Building Lease



 Exhibit 10.32 
  
 BUILDING LEASE 
  

							
	 DATE OF LEASE
	  	 TERM OF LEASE
	    	 BASE RENT AMOUNT

	 September 15, 2004
	  	 Beginning
	  	 Ending
	    	 $120,000.00 for first year

	 	  	 9/15/04
	  	 9/15/07
	    	 
			
	 LOCATION OF PREMISES:
	  	 453 Commerce
 Burr Ridge, Illinois
	    	 Security Deposit:
 $ 10,000.00


  
 DESCRIPTION OF PREMISES: The property
being leased hereunder is as depicted upon That diagram/site plan attached hereto as Exhibit A, together with those rights of ingress, egress, storage and loading set forth herein. 
  

							
	 LESSEE
	 	 	  	 LESSOR
	 	 
				
	 Name:
	 	 Nanophase Technologies Corporation
	  	 Name:
	 	 Village of Burr Ridge

				
	 Address:
	 	 453 Commerce
	  	 Address:
	 	 7660 S. County Line Rd.

	 	 	 Burr Ridge, IL
	  	 	 	 Burr Ridge, IL 60527


  
 In consideration of
the mutual covenants and agreements herein stated, Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, the premises designated above (the “Premises”), together with the appurtenances thereto, for the above Term.

  
 1. Rent: Lessee shall pay Lessor the base rent amount
of $120,000,00, which consists of $6.00/square foot for 20,000 square feet, in twelve (12) equal installments in the amount of Ten Thousand dollars ($10,000.00) as rent for the Premises, at Lessor’s address as shown above, payable on or before
the 15th of each calendar month. The first monthly payment, and the security deposit in the amount of $10,000.00
shall be due on or before September 15, 2004. Rent shall continue to be due monthly for the term of this Lease to be calculated based upon the following: for each year after the first year of this Lease, the base rental amount of $120,000.00 will
increase annually by that percentage equal to the annual percentage increase for the preceding twelve (12) months in the Consumer Price Index, (Chicago-All Items for all Urban Wage Earners and Clerical Workers) (CPI-W) or an amount of 3% annually,
whichever is greater. 
  
 2. Improvements: Lessee shall be
responsible for any improvements to the Premises, including, for example, carpeting, lighting and fixtures, partitions or ceiling enhancements, provided that any alteration or addition to the Premises by Lessee requires the prior written consent of
Lessor. Said consent will not be unreasonably withheld by Lessor. 







 3. Condition and Upkeep of Premises: Lessee has examined and knows the condition of the Premises
and has received the same in good order and repair, and acknowledges that no representations as to the condition and repair thereof have been made by Lessor, or his agent, prior to or at the execution of this Lease that are not herein expressed;
Lessee will keep the Premises including all appurtenances, in good repair, replacing all broken glass and all damaged plumbing fixtures with others of equal quality, and will keep the Premises, including adjoining areas, in a clean and healthful
condition according to the applicable municipal ordinances during the term of this Lease at Lessee’s expense. Lessor will remove all snow and ice from the roof when necessary, and will be responsible for snow removal, as needed, from the
sidewalk abutting the Premises and parking lot serving the Premises. Upon the termination of this Lease, for any reason, Lessee will yield up the Premises to Lessor, in good condition and repair, loss by fire and ordinary wear excepted. Lessor has
responsibility for upkeep of all areas on the exterior of building, including, but not limited to the roof, parking area, grass area, sidewalks and exterior walls. Lessee has responsibility for upkeep of all elements on the interior of the space
within the Premises, including, but not limited to, plumbing, electric, and H.V.A.C. equipment and facilities. Lessor represents that the plumbing, electric, gas and H.V.A.C. equipment and facilities is in good working order at the commencement of
this lease. Lessor shall not be obliged to incur any other expense for repairing any improvements upon said demised premises or connected therewith, and the Lessee at his own expense will keep all improvements in good repair (injury by fire, or
other causes beyond Lessee’s control excepted) as well as in a good tenantable and wholesome condition, and will comply with all local or general regulations, laws and ordinances applicable thereto. If Lessee does not make repairs as required
hereunder promptly and adequately, Lessor may, but need not make such repairs and pay the costs thereof, and such costs shall be so much additional rent immediately due from and payable by Lessee to Lessor. Lessee is obligated to provide Lessor
prompt notice of any necessary repairs for which Lessor may be responsible. 
  
 4. Lessee’s Access to Premises: Lessee shall have rights of reasonable ingress and egress to the Premises over the paved portions and sidewalks on Lessor’s property as well as ingress and egress
rights over Lessor’s property to access Lessee’s loading dock and shared use of Lessor’s paved parking area. Lessee shall also be entitled to reasonable use of that area needed to the south of the Premises to locate its outside
storage tank(s). The storage tank(s) shall be located generally in that area depicted for such use on Exhibit A. Lessee agrees to locate and install said tank(s) in a neat and orderly fashion. Lessee shall petition the Village of Burr
Ridge or other applicable governmental entity for any variations(s) or permit(s) that may be needed to lawfully locate, construct and/or operate such tanks, Lessor acknowledges that said storage tanks are an integral part of Lessee’ s use of
the Premises. If such permit, variation or approval as is needed to permit the lawful construction and use of such tanks is denied by the governmental entity with jurisdiction, Lessee shall have the option, within thirty (30) days after such denial,
to terminate this Lease. 
  
 5. Lessee Not to Misuse; Sublet;
Assignment: Lessee will not allow the Premises to be used for any purpose that will increase the rate of insurance thereon for Lessor, and will not load floors with machinery or goods beyond the floor load rating prescribed by applicable
governmental ordinances, and will not allow the Premises to be occupied in whole, or in part, by any other person, and will not sublet the same or any part thereof, nor assign this Lease without 

  

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in each case the prior written consent of the Lessor first had, and Lessee will not permit any transfer by operation of law, mortgage or other encumbrance of
the interest in the Premises acquired through this Lease, Lessee will not permit the Premises to be used for any unlawful purpose, or for any purpose that will injure the reputation of the building or increase the fire hazard of the building, or
disturb the neighborhood, provided however, it is understood and acknowledged by Lessor that Lessee will conduct certain warehousing and manufacturing activities on the Premises and such activities shall be permitted if in compliance with applicable
federal, state and local law. Lessee will not allow any signs, cards or placards to be posted, or placed thereon, nor permit any alteration of or addition to any part of the Premises, except by written consent of Lessor which consent would not be
unreasonably withheld; all alterations and additions to the Premises shall remain for the benefit of Lessor unless otherwise provided in the consent aforesaid. Lessor represents that the Premises are currently zoned for Lessee’s manufacturing,
warehousing and office uses. 
  
 6. Mechanic’s Lien:
Lessee will not permit any mechanic’s lien or liens to be placed upon the Premises or any building or improvement thereon during the term hereof, and in case of the filing of such lien Lessee will promptly pay same. If a default in payment
shall continue for thirty (30) days after written notice to Lessee from Lessor to the Lessee, the Lessor shall have the right and privilege at Lessor’s option of paying the same or any portion of the lien amount without inquiry as to its
validity, and any amounts so paid, including expenses and interest, shall be so much additional indebtedness hereunder due from Lessee to Lessor and shall be repaid to Lessor immediately on tender of bill the lien costs. 
  
 7. Indemnify for Accidents: Lessee covenants and agrees that it will
protect and save and keep the Lessor forever harmless and indemnified against and from any penalty or damages or charges imposed for any violation of any laws or ordinances, whether occasioned by the neglect of Lessee or those holding under Lessee,
and that Lessee will at all times protect, indemnify and save and keep harmless the Lessor against and from any and all loss, cost, damage or expense, arising out of or from any accident or other occurrences on or about the Premises, causing injury
to any person or property whomsoever or whatsoever and will protect, indemnify and save and keep harmless the Lessor against and from any and all claims and against and from any and all loss, cost, damage or expense arising out of any failure of
Lessee in any respect to comply with and perform all the requirements and provisions hereof. Lessee agrees to obtain from a responsible insurance company, or companies, at its expense, public liability insurance in an amount not less than ONE
MILLION ($1,000,000.00) DOLLARS with respect to any one accident and FIVE HUNDRED THOUSAND ($500,000.00) DOLLARS property damage with respect to any one accident, and a certificate as to such insurance shall be deposited with Lessor. 
  
 8. Non-Liability of Lessor: None of the provisions of this Lease shall
operate to waive any protections or immunities from suit or liability that the Lessor is entitled to as a municipal entity under Illinois or Federal law. 
  
 9. Water, Gas and Electric Charges: Lessee will pay, in addition to the rent above specified, all water rents, gas and electric light and power
bills taxed, levied or charged on the Premises, for and during the time for which this Lease is granted, and in case said water rents and bills for gas, electric light and power shall not be paid when due, Lessor shall, upon three days notice to
Lessee have the right to pay the same, which amounts so paid are declared to be so much additional rent and payable with the installment of rent next due thereafter. Such services shall be separately metered. 
  

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 10. Lessor’s Access to Premises: Lessor and its designees shall have the right, upon
reasonable notice to Lessee, to enter upon the Premises at all reasonable hours (and in emergencies at all times and without notice): (a) to inspect the same; (b) to make repairs, additions or alterations to the Premises or the building in which the
same are located or any property owned or controlled by Lessor; provided, however, if Lessor intends to be reimbursed by Lessee for any such repairs, additions or alterations, it shall so notify Lessee at least fourteen (14) days prior to taking any
such action in order for Lessee to determine whether it is responsible for any such repairs, additions or alterations. 
  
 11. Option Period: Lessee has the right to extend the Lease term for three (3) consecutive 12 month periods. The annual rent escalation for each of
the one year option periods will continue to be determined in the manner utilized during the initial 36 month Lease term. Responsibility for real estate taxes will continue to be determined in the manner utilized during the initial 36 month Lease
term. Lessee must provide written notice to Lessor of its intent to exercise this option to extend the lease for a 12 month period at least six (6) months prior to the expiration of the term of the Lease. Notice must be provided in conformance with
paragraph 25. 
  
 12. Abandonment and Reletting: If Lessee
shall abandon or vacate the Premises, or if Lessee’s right to occupy the Premises is terminated by Lessor by reason of Lessee’s breach of any of the covenants herein, the same may be re-let by Lessor for such rent and upon such terms as
Lessor may reasonably deem fit, subject to Illinois statute; and if a sufficient sum shall not thus be realized monthly, after paying the out-of-pocket expenses of such re-letting and collecting to satisfy the rent hereby reserved, Lessee agrees to
satisfy and pay all deficiencies monthly during the remaining period of this Lease. Lessor shall exercise reasonable efforts to obtain a new lessee to occupy the Premises following abandonment or vacation thereof by Lessee at a rate of rental then
prevailing in the Burr Ridge area and upon such other lease terms as are herein contained. Upon abandonment or vacation of the Premises, Lessee’s obligation is to restore the Premises to its original condition at the commencement of this Lease
and return the Premises to Lessor in good condition and repair, provided, however, Lessee shall not be required to remove any improvements to the Premises approved by Lessor (unless such improvements are special or unique to Lessee’s business,
as reasonably determined by Lessor, and are so conditioned by Lessor). Lessee shall be solely responsible for the complete removal of any outside storage tank(s) and restoration of the affected location of the tank(s). 
  
 13. Hazards and Hazardous Substances: Lessor hereby represents that no
hazardous materials exist on, within, or under the Premises as of the commencement of Lessee’s occupancy hereunder in violation of applicable environmental requirements under local, Illinois or Federal law. Lessee shall not cause or permit any
hazardous material to be brought upon, or kept or used in or about the premises by Lessee, its agents, employees, contractors, or invitees, without the prior written consent of Lessor, (which consent Lessor shall not unreasonably withhold) so long
as Lessee demonstrates to Lessor’s reasonable satisfaction that such hazardous material is necessary or useful to Lessee’s business and will be used, kept, and stored and disposed of in a manner that complies with all laws, rules,
statutes, and ordinances regulating any hazardous material so brought upon or used or kept in or about the Premises. Lessor consents to Lessee’s 

  

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use and storage of materials which are determined to be hazardous in reasonable quantities on the Premises so long as such materials are necessary or
appropriate in connection with Lessee’s manufacturing and warehousing uses on the Premises. If Lessee or Lessor breach their respective representations or obligations stated above in this paragraph, or if the presence of hazardous material on
or about the Premises caused or permitted by Lessee or Lessor results in contamination of the Premises or Lessor’s adjacent property, or if contamination of the Premises or surrounding area by hazardous material otherwise occurs the responsible
party (Lessee or Lessor) shall indemnify, defend, and hold harmless the other from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses (including, without limitation, diminution in value of the Premises or
Lessor’s adjacent property, or the entire building, damages for the loss or restriction on the use of rentable or usable space or of any amenity of the Premises or Lessor’s adjacent property, damages arising from any adverse impact on
marketing of space in the building, and sum paid in settlement of claims, reasonable attorneys’ fees, reasonable consultant fees and expert fees) that arise during or after the term of this Lease as a result of that contamination. This
indemnification includes, without limitation, reasonable costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal, or restoration work required by any federal, state, or local governmental agency or
political subdivision because of hazardous material present in the soil or ground water on, under or about the Premises or Lessor’s adjacent property. Without limiting the above, if the presence of any hazardous material on or about the
Premises caused or permitted by either Lessor or Lessee results in any contamination of the Premises or surrounding area, or causes the Premises or surrounding area to be in violation of any laws, rules, statutes, or ordinances, the responsible
party (Lessee or Lessor) shall promptly take all actions at its sole expense as are necessary to return the Premises and surrounding area to the condition existing before the introduction of any such hazardous material; provided that, if Lessee is
responsible, Lessor’ s approval of those actions shall first be obtained, which approval shall not be unreasonably withheld so long as those actions would not potentially have any material adverse long-term or short-term effect on the Premises
or surrounding area. 
  
 As used in this Lease, the term
“hazardous material” means any hazardous or toxic substance, material or waste which is or becomes regulated by any local governmental authority, the state of Illinois, or the United States government, including any material which, when
present, would require environmental remediation (“clean-up”) under any such local, Illinois or Federal law. Lessee shall not allow, keep or use on the Premises any inflammable or explosive liquids or materials save such as may be
necessary for use in the business of the Lessee, and in such case, any such substances shall be delivered and stored in amount, and used, in accordance with the rules for the applicable Board of Underwriters and statutes and ordinances now or
hereafter in force. Further, no unlawful activities of any kind shall be conducted by Lessee on the Premises. 
  
 Nothing in this paragraph 13 shall be construed to impose any additional liability whatsoever upon either of the parties hereto as a result of any acts or
omissions of any third parties, specifically including any tenants leasing other space from Lessor. 
  

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 14. Default by Lessee: If Lessee shall vacate or abandon the Premises, or in case of the
non-payment of the rent reserved hereby, or any part thereof, or of the breach of any covenant in this Lease, Lessee’s right to the possession of the Premises thereupon shall terminate upon written notice to Lessee from Lessor and upon
Lessee’s failure to cure any such default within sixty (60) days of receipt of such notice, and the mere retention of possession thereafter by Lessee shall constitute a forcible detainer of the Premises; and if the Lessor so elects, but not
otherwise, and upon written notice of such election to Lessee, this Agreement shall thereupon terminate, and upon the termination of Lessee’s right of possession, as aforesaid, whether this Agreement be terminated or not, Lessee agrees to
surrender possession of the Premises immediately, without the receipt of any demand for rent, notice to quit or demand for possession of the Premises whatsoever, and hereby grants to Lessor full and free license to enter into and upon the Premises
or any part thereof, to take possession thereof after due process of law, and to expel and to remove Lessee or any other person who may be occupying the Premises or any part thereof, and Lessor may repossess itself of the Premises as of its former
estate, but such entry of the Premises shall not constitute a trespass or forcible entry or detainer, nor a waiver of any covenants, agreement or promise in this Agreement contained, to be performed by Lessee. The acceptance of rent, whether in a
single instance or repeatedly, after it falls due, or after knowledge of any breach hereof by Lessee, or the giving or making of any notice or demand, whether according to any statutory provision or not, or any act or series of acts except as an
express written waiver, shall not be construed as a waiver of Lessor’s rights hereunder, or as an election not to proceed under the provisions of this Agreement. 
  
 15. Real Estate Taxes: Lessor is responsible for the base real estate taxes during the Lease term. The base real
estate taxes for the 2003 tax year arc $2,952.82. Following the base year of 2003, the Lessor is subsequently responsible for the base real estate taxes plus an amount not to exceed 3% escalation of the base taxes. Lessor’s obligation cannot
increase more than 3% over the base taxes plus escalation amount of the prior year in any subsequent year. Following the first year, Lessee will be responsible for that portion of annual increases in real estate taxes for each subsequent year which
exceeds the base year taxes plus a 3% escalation of that base amount, as set forth herein. Lessee’s share shall be based on the actual increase in taxes each year, not on its prior year’s payment or share. Lessee’s payment, as
required hereunder, shall be due upon issuance of the final tax bill for the second installment of taxes each year, within thirty (30) days of receipt of notice from Lessor, along with a copy of the tax bill and a reasonably itemized statement by
the Village showing the calculation by which Lessee’s share of such tax bill was determined. Nothing in this paragraph shall limit Lessor or Lessee in the exercise of any rights afforded by Illinois law to challenge any assessment amount
arrived at by the Assessor/County Clerk provided that any such challenge shall not delay or excuse the payment obligations of Lessor and Lessee set forth above. 
  

16. No Rent Deduction or Set Off: Lessee’s covenant to pay rent is and shall be independent of each and every other covenant of this Lease.
Lessee agrees that any claim by Lessee against Lessor shall not be deducted from rent nor set off against any claim for rent in any action. 
  

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 17. Security Deposit: The security deposit required herein shall be available to Lessor for its
use or reimbursement to satisfy any of Lessee’s obligations hereunder, if Lessee shall fail to meet or abide by such obligations. Lessor shall otherwise be allowed to use such security deposit monies as permitted by law. 
  
 18. Rent after Notice or Suit: It is further agreed, by the parties
hereto, that after the service of notice, or the commencement of a suit or after final judgment for possession of the Premises, Lessor may receive and collect any rent due, and the payment of said rent shall not waive or affect said notice, said
suit, or said judgment. 
  
 19. Payment of Costs: Lessee
will pay and discharge all reasonable costs, attorney’s fees and expenses that shall be made and incurred by Lessor in enforcing the covenants and agreements of this Lease. 
  
 20. Rights Cumulative: The rights and remedies of Lessor under this Lease are cumulative. The exercise or use of any
one or more thereof shall not bar Lessor from exercise or use of any other right or remedy provide herein or otherwise provided by law, nor shall exercise nor use of any right or remedy by Lessor waive any other right or remedy. 
  
 21. Fire and Casualty: In the event the Premises are substantially
damaged by fire or other casualty, Lessor shall, within sixty (60) days, notify Lessee in writing as to whether said Premises will be rebuilt or repaired, and in the event Lessor fails to so notify Lessee, Lessee may, at its option, terminate this
Agreement by giving written notice to Lessor within ten (10) days after the expiration of said sixty (60) days. If Lessor so notifies Lessee that the Premises will be rebuilt or repaired, then this Agreement shall continue in effect upon the same
terms and conditions; provided, however, if Lessor fails to rebuild or repair said Premises within sixty (60) days following the expiration of the sixty (60) day period in which Lessor must notify Lessee of such action, then Lessee may terminate
this Agreement upon written notice to Lessor; and provided further, if Lessor so notifies Lessee that the Premises will be rebuilt or repaired, Lessee may, at its option, terminate this Agreement by giving written notice to Lessor within sixty (60)
days after Lessor has so notified Lessee. If Lessor notifies Lessee that the Premises will not be rebuilt or repaired, and same are, in fact, not rebuilt or repaired within 180 days after the occurrence of the fire or other casualty, then this
Agreement shall forthwith terminate. The fixed or basic rent herein reserved shall abate during the time that the Premises is untenantable. In the event of insubstantial damage to the Premises by fire or other casualty, said Premises shall be
promptly restored or repaired by Lessor, and a just and proportionate part of the fixed or basic rent herein specified shall abate until said Premises have been fully restored or repaired, 
  
 22. Right to Cure Defaults: If either party shall fail to comply fully
with any of its obligations under this Lease (including, without limitation, its obligations to make repairs, maintain various policies of insurance, comply with all laws, ordinances and regulations and pay all bills for utilities), then the
non-defaulting party shall give notice to the defaulting party regarding the nature and extent of such default and the defaulting party will have sixty (60) days to cure any such default, and if it fails to cure such default, then the non-defaulting
party shall have the right, at its option, to cure such breach at the other party’s expense. Each party agrees to reimburse the other (as additional rental or otherwise) for all costs and expenses incurred as a result thereof together with
interest thereon promptly upon demand. 
  

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 23. Severability: Wherever possible each provision of this Lease shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Lease shall be prohibited by or invalid under applicable law, such provisions shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Lease. 
  
 24. Relationships of Parties: Nothing contained in this Agreement shall be construed to create the relationship of principal and agent, partnership, joint venture or any other relationship between the parties
hereto other than the relationship of Lessor and Lessee. 
  
 25.
Notices: Every notice, approval, consent or other communication authorized or required by this Agreement shall not be effective unless served in writing and sent by United States registered or certified mail, return receipt requested,
directed, if to Lessee to the Premises, and if to Lessor at the address listed on page 1 hereof or such other address as either party may designate by notice from time to time. 
  
 26. Waiver: One or more waivers of any covenant or condition by either party hereto shall not be construed as a
wavier of a subsequent breach of the same or any other covenant or condition, and the consent or approval by one party to or of any act by the other party requiring the consenting party’s consent or approval shall not be construed to waive or
render unnecessary the consenting party’s consent or approval to or of any subsequent similar act. 
  
 27. Entire Agreement: No oral statement or prior written matter shall have any force or effect all of which shall merge herein and be superseded
hereby. No waiver of any provision of this Agreement shall be effective unless in writing, signed by the waiving party. The parties agree that they are not relying on any representations or agreements other than those contained in this Agreement.
This Agreement shall not be modified except by a writing subscribed by all parties, nor may this Agreement be canceled by either party except with the written consent of the other, unless otherwise specifically provided herein. The invalidity or
unenforceability of any provisions of this Agreement shall not affect or impair any other provision. All captions herein are solely for convenience and shall not be given any legal effect. 
  
 Except as otherwise provided in this Agreement, the covenants, conditions and
agreements contained in this Agreement shall bind and inure to the benefit of Lessor and Lessee and their respective successors and permitted assigns. 
  

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 IN WITNESS WHEREOF, the parties hereby set their hands and seals. 
  

							
	 LESSOR:
	 	 LESSEE:

		
	 VILLAGE OF BURR RIDGE
 Cook and DuPage Counties, Illinois
	 	 NANOPHASE TECHNOLOGIES CORPORATION
 DuPage County, Illinois

		
	 Jo V. Irmen

	 	 Joseph Cross


	 President
	 	 President

		
	 ATTEST:
	 	 ATTEST:

		
	 Karen J. Thomas

	 	 Jess Jankowski


	 Clerk
	 	 Secretary

				
	 Dated:
	 	 09-13-04
	 	 Dated:
	 	 09-08-2004


  

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