Exhibit 10.53


 


LEASE AGREEMENT


 


THIS LEASE AGREEMENT is made this 29th day of July 2009,
between ProLogis (“Landlord”), and the Tenant named below.


 


	
  Tenant:

  	
  UFP Technologies, Inc.

  
	
   

  	
   

  
	
  Tenant’s Representative,

  	
  Michael Zumpano

  
	
  Address, and Telephone:

  	
  80 Internationale Boulevard

  
	
   

  	
   

  
	
   

  	
  Glendale Heights, IL 60139

  
	
   

  	
  630-363-4600

  
	
   

  	
   

  
	
  Premises:

  	
  That portion of the Building, containing approximately 78,913
  rentable square feet, as determined by Landlord, as shown on Exhibit A.

  
	
   

  	
   

  
	
  Project:

  	
  Glendale Heights Distribution Center #1

  
	
   

  	
   

  
	
  Building:

  	
  Glendale Heights Distribution Center #1

  
	
   

  	
  80 Internationale Boulevard

  
	
   

  	
   

  
	
   

  	
  Glendale Heights, IL 60139

  
	
   

  	
   

  
	
  Tenant’s Proportionate Share of Project:

  	
  58.230%

  
	
   

  	
   

  
	
  Tenant’s Proportionate Share of Building:

  	
  58.230%

  
	
   

  	
   

  
	
  Lease Term:

  	
  Beginning on the Commencement Date and ending on the last day of the
  60th full calendar month thereafter.

  
	
   

  	
   

  
	
  Commencement Date:

  	
  August 1, 2009

  
	
   

  	
   

  
	
  Initial Monthly Base Rent:

  	
  See Addendum 1

  
	
   

  	
   

  
	
  Base Year:

  	
  2009

  
	
   

  	
   

  
	
  Security Deposit:

  	
  $25,000.00

  
	
   

  	
   

  
	
  Broker:

  	
  Jones Lang LaSalle

  
	
   

  	
   

  
	
  Addenda:

  	
  1. Base Rent Adjustments 2. Cancellation Option 3. Renewal Option
  (Baseball Arbitration) 4. Tenant Made Alterations Allowance 5. Storage and
  Use of Permitted Hazardous Materials

  
	
   

  	
   

  
	
  Exhibits:

  	
  A. Site Plan

  



 


1.                                       Granting Clause.  In
consideration of the obligation of Tenant to pay rent as herein provided and in
consideration of the other terms, covenants, and conditions hereof, Landlord
leases to Tenant, and Tenant takes from Landlord, the Premises, to have and to
hold for the Lease Term, subject to the terms, covenants and conditions of this
Lease.


 


2.                                       Acceptance of Premises.  Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions.  Landlord has made no representation or
warranty as to the suitability of the Premises for the conduct of Tenant’s
business, and Tenant waives any implied warranty that the Premises are suitable
for Tenant’s intended purposes.  Except
as provided in Paragraph 10, in no event shall Landlord have any obligation for
any defects in the Premises or any limitation on its use.  The taking of possession of the Premises
shall be conclusive evidence that Tenant accepts the Premises and that the
Premises were in good condition at the time possession 


 


1

















 


was
taken except for items that are Landlord’s responsibility under Paragraph 10
and any punchlist items agreed to in writing by Landlord and Tenant.


 


3.                                       Use.  The
Premises shall be used only for the purpose of assembling, receiving, storing,
shipping and selling (but limited to wholesale sales) products, materials and
merchandise made and/or distributed by Tenant, light manufacturing (including
foam fabricating) and for such other lawful purposes as may be incidental
thereto; provided, however, with Landlord’s prior written consent, Tenant may
also use the Premises for light manufacturing. 
Tenant shall not conduct or give notice of any auction, liquidation, or
going out of business sale on the Premises. 
Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises or
subject the Premises to use that would damage the Premises.  Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
disturb, unreasonably interfere with, or endanger Landlord or any tenants of
the Project.  Outside storage, including
without limitation, storage of trucks and other vehicles, is prohibited without
Landlord’s prior written consent. Landlord shall have no liability whatsoever
in connection with such dumpsters, and Tenant shall indemnify Landlord for any
and all claims arising from the presence and maintenance of such
dumpsters.  Tenant, at its sole expense,
shall use and occupy the Premises in compliance with all laws, including, without
limitation, the Americans With Disabilities Act, orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants and restrictions
now or hereafter applicable to the Premises (collectively, “Legal Requirements”).  The Premises shall not be used as a place of
public accommodation under the Americans With Disabilities Act or similar state
statutes or local ordinances or any regulations promulgated thereunder, all as
may be amended from time to time.  Tenant
shall, at its expense, make any alterations or modifications, within or without
the Premises, that are required by Legal Requirements related to Tenant’s use
or occupation of the Premises.  Tenant
will not use or permit the Premises to be used for any purpose or in any manner
that would void Tenant’s or Landlord’s insurance, increase the insurance risk,
or cause the disallowance of any sprinkler credits.  If any increase in the cost of any insurance
on the Premises or the Project is caused by Tenant’s use or occupation of the
Premises, or because Tenant vacates the Premises, then Tenant shall pay the
amount of such increase to Landlord.  Any
occupation of the Premises by Tenant prior to the Commencement Date shall be
subject to all obligations of Tenant under this Lease.


 


4.                                       Base Rent.  Tenant
shall pay Base Rent in the amount set forth above.  The first month’s Base Rent and the Security
Deposit shall be due and payable on the date hereof, and Tenant promises to pay
to Landlord in advance, without demand, deduction or set-off, monthly
installments of Base Rent on or before the first day of each calendar month
succeeding the Commencement Date. 
Payments of Base Rent for any fractional calendar month shall be
prorated.  All payments required to be
made by Tenant to Landlord hereunder (or to such other party as Landlord may
from time to time specify in writing) shall be made by Electronic Fund Transfer
(“EFT”) of immediately available federal funds before 11:00 a.m., Eastern
Time, at such place, within the continental United States, as Landlord may from
time to time designate to Tenant in writing. 
The obligation of Tenant to pay Base Rent and other sums to Landlord and
the obligations of Landlord under this Lease are independent obligations.  Tenant shall have no right at any time to
abate, reduce, or set-off any rent due hereunder except as may be expressly
provided in this Lease.  If Tenant is
delinquent in any monthly installment of Base Rent or of Operating Expenses
beyond 5 days after the due date thereof, and after notice as provided below,
Tenant shall pay to Landlord on demand a late charge equal to 8 percent of such
delinquent sum.  Tenant shall not be
obligated to pay the late charge until Landlord has given Tenant 5 days written
notice of the delinquent payment (which may be given at any time during the
delinquency); provided, however, that such notice shall not be required more
than twice in any 12-month period.  The
provision for such late charge shall be in addition to all of Landlord’s other
rights and remedies hereunder or at law and shall not be construed as a penalty
or as limiting Landlord’s remedies in any manner.


 


5.                                       Security Deposit.  The
Security Deposit shall be held by Landlord as security for the performance of
Tenant’s obligations under this Lease. 
The Security Deposit is not an advance rental deposit or a measure of
Landlord’s damages in case of Tenant’s default. 
Upon each occurrence of an Event of Default (hereinafter defined),
Landlord may use all or part of the Security Deposit to pay delinquent payments
due under this Lease, and the cost of any damage, injury, expense or liability
caused by such Event of Default, without prejudice to any other remedy provided
herein or provided by law.  Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its
original amount.  Landlord’s obligation
respecting the Security Deposit is that of a debtor, not a trustee; no interest
shall accrue thereon.  The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant’s obligations under this Lease have been completely fulfilled.  Landlord shall be released from any
obligation with respect to the Security Deposit upon transfer of this Lease and
the Premises to a person or entity assuming Landlord’s obligations under this
Paragraph 5.


 


6.                                       Operating Expense Payments.  During each month of the Lease Term
subsequent to the Base Year, on the same date that Base Rent is due, Tenant
shall pay Landlord an amount equal to 1/12 of the annual cost, as estimated by
Landlord from time to time, of Tenant’s Proportionate Share (hereinafter
defined) of Excess Operating Expenses for the Project.  Payments thereof for any fractional calendar
month shall be 


 


2

















 


prorated.  The term “Excess Operating Expenses” means
Operating Expenses for the applicable year in excess of Operating Expenses for
the Base Year.  The term “Operating
Expenses” means all costs and expenses incurred by Landlord with respect to the
ownership, maintenance, and operation of the Project including, but not limited
to costs of: Taxes (hereinafter defined) and fees payable to tax consultants
and attorneys for consultation and contesting taxes; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs (including the roof
membrane), alleys, and driveways, mowing, landscaping, snow removal, exterior
painting, utility lines, heating, ventilation and air conditioning systems,
lighting, electrical systems and other mechanical and building systems; amounts
paid to contractors and subcontractors for work or services performed in
connection with any of the foregoing; charges or assessments of any association
to which the Project is subject; 
property management fees payable to a property manager, including any
affiliate of Landlord, no to exceed three (3%) of gross receipts due and
payable under this Lease or if there is no property manager, an administration
fee of 15 percent of the total amount of Operating Expenses; security services,
if any; trash collection, sweeping and removal; and additions or alterations
made by Landlord to the Project or the Building in order to comply with Legal
Requirements (other than those expressly required herein to be made by Tenant)
or that are appropriate to the continued operation of the Project or the
Building as a bulk warehouse facility in the market area, provided that the
cost of additions or alterations that are required to be capitalized for
federal income tax purposes shall be amortized on a straight line basis over a
period equal to the lesser of the useful life thereof for federal income tax
purposes or 10 years.  Operating Expenses
do not include (1) costs, expenses, 
depreciation or amortization for capital repairs and capital replacements
required to be made by Landlord under Paragraph 10 of this Lease, ; (2) debt
service under mortgages or ground rent under ground leases, ; (3) costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto; (4), leasing commissions, or the costs of renovating space for
tenants; (4) expenditures made by Tenant with respect to (a) 
cleaning, maintenance and upkeep of the Premises, (b)  the provision of
electricity and other utilities to the Premises; (5) intentionally
omitted; (6) expenses for which the Landlord is reimbursed by another
source (excluding tenant reimbursement for Operating Expenses) including repair
or replacement of any item covered by warranty; (7) costs incurred to
benefit (or as a result of) a specific tenant or items and services selectively
supplied to any specific tenant; (8) expenses for the defense of the
Landlord’s title to the Premises or the Building; (9) charitable or
political contributions; (11) any amounts expended by Landlord as environmental
response costs for removal, enclosure, encapsulation, clean-up, remediation or
other activities regarding Landlord’s compliance with federal, state, municipal
or local hazardous waste and environmental laws, regulations or ordinances
which shall be addressed as provided in Paragraph 30; (12) costs to correct
original defects in the design, construction or equipment of or latent defects
in the Premises or the Building; (13) intentionally omitted; (14) any amounts
pavable as a result of Landlord’s violation or failure to comply with any
governmental regulations and rules or any court order, decree or judgment;
(15) advertising expenses and other costs incurred in leasing or procuring new
tenants; and (16) attorneys’ fees, accounting fees and expenditures incurred in
connection with negotiations, disputes and claims of other tenants or occupants
of the Building or with other third parties except as specifically provided in
the Lease.


 


No later than 90 days following the first day
of each calendar year during the Lease Term, Landlord shall deliver to Tenant
an Operating Expense Reconciliation Invoice (“Invoice”) and an Operating
Expense Summary Report listing the Operating Expenses for the prior year of the
Lease Term (“Report”).  Provided (x) no
Event of Default exists under this Lease, (y) no payments of Base
Rent,  Operating Expenses, or other
amounts due under the Lease are outstanding, and (z) Tenant has a
reasonable belief that the Invoice and Report contain an error to the detriment
of Tenant, Tenant, at its sole cost and expense, shall have the right to
examine property invoices evidencing such costs and expenses as provided in the
Invoice and Report which Tenant believes to be in error as more specifically
provided herein.  Such review of Landlord’s
property invoices may occur not more than once per year at Landlord’s local
market office during reasonable business hours. 
Landlord agrees to make the property invoices pertaining to those items
which Tenant reasonably believes to be in error, a copier and conference room
available to Tenant for a period not to exceed one week to examine such
property invoices. In the event Tenant desires to exercise the foregoing right,
Tenant shall deliver written notice of Tenant’s intent to review the property
invoices, and shall identify the item(s) contained in the Invoice and
Report which Tenant believes to be in error, no later than thirty (30) days
following Tenant’s receipt of the Invoice and Report.  Time is of the essence with regards to the
delivery of such notice.  Upon Landlord’s
receipt of Tenant’s notice, Landlord and Tenant shall work in good faith to
schedule a time and date for such property invoice examination which shall be
acceptable to both parties.  In the event
that Tenant accurately determines that the Invoice and Report contain an error
to the detriment of Tenant, Landlord shall immediately provide a revised
Invoice and Report to Tenant.  If Tenant
has already paid the Invoice, Landlord will provide a credit against Tenant’s
obligations to pay Base Rent the amount overpaid by Tenant.  Tenant shall keep any information gained from
such examination confidential and shall not disclose it to any other party,
except as required by law.  If requested
by Landlord, Tenant shall be required to sign a confidentiality agreement as a
condition of Landlord making Landlord’s invoices available for inspection.  Notwithstanding anything contained herein to
the contrary, in no event shall Tenant retain any person paid on a contingency
fee basis to act on behalf of Tenant with regards to the forgoing rights to
review the property invoices and Landlord shall have no obligation to allow any
such representative paid on a contingency fee basis access to Landlord’s
records.  Notwithstanding anything
contained in this Lease to the contrary, Tenant hereby agrees that Tenant’s
sole remedy pertaining to an error in the Invoice or Report shall 


 


3

















 


be for the recovery from Landlord an amount equal to the amount
overpaid by Tenant, and Tenant  hereby waives any right to terminate this
Lease as a result of any such error in the Invoice or Report which Tenant may
have under law or equity.


 


If Tenant’s total payments of Operating
Expenses for any year are less than Tenant’s Proportionate Share of Excess
Operating Expenses for such year, then Tenant shall pay the difference to
Landlord within 30 days after demand, and if more, then Landlord shall retain
such excess and credit it against Tenant’s next payments.  For purposes of calculating Tenant’s
Proportionate Share of Excess Operating Expenses, a year shall mean a calendar
year except the last year, which shall end on the expiration of this
Lease.  For purposes of calculating
Excess Operating Expenses for the last year of the Lease Term, Operating
Expenses for the Base Year shall be reduced proportionately based upon the
number of days that this Lease is in effect during such last year.  With respect to Operating Expenses which
Landlord allocates to the entire Project, Tenant’s “Proportionate Share” shall
be the percentage set forth on the first page of this Lease as Tenant’s
Proportionate Share of the Project as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Project; and,
with respect to Operating Expenses which Landlord allocates only to the
Building, Tenant’s “Proportionate Share” shall be the percentage set forth on
the first page of this Lease as Tenant’s Proportionate Share of the
Building as reasonably adjusted by Landlord in the future for changes in the
physical size of the Premises or the Building. 
Landlord may equitably increase Tenant’s Proportionate Share for any
item of expense or cost reimbursable by Tenant that relates to a repair,
replacement, or service that benefits only the Premises or only a portion of
the Project or Building that includes the Premises or that varies with
occupancy or use.


 


7.                                       Utilities.  Tenant
shall pay for all water, gas, electricity, heat, light, power, telephone,
sewer, sprinkler services, refuse and trash collection, and other utilities and
services used on the Premises, all maintenance charges for utilities, and any
storm sewer charges or other similar charges for utilities imposed by any
governmental entity or utility provider, together with any taxes, penalties,
surcharges or the like pertaining to Tenant’s use of the Premises.  Landlord may cause at Tenant’s expense any
utilities used on the Premises to be separately metered and charged directly to
Tenant by the provider.  Tenant shall pay
its share of all charges for jointly metered utilities based upon consumption,
as reasonably determined by Landlord as part of Operating Expenses.  No interruption or failure of utilities shall
result in the termination of this Lease or the abatement of rent.  Tenant agrees to limit use of water and sewer
for normal restroom use.


 


8.                                       Taxes.  Landlord
shall pay all taxes, assessments and governmental charges (collectively
referred to as “Taxes”) that accrue against the Project during the Lease Term,
which shall be included as part of the Operating Expenses charged to
Tenant.  Landlord may contest by
appropriate legal proceedings the amount, validity, or application of any Taxes
or liens thereof.  All capital levies or
other taxes assessed or imposed on Landlord upon the rents payable to Landlord
under this Lease and any franchise tax, any excise, transaction, sales or
privilege tax, assessment, levy or charge measured by or based, in whole or in
part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments
or upon demand, at the option of Landlord, as additional rent; provided,
however, in no event shall Tenant be liable for any net income taxes imposed on
Landlord unless such net income taxes are in substitution for any Taxes payable
hereunder.  If any such tax or excise is
levied or assessed directly against Tenant, then Tenant shall be responsible
for and shall pay the same at such times and in such manner as the taxing
authority shall require.  Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.


 


9.                                       Insurance.  Landlord
shall maintain all risk property insurance covering the full replacement cost
of the Building.  Landlord may, but is
not obligated to, maintain such other insurance and additional coverages as it
may deem necessary, including, but not limited to, commercial liability
insurance and rent loss insurance.  All
such insurance shall be included as part of the Operating Expenses charged to
Tenant.  The Project or Building may be
included in a blanket policy (in which case the cost of such insurance
allocable to the Project or Building will be determined by Landlord based upon
the insurer’s cost calculations).  Tenant
shall also reimburse Landlord for any increased premiums or additional
insurance which Landlord reasonably deems necessary as a result of Tenant’s use
of the Premises.


 


Tenant, at its expense, shall maintain during
the Lease Term: all risk property insurance covering the full replacement cost
of all property and improvements installed or placed in the Premises by Tenant
at Tenant’s expense; worker’s compensation insurance with no less than the
minimum limits required by law; employer’s liability insurance with such limits
as required by law; and commercial liability insurance, with a minimum limit of
$1,000,000 per occurrence and a minimum umbrella limit of $1,000,000, for a
total minimum combined general liability and umbrella limit of $2,000,000
(together with such additional umbrella coverage as Landlord may reasonably
require) for property damage, personal injuries, or deaths of persons occurring
in or about the Premises.  Landlord may
from time to time require reasonable increases in any such 


 


4

















 


limits.  The commercial liability
policies shall name Landlord as an additional insured, insure on an occurrence
and not a claims-made basis, be issued by insurance companies which are
reasonably acceptable to Landlord, not be cancelable unless 30 days’ prior
written notice shall have been given to Landlord, contain a hostile fire
endorsement and a contractual liability endorsement and provide primary
coverage to Landlord (any policy issued to Landlord providing duplicate or
similar coverage shall be deemed excess over Tenant’s policies).  Such policies or certificates thereof shall
be delivered to Landlord by Tenant upon commencement of the Lease Term and upon
each renewal of said insurance.


 


The all risk property insurance obtained by
Landlord and Tenant shall include a waiver of subrogation by the insurers and
all rights based upon an assignment from its insured, against Landlord or
Tenant, their officers, directors, employees, managers, agents, invitees and
contractors, in connection with any loss or damage thereby insured
against.  Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage.  The
failure of a party to insure its property shall not void this waiver.  Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims
against such parties for, business interruption and losses occasioned thereby
sustained by Tenant or any person claiming through Tenant resulting from any
accident or occurrence in or upon the Premises or the Project from any cause
whatsoever, including without limitation, damage caused in whole or in part, directly
or indirectly, by the negligence of Landlord or its agents, employees or
contractors.


 


10.                                 Landlord’s Repairs. 
Landlord shall maintain, at its expense, the structural soundness of the
roof, foundation, and exterior walls of the Building in good repair, reasonable
wear and tear and uninsured losses and damages caused by Tenant, its agents and
contractors excluded.  The term “walls”
as used in this Paragraph 10 shall not include windows, glass or plate glass,
doors or overhead doors, special store fronts, dock bumpers, dock plates or
levelers, or office entries.  Tenant
shall promptly give Landlord written notice of any repair required by Landlord
pursuant to this Paragraph 10, after which Landlord shall have a reasonable
opportunity to repair.


 


11.                                 Tenant’s Repairs. 
Landlord, at Tenant’s expense as provided in Paragraph 6, shall maintain
in good repair and condition the parking areas and other common areas of the
Building, including, but not limited to driveways, alleys, landscape and
grounds surrounding the Premises and the water tightness of the roof of the
Building.  Subject to Landlord’s
obligation in Paragraph 10 and subject to Paragraphs 9 and 15, Tenant, at its
expense, shall repair, replace and maintain in good condition all portions of
the Premises and all areas, improvements and systems exclusively serving the
Premises including, without limitation, dock and loading areas, truck doors,
plumbing, water and sewer lines up to points of common connection, fire
sprinklers and fire protection systems, entries, doors, ceilings, windows,
interior walls, and the interior side of demising walls, and heating,
ventilation and air conditioning systems. 
Such repair and replacements include capital expenditures and repairs
whose benefit may extend beyond the Term. 
Heating, ventilation and air conditioning systems and other mechanical
and building systems serving the Premises shall be maintained at Tenant’s
expense pursuant to maintenance service contracts entered into by Tenant or, at
Landlord’s election, by Landlord.  The
scope of services and contractors under such maintenance contracts shall be
reasonably approved by Landlord.  At
Landlord’s request, Tenant shall enter into a joint maintenance agreement with
any railroad that services the Premises. 
If Tenant fails to perform any repair or replacement for which it is
responsible, Landlord may perform such work and be reimbursed by Tenant within
10 days after demand therefor.  Subject
to Paragraphs 9 and 15, Tenant shall bear the full cost of any repair or
replacement to any part of the Building or Project that results from damage
caused by Tenant, its agents, contractors, or invitees and any repair that
benefits only the Premises.


 


Notwithstanding anything contained herein to the
contrary, Landlord shall warrant any repairs or replacements to the heating,
ventilation and air conditioning systems and equipment related thereto
servicing the Premises for a period of one (1) year from the Commencement
Date; provided, however, that such warranty shall not be effective for any
repairs or replacements necessitated due to the misuse of, lack of maintenance
by, or damages caused by, Tenant, its employees, contractors, agents,
subtenants, or invitees.  Notwithstanding
the foregoing, Tenant shall continue to be responsible for the maintenance of
such heating, ventilation and air conditioning systems and equipment related
thereto during such one-year period and thereafter during the Lease Term.  Furthermore, Landlord agrees to enforce to
Tenant’s benefits any guarantees an warranties, if any, which relate to any
maintenance or repair to be completed by Tenant above or which are to be
completed by Landlord at Tenant’s expense as an Operating Expense as provided
above.


 


12.                                 Tenant-Made Alterations and Trade Fixtures.  Any alterations, additions, or improvements
made by or on behalf of Tenant to the Premises (“Tenant-Made Alterations”)
shall be subject to Landlord’s prior written consent which shall not be
unreasonably withheld.  Tenant shall
cause, at its expense, all Tenant-Made Alterations to comply with insurance
requirements and with Legal Requirements and shall construct at its expense any
alteration or modification required by Legal Requirements as a result of any
Tenant-Made Alterations.  All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by 


 


5

















 


contractors
reasonably acceptable to Landlord and only good grades of materials shall be
used.  All plans and specifications for
any Tenant-Made Alterations shall be submitted to Landlord for its
approval.  Landlord may monitor
construction of the Tenant-Made Alterations. 
Tenant shall reimburse Landlord for its reasonable costs in reviewing
plans and specifications and in monitoring construction.  Landlord’s right to review plans and
specifications and to monitor construction shall be solely for its own benefit,
and Landlord shall have no duty to see that such plans and specifications or
construction comply with applicable laws, codes, rules and regulations.  Tenant shall provide Landlord with the
identities and mailing addresses of all persons performing work or supplying
materials, prior to beginning such construction, and Landlord may post on and
about the Premises notices of non-responsibility pursuant to applicable
law.  Tenant shall furnish security or
make other arrangements satisfactory to Landlord to assure payment for the
completion of all work free and clear of liens and shall provide certificates
of insurance for worker’s compensation and other coverage in amounts and from
an insurance company satisfactory to Landlord protecting Landlord against
liability for personal injury or property damage during construction.  Upon completion of any Tenant-Made Alterations,
Tenant shall deliver to Landlord sworn statements setting forth the names of
all contractors and subcontractors who did work on the Tenant-Made Alterations
and, with regards to any work Tenant-Made Alterations which exceed $5,000.00,
final lien waivers from all such contractors and subcontractors.  Upon surrender of the Premises, all
Tenant-Made Alterations and any leasehold improvements constructed by Landlord
or Tenant shall remain on the Premises as Landlord’s property, except to the
extent Landlord requires removal at Tenant’s expense of any such items or
Landlord and Tenant have otherwise agreed in writing in connection with
Landlord’s consent to any Tenant-Made Alterations.  Tenant shall repair any damage caused by such
removal.


 


Tenant,
at its own cost and expense and without Landlord’s prior approval, may erect or
install such shelves, bins, machinery and trade fixtures (collectively “Trade
Fixtures”) in the ordinary course of its business provided that such items do
not alter the basic character of the Premises, do not overload or damage the
Premises, and may be removed without injury to the Premises, and the
construction, erection, and installation thereof complies with all Legal
Requirements and with Landlord’s requirements set forth above.  Tenant shall remove its Trade Fixtures and
shall repair any damage caused by such removal. 
Notwithstanding anything contained herein to the contrary, all
electrical transformers, bus bars, or plugs installed in the Premises by Tenant
shall be deemed Trade Fixtures provided upon the expiration or earlier
termination of this Lease all electrical systems shall be brought back to the
nearest junction box.


 


13.                                 Signs.  Tenant
shall not make any changes to the exterior of the Premises, install any
exterior lights, decorations, balloons, flags, pennants, banners, or painting,
or erect or install any signs, windows or door lettering, placards,
decorations, or advertising media of any type which can be viewed from the
exterior of the Premises, without Landlord’s prior written consent.  Upon surrender or vacation of the Premises,
Tenant shall have removed all signs and repair, paint, and/or replace the
building facia surface to which its signs are attached.  Tenant shall obtain all applicable
governmental permits and approvals for sign and exterior treatments.  All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord’s
approval and conform in all respects to Landlord’s requirements.


 


14.                                 Parking.  Tenant
shall have the exclusive use of the those parking spaces as identified on Exhibit A
attached hereto and for all other parking Tenant shall be entitled to park in
common with other tenants of the Project in those areas designated for
nonreserved parking.  Landlord may
allocate parking spaces among Tenant and other tenants in the Project if
Landlord determines that such parking facilities are becoming crowded.  Landlord shall not be responsible for
enforcing Tenant’s parking rights against any third parties.


 


15.                                 Restoration.  If at any
time during the Lease Term the Premises are damaged by a fire or other
casualty, Landlord shall notify Tenant within 60 days after such damage as to
the amount of time Landlord reasonably estimates it will take to restore the
Premises.  If the restoration time is
estimated to exceed 6 months, either Landlord or Tenant may elect to terminate
this Lease upon notice to the other party given no later than 30 days after
Landlord’s notice. If neither party elects to terminate this Lease or if
Landlord estimates that restoration will take 6 months or less, then, subject
to receipt of sufficient insurance proceeds, Landlord shall promptly restore
the Premises excluding the improvements installed by Tenant or by Landlord and
paid by Tenant, subject to delays arising from the collection of insurance
proceeds or from Force Majeure events. 
Tenant at Tenant’s expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure
events, all repairs or restoration not required to be done by Landlord and
shall promptly re-enter the Premises and commence doing business in accordance
with this Lease.  Notwithstanding the
foregoing, either party may terminate this Lease if the Premises are damaged
during the last year of the Lease Term and Landlord reasonably estimates that
it will take more than one month to repair such damage.  Base Rent and Operating Expenses shall be
abated for the period of repair and restoration in the proportion which the
area of the Premises, if any, which is not usable by Tenant bears to the total
area of the Premises.  Such abatement
shall be the sole remedy of Tenant, and except as provided herein, Tenant
waives any right to terminate the Lease by reason of damage or casualty loss.


 


6

















 


16.                                 Condemnation.  If any part
of the Premises or the Project should be taken for any public or quasi-public
use under governmental law, ordinance, or regulation, or by right of eminent
domain, or by private purchase in lieu thereof (a “Taking” or “Taken”), and the
Taking would prevent or materially interfere with Tenant’s use of the Premises
or in Landlord’s judgment would materially interfere with or impair its ownership
or operation of the Project, then upon written notice by Landlord this Lease
shall terminate and Base Rent shall be apportioned as of said date.  If part of the Premises shall be Taken, and
this Lease is not terminated as provided above, the Base Rent payable hereunder
during the unexpired Lease Term shall be reduced to such extent as may be fair
and reasonable under the circumstances. 
In the event of any such Taking, Landlord shall be entitled to receive the
entire price or award from any such Taking without any payment to Tenant, and
Tenant hereby assigns to Landlord Tenant’s interest, if any, in such
award.  Tenant shall have the right, to
the extent that same shall not diminish Landlord’s award, to make a separate
claim against the condemning authority (but not Landlord) for such compensation
as may be separately awarded or recoverable by Tenant for moving expenses and
damage to Tenant’s Trade Fixtures, if a separate award for such items is made
to Tenant.


 


17.                                 Assignment and Subletting.  Without Landlord’s prior written consent,
which shall not be unreasonably withheld, Tenant shall not assign this Lease or
sublease the Premises or any part thereof or mortgage, pledge, or hypothecate
its leasehold interest or grant any concession or license within the Premises
and any attempt to do any of the foregoing shall be void and of no effect.  It shall be reasonable for the Landlord to
withhold, delay or condition its consent, where required, to any assignment or
sublease in any of the following instances: (i) the assignee or sublessee
does not have a net worth calculated according to generally accepted accounting
principles at least equal to the greater of the net worth of Tenant immediately
prior to such assignment or sublease or the net worth of the Tenant at the time
it executed the Lease; (ii) the intended use of the Premises by the
assignee or sublessee is not reasonably satisfactory to Landlord; (iii) the
intended use of the Premises by the assignee or sublessee would materially
increase the pedestrian or vehicular traffic to the Premises or the Project; (iv) occupancy
of the Premises by the assignee or sublessee would, in Landlord’s opinion,
violate any agreement binding upon Landlord or the Project with regard to the
identity of tenants, usage in the Project, or similar matters; (v) the
identity or business reputation of the assignee or sublessee will, in the good
faith judgment of Landlord, tend to damage the goodwill or reputation of the
Project; (vi) the assignment or sublease is to another tenant in the
Project and is at rates which are below those charged by Landlord for
comparable space in the Project; (vii) in the case of a sublease, the
subtenant has not acknowledged that the Lease controls over any inconsistent
provision in the sublease; or (viii) the proposed assignee or sublessee is
a government entity.  The foregoing
criteria shall not exclude any other reasonable basis for Landlord to refuse
its consent to such assignment or sublease. 
Any approved assignment or sublease shall be expressly subject to the
terms and conditions of this Lease. 
Tenant shall provide to Landlord all information concerning the assignee
or sublessee as Landlord may reasonably request.  Landlord may revoke its consent immediately
and without notice if, as of the effective date of the assignment or sublease,
there has occurred and is continuing any default under the Lease.  For purposes of this paragraph, a transfer of
the ownership interests controlling Tenant shall be deemed an assignment of
this Lease unless such ownership interests are publicly traded.  Notwithstanding the foregoing to the
contrary, provided no uncured default has occurred under this Lease, and
subject to the provisions herein, Tenant may, without Landlord’s prior written
consent, assign this Lease to any entity into which Tenant is merged or
consolidated, or to any entity to which substantially all of Tenant’s assets
are transferred, provided the following conditions are met:  (x) such merger, consolidation, or
transfer of assets is not principally for the purpose of transferring Tenant’s
leasehold estate, (y) such merger, consolidation, or transfer of assets
does not adversely affect the legal existence of the Tenant hereunder, and (z) such
merger, consolidation, or transfer of assets Tenant does not reduce the
tangible net worth of Tenant after giving effect to such transfer (“Permitted
Transfer”).  Tenant hereby agrees to give
Landlord written notice thirty (30) days prior to such merger or transfer of
assets along with any documentation reasonably requested by Landlord related to
the required conditions as provided above. 
Notwithstanding the above, Tenant may assign or sublet the Premises, or
any part thereof, to any entity controlling Tenant, controlled by Tenant or
under common control with Tenant (a “Tenant Affiliate”), without the prior
written consent of Landlord.  Tenant
shall reimburse Landlord for all of Landlord’s reasonable out-of-pocket
expenses in connection with any assignment or sublease.  Upon Landlord’s receipt of Tenant’s written
notice of a desire to assign or sublet the Premises, or any part thereof (other
than to a Tenant Affiliate), Landlord may, by giving written notice to Tenant
within 30 days after receipt of Tenant’s notice, terminate this Lease with
respect to the space described in Tenant’s notice, as of the date specified in
Tenant’s notice for the commencement of the proposed assignment or sublease.


 


Notwithstanding any assignment or subletting,
Tenant and any guarantor or surety of Tenant’s obligations under this Lease
shall at all times remain fully responsible and liable for the payment of the
rent and for compliance with all of Tenant’s other obligations under this Lease
(regardless of whether Landlord’s approval has been obtained for any such
assignments or sublettings).  In the
event that the rent due and payable by a sublessee or assignee (or a
combination of the rental payable under such sublease or assignment plus any
bonus or other consideration therefor or incident thereto) exceeds the rental
payable under this Lease, then Tenant shall be bound and obligated to pay
Landlord as additional rent hereunder one half of such excess rental and other
excess consideration within 10 days following receipt thereof by Tenant.


 


7

















 


If this Lease be assigned or if the Premises
be subleased (whether in whole or in part) or in the event of the mortgage,
pledge, or hypothecation of Tenant’s leasehold interest or grant of any
concession or license within the Premises or if the Premises be occupied in
whole or in part by anyone other than Tenant, then upon a default by Tenant
hereunder Landlord may collect rent from the assignee, sublessee, mortgagee,
pledgee, party to whom the leasehold interest was hypothecated, concessionee or
licensee or other occupant and, except to the extent set forth in the preceding
paragraph, apply the amount collected to the next rent payable hereunder; and
all such rentals collected by Tenant shall be held in trust for Landlord and
immediately forwarded to Landlord.  No
such transaction or collection of rent or application thereof by Landlord,
however, shall be deemed a waiver of these provisions or a release of Tenant
from the further performance by Tenant of its covenants, duties, or obligations
hereunder.


 


18.                                 Indemnification. 
Except for the negligence of Landlord, its agents, employees or
contractors, and to the extent permitted by law, Tenant agrees to indemnify,
defend and hold harmless Landlord, and Landlord’s agents, employees and
contractors, from and against any and all losses, liabilities, damages, costs
and expenses (including attorneys’ fees) resulting from claims by third parties
for injuries to any person and damage to or theft or misappropriation or loss
of property occurring in or about the Project and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises or due to any other act or
omission of Tenant, its subtenants, assignees, invitees, employees, contractors
and agents.  The furnishing of insurance
required hereunder shall not be deemed to limit Tenant’s obligations under this
Paragraph 18.


 


19.                                 Inspection and Access.  After reasonable advance notice (except in
the event of an emergency in which case not notice shall be required) Landlord
and its agents, representatives, and contractors may enter the Premises at any
reasonable time to inspect the Premises and to make such repairs as may be
required or permitted pursuant to this Lease and for any other business
purpose.  Landlord and Landlord’s
representatives may enter the Premises during business hours for the purpose of
showing the Premises to prospective purchasers and, during the last year of the
Lease Term, to prospective tenants.  Any
and all such entry and activity in the Premises by Landlord or any of its
agents, employees and contractors shall be so conducted as not to interfere
with Tenant’s use and enjoyment of the Premises. Landlord may erect a suitable
sign on the Premises stating the Premises are available to let or that the
Project is available for sale.  Landlord
may grant easements, make public dedications, designate common areas and create
restrictions on or about the Premises, provided that no such easement,
dedication, designation or restriction materially interferes with Tenant’s use
or occupancy of the Premises.  At
Landlord’s request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.


 


20.                                 Quiet Enjoyment.  If
Tenant shall perform all of the covenants and agreements herein required to be
performed by Tenant, Tenant shall, subject to the terms of this Lease, at all
times during the Lease Term, have peaceful and quiet enjoyment of the Premises
against any person claiming by, through or under Landlord.


 


21.                                 Surrender.  Upon
termination of the Lease Term or earlier termination of Tenant’s right of
possession, Tenant shall surrender the Premises to Landlord in the same
condition as received, broom clean, ordinary wear and tear and casualty loss
and condemnation covered by Paragraphs 15 and 16 excepted.  Any Trade Fixtures, Tenant-Made Alterations
and property not so removed by Tenant as permitted or required herein shall be
deemed abandoned and may be stored, removed, and disposed of by Landlord at
Tenant’s expense, and Tenant waives all claims against Landlord for any damages
resulting from Landlord’s retention and disposition of such property.  All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Excess Operating Expenses and all obligations
concerning the condition and repair of the Premises.


 


22.                                 Holding Over.  If Tenant
retains possession of the Premises after the termination of the Lease Term,
unless otherwise agreed in writing, such possession shall be subject to
immediate termination by Landlord at any time, and all of the other terms and
provisions of this Lease (excluding any expansion or renewal option or other
similar right or option) shall be applicable during such holdover period,
except that Tenant shall pay Landlord from time to time, upon demand, as Base
Rent for the holdover period, an amount equal to double the Base Rent in effect
on the termination date, computed on a monthly basis for each month or part
thereof during such holding over.  All
other payments shall continue under the terms of this Lease.  In addition, Tenant shall be liable for all
damages incurred by Landlord as a result of such holding over.  No holding over by Tenant, whether with or
without consent of Landlord, shall operate to extend this Lease except as
otherwise expressly provided, and this Paragraph 22 shall not be construed as
consent for Tenant to retain possession of the Premises.  For purposes of this Paragraph 22, “possession
of the Premises” shall continue until, among other things, Tenant has delivered
all keys to the Premises to Landlord, Landlord has complete and total dominion
and control over the Premises, and Tenant has completely fulfilled all
obligations required of it upon termination of the Lease as set forth in this
Lease, including, without limitation, those concerning the condition and repair
of the Premises.


 


8

















 


23.                                 Events of Default.  Each
of the following events shall be an event of default (“Event of Default”) by
Tenant under this Lease:


 


a)                                      Tenant shall
fail to pay any installment of Base Rent or any other payment required herein
when due, and such failure shall continue for a period of 5 days after notice
from Landlord  that from the date such
payment was not received when due.


 


b)                                     Tenant or any
guarantor or surety of Tenant’s obligations hereunder shall (A) make a
general assignment for the benefit of creditors; (B) commence any case,
proceeding or other action seeking to have an order for relief entered on its
behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or of any substantial
part of its property (collectively a “proceeding for relief”); (C) become
the subject of any proceeding for relief which is not dismissed within 60 days
of its filing or entry; or (D) die or suffer a legal disability (if
Tenant, guarantor, or surety is an individual) or be dissolved or otherwise
fail to maintain its legal existence (if Tenant, guarantor or surety is a
corporation, partnership or other entity).


 


c)                                      Any insurance
required to be maintained by Tenant pursuant to this Lease shall be cancelled
or terminated or shall expire or shall be reduced or materially changed (“Insurance
Defaults”), except, in each case, as permitted in this Lease; provided,
however, that Landlord shall give Tenant written notice of any Insurance
Default of which Landlord becomes aware, and Tenant shall have 3 business days
in which to cure such default..


 


d)                                     Tenant shall
not occupy or shall vacate the Premises or shall fail to continuously operate
its business at the Premises for the permitted use set forth herein, whether or
not Tenant is in monetary or other default under this Lease.


 


e)                                      Tenant shall
attempt or there shall occur any assignment, subleasing or other transfer of
Tenant’s interest in or with respect to this Lease except as otherwise
permitted in this Lease.


 


f)                                        Tenant shall
fail to discharge any lien placed upon the Premises in violation of this Lease
within 30 days after any such lien or encumbrance is filed against the
Premises.


 


g)                                     Tenant shall
fail to comply with any provision of this Lease other than those specifically
referred to in this Paragraph 23, and except as otherwise expressly provided
herein, such default shall continue for more than 30 days after Landlord shall
have given Tenant written notice of such default (unless such performance will,
due to the nature of the obligation, require a period of time in excess of 30
days, then after such period of time as is reasonably necessary provided Tenant
commences the curing of such default during the 30 day period and thereafter
diligently pursues the curing of such default).


 


24.                                 Landlord’s Remedies.  Upon
each occurrence of an Event of Default and so long as such Event of Default
shall be continuing, Landlord may at any time thereafter at its election:
terminate this Lease or Tenant’s right of possession, (but Tenant shall remain
liable as hereinafter provided) and/or pursue any other remedies at law or in
equity.  Upon the termination of this
Lease or termination of Tenant’s right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property
therefrom.  If Landlord re-enters the
Premises, Landlord shall have the right to keep in place and use, or remove and
store, all of the furniture, fixtures and equipment at the Premises.


 


If Landlord terminates this Lease, Landlord
may recover from Tenant the sum of:  all
Base Rent and all other amounts accrued hereunder to the date of such
termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant’s or any other occupant’s
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable
expenses incurred by Landlord in pursuing its remedies, including reasonable
attorneys’ fees and court costs; and the excess of the then present value of
the Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date  stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration
the availability 


 


9

















 


of acceptable tenants and other market conditions affecting
leasing.  Such present values shall be
calculated at a discount rate equal to the 90-day U.S. Treasury bill rate at
the date of such termination.


 


If Landlord terminates Tenant’s right of
possession (but not this Lease), Landlord may, but shall be under no obligation
to, relet the Premises for the account of Tenant for such rent and upon such
terms as shall be satisfactory to Landlord without thereby releasing Tenant
from any liability hereunder and without demand or notice of any kind to
Tenant.  For the purpose of such
reletting Landlord is authorized to make any repairs, changes, alterations, or
additions in or to the Premises as Landlord deems reasonably necessary or
desirable.  If the Premises are not
relet, then Tenant shall pay to Landlord as damages a sum equal to the amount
of the rental reserved in this Lease for such period or periods, plus the cost
of recovering possession of the Premises (including attorneys’ fees and costs
of suit), the unpaid Base Rent and other amounts accrued hereunder at the time
of repossession, and the costs incurred in any attempt by Landlord to relet the
Premises.  If the Premises are relet and
a sufficient sum shall not be realized from such reletting [after first
deducting therefrom, for retention by Landlord, the unpaid Base Rent and other
amounts accrued hereunder at the time of reletting, the cost of recovering
possession (including attorneys’ fees and costs of suit), all of the costs and
expense of repairs, changes, alterations, and additions, the expense of such
reletting (including without limitation brokerage fees and leasing commissions)
and the cost of collection of the rent accruing therefrom] to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately satisfy
and pay any such deficiency.  Any such
payments due Landlord shall be made upon demand therefor from time to time and
Tenant agrees that Landlord may file suit to recover any sums falling due from
time to time.  Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.


 


Exercise by Landlord of any one or more
remedies hereunder granted or otherwise available shall not be deemed to be an
acceptance of surrender of the Premises and/or a termination of this Lease by
Landlord, whether by agreement or by operation of law, it being understood that
such surrender and/or termination can be effected only by the written agreement
of Landlord and Tenant.  Any law, usage,
or custom to the contrary notwithstanding, Landlord shall have the right at all
times to enforce the provisions of this Lease in strict accordance with the
terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same.  Tenant and Landlord further agree that
forbearance or waiver by Landlord to enforce its rights pursuant to this Lease
or at law or in equity, shall not be a waiver of Landlord’s right to enforce
one or more of its rights in connection with any subsequent default.  A receipt by Landlord of rent or other
payment with knowledge of the breach of any covenant hereof shall not be deemed
a waiver of such breach, and no waiver by Landlord of any provision of this
Lease shall be deemed to have been made unless expressed in writing and signed
by Landlord.  To the greatest extent
permitted by law, Tenant waives the service of notice of Landlord’s intention
to re-enter as provided for in any statute, or to institute legal proceedings
to that end, and also waives all right of redemption in case Tenant shall be
dispossessed by a judgment or by warrant of any court or judge.  The terms “enter,” “re-enter,” “entry” or “re-entry,”
as used in this Lease, are not restricted to their technical legal
meanings.  Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, lease
of less than the entire Premises to any tenant and leasing any or all other
portions of the Project before reletting the Premises).  Landlord shall not be liable, nor shall
Tenant’s obligations hereunder be diminished because of, Landlord’s failure to
relet the Premises or collect rent due in respect of such reletting.


 


25.                                 Tenant’s Remedies/Limitation of Liability.  Landlord shall not be in default hereunder
unless Landlord fails to perform any of its obligations hereunder within 30
days after written notice from Tenant specifying such failure (unless such
performance will, due to the nature of the obligation, require a period of time
in excess of 30 days, then after such period of time as is reasonably
necessary).  All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and, except as may
be otherwise expressly provided in this Lease, Tenant may not terminate this
Lease for breach of Landlord’s obligations hereunder.  All obligations of Landlord under this Lease
will be binding upon Landlord only during the period of its ownership of the
Premises and not thereafter.  The term “Landlord”
in this Lease shall mean only the owner, for the time being of the Premises,
and in the event of the transfer by such owner of its interest in the Premises,
such owner shall thereupon be released and discharged from all obligations of
Landlord thereafter accruing, but such obligations shall be binding during the
Lease Term upon each new owner for the duration of such owner’s ownership.  Any liability of Landlord under this Lease
shall be limited solely to its interest in the Project, and in no event shall
any personal liability be asserted against Landlord in connection with this
Lease nor shall any recourse be had to any other property or assets of Landlord.


 


26.                                 Waiver of Jury Trial.  TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL
BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.


 


10
















 


27.                                 Subordination.  This Lease
and Tenant’s interest and rights hereunder are and shall be subject and
subordinate at all times to the lien of any first mortgage, now existing or
hereafter created on or against the Project or the Premises, and all amendments,
restatements, renewals, modifications, consolidations, refinancing, assignments
and extensions thereof, without the necessity of any further instrument or act
on the part of Tenant.  Tenant agrees, at
the election of the holder of any such mortgage, to attorn to any such
holder.  Tenant agrees upon demand to
execute, acknowledge and deliver such instruments, confirming such
subordination and such instruments of attornment as shall be requested by any
such holder.  Tenant hereby appoints
Landlord attorney in fact for Tenant irrevocably (such power of attorney being
coupled with an interest) to execute, acknowledge and deliver any such
instrument and instruments for and in the name of the Tenant and to cause any
such instrument to be recorded. Notwithstanding the foregoing, any such holder
may at any time subordinate its mortgage to this Lease, without Tenant’s
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such mortgage and had been
assigned to such holder.  The term “mortgage”
whenever used in this Lease shall be deemed to include deeds of trust, security
assignments and any other encumbrances, and any reference to the “holder” of a
mortgage shall be deemed to include the beneficiary under a deed of trust.  Landlord represents to Tenant that as of the
date hereof the Building is not subject to or encumbered by a mortgage.


 


Notwithstanding the preceding provisions of this
Paragraph 27, this Lease and Tenant’s interest in the Premises shall not be
subordinate to any future mortgage or deed of trust on the Project, and Tenant
shall not be obligated to execute an instrument subordinating this Lease or
Tenant’s interest in the Premises to any future mortgage or deed of trust on
the Project, unless concurrently with such subordination the holder of such
mortgage or deed of trust agrees in such instrument of subordination not to
disturb Tenant’s possession of the Premises (so long as no default exists under
the Lease) in the event such holder acquires title to the Premises through
foreclosure, deed in lieu of foreclosure or otherwise.


 


28.                                 Mechanic’s Liens. 
Tenant has no express or implied authority to create or place any lien
or encumbrance of any kind upon, or in any manner to bind the interest of
Landlord or Tenant in, the Premises or to charge the rentals payable hereunder
for any claim in favor of any person dealing with Tenant, including those who
may furnish materials or perform labor for any construction or repairs. Tenant
covenants and agrees that it will pay or cause to be paid all sums legally due
and payable by it on account of any labor performed or materials furnished in
connection with any work performed on the Premises and that it will save and
hold Landlord harmless from all loss, cost or expense based on or arising out
of asserted claims or liens against the leasehold estate or against the
interest of Landlord in the Premises or under this Lease.  Tenant shall give Landlord immediate written
notice of the placing of any lien or encumbrance against the Premises and cause
such lien or encumbrance to be discharged within 30 days of the filing or
recording thereof; provided, however, Tenant may contest such liens or
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such 30 day period.


 


29.                                 Estoppel Certificates.  Each party
agrees, from time to time, within 10 days after request of the requesting
party, to execute and deliver to the requesting party, or the requesting party’s
designee, any estoppel certificate requested by the other, stating, if true,
that this Lease is in full force and effect, the date to which rent has been
paid, that the requesting party is not in default hereunder (or specifying in
detail the nature of the requesting party’s default), the termination date of
this Lease and such other matters pertaining to this Lease as may be reasonably
requested by the requesting party.  Each
party’s obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for each party’s execution of this Lease.  No cure or grace period provided in this
Lease shall apply to either party’s obligations to timely deliver an estoppel
certificate.


 


30.                                 Environmental
Requirements.  Except for
Hazardous Material (a) permitted under Addendum 5 to this Lease and
subject to the provisions thereof, or (b) contained in products used by
Tenant in de minimis quantities for ordinary cleaning and office purposes,
Tenant shall not permit or cause any party to bring any Hazardous Material upon
the Premises or transport, store, use, generate, manufacture or release any
Hazardous Material in or about the Premises without Landlord’s prior written
consent.  Tenant, at its sole cost and
expense, shall operate its business in the Premises in strict compliance with
all Environmental Requirements and shall remediate in a manner satisfactory to
Landlord any Hazardous Materials released on or from the Project by Tenant, its
agents, employees, contractors, subtenants or invitees.  Tenant shall complete and certify to
disclosure statements as requested by Landlord from time to time relating to
Tenant’s transportation, storage, use, generation, manufacture or release of
Hazardous Materials on the Premises.  The
term “Environmental Requirements” means all applicable present and future
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any governmental authority or agency regulating or
relating to health, safety, or environmental conditions on, under, or about the
Premises or the environment, including without limitation, the following:  the Comprehensive Environmental Response,
Compensation and


 


11

















 


Liability
Act; the Resource Conservation and Recovery Act; and all state and local
counterparts thereto, and any regulations or policies promulgated or issued
thereunder.  The term “Hazardous
Materials” means and includes any substance, material, waste, pollutant, or
contaminant listed or defined as hazardous or toxic, under any Environmental
Requirements, asbestos and petroleum, including crude oil or any fraction
thereof, natural gas liquids, liquified natural gas, or synthetic gas usable
for fuel (or mixtures of natural gas and such synthetic gas).  As defined in Environmental Requirements,
Tenant is and shall be deemed to be the “operator” of Tenant’s “facility” and
the “owner” of all Hazardous Materials brought on the Premises by Tenant, its
agents, employees, contractors or invitees, and the wastes, by-products, or
residues generated, resulting, or produced therefrom.


 


Tenant shall indemnify, defend, and hold
Landlord harmless from and against any and all losses (including, without
limitation, diminution in value of the Premises or the Project and loss of
rental income from the Project), claims, demands, actions, suits, damages
(including, without limitation, punitive damages), expenses (including, without
limitation, remediation, removal, repair, corrective action, or cleanup
expenses), and costs (including, without limitation, actual reasonable
attorneys’ fees, consultant fees or expert fees and including, without
limitation, removal or management of any asbestos brought into the property or
disturbed in breach of the requirements of this Paragraph 30, regardless of
whether such removal or management is required by law) which are brought or
recoverable against, or suffered or incurred by Landlord as a result of any
release of Hazardous Materials for which Tenant is obligated to remediate as
provided above or any other breach of the requirements under this Paragraph 30
by Tenant, its agents, employees, contractors, subtenants, assignees or
invitees, regardless of whether Tenant had knowledge of such
noncompliance.  The obligations of Tenant
under this Paragraph 30 shall survive any termination of this Lease.


 


Landlord shall have access to, and a right to
perform inspections and tests of, the Premises to determine Tenant’s compliance
with Environmental Requirements, its obligations under this Paragraph 30, or
the environmental condition of the Premises. 
Access shall be granted to Landlord upon Landlord’s prior notice to
Tenant and at such times so as to minimize, so far as may be reasonable under
the circumstances, any disturbance to Tenant’s operations.  Such inspections and tests shall be conducted
at Landlord’s expense, unless such inspections or tests reveal that Tenant has
not complied with any Environmental Requirement, in which case Tenant shall
reimburse Landlord for the reasonable cost of such inspection and tests.  Landlord’s receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.


 


Landlord represents to Tenant that to the
best of Landlord’s current, actual knowledge that there are no Hazardous
Materials in reportable quantities on the Project.  The phrase “current, actual knowledge of
Landlord” shall mean and refer only to the best of the current, actual knowledge
of the officers of Landlord having direct, operational responsibility for the
Project, with the express limitations and qualifications that the knowledge of
any contractor or consultant shall not be imputed to Landlord, and none of such
officers has made any special investigation or inquiry, and none of such
officers has any duty or obligation of diligent investigation or inquiry, or
any other duty or obligation, to acquire or to attempt to acquire information
beyond or in addition to the current, actual knowledge of such persons.


 


Landlord represents to
Tenant that to the best of Landlord’s current, actual knowledge that there are
no Hazardous Materials in reportable quantities on the Project.  The phrase “current, actual knowledge of
Landlord” shall mean and refer only to the best of the current, actual
knowledge of the officers of Landlord having direct, operational responsibility
for the Project, with the express limitations and qualifications that the
knowledge of any contractor or consultant shall not be imputed to Landlord, and
none of such officers has made any special investigation or inquiry, and none
of such officers has any duty or obligation of diligent investigation or
inquiry, or any other duty or obligation, to acquire or to attempt to acquire
information beyond or in addition to the current, actual knowledge of such
persons.


 


If Hazardous Materials are
hereafter discovered on the Premises, and the presence of such Hazardous
Materials is not the result of Tenant’s use of the Premises or any act or
omission of Tenant or its agents, employees, contractors, subtenants or
invitees, and the presence of such Hazardous Materials results in any
contamination, damages, or injury to the Premises that materially and adversely
affects Tenant’s occupancy or use of the Premises or human health, Landlord
shall promptly take all actions at its sole expense as are necessary to
remediate such Hazardous Materials and as may be required by the Environmental
Requirements.  Actual or threatened
action or litigation by any governmental authority is not a condition
prerequisite to Landlord’s obligations under this paragraph.  Within thirty (30) days after notification
from Tenant supported by reasonable documentation setting forth such presence
or release of Hazardous Materials, and after Landlord has been given a
reasonable period of time after such thirty (30) day period to conduct its own
investigation to confirm such presence or release of Hazardous Materials,
Landlord shall commence to remediate such Hazardous Materials within one
hundred eighty (180) days after the completion of Landlord’s investigation and
thereafter diligently prosecute such remediation to completion.  If Landlord commences remediation pursuant to
this paragraph, the Base Rent and Operating Expenses shall be equitably
adjusted if and to the extent and during the period the Premises are unsuitable
for Tenant’s business.  Notwithstanding
anything herein to the contrary, if Landlord obtains a letter from the
appropriate governmental authority that 


 


12

















 


no further remediation is required Landlord’s
obligation to remediate as provided in this paragraph shall be null and void.


 


No later than 90 days
following the full execution of this Lease, Landlord shall, at Landlord’s
expense cause a qualified environmental consultant to prepare a Phase I Site
Assessment Report (“Report”) with respect to the Building, a copy of which
shall be delivered to Tenant upon the completion of such Report.  Tenant hereby agrees to the following
conditions pertaining to the Report:


 


(a)                                  Tenant
acknowledges and agrees that Landlord has not made and hereby specifically
disclaims any and all representations and warranties, express or implied,
statutory, contractual or otherwise, with respect to (1) the accuracy or
completeness of the Report or any of the information contained or referenced
therein; and/or (2) the credentials, reputation, methodology, procedures,
findings, conclusions or recommendations of the consultant, its officers,
employees or agents, compiling the information set forth in the Report or
otherwise conducting the activities described in such Report; and Tenant
acknowledges that Landlord is providing the Report to Tenant solely for
informational purposes and not with the intention that Tenant should or may
rely upon the Report, or in any way interpret the Report as any environmental
representation or warranty from ProLogis with respect to the Project or any
portion thereof; and


 


(b)                                 Tenant
covenants and agrees that (1) Tenant shall not copy or reproduce any
portion of the Report except for use by Tenant or Tenant’s employees or
representatives for the purposes of documenting the the codition of the
Building as of the date of such report, and (2) Tenant shall not disclose
any information in the Report to any company, firm, entity or person other than
Tenant’s employees or representatives.


 


Notwithstanding anything to the contrary in
this Paragraph 30, Tenant shall have no liability of any kind to Landlord as to
Hazardous Materials on or affecting the Premises caused or permitted by (i) Landlord,
its agents, employees, contractors or invitees; or (ii) any other tenants
in the Project or their agents, employees, contractors, subtenants, assignees
or invitees; or (iii) any other person or entity located outside of the
Premises or the Project.


 


31.                                 Rules and Regulations.  Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project.  The
current rules and regulations are attached hereto.  In the event of any conflict between said rules and
regulations and other provisions of this Lease, the other terms and provisions
of this Lease shall control.  Landlord
shall not have any liability or obligation for the breach of any rules or
regulations by other tenants in the Project.


 


32.                                 Security Service. 
Tenant acknowledges and agrees that, while Landlord may patrol the
Project, Landlord is not providing any security services with respect to the
Premises and that Landlord shall not be liable to Tenant for, and Tenant waives
any claim against Landlord with respect to, any loss by theft or any other
damage suffered or incurred by Tenant in connection with any unauthorized entry
into the Premises or any other breach of security with respect to the Premises.


 


33.                                 Force Majeure.  Except for
monetary obligations, neither Landlord nor Tenant shall be held responsible for
delays in the performance of its obligations hereunder when caused by strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials
or reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, delay in issuance of permits, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of Landlord or Tenant, as the case may be
(“Force Majeure”).


 


34.                                 Entire Agreement.  This
Lease constitutes the complete agreement of Landlord and Tenant with respect to
the subject matter hereof.  No representations, inducements, promises or
agreements, oral or written, have been made by Landlord or Tenant, or anyone
acting on behalf of Landlord or Tenant, which are not contained herein, and any
prior agreements, promises, negotiations, or representations are superseded by
this Lease.  This Lease may not be
amended except by an instrument in writing signed by both parties hereto.


 


35.                                 Severability.  If any
clause or provision of this Lease is illegal, invalid or unenforceable under
present or future laws, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected
thereby.  It is also the intention of the parties to this Lease that in lieu
of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.


 


36.                                 Brokers.  Tenant
represents and warrants that it has dealt with no broker, agent or other person
in connection with this transaction and that
no broker, agent or other person brought about this


 


13

















 


transaction, other than the broker, if any, set forth on the first page of
this Lease, and Tenant agrees to indemnify and hold Landlord harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction.


 


37.                                 Miscellaneous.


 


(a)                                   Any payments or charges due
from Tenant to Landlord hereunder shall be considered rent for all purposes of
this Lease.


 


(b)                                 If and when
included within the term “Tenant,” as used in this instrument, there is more
than one person, firm or corporation, each shall be jointly and severally
liable for the obligations of Tenant.


 


(c)                                  All notices
required or permitted to be given under this Lease shall be in writing and
shall be sent by registered or certified mail, return receipt requested, or by
a reputable national overnight courier service, postage prepaid, or by hand delivery
addressed to the parties at their addresses below, and with a copy sent to
Landlord at 4545 Airport Way, Denver, Colorado 80239.  Either party may by notice given aforesaid
change its address for all subsequent notices. 
Except where otherwise expressly provided to the contrary, notice shall
be deemed given upon delivery.


 


(d)                                 Except as
otherwise expressly provided in this Lease or as otherwise required by
law,  Landlord retains the absolute right
to withhold any consent or approval.


 


(e)                                  At Landlord’s
request from time to time Tenant shall furnish Landlord with true and complete
copies of its most recent annual and quarterly financial statements prepared by
Tenant or Tenant’s accountants and any other financial information or summaries
that Tenant typically provides to its lenders or shareholders.


 


(f)                                    Neither this
Lease nor a memorandum of lease shall be filed by or on behalf of Tenant in any
public record.  Landlord may prepare and
file, and upon request by Landlord Tenant will execute, a memorandum of lease.


 


(g)                                 The normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Lease or any
exhibits or amendments hereto.


 


(h)                                 The submission
by Landlord to Tenant of this Lease shall have no binding force or effect,
shall not constitute an option for the leasing of the Premises, nor confer any
right or impose any obligations upon either party until execution of this Lease
by both parties.


 


(i)                                     Words of any
gender used in this Lease shall be held and construed to include any other
gender, and words in the singular number shall be held to include the plural,
unless the context otherwise requires. 
The captions inserted in this Lease are for convenience only and in no
way define, limit or otherwise describe the scope or intent of this Lease, or
any provision hereof, or in any way affect the interpretation of this Lease.


 


(j)                                     Any amount not
paid by Tenant within 5 days after its due date in accordance with the terms of
this Lease shall bear interest from such due date until paid in full at the
lesser of the highest rate permitted by applicable law or 15 percent per
year.  It is expressly the intent of
Landlord and Tenant at all times to comply with applicable law governing the
maximum rate or amount of any interest payable on or in connection with this
Lease.  If applicable law is ever
judicially interpreted so as to render usurious any interest called for under
this Lease, or contracted for, charged, taken, reserved, or received with
respect to this Lease, then it is Landlord’s and Tenant’s express intent that
all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately
shall be deemed reformed and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder.


 


(k)                                  Construction
and interpretation of this Lease shall be governed by the laws of the state in
which the Project is located, excluding any principles of conflicts of laws.


 


(l)                                     Time is of the
essence as to the performance of Tenant’s obligations under this Lease.


 


(m)                               All exhibits
and addenda attached hereto are hereby incorporated into this Lease and made a
part hereof.  In the event of any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.


 


14

















 


(n)                                 In the event either party
hereto initiates litigation to enforce the terms and provisions of this Lease,
the non-prevailing party in such action shall reimburse the prevailing party
for its reasonable attorney’s fees, filing fees, and court costs.


 


38.                                 Intentionally Omitted


 


39.                                 Limitation of Liability of Trustees, Shareholders, and Officers of ProLogis.  Any obligation or liability whatsoever of
ProLogis, a Maryland real estate
investment trust, which may arise at any time under this Lease or any
obligation or liability which may be incurred by it pursuant to any other
instrument, transaction, or undertaking contemplated hereby shall not be
personally binding upon, nor shall resort for the enforcement thereof be had to
the property of, its trustees, directors, shareholders, officers, employees or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort, or otherwise.


 


15

















 


IN
WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and
year first above written.


 


 


	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UFP
  Technologies, Inc.

  	
   

  	
  PROLOGIS, a Maryland real
  estate investment trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ronald J. Lataille

  	
   

  	
  By:

  	
  /s/ Douglas A.
  Kiersey, Jr.

  
	
  Name:

  	
  Ronald J. Lataille

  	
   

  	
  Name:

  	
  Douglas A.
  Kiersey, Jr.

  
	
  Title:

  	
  Treasurer and CFO

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
  80 Internationale
  Boulevard

  	
   

  	
  8755 W. Higgins Road

  
	
   

  	
   

  	
   

  
	
  Glendale Heights, IL 60139

  	
   

  	
  Chicago, IL 60631

  



 


16
















 


Rules and Regulations


 


1.                                       The sidewalk,
entries, and driveways of the Project shall not be obstructed by Tenant, or its
agents, or used by them for any purpose other than ingress and egress to and
from the Premises.


 


2.                                        Tenant shall
not place any objects, including antennas, outdoor furniture, etc., in the
parking areas, landscaped areas or other areas outside of its Premises, or on
the roof of the Project.


 


3.                                       Except for
seeing-eye dogs, no animals shall be allowed in the offices, halls, or
corridors in the Project.


 


4.                                       Tenant shall
not disturb the occupants of the Project or adjoining buildings by the use of
any radio or musical instrument or by the making of loud or improper noises.


 


5.                                       If Tenant
desires telegraphic, telephonic or other electric connections in the Premises,
Landlord or its agent will direct the electrician as to where and how the wires
may be introduced; and, without such direction, no boring or cutting of wires
will be permitted.  Any such installation
or connection shall be made at Tenant’s expense.


 


6.                                       Tenant shall
not install or operate any steam or gas engine or boiler, or other mechanical
apparatus in the Premises, except as specifically approved in the Lease.  The use of oil, gas or inflammable liquids
for heating, lighting or any other purpose is expressly prohibited.  Explosives or other articles deemed extra
hazardous shall not be brought into the Project.


 


7.                                       Parking any
type of recreational vehicles is specifically prohibited on or about the
Project.  Further, parking any type of
trucks, trailers or other vehicles in the Premises is specifically
prohibited.  Except for the overnight
parking of operative vehicles, no vehicle of any type shall be stored in the
parking areas at any time.  In the event
that a vehicle is disabled, it shall be removed within 48 hours.  There shall be no “For Sale” or other
advertising signs on or about any parked vehicle.  All vehicles shall be parked in the
designated parking areas in conformity with all signs and other markings.  All parking will be open parking, and no
reserved parking, numbering or lettering of individual spaces will be permitted
except as specified by Landlord.


 


8.                                       Tenant shall
maintain the Premises free from rodents, insects and other pests.


 


9.                                       Landlord
reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs
or who shall in any manner do any act in violation of the Rules and
Regulations of the Project.


 


10.                                 Tenant shall
not cause any unnecessary labor by reason of Tenant’s carelessness or
indifference in the preservation of good order and cleanliness.  Landlord shall not be responsible to Tenant
for any loss of property on the Premises, however occurring, or for any damage
done to the effects of Tenant by the janitors or any other employee or person.


 


11.                                 Tenant shall
give Landlord prompt notice of any defects in the water, lawn sprinkler,
sewage, gas pipes, electrical lights and fixtures, heating apparatus, or any
other service equipment affecting the Premises.


 


12.                                 Tenant shall
not permit storage outside the Premises, including without limitation, outside
storage of trucks and other vehicles, or dumping of waste or refuse or permit
any harmful materials to be placed in any drainage system or sanitary system in
or about the Premises.


 


13.                                 All moveable
trash receptacles provided by the trash disposal firm for the Premises must be
kept in the trash enclosure areas, if any, provided for that purpose.


 


14.                                 No auction,
public or private, will be permitted on the Premises or the Project.


 


15.                                 No awnings
shall be placed over the windows in the Premises except with the prior written
consent of Landlord.


 


16.                                 The Premises
shall not be used for lodging, sleeping or cooking or for any immoral or
illegal purposes or for any purpose other than that specified in the
Lease.  No gaming devices shall be
operated in the Premises.


 


17

















 


17.                                 Tenant shall
ascertain from Landlord the maximum amount of electrical current which can
safely be used in the Premises, taking into account the capacity of the
electrical wiring in the Project and the Premises and the needs of other
tenants, and shall not use more than such safe capacity.  Landlord’s consent to the installation of
electric equipment shall not relieve Tenant from the obligation not to use more
electricity than such safe capacity.


 


18.                                 Tenant assumes
full responsibility for protecting the Premises from theft, robbery and
pilferage.


 


19.                                 Tenant shall
not install or operate on the Premises any machinery or mechanical devices of a
nature not directly related to Tenant’s ordinary use of the Premises and shall
keep all such machinery free of vibration, noise and air waves which may be
transmitted beyond the Premises.


 


18

















 


ADDENDUM 1


 


BASE RENT ADJUSTMENTS


 


ATTACHED TO AND A PART OF
THE LEASE AGREEMENT


DATED  July 29, 2009  BETWEEN


 


ProLogis


and


UFP
Technologies, Inc.


 


Base Rent shall equal the following amounts
for the respective periods set forth below:


 


	
  Period

  	
   

  	
  Monthly Base Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2009

  	
   

  	
  to

  	
  December 31, 2009

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2010

  	
   

  	
  to

  	
  April 30, 2010

  	
   

  	
  $

  	
  11,376.62

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 1, 2010

  	
   

  	
  to

  	
  July 31, 2011

  	
   

  	
  $

  	
  24,989.12

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2011

  	
   

  	
  to

  	
  July 31, 2012

  	
   

  	
  $

  	
  26,468.74

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2012

  	
   

  	
  to

  	
  July 31, 2013

  	
   

  	
  $

  	
  27,109.08

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  August 1, 2013

  	
   

  	
  to

  	
  July 31, 2014

  	
   

  	
  $

  	
  27,765.44

  	
   

  



 


19

















 


ADDENDUM 2


 


CANCELLATION OPTION


 


ATTACHED TO AND A PART OF THE LEASE
AGREEMENT


DATED  July 29, 2009  BETWEEN


 


ProLogis


and


UFP Technologies, Inc.


 


Provided no Event of Default shall then exist
and no condition shall then exist which with the passage of time or giving of
notice, or both, would constitute an Event of Default, Tenant shall have the
right at any time after July 31, 2011 to send Landlord written
notice (the “Termination Notice”) that Tenant has elected to terminate
this Lease effective on the date which is six (6) months following
Landlord’s receipt of notice of the Termination Notice.


 


If Tenant elects to terminate this Lease
pursuant to the immediately preceding sentence, the effectiveness of such
termination shall be conditioned upon Tenant paying  $345,000.00 to Landlord  contemporaneously with Tenant’s delivery of
the Termination Notice to Landlord.  Such
amount is consideration for Tenant’s option to terminate and shall not be
applied to rent or any other obligation of Tenant.  Landlord and Tenant shall be relieved of all
obligations accruing under this Lease after the effective date of such
termination but not any obligations accruing under the Lease prior to the
effective date of such termination.


 


20

















 


ADDENDUM 3


 


RENEWAL OPTION


(BASEBALL ARBITRATION)


 


ATTACHED TO AND A PART OF THE LEASE
AGREEMENT


DATED  July 29,
2009 BETWEEN


 


ProLogis


and


UFP Technologies, Inc.


 


(a)                                  Provided that
as of the time of the giving of the Extension Notice and the Commencement Date
of the Extension Term (as such terms are defined below), (x) Tenant is the
Tenant originally named herein or a Tenant Affiliate, (y) Tenant actually
occupies all of the Premises initially demised under this Lease and any space
added to the Premises, and (z) no Event of Default exists, or would exist
but for the passage of time or the giving of notice, or both; then Tenant shall
have the right to extend the Lease Term for an additional term of 5 years (such
additional term is hereinafter called the “Extension Term”) commencing on the
day following the expiration of the Lease Term (hereinafter referred to as the “Commencement
Date of the Extension Term”).  Tenant
must give Landlord notice (hereinafter called the “Extension Notice”) of its
election to extend the term of the Lease Term at least 9 months, but not more
than 12 months, prior to the scheduled expiration date of the Lease Term.


 


(b)                                 The Base Rent
payable by Tenant to Landlord during the Extension Term shall be the greater
of:


 


(i)                                     the Base Rent
in effect on the expiration of the Lease Term (if the Base Rent is stated as an
annual or other periodic rate, adjusted for the length of the Lease Term), and


 


(ii)                                  the Fair Market
Rent, as defined and determined pursuant to Paragraphs (c), (d), and (e) below.


 


(c)                                  The term “Fair
Market Rent” shall mean the Base Rent, expressed as an annual rent per square
foot of floor area excluding Operating Expenses and Excess Operating Expenses,
not to exceed $5.50 per square foot annually or $434,021.50 annually for the
first year of the Extension Term, which Landlord would have received from
leasing the Premises for the Extension Term to an unaffiliated person which is
not then a tenant in the Project, assuming that such space were to be delivered
in “as-is” condition, and taking into account the rental which such other
tenant would most likely have paid for such premises, including market
escalations,  provided that Fair Market
Rent shall not in any event be less than the Base Rent for the Premises as of
the expiration of the Lease Term.  Fair
Market Rent shall not be reduced by reason of any costs or expenses saved by
Landlord by reason of Landlord’s not having to find a new tenant for the
Premises (including without limitation brokerage commissions, cost of
improvements necessary to prepare the space for such tenant’s occupancy, rent
concession, or lost rental income during any vacancy period).  Fair Market Rent means only the rent
component defined as Base Rent in the Lease and does not include reimbursements
and payments by Tenant to Landlord with respect to operating expenses and other
items payable or reimbursable by Tenant under the Lease.  In addition to its obligation to pay Base
Rent (as determined herein), Tenant shall continue to pay and reimburse
Landlord as set forth in the Lease with respect to such operating expenses and
other items with respect to the Premises during the Extension Term.  The arbitration process described below shall
be limited to the determination of the Base Rent and shall not affect or otherwise
reduce or modify the Tenant’s obligation to pay or reimburse Landlord for such
operating expenses and other reimbursable items.


 


(d)                                 No later than
20 business days following Landlord’s receipt of the Extension Notice, Landlord
shall notify Tenant of its determination of the Fair Market Rent (which shall
be made in Landlord’s sole discretion and shall in any event be not less than
the Base Rent in effect as of the expiration of the Lease Term) for the
Extension Term, and Tenant shall advise Landlord of any objection within 10
days of receipt of Landlord’s notice. 
Failure to respond within the 10-day period shall constitute Tenant’s
acceptance of such Fair Market Rent.  If
Tenant objects, Landlord and Tenant shall commence negotiations to attempt to
agree upon the Fair Market Rent within 30 days of Landlord’s receipt of Tenant’s
notice.  If the parties cannot agree,
each acting in good faith but without any obligation to agree, then the Lease
Term shall not be extended and shall terminate on its scheduled termination
date and Tenant shall have no further right hereunder or any remedy by reason
of the parties’ failure to agree unless Tenant or Landlord invokes the
arbitration procedure provided below to determine the Fair Market Rent.


 


(e)                                  Arbitration to
determine the Fair Market Rent shall be in accordance with the Real Estate
Valuation Arbitration Rules of the American Arbitration Association.  Unless otherwise required by state law,
arbitration shall be conducted in the metropolitan area where the Project is
located by a single arbitrator 


 


21

















 


unaffiliated
with either party.  Either party may
elect to arbitrate by sending written notice to the other party and the
Regional Office of the American Arbitration Association within 5 days after the
30-day negotiating period provided in Paragraph (d), invoking the binding
arbitration provisions of this paragraph. 
Landlord and Tenant shall each submit to the arbitrator their respective
proposal of Fair Market Rent.  The
arbitrator must choose between the Landlord’s proposal and the Tenant’s
proposal and may not compromise between the two or select some other
amount.  Notwithstanding any other
provision herein, the Fair Market Rent determined by the arbitrator shall not
be less than, and the arbitrator shall have no authority to determine a Fair
Market Rent less than, the Base Rent in effect as of the scheduled expiration
of the Lease Term.  The cost of the
arbitration shall be paid by Landlord if the Fair Market Rent is that proposed
by Landlord and by Tenant if the Fair Market Rent is that proposed by Tenant;
and shall be borne equally otherwise.  If
the arbitrator has not determined the Fair Market Rent as of the end of the
Lease Term, Tenant shall pay 105 percent of the Base Rent in effect under the
Lease as of the end of the Lease Term until the Fair Market Rent is determined
as provided herein.  Upon such
determination, Landlord and Tenant shall make the appropriate adjustments to
the payments between them.


 


(f)                                    The parties
consent to the jurisdiction of any appropriate court to enforce the arbitration
provisions of this Addendum and to enter judgment upon the decision of the
arbitrator.


 


(g)                                 Except for the
Base Rent as determined above, Tenant’s occupancy of the Premises during the
Extension Term shall be on the same terms and conditions as are in effect
immediately prior to the expiration of the initial Lease Term; provided,
however, Tenant shall have no further right to extend the Lease Term pursuant
to this addendum or to any allowances, credits or abatements or options to
expand, contract, renew or extend the Lease.


 


(h)                                 If Tenant does
not send the Extension Notice within the period set forth in Paragraph (a),
Tenant’s right to extend the Lease Term shall automatically terminate.  Time is of the essence as to the giving of
the Extension Notice and the notice of Tenant’s objection under Paragraph (d).


 


(i)                                     Landlord shall
have no obligation to refurbish or otherwise improve the Premises for the
Extension Term.  The Premises shall be
tendered on the Commencement Date of the Extension Term in “as-is” condition.


 


(j)                                     If the Lease is
extended for the Extension Term, then Landlord shall prepare and Tenant shall
execute an amendment to the Lease confirming the extension of the Lease Term
and the other provisions applicable thereto.


 


(k)                                  If Tenant
exercises its right to extend the term of the Lease for the Extension Term
pursuant to this Addendum, the term  “Lease
Term” as used in the Lease, shall be construed to include, when practicable,
the Extension Term except as provided in (g) above.


 


22

















 


ADDENDUM 4


 


TENANT-MADE ALTERATIONS ALLOWANCE


 


ATTACHED TO AND A PART OF THE LEASE
AGREEMENT


DATED  July 29,
2009  BETWEEN


 


ProLogis


and


UFP Technologies, Inc.


 


Notwithstanding anything contained herein
to the contrary, Landlord shall contribute up to a maximum amount of $30,000.00
(the “TI Allowance”), toward the upgrade of the existing power at the Premises
to 2,000 amps at 480 volts (“Allowance Work”) which such payment shall be made
by Landlord to Tenant within 30 days following (i) completion of the
Allowance Work, and (ii) Landlord’s receipt of Tenant’s invoice
substantiating the costs related thereto, (iii) Landlord’s receipt of
final lien waivers (to the extent required under Paragraph 12 above) from all
contractors and subcontractors who did work on the Allowance Work.  Landlord shall be under no obligation to pay
for any Allowance Work in excess of the TI Allowance.  Further, such TI Allowance shall only be
available for Tenant’s use through December 31, 2009, and Tenant hereby
waives any and all rights to any unused portion of the TI Allowance remaining
as of January 1, 2010.


 


23

















 


ADDENDUM 5


 


STORAGE AND USE OF PERMITTED HAZARDOUS MATERIALS


 


ATTACHED TO AND A PART OF THE LEASE
AGREEMENT


DATED  July 29,
2009  BETWEEN


 


ProLogis


and


UFP Technologies, Inc.


 


1.                                       Permitted Hazardous Materials and Use.


 


Tenant has
requested Landlord’s consent to use the Hazardous Materials listed below in its
business at the Premises (the “Permitted Hazardous Materials”).  Subject to the conditions set forth herein,
Landlord hereby consents to the Use (hereinafter defined) of the Permitted
Hazardous Materials.  Any Permitted
Hazardous Materials on the Premises will be generated, used, received,
maintained, treated, stored, or disposed in a manner consistent with good
engineering practice and in compliance with all Environmental Requirements.


 


Permitted
Hazardous Materials (including maximum quantities):


 


 


The storage, uses
or processes involving the Permitted Hazardous Materials (the “Use”) are
described below.


 


Use [If limited to receiving and storage, so
specify]:


 


 


2.                                       No Current Investigation. 
Tenant represents and warrants that it is not currently subject to an
inquiry, regulatory investigation, enforcement order, or any other proceeding
regarding the generation, use, treatment, storage, or disposal of a Hazardous
Material.


 


3.                                       Notice and Reporting. 
Tenant immediately shall notify Landlord in writing of any spill,
release, discharge, or disposal of any Hazardous Material in, on or under the
Premises or the Project.  All reporting
obligations imposed by Environmental Requirements are strictly the
responsibility of Tenant.  Tenant shall
supply to Landlord within 5 business days after Tenant first receives or sends
the same, copies of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to Tenant’s use of the Premises.


 


4.                                       Indemnification. 
Tenant’s indemnity obligation under the Lease with respect to Hazardous
Materials shall include indemnification for the liabilities, expenses and other
losses described therein as a result of the Use of the Hazardous Materials or
the breach of Tenant’s obligations or representations set forth above.  It is the intent of this provision that
Tenant be strictly liable to Landlord as a result of the Use of Hazardous
Materials without regard to the fault or negligence of Tenant, Landlord or any
third party.


 


5.                                       Disposal Upon Lease Termination. 
At the expiration or earlier termination of the Lease, Tenant, at its
sole cost and expense, shall:  (i) remove
and dispose off-site any drums, containers, receptacles, structures, or tanks
storing or containing Hazardous Materials (or which have stored or contained
Hazardous Materials) and the contents thereof; (ii) remove, empty, and
purge all underground and above ground storage tank systems, including
connected piping, of all vapors, liquids, sludges and residues; and (iii) restore
the Premises to its original condition. 
Such activities shall be performed in compliance with all Environmental
Requirements and to the satisfaction of Landlord.  Landlord’s satisfaction with such activities
or the condition of the Premises does not waive, or release Tenant from, any
obligations hereunder.


 


24

















 


EXHIBIT A


 


SITE PLAN


 


ATTACHED TO AND A PART OF THE LEASE
AGREEMENT


DATED  July 29,
2009  BETWEEN


 


ProLogis


and


UFP Technologies, Inc.


 


25

















 





 


26