Exhibit 10.36

***Text Omitted and Filed Separately with the Securities and Exchange
Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

SECOND AMENDMENT TO LEASE

(Corporate 500 Centre)

THIS SECOND AMENDMENT TO LEASE (“Second Amendment”) is made and entered into as
of the 10th day of December, 2013, by and between LONG RIDGE OFFICE PORTFOLIO,
L.P., a Delaware limited partnership (“Landlord”), and HORIZON PHARMA USA, INC.,
a Delaware corporation (“Tenant”).

RECITALS

A.     Landlord and Tenant entered into that certain Standard Office Lease dated
as of August 2, 2011 (the “Original Lease”), whereby Tenant leases certain
office space located in that certain building located and addressed at 520 Lake
Cook Road, Deerfield, Illinois 60015 (the “Building”). The Original Lease was
subsequently amended by that certain First Amendment to Lease dated July 31,
2012, by and between Landlord and Tenant (the “First Amendment”). The Original
Lease, as amended by the First Amendment, shall be referred to herein as the
“Lease.”

B.     By this Second Amendment, Landlord and Tenant desire that Tenant lease
additional space within the Building, and to otherwise modify the Lease as
provided herein.

C.     Unless otherwise defined herein, capitalized terms shall have the
meanings given such terms in the Lease.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

AGREEMENT

1.     Existing Premises.   Landlord and Tenant hereby acknowledge that Tenant
currently leases from Landlord (a) that certain office space in the Building
containing 4,926 rentable square feet located on the third (3rd) floor of the
Building and known as Suite 350, and (b) that certain office space in the
Building containing 21,182 rentable square feet located on the fifth (5th) floor
of the Building and known as Suites 520 and 550 (collectively the “Existing
Premises”).

2.     Second Expansion Space.   That certain space located on the third
(3rd) floor of the Building known as Suite 375, as outlined on the floor plan
attached hereto as EXHIBIT A, shall be referred to herein as the “Second
Expansion Space.” Landlord and Tenant hereby stipulate that the Second Expansion
Space contains 8,352 rentable square feet. Tenant shall commence to pay charges
with regard to the Second Expansion Space effective as of May 1, 2014 (“Second
Expansion Commencement Date”). The addition of the Second Expansion Space to the
Existing Premises shall, effective as of the Second Expansion Commencement Date,
increase the number of rentable square feet leased by Tenant in the Building to
a total of 34,460 rentable square feet. Effective as of the Second Expansion
Commencement Date, all references to the “Premises” shall mean and refer to the
Existing Premises as expanded by the Second Expansion Space.

3.     Second Expansion Space Term.   The Term for Tenant’s lease of the Second
Expansion Space (“Second Expansion Space Term”) shall commence on the Second
Expansion Commencement Date and shall expire co-terminously with Tenant’s lease
of the Existing Premises on June 30, 2018 (the “Expiration Date”). Tenant shall
have the right to extend the Second Expansion Space Term beyond the Expiration
Date under the terms and conditions set forth in Section 31 of the Original
Lease and Section 10 below.

Notwithstanding anything to the contrary contained herein, Tenant shall have the
right to commence business from the Second Expansion Space during the period
(the “Beneficial Occupancy Period”) from the date of Landlord’s delivery of
possession of the Second Expansion Space to Tenant until the Second Expansion
Commencement Date, provided that (i) Tenant shall give Landlord at least ten
(10) days prior notice of any such occupancy of the Second Expansion Space,
(ii) a certificate of occupancy (or its equivalent) shall have been issued by
the appropriate governmental authorities for the Second Expansion Space, and
(iii) all of the terms and conditions of the Lease, as amended hereby, shall
apply, including Tenant’s obligation to pay parking fees pursuant to Article 9
below, during the Beneficial Occupancy Period (if any), except that Tenant’s
obligation to pay monthly Basic Rental and any Direct Costs shall not apply
during the Beneficial Occupancy Period.

 

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4.     Basic Rental.   Notwithstanding anything to the contrary in the Lease,
during the Second Expansion Space Term, Tenant shall pay, in accordance with the
applicable provisions of the Lease and this Section 4, monthly installments of
Basic Rental for the Second Expansion Space as follows:

 

      Lease Period   Monthly Basic Rental  

Annual Basic Rental per

Rentable Square Foot

     

May 1, 2014 – November 30, 2014  

  *$12,354.00   $17.75      

December 1, 2014 – November 30, 2015  

  $12,702.00   $18.25      

December 1, 2015 – November 30, 2016  

  $13,050.00   $18.75      

December 1, 2016 – November 30, 2017  

  $13,398.00   $19.25      

December 1, 2017 – June 30, 2018  

  $13,746.00   $19.75

*Subject to the terms of Section 5 below, Tenant’s obligation to pay monthly
Basic Rental and Tenant’s Proportionate Share of Direct Costs for the Second
Expansion Space shall be conditionally abated with respect to each of the full
calendar months of June 2014 through and including the month of September 2014.

5.     Conditional Abatement of Basic Rental and Direct Costs.   Notwithstanding
anything to the contrary contained in either the Lease or this Second Amendment,
provided that Tenant faithfully performs all of the terms and conditions of the
Lease, as hereby amended, through the date monthly Basic Rental and Tenant’s
Proportionate Share of Direct Costs would otherwise become due for the Second
Expansion Space, Landlord hereby agrees to fully abate Tenant’s obligation to
pay monthly Basic Rental and Tenant’s Proportionate Share of Direct Costs for
the Second Expansion Space for each of the full calendar months of June 2014
through and including the month of September 2014. The total amount of Basic
Rental and Direct Costs so abated may be referred to herein as the “Abatement
Amount.” During such abatement periods, Tenant shall remain responsible for the
payment of all of its other monetary obligations under the Lease, as hereby
amended. However, in the event of a default by Tenant under the terms of the
Lease, as hereby amended, at any subsequent time during the Second Expansion
Space Term which results in early termination pursuant to the provisions of
Section 20 of the Original Lease, then as a part of the recovery set forth in
Section 20 of the Original Lease, Landlord shall be entitled to the then
unamortized portion of the Abatement Amount, with such amortization to be
calculated on a monthly basis over the period from the May 1, 2014 Second
Expansion Commencement Date through the June 30, 2018 Expiration Date.

6.     Tenant’s Proportionate Share for the Second Expansion Space.  
Notwithstanding anything to the contrary in the Lease, during the Second
Expansion Space Term, Tenant’s Proportionate Share for the Second Expansion
Space shall be 1.25%.

7.     Improvements to the Second Expansion Space.   Commencing upon January 1,
2014, Tenant shall cause certain work to be performed in the Second Expansion
Space pursuant to the Tenant Work Letter attached hereto as EXHIBIT B, using
Building-standard quantities and materials (the “Improvements”). Tenant hereby
agrees that the construction of the Improvements shall in no way constitute a
constructive eviction of Tenant nor entitle Tenant to any abatement of Basic
Rental payable pursuant to this Second Amendment. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant’s business arising from the construction
of the Improvements, nor shall Tenant be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Existing
Premises or the Second Expansion Space resulting from the construction of the
Improvements or for any inconvenience or annoyance occasioned by the
construction of the Improvements. Except as specifically set forth in this
Second Amendment, Tenant hereby agrees to accept the Second Expansion Space in
its “as-is” condition and Tenant hereby acknowledges that Landlord shall not be
obligated to provide or pay for any improvement work or services related to the
improvement of the Second Expansion Space. Tenant also acknowledges that
Landlord has made no representation or warranty regarding the condition of the
Second Expansion Space.

8.     Letter of Credit.   Landlord and Tenant hereby acknowledge that Landlord
is currently holding a Letter of Credit on file in the amount of $[…***…].
Landlord shall continue to hold such Letter of Credit in accordance with the
applicable terms and conditions of Section 4 of the Original Lease.

9.       Parking.   Effective as of the Second Expansion Commencement Date or
commencement of the Beneficial Occupancy Period (if earlier) and continuing
throughout the Second Expansion Space Term, Tenant shall rent a total of nine
(9) unreserved parking passes (i.e., the seven (7) passes referenced in
Section 9 of the First Amendment, plus the conversion of one (1) current
month-to-month pass to a

 

 

***Confidential Treatment Requested

 

2

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permanent pass plus one (1) additional pass) for use in the Building’s
underground parking facility. Tenant’s rental and use of such parking passes
shall continue to be in accordance with, and subject to, all provisions of
Section 23 of the Original Lease, and at the prevailing rate charged from time
to time.

10.     Option to Extend.   Tenant’s existing option rights shall remain in full
force and effect, pursuant to the terms and conditions of Section 31 of the
Original Lease; provided however, the Option shall apply to the entirety of the
Existing Premises and the Second Expansion Space.

11.     Monument Sign.   Landlord and Tenant acknowledge that Landlord is
currently constructing a multi-tenant monument sign at the entrance to Corporate
500 Centre. Tenant shall be entitled to install, at Tenant’s sole cost and
expense, the following (collectively, “Tenant’s Signage”): (i) a sign adjacent
to the entry to the Second Expansion Space, with the frame of such sign 23” wide
by 6” tall, with 1 7⁄8” capital letters and 1 1⁄2” lower case letters, and
(ii) a strip on such monument sign. The graphics, materials, color, design and
the specifications for Tenant’s Signage shall be subject to Landlord’s
reasonable approval. Tenant’s Signage shall be personal to the Original Tenant
or an Affiliated Assignee (as those terms are defined in Article 31 of the
Original Lease) and may not be assigned to any other assignee or sublessee, or
any other person or entity. Landlord has the right, but not the obligation, to
oversee the installation of Tenant’s Signage. The cost to maintain and operate,
if any, Tenant’s Signage shall be paid for by Tenant. Upon the expiration or
earlier termination of the Lease (as amended), Tenant shall be responsible for
any and all costs associated with the removal of Tenant’s Signage, including,
but not limited to, the cost to repair and restore the monument to its original
condition, normal wear and tear excepted. Notwithstanding anything to the
contrary contained herein, if Landlord grants signage rights on such monument to
another tenant leasing a larger number of rentable square feet than Tenant,
Landlord may, at Tenant’s expense, remove Tenant’s Signage granted to Tenant
under (ii) above from the monument and repair any damage to the monument
resulting from such removal.

12.     Brokers.   Each party represents and warrants to the other that no
broker, agent or finder, other than Steve Kling and Chris Cummins of Colliers
International on behalf of Landlord and Joe Learner of Studley on behalf of
Tenant (collectively, the “Brokers”), negotiated or was instrumental in
negotiating or consummating this Second Amendment. Each party further agrees to
defend, indemnify and hold harmless the other party from and against any claim
for commission or finder’s fee by any entity, other than the Brokers, who claims
or alleges that they were retained or engaged by or at the request of such party
in connection with this Second Amendment.

13.     Payments to Landlord.   Notwithstanding anything to the contrary
contained in the Lease, any and all amounts due and payable by Tenant to
Landlord shall be in the form of (i) business checks, (ii) wire transfers,
(iii) electronic funds transfers, and (iv) automated clearing house payments.
Any other forms of payment are not acceptable to Landlord including, without
limitation (1) cash or currency, (2) cashier’s checks and money orders,
(3) traveler’s checks, (4) payments from credit unions or other non-bank
financial institutions, (5) multiple payments for one (1) scheduled payment, and
(6) third party checks.

14.     No Further Modification.   Except as set forth in this Second Amendment,
all of the terms and provisions of the Lease shall apply during the Second
Expansion Space Term and shall remain unmodified and in full force and effect.
Effective as of the date hereof, all references to the “Lease” shall refer to
the Lease as amended by this Second Amendment.

(Signatures appear on the following page.)

 

3

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IN WITNESS WHEREOF, this Second Amendment has been executed as of the day and
year first above written.

 

“LANDLORD”     LONG RIDGE OFFICE PORTFOLIO, L.P.,     a Delaware limited
partnership     By:     M.F. FUNDING, INC.,       a Delaware corporation      
Its:   General Partner       By:     /s/ Scott E. Lyle         Its:     Vice
President

 

“TENANT”     HORIZON PHARMA USA, INC.,     a Delaware corporation     By:   /s/
Timothy P. Walbert     Print Name:   Timothy P. Walbert     Title:   Chairman,
President & CEO     By:         Print Name:         Title:    

 

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EXHIBIT A – Outline of Second Expansion Space

 

LOGO [g681079g93w62.jpg]

 

Exhibit A-1

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EXHIBIT B – Tenant Work Letter

This Tenant Work Letter shall set forth the terms and conditions relating to the
renovation of the tenant improvements in the Second Expansion Space. This Tenant
Work Letter is essentially organized chronologically and addresses the issues of
the renovation of the Second Expansion Space, in sequence, as such issues will
arise.

1.      LANDLORD’S INITIAL CONSTRUCTION IN THE SECOND EXPANSION SPACE

Landlord has constructed, at its sole cost and expense, the base, shell and core
(i) of the Second Expansion Space, and (ii) of the floor of the Building on
which the Second Expansion Space is located (collectively, the “Base, Shell and
Core”). Tenant has inspected and hereby approves the condition of the Second
Expansion Space and Base, Shell and Core, and agrees that, subject to
construction of the Improvements, the Second Expansion Space and the Base, Shell
and Core shall be delivered to Tenant in its current “as-is” condition. The
improvements to be initially installed in the Second Expansion Space shall be
designed and constructed pursuant to this Tenant Work Letter. Any costs of
initial design and construction of any improvements to the Second Expansion
Space shall be an “Improvement Allowance Item”, as that term is defined in
Section 2B of this Tenant Work Letter.

2.      IMPROVEMENTS

A.     Improvement Allowance.   Beginning January 1, 2014, Tenant shall be
entitled to a one-time improvement allowance (the “Improvement Allowance”) in
the amount of $187,920 for the costs relating to the initial design and
construction of Tenant’s improvements which are permanently affixed to the
Second Expansion Space (the “Improvements”). In no event shall Landlord be
obligated to make disbursements pursuant to this Tenant Work Letter in a total
amount which exceeds the Improvement Allowance.

B.     Improvement Allowance Items.   Except as otherwise set forth in this
Tenant Work Letter, the Improvement Allowance shall be disbursed by Landlord
(each of which disbursements shall be made pursuant to Landlord’s disbursement
process) for costs related to the construction of the Improvements and for the
following items and costs (collectively, the “Improvement Allowance Items”):
(i) payment of the fees of the “Architect” and the “Engineers,” as those terms
are defined in Section 3 of this Tenant Work Letter, and payment of the fees
incurred by, and the cost of documents and materials supplied by, Landlord and
Landlord’s consultants in connection with the preparation and review of the
“Construction Drawings,” as that term is defined in Section 3 of this Tenant
Work Letter; (ii) the cost of permits and license fees relating to construction
of the Improvements; (iii) the cost of any changes in the Base, Shell and Core
required by the Construction Drawings; (iv) the cost of any changes to the
Construction Drawings or Improvements required by applicable building codes (the
“Code”); (v) the cost of construction of the Improvements, including, without
limitation, testing and inspection costs and trash removal costs, and
contractors’ fees and general conditions; (vi) sales and use taxes; and
(vii) all other costs to be expended by Tenant and reasonably approved Landlord
in connection with the construction of the Improvements. However, in no event
shall more than three and 50/100 Dollars ($3.50) per rentable square foot of the
Improvement Allowance be used for the aggregate cost of items described in
(i) and (ii) above; any additional amount incurred as a result of (i) and
(ii) above shall be paid for by Tenant as part of the Over-Allowance Amount.

C.     Application toward FF&E and/or Rent Credit.   Notwithstanding the
foregoing, Tenant shall have the right to apply up to $83,520.00 of the
Improvement Allowance to reimburse Tenant for costs associated with the purchase
and/or installation of furniture, fixtures and equipment (“FF&E”) within the
Second Expansion Space and/or as a credit against monthly Basic Rental for the
Second Expansion Space; provided, however, Tenant shall be required to provide
Landlord with written notice of its election to utilize any portions of the
Improvement Allowance toward any FF&E costs and/or monthly Basic Rental credit,
with such notice including copies of paid invoices for furniture, fixtures and
equipment in the event Tenant elects to use any portion of the Improvement
Allowance for reimbursement of FF&E costs. In no event shall Tenant be entitled
to any credit for any unused portion of the Improvement Allowance not applied
(toward Improvements, FF&E and/or monthly Basic Rental credit) by December 31,
2014.

D.     Disbursement of the Improvement Allowance.   Landlord shall disburse the
Improvement Allowance in interim progress disbursements (“Progress
Disbursement”), and one (1) final disbursement (“Final Disbursement”), within
thirty (30) days after Tenant submits complete written disbursement requests, as
further described below. Landlord may issue checks to fund the Improvement
Allowance jointly or separately to Tenant, its general contractor, and any other
of “Tenant’s Agents” (as defined in Section 4A below). Without limiting the
generality of the provisions below, Landlord may withhold payments of the
Improvement Allowance pending inspection of the Improvements theretofore
performed to determine that the applicable portions of the Improvements were
properly performed in accordance with this Tenant Work Letter and the Approved
Working Drawings, and that no substandard work exists

 

Exhibit B-1

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which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the Building,
the curtain wall of the Building, the structure or exterior appearance of the
Building, or any other tenant’s use of such other tenant’s leased premises in
the Building; provided, such inspections shall not be deemed a warranty by
Landlord that such conditions do not exist nor a waiver of Landlord’s rights if
such conditions exist and were not reported during such inspection.

 

  (a)

Progress Disbursements.   Each Progress Disbursement shall be paid based on the
percentage value of the Improvements theretofore completed (“Completed Work
Percentage”), less ten percent (10%) retention (“Retention”) to be deferred to
the Final Disbursement. Tenant shall not request any Progress Payments more
often than monthly. In each Progress Disbursement Request, Tenant shall:
(i) state the Completed Work Percentage as of the date of such Progress
Disbursement Request (which may include any material actually delivered to the
Second Expansion Space as of such date), and show the subtraction of the
Retention required herein, (ii) set forth the total estimated cost of the
Improvements, and the computation of the Progress Disbursement, (iii) attach a
general contractor application for payment on AIA G702 and G703 forms (or such
modified version and/or a “sworn statement” or “affidavit of payment” in such
form as Landlord may require consistent with Illinois laws and customs to
protect against mechanics’ and other liens), respecting the portion of the
Improvements covered by such Progress Disbursement Request, duly executed and
certified under oath (or sworn under penalty of perjury and notarized as
Landlord may require consistent with Illinois laws) by the general contractor
and all subcontractors, and which shall include execution and certification by
the Architect that all Improvements for which payment is requested have been
properly completed in accordance with the Approved Working Drawings, and shall
show the names of all parties furnishing material and labor and the amount
previously paid and due or to become due to each of them, and shall include
invoices and other reasonable supporting documentation, and (iv) include partial
lien releases (which may, at Landlord’s sole option, be conditional as to the
amount of the current payment requested, but shall in any event be unconditional
releases as to prior amounts), by the general contractor and all subcontractors,
suppliers, materialmen and persons who have provided any labor, services,
material, fixtures, apparatus or machinery (collectively, “Subcontractors”), in
such form as Landlord may require consistent with Illinois laws, respecting the
portion of the Improvements covered by such Progress Disbursement Request.

 

  (b)

Final Disbursement Request.   Tenant’s Final Disbursement Request shall specify
that it is the “Final Disbursement Request,” and shall include: (i) an
“Architect’s Certificate of Substantial Completion” on the current AIA form, and
an Architect’s certificate for final payment, (ii) a general contractor
application for payment on AIA G702 and G703 forms (or such modified version
and/or such form of “sworn statement” or “affidavit of payment” as Landlord may
require consistent with Illinois laws to protect against mechanics’ and other
liens), duly executed and certified under oath (or sworn under penalty of
perjury and notarized as Landlord may require consistent with Illinois laws) by
the contractor and all Subcontractors, and which shall include execution and
certification by the Architect, as further described above respecting Progress
Disbursement Requests, (iii) copies of all invoices for the Improvements not
previously provided, (iv) a copy of the permanent certificate of occupancy for
the Second Expansion Space (if required by law, or otherwise such evidence or
government inspections and approvals as may be customary), and (v) final,
complete, unconditional lien releases by the general contractor and all
Subcontractors in such form as Landlord may require consistent with Illinois
laws, and (vi) such other evidence as Landlord may reasonably require that the
costs of the Improvements have been paid and that no architect’s, engineer’s
mechanic’s, materialmen’s or other liens have been or may be filed against the
Building or Second Expansion Space arising out of the design or performance of
such Improvements. Notwithstanding anything to the contrary contained herein, to
the extent substantial completion has occurred, but any so-called punch-list
items or other items remain to be performed, Landlord may defer paying the Final
Disbursement or such portion thereof as Landlord may determine, until all such
items are fully completed.

 

  (c)

Other Terms.   Landlord shall only be obligated to make disbursements from the
Improvement Allowance to the extent costs are incurred by Tenant for Improvement
Allowance Items. Except for furniture, fixtures and equipment purchased under
Section 2.C above, all Improvement Allowance Items for which the Improvement
Allowance has been made available shall be deemed Landlord’s property under the
terms of this Second Amendment.

 

Exhibit B-2

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3.      CONSTRUCTION DRAWINGS

A.     Selection of Architect/Construction Drawings.   Tenant shall retain an
architect/space planner approved by Landlord (the “Architect’’) to prepare the
“Construction Drawings,” as that term is defined in this Section 3. Tenant shall
also retain the engineering consultants approved by Landlord (the “Engineers”)
to prepare all plans and engineering working drawings relating to the
structural, mechanical, electrical, plumbing, HVAC and life safety work of the
Improvements. The Architect and the Engineers are collectively referred to
herein as the “Design Professionals”. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known collectively as the
“Construction Drawings.” All Construction Drawings shall comply with the drawing
format and specifications as reasonably determined by Landlord, and shall be
subject to Landlord’s reasonable approval. Tenant and Architect shall verify, in
the field, the dimensions and conditions as shown on the relevant portions of
the base building plans, and Tenant and Architect shall be solely responsible
for the same, and Landlord shall have no responsibility in connection therewith.
Landlord’s review of the Construction Drawings as set forth in this Section 3,
shall be for its sole purpose and shall not imply Landlord’s review of the same,
or obligate Landlord to review the same, for quality, design, Code compliance or
other like matters. Accordingly, notwithstanding that any Construction Drawings
are reviewed by Landlord or its space planner, architect, engineers and
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord’s space planner, architect, engineers, and
consultants, Landlord shall have no liability whatsoever in connection therewith
and shall not be responsible for any omissions or errors contained in the
Construction Drawings. Approval of the Construction Drawings by Landlord is not
a representation that the drawings are in compliance with the requirements of
governing authorities, and it shall be Tenant’s responsibility to meet and
comply with all federal, state, and local code requirements. Landlord’s approval
of the “Contract” (as defined in Section 4B(a) below), and Landlord’s
designations, lists, recommendations or approvals concerning Design
Professionals and Tenant’s Agents, shall not be deemed a warranty as to the
quality or adequacy thereof or of the Construction Drawings or the Improvements,
or the design thereof, or of compliance with laws, codes and other legal
requirements.

B.     Approved Working Drawings.   Landlord shall approve (or disapprove)
working drawings prepared by the Architect within ten (10) days after Landlord
receives the final working drawings (the “Approved Working Drawings”). Tenant
shall submit the same to the applicable governmental agencies and diligently
pursue its receipt of all applicable building permits. Tenant hereby agrees that
neither Landlord nor Landlord’s consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Second Expansion Space
and that obtaining the same shall be Tenant’s responsibility; provided, however,
that Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Working Drawings may be made without the prior
written consent of Landlord, which consent may not be unreasonably withheld.

4.      CONSTRUCTION OF THE IMPROVEMENTS

A.     Contractor and Tenant’s Agents.   The contractor which shall construct
the Improvements shall be retained by and contract directly with Tenant and
shall be a contractor reasonably approved by Landlord. The contractor selected
may be referred to herein as the “Contractor”. All subcontractors, laborers,
materialmen, and suppliers used by Tenant (such subcontractors, laborers,
materialmen, and suppliers, and the Contractor to be known collectively as
“Tenant’s Agents”) must be approved in writing by Landlord, which approval shall
not be unreasonably withheld or delayed. If Landlord does not approve any of
Tenant’s proposed subcontractors, laborers, materialmen or suppliers, Tenant
shall submit other proposed subcontractors, laborers, materialmen or suppliers
for Landlord’s written approval.

B.     Construction of Improvements by Tenant’s Agency.

 

  (a)

Construction Contract; Cost Budget.   Prior to Tenant’s execution of the
construction contract and general conditions with Contractor (the “Contract”),
Tenant shall submit the Contract to Landlord for its approval with regard to
proper insurance and licensing requirements and any other provisions which may
adversely affect Landlord or Landlord’s interest in the Building, and which
approval shall not be unreasonably withheld or delayed by more than five
(5) business days after Landlord’s receipt of the Contract. Prior to the
commencement of the construction of the Improvements, and after Tenant has
accepted all bids for the Improvements, Tenant shall provide Landlord with a
detailed breakdown, by trade, of the final costs to be incurred or which have
been incurred in connection with the design and construction of the Improvements
to be performed by or at the direction of Tenant or the Contractor, which costs
form a basis for the amount of the Contract (the “Final Costs”). Prior to the
commencement of construction of the Improvements, Tenant shall supply Landlord
with an amount (the “Over-Allowance Amount”) equal to the difference between the
amount of the Final Costs and the amount of the Improvement Allowance (less any
portion thereof already disbursed by Landlord, or in the process of being
disbursed by Landlord,

 

Exhibit B-3

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on or before the commencement of construction of the Improvements). The
Over-Allowance Amount shall be disbursed by Landlord prior to the disbursement
of any of the then remaining portion of the Improvement Allowance, and such
disbursement shall be pursuant to the same procedure as the Improvement
Allowance. In the event that, after the Final Costs have been delivered by
Tenant to Landlord, the costs relating to the design and construction of the
Improvements shall change, any additional costs necessary to such design and
construction in excess of the Final Costs, shall be paid by Tenant to Landlord
immediately as an addition to the Over-Allowance Amount or at Landlord’s option,
Tenant shall make payments for such additional costs out of its own funds, but
Tenant shall continue to provide Landlord with the documents described in
Section 2D(a) (i), (ii), (iii) and (iv) of this Tenant Work Letter, above, for
Landlord’s approval, prior to Tenant paying such costs.

 

  (b)

Tenant’s Agents.

 

  (i)

Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement Work.  
Tenant’s and Tenant’s Agent’s construction of the Improvements shall comply with
the following: (i) the Improvements shall be constructed in strict accordance
with the Approved Working Drawings; (ii) Tenant’s Agents shall submit schedules
of all work relating to the Improvements to Contractor and Contractor shall,
within five (5) business days of receipt thereof, inform Tenant’s Agents of any
changes which are necessary thereto, and Tenant’s Agents shall adhere to such
corrected schedule; and (iii) Tenant shall abide by all rules made by Landlord’s
Project manager with respect to the use of freight, loading dock and service
elevators, storage of materials, coordination of work with the contractors of
other tenants, and any other matter in connection with this Tenant Work Letter,
including, without limitation, the construction of the Improvements.

 

  (ii)

Indemnity and Waiver.   Tenant’s indemnity of Landlord and waiver of claims
against Landlord as set forth in the Lease shall also apply, to the extent not
prohibited by applicable Illinois laws, with respect to any and all costs,
losses, damages, injuries and liabilities related in any way to any act or
omission of Tenant or Tenant’s Agents, or anyone directly or indirectly employed
by any of them, or in connection with Tenant’s non-payment of any amount arising
out of the Improvements and/or Tenant’s disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in the Lease, shall
also apply, to the extent not prohibited by applicable Illinois laws, with
respect to any and all costs, losses, damages, injuries and liabilities related
in any way to Landlord’s performance of any ministerial acts reasonably
necessary (i) to permit Tenant to complete the Improvements, and (ii) to enable
Tenant to obtain any building permit or certificate of occupancy for the Second
Expansion Space.

 

  (iii)

Requirements of Tenant’s Agents.   Each of Tenant’s Agents shall guarantee to
Tenant and for the benefit of Landlord that the portion of the Improvements for
which it is responsible shall be free from any defects in workmanship and
materials for a period of not less than one (1) year from the date of completion
thereof. Each of Tenant’s Agents shall be responsible for the replacement or
repair, without additional charge, of all work done or furnished in accordance
with its contract that shall become defective within one (1) year after the
later to occur of (i) completion of the work performed by such contractor or
subcontractors and (ii) the Second Expansion Commencement Date. The correction
of such work shall include, without additional charge, all additional expenses
and damages incurred in connection with such removal or replacement of all or
any part of the Improvements, and/or the Building and/or common areas that may
be damaged or disturbed thereby. All such warranties or guarantees as to
materials or workmanship of or with respect to the Improvements shall be
contained in the Contract or subcontract and shall be written such that such
guarantees or warranties shall inure to the benefit of both Landlord and Tenant,
as their respective interests may appear, and can be directly enforced by
either. Tenant covenants to give to Landlord any assignment or other assurances
which may be necessary to effect such right of direct enforcement.

 

Exhibit B-4

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  (1)

Lien-Free Basis.   Tenant’s Contractor and the other Tenant’s Agents and the
Design Professionals shall perform all work and services on a lien-free basis.
If a lien is filed or recorded against the Building due to, or in any way
associated with, the design, engineering or construction of the Improvements,
Tenant agrees to have such lien released of record by recording a lien release
bond or otherwise (in a manner and form approved by Landlord) within five
(5) days of Landlord’s notice to Tenant regarding same. If Tenant fails to cause
the release of such lien within such five (5) day period to Landlord’s
satisfaction, Landlord may cause the removal of such lien from Landlord’s title
or require a deposit by Tenant as provided under Article 10 (Liens) of the
Lease, and Tenant agrees to repay Landlord for all costs and expenses incurred
by Landlord to release the lien (including, but not limited to, the payment of
the amount stated in the lien, any filing, processing, recording and attorneys’
fees) within ten (10) days of Landlord’s request therefor, and such amount shall
be considered Additional Rent due under the Lease. If Tenant fails to pay
Landlord as aforesaid, such failure shall be deemed an uncured noticed material
default under the Lease, and Landlord may pursue any remedy provided for under
the Lease, at law or in equity. Under no circumstances shall Landlord’s approval
or payment of a Progress Disbursement, Final Disbursement or any other amount,
be deemed a waiver of Tenant’s obligations or Landlord’s rights respecting
liens.

 

  (iv)

Insurance Requirements.

 

  (1)

General Coverages.   All of Tenant’s Agents shall carry worker’s compensation
insurance covering all of their respective employees, and shall also carry
commercial general liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in the Lease.

 

  (2)

Special Coverages. Tenant shall carry “Builder’s All Risk” insurance in an
amount approved by Landlord covering the construction of the Improvements, and
such other insurance as Landlord may require, it being understood and agreed
that the Improvements shall be insured by Tenant pursuant to the Lease, as
amended by this Second Amendment, during construction and immediately upon
completion thereof. Such insurance shall be in amounts and shall include such
extended coverage endorsements as may be reasonably required by Landlord
including, but not limited to, the requirement that all of Tenant’s Agents shall
carry excess liability and Products and Completed Operating Coverage insurance,
each in amounts not less than $500,000 for each incident, $1,000,000 in
aggregate, and in form and with companies as are required to be carried by
Tenant as set forth in the Lease.

 

  (c)

General Terms.   Certificates for all insurance carried pursuant to this
Section 4B(c) shall be delivered to Landlord before the commencement of
construction of the Improvements and before the Contractor’s equipment is moved
onto the site. All such policies of insurance must contain a provision that the
company writing said policy will give Landlord thirty (30) days prior written
notice of any cancellation or lapse of the effective date or any reduction in
the amounts of such insurance. In the event that the Improvements are damaged by
any cause during the course of the construction thereof, Tenant shall
immediately repair the same at Tenant’s sole cost and expense. Tenant’s Agents
shall maintain all of the foregoing insurance coverage in force until the
Improvements are fully completed and accepted by Landlord, except for any
Products and Completed Operation Coverage insurance required by Landlord, which
is to be maintained for ten (10) years following completion of the work and
acceptance by Landlord and Tenant. All policies carried under this Section 4B(c)
shall insure Landlord and Tenant, as their interests may appear, as well as
Contractor and Tenant’s Agents. All insurance maintained by Tenant’s Agents
shall preclude subrogation or contribution claims by the insurer against anyone
insured thereunder, to the extent not prohibited under applicable Illinois laws.
Such insurance shall provide that it is primary insurance as respects

 

Exhibit B-5

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the Landlord and that any other insurance maintained by Landlord is excess and
noncontributing with the insurance required hereunder. The requirements for the
foregoing insurance shall not derogate from the provisions for indemnification
of Landlord by Tenant under Section 4B(b)(ii) of this Tenant Work Letter.

 

  (d)

Governmental Compliance.   The Improvements shall comply in all respects with
the following: (i) the Code and other state, federal, city or quasi-governmental
laws, codes, ordinances and regulations, as each may apply according to the
rulings of the controlling public official, agent or other person;
(ii) applicable standards of the American Insurance Association (formerly, the
National Board of Fire Underwriters) and the National Electrical Code; and
(iii) material and equipment manufacturer’s specifications for the Building and
for materials and equipment to be installed as part of the Improvements.

 

  (e)

Inspection by Landlord.   Landlord shall have the right to inspect the
Improvements at all times, provided however, that Landlord’s failure to inspect
the Improvements shall in no event constitute a waiver of any of Landlord’s
rights hereunder nor shall Landlord’s inspection of the Improvements constitute
Landlord’s approval of the same. Should Landlord disapprove any portion of the
Improvements, Landlord shall notify Tenant in writing of such disapproval and
shall specify the items disapproved. Any defects or deviations in, and/or
disapproval by Landlord of, the Improvements shall be rectified by Tenant at no
expense to Landlord, provided however, that in the event Landlord determines
that a defect or deviation exists or disapproves of any matter in connection
with any portion of the Improvements and such defect, deviation or matter might
adversely affect the mechanical, electrical, plumbing, heating, ventilating and
air conditioning or life-safety systems of the Building, the structure or
exterior appearance of the Building or any other tenant’s use of such other
tenant’s leased premises, Landlord may take such action as Landlord deems
necessary, at Tenant’s expense and without incurring any liability on Landlord’s
part, to correct any such defect, deviation and/or matter, including, without
limitation, causing the cessation of performance of the construction of the
Improvements until such time as the defect, deviation and/or matter is corrected
to Landlord’s satisfaction.

 

  (f)

Meetings.   Commencing upon the execution of this Second Amendment, Tenant and
Landlord shall hold meetings as required at a reasonable time with the Architect
and the Contractor regarding the progress of the preparation of Construction
Drawings and the construction of the Improvements, which meetings shall be held
at a location designated by Landlord, and Landlord and/or its agents shall
receive prior notice of, and shall have the right to attend, all such meetings,
and, upon Landlord’s request, certain of Tenant’s Agents shall attend such
meetings. One such meeting each month shall include the review of Contractor’s
current request for payment.

C.     Copy of “As Built” Plans.   At the conclusion of construction, (i) Tenant
shall cause the Architect and Contractor (A) to update the Approved Working
Drawings as necessary to reflect all changes made to the Approved Working
Drawings during the course of construction, (B) to certify to the best of their
knowledge that the “record-set” of as-built drawings are true and correct, which
certification shall survive the expiration or termination of the Lease, and
(C) to deliver to Landlord two (2) sets of copies of such as-built drawings
within ninety (90) days following substantial completion of the Improvements,
and (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties,
and operating manuals and information relating to the improvements, equipment,
and systems in the Second Expansion Space.

5.      MISCELLANEOUS

A.     Tenant’s Representative.   Tenant has designated Rob Metz as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

B.     Landlord’s Representative.   Prior to commencement of construction of
Improvements, Landlord shall designate a representative with respect to the
matters set forth in this Tenant Work Letter, who, until further notice to
Tenant, shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.

C.     Time of the Essence.   Time is of the essence with respect to Tenant’s
obligations under this Tenant Work Letter. Unless otherwise indicated, all
references herein to a “number of days” shall mean and refer to calendar days.

D.     Tenant’s Lease Default.   Notwithstanding any provision to the contrary
contained in the Lease, if an event of default as described in the Lease or this
Tenant Work Letter has occurred at any time,

 

Exhibit B-6

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then (i) in addition to all other rights and remedies granted to Landlord
pursuant to the Lease, Landlord shall have the right to withhold payment of all
or any portion of the Improvement Allowance and/or Landlord may cause Contractor
to cease the construction of the Second Expansion Space (in which case, Tenant
shall be responsible for any delay in the substantial completion of the Second
Expansion Space caused by such work stoppage), and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be forgiven until such
time as such default is cured pursuant to the terms of the Lease (in which case,
Tenant shall be responsible for any delay in the substantial completion of the
Second Expansion Space caused by such inaction by Landlord).

E.     Construction Defects.   Landlord shall have no responsibility for the
Improvements and Tenant will remedy, at Tenant’s own expense, and be responsible
for any and all defects in the Improvements that may appear during or after the
completion thereof whether the same shall affect the Improvements in particular
or any parts of the Second Expansion Space in general. Tenant shall indemnify,
defend, hold harmless and reimburse Landlord for any liabilities, costs or
expenses incurred by Landlord by reason of any defect in any portion of the
Improvements constructed by Tenant or Tenant’s contractor or subcontractors, or
by reason of inadequate cleanup following completion of the Improvements.

F.     Coordination of Labor.   All of Tenant’s contractors, subcontractors,
employees, servants and agents must work in harmony with and shall not interfere
with any labor employed by Landlord, or Landlord’s contractors or by any other
tenant or its contractors with respect to any portion of the Building.

G.     HVAC Systems.   Tenant agrees to be entirely responsible for the
maintenance or the balancing of any heating, ventilating or air conditioning
system installed by Tenant and/or maintenance of the electrical or plumbing work
installed by Tenant and/or for maintenance of lighting fixtures, partitions,
doors, hardware or any other installations made by Tenant.

 

Exhibit B-7