EXHIBIT 10.18

 

THIS AGREEMENT made this              14th      day of      June
                    , 2005

 

BETWEEN:

 

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.) a wholly owned subsidiary of
Manulife Financial Corporation, having a local regional office at 1475 E.
Woodfield Road, Suite 108, in the Village Of Schaumburg, Illinois 60173

 

(hereinafter called the “Landlord”)

 

OF THE FIRST PART,

 

— and —

 

Learning Tree International USA, Inc.

A Delaware Corporation

having an office at

  

1501 E. Woodfield Road

    

Suite 105-North

    

Floor 1

in the

  

Village

of

  

Schaumburg, Illinois 60173

 

(hereinafter called the “Tenant”)

 

        OF THE SECOND PART,

 

In consideration of the rents, covenants and agreements hereinafter contained,
the Landlord and Tenant hereby agree as follows:

 

1. LEASED PREMISES

 

Leased Premises

 

The Landlord does demise and lease to the Tenant the premises (the “Leased
Premises”) located in a building (the “Building”) having a municipal address of
1501 E. Woodfield Road, Suite 105-North in the Village of Schaumburg, Illinois
60173 and known as Schaumburg Corporate Center (the Leased Premises, the
Building, together with the lands described in Schedule “A” attached hereto and
present and future improvements, additions and changes thereto being herein
called the “Property”). The Leased Premises is located on the 1st floor and the
approximate location is outlined in heavy black and cross hatched on the plan or
plans marked Schedule(s) “B1” attached hereto. The parties agree that the
Rentable Area of the Leased Premises is 11,019 square feet and has been measured
in accordance with the provisions of Schedule “B” attached hereto.

 

2. TERM

 

Term

 

(a) TO HAVE AND TO HOLD the Leased Premises for and during the term of 10 years
(the “Term”) to be computed from the 1st day of September, 2006 (the
“Commencement Date”), and to be fully complete and ended on the 31st day of
August, 2016 (the “Lease Expiration Date”), unless otherwise terminated.
Reference is made to that certain lease (the “Existing Lease”) between Landlord
and Tenant with respect to certain other space in the Building (the “Existing
Premises”). The term of the Existing Lease shall expire upon commencement of the
Early Occupancy Period (September 1, 2005) as stated in Schedule “K-2”, and
Tenant shall vacate and surrender the Existing Premises no later than 4 weeks
after commencement of the Early Occupancy Period in the condition required by
the Existing Lease upon expiration of the term thereof.

 

Delay in

Occupancy

 

(b) If the Leased Premises or any part thereof are not ready for occupancy
(i.e., meaning that Landlord has not substantially completed Landlord’s Work” as
described in Schedule “F”) on the date of commencement of the Term, no part of
the “Rent” (as hereinafter defined) or only a proportionate part thereof, if
part of the Leased Premises is available for occupancy by Tenant, shall be
payable for the period prior to the date when the entire Leased Premises are
ready for occupancy and the full Rent shall accrue only after such last
mentioned date. The Tenant agrees to accept any such abatement of Rent in full
settlement of all claims which the Tenant might otherwise have by reason of the
Leased Premises not being ready for occupancy on the date of commencement of the
Term, provided that when the Landlord has

 

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completed construction of such part of the Leased Premises as it is obliged
hereunder to construct, the Tenant shall not be entitled to any abatement of
Rent for any delay in occupancy due to the Tenant’s failure or delay to provide
plans or to complete any special installations or other work required for its
purposes or due to any other reason, nor shall the Tenant be entitled to any
abatement of Rent for any delay in occupancy if the Landlord has been unable to
complete construction of the Leased Premises by reason of such failure or delay
by the Tenant. A certificate of the Landlord as to the date the Leased Premises
were ready for occupancy and such construction as the Landlord is obliged to
complete is substantially completed, or as to the date upon which the same would
have been ready for occupancy and completed respectively but for the failure or
delay of the Tenant, shall be conclusive and binding on the Tenant and Rent in
full shall accrue and become payable from the date set out in the said
certificate. Notwithstanding any delay in occupancy, the expiry date of this
Lease shall be extended accordingly.

 

Over-holding

 

(c) If at the expiration of the Term or sooner termination hereof, the Tenant
shall remain in possession without any further written agreement or in
circumstances where a tenancy would thereby be created by implication of law or
otherwise, a tenancy from year to year shall not be created by implication of
law or otherwise, but the Tenant shall be deemed to be a monthly tenant only, at
One Hundred Fifty percent (150%) “Basic Rent” (as hereinafter defined) payable
monthly in advance plus “Additional Rent” (as hereinafter defined) and otherwise
upon and subject to the same terms and conditions as herein contained, excepting
provisions for renewal (if any) and leasehold improvement allowance (if any),
contained herein, and nothing, including the acceptance of any Rent by the
Landlord, for periods other than monthly periods, shall extend this Lease to the
contrary except an agreement in writing between the Landlord and the Tenant and
the Tenant hereby authorizes the Landlord to apply any moneys received from the
Tenant in payment of such monthly Rent. Further, in the event that Tenant
remains in possession after the expiration of this Lease, without Landlord’s
written consent, then Tenant will indemnify Landlord against all damages, losses
and liabilities resulting from any delay in Tenant’s surrendering the Premises,
including, without limitation, claims made by any succeeding tenants founded on
such delay and any reasonable attorney’s fees and costs resulting therefrom.
Notwithstanding the foregoing, in the event that the Tenant shall hold over
after the expiration of the Term and the Landlord shall desire to regain
possession of the Leased Premises promptly at the expiration of the Term, then
the Landlord, at its sole option, may forthwith re-enter and take possession of
the Leased Premises without process, or by any legal process in force, Tenant
hereby expressly waiving any and all notices to cure or vacate or to quit the
Leased Premises (except for those notices specifically provided by law).

 

3. RENT

 

Basic Rent

 

(a) (i) The Tenant shall without demand, deduction or right of offset, except as
specifically set forth in this Lease, pay to the Landlord yearly and every year
during the Term as rental (herein called “Basic Rent”), the sum of One Hundred
Seventy-Three Thousand Five Hundred Forty-Four and 00/100 Dollars ($173,544.00)
of lawful money of the jurisdiction in which the Leased Premises are located, in
equal monthly installments of Fourteen Thousand Four Hundred Sixty-Two and
00/100 Dollars ($14,462.00) each in advance on the first day of each month
during the Term, the first payment to be made on the first day of September,
2006.

 

Increase in

Basic Rent

 

  (ii) Commencing on the 1st day of September, 2007 and continuing until the
31st day of August, 2008, the Basic Rent shall be increased to One Hundred
Seventy-Eight Thousand Seven Hundred Twenty-Eight and 00/100 Dollars
($178,728.00) per annum of lawful money of the jurisdiction in which the Leased
Premises are located payable in equal monthly installments of Fourteen Thousand
Eight Hundred Ninety-Four and 00/100 Dollars ($14,894.00) each in advance on the
first day of each month during the Term, the first payment to be made on the 1st
day of September, 2007.

 

  (iii) Commencing on the 1st day of September, 2008 and continuing until the
31st day of August, 2009, the Basic Rent shall be increased to One Hundred
Eighty-Four Thousand One Hundred Twenty-Eight and 00/100 Dollars ($184,128.00)
per annum of lawful money of the jurisdiction in which the Leased Premises are
located payable in equal monthly installments of Fifteen Thousand Three Hundred
Forty-Four and 00/100 Dollars ($15,344.00) each in advance on the first day of
each month during the Term, the first payment to be made on the 1st day of
September, 2008.

 

  (iv) Commencing on the 1st day of September, 2009 and continuing until the
31st day of August, 2010, the Basic Rent shall be increased to One Hundred
Eighty-Nine Thousand Six Hundred Thirty-Six and 00/100 Dollars ($189,636.00) per
annum of lawful money of the jurisdiction in which the Leased Premises are
located payable in equal monthly installments of Fifteen Thousand Eight Hundred
Three and 00/100 Dollars ($15,803.00) each in advance on the first day of each
month during the Term, the first payment to be made on the 1st day of September,
2009.

 

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  (v) Commencing on the 1st day of September, 2010 and continuing until the 31st
day of August, 2011, the Basic Rent shall be increased to One Hundred
Ninety-Five Thousand Three Hundred Seventy-Two and 00/100 Dollars ($195,372.00)
per annum of lawful money of the jurisdiction in which the Leased Premises are
located payable in equal monthly installments of Sixteen Thousand Two Hundred
Eighty-One and 00/100 Dollars ($16,281.00) each in advance on the first day of
each month during the Term, the first payment to be made on the 1st day of
September, 2010.

 

  (vi) Commencing on the 1st day of September, 2011 and continuing until the
31st day of August, 2012, the Basic Rent shall be increased to Two Hundred One
Thousand Two Hundred Four and 00/100 Dollars ($201,204.00) per annum of lawful
money of the jurisdiction in which the Leased Premises are located payable in
equal monthly installments of Sixteen Thousand Seven Hundred Sixty-Seven and
00/100 Dollars ($16,767.00) each in advance on the first day of each month
during the Term, the first payment to be made on the 1st day of September, 2011.

 

  (vii) Commencing on the 1st day of September, 2012 and continuing until the
31st day of August, 2013, the Basic Rent shall be increased to Two Hundred Seven
Thousand Two Hundred Sixty-Four and 00/100 Dollars ($207,264.00) per annum of
lawful money of the jurisdiction in which the Leased Premises are located
payable in equal monthly installments of Seventeen Thousand Two Hundred
Seventy-Two and 00/100 Dollars ($17,272.00) each in advance on the first day of
each month during the Term, the first payment to be made on the 1st day of
September, 2012.

 

  (viii) Commencing on the 1st day of September, 2013 and continuing until the
31st day of August, 2014, the Basic Rent shall be increased to Two Hundred
Thirteen Thousand Four Hundred Forty-Four and 00/100 Dollars ($213,444.00) per
annum of lawful money of the jurisdiction in which the Leased Premises are
located payable in equal monthly installments of Seventeen Thousand Seven
Hundred Eighty-Seven and 00/100 Dollars ($17,787.00) each in advance on the
first day of each month during the Term, the first payment to be made on the 1st
day of September, 2013.

 

  (ix) Commencing on the 1st day of September, 2014 and continuing until the
31st day of August, 2015, the Basic Rent shall be increased to Two Hundred
Nineteen Thousand Eight Hundred Twenty-Eight and 00/100 Dollars ($219,828.00)
per annum of lawful money of the jurisdiction in which the Leased Premises are
located payable in equal monthly installments of Eighteen Thousand Three Hundred
Nineteen and 00/100 Dollars ($18,319.00) each in advance on the first day of
each month during the Term, the first payment to be made on the 1st day of
September, 2014.

 

  (x) Commencing on the 1st day of September, 2015 and continuing until the 31st
day of August, 2016, the Basic Rent shall be increased to Two Hundred Twenty-Six
Thousand Four Hundred Forty and 00/100 Dollars ($226,440.00) per annum of lawful
money of the jurisdiction in which the Leased Premises are located payable in
equal monthly installments of Eighteen Thousand Eight Hundred Seventy and 00/100
Dollars ($18,870.00) each in advance on the first day of each month during the
Term, the first payment to be made on the 1st day of September, 2015.

 

Additional

Rent

 

(b) The Tenant shall, without deduction or right of offset, except as
specifically set forth in this Lease, pay to the Landlord yearly and every year
during the Term as additional rental (herein called “Additional Rent”).

 

  (i) the amounts of any Taxes payable by the Tenant to the Landlord pursuant to
the provisions of Schedule “C” attached hereto; and

 

  (ii) the amounts required to be paid to the Landlord pursuant to the
provisions of Schedule “D” attached hereto.

 

Payment -

Additional Rent

 

(c) Additional Rent shall be paid and adjusted with reference to a fiscal period
of twelve (12) calendar months (“Fiscal Period”), which shall be a calendar year
unless the Landlord shall from time to time have selected a Fiscal Period which
is not a calendar year by written notice to the Tenant. Payments of Additional
Rent shall be made in equal monthly installments, each in advance on the first
day of each month during the Term.

 

The Landlord shall advise the Tenant in writing of its estimate of the
Additional Rent to be payable by the Tenant during the Fiscal Period (or broken
portion of the Fiscal Period, as the case may be, if applicable at the
commencement or end of the Term or because of a change in Fiscal Period) which
commenced upon

 

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the commencement date of the Term and for each succeeding Fiscal Period or
broken portion thereof which commences during the Term. Such estimate shall in
every case be a reasonable estimate and, if requested by the Tenant, shall be
accompanied by reasonable particulars of the manner in which it was calculated.
The Additional Rent payable by the Tenant shall be paid in equal monthly
installments in advance at the same time as payment of Basic Rent is due
hereunder based on the Landlord’s estimate as aforesaid. From time to time, the
Landlord may re-estimate, on a reasonable basis not more than two times per
year, the amount of Additional Rent for any Fiscal Period or broken portion
thereof, in which case the Landlord shall advise the Tenant in writing of such
re-estimate and fix new equal monthly installments for the remaining balance of
such Fiscal Period or broken portion thereof. After, no later than the 120th day
following the end of each such Fiscal Period or broken portion thereof, the
Landlord shall provide the Tenant with a statement of the actual Additional Rent
payable in respect of such Fiscal Period or broken portion thereof and a
calculation of the amounts by which the Additional Rent payable by the Tenant
exceeds or is less than (as the case may be) the aggregate installments paid by
the Tenant on account of Additional Rent for such Fiscal Period.

 

Within thirty (30) days after the submission of such statement either the Tenant
shall pay to the Landlord any amount by which the amount found payable by the
Tenant with respect to such Fiscal Period or broken portion thereof exceeds the
aggregate of the monthly payments made by it on account thereof during such
Fiscal Period or broken portion thereof, or the Landlord shall pay to the Tenant
any amount by which the amount found payable as aforesaid is less than the
aggregate of such monthly payments.

 

Recovery

of Rent

 

(d) In this Lease “Rent” means all amounts required to be paid by the Tenant
pursuant to this Lease including without limitation Basic Rent and Additional
Rent.

 

Accrual of

Rent

 

(e) Basic Rent and Additional Rent shall be considered as accruing from day to
day, and for an irregular period of less than one year or less than one calendar
month shall be apportioned and adjusted by the Landlord for the Fiscal Periods
of the Landlord in which the tenancy created hereby commences and expires. Where
the calculation of Additional Rent for a period cannot be made until after the
termination of this Lease, the obligation of the Tenant to pay Additional Rent
shall survive the termination hereof and Additional Rent for such period shall
be payable by the Tenant upon demand by the Landlord. If the Term commences or
expires on any day other than the first or the last day of a month, Basic Rent
and Additional Rent for such fraction of a month shall be apportioned and
adjusted as aforesaid and paid by the Tenant on the commencement date of the
Term.

 

Limitations

 

(f) The information set out in statements, documents or other writings setting
out the amount of Additional Rent submitted to the Tenant under or pursuant to
this Lease shall be binding on the Tenant and deemed to be accepted by it and
shall not be subject to amendment for any reason unless the Tenant gives written
notice (the “Dispute Notice”) to the Landlord within sixty (60) days of the
Landlord’s submission of such statement, document, or writing identifying the
statement, document, or writing. The Dispute Notice shall set out in reasonable
detail the reason why such statement, document or writing is in error or
otherwise should not be binding on the Tenant. If the Tenant disputes the amount
of the Additional Rent as aforesaid, and if such dispute is not resolved within
thirty (30) days after the Tenant delivers the Dispute Notice to the Landlord,
then the Landlord shall cause an audited statement of Additional Rent to be
prepared by an independent nationally recognized firm of certified public
accountants. The statement of Additional Rent as prepared by such accountants
shall be final and binding upon the parties hereto and within fifteen (15) days
after delivery of such statement of Additional Rent to the parties by the
accountants the Landlord and Tenant shall readjust Additional Rent as
contemplated by section 3(c). The cost of preparation of such audited statement
shall be paid by the Tenant as Rent unless the amount of Additional Rent payable
by the Tenant as set forth in such audited financial statement is at least 4%
less than the amount of Additional Rent demanded by the Landlord in accordance
with the statement delivered to the Tenant pursuant to section 3(c).

 

4. SECURITY DEPOSIT

 

Security

Deposit

 

Upon Lease execution, Landlord shall refund to Tenant $6,300 of Tenant’s
existing Security Deposit and retain $27,000 of their existing Security Deposit
to be held as a Security Deposit on this Lease, and as a deposit to the Landlord
to stand as security for the payment by the Tenant of any and all present and
future debts and liabilities of the Tenant to the Landlord and for the
performance by the Tenant of all of its obligations arising under or in
connection with this Lease (the “Debts, Liabilities and Obligations”). The
Landlord shall not be required to keep the Security Deposit separate from its
general funds. In the event of

 

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the Landlord disposing of its interest in this Lease, the Landlord shall credit
the Security Deposit to its successor and thereupon shall have no liability to
the Tenant to repay the Security Deposit to the Tenant. Subject to the foregoing
and to the Tenant not being in default under this Lease, the Landlord shall
repay the Security Deposit to the Tenant without interest at the end of the Term
or sooner termination of the Lease provided that all Debts, Liabilities and
Obligations of the Tenant to the Landlord are paid and performed in full,
failing which the Landlord may on notice to the Tenant elect to retain the
Security Deposit and to apply it in reduction of the Debts, Liabilities and
Obligations and the Tenant shall remain fully liable to the Landlord for payment
and performance of the remaining Debts, Liabilities and Obligations.

 

5. GENERAL COVENANTS

 

Landlord’s

Covenant

 

(a) The Landlord covenants with the Tenant:

 

(i) for quiet enjoyment; and

 

(ii) to observe and perform all the covenants and obligations of the Landlord
herein.

 

Tenant’s

Covenant

 

(b) The Tenant covenants with the Landlord:

 

(i) to pay Rent; and

 

(ii) to observe and perform all the covenants and obligations of the Tenant
herein.

 

6. USE AND OCCUPANCY

 

The Tenant covenants with the Landlord:

 

Use

 

(a) not to use the Leased Premises for any purpose other than a training
facility for the conduct of the Tenant’s business which is computer and business
technology-related training and related classes, and incidental and accessory
uses including administration. Tenant shall ensure such use shall be consistent
with the character of the Property and compatible with the other uses of the
Property. In no event shall the Leased Premises be used in any manner that would
violate any declarations, restrictions or encumbrances recorded in the public
records of the County in which the Property is located or the restrictive
covenants set forth in Schedule “J” attached hereto;

 

Waste,

Nuisance, etc.

 

(b) not to commit, or permit, any waste, injury or damage to the Property
including the Leasehold Improvements and any trade fixtures therein, any loading
of the floors thereof in excess of the maximum degree of loading as determined
by the Landlord acting reasonably, any nuisance therein or any use or manner of
use causing unreasonable annoyance to other tenants and occupants of the
Property or to the Landlord;

 

Insurance

Risks

 

(c) not to do, omit or permit to be done or omitted to be done upon the Property
anything which would cause to be increased the Landlord’s cost of insurance or
the costs of insurance of another tenant of the Property against perils as to
which the Landlord or such other tenant has insured or which shall cause any
policy of insurance on the Property to be subject to cancellation;

 

Compliance

with Law

 

(d) to comply at its own expense with all governmental laws, regulations and
requirements pertaining to the occupation and use of the Leased Premises, the
condition of the Leasehold Improvements, trade fixtures, furniture and equipment
installed by or on behalf of the Tenant therein and the making by the Tenant of
any repairs, changes or improvements therein (however, Tenant shall not be
responsible for modification of structural elements of the Building unless the
particular legal requirement therefore is a result of Tenant’s particular use of
the Leased Premises including Tenant’s alterations thereof); Landlord warrants
that the Leased Premises will be in compliance with all Governmental Regulations
on the date this Lease is signed by the parties.

 

Environmental

Compliance

 

  (e) (i) to conduct and maintain its business and operations at the Leased
Premises so as to comply in all respects with common law and with all present
and future applicable federal, provincial/ state, local, municipal, governmental
or quasi-governmental laws, by-laws, rules, regulations, licenses, orders,
guidelines, directives, permits, decisions or requirements concerning
occupational or public health and safety or the environment and any order,
injunction, judgment, declaration, notice or demand issued thereunder,
(“Environmental Laws”); but the Tenant is not obligated to continuously occupy
the Leased Premises during the term.

 

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(i) not to permit or suffer as a result of the positive action of the Tenant (or
failure to control any of Tenant’s agents, contractors and/or employees) any
substance which is hazardous or is prohibited, restricted, regulated or
controlled under any Environmental Law to be present at, on or in the Leased
Premises, except such incidental amounts of substances consistent with general
office use, unless it has received the prior written consent of the Landlord
which consent may be arbitrarily withheld;

 

Rules and Regulations

 

  (f) to observe and perform, and to cause its employees, invitees and others
over whom the Tenant can reasonably be expected to exercise control to observe
and perform, the Rules and Regulations contained in Schedule “E” hereto, and
such further and other reasonable rules and regulations and amendments and
additions therein as may hereafter be made by the Landlord and notified in
writing to the Tenant, except that no change or addition may be made that is
inconsistent with this Lease unless as may be required by governmental
regulation or unless the Tenant consents thereto. The imposition of such Rules
and Regulations shall not create or imply any obligation of the Landlord to
enforce them or create any liability of the Landlord for their non-enforcement
or otherwise.

 

  (g) Tenant shall be permitted to use not more than its prorata share of
parking spaces as described in Paragraph 11 of Schedule “E”, inclusive of any
reserved parking which Landlord and Tenant may subsequently agree upon.

 

7. ASSIGNMENT AND SUB-LETTING

 

No Assignment and Subletting

 

(a) The Tenant covenants that it will not assign this Lease or sublet all or any
part of the Leased Premises or mortgage or encumber this Lease or the Leased
Premises or any part thereof, or suffer or permit the occupation of all or any
part thereof by others (each of which is a “Transfer”) without the prior written
consent of the Landlord, which consent the Landlord covenants not to withhold
unreasonably (i) as to any assignee, subtenant or occupant (the “Transferee”)
who is in a satisfactory financial condition, agrees to use the Leased Premises
for those purposes permitted hereunder, or a general office use, and is
otherwise satisfactory to the Landlord, and (ii) as to any portion of the Leased
Premises which, in the Landlord’s sole judgment, is a proper and rational
division of the Leased Premises, subject to the Landlord’s right of termination
arising under this paragraph. This prohibition against a Transfer shall be
construed to include a prohibition against any Transfer by operation of law.

 

Assignment or Subletting Procedures

 

(b) The Tenant shall not effect a Transfer unless:

 

(i) it shall have received or procured a bona fide written offer to take an
assignment or sublease which is not inconsistent with the Lease, and the
acceptance of which would not breach any provision of this Lease if this
paragraph is complied with and which the Tenant has determined to accept subject
to this paragraph being complied with, and

 

(ii) it shall have first requested and obtained the consent in writing of the
Landlord thereto.

 

Any request for consent shall be in writing and accompanied by a copy of the
offer certified by the Tenant to be true and complete, and the Tenant shall
furnish to the Landlord all information available to the Tenant and reasonably
requested by the Landlord as to the responsibility, financial standing and
business of the proposed Transferee. Notwithstanding the provisions of
sub-paragraph (a), within twenty (20) days after the receipt by the Landlord of
such request for consent and of all information which the Landlord shall have
requested hereunder, the Landlord shall have the right upon written notice of
termination submitted to the Tenant, if the request is to assign this Lease or
sublet the whole of the Leased Premises through the end of the of the Lease
Term, to cancel and terminate this Lease, as of a termination date to be
stipulated in the notice of termination which shall be not less than sixty (60)
days or more than ninety (90) days following the giving of such notice. In such
event the Tenant shall surrender the whole or part, as the case may be, of the
Leased Premises in accordance with such notice of termination and Basic Rent and
Additional Rent shall be apportioned and paid to the date of surrender and, if a
part only of the Leased Premises is surrendered, Basic Rent and Additional Rent
shall after the date of surrender abate proportionately. If such consent shall
be given the Tenant shall affect the Transfer only upon the terms set out in the
offer submitted to the Landlord as aforesaid and not otherwise. Any consent
shall be given without prejudice to the Landlord’s rights under the Lease and
shall be limited to the particular Transfer in respect of which it was given and
shall not be deemed to be an authorization for or consent to any further or
other Transfer.

 

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Excess Transfer Rent

 

(c) In the event the Landlord consents to any Transfer, the Tenant shall pay to
the Landlord, as and when amounts on account are due or paid by the Transferee
to the Tenant, 50% of the excess Transfer rents (hereinafter called the “Excess
Transfer Rent”), if any, as Rent. The Excess Transfer Rent shall be determined
in accordance with the following formula:

 

all gross revenue received by the Tenant from the Transferee and attributable to
the Transfer less:

 

  i) the Rent paid by the Tenant to the Landlord during the term of the
Transfer;

 

  ii) any reasonable and customary out of pocket transaction costs incurred by
the Tenant in connection with such Transfer including attorney’s fees, brokerage
commissions, cash inducements and alteration costs (which transaction costs
shall be amortized on a straight line basis over the term of the Transfer).

 

The Tenant agrees to promptly furnish such information with regard to the Excess
Transfer Rent as the Landlord may request from time to time.

 

Assumption of Obligations

 

(d) No Transfer shall be effective unless the Transferee shall execute an
agreement, assuming the Tenant’s future obligations under this Lease, effective
as of the date of the Transfer on the Landlord’s form, assuming all the
obligations of the Tenant hereunder, and shall have paid to the Landlord its
reasonable fee for processing the Transfer, not to exceed $500 each time a
sublease is executed.

 

Tenant’s Continuing Obligations

 

(e) The Tenant agrees that any consent to a Transfer shall not thereby release
the Tenant of its obligations hereunder but recapture by the Landlord shall
release the Tenant of its obligations first accruing after the date of
recapture.

 

Change of Control

 

(f) If the Tenant or occupant of the Leased Premises at any time is a
corporation, it is acknowledged and agreed that the transfer of the majority of
the issued capital stock of the corporation or the transfer or issuance of any
capital stock of the corporation sufficient to transfer effective voting control
of the corporation to others than the shareholder or shareholders having
effective voting control of the corporation immediately prior to such transfer
or issuance, shall be deemed for all purposes of this paragraph 7 to be a
Transfer and, accordingly, a violation of this paragraph 7 respecting assignment
of this Lease unless the prior written consent of the Landlord is first
obtained, and the Landlord shall have all of the same rights in respect thereof
as though any such transfer or issuing of shares or proposed transferring or
issuing of shares were a Transfer. This subparagraph 7 (f) shall not apply to
the Tenant if and for so long as the Tenant is a corporation whose shares are
listed and traded on any recognized stock exchange in Canada or the United
States.

 

(g) Notwithstanding anything in this Lease to the contrary, the Tenant shall not
be permitted without the written consent of the Landlord to effect a Transfer to
tenants currently occupying space in the Property (See Schedule K).

 

8. REPAIR & DAMAGE

 

Landlord’s Repairs to Building & Property

 

(a) The Landlord covenants with the Tenant to keep in a good and reasonable
state of repair and decoration:

 

  (i) those portions of the Property consisting of the entrance, lobbies,
stairways, corridors, landscaped areas, parking areas, and other facilities from
time to time provided for use in common by the Tenant and other tenants of the
Building or Property, and the exterior portions (including foundations and
roofs) of all buildings and structures from time to time forming part of the
Property and affecting its general appearance; and

 

  (ii) the Building (other than the Leased Premises and premises of other
tenants) including the systems for interior climate control, the elevators and
escalators (if any), entrances, lobbies, stairways, corridors and washrooms from
time to time provided for use in common by the Tenant and other tenants of the
Building or Property and the systems provided for use in common by the Tenant
and other tenants of the Building or Property and the systems provided for
bringing utilities to the Leased Premises.

 

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  (iii) To the best of Landlord’s knowledge based solely on review of Landlord’s
current environmental report covering the Property, there is not present any
hazardous substance in the Leased Premises and/or common areas, which is in
violation of Environmental Laws. Landlord hereby agrees to promptly notify
Tenant upon becoming aware of the presence of any hazardous substance in the
Leased Premises and/or common areas which is in violation of Environmental Laws.

 

In the event that Landlord is notified of the presence of any hazardous
substance in the Leased Premises and/or common areas which is in violation of
Environmental Laws, and such hazardous substance has not been caused, introduced
or permitted to be introduced by Tenant, Landlord shall commence remedial action
with respect thereto as soon as practicable. Landlord shall comply with all
applicable federal, state, or local controls or guidelines relating to the
presence or removal of asbestos-containing materials.

 

In the event Landlord caused or introduced a hazardous substance then in
violation of Environmental Laws, and said cause or introduction was not by other
tenants or third parties, Landlord shall indemnify, defend and hold Tenant
harmless from all damages, costs, losses and expenses (including without
limitation reasonable attorney’s fees) arising from or attributable to any
misrepresentation and/or breach by Landlord of its obligations under this
paragraph. Notwithstanding the foregoing, Landlord shall at its sole cost be
responsible for remediation of hazardous substances as required by Environmental
Laws provided that such hazardous substances were not introduced by Tenant or
any employee, agent or contractor of Tenant.

 

Landlord’s Repairs to the Leased Premises

 

(b) The Landlord covenants with the Tenant to repair, so far as reasonably
feasible, and as expeditiously as reasonably feasible, defects in standard
demising walls or in structural elements, exterior walls of the Building,
suspended ceiling, electrical and mechanical installations standard to the
Building installed by the Landlord in the Leased Premises (if and to the extent
that such defects are sufficient to impair the Tenant’s use of the Leased
Premises while using them in a manner consistent with this Lease) and “Insured
Damage” (as herein defined). The Landlord shall in no event be required to make
repairs to Leasehold Improvements made by the Tenant, or by the Landlord on
behalf of the Tenant or another tenant or to make repairs to wear and tear
within the Leased Premises.

 

Tenant’s Repairs

 

(c) The Tenant covenants with the Landlord to repair, maintain and keep at the
Tenant’s own cost, except insofar as the obligation to repair rests upon the
Landlord pursuant to this paragraph, the Leased Premises, including Leasehold
Improvements in good and substantial repair, reasonable wear and tear excepted,
provided that this obligation shall not extend to structural elements or to
exterior glass or to repairs which the Landlord would be required to make under
this paragraph but for the exclusion therefrom of defects not sufficient to
impair the Tenant’s use of the Leased Premises while using them in a manner
consistent with this Lease. The Landlord may enter the Leased Premises at all
reasonable times upon reasonable verbal notice and view the condition thereof
and the Tenant covenants with the Landlord to repair, maintain and keep the
Leased Premises in good and substantial repair according to notice in writing,
reasonable wear and tear excepted. If the Tenant shall fail to repair as
aforesaid after reasonable notice to do so, the Landlord may effect the repairs
and the Tenant shall pay the reasonable cost thereof to the Landlord on demand.
The Tenant covenants with the Landlord that the Tenant will at the expiration of
the Term or sooner termination thereof peaceably surrender the Leased Premises
and appurtenances in good and substantial repair and condition, reasonable wear
and tear excepted.

 

Indemnification

 

(d) If any part of the Property becomes out of repair, damaged or destroyed
through the negligence of, or misuse by, the Tenant or its employees, agents,
invitees or others under its control, the Tenant shall pay the Landlord on
demand the expense of repairs or replacements, including the Landlord’s
reasonable administration charge thereof, necessitated by such negligence or
misuse.

 

Damage and Destruction

 

(e) It is agreed between the Landlord and the Tenant that:

 

  (i) in the event of damage to the Property or to any part thereof, if in the
reasonable opinion of the Landlord the damage is such that the Leased Premises
or any substantial part thereof is rendered not reasonably capable of use and
occupancy by the Tenant for the purposes of its business for any period of time
in excess of three (3) days, then

 

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  (1) from the date of occurrence of the damage and until the Leased Premises
are again reasonably capable for use and occupancy as aforesaid, the Rent
payable pursuant to this Lease shall abate from time to time in proportion to
the part or parts of the Leased Premises not reasonably capable of such use and
occupancy, and

 

  (2) unless this Lease is terminated as hereinafter provided, the Landlord or
the Tenant as the case may be (according to the nature of the damage and their
respective obligations to repair as provided in sub-paragraphs (a), (b) and (c)
of this paragraph) shall repair such damage with all reasonable diligence, but
to the extent that any part of the Leased Premises is not reasonably capable of
such use and occupancy by reason of damage which the Tenant is obligated to
repair hereunder, any abatement of Rent to which the Tenant would otherwise be
entitled hereunder shall not extend later than the time by which, in the
reasonable opinion of the Landlord, repairs by the Tenant ought to have been
completed with reasonable diligence;

 

  (ii) if the damage is such that the Leased Premises are rendered untenantable,
in whole or in part, and if, in the opinion of the Landlord, the damage cannot
be repaired with reasonable diligence within one hundred and twenty (120) days
from the happening of the damage, then either party may, within thirty (30) days
after the date of the damage, terminate this Lease by notice to the other. Upon
the giving of such notice, this Lease shall be terminated as of the date of the
damage and the Rent and all other payments for which the Tenant is liable under
the terms of this Lease shall be apportioned and paid in full to the date of the
damage. Notwithstanding anything herein to the contrary, in the event Landlord
does not complete its required restoration of the Leased Premises within 270
days after the occurrence of the damage or destruction, Tenant shall be entitled
to terminate this Lease by giving Landlord written notice of intent to terminate
within ten (10) days after expiration of such 270 day period. However, if at any
time Landlord believes it will be unable to complete restoration within such 270
day period, it shall be entitled to notify Tenant in writing of the Landlord’s
estimated time frame for completion of restoration and if Tenant fails to cancel
this Lease by notice of cancellation given to Landlord within 10 days following
Landlord’s written notice, such 270 day period shall automatically be extended
to the last day of Landlord’s estimated time frame;

 

  (iii) the Landlord shall not be required to use plans and specifications and
working drawings used in the original construction of the Building and nothing
in this Section requires the Landlord to rebuild the Building in the condition
and state that existed before the damage, but the Building, as rebuilt, will
have reasonably similar facilities and similar to the quality and class of the
original construction and services to those in the Building prior to the damage;
and

 

  (iv) if premises whether of the Tenant or other tenants of the Property
comprising in the aggregate half or more of the total number of square feet of
rentable office area in the Property or half or more of the total number of
square feet of rentable office area in the Building (as determined by the
Landlord) or portions of the Property which affect access or services essential
thereto, are substantially damaged or destroyed by any cause and if in the
reasonable opinion of the Landlord the damage cannot reasonably be repaired
within one hundred and eighty (180) days after the occurrence thereof, then the
Landlord may, by written notice to the Tenant given within thirty (30) days
after the occurrence of such damage or destruction, terminate this Lease, in
which event neither the Landlord nor the Tenant shall be bound to repair as
provided in sub-paragraphs (a) (b) and (c) of this paragraph, and the Tenant
shall instead deliver up possession of the Leased Premises to the Landlord with
reasonable expedition but in any event within sixty (60) days after delivery of
such notice of termination, and Rent shall be apportioned and paid to the date
upon which possession is so delivered up (but subject to any abatement to which
the Tenant may be entitled under sub-paragraph (e) (i) of this paragraph).

 

9. INSURANCE AND LIABILITY

 

Landlord’s Insurance

 

(a) The Landlord shall take out and keep in force during the Term insurance with
respect to the Property except for the “Leasehold Improvements” (as hereinafter
defined) in the Leased Premises. The insurance to be maintained by the Landlord
shall be in respect of perils and in amounts and on terms and conditions which
from time to time are insurable at a reasonable premium and which are normally
insured by reasonable prudent owners of properties similar to the Property, all
as from time to time determined at reasonable intervals by insurance advisors
selected by the Landlord, and whose opinion shall be conclusive. Unless and
until the insurance advisors shall state that any such perils are not
customarily insured against by owners of properties similar to the Property, the
perils to be insured against by the Landlord shall include,

 

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without limitation, public liability, boilers and machinery, fire and extended
perils and may include at the option of the Landlord losses suffered by the
Landlord in its capacity as Landlord through business interruption. The property
insurance to be maintained by the Landlord shall contain a waiver by the insurer
of any rights of subrogation or indemnity or any other claim over which the
insurer might otherwise be entitled against the Tenant or the agents or
employees of the Tenant.

 

Tenant’s Insurance

 

(b) The Tenant shall take out and keep in force during the Term:

 

  (i) commercial general public liability insurance all on an occurrence basis
with respect to the business carried on in or from the Leased Premises and the
Tenant’s use and occupancy of the Leased Premises and of any other part of the
Property, with coverage for any one occurrence or claim of not less than Three
Million Dollars ($3,000,000) or such other amount as the Landlord may reasonably
require upon not less than one (1) month notice at any time during the Term,
which insurance shall include the Landlord as an additional insured and shall
contain a cross liability clause protecting the Landlord in respect of claims by
the Tenant as if the Landlord were separately insured;

 

  (ii) insurance in respect of fire and such other perils as are from time to
time in the usual extended coverage endorsement covering the Leasehold
Improvements, trade fixtures, and the furniture and equipment in the Leased
Premises for not less than the full replacement cost thereof, and which
insurance shall include the Landlord as an additional insured as the Landlord’s
interest may appear; and

 

  (iii) insurance against such other perils and in such amounts as the Landlord
may from time to time reasonably require upon not less than ninety (90) days’
written notice, such requirement to be made on the basis that the required
insurance is customary at the time for prudent tenants of properties similar to
the Property.

 

All insurance required to be maintained by the Tenant shall be on terms and with
insurers satisfactory to the Landlord. Each policy shall contain: (A) a waiver
by the insurer of any rights of subrogation or indemnity or any other claim over
to which the insurer might otherwise be entitled against the Landlord or the
agents or employees of the Landlord, and (B) an undertaking by the insurer that
no material change adverse to the Landlord or the Tenant will be made, and the
policy will not lapse or be canceled, except after not less than thirty (30)
days’ written notice to the Landlord of the intended change, lapse or
cancellation. The Tenant shall furnish to the Landlord, if and whenever
reasonably requested by it, certificates or other evidences acceptable to the
Landlord as to the insurance from time to time effected by the Tenant and its
renewal or continuation in force, together with evidence as to the method of
determination of full replacement cost of the Tenant’s Leasehold Improvements,
trade fixtures, furniture and equipment, and if the Landlord reasonably
concludes that the full replacement cost has been underestimated, the Tenant
shall forthwith arrange for any consequent increase in coverage required under
sub-paragraph (b). If the Tenant shall fail to take out, renew and keep in force
such insurance, or if the evidences submitted to the Landlord are unacceptable
to the Landlord (or no such evidences are submitted within a reasonable period
after request therefor by the Landlord), then the Landlord may give to the
Tenant written notice requiring compliance with this sub-paragraph and
specifying the respects in which the Tenant is not then in compliance with this
sub-paragraph. If the Tenant does not within forty-eight (48) hours provide
appropriate evidence of compliance with this sub-paragraph, the Landlord may
(but shall not be obligated to) obtain some or all of the additional coverage or
other insurance which the Tenant shall have failed to obtain, without prejudice
to any other rights of the Landlord under this Lease or otherwise, and the
Tenant shall pay all premiums and other reasonable expenses incurred by the
Landlord to the Landlord on demand.

 

WAIVER OF SUBROGATION.

Each of Landlord and Tenant hereby waive any claims it may have against the
other party for property damages that are insurable under special form all-risk
property insurance policies, regardless whether (i) the damages were caused by
the negligence of the other party or (ii) the waiving party actually maintains
such insurance.

 

Limitation of Landlord’s Liability

 

(c) The Tenant agrees that the Landlord shall not be liable for any bodily
injury or death of, or loss or damage to any property belonging to, the Tenant
or its employees, invitees or licensees or any other person in, on or about the
Property unless resulting from the actual willful misconduct or negligence of
the Landlord or its own employees or contractors. In no event shall the Landlord
be liable for any damage, including indirect, special or consequential damages,
which is caused by steam, water, rain or snow or other

 

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thing which may leak into, issue or flow from any part of the Property or from
the pipes or plumbing works, including the sprinkler system (if any) therein or
from any other place or for any damage caused by or attributable to the
condition or arrangement of any electric or other wiring or of sprinkler heads
(if any) or for any such damage caused by anything done or omitted by any other
tenant.

 

Indemnity of Landlord

 

(d) Except with respect to claims or liabilities in respect of any damage which
is Insured Damage to the extent of the cost of repairing such Insured Damage and
claims which are waived pursuant to the Waiver of Subrogation set forth above,
the Tenant agrees to indemnify and save harmless the Landlord in respect of:

 

  (i) all claims for bodily injury or death, property damage or other loss or
damage arising from the conduct of any work or any act or omission of the Tenant
or any assignee, sub-tenant, agent, employee, contractor, invitee or licensee of
the Tenant, and in respect of all costs, expenses and liabilities incurred by
the Landlord in connection with or arising out of all such claims, including the
expenses of any action or proceeding pertaining thereto; and

 

  (ii) any loss, cost, (including, without limitation, lawyers’ fees and
disbursements), expense or damage suffered by the Landlord arising from any
breach by the Tenant of any of its covenants and obligations under this Lease.

 

Definition of “Insured Damage”

 

(e) Except with respect to claims or liabilities in respect of any damage which
is Insured Damage to the extent of the cost of repairing such Insured Damage and
claims which are waived pursuant to the Waiver of Subrogation set forth above,
the Landlord agrees to indemnify and save harmless the Tenant in respect of all
claims resulting from Landlord’s negligence or intentional misconduct.

 

(f) For purposes of this Lease, “Insured Damage” means that part of any damage
occurring to the Property of which the entire cost of repair (or the entire cost
of repair other than deductible amount properly collectable by the Landlord as
part of the Additional Rent) is actually recovered by the Landlord under a
policy or policies of insurance from time to time effected by the Landlord
pursuant to sub-paragraph (a).

 

10. EVENTS OF DEFAULT AND REMEDIES

 

Events of Default and Remedies

 

(a) In the event of the happening of any one of the following events:

 

  (i) the Tenant shall have failed to pay an installment of Rent or any other
amount payable hereunder when due, and such failure shall be continuing for a
period of more than ten (10) days after written notice of such failure to pay
such installment or amount when due (however, Landlord shall not be required to
give more than 2 such notices in any 12 month period, and after giving 2 such
notices in any 12 month period, any subsequent failure in such 12 month period
of Tenant to make a required monetary payment on its due date shall
automatically constitute a default hereunder entitling Landlord to exercise
default remedies without Landlord having given Tenant prior notice of such
monetary default);

 

  (ii) there shall be a default of or with any condition, covenant, agreement or
other obligation on the part of the Tenant to be kept, observed or performed
hereunder (other than the obligation to pay Rent or any other amount of money)
and such default shall be continuing for a period of more than thirty (30) days
after written notice by the Landlord to the Tenant specifying the default and
requiring that it be cured, provided, however, if it cannot be cured within such
time, there shall be no default if Tenant commences cure within such time and
diligently proceeds to complete such cure;

 

  (iii) if any policy of insurance upon the Property or any part thereof from
time to time effected by the Landlord shall be canceled or is about to be
canceled by the insurer by reason of the use or occupation of the Leased
Premises by the Tenant or any assignee, sub-tenant or licensee of the Tenant or
anyone permitted by the Tenant to be upon the Leased Premises and the Tenant
after receipt of notice in writing from the Landlord shall have failed to take
such immediate steps in respect of such use or occupation as shall enable the
Landlord to reinstate or avoid cancellation (as the case may be) of such policy
of insurance;

 

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  (iv) the Leased Premises shall, without the prior written consent of the
Landlord, be used by any other persons than the Tenant or a permitted Transferee
or for any purpose other than that for which they were leased or occupied or by
any persons whose occupancy is prohibited by this Lease;

 

  (v) the Leased Premises shall be vacated or abandoned and Tenant does not pay
Basic Rent and Additional Rent and any other payments due under this Lease;

 

  (vi) any of the goods and chattels of the Tenant located in the Leased
Premises, shall at any time be seized in execution or attachment; or

 

  (vii) the Tenant shall make any assignment for the benefit of creditors or
become bankrupt or insolvent or take the benefit of any statute for bankrupt or
insolvent debtors or, if a corporation, shall take any steps or suffer any order
to be made for its winding-up or other termination of its corporate existence;
or a trustee, receiver or receiver-manager or agent or other like person shall
be appointed of any of the assets of the Tenant;

 

then the Landlord shall have the following rights and remedies all of which are
cumulative and not alternative and not to the exclusion of any other or
additional rights and remedies in law or equity available to the Landlord by
statute or otherwise:

 

  (A) to remedy or attempt to remedy any default of the Tenant, and in so doing
to make any payments due or alleged to be due by the Tenant to third parties and
to enter upon the Leased Premises to do any work or other things therein, and in
such event all reasonable expenses of the Landlord in remedying or attempting to
remedy such default shall be payable by the Tenant to the Landlord on demand;

 

  (B) with respect to unpaid overdue Rent, to the payment by the Tenant of the
Rent and of interest (which said interest shall be deemed included herein in the
term “Rent”) thereon at a rate equal to the lesser of three percent (3%) above
the prime commercial loan rate charged to borrowers having the highest credit
rating from time to time by the Landlord’s principal bank from the date upon
which the same was due until actual payment thereof and the maximum amount
allowed under the laws of the jurisdiction in which the Building is located;

 

  (C) to terminate this Lease forthwith by leaving upon the Leased Premises or
by affixing to an entrance door to the Leased Premises notice terminating the
Lease and to immediately thereafter cease to furnish any services hereunder and
enter into and upon the Leased Premises or any part thereof in the name of the
whole and the same to have again, re-possess and enjoy as of its former estate,
anything in this Lease contained to the contrary notwithstanding;. The Tenant
hereby expressly waives any and all notices (other than those notices
specifically outlined in this Lease) to cure or vacate or to quit the Leased
Premises provided by current or future law;

 

  (D) to enter the Leased Premises as agent of the Tenant and as such agent to
re-let them and to receive the rent therefor and as the agent of the Tenant to
take possession of any furniture or other property thereon owned by Tenant and
upon giving ten (10) days’ written notice to the Tenant to store the same at the
expense and risk of the Tenant or to sell or otherwise dispose of the same at
public or private sale without further notice and to apply the proceeds thereof
and any rent derived from re-letting the Leased Premises upon account of the
Rent due and to become due under this Lease and the Tenant shall be liable to
the Landlord for the deficiency if any subject, however, to any rights or
security interest therein; and

 

  (E) in the event of any breach by the Tenant of any of the covenants or
provisions of this Lease, the Landlord shall have the right of injunction and
the right to invoke any remedy allowed at law or in equity, and mention in this
Lease of any particular remedy shall not preclude the Landlord from any other
remedy at law or in equity. Tenant hereby expressly waives any and all rights of
redemption or to any notice to quit granted by or under any present or future
laws in the event of this Lease being terminated and/or Landlord obtaining
possession of the Leased Premises pursuant to the provisions of this section.

 

Payment of Rent, etc. on Termination

 

(b) Upon the giving by the Landlord of a notice in writing terminating this
Lease under paragraph 10 (a)(C) , above, this Lease and the Term shall
terminate, the Tenant shall remain liable for and shall pay on demand by the
Landlord (i) the full amount of all Rent which would have accrued until the date
on which this Lease would have expired had such termination not occurred, and
any and all damages and expenses incurred by the Landlord in re-entering and
repossessing the Leased Premises or in making good any default

 

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of the Tenant, in making any alterations to the Leased Premises, and any and all
expenses which the Landlord may incur during the occupancy of any new tenant,
less (ii) the net proceeds of any re-letting of the Leased Premises which has
occurred at the time of the aforesaid demand by the Landlord to the Tenant. The
Tenant agrees to pay to the Landlord the difference between items (i) and (ii)
above for the period through and including the date on which this Lease would
have expired if it had not been terminated. The Landlord shall be entitled to
any excess with no credit to the Tenant. The Landlord may, in its sole
discretion, make demand on the Tenant as aforesaid on any one or more occasions,
and any suit brought by the Landlord to enforce collection of such difference
for any one month shall not prejudice the Landlord’s right to enforce the
collection of any difference for any subsequent month or months. In addition to
the foregoing, and without regard to whether this Lease has been terminated,
Tenant shall pay to the Landlord all costs incurred by the Landlord, including
reasonable attorneys’ fees, with respect to any lawsuit or action instituted or
taken by the Landlord to enforce the provisions of this Lease, except in the
event that the Tenant prevails in such suit, as declared in suit. The Tenant’s
liability shall survive the institution of summary proceedings and the issuance
of any warrant hereunder.

 

If the Landlord determines that it is impracticable or extremely difficult to
fix the actual damages, then, as an alternative to the remedy set forth in the
preceding paragraph, the Tenant will pay to the Landlord on demand, liquidated
and agreed final damages for the Tenant’s default calculated in accordance with
this paragraph. Liquidated damages hereunder shall be an amount equal to the
present value at a rate of six percent (6%) per annum of the excess, if any, of
(i) all Rent payable under this Lease from the date of such demand for what
would be the then unexpired Term of this Lease in the absence of such
termination over (ii) the then fair market rental value of the Leased Premises
(as reasonably determined by the Landlord). If any law shall limit the amount
agreed upon, the Landlord shall be entitled to the maximum amount allowable
under such law. Nothing herein shall be construed to affect or prejudice the
Landlord’s right to prove, and claim in full, unpaid rent accrued prior to
termination of this Lease. Upon termination of this Lease and the Term, the
Tenant shall immediately deliver up possession of the Leased Premises to the
Landlord, and the Landlord may forthwith re-enter and take possession of them.

 

(c) The Tenant shall pay to the Landlord on demand all costs and expenses,
including lawyers’ fees, incurred by the Landlord in enforcing any of the
obligations of the Tenant under this Lease, except in the event that the Tenant
prevails in such suit, in which case the Landlord shall pay on demand all costs
and expenses including attorney’s fees incurred by the Tenant.

 

ADDITIONAL PROVISIONS

 

Common Areas

 

11. The Tenant acknowledges and agrees that the common areas of the Property
shall at all times be subject to the exclusive management and control of the
Landlord. Without limiting the generality of the foregoing, the Tenant
specifically acknowledges and agrees that the Landlord may temporarily close or
restrict the use of all or any part of the common areas of the Property in an
emergency, or for security or crowd control purposes, to facilitate tenants
moving in or out of the building, or for the purpose of making repairs,
alterations or renovations. The Landlord agrees not to permanently alter such
common areas in any manner, which would deny reasonable access to the Leased
Premises; provided, however, that Tenant shall at all times have reasonable
access to the Leased Premises subject to emergencies and governmental
requirements. In the event of any such temporary closure or restriction of use
or if changes are made to such common areas by the Landlord, the Landlord shall
not be subject to any liability nor shall the Tenant be entitled to any
compensation or any diminution or abatement of Rent and such closures,
restriction and changes shall not be deemed to be a constructive or actual
eviction or a breach of the Landlord’s covenant for quiet enjoyment.

 

Relocation of

Leased Premises

 

12. (Deleted)

 

Subordination

and Attornment

 

13. This Lease and all rights of the Tenant hereunder are subject and
subordinate to all underlying leases and charges, or mortgages now or hereafter
existing (including charges, and mortgages by way of debenture, note, bond,
deeds of trust and mortgage and all instruments supplemental thereto) which may
now or hereafter affect the Property or any part thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof provided the
lessor, chargee, mortgagee or trustee agrees to accept this Lease if not in
default continuing after exhaustion of all applicable cure periods; and in
recognition of the foregoing the Tenant agrees that it will, whenever requested,
attorn to such lessor, chargee, mortgagee as a tenant upon all the terms of this
Lease. The Tenant agrees to execute promptly whenever requested by the Landlord
or by the holder of any such lease, charge, or mortgage an instrument of
subordination or attornment as may be required of it.

 

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Certificates

 

14. The Tenant agrees that it shall promptly whenever requested by the Landlord
from time to time execute and deliver to the Landlord, and if required by the
Landlord, to any lessor, chargee, or mortgagee (including any trustee) or other
person designated by the Landlord, an acknowledgment in writing as to the then
status of this Lease, including as to whether it is in full force and effect, is
modified or unmodified, confirming the Rent payable hereunder and the state of
the accounts between Landlord and the Tenant, the existence or non-existence of
defaults, and any other matters pertaining to this Lease as to which the
Landlord shall request an acknowledgment.

 

Inspection of and Access to the Leased Premises

 

15. The Landlord shall be permitted at any time and from time to time with
reasonable verbal notice to Tenant to enter and to have its authorized agents,
employees and contractors enter the Leased Premises for the purposes of
inspection, window cleaning, maintenance, providing janitor service, making
repairs, alterations or improvements to the Leased Premises or the Property, or
to have access to utilities and services (including all ducts and access panels
(if any), which the Tenant agrees not to obstruct) and the Tenant shall provide
free and unhampered access for the purpose, and shall not be entitled to
compensation or any diminution or abatement of Rent for any inconvenience,
nuisance or discomfort caused thereby. The Landlord and its authorized agents
and employees shall be permitted entry to the Leased Premises for the purpose of
exhibiting them to prospective tenants during the final six (6) months of the
Term. The Landlord in exercising its rights under this paragraph shall do so to
the extent reasonably necessary so as to minimize interference with the Tenant’s
use and enjoyment of the Leased Premises provided that in an emergency the
Landlord or persons authorized by it may enter the Leased Premises without
regard to minimizing interference.

 

Delay

 

16. Except as herein otherwise expressly provided, if and whenever and to the
extent that either the Landlord or the Tenant shall be prevented, delayed or
restricted in the fulfillment of any obligation hereunder in respect of the
supply or provision of any service or utility, the making of any repair, the
doing of any work or any other thing (other than the payment of moneys required
to be paid by the Tenant to the Landlord hereunder) by reason of:

 

  (a) strikes or work stoppages;

 

  (b) being unable to obtain any material, service, utility or labor required to
fulfill such obligation;

 

  (c) any statute, law or regulation of, or inability to obtain any permission
from any government authority having lawful jurisdiction preventing, delaying or
restricting such fulfillment;

 

                        or

 

  (d) other unavoidable occurrence,

 

the time for fulfillment of such obligation shall be extended during the period
in which such circumstance operates to prevent, delay or restrict the
fulfillment thereof, and the other party to this Lease shall not be entitled to
compensation for any inconvenience, nuisance or discomfort thereby occasioned;
provided that nevertheless the Landlord will use its best efforts to maintain
services essential to the use and enjoyment of the Leased Premises and provided
further that if the Landlord shall be prevented, delayed or restricted in the
fulfillment of any such obligation hereunder by reason of any of the
circumstances set out in sub-paragraph (c) of this paragraph 16 and to fulfill
such obligation could not, in the reasonable opinion of the Landlord, be
completed without substantial additions to or renovations of the Property, the
Landlord may on sixty (60) days’ written notice to the Tenant terminate this
Lease.

 

Waiver

 

17. If either the Landlord or the Tenant shall overlook, excuse, condone or
suffer any default, breach, non-observance, improper compliance or
non-compliance by the other of any obligation hereunder, this shall not operate
as a waiver of such obligation in respect of any continuing or subsequent
default, breach, or non-observance, and no such waiver shall be implied but
shall only be effective if expressed in writing.

 

Sale, Demolition

and Renovation

 

18. (a) The term “Landlord” as used in this Lease, means only the owner for the
time being of the Property, so that in the event of any sale or sales or
transfer or transfers of the Property, or the making of any lease or leases
thereof, or the sale or sales or the transfer or transfers or the assignment or
assignments of any such lease or leases, previous landlords shall be and hereby
are relieved of all covenants and obligations of

 

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Landlord hereunder. It shall be deemed and construed without further agreement
between the parties, or their successors in interest, or between the parties and
the transferee or acquirer, at any such sale, transfer or assignment, or lessee
on the making of any such lease, that the transferee, acquirer or lessee has
assumed and agreed to carry out any and all of the covenants and obligations of
Landlord hereunder to Landlord’s exoneration, and Tenant shall thereafter be
bound to and shall attorn to such transferee, acquirer or lessee, as the case
may be, as Landlord under this Lease;

 

(b) Notwithstanding anything contained in this Lease to the contrary, in the
event the Landlord intends to demolish or to renovate substantially all the
Building following expiration of the initial Term, then the Landlord, upon
giving the Tenant one hundred and eighty (180) days’ written notice, shall have
the right to terminate this Lease and this Lease shall thereupon expire on the
expiration of one hundred and eighty (180) days from the date of the giving of
such notice without compensation of any kind to the Tenant. In no event shall
such termination of this Lease occur prior to expiration of the initial Term.

 

Public Taking

 

19. The Landlord and Tenant shall co-operate, each with the other, in respect of
any Public Taking of the Leased Premises or any part thereof so that the Tenant
may receive the maximum award to which it is entitled in law for relocation
costs and business interruption and so that the Landlord may receive the maximum
award for all other compensation arising from or relating to such Public Taking
(including all compensation for the value of the Tenant’s leasehold interest
subject to the Public Taking) which shall be the property of the Landlord, and
the Tenant’s rights to such compensation are hereby assigned to the Landlord. If
the whole or any part of the Leased Premises is Publicly Taken, as between the
parties hereto, their respective rights and obligations under this Lease shall
continue until the day on which the Public Taking authority takes possession
thereof. If the whole or any part of the Leased Premises is Publicly Taken, the
Landlord shall have the option, to be exercised by written notice to the Tenant,
to terminate this Lease and such termination shall be effective on the day the
Public Taking authority takes possession of the whole or the portion of the
Property Publicly Taken. Rent and all other payments shall be adjusted as of the
date of such termination and the Tenant shall, on the date of such Public
Taking, vacate the Leased Premises and surrender the same to the Landlord, with
the Landlord having the right to re-enter and re-possess the Leased Premises
discharged of this Lease and to remove all persons therefrom. In this paragraph,
the words “Public Taking” shall include expropriation and condemnation and shall
include a sale by the Landlord to an authority with powers of expropriation,
condemnation or taking, in lieu of or under threat of expropriation or taking
and “Publicly Taken” shall have a corresponding meaning.

 

Registration of

Lease

 

20. The Tenant agrees with the Landlord not to register this Lease in any
recording office and not to register notice of this Lease in any form without
the prior written consent of the Landlord. If such consent is provided such
notice of Lease or caveat shall be in such form as the Landlord shall have
approved and upon payment of the Landlord’s reasonable fee for same and all
applicable transfer or recording taxes or charges. The Tenant shall remove and
discharge at Tenant’s expense registration of such a notice or caveat at the
expiry or earlier termination of the Term, and in the event of Tenant’s failure
to so remove or discharge such notice or caveat after ten (10) days’ written
notice by Landlord to Tenant, the Landlord may in the name and on behalf of the
Tenant execute a discharge of such a notice or caveat in order to remove and
discharge such notice of caveat and for the purpose thereof the Tenant hereby
irrevocably constitutes and appoints any officer of the Landlord the true and
lawful attorney of the Tenant.

 

Lease Entire

Agreement

 

21. The Tenant acknowledges that there are no covenants, representations,
warranties, agreements or conditions express or implied, collateral or otherwise
forming part of or in any way affecting or relating to this Lease save as
expressly set out in this Lease and Schedules attached hereto and that this
Lease and such Schedules constitute the entire agreement between the Landlord
and the Tenant and may not be modified except as herein explicitly provided or
except by agreement in writing executed by the Landlord and the Tenant.

 

Notices

 

22. Any notice, advice, document or writing required or contemplated by any
provision hereof shall be given in writing and if to the Landlord, either
delivered personally to an officer of the Landlord or mailed by prepaid mail
addressed to the Landlord at the said local office address of the Landlord as
stated below, and if to the Tenant, either delivered personally to the Tenant
(or to an officer of the Tenant, if a corporation) or mailed by prepaid mail
addressed to the Tenant at the Leased Premises, or if an address of the Tenant
is shown in the description of the Tenant, to such address as stated below.
Every such notice, advice, document or writing shall be deemed to have been
given when delivered or when refused as evidenced by the deliveryman’s records.
The Landlord may from time to time by notice in writing to the Tenant designate
another address as the address to which notices are to be mailed to it, or
specify with greater particularity the address and persons to which such notices
are to be mailed and may require that copies of notices be sent to

 

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an agent designated by it. The Tenant may from time to time by notice in writing
to the Landlord, designate another address as the address to which notices are
to be mailed to it, or specify with greater particularity the address to which
such notices are to be mailed.

 

NOTICES TO LANDLORD:  

John Hancock Life Insurance Company (U.S.A.)

   

c/o Manulife Financial

Chicago Real Estate Office

1475 East Woodfield Road, Suite 108

Schaumburg, IL, 60173

 

Interpretation

 

23. In this Lease, “herein”, “hereof”‘, “hereby”, “hereunder”, “hereto”,
“hereinafter” and similar expressions refer to this Lease and not to any
particular paragraph, clause or other portion thereof, unless there is something
in the subject matter or context inconsistent therewith; and the parties agree
that all of the provisions of this Lease are to be construed as covenants and
agreements as though words importing such covenants and agreements were used in
each separate paragraph hereof, and that should any provision or provisions of
this Lease be illegal or not enforceable it or they shall be considered separate
and severable from the Lease and its remaining provisions shall remain in force
and be binding upon the parties hereto as though the said provision or
provisions had never been included, and further that the captions appearing for
the provisions of this Lease have been inserted as a matter of convenience and
for reference only and in no way define, limit or enlarge the scope or meaning
of this Lease or of any provisions hereof.

 

Extent of Lease

Obligations

 

24. This Lease and everything herein contained shall enure to the benefit of and
be binding upon the respective heirs, executors, administrators, successors,
assigns and other legal representatives, as the case may be, of each and every
of the parties hereto, subject to the granting of consent by the Landlord to any
assignment or sublease, and every reference herein to any party hereto shall
include the heirs, executors, administrators, successors, assigns and other
legal representatives of such party, and where there is more than one tenant or
there is a male or female party the provisions hereof shall be read with all
grammatical changes thereby rendered necessary and all covenants shall be deemed
joint and several.

 

Use and Occupancy Prior

to Term

 

25. If the Tenant shall for any reason use or occupy the Leased Premises in any
way prior to the commencement of the Term without there being an existing lease
between the Landlord and Tenant under which the Tenant has occupied the Leased
Premises, then during such prior use or occupancy the Tenant shall be a Tenant
of the Landlord and shall be subject to the same covenants and agreements in
this Lease mutatis mutandis.

 

Limitation on

Landlord Liability

 

26. Notwithstanding any other provision of this Lease, it is expressly
understood and agreed that the total liability of the Landlord arising out of or
in connection with this Lease, the relationship of the Landlord and the Tenant
hereunder and/or the Tenant’s use of the Leased Premises, shall be limited to
the estate of the Landlord in the Property. No other property or asset of the
Landlord or any partner or owner of the Landlord shall be subject to levy,
execution, or other enforcement proceedings or other judicial process for the
satisfaction of any judgment or any other right or remedy of the Tenant arising
out of or in connection with this Lease, the relationship of the Landlord and
the Tenant hereunder and/or the Tenant’s use of the Leased Premises.

 

Waiver of Jury

Trial

 

27. The Tenant hereby waives trial by jury in any claim, action, proceeding or
counterclaim brought by either party against the other on any matters arising
out of or in any way connected with this Lease, the relationship of the Landlord
and the Tenant, or the Tenant’s use and occupancy of the Leased Premises.

 

Choice of Law

 

28. This Lease shall be governed by the laws of the State in which the Leased
Premises are located. Any litigation between the Landlord and the Tenant
concerning this Lease shall be initiated in the county in which the Leased
Premises are located.

 

Broker

 

29. Landlord and Tenant represent to each other that the only person involved in
this transaction is Leland Middleton, Studley, Inc. (the “Broker”). Landlord
agrees to pay the Broker a leasing commission in accordance with a separate
agreement. The parties shall indemnify each other for their breach of this
paragraph.

 

(03/5/98) OFFICE LEASE (U.S.A.)

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Food Service

 

30. Tenant’s business requires the service of food (prepared off-site) through
caterers. Tenant shall be free to direct that business to the caterer/food
supplier of its selection and shall not be restricted to use any Landlord
designated supplier/caterer. Tenant shall use its Leased Premises to serve and
consume the food and will properly clean up and dispose of garbage.

 

Hazardous

Materials

 

31. The Landlord represents that to the best of the Landlord’s knowledge,
Landlord has not used the Building to treat, store, refine, process, or dispose
of hazardous wastes, hazardous substances, or toxic substances, as those terms
are defined under CERCLA, 43 U.S.C. 9601 et seq., RECR, 52 U.S.C. 6901, et seq.,
or TSCA, 15 U.S.C. 2401 et seq., (hereinafter “Hazardous Materials”) except as
is normal in the operation of a commercial office building, including but not
limited to janitorial supplies and duplicating supplies, and further represents
that to the best of Landlord’s knowledge, there are no releases nor, to the best
of Landlord’s knowledge, have there ever been any releases of such Hazardous
Materials at, on, or under the Building which would give rise to a cleanup or
remediation obligation under any applicable federal, state, or local
environmental law, regulation, or ordinance or under common law. Landlord
further represents that to the best of Landlord’s knowledge the Building does
not contain friable asbestos in any form, including insulation or flooring.

 

Americans with

Disabilities Act

 

32. The Landlord agrees that it will discharge any obligations imposed upon it
as the owner of the Building by the Americans with Disabilities Act. The Tenant
agrees that it will discharge any obligations with respect to the Leased
Premises imposed by the Americans with Disabilities Act.

 

Anti-Terrorism

 

33. Tenant represents and warrants that it is not acting, directly or
indirectly, for or on behalf of any person, group, entity, or nation named by
the United States Treasury Department as a Specially Designated National and
Blocked Person, or for or on behalf of any person, group, entity, or nation
designated in Presidential Executive Order 13224 as a person who commits,
threatens to commit, or supports terrorism; and that it is not engaged in this
Lease directly or indirectly on behalf of, or facilitating this Lease directly
or indirectly on behalf of, any such person, group, entity, or nation. Tenant
agrees to defend, indemnify, and hold harmless Landlord from and against any and
all claims, damages, losses, risks, liabilities, and expenses (including
reasonable attorneys’ fees and costs) arising from or related to any breach of
the foregoing representation and warranty.

 

(03/5/98) OFFICE LEASE (U.S.A.)

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Schedules

 

34. The provisions of the following Schedules attached hereto shall form part of
this Lease as if the same were embodied herein:

 

Schedule “A”

 

-

    

Legal Description of Property

Schedule “B”

 

-

    

Measurement of Rentable Area

Schedule “B-1”

 

-

    

Location of Leased Premises

Schedule “B-2”

 

-

    

Space Plan

Schedule “C”

 

-

    

Taxes Payable by Landlord and Tenant

Schedule “D”

 

-

    

Services and Costs

Schedule “E”

 

-

    

Rules and Regulations

Schedule “F”

 

-

    

Leasehold Improvements

Schedule “G”

 

-

    

Tenant Cash Allowance

Schedule “H”

 

-

    

Option to Renew

Schedule “I”

 

-

    

Not Applicable – not a part of this Lease

Schedule “J”

 

-

    

Restrictive Covenant in other Leases

Schedule “K”

 

-

    

Right to Assign & Sublet

Schedule “K-1”

 

-

    

Option to Cancel

Schedule “K-2”

 

-

    

Occupancy Prior to Commencement of Term

Schedule “L-1”

 

-

    

Cleaning Specifications

Schedule “L-2”

 

-

    

Security

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement. I/We have
authority to bind the corporation.

 

    

Landlord:

     JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)           

 

--------------------------------------------------------------------------------

  

by Signature

 

 

--------------------------------------------------------------------------------

Witness as to signing

by Landlord

  

Title:

 

Bruce R. Pearson

Regional Director

    

Tenant:

   

Witness/Attest

  

LEARNING TREE INTERNATIONAL USA, INC.

A Delaware Corporation

          

 

--------------------------------------------------------------------------------

  

by Signature

 

 

--------------------------------------------------------------------------------

Witness as to signing by   

Title:

 

General Manager, USA

Tenant or officer(s) of Tenant   

Print Name:

 

Donald Berbary

    

by Signature

 

 

--------------------------------------------------------------------------------

    

Title:

 

President & COO

    

Print Name:

 

Nicholas R. Schacht

 

(03/5/98) OFFICE LEASE (U.S.A.)

                INITIAL       .     18   Landlord | Tenant

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SCHEDULE “A”

 

(Legal Description of Property)

 

The East Half of the South West quarter of Section 13, Township 41 North, Range
10, East of the Third Principal Meridian (excepting therefrom the following: the
East 25.00 feet thereof; the North 67.00 feet thereof dedicated for Woodfield
Road per Document 20944554; the West 70.00 feet thereof taken for Meacham Road;
that part thereof lying Southwesterly of the Northeasterly line of Higgins Road
as monumented and occupied) all in Cook County, Illinois

 

Property Name: Schaumburg Corporate Center

 

(03/5/98): File (SCH_A)

  Schedule A             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “B”

 

(Measurement of Rentable Area)

 

The rentable area and usable area of the Premises have been calculated in
accordance with the methods of measurement rentable area and usable area as
described in the Standard Method for Measuring Floor Area in Office Building,
ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association
(BOMA) International.

 

Property Name: Schaumburg Corporate Center

 

(03/5/98): File (SCH_B)

  Schedule B             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “B-1”

 

(Location of Leased Premises cross-hatched)

 

This Schedule is for identification purposes only and is not to be interpreted
as being a representation or warranty on the part of the Landlord as to the
exact location, area, configuration and layout.

 

Property Name: Schaumburg Corporate Center

 

(03/5/98): File (SCH_B-1)

  Schedule B-1             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “B-2”

 

(Interior Plan of Leased Premises cross-hatched)

 

This Schedule is for identification purposes only and is not to be interpreted
as being a representation or warranty on the part of the Landlord as to the
exact location, area, configuration and layout.

 

(03/5/98): File (SCH_B-2)

  Schedule B-2             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “C”

 

Taxes Payable by Landlord and Tenant

 

Tenant’s Taxes

 

  1.  (a)   The Tenant covenants to pay all Tenant’s Taxes, as and when the same
become due and payable. Where any Tenant’s Taxes are payable by the Landlord to
the relevant taxing authorities, the Tenant covenants to pay the amount thereof
to the Landlord.

 

  (b) The Tenant covenants to pay the Landlord the Tenant’s Proportionate Share
of the amount of the Landlord’s Taxes in each Fiscal Period.

 

  (c) The Tenant covenants to pay to the Landlord the Tenant’s Proportionate
Share of the costs and expenses (including legal and other professional fees and
interest and penalties on deferred payments) incurred in good faith by the
Landlord in contesting, resisting or appealing any of the Taxes.

 

Landlord’s Taxes

 

  (d) The Landlord covenants to pay all Landlord’s Taxes subject to the payments
on account of Landlord’s Taxes required to be made by the Tenant elsewhere in
this Lease. The Landlord may appeal any official assessment or the amount of any
Taxes or other taxes based on such assessment and relating to the Property. In
connection with any such appeal, the Landlord may defer payment of any Taxes or
other taxes, as the case may be, payable by it to the extent permitted by law,
and the Tenant shall co-operate with the Landlord and provide the Landlord with
all relevant information reasonably required by the Landlord in connection with
any such appeal.

 

Separate Allocation

 

  (e) In the event that the Landlord is unable to obtain from the taxing
authorities any separate allocation of Landlord’s Taxes, Tenant’s Taxes or
assessment as required by the Landlord to make calculations of Additional Rent
under this Lease, such allocation shall be made by the Landlord acting
reasonably and shall be conclusive.

 

Information

 

  (f) Whenever requested by the Landlord, the Tenant shall deliver to it
receipts for payment of all the Tenant’s Taxes and furnish such other
information in connection therewith as the Landlord may reasonably require.

 

Tax Adjustment

 

  (g) If the Property has not been taxed as a completed and fully occupied
property for any Fiscal Period, the Landlord’s Taxes will be determined by the
Landlord as if the Property had been taxed as a completed property with all
improvements therein fully occupied by commercial tenants for any such Fiscal
Period.

 

Definition

 

  2. In this Lease:

  (a) “Landlord’s Taxes” shall mean the aggregate of all Taxes attributable to
the Property, the Rent or the Landlord in respect thereof and including, any
amounts imposed, assessed, levied or charged in substitution for or in lieu of
any such Taxes, but excluding such taxes as capital gains taxes, corporate
income, profit or excess profit taxes to the extent such taxes are not levied in
lieu of any of the foregoing against the Property or the Landlord in respect
thereof;

 

  (b) “Taxes” shall mean all taxes, rates, duties, levies, fees, charges, local
improvement rates, capital taxes, rental taxes and assessments whatsoever
including fees, rents, and levies for air rights and encroachments on or over
municipal property imposed, assessed, levied or charged by any school,
municipal, regional, state, provincial, federal, parliamentary or other body,
corporation, authority, agency or commission provided that “Taxes” shall not
include any special utility, levies, fees or charges imposed, assessed, levied
or charged which are directly associated with initial construction of the
Property;

 

  (c) “Tenant’s Taxes” shall mean the aggregate of:

 

  (i) all Taxes (whether imposed upon the Landlord or the Tenant) attributable
to the personal property, trade fixtures, business, income, occupancy or sales
of the Tenant or any other occupant of the Leased Premises, and to any Leasehold
Improvements or fixtures installed by or on behalf of the Tenant within the
Leased Premises, and to the use by the Tenant of any of the Property; and

 

(03/5/98) Net Office: File (SCH_CNET)

  Schedule C             INITIAL       .     1   Landlord | Tenant

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  (ii) the amount by which Taxes (whether imposed upon the Landlord or the
Tenant) are increased above the Taxes which would have otherwise been payable as
a result of the Leased Premises or the Tenant or any other occupant of the
Leased Premises being taxed or assessed in support of separate schools; and

 

  (d) “Tenant’s Proportionate Share” shall mean 1.10% subject to adjustment as
determined solely by the Landlord and notified to the Tenant in writing for
physical increases or decreases in the total Rentable Area of the Property
provided that total Rentable Area of the Property and the Rentable Area of the
Leased Premises shall exclude areas designated (whether or not rented) for
parking and for storage. The above referenced proportionate share was calculated
using 1,000,211 rentable square feet as the total area of the Building/Property.
It is agreed and understood that the Landlord has confirmed that the rentable
area and usable area of the Premises and the Property has been calculated in
accordance with the methods of measurement rentable area and usable area as
described in the Standard Method for Measuring Floor Area in Office Building,
ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association
(BOMA) International.

 

  (e) Tenant shall receive credit for any reduction in Taxes applicable in the
year received by taxing authority, from the amount Tenant paid for that year in
which the refund was made.

 

(03/5/98) Net Office: File (SCH_CNET)

  Schedule C             INITIAL       .     2   Landlord | Tenant

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SCHEDULE “D”

 

Services and Costs

 

Interior Climate

Control

  1. The Landlord covenants with the Tenant:

 

  (a) To maintain in the Leased Premises conditions of reasonable temperature
and comfort in accordance with good standards applicable to normal occupancy of
premises for office purposes subject to governmental regulations during hours to
be determined by the Landlord (but to be at least the hours from 8:00 a.m. to
7:00 p.m. from Monday to Friday and from 8:00 a.m. to 1:00 p.m. on Saturdays as
long as it is customary in similar buildings in the Woodfield area of
Schaumburg, Illinois, inclusive with the exception of holidays, and Sundays),
such conditions to be maintained by means of a system for heating and cooling,
filtering and circulating air. At times other than the normal business hours and
days aforesaid, central air conditioning and heating shall be provided to the
Tenant upon at least twenty four (24) hours’ prior notice from the Tenant, and
upon payment by the Tenant of the hourly charge established by the Landlord for
each hour (or a portion) of after-hours HVAC usage. As of the date hereof, the
charge for the provision by the Landlord of after-hours HVAC service is $35.00
per hour, per floor, for which the Tenant requests that the Landlord provide
such services. The Landlord shall have no responsibility for any inadequacy of
performance of the said system if the occupancy of the Leased Premises or the
electrical power or other energy consumed on the Leased Premises for all
purposes exceeds reasonable amounts as determined by the Landlord or the Tenant
installs partitions or other installations in locations which interfere with the
proper operation of the system of interior climate control or if the window
covering on exterior windows is not kept fully closed;

 

Janitor

Service

 

  (b) To provide janitor and cleaning services to the Leased Premises and to
common areas of the Building consisting of reasonable services in accordance
with the standards of similar office buildings (See Schedule L-1);

 

Elevators,

Lobbies, etc.

 

  (c) To keep available the following facilities for use by the Tenant and its
employees and invitees in common with other persons entitled thereto:

 

  (i) passenger and freight elevator service to each floor upon which the Leased
Premises are located provided such service is installed in the Building and
provided that the Landlord may prescribe the hours during which and the
procedures under which freight elevator service shall be available and may limit
the number of elevators providing service outside normal business hours;

 

  (ii) common entrances, lobbies, stairways and corridors giving access to the
Building and the Leased Premises, including such other areas from time to time
which may be provided by the Landlord for common use and enjoyment within the
Property;

 

  (iii) the washrooms as the Landlord may assign from time to time which are
standard to the Building, provided that the Landlord and the Tenant acknowledge
that where an entire floor is leased to the Tenant or some other tenant the
Tenant or such other tenant, as the case may be, may exclude others from the
washrooms thereon. Tenant shall have the use of potable water for drinking and
lavatory use as provided for in the common areas of the Property.

 

Security                   (d)      See  Schedule  L-2.

 

Electricity

 

  2.    (a)     The Landlord covenants with the Tenant and the Landlord shall
have the sole right to furnish electricity to the Property. Standard to the
common areas of the Building, the Landlord shall furnish electricity during
hours to be determined by the Landlord (but to be at least the hours from 8:00
a.m. to 6:00 p.m. from Monday to Friday and from 8:00 a.m. to 1:00 p.m. on
Saturdays as long as it is customary in similar buildings in the Woodfield area
of Schaumburg, Illinois inclusive with the exception of holidays and Sundays)
and during such other hours that the Tenant elects at its sole cost and expense
subject to governmental regulations;

 

        (b)     The amount of electricity consumed in the Leased Premises,
required by the Tenant for normal office use, available 24 hours a day, shall be
as determined by a sub metering device for energy allocation purposes, and
billed directly to the Tenant by the local electrical company. The Tenant shall
pay the Landlord for any such excess electricity on demand (i.e. as may be
required for HVAC after-hour usage).

 

3. The Landlord shall maintain and keep in repair the facilities required for
the provision of the interior climate control, elevator (if installed in the
Building) and other services referred to in sub-paragraph (a) and

 

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(c) of paragraph 1 and sub-paragraph (a) of paragraph 2 of this Schedule in
accordance with the standards of office buildings similar to the Building but
reserves the right to stop the use of any of these facilities and the supply of
the corresponding services when necessary by reason of accident or breakdown or
during the making of repairs, alterations or improvements, in the reasonable
judgment of the Landlord necessary or desirable to be made, until the repairs,
alterations or improvements shall have been completed to the satisfaction of the
Landlord.

 

Additional

Services

 

  4.    (a)     The Landlord may (but shall not be obliged) on request of the
Tenant supply services or materials to the Leased Premises and the Property
which are not provided for under this Lease and which are used by the Tenant
(the “Additional Services”) including, without limitation,

 

  (i) replacement of tubes and ballasts;

 

  (ii) carpet shampooing;

 

  (iii) window covering cleaning;

 

  (iv) locksmithing;

 

  (v) removal of bulk garbage;

 

  (vi) picture hanging; and

 

  (vii) special security arrangement.

 

      (b)   When Additional Services are supplied or furnished by the Landlord,
accounts therefor shall be rendered by the Landlord and shall be payable by the
Tenant to the Landlord within thirty (30) days. In the event the Landlord shall
elect not to supply or furnish Additional Services, only persons with prior
written approval by the Landlord (which approval shall not be unreasonably
withheld) shall be permitted by the Landlord or the Tenant to supply or furnish
Additional Services to the Tenant and the supplying and furnishing shall be
subject to the reasonable rules fixed by the Landlord with which the Tenant
undertakes to cause compliance and to comply.

 

Operating

Charges Payable

 

  5.    (a)     The Tenant covenants to pay to the Landlord the Tenant’s
Proportionate Share of the amount of the Operating Costs in each Fiscal Period
(Landlord shall maintain its books and records regarding Operating Costs
calculated according to GAAP);

 

          (b) Subject to the other terms and conditions of this Lease, the
Landlord shall not be responsible during the Term for any costs, charges,
expenses and outlays of any nature whatsoever arising from or relating to the
Leased Premises and the Tenant shall pay all charges, impositions, costs and
expenses of every nature and kind relating to the Leased Premises and the
amounts included as Additional Rent whether or not specifically provided for
herein and the Tenant covenants with the Landlord accordingly;

 

          (c) In this Lease “Operating Costs” shall include all costs incurred
or which will be incurred by the Landlord in discharging its obligations under
this Lease and in the maintenance, operation, administration and management of
the Property including without limitation which are not incurred by or charged
directly to a specific tenant:

 

  (i) cost of heating, ventilating and air-conditioning;

 

  (ii) cost of water and sewer charges;

 

  (iii) cost of electricity, fuel or other form of energy which are not
separately metered and recovered or paid by tenants;

 

  (iv) costs of insurance carried by the Landlord pursuant to paragraph 9(a) of
this Lease and cost of any deductible amount paid by the Landlord in connection
with each claim made by the Landlord under such insurance;

 

  (v) cost of building office expenses, including telephone, rent, stationery
and supplies;

 

  (vi) costs of all elevator and escalator (if installed in the Building)
maintenance and operation;

 

  (vii) costs of operating staff, management staff and other administrative
personnel, including salaries, wages, and fringe benefits of such personnel who
are devoted to the Property;

 

  (viii) cost of providing security and costs of repair, maintenance and
replacement of communications, fire and life safety systems serving the
Property;

 

  (ix) cost of providing janitorial services, window cleaning, garbage and snow
removal and pest control;

 

  (x) cost of supplies and materials;

 

  (xi) cost of decoration of common areas;

 

  (xii) cost of landscaping;

 

  (xiii) cost of maintenance and operation of the parking area and costs of
operating, maintaining, repairing, and replacing all pedestrian and vehicular
entrances and exits, passageways, driveways, tunnels, subway connections and
delivery and holding areas used in connection with the Property;

 

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  (xiv) cost of consulting, and professional fees including expenses;

 

  (xv) cost of replacements, additions and modifications unless otherwise
included under Operating Costs under subparagraph (xvi), and cost of repair and;

 

  (xvi) costs in respect of each Major Expenditure (as hereinafter defined) as
amortized over the period of the Landlord’s reasonable estimate of the economic
life of the Major Expenditure, but not to exceed fifteen (15) years, using equal
monthly installments of principal and interest at ten percent (10%) per annum
compounded semi-annually. For the purpose hereof “Major Expenditure” shall mean
any expenditure incurred after the date of substantial completion of the
Building for replacement of machinery, equipment, building elements, systems or
facilities forming a part of or used in connection with the Property or for
modifications, upgrades or additions to the Property or facilities used in
connection therewith, provided that, in each case, such expenditure was more
than ten percent (10%) of the total Operating Costs for the immediately
preceding Fiscal Period.

 

          (d)     In this Lease there shall be excluded from Operating Costs the
following:

 

  (i) interest on debt and capital retirement of debt;

 

  (ii) such of the Operating Costs as are recovered from insurance proceeds; and

 

  (iii) costs as determined by the Landlord of acquiring tenants for the
Property or are chargeable to a particular tenant;

 

  (iv) Ground lease rents;

 

  (v) Political contributions;

 

  (vi) Profit sharing contributions;

 

  (vii) Property management fees in excess of 3% of Gross Rent.

 

6. In calculating Operating Costs for any Fiscal Period, if less than one
hundred percent (100%) of Property is occupied by tenants, then the amount of
such Operating Costs shall be deemed for the purposes of this Schedule to be
increased to an amount equal to the like Operating Costs which normally would be
expected by the Landlord to have been incurred had such occupancy been one
hundred percent (100%) during such entire period.

 

7. “Tenant’s Proportionate Share” shall mean one decimal one zero percent
(1.10%) subject to adjustment as determined solely by the Landlord and notified
to the Tenant in writing for physical increases or decreases in the total
Rentable Area of the Property provided that total Rentable Area of the Property
and the Rentable Area of the Leased Premises shall exclude areas designated
(whether or not rented) for parking and for storage. The above referenced
proportionate share was calculated using 1,000,211 rentable square feet as the
total area of the Building/Property. It is agreed and understood that the
Landlord has confirmed that the rentable area and usable area of the Premises
and the Property has been calculated in accordance with the methods of
measurement rentable area and usable area as described in the Standard Method
for Measuring Floor Area in Office Building, ANSI Z65.1-1996, as promulgated by
the Building Owners and Managers Association (BOMA) International.

 

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SCHEDULE “E”

 

Rules and Regulations

 

1. The sidewalks, entry passages, elevators (if installed in the Building) and
common stairways shall not be obstructed by the Tenant or used for any other
purpose than for ingress and egress to and from the Leased Premises. The Tenant
will not place or allow to be placed in the Building corridors or public
stairways any waste paper, dust, garbage, refuse or anything whatever.

 

2. The washroom plumbing fixtures and other water apparatus shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, ashes or other substances shall be thrown therein. The
expense of any damage resulting by misuse by the Tenant shall be borne by the
Tenant.

 

3. The Tenant shall permit window cleaners to clean the windows of the Leased
Premises during normal business hours.

 

4. No birds or animals shall be kept in or about the Property nor shall the
Tenant operate or permit to be operated any musical or sound-producing
instruments or device or make or permit any improper noise inside or outside the
Leased Premises which may be heard outside such Leased Premises.

 

5. No one shall use the Leased Premises for residential purposes, or for the
storage of personal effects or articles other than those required for business
purposes.

 

6. All persons entering and leaving the Building at any time other than during
normal business hours shall register in the books which may be kept by the
Landlord at or near the night entrance and the Landlord will have the right to
prevent any person from entering or leaving the Building or the Property unless
provided with a key to the premises to which such person seeks entrance and a
pass in a form to be approved by the Landlord. Any persons found in the Building
at such times without such keys and passes will be subject to the surveillance
of the employees and agents of the Landlord.

 

7. No dangerous or explosive materials shall be kept or permitted to be kept in
the Leased Premises.

 

8. The Tenant shall not permit any cooking in the Leased Premises except for
food warmed up in microwaves for consumption by employees or guests of the
Tenant. The Tenant shall not install or permit the installation or use of any
machine dispensing goods for sale in the Leased Premises without the prior
written approval of the Landlord. Only persons authorized by the Landlord shall
be permitted to deliver or to use the elevators (if installed in the Building)
for the purpose of delivering food or beverages to the Leased Premises.
Notwithstanding the foregoing, Tenant shall have the right to install four (4)
vending machines for food/snacks within the Leased Premises.

 

9. The Tenant shall not bring in or take out, position, construct, install or
move any safe, business machine or other heavy office equipment without first
obtaining the prior written consent of the Landlord. In giving such consent, the
Landlord shall have the right in its sole discretion, to prescribe the weight
permitted and the position thereof, and the use and design of planks, skids or
platforms to distribute the weight thereof. All damage done to the Building by
moving or using any such heavy equipment or other office equipment or furniture
shall be repaired at the expense of the Tenant. The moving of all heavy
equipment or other office equipment or furniture shall occur only at times
consented to by the Landlord and the persons employed to move the same in and
out of the Building must be acceptable to the Landlord. Safes and other heavy
office equipment will be moved through the halls and corridors only upon steel
bearing plates. No freight or bulky matter of any description will be received
into the Building or carried in the elevators (if installed in the Building)
except during hours approved by the Landlord.

 

10. The Tenant shall give the Landlord prompt notice of any accident to or any
defect in the plumbing, heating, air-conditioning, ventilating, mechanical or
electrical apparatus or any other part of the Building.

 

11. The parking of automobiles shall be subject to the charges and the
reasonable regulations of the Landlord. The Landlord shall not be responsible
for damage to or theft of any car, its accessories or contents whether the same
be the result of negligence or otherwise. So long as no Event of Default exists
hereunder, Tenant shall be entitled to the use of 44 of the of the above-ground,
non-reserved parking spaces or 4 per 1,000 square feet of Rentable Area of the
Premises in common with Landlord and other tenants in the Building on an
unassigned, “first come-first served” basis during the Lease Term. Tenant and
its agents, employees, licensees and invitees shall not park in any spaces
reserved for another tenant and clearly marked for reserve use. Landlord has and
reserves the right to alter the methods used to control parking and the right to
establish such controls and rules and regulations (such as parking stickers to
be affixed to vehicles) regarding parking that Landlord may deem desirable.
Without liability, Landlord will have the right to tow or otherwise remove
vehicles improperly parked, blocking ingress or egress lanes, or

 

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violating parking rules, at the expense of the offending tenant and/or owner of
the vehicle. Tenant’s right to use the parking facilities pursuant to this Lease
are subject to the following conditions: (i) Landlord has no obligation to
provide a parking attendant and Landlord shall have no liability on account of
any loss or damage to any vehicle or the contents thereof, Tenant hereby
agreeing to bear the risk of loss for same; and (ii) if and when so requested by
Landlord, Tenant shall furnish Landlord with the license numbers of any vehicles
of Tenant, its agents and employees.

 

12. The Tenant shall not mark, drill into or in any way deface the walls,
ceilings, partitions, floors or other parts of the Leased Premises and the
Building.

 

13. Except with the prior written consent of the Landlord, no tenant shall use
or engage any person or persons other than the janitor or janitorial contractor
of the Landlord for the purpose of any cleaning of the Leased Premises.

 

14. If the Tenant desires any electrical or communications wiring, the Landlord
reserves the right to direct qualified persons as to where and how the wires are
to be introduced, and without such directions no borings or cutting for wires
shall take place. No other wires or pipes of any kind shall be introduced
without the prior written consent of the Landlord.

 

15. The Tenant shall not place or cause to be placed any additional locks upon
any doors of the Leased Premises without the approval of the Landlord and
subject to any conditions imposed by the Landlord. Additional keys may be
obtained from the Landlord at the cost of the Tenant.

 

16. The Tenant shall be entitled to have its name shown upon the directory board
of the Building and at one of the entrance doors to the Leased Premises all at
the Tenant’s expense, but the Landlord shall in its sole discretion design the
style of such identification and allocate the space on the directory board for
the Tenant.

 

17. The Tenant shall keep the window coverings (if any) in a closed position
during period of direct sun load. The Tenant shall not interfere with or
obstruct any perimeter heating, air-conditioning or ventilating units.

 

18. The Tenant shall not conduct, and shall not permit any, canvassing in the
Building.

 

19. The Tenant shall take care of the rugs and window coverings (if any) in the
Leased Premises and shall arrange for the carrying-out of regular spot cleaning
and shampooing of carpets and cleaning of window coverings in a manner
acceptable to the Landlord.

 

20. The Tenant shall permit the periodic closing of lanes, driveways and
passages for the purpose of preserving the Landlord’s rights over such lanes,
driveways and passages.

 

21. The Tenant shall not place or permit to be placed any sign, advertisement,
notice or other display on any part of the exterior of the Leased Premises or
elsewhere if such sign, advertisement, notice or other display is visible from
outside the Leased Premises without the prior written consent of the Landlord
which may be arbitrarily withheld. The Tenant, upon request of the Landlord,
shall immediately remove any sign, advertisement, notice or other display which
the Tenant has placed or permitted to be placed which, in the opinion of the
Landlord, is objectionable, and if the Tenant shall fail to do so, the Landlord
may remove the same at the expense of the Tenant.

 

22. The Landlord shall have the right to make such other and further reasonable
rules and regulations and to alter the same as in its judgment may from time to
time be needful for the safety, care, cleanliness and appearance of the Leased
Premises and the Building and for the preservation of good order therein, and
the same shall be kept and observed by the tenants, their employees and
servants. The Landlord also has the right to suspend or cancel any or all of
these rules and regulations herein set out.

 

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SCHEDULE “F”

 

Leasehold Improvements

 

Definition of

Leasehold

Improvements

 

1. For purposes of this Lease, the term “Leasehold Improvements” includes,
without limitation, all fixtures, improvements, installations, alterations and
additions from time to time made, erected or installed by or on behalf of the
Tenant, or any previous occupant of the Leased Premises, in the Leased Premises
and by or on behalf of other tenants in other premises in the Building
(including the Landlord if an occupant of the Building), including all
partitions, doors and hardware however affixed, and whether or not movable, all
mechanical, electrical, telephone/data cabling, utility installations and all
carpeting and drapes with the exception only of furniture and equipment not of
the nature of fixtures.

 

Installation of

Improvements

and Fixtures

 

2. The Tenant shall not make, erect, install or alter any Leasehold Improvements
in the Leased Premises without having requested and obtained the Landlord’s
prior written approval. Tenant should note that the leased Premises contains
post tensioning, therefore no drilling or coring to beams or slabs should be
performed without prior written approval of Landlord and Building Structural
Engineer. The Landlord’s approval shall not, if given, under any circumstances
be construed as consent to the Landlord having its estate charged with the cost
of work. The Landlord shall not unreasonably withhold its approval to any such
request, but failure to comply with the Landlord’s reasonable requirements from
time to time for the Building shall be considered sufficient reason for refusal.
In making, erecting, installing or altering any Leasehold Improvements the
Tenant shall not, without the prior written approval of the Landlord, alter or
interfere with any installations which have been made by the Landlord or others
and in no event shall alter or interfere with window coverings (if any) or other
light control devices (if any) installed in the Building. The Tenant’s request
for any approval hereunder shall be in writing and accompanied by an adequate
description of the contemplated work and, where considered appropriate by the
Landlord, working drawings and specifications thereof. If the Tenant requires
from the Landlord drawings or specifications of the Building in connection with
the Leasehold Improvements, the Tenant shall pay the cost thereof to the
Landlord on demand (however, Tenant shall not be required to pay the cost of CAD
drawings that were emailed to Tenant prior to signing of this Lease). Any
reasonable costs and expenses incurred by the Landlord in connection with the
Tenant’s Leasehold Improvements shall be paid by the Tenant to the Landlord on
demand. Tenant will manage its construction process with their own construction
manager. All work to be performed in the Leased Premises shall be performed by
competent and adequately insured contractors and sub-contractors of whom the
Landlord shall have approved in writing prior to commencement of any work, such
approval not to be unreasonably withheld (except that the Landlord may require
that the Landlord’s contractors and sub-contractors be engaged for any
mechanical or electrical work) and by workmen who have labor union affiliations
that are compatible with those affiliations (if any) of workmen employed by the
Landlord and its contractors and sub-contractors. All such work including the
delivery, storage and removal of materials shall be subject to the reasonable
supervision of the Landlord, shall be performed in accordance with any
reasonable conditions or regulations imposed by the Landlord including, without
limitation, payment on demand of a reasonable fee of the Landlord for such
supervision (however, such fee shall be waived with respect to the initial
Leasehold Improvements), and shall be completed in good and workmanlike manner
in accordance with the description of the work approved by the Landlord and in
accordance with all laws, regulations and by-laws of all regulatory authorities.
Required building permits or authorizations shall be obtained by the Tenant at
its expense and copies thereof shall be provided to the Landlord. If the Tenant
undertakes Leasehold Improvements, upon completion of such Leasehold
Improvements the Tenant shall supply to the Landlord complete “As-Built”
drawings representing Leasehold Improvements installed, in such format as
reasonably required by the Landlord, and, if applicable, an engineer approved
air balance report. No locks shall be installed on the entrance doors or in any
doors in the Leased Premises that are not keyed to the Building master key
system.

 

Liens and

Encumbrances on

Improvements

and Fixtures

 

3. In connection with the making, erection, installation or alteration of
Leasehold Improvements and all other work or installations made by or for the
Tenant in the Leased Premises the Tenant shall comply with all the provisions of
the construction lien and other similar statutes from time to time applicable
thereto (including any proviso requiring or enabling the retention by way of
holdback of portions of any sums payable) and, except as to any such holdback,
shall promptly pay all accounts relating thereto. The Tenant will not create any
mortgage, conditional sale agreement or other encumbrance in respect of its
Leasehold Improvements or, without the written consent of the Landlord, with
respect to its trade fixtures nor shall the Tenant take any action as a
consequence of which any such mortgage, conditional sale agreement or other
encumbrance would attach to the Property or any part thereof. If and whenever
any construction or other lien for work, labor, services or materials supplied
to or for the Tenant or for the cost of which the Tenant

 

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may be in any way liable or claims therefore shall arise or be filed or any such
mortgage, conditional sale agreement or other encumbrance shall attach, the
Tenant shall within twenty (20) days after submission by the Landlord of notice
thereof procure the discharge thereof, including any certificate of action
registered in respect of any lien, by payment or giving security or in such
other manner as may be required or permitted by law, and failing which the
Landlord may avail itself of any of its remedies hereunder for default of the
Tenant and may make any payments or take any steps or proceedings required to
procure the discharge of any such liens or encumbrances, and shall be entitled
to be repaid by the Tenant on demand for any such payments and to be paid on
demand by the Tenant for all costs and expenses in connection with steps or
proceedings taken by the Landlord and the Landlord’s right to reimbursement and
to payment shall not be affected or impaired if the Tenant shall then or
subsequently establish or claim that any lien or encumbrances so discharged was
without merit or excessive or subject to any abatement, set-off or defense. The
Tenant agrees to indemnify the Landlord from all claims, costs and expenses
which may be incurred by the Landlord in any proceedings brought by any person
against the Landlord alone or with another or others for or in respect of work,
labor, services or materials supplied to or for the Tenant.

 

Removal of

Improvements

and Fixtures

 

4. All Leasehold Improvements in or upon the Leased Premises shall immediately
upon their placement be and become the Landlord’s property without compensation
therefore to the Tenant. Except to the extent otherwise expressly agreed by the
Landlord in writing, no Leasehold Improvements, furniture or equipment shall be
removed by the Tenant from the Leased Premises either during or at the
expiration or sooner termination of the Term except that:

 

  a) the Tenant shall, prior to the end of the Term, remove such of the
Leasehold Improvements and trade fixtures in the Leased Premises as the Landlord
shall require to be removed beyond those approved in Schedule “B-2”; however, in
any event the Tenant is obligated to remove all telephone/data cabling installed
on Tenant’s behalf; and

 

  b) the Tenant may, at the times appointed by the Landlord and subject to
availability of elevators (if installed in the Building), remove its furniture
and equipment at the end of the Term, and also during the Term in the usual and
normal course of its business where such furniture or equipment has become
excess for the Tenant’s purposes or the Tenant is substituting therefore new
furniture and equipment.

 

The Tenant shall, in the case of every removal, make good at the expense of the
Tenant any damage caused to the Property by the installation and removal. In the
event of the Non-removal by the end of the Term, or sooner termination of this
Lease, of such trade fixtures or Leasehold Improvements required by the Landlord
of the Tenant to be removed, the Landlord shall have the option, in addition to
its other remedies under this Lease to declare to the Tenant that such trade
fixtures are the property of the Landlord and the Landlord upon such a
declaration may dispose of such trade fixtures and retain any proceeds of
disposition as security for the obligations of the Tenant to the Landlord and
the Tenant shall be liable to the Landlord for any expenses incurred by the
Landlord.

 

5. For the purpose of this Lease,

 

  a) the term “Tenant’s Work” shall mean all work required to be done to
complete the Leased Premises for occupancy by the Tenant excluding the
“Landlord’s Work” (as hereinafter defined).

 

  b) the term “Landlord’s Work” shall mean:

 

  i) All work related to base building construction (“Base Building
Construction”). Base Building Construction means:

 

  I. Window blinds or treatments;

 

  II. Socket for metering the premises (which meter is currently provided by
ComEd);

 

  III. Completed men’s and women’s washroom facilities on each floor; a minimum
of one water fountain on each floor;

 

  IV. Heating, ventilating, air conditioning and sprinklers brought to the
premises with all “main loops” and major distribution lines in place and
perimeter window line heating installed;

 

  V. All perimeter walls, core walls and columns dry walled, taped and ready for
painting;

 

  VI. Fire exits signs as required on open floors;

 

  VII. All required fire hose cabinets and standpipe connections completed as
required on open floors and all smoke detectors installed as required;

 

  VIII. All other Base Building Construction supplied on typical multi-tenant
floor lobbies and common areas such as: elevator lobby finishes; common area
ceilings (all finished ceiling heights shall be 8’6”); security systems; air
conditioning and lighting shall be installed on Tenant’s floor at no cost to
Tenant.

 

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  It is agreed and understood that all of the above described Base Building
Construction is more specifically defined in the Base Building plans and
specifications and shall prevail as the ultimate definition of said work and
said documents shall be available to Tenant for review at Landlord’s office
during normal business hours.

 

6. Other than Landlord’s work, Tenant shall accept the Leased Premises in its
“as-is” condition and perform all work to complete the Leasehold Improvements.

 

7. Implementation Schedule:

 

May 24, 2005

   On or before this date Tenant shall have delivered to Landlord executed
Leases in a form acceptable to Landlord.

April 15, 2005

   On or before this date Tenant shall have provided Landlord with space study.

May 27, 2005

   On or before this date Tenant shall have provided Landlord with approved
Working Drawings.

June 27, 2005

   On or before this date Landlord shall commence construction of Landlord’s
Work.

September 1, 2005

   On or before this date Landlord shall have completed Landlord’s Work.

June 27, 2005

   On or before this date Tenant shall commence construction of Tenant’s Work.

September 1, 2005

   On or before this date Tenant shall have completed Tenant’s Work.

 

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SCHEDULE “G”

 

Tenant Cash Allowance and Improvements

 

Within Forty Five (45) days after occupancy by the Tenant in the Leased Premises
and upon written request from Tenant to Landlord, following the date of
commencement of the Term, the Landlord will pay to the Tenant the sum of Three
Hundred Eighty-Five Thousand Six Hundred Sixty-Five and 00/100 Dollars
($385,665.00) as a Tenant Cash Allowance. Tenant will have the right to convert
unused Tenant Improvement Allowance dollars ($35.00 prsf) into a rent credit or
utilize funds for soft costs and telecommunications infrastructure.

 

Landlord, at its sole cost, shall provide Building Standard carpeting/floor
covering and paint for the Lease Premises valued at approximately $6.00 per sf.
Also, Landlord shall demise & separately meter the Premises as determined by the
Tenant’s space plan, at Landlord’s sole cost. Additionally, Landlord shall
remove all existing telephone/data cabling prior to Tenant’s commencement of
Tenant’s construction of Tenant Improvements.

 

In the event Tenant requests Landlord to perform any Tenant Improvements to the
Leased Premises, the cost of such improvement and related expenses shall be
deducted from the Tenant Cash Allowance. If such improvements exceed the Tenant
Cash Allowance, Tenant agrees to pay the difference to the Landlord within ten
(10) days of receipt of Landlord’s invoice.

 

(06/97) OFFICE : File (SCH.G)

  Schedule G             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “H”

 

OPTION TO RENEW

 

(a) The Landlord covenants with the Tenant that if the Tenant duly and regularly
pays the Rent and any and all amounts required to be paid pursuant to this Lease
and performs each and every covenant, proviso and agreement on the part of the
Tenant to be paid, rendered, observed and performed herein, the Landlord will at
the expiration of the then expiring term on written notice by the Tenant to the
Landlord given by the Tenant not more than Twelve (12) months prior to the
expiration of the then expiring term and received by the Landlord not less than
Nine (9) months prior to the expiration of the then expiring term grant to the
Tenant a Five (5) Year renewal of lease of the Leased Premises (the Renewal
Term”) on the same terms and conditions as in the standard lease agreement then,
at the commencement of the Renewal Term, being used by the Landlord for the
Building save and except the right of further renewal, Landlord’s Work (if any),
Basic Rent, tenant improvement allowance (if any) and Rent Free Period (if any).

 

(b) The Basic Rent for the Renewal Term shall be determined by negotiations
between the parties hereto, and it is agreed that during such negotiations in
respect of Basic Rent, they will be guided by fair market rental levels (either
fixed or escalating during the said Renewal Term) as would then be charged by
landlords entering into new leases with consideration for any incentives
including but not limited to Landlord’s Work (if any), Tenant Improvement
Allowance (if any) and Rent Free Period (if any) but having similar terms and
conditions as contained herein and for similar premises in the Building or if
not available in similar buildings in the Woodfield area of Schaumburg,
Illinois. If the parties hereto are unable to agree in writing as to the Basic
Rent for the Renewal Term prior to Ninety (90) days before the expiry of the
Lease, this Lease shall end on the expiry of the Term and this Option to Renew
and any subsequent options to renew shall be null and void.

 

(c) The Tenant agrees to execute the Landlord’s standard lease agreement or
lease amendment agreement then, at the commencement of the Renewal Term, being
used by the Landlord for the Building to give effect to this Option to Renew if
exercised by the Tenant. The Tenant shall execute such agreement prior to the
commencement date of the Renewal Term.

 

(d) Notwithstanding the above, if the Tenant does not exercise the Option to
Renew in accordance with this Schedule “H” then this Option to Renew is null and
void.

 

(e) The Tenant’s Option to Renew hereunder is personal to the Tenant and
automatically expires on any Transfer or parting with possession of all or any
part of the Leased Premises whether or not the same is with the consent of the
Landlord.

 

(06/97) OFFICE : File (SCH.H)

  Schedule H             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “J”

 

Restrictive Covenant in Other Leases

 

Notwithstanding any use of the Leased Premises permitted by this Lease, the
Leased Premises shall not be used in such a way as to contravene the following
covenants in leases from the Landlord to other tenants in the Property. The
Tenant hereby covenants and agrees that it will not carry on in the Leased
Premises any business which will in any way place the Landlord in breach of such
covenants and will indemnify and save the Landlord harmless against all actions,
claims, demands, costs and expenses with respect thereto. If, in the opinion of
the Landlord, any of such covenants are being contravened as a result of any use
of the Leased Premises by the Tenant, the Tenant shall immediately discontinue
such use upon the Landlord’s written request and failing such discontinuance the
Landlord shall have the right to terminate this Lease forthwith by notice in
writing. The covenants are:

 

1) “Lease to Northern Trust Bank”

 

Provided the Lease is in full force and effect and Tenant is not in default
beyond any applicable cure period in payment of Rent or any other monetary
obligation under the Lease, and that the Tenant duly and regularly pays the
Basic Rent and any and all sums required to be paid pursuant to this Lease
Agreement and its attached Schedules and performs each and every covenant,
proviso and agreement on the part of the Tenant to be paid, rendered, observed,
and performed herein, the Landlord agrees, as of the commencement date of the
Lease and throughout the Term of the Lease, not to enter into a Lease or
Sublease Agreement with any other bank, savings and loan association, credit
union or trust company in the 1501 Building in the Property known as the
Schaumburg Corporate Center.

 

Also, no other stockbroker or insurance company (except Landlord) will have
rights to the sign band on the West side of the 1501 Building. Tenant’s
exclusivity rights shall only be applicable to the 1501 Building.

 

2) “Lease to Dennis Smith and Maureen Smith, d/b/a The Atrium Shop”

 

Provided that the Tenant duly and regularly pays the Rent and any and all sums
required pursuant to this Lease Agreement and performs each and every covenant,
proviso and agreement on the part of the Tenant to be paid, rendered, observed,
and performed herein, the Landlord agrees, throughout the Term of the Lease, not
to enter into a Lease Agreement with any other smoke shop as defined herein, in
the property known as the Schaumburg Corporate Center.

 

3) “Lease to Arthur G. Artman, an Individual, d/b/a Hair Studio 114”

 

Provided that the Tenant duly and regularly pays the Rent and any and all sums
required pursuant to this Lease Agreement and performs each and every covenant,
proviso and agreement on the part of the Tenant to be paid, rendered, observed,
and performed herein, the Landlord agrees, as of the commencement date of the
Lease and throughout the Term of the Lease, not to enter into a Lease Agreement
with any other barber or beauty shop in the Property known as the Schaumburg
Corporate Center.

 

4) “Lease to Hoopis Financial Group, Inc.”

 

The Landlord agrees that, as long as Tenant occupies a minimum of 16,500 square
feet +/- 500 sq.ft. in the Property during the Lease Term, any major life
insurance company shall not be permitted to display Building signage (name/logo)
at the top of the 1475 E. Woodfield Road Building during this initial Lease
Term.

 

5) “Lease to Xerox Corporation”

 

Landlord shall not lease space on the ground floor of the Building or on any
floor of the Building on which [Xerox Corporation] is then occupying space to a
competitor of Tenant. The term “competitor of Tenant” as used in this paragraph
shall mean the following persons, firms or corporations, their respective
successors and/or assigns and any distributors thereof:

 

(06/97) OFFICE : File (SCH.J)

  Schedule J             INITIAL       .     1   Landlord | Tenant

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A.B. Dick    Imagistics    Olivetti Canon    Kodak    Panasonic Danka    Konica
   Pitney Bowes Gestetner    Lanier    Ricoh HP (Hewlett Packard)    Minolta   
Savin BM    Mita    Sharp IKON Office Solutions    Oce    Toshiba

 

6) “Lease to PepsiAmericas Inc.”

 

Subject to the original named Tenant (or a Controlled Tenant using the Pepsi
logo) leasing and occupying a minimum of three full floors in the Building
throughout the entire Lease Term, and subject to conflicting provisions of any
existing leases in the Property, (i) Landlord shall ensure that the only food
and beverage items sold in the Common Areas of Schaumburg Corporate Center
(including cafeteria, sundry and vending areas to the extent such areas are
under Landlord’s control for this purpose) are from the Tenant’s product line
for so long as such products are reasonably comparable in terms of products
otherwise desired by Landlord (and/or the operator of the café) and are
available at commercially reasonable prices, and (ii) Landlord shall not lease
any space in the Building to any competitive soft drink beverage company.

 

For so long as Tenant occupies a minimum of three full floors in the Building,
Landlord agrees that it will not permit signage of any other tenant to be
installed on [the marble wall in the elevator core of the Building across from
the Building directory].

 

(06/97) OFFICE : File (SCH.J)

  Schedule J             INITIAL       .     2   Landlord | Tenant

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SCHEDULE “K”

 

RIGHT TO ASSIGN AND SUBLET

 

(a) Notwithstanding anything to the contrary contained herein provided Tenant
gives Landlord fifteen (15) days prior written notice, Tenant shall be entitled
to assign this Lease or sublet the Premises to an entity (“Controlled Tenant”)
(i) resulting from the merger of the originally named Tenant with, or
acquisition (including all or substantially all of the assets) by or of, another
company, provided such Controlled Tenant shall have a tangible net worth not
less than the tangible net worth of Tenant as of the date of this Lease or (ii)
any company that is and remains throughout the Lease Term an affiliate of
Tenant. As used in the immediately preceding sentence, an affiliate is a company
that controls Tenant, is controlled by Tenant or which is controlled by a
company that likewise controls Tenant. In connection with any such assignment,
Tenant shall cause the Controlled Tenant to execute and deliver to Landlord an
agreement whereby the Controlled Tenant agrees to be bound by all the covenants
and agreements in this Lease which Tenant has agreed to keep, observe or
perform, and whereby the Controlled Tenant agrees that the provisions of this
paragraph shall be binding upon it as if it were the original Tenant hereunder.
Together with its required notice to Landlord regarding the proposed transfer to
a Controlled Tenant, Tenant shall provide Landlord with supporting documentation
confirming to Landlord’s reasonable satisfaction that the transferee is, in
fact, a Controlled Tenant. Notwithstanding the foregoing, in no event shall the
Tenant be released from liability for the obligations under the Lease upon a
transfer to a Controlled Tenant.

 

(b) No sublease or assignment of this Lease under this Schedule shall be
effective unless the Tenant and assignee or sublessee shall execute an agreement
on the Landlord’s standard Consent By Landlord To Sublease and/or Assignment
form, in which the assignee or sublessee shall assume all the obligations of the
Tenant hereunder, and the Tenant shall pay to the Landlord its reasonable fee
for processing the assignment or sublease.

 

(c) The Tenant agrees that any sublease or assignment of this Lease shall not
thereby release the Tenant of its obligations hereunder.

 

(06/97) OFFICE : File (SCH.K)

  Schedule K             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “K-1”

 

OPTION TO CANCEL

 

(a) The Landlord covenants with the Tenant that if the Tenant duly and regularly
pays the Rent and any and all amounts required to be paid pursuant to this Lease
and performs each and every covenant, proviso and agreement on the part of the
Tenant to be paid, rendered, observed and performed herein, the Tenant shall
have and is hereby given the right and option to cancel and terminate this Lease
following the 5th rent paying year with twelve (12) months prior written notice
to Landlord.

 

(b) In the event that the Tenant elects to exercise Tenant’s right and option to
cancel and terminate this Lease, the Tenant shall without deduction or right of
offset, pay to the Landlord as consideration for said cancellation and
termination a termination fee equal to all unamortized transaction costs
(including brokerage commissions, improvement costs, allowances and “free rent”
based on Tenant’s occupancy of the Leased Premises prior to the Commencement
Date) and such costs shall be amortized on a straight-line basis at a 10%
interest rate. Said payment is to be made on the date that notification of
Tenant’s intention to cancel and terminate this Lease is provided to the
Landlord. The Tenant shall continue to pay Rent through the effective date of
termination of this Lease.

 

(06/97) OFFICE : File (SCH.K-1)

  Schedule K-1             INITIAL       .     1   Landlord | Tenant

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SCHEDULE “K-2”

 

EARLY OCCUPANCY PRIOR TO COMMENCEMENT OF TERM

 

The Tenant may enter the Leased Premises twelve (12) months prior to
commencement of the Term (September 1, 2005 – August 31, 2006) “Early Occupancy
Period”. Additionally, Landlord shall turn over the Demised Premises to Tenant
upon the date Landlord completes any work it is required to perform pursuant to
this Lease and its Schedules, to Early Occupancy for Tenant Construction.

 

Tenant’s occupancy of the Leased Premises during the Early Occupancy Period
shall be upon and subject to the following conditions:

 

1. During the Early Occupancy Period the Tenant, its servants, agents,
employees, contractors, subcontractors, officers and directors shall be subject
to and bound by all of the terms and conditions of this Lease including without
limiting the generality of the foregoing insurance and indemnification subject
only to the following:

 

  (a) During the Early Occupancy Period the Tenant shall not be obligated to pay
Rent except those charges set out in 1(b).

 

  (b) The Tenant shall be responsible for the Landlord’s reasonable charges
during the Early Occupancy Period for services and utilities used for or in
connection with the Leased Premises, including, without limiting the generality
of the foregoing, those relating to power and telephone. The Tenant shall pay to
the Landlord on demand the amount of such charges, based on estimates by the
Landlord.

 

(06/97) OFFICE : File (SCH.K-1)

  Schedule K-2             INITIAL       .     1   Landlord | Tenant

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Manulife Financial   Real Estate Division

 

SCHEDULE “L-1”

 

CLEANING SPECIFICATIONS

 

The following tasks identify the work required. The frequency of the required
tasks has been shown in the attached Frequency Schedule. Landlord reserves the
right to modify these Cleaning Specifications provided that any modifications
are consistent with other first class office buildings located in Schaumburg
Illinois:

 

  1. Lobby Glass:

 

All glass windows, doors and jambs to be spot cleaned to remove all fingermarks,
smudges and spills.

 

  2. Glass Doors & Partitions:

 

All glass doors and partitions including any directory glass, to be spot cleaned
to remove any fingermarks, smudges or stains and to be left in a uniformly
bright, clean condition.

 

  3. Lobby Displays:

 

Clean all miscellaneous lobby displays as necessary.

 

  4. Cigarette Urns:

 

Clean all cigarette urns, ash trays and remove all butts and debris. Replace
sand as necessary.

 

  5. Elevator Doors & Thresholds:

 

Elevator doors to be wiped down and polished, and left in a bright condition
free of all dust and streaks.

 

  6. Elevator Floors:

 

If carpeted, elevator carpets to be steam cleaned as often as necessary to
maintain even appearance, but not less than once per month.

 

  7. Miscellaneous Metalwork:

 

All metalwork, such as mail chutes and boxes, door hardware and frames, metal
lettering, etc. to be wiped clean and polished and left in a bright condition,
free of all dust and streaks.

 

  8. Stairwells:

 

Spot clean all railways, doors jambs and walls and remove all fingermarks,
smudges and stains from lobby areas, elevators and stairwell.

 

  9. Stairs:

 

All uncarpeted stairs and landings up to and including the third level to be
swept with a treated dust mop and spot cleaned as necessary to remove all
spills, stains and litter. The remainder of landings and treads to be checked
and cleaned and loose trash removed.

 

  10. Stairs With Carpets:

 

All carpeted stairs and landings to be washed and dried as needed.

 

  11. Restrooms-General:

 

It is the intention of this specification to keep lavatories thoroughly clean.
Remove all waste paper and refuse, including soiled sanitary napkins, to
designated areas in the building and dispose of same. All waste paper and
sanitary napkin receptacles to be thoroughly cleaned and washed and new liners
installed. Fill toilet tissue holders, seat cover containers, soap and hand
lotion dispensers, towel dispensers, tissue dispensers and sanitary napkin
vending dispensers and maintain the operation.

 

  12. Restroom Walls, Partitions and Ceilings:

 

Wash thoroughly with water and germicidal solution. Wipe dry and polish to a
uniformly bright clean condition.

 

  13. Dusting:

 

Dust all furniture, accessories, ledges and all other horizontal surfaces, using
a treated dust cloth.

 

  14. Carpeted Areas:

 

All carpeted floors to be vacuumed and edged with a small broom or edging tools.

 

(03/5/98) OFFICE : File (cleaning)

                INITIAL       .         Landlord | Tenant

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  15. Uncarpeted Areas:

 

All hard surfaced floors to be mopped with a treated dust mop and buffed as
needed.

 

  16. Walls:

 

All walls to be spot-cleaned to remove as necessary all smudges, stains and
handmarks.

 

  17. Furniture and Accessories and Waste Baskets:

 

Spot clean all furniture, file cabinets and telephones. Empty all waste baskets
and replace liners where necessary.

 

(03/5/98) OFFICE : File (cleaning)

                INITIAL       .         Landlord | Tenant

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FREQUENCY

SCHEDULE

--------------------------------------------------------------------------------

   Stairwells

--------------------------------------------------------------------------------

   Main Lobby

--------------------------------------------------------------------------------

   Public
Areas

--------------------------------------------------------------------------------

   Elevators

--------------------------------------------------------------------------------

   Tenant Space

--------------------------------------------------------------------------------

   Rest Rooms

--------------------------------------------------------------------------------

   Below
Grade

--------------------------------------------------------------------------------

1. Lobby Glass

        Nightly                         

2. Glass Doors/Partitions

        Nightly    Nightly         Nightly          

3. Lobby Displays

        Nightly                         

4. Cigarette Urns

        Nightly    Nightly         Nightly          

5. Elevator Doors & Thresholds

        Nightly    Nightly    Nightly               

6. Elevator Floors

                  Monthly               

7. Miscellaneous Metalwork

        Nightly         Nightly    Nightly    Nightly     

8. Stairwells

   Daily/Nightly    Daily/Nightly         Daily/Nightly               

9. Stairs

   Daily/Nightly                              

10. Stairs with Carpets

   Monthly                              

11. Restrooms-General

                            Nightly     

12. Dusting

        Nightly    Nightly         Nightly          

21. Carpeted Areas

        Nightly    Nightly         Nightly          

22. Uncarpeted Areas

        Nightly    Nightly    Nightly    Nightly         Nightly

24. Walls

        Nightly    Nightly    Nightly    Nightly    Nightly     

27. Furniture, Accessories and Waste Baskets

                       Nightly          

 

•      Daily

   = 5 Days/Week

•      Nightly

   = 5 Nights/Week

•      Weekly

   = Once/Week

•      Monthly

   = Once/Month

•      Quarterly

   = Once/3 Months

 

(03/5/98) OFFICE : File (cleaning)

                INITIAL       .         Landlord | Tenant

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SCHEDULE “L-2”

 

SECURITY

 

Limited access services are currently contracted with Cognisa. The Property has
24 hours/7 days a week manned access limitation. In addition, there is a mobile
unit that monitors the parking lot at varying times during the day/evening, five
days a week. After-hours access to the Building is maintained by security card
readers. Tenant shall have, barring emergency or unusual situations, 24-hour per
day, 365-day per year access to the Building and its premises via this security
card system. The Building, during regular building hours will be open to
visitors and the public from 7:00 a.m. to 6:00 p.m. Monday through Friday and
8:00 a.m. to 1:00 p.m. on Saturday. In addition to all of the above, the
Property has a security camera system, which is monitored at the security desk
in the atrium. Notwithstanding anything herein to the contrary, in no event
shall Landlord have any liability for loss or damage sustained by Tenant or any
of its employees or invitees as a result of criminal activities.

 

Also, a limited access desk is located on the first floor of the office tower
lobbies, which is manned during normal business hours.

 

# 2746388_v6

 

(03/5/98) OFFICE : File (cleaning)

                INITIAL       .         Landlord | Tenant