and shall in all respects be subordinate to Landlord’s title to the Building, Property and Premises. If Tenant has not removed or bonded over any such lien or encumbrance within thirty (30) days after written notice to Tenant by Landlord, Landlord may, but shall not be obligated to, pay the amount necessary to remove such lien or encumbrance, without being responsible for making any investigation as to the validity or accuracy thereof, and the amount so paid, together with all costs and expenses (including attorneys’ fees) incurred by Landlord in connection therewith, shall be deemed additional Rent reserved under this Lease due and payable within thirty (30) days after Tenant’s receipt of notice of such payment by Landlord and supporting documentation.

ARTICLE 11

DAMAGE OR DESTRUCTION BY FIRE OR CASUALTY

     (A) If the Premises or any part of the Building shall be damaged by fire or other casualty and if such damage does not render all or a substantial portion of the Premises or the Building untenantable, then, except as expressly hereinafter set forth, Landlord shall proceed to repair and restore the same to its prior existing condition with reasonable promptness, subject to reasonable delays for insurance adjustments and delays caused by matters beyond Landlord’s control. If any such damage renders all or a substantial portion of the Premises or the Building untenantable, Landlord shall, with reasonable promptness after the occurrence of such damage and in good faith, estimate the length of time that will be required to substantially complete the repair and restoration of such damage and shall by notice advise Tenant of such estimate. If it is so estimated that the amount of time required to substantially complete such repair and restoration will exceed one hundred eighty (180) days from the date such damage occurred, then Tenant shall have the right to terminate this Lease as of the date of such damage upon giving notice to Landlord at any time within twenty (20) days after Landlord gives Tenant the notice containing said estimate. Unless this Lease

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is terminated as provided in the preceding sentence, except as expressly hereinafter set forth, Landlord shall proceed with reasonable promptness and all due diligence to repair and restore the Premises, subject to reasonable delays for insurance adjustments and delays caused by matters beyond Landlord’s control, and also subject to zoning laws and building codes then in effect. Landlord shall have no liability to Tenant, and Tenant shall not be entitled to terminate this Lease (except as herein provided) if such repairs and restoration are not in fact completed within the time period estimated by Landlord, as aforesaid, or within said one hundred eighty (180) days, so long as Landlord shall proceed with reasonable promptness and due diligence to complete the same. In addition to the foregoing, Landlord shall have the right to terminate this Lease if a material casualty damages the Premises during the last twelve (12) months of the Term, as it may have been extended, by delivering notice thereof to Tenant within ten (10) days after such casualty, provided, however, in any such event, Tenant shall have the right, in addition to the rights of Tenant under Section 38 below, to elect to extend the Term, or any extension thereof, for the next available Initial Extension Term or the Final Extension Term by delivering written notice of such election to Landlord within twenty (20) days after receipt of Landlord’s notice of termination as described in this sentence, in which event said notice shall be of no force and effect and Landlord shall restore the Premises as set forth herein. Notwithstanding anything to the contrary herein set forth, Tenant shall also have the right to complete the restoration of the Premises or to terminate this Lease in the event the Premises are not substantially restored within two hundred ten (210) days after the date of casualty, except that Tenant shall not have the right to terminate this Lease pursuant to this Article 11 if the damage or destruction was caused by the intentional or negligent act of Tenant, its subtenants, assigns, agents or employees. In the event Tenant elects to complete the restoration of the Premises as set forth above, Landlord agrees to make available to Tenant all insurance proceeds payable in connection therewith.

     (B) In the event any such fire or casualty damage not caused by the intentional or negligent act of Tenant, its agents or employees, renders the Premises substantially untenantable and Tenant is not occupying the Premises and if this Lease shall not be terminated pursuant to the foregoing provisions of this Article 11 by reason of such damage, then Rent shall abate during the period beginning with the date of such damage and ending with the date when Landlord substantially completes its repair and restoration work. Such abatement shall be in an amount bearing the same ratio to the total amount of Rent for such period as the portion of the Premises being repaired and restored by Landlord and not heretofore delivered to Tenant from time to time bears to the entire Premises. In the event of termination of this Lease pursuant to this Article 11, Rent shall be apportioned on a per diem basis and be paid to the date of such fire or other casualty.

     (C) In the event of any such fire or other casualty, and if this Lease is not terminated pursuant to the foregoing provisions of this Lease, Tenant shall repair and restore any portion of alterations, additions or improvements made by or on behalf of Tenant in the Premises.

ARTICLE 12

INSURANCE

     In consideration of the leasing of the Premises at the rental stated in Article 2, Landlord and Tenant agree to provide insurance and allocate the risk of loss as follows:

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          (a) Tenant, at its sole cost and expense but for the mutual benefit of Landlord and Tenant (when used in this Article the term “Landlord” shall include Landlord and its officers, agents, servants and employees, lenders holding a mortgage on th


 
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