10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from  ________ to ________

Commission file number 0-01097

THE STANDARD REGISTER COMPANY

(Exact name of Registrant as specified in its charter)

OHIO	31-0455440
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
600 ALBANY STREET, DAYTON OHIO	45417
(Address of principal executive offices)	(Zip code)
(937) 221-1000
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT

Common stock $1.00 par value	New York Stock Exchange
Title of each class	Name of each exchange
	on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes [X]  No[  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [X]  No[  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.   See definition of “accelerated filer,” “large accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [  ]	Accelerated filer [  ]
Non-accelerated filer [  ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes [  ]  No [X]

At March 31, 2013, the number of shares outstanding of the issuer’s classes of common stock is as follows:

Common stock, $1.00 par value	26,173,540 shares
Class A stock, $1.00 par value	4,725,000 shares

The Standard Register Company

Form 10-Q

For the Quarter Ended March 31, 2013

TABLE OF CONTENTS

	Part I - Financial Information		Page
Item 1.	Consolidated Financial Statements (Unaudited)		3
		Consolidated Statements of Income for the 13-Week Periods Ended March 31, 2013 and April 1, 2012	3
		Consolidated Statements of Comprehensive Income for the 13-Week Periods Ended March 31, 2013 and April 1, 2012	4
		Consolidated Balance Sheets as of March 31, 2013 and December 30, 2012	5
		Consolidated Statements of Cash Flows for the 13-Week Periods Ended March 31, 2013 and April 1, 2012	7
		Notes to Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Qualitative and Quantitative Disclosures About Market Risk		19
Item 4.	Controls and Procedures		19
	Part II - Other Information
Item 1.	Legal Proceedings		19
Item 1A.	Risk Factors		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults Upon Senior Securities		19
Item 4.	Mine Safety Disclosures		19
Item 5.	Other Information		20
Item 6.	Exhibits		20
Signature			21

PART I - FINANCIAL INFORMATION

THE STANDARD REGISTER COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	13 Weeks Ended
	March 31, 2013			April 1, 2012
REVENUE
Products	$	125,260		$	138,901
Services	16,360			18,748
Total revenue	141,620			157,649
COST OF SALES
Products	90,441			98,104
Services	9,259			11,344
Total cost of sales	99,700			109,448
GROSS MARGIN	41,920			48,201
OPERATING EXPENSES
Selling, general and administrative	42,592			50,215
Pension settlement	—			983
Restructuring and other exit costs	626			1,122
Total operating expenses	43,218			52,320
LOSS FROM OPERATIONS	(1,298		)	(4,119		)
OTHER INCOME (EXPENSE)
Interest expense	(624		)	(704		)
Other income (expense)	(1		)	16
Total other expense	(625		)	(688		)
LOSS BEFORE INCOME TAXES	(1,923		)	(4,807		)
INCOME TAX EXPENSE	127			305
NET LOSS	$	(2,050	)	$	(5,112	)
BASIC AND DILUTED LOSS PER SHARE	$	(0.07	)	$	(0.18	)
Dividends per share declared for the period	$	—		$	0.05

See accompanying notes.

3

THE STANDARD REGISTER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except per share amounts)

	13 Weeks Ended
	March 31, 2013			April 1, 2012
NET LOSS	$	(2,050	)	$	(5,112	)
Other comprehensive income, net of tax:
Actuarial loss	—			(392		)
Actuarial loss reclassification	6,898			6,395
Cumulative translation adjustment	246			(183		)
Total other comprehensive income, net of tax	$	7,144		$	5,820
COMPREHENSIVE INCOME	$	5,094		$	708

See accompanying notes.

4

THE STANDARD REGISTER COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

A S S E T S	March 31, 2013		December 30, 2012
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	1,063	$	1,012
Accounts receivable, net of allowance of $2,227 and $2,312	99,768		104,513
Inventories, net	44,718		44,281
Prepaid expense	10,244		9,248
Total current assets	155,793		159,054
PLANT AND EQUIPMENT
Land	1,900		1,900
Buildings and improvements	65,370		65,259
Machinery and equipment	182,090		182,830
Office equipment	157,779		156,596
Construction in progress	5,465		2,886
Total	412,604		409,471
Less accumulated depreciation	353,931		350,548
Total plant and equipment, net	58,673		58,923
OTHER ASSETS
Goodwill	7,456		7,456
Intangible assets, net	5,660		5,933
Deferred tax asset	22,765		22,765
Other	5,424		5,773
Total assets	$	255,771	$	259,904

See accompanying notes.

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THE STANDARD REGISTER COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

LIABILITIES AND SHAREHOLDERS' DEFICIT	March 31, 2013			December 30, 2012
	(Unaudited)
CURRENT LIABILITIES
Current portion of long-term debt	$	45,957		$	2,361
Accounts payable	29,108			29,237
Other current liabilities	42,025			43,234
Total current liabilities	117,090			74,832
LONG-TERM LIABILITIES
Long-term debt	4,980			49,159
Pension benefit liability	245,349			252,665
Deferred compensation	3,345			3,498
Environmental liabilities	3,697			3,986
Other long-term liabilities	2,608			2,624
Total long-term liabilities	259,979			311,932
COMMITMENTS AND CONTINGENCIES - See Note 11
SHAREHOLDERS' DEFICIT
Common stock, $1.00 par value:
Authorized 101,000 shares; Issued 26,876 and 26,528 shares	26,876			26,528
Class A stock, $1.00 par value: Authorized 9,450 shares; Issued 4,725 shares	4,725			4,725
Capital in excess of par value	68,000			67,880
Accumulated other comprehensive loss	(224,474		)	(231,618		)
Retained earnings	53,811			55,861
Treasury stock at cost: 2,021 shares	(50,236		)	(50,236		)
Total shareholders' deficit	(121,298		)	(126,860		)
Total liabilities and shareholders' deficit	$	255,771		$	259,904

See accompanying notes.

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THE STANDARD REGISTER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	13 Weeks Ended
	March 31, 2013			April 1, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,050	)	$	(5,112	)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization	5,066			5,822
Restructuring and other exit costs	626			1,122
Pension benefit cost	6,242			6,184
Other	285			1,043
Changes in operating assets and liabilities:
Accounts and notes receivable	4,688			5,722
Inventories	(437		)	(2,374		)
Restructuring payments	(565		)	(1,653		)
Accounts payable and other current liabilities	(780		)	7,829
Pension contributions	(6,660		)	(9,010		)
Other assets and liabilities	(1,542		)	(3,121		)
Net cash provided by operating activities	4,873			6,452
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant and equipment	(4,389		)	(713		)
Proceeds from sale of equipment	77			8
Net cash used in investing activities	(4,312		)	(705		)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings under revolving credit facility	(629		)	(3,389		)
Additions to short-term notes payable	500			—
Principal payments on long-term debt	(592		)	(724		)
Dividends paid	—			(1,470		)
Other	—			(5		)
Net cash used in financing activities	(721		)	(5,588		)
Effect of exchange rate changes on cash	211			(194		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	51			(35		)
Cash and cash equivalents at beginning of period	1,012			1,569
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,063		$	1,534
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Capital leases	$	138		$	—

See accompanying notes.

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THE STANDARD REGISTER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in thousands, except per share amounts)

NOTE 1 – BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of The Standard Register Company and its wholly-owned subsidiaries (collectively, the Company) after elimination of intercompany transactions, profits, and balances. The consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 30, 2012 (Annual Report). In our opinion, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of trends or of results to be expected for a full year.

Certain prior-year amounts have been reclassified to conform to the current-year presentation.

NOTE 2 – REVERSE STOCK SPLIT

On April 25, 2013, our shareholders approved a 1-for-5 reverse stock split of our outstanding shares of Common and Class A Stock that will be effective May 10, 2013. This will result in a reduction of our Common Stock issued and outstanding from 26,876 shares to approximately 5,375 shares, and a reduction in our Class A Stock issued and outstanding from 4,725 shares to approximately 945 shares. The reverse stock split will affect all shareholders of the Company's stock uniformly, but should not materially affect any shareholder’s percentage of ownership interest. The par value of our Common Stock and Class A Stock will remain unchanged at $1.00 per share and the number of authorized shares will remain the same after the reverse stock split.

As the par value per share of the Company's stock will remain unchanged at $1.00 per share, approximately $25,281 will be reclassified to capital in excess of par value. In connection with this reverse stock split, the number of shares of Common Stock underlying outstanding share-based awards will also be proportionately reduced while the exercise prices of stock options will be proportionately increased.

NOTE 3 – RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In 2013, we adopted Accounting Standards Update (ASU) 2013-2, which requires additional disclosure of information related to changes in our accumulated other comprehensive loss by component and significant items reclassified out of our accumulated other comprehensive loss.

Changes in accumulated other comprehensive loss, net of deferred taxes, for the period ended March 31, 2013 consist of the following:

	Foreign Currency Translation			Defined Benefit Pension Plans			Total
Balance beginning of period	$	(192	)	$	(231,426	)	$	(231,618	)
Other comprehensive income before reclassifications	246			—			246
Amounts reclassified from accumulated other comprehensive loss	—			6,898			6,898
Net current-period other comprehensive income	246			6,898			7,144
Balance end of period	$	54		$	(224,528	)	$	(224,474	)

During 2013, 6,898 of net actuarial loss was amortized from accumulated other comprehensive loss into net periodic benefit cost (see Note 8 Pension Plans). Because of the valuation allowance against our deferred tax assets, there was no federal or state income-based tax expense or benefit related to amounts recorded to or reclassified out of accumulated other comprehensive loss.

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NOTE 4 – RESTRUCTURING AND OTHER EXIT COSTS

In late 2011, we developed a strategic restructuring program that was announced in January 2012. Costs of the two-year program include employee separation costs for severance related to the workforce reductions, contract exit and termination costs related to lease terminations, and other associated exit costs that include fees to third parties to assist with the program implementation and certain costs related to implementation of an ERP system that will replace select software applications.

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	6,177	$	—	$	6,177
Contract exit and termination costs	557		—		247
Other associated exit costs	3,300		25		3,325
Total	$	10,034	$	25	$	9,749

In March of 2013 we announced plans for a new digital print, kitting, and distribution center which is expected to be operational by the third quarter of 2013. To take full advantage of the enhanced capabilities and to support customer requirements, some operations from existing facilities will be transferred to the new center. While certain facilities will close at the end of their current lease term, the company will maintain local presence in the current manufacturing and distribution network to meet customer needs, but in a smaller footprint. Costs of the initiative include employee separation costs for severance and relocation expense as we move a portion of our operations to the new facility and other associated exit costs, primarily for equipment and inventory relocation.

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	875	$	601	$	601
Other associated exit costs	1,725		—		—
Total	$	2,600	$	601	$	601

Restructuring and other exit costs in 2012 also included costs from a completed restructuring plan that were required to be expensed as incurred. These amounts were not material.

Restructuring Liability

A summary of activity in the restructuring liability is as follows:

	Balance 2012		Accrued in 2013		Incurred in 2013			Balance 2013
Employee separation costs	$	1,350	$	601	$	(524	)	$	1,427
Contract exit and termination costs	21		—		(16		)	5
Total	$	1,371	$	601	$	(540	)	$	1,432

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NOTE 5 – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

	March 31, 2013		December 30, 2012
Accrued compensation	$	13,309	$	13,996
Deferred revenue	5,198		6,020
Accrued non-income taxes	3,714		3,885
Current portion of pension	2,058		2,058
Accrued customer rebates	4,876		4,814
Other current liabilities	12,870		12,461
Total	$	42,025	$	43,234

NOTE 6 – LONG TERM DEBT

Our existing credit facility expires in March 2014; therefore, the $43,000 of debt currently outstanding on this facility is classified as a current liability in the accompanying consolidated balance sheet. We are currently renegotiating with our banking partners and anticipate completing a new credit agreement later in 2013 or early 2014.

NOTE 7 – EARNINGS PER SHARE

The number of shares outstanding for calculation of earnings per share (EPS) is as follows:

	13 Weeks Ended
(Shares in thousands)	March 31, 2013	April 1, 2012
Weighted-average shares outstanding - basic and diluted	29,358	29,117

Due to the net loss incurred for the 13-week periods ending on March 31, 2013, and April 1, 2012, no outstanding options or nonvested shares were included in the diluted EPS computation because they would automatically result in anti-dilution.

NOTE 8 – SHARE-BASED COMPENSATION

Total share-based compensation expense was $469 and $703 for the periods ended March 31, 2013, and April 1, 2012.

NOTE 9 – PENSION PLANS

Net periodic benefit cost includes the following components:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Interest cost	$	4,552		$	5,042
Expected return on plan assets	(5,208		)	(5,626		)
Amortization of net actuarial losses	6,898			5,785
Settlement loss	—			983
Total	$	6,242		$	6,184

As a result of associates retiring in 2012 and electing a lump-sum payment of their pension benefits under our non-qualified retirement plan, we recognized a non-cash settlement loss during the first quarter of 2012. A pension settlement is recorded when the total lump sum payments for a year exceed total service and interest costs to be recognized for that year. As part of the settlement, we recognized a pro-rata portion of the unrecognized net losses included in accumulated other comprehensive loss equal to the percentage reduction in the pension benefit obligation.

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NOTE 10 – SEGMENT REPORTING

Information about our operations by reportable segment for the 13-week periods ended March 31, 2013 and April 1, 2012 is as follows:

		Healthcare		Business Solutions		Total
Revenue from external customers	2013	$	49,495	$	92,125	$	141,620
	2012	57,050		100,599		157,649
Operating income	2013	$	2,136	$	2,934	$	5,070
	2012	2,568		672		3,240

Reconciling information between reportable segments and our consolidated financial statements is as follows:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Segment operating income	$	5,070		$	3,240
Restructuring and other exit costs	(626		)	(1,122		)
Net pension periodic benefit cost	(6,242		)	(6,184		)
Other unallocated	500			(53		)
Total other expense	(625		)	(688		)
Loss before income taxes	$	(1,923	)	$	(4,807	)

NOTE 11 – COMMITMENTS AND CONTINGENCIES

In March 2013, we entered into an operating lease for a new digital print, kitting, and distribution center. The term of the lease is seven years but includes an exit right after five years with payment of an exit fee. Payments under the lease are approximately $1,400 per year and will begin April 1, 2013.

Contingencies

The Company has participated with other Potentially Responsible Parties (“PRPs”) in the investigation, study, and remediation of the Pasco Sanitary Landfill Superfund Site (the “Pasco Site”) in eastern Washington State since 1998. The Company was a member of a PRP Group known as the Industrial Waste Area Generators Group II (the “IWAG Group”). In 2000, the IWAG Group and several other PRP groups entered into agreed orders with the Department of Ecology for implementation of interim remedial actions and expansion of groundwater monitoring. In September 2010, the group entered into a new agreement creating the IWAG Group III. The new agreement changed the allocation of responsibility among the members, which resulted in a significant decrease in our level of participation. Based upon new investigations, it was also deemed probable that the level of participation by certain other PRPs would increase for costs expected to be incurred after 2010. At this time, an agreement has not yet been reached on the final remediation approach. We have accrued our best estimate of our obligation and have an undiscounted long-term liability of $1,213 that we currently believe is adequate to cover our portion of the total future potential costs of remediation. We expect the costs to be incurred over a period of 60 years; however, the current proposed remediation approach could require monitoring for a longer period of time. This estimate is contingent upon the final remedy agreed upon, the participation of other PRPs not currently in the IWAG Group III, the length of monitoring required, and the final agreed upon allocation. Until a final remediation approach is approved and a final agreement is reached among all PRPs, it is reasonably possible that one or more of these factors could change our estimate; however, we are unable to determine the impact at this time.

The Company participates with other PRPs in the investigation, study, and remediation of the Valleycrest Landfill Site (the “Valleycrest Site”) in western Ohio. The Company is a member of a PRP Group known as the Valleycrest Landfill Site Group (the “VLSG”). A remedial investigation and feasibility study was conducted by the VLSG which indicated a range of viable remedial approaches. At this time, a final remediation approach has not been selected, and we have accrued the estimate of our obligation based on the most likely approach being considered by the U.S. Environmental Protection Agency. We have an undiscounted long-term liability of $2,382 that we currently believe is adequate to cover our portion of the total future potential costs of remediation, which are expected to be incurred over a period of 30 years. This estimate is contingent upon the final

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remedy agreed upon, the participation of other PRPs not currently in the VLSG, and the final agreed upon allocation. Until a final remediation approach is approved and a final agreement is reached among all PRPs, it is reasonably possible that one or more of these factors could change our estimate; however, we are unable to determine the impact at this time.

NOTE 12 – FAIR VALUE MEASUREMENTS

We have financial assets and liabilities that are not recorded at fair value but which require disclosure of their fair value. The carrying value of cash equivalents approximates fair value due to the short-term maturity of these instruments and is not material. The carrying value of outstanding amounts under our secured revolving credit facility and capital lease obligation approximate fair value based on currently available market rates.

NOTE 13 – INCOME TAXES

Because of the valuation allowance against our deferred tax assets, there was no federal or state income-based tax expense or benefit. Tax expense for 2013 and 2012 reflects state tax liabilities derived from a tax base other than net income and foreign taxes in Mexico.

NOTE 14 – SUBSEQUENT EVENTS

The Company has evaluated for disclosure all subsequent events through the date the financial statements were issued and filed with the United States Securities and Exchange Commission.

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Item 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in millions, except per share amounts)

FORWARD-LOOKING INFORMATION

This report includes forward-looking statements covered by the Private Securities Litigation Reform Act of 1995. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Forward-looking statements include statements in which we use words such as "anticipates," "projects," "expects," "plans," "intends," "believes," "estimates," "targets," and other similar expressions that indicate trends and future events. Among other things, all statements regarding expectations related to the following are forward-looking statements that involve certain risks and uncertainties:

• decline in traditional print and related services

• adoption of electronic health records (EHR)

• expansion in our solutions

• future pension funding requirements and amortization of actuarial gains and losses

• investing in our employees

• 2013 priorities

• future financial condition, revenue trends, and cash flows

• projected costs or cost savings related to our restructuring plans

• ability to realize deferred tax assets

• 2013 capital expenditures

• business strategy.

Because forward-looking statements deal with future events, actual results for fiscal year 2013 and beyond could differ materially from our current expectations depending on a variety of factors including, but not limited to:

• our access to capital for expanding our solutions

• the pace at which digital technologies and EHR adoption erode the demand for certain products and services

• the success of our plans to deal with the threats and opportunities brought by digital technology and EHR adoption

• results of cost-containment strategies and restructuring programs

• our ability to attract and retain key personnel

• variation in demand and acceptance of the Company's products and services

• frequency, magnitude, and timing of paper and other raw material price changes

• timing of the completion and integration of acquisitions

• general business and economic conditions beyond our control

• consequences of competitive factors in the marketplace including the ability to attract and retain customers.

These forward-looking statements are based on current expectations and estimates. We cannot assure that such expectations will prove to be correct. The Company undertakes no obligation to update forward-looking statements as a result of new information, since these statements may no longer be accurate or timely. You should read this Management's Discussion and Analysis in conjunction with the financial statements and related notes included in this Quarterly Report on Form 10-Q (Quarterly Report) and included on Form 10-K for the year ended December 30, 2012 (Annual Report).

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This Management's Discussion and Analysis includes the following sections:

• Critical Accounting Policies and Estimates – An update on the discussion provided in our Annual Report of the accounting policies that require our most critical judgments and estimates.

• Results of Operations – An analysis of consolidated results of operations and segment results for the first quarter of 2013 as compared with the same period of 2012.

• Liquidity and Capital Resources – An analysis of cash flows and a discussion of our financial condition. 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing the accompanying unaudited financial statements and accounting for the underlying transactions and balances, we applied the accounting policies disclosed in the Notes to the Consolidated Financial Statements contained in our Annual Report. Preparation of these unaudited financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although we believe our estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates. For a detailed discussion of these critical accounting estimates, see the Management's Discussion and Analysis included in our Annual Report. There have been no significant changes to our critical accounting policies from those disclosed in our Annual Report. We have discussed the development and selection of the critical accounting policies and the related disclosures included in this Quarterly Report with the Audit Committee of our Board of Directors.

RESULTS OF OPERATIONS

The discussion that follows provides information which we believe is relevant to an understanding of our consolidated results of operations, supplemented by a discussion of segment results where appropriate.  We are providing detail of revenue for each of our solutions which we believe is relevant to an understanding of our results of operations. Further discussion of our solutions is contained under the caption "Business" in Item 1 of our 2012 Annual Report.

Consolidated Results

The following table presents “Non-GAAP net income,” which is a non-GAAP financial measure and represents net income excluding pension loss amortization, pension settlements, restructuring charges, and certain adjustments to the deferred tax valuation allowance. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows where amounts are either excluded or included not in accordance with generally accepted accounting principles. The presentation of non-GAAP information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States. We believe that this non-GAAP financial measure provides a more complete understanding of our current underlying operating performance, a clearer comparison of current period results with past reports of financial performance, and greater transparency regarding information used by management in its decision making. This presentation is similar to the manner in which our Board of Directors internally evaluates performance.

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The following table reconciles our consolidated net loss to net income presented on a non-GAAP basis.

	2013			% Change	2012
Revenue	$	141.6		(10.2)%	$	157.6
Cost of sales	99.7			(8.9)%	109.4
Gross margin	41.9			(13.1)%	48.2
Gross margin % of sales	29.6		%		30.6		%
SG&A expense	42.6			(15.1)%	50.2
Pension settlements	—				1.0
Restructuring	0.6				1.1
Other expense, net	0.6				0.7
Loss before taxes	(1.9		)		(4.8		)
Income tax expense	0.1				0.3
Net loss	$	(2.0	)		$	(5.1	)
Non-GAAP net income:
Net loss	$	(2.0	)		$	(5.1	)
Adjustments:
Deferred tax valuation allowance	0.8				2.2
Pension loss amortization	6.9				5.8
Pension settlements	—				1.0
Restructuring	0.6				1.1
Tax effect of adjustments (at statutory tax rates)	(3.0		)		(3.1		)
Non-GAAP net income	$	3.3			$	1.9

Revenue

The following table quantifies, on a percentage basis, the estimated impact of key factors that contribute to the increase or decrease in consolidated revenue:

Percent Change Q1 2013 vs. Q1 2012
Units	Price & Product Mix	Total
(9)%	(1)%	(10)%

The decline in first quarter 2013 revenue over the same period in 2012 is primarily due to the net unit decrease. This is occurring most prominently within marketing solutions and document management. Our transactional documents and clinical forms along with the related services, which are primarily included within document management, continue to see decline in demand. In addition, a previously discussed financial customer is significantly impacting marketing communications and document management through a decrease in order volume of $5.4 million when compared to the first quarter of 2012. Revenue from marketing communications was impacted by a decline in same customer sales, including decreases due to one-time sales in the first quarter of 2012.

We expect the decline in revenue to slow during the rest of 2013.

The following table quantifies the changes in consolidated revenue for each of our solutions:

	2013		% Chg	2012
Marketing Communications	$	36.6	(17.0)%	$	44.1
Customer Communications	7.7		(4.9)%	8.1
Product Marking and Labeling	22.1		1.8%	21.7
Patient Identification and Safety	8.0		(7.0)%	8.6
Patient Information Solutions	4.2		27.3%	3.3
Document Management	63.0		(12.3)%	71.8
	$	141.6	(10.2)%	$	157.6

15

Cost of Sales and Gross Margin

Cost of sales decreased in the first quarter of 2013 when compared with the same period of 2012, primarily due to lower unit sales volume. Gross margin as a percent of revenue decreased during the quarter due to lower unit volume reducing the absorption of fixed costs, pricing pressures, and increased costs associated with newly-acquired customers. This impact is being partially offset by savings from our restructuring activities as well ongoing cost saving initiatives, which have allowed us to more closely match our cost structure to our reduced volume.

Selling, General and Administrative Expense

SG&A expense for the first quarter of 2013 was $7.6 million or approximately 15 percent lower when compared with the first quarter of 2012. This decrease reflects the savings from our 2011 restructuring plan as well as additional cost saving initiatives. We are seeing savings primarily in the areas of compensation and employee-related expenses, benefits, various fees and services, and facility costs. A portion of these savings was offset by an increase in amortization of pension actuarial losses of $1.1 million over the first quarter of 2012.

Restructuring and Other Exit Costs

In late 2011, we developed a strategic restructuring program that was announced in January 2012. When fully implemented at the end of 2013, the restructuring program is expected to result in an estimated $60 million of savings annually. Our current estimate of total costs is approximately $10 million, all but $0.3 million of which has already been recorded to restructuring expense to date.

In March of 2013 we initiated plans for a new digital print, kitting, and distribution center which is expected to be operational by the third quarter of 2013. To take full advantage of the enhanced capabilities and support customer requirements, some operations from existing facilities will be transferred to the new center. While certain facilities will close at the end of their current lease term, the company will maintain a local presence in the current manufacturing and distribution network to meet customer needs. The total cost of the plan is expected to be $2.6 million, and the costs will be incurred from 2013 through 2015. Costs of the initiative include employee separation costs for severance and relocation expense as we move a portion of our operations to the new facility and other associated exit costs, primarily for equipment and inventory relocation. To date, $0.6 million of expense has been recorded related to employee severance costs.

Income Taxes

Because of the valuation allowance against our deferred tax assets, there was no federal or state income-based tax expense or benefit. Tax expense for 2013 and 2012 reflects foreign taxes in Mexico and state tax liabilities derived from a tax base other than net income.

Segment Operating Results

The following table presents Revenue and Operating Income for each of our reportable segments:

	2013		% Chg	2012
Revenue
Healthcare	$	49.5	(13.2)%	$	57.0
Business Solutions	92.1		(8.4)%	100.6
Consolidated Revenue	$	141.6	(10.2)%	$	157.6
			% Rev			% Rev
Operating Income
Healthcare	$	2.1	4.2%	$	2.6	4.6%
Business Solutions	2.9		3.1%	0.7		0.7%
Segment Operating Income (1)	$	5.0	3.5%	$	3.3	2.1%

(1) A reconciliation of segment operating income to consolidated loss from operations is provided in Note 9- Segment Reporting of the Notes to Financial Statements.

16

Healthcare

Revenue

The following table quantifies, on a percentage basis, the estimated impact of key factors that contribute to an increase or decrease in revenue:

Percent Change Q1 2013 vs. Q1 2012
Units	Price & Product Mix	Total
(12)%	(1)%	(13)%

Healthcare revenue for the first quarter of 2013 declined a total of $7.5 million when compared with the first quarter of 2012, primarily due to a net unit decrease. Revenue from document management, which is largely made up of clinical paper documents and administrative forms as well as the related freight and storage services, drove the decline, decreasing $6.1 million or approximately 21 percent. As more hospitals progress in their adoption of electronic health records, we will continue to see decline in document management. Marketing communications also contributed to the unit decline in 2013 due to a combination of one-time sales in 2012 and a decline in existing customer order volume. A portion of these declines was offset by an increase in revenue from our patient information solutions due to additional sales of iMedConsent as well as other new technology sales.

The following table quantifies the changes in revenue for each of this segment's solutions:

	2013		% Chg	2012
Marketing Communications	$	13.9	(10.9)%	$	15.6
Patient Identification & Safety	8.0		(7.0)%	8.6
Patient Information Solutions	4.2		27.3%	3.3
Document Management	23.4		(20.7)%	29.5
	$	49.5	(13.2)%	$	57.0

Operating income

Despite the decline in revenue, operating profit only declined slightly by $0.5 million. Savings from the restructuring program and other cost savings initiatives in recent years offset a portion of this decline.

Business Solutions

Revenue

The following table quantifies, on a percentage basis, the estimated impact of key factors that contribute to the increase or decrease in revenue:

Percent Change Q1 2013 vs. Q1 2012
Units	Price & Product Mix	Total
(7)%	(1)%	(8)%

Business Solutions revenue declined $8.5 million or approximately 8 percent in the first quarter of 2013 when compared with the first quarter of 2012; however, the largest portion of this decline is a unit decrease from a previously discussed significant financial customer. In the first quarter of 2013 this decline totaled $5.4 million, with $3.0 million impacting document management, which primarily includes transactional printed documents and related services, and $2.4 million affecting marketing solutions. The remaining reduction in marketing solutions is largely the result of declines in order volume with existing customers.

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The following table quantifies the changes in revenue for each of this segment's solutions:

	2013		% Chg	2012
Marketing Communications	$	22.7	(20.4)%	$	28.5
Customer Communications	7.7		(4.9)%	8.1
Product Marking and Labeling	22.1		1.8%	21.7
Document Management	39.6		(6.4)%	42.3
	$	92.1	(8.4)%	$	100.6

Operating income

Operating income increased from $0.7 million in the first quarter of 2012 to $2.9 million in the first quarter of 2013, despite the decline in revenue. Operating income has improved significantly as savings from the restructuring program and other cost savings initiatives are having a positive impact.

LIQUIDITY AND CAPITAL RESOURCES

Our discussion of liquidity also presents a financial measure that is considered non-GAAP. Because our credit facility is borrowed under a revolving credit agreement which currently permits us to borrow and repay at will up to a balance of $100 million (subject to limitations related to receivables, inventories, and letters of credit), we measure cash flow performance prior to borrowing or repayment of the credit facility. In effect, we evaluate cash flow as the change in net debt (credit facility less cash and cash equivalents).

Cash Flows

Overall, cash flow on a net debt basis was positive by $0.7 million for the first quarter of 2013. Summarized Statements of Cash Flows are presented below:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Net cash provided by operating activities	$	4.9		$	6.5
Net cash used in investing activities	(4.3		)	(0.7		)
Net cash used in financing activities	(0.7		)	(5.6		)
Effect of exchange rate on changes in cash	0.2			(0.2		)
Net change in cash	$	0.1		$	—
Memo:
Add back credit facility repaid	0.6			3.4
Cash flow on a net debt basis	$	0.7		$	3.4

Operating activities

Net cash provided by operating activities was $4.9 million for the first quarter of 2013 as we continue to manage working capital requirements. While payments for restructuring have slowed as our 2011 plan winds down, we expect spending to increase during the year due to our restructuring plan initiated in March of 2013.

Contributions to the Company’s qualified pension plan were $5.8 million in the first quarter of 2013 compared to $7.0 million in the same quarter for 2012. The minimum funding requirement for 2013 is $26.8 million, of which $2.0 million was contributed in 2012, allowing us to lower our cash outlay in the first quarter of 2013.

Investing activities

Net cash used in investing activities was primarily driven by capital expenditures. Capital expenditures in 2013 are primarily related to planned upgrades and changes to our IT infrastructure necessary to grow and support our solutions.

Financing activities

Net cash used by financing activities was minimal in the first quarter of 2013, with the primary use of cash being payments toward capital leases and the Credit Facility.

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As of March 31, 2013, we had $32.8 million available under the Credit Facility. We believe that the combination of our ability to generate cash and to borrow under our Credit Facility will be sufficient to fund our operations, including cash outlays for required pension contributions, capital expenditures, restructuring payments, and investments in growth initiatives over the next year.  We believe our major long-term cash requirements consist of funding our pension plan and necessary investments aimed at transforming and supporting our product portfolio.  While we have taken steps to enable us to adequately fund these items, actual amounts required may be higher than estimated due to the uncertainty in determining the exact amounts needed.

Our existing credit facility expires in March 2014; therefore, the $43.0 million of debt is classified as a current liability in the accompanying consolidated balance sheet. We are currently renegotiating with our banking partners and anticipate completing a new credit agreement later in 2013 or early 2014.

Item 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

Item 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures over financial reporting (Disclosure Controls) as of March 31, 2013.  The evaluation was carried out under the supervision, and with the participation, of our management including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO).

Based on that evaluation, our CEO and CFO have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our Disclosure Controls were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified by the SEC and that material information relating to The Standard Register Company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared.

Changes in Internal Control

During the first quarter of fiscal 2013, there have been no significant changes in our internal controls or in other factors that could significantly affect these controls, and no corrective actions taken with regard to material weaknesses in such controls.

PART II – OTHER INFORMATION

Item 1 – LEGAL PROCEEDINGS

There have been no material legal proceedings within the reporting period that the Company has been involved with beyond those conducted in a normal course of business.

Item 1A – RISK FACTORS

Not applicable

Item 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

Item 3 – DEFAULTS UPON SENIOR SECURITIES

Not applicable

Item 4 – MINE SAFETY DISCLOSURES

Not applicable

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Item 5 – OTHER INFORMATION

None.

Item 6 – EXHIBITS

Exhibit #	Description
2	Plan of acquisition, reorganization, arrangement, liquidation or succession	Not applicable
3	Articles of incorporation and bylaws	Not applicable
4	Instruments defining the rights of security holders, including indentures	Not applicable
10.1	Lease agreement between River Ridge Crossdock 700, LLC, and The Standard Register Company, dated March 20, 2013.	Included
11	Statement re: computation of per share earnings	Not applicable
15	Letter re: unaudited interim financial information	Not applicable
18	Letter re: change in accounting principles	Not applicable
19	Report furnished to security holders	Not applicable
22	Published reports regarding matters submitted to vote of security holders	Not applicable
23	Consent of Independent Registered Public Accounting Firm	Included
24	Power of attorney	Not applicable
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Included
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Included
32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Included
99.1	Report of Independent Registered Public Accounting Firm	Included
101	The following financial information from The Standard Register Company Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in XBRL (eXtensible Business Reporting Language): Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements	Included

20

SIGNATURE

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 3, 2013

THE STANDARD REGISTER COMPANY

(REGISTRANT)

/S/  ROBERT M. GINNAN

By: Robert M. Ginnan, Vice President, Treasurer, Chief Financial Officer and Chief Accounting Officer

(On behalf of the Registrant and as Chief Accounting Officer)

21

EX-10.1

Exhibit 10.1

MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE

	Effective Date: March 20, 2013
	BASIC LEASE INFORMATION
Landlord:	River Ridge Crossdock 700, LLC an Indiana limited liability company
Landlord's Address For Notice:	River Ridge Crossdock 700, LLC 2404 Belknap Beach Road Prospect, Kentucky 40059 Telephone: 502-566-0300 Email: jtinnell@crossdockdevelopment.com
Landlord's Address For Payment of Rent:	River Ridge Crossdock 700, LLC P.O. Box 827 Prospect, Kentucky 40059 Telephone: 502-645-0916
Tenant:	The Standard Register Company
Tenant's Address For Notice:	The Standard Register Company 600 Albany Street Dayton, Ohio 45417-3405 Attn: Gerard D. Sowar, Vice President, General Counsel and Secretary Phone: 937-221-1940
With a copy to:	The Standard Register Company 600 Albany Street Dayton, Ohio 45417-3405 Attn: David Clapper, Director Facilities Management and Safety Phone: 937-221-3300
Project:	River Ridge Commerce Center; which is the Property depicted on Exhibit A, and does not include adjacent property.
Building:	700 Patrol Road Jeffersonville, IN; containing approximately 450,535 rentable square feet
Premises:	Approximately 335,535 rentable square feet as shown in Exhibit A.
Premises Address:
Street:	700 Patrol Road
City and State:	Jeffersonville, Clark County, IN
Term:	Eighty-Eight (88) months, ending July 31, 2020, subject to Section 3.1
Tenant Fixturing Period Date:	Effective Date, Tenant to place utilities in their name upon occupancy
Lease Commencement Date:	April 1, 2013, subject to Section 2.1
Rent Commencement Date:	August 1, 2013, subject to Section 2.1
Net Rent:	Months 1- 4 5-52 53-64 65-88	Monthly Net Rent $0.00 based on Net Rent abatement* $96,466.31 $99,262.44 $102,058.56	Net Rent PSF $0.00* $3.45 $3.55 $3.65
	*Subject to abatement of Net Rent during the Net Rent Abatement Period as provided in Section 19.

i

Tenant's Share:	74.47% of the Building
Operating Expenses and Taxes:	Estimated Combined Reimbursement for Tenant's Share of 2013 Operating Expenses and Taxes is $.69 PSF, and it will be paid as “Additional Rent”.
Additional Rent:	$231,519/yr or $19,293.25/month beginning on the Lease Commencement Date (projected to be April 1, 2013), subject to Section 7.
Security Deposit:	None
Brokers:	Landlord's Broker:CBRE/Louisville Tenant's Brokers:NAI Fortis Group FIK Investment Corp.; Chicago, Illinois, Attn: Kareem Fikri
Lease Year:	Shall refer to each twelve month period during the Term commencing on the Rent Commencement Date.
Permitted Uses:	General warehousing and distribution and related general office use, kitting operations and production of color and black and white digital print products. No other uses shall be permitted without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned, provided that the parties hereby agree that, by way of example only and without limitation, it shall be reasonable for Landlord to withhold such consent to a change in use which would result in increased risk of liability to Landlord from the operation of business from the Premises (including, without limitation, increased risk of liability relating to Hazardous Materials).
Option to Expand:	An option to expand described in Section 21.
Option to Terminate:	An option to terminate described in Section 22.
Guarantor(s):	None

ii

EXHIBITS

APremises

BWork Letter

B-1Specifications for Work

CCommencement Date Memorandum

DProhibited Uses

ERules and Regulations (Existing Covenants, Conditions and Restrictions)

FSchedule of Required Maintenance Contracts

GLandlord's Lien Waiver

HSubordination, Nondisturbance and Attornment Agreement

The Basic Lease Information set forth above and the Exhibits attached hereto are incorporated into and made a part of the following Lease. Each reference in this Lease to any of the Basic Lease Information shall mean the respective information above and shall be construed to incorporate all of the terms provided under the particular Lease paragraph pertaining to such information. In the event of any conflict between the Basic Lease Information and the provisions of the Lease, the latter shall control.

LANDLORD/s/ LCW AND TENANT /s/ JPM AGREE.

initialinitial

iii

Table of Contents

1.	PREMISES	1
2.	TERM.	1
3.	RENT.	1
4.	UTILITIES.	2
5.	TAXES.	2
6.	OPERATING EXPENSES.	4
7.	ESTIMATED EXPENSES/ADDITIONAL RENT.	4
8.	INSURANCE.	5
9.	REPAIRS AND MAINTENANCE.	8
10.	ALTERATIONS.	9
11.	USE.	10
12.	ENVIRONMENTAL MATTERS.	10
13.	DAMAGE AND DESTRUCTION.	11
14.	EMINENT DOMAIN.	13
15.	DEFAULT.	14
16.	ASSIGNMENT AND SUBLETTING.	16
17.	ESTOPPEL, ATTORNMENT AND SUBORDINATION.	16
18.	MISCELLANEOUS.	17
19.	NET RENT ABATEMENT PERIOD.	20
20.	LEASE CONTINGENCIES.	20
21.	OPTION TO EXPAND.	20
22.	OPTION TO TERMINATE LEASE.	20
23.	RIGHT OF FIRST REFUSAL.	21
24.	COUNTERPARTS.	21

iv

1. PREMISES

1.1    Premises. Landlord hereby leases to Tenant the Premises as shown on Exhibit A attached hereto. Tenant acknowledges that the Premises are acceptable for Tenant's use (subject to obligations undertaken in the Work Letter attached as Exhibit B), and Tenant acknowledges that, except as set forth in the Work Letter, neither Landlord nor any broker or agent has made any representations or warranties in connection with the physical condition of the Premises or their fitness for Tenant's use upon which Tenant has relied directly or indirectly for any purpose.

1.2    Parking. Landlord grants Tenant the exclusive right to use up to 304 parking spaces, in the area shown on Exhibit A (“Tenant's Exclusive Parking Area”).

1.3    Common Area. Tenant may, subject to rules made by Landlord, use the following areas ("Common Area") in common with Landlord and other tenants of the Project, if any: refuse facilities, landscaped areas, parking areas and driveways shown on Exhibit A, and any other roadways necessary for access to the Premises, and other common facilities designated by Landlord from time to time for the common use of all tenants of the Project.

1.4    Reserved Rights. Landlord reserves the right to enter the Premises upon reasonable notice to Tenant (or without notice in case of an emergency) in order to undertake the following all without abatement of rent or liability to Tenant, so long as Landlord employs commercially reasonable efforts to avoid obstructions and disturbance to Tenant's business operations: inspect the Premises and/or the performance by Tenant of the terms and conditions hereof; make such alterations, repairs, improvements or additions to the Premises as required or permitted hereunder; change boundary lines of the Common Areas; install, use, maintain, repair, alter, relocate or replace any pipes, ducts, conduits, wires, equipment and other facilities in the Common Area or the Building; grant easements on the Project, dedicate for public use portions thereof and record amendments to the covenants, conditions and restrictions ("CC&Rs") affecting the Building, so long as such amendments do not unreasonably or materially interfere with Tenant's use of the Premises or impose additional material monetary obligations on Tenant; change the name of the Project; affix reasonable signs and displays; and, during the last six (6) months of the Term, place signs for the rental of, and show the Premises to prospective tenants. A copy of the existing CC&R's is attached as Exhibit E.

2. TERM.

2.1    Commencement Date / Rent Commencement Date. The Term of the Lease shall commence on the first day of April 2013, subject to the requirements of this Section (the “Commencement Date”), and payment of Net Rent shall commence 4 months later (which the parties anticipate will be the first day of August 2013, the "Rent Commencement Date") and shall continue in full force and effect for the period of time specified as the Term or any earlier date when this Lease is terminated as otherwise provided herein. The Premises shall be deemed to be "Substantially Complete" on the date on which Landlord completes the “Landlord's Work” defined in the Work Letter. The terms of the Tenant's Specifications are further described in Exhibit B-1. If, for any reason, Landlord has not completed Landlord's Work by the target Commencement Date of April 1, 2013, Tenant will have the right to delay the Commencement Date until the date Landlord's Work is Substantially Complete, in which case the Rent Commencement Date will be the 123^rd day after the Commencement Date (for example, if the Commencement Date is April 5, the Rent Commencement Date will be August 5). In any case, as soon as possible after Landlord's Work is Substantially Complete, the parties will execute and deliver a Commencement Date Memorandum in the form attached hereto as Exhibit C acknowledging (i) the Commencement Date, (ii) the final square footage of the Premises, (iii) Tenant's acceptance of the Premises, and (iv)the Rent Commencement Date.

3. RENT.

3.1    Rent. Tenant shall pay to Landlord, at Landlord's Address for Payment of Rent designated in the Basic Lease Information, or at such other address as Landlord may from time to time designate in writing to Tenant for the payment of Net Rent, and Additional Rent as defined herein, in advance on the Rent Commencement Date, and then on the first day of each successive calendar month for the remainder of the Term (except as otherwise

1

provided in this Lease). Landlord agrees that Tenant may fulfill this obligation by making electronic payments through the Automated Clearing House (ACH) Network, and, at Tenant's request, Landlord will cooperate with Tenant to set up the ACH payment arrangement. It is intended that this Lease be a "triple net lease." Except as expressly provided to the contrary in this Lease, Tenant has no right to require Landlord to make any expenditure, incur any obligation, or incur any liability of any kind whatsoever in connection with this Lease or the ownership, construction, maintenance, operation or repair of the Premises or the Project. If during an extension of the Lease, the Term commences (or ends) on a date other than the first (or last) day of a month Net Rent shall be prorated on the basis of a thirty (30) day month. All sums other than Net Rent which Tenant is obligated to pay under this Lease shall be deemed to be additional rent due hereunder (“Additional Rent”), whether or not such sums are designated Additional Rent and, together with the Net Rent, shall be due and payable to Landlord commencing on the Commencement Date. The term "Rent" means the Net Rent and all Additional Rent payable hereunder.

3.2    Late Charge and Interest. The late payment of any Rent will cause Landlord to incur additional costs, including administration and collection costs and processing and accounting expenses and increased debt service ("Delinquency Costs"). Landlord shall notify Tenant if it has not received the monthly Rent by the 3^rd day of any given month. If Landlord has not received any installment of Rent within five (5) days after such notice is given Tenant, Tenant shall pay a late charge of three percent (3%) of the delinquent amount, which is agreed to represent a reasonable estimate of the Delinquency Costs incurred by Land-lord.

3.3    Security Deposit. Tenant shall not be responsible to pay a Security Deposit.

4. UTILITIES.

Tenant shall pay all charges for heat, water, sewerage, storm water, gas, electricity, telephone and any other utilities used on or provided to the Premises. Landlord shall not be liable to Tenant for interrup-tion in or curtailment of any utility service, nor shall any such interruption or curtailment constitute constructive eviction or grounds for rental abatement, unless such interruption or curtailment is caused by Landlord's negligence or willful misconduct. Landlord shall, at its sole cost and expense, cause the Premises to be separately metered for electricity, gas, water and sewer.

Notwithstanding anything to the contrary contained in this Lease, during the period from the Tenant Fixturing Period Commencement Date through to the expiration of the Term of the Lease, if Tenant is actually prevented from using all or a material portion of the Premises as a result of (i) an interruption in essential utility services to the Premises which is the fault of Landlord or Landlord's employees, agents or contractors, (ii) Landlord's actions in entering upon the Premises (other than in exercising any remedy or curing any Tenant failure to perform in accordance with this Lease), or (iii) Landlord's failure to perform its maintenance and repair obligations under this Lease as and when due hereunder, and which prevention from use is not cured by Landlord within ten (10) consecutive business days following Landlord's receipt of written notice thereof from Tenant stating Tenant's intent to receive an abatement, then Net Rent and Tenant's obligation for payment of Tenant's Share of Operating Expenses and Real Property Taxes shall thereafter be equitably abated based upon the portion of the Premises which Tenant is so prevented from using, until and to the extent that Tenant is no longer so prevented from using such portion of the Premises as a result of the applicable item described in clause (i), (ii) or (iii) above. Notwithstanding the foregoing, the provisions of Section 13 below and not the provisions of this Section 4 shall govern in the event of casualty damage to the Premises or Project and the provisions of Section 14 below and not the provisions of this Section 4 shall govern in the event of condemnation of all or a part of the Premises or Project.

5. TAXES.

5.1    Real Property Taxes. Beginning on the Commencement Date (projected to be April 1, 2013), Tenant shall pay to Landlord Tenant's Share of the Real Property Taxes for each full or partial calendar year during the Lease Term, payable monthly, as provided in Section 7.1.

5.2    Definition of Real Property Taxes. "Real Property Taxes" shall be the sum of the following: all real property taxes, assessments, supplementary taxes, escape taxes, possessory-interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, special taxes, fees and/or charges assessed or otherwise payable under any community facilities district, special service district or any other special taxing district or

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authority, annual or periodic license or use fees, excises, transit and traffic charges, housing fund assessments, open space charges, childcare fees, school, sewer and parking fees or any other assessments, levies, fees, exactions or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen (including fees "in-lieu" of any such tax or assessment) which are assessed, levied, charged, conferred or imposed by any public authority upon the Project (or any real property comprising any portion thereof) or its opera-tions, together with all taxes, assessments or other fees imposed by any public authority or quasi-public authority upon or measured by any Rent or other charges payable hereunder, including any gross receipts tax or excise tax levied by any governmental authority with respect to receipt of rental income, or upon, with respect to or by reason of the development, possession, leasing, operation, management, main-tenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof, or documentary transfer taxes upon this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises, together with any tax imposed in substitution, partially or totally, of any tax previously included within the aforesaid definition or any additional tax the nature of which was previously included within the aforesaid definition, together with any and all costs and expenses (including, without limitation, attorneys, administrative and expert witness fees and costs) of challenging any of the foregoing or seeking the reduction in or abatement, redemption or return of any of the foregoing, but only to the extent of any such reduction, abatement, redemption or return. All references to Real Property Taxes during a particular year shall be deemed to refer to taxes accrued during such year, including supplemental tax bills regardless of when they are actually assessed and without regard to when such taxes are payable. The obligation of Tenant to reimburse Landlord for Tenant's Share of Real Property Taxes (including, without limitation, any supplemental taxes) relating in whole or in part to a part of the Term of this Lease shall survive the expiration or early termination of this Lease. Tenant will not be permitted to file any property tax assessment appeal, except as provided in the following paragraph. Nothing con-tained in this Lease shall require Tenant to pay any franchise, corporate, estate or inheritance tax of Landlord, or any income, profits or revenue tax or charge upon the net income of Landlord, or any amounts that Landlord is not required to pay to the taxing authority for any reason (for example, due to abatements, incentives and other benefits in effect at any time during the Term). For clarity, the parties confirm that Tenant will be credited with the full amount (100%) of all incentives Tenant receives from the State of Indiana, as provided in Section 20 of this Lease; and Tenant will be credited with (or otherwise receive) Tenant's Share of the benefit of any other abatements and incentives procured by Landlord. Real Property Taxes for partial years, if any, falling within the Term shall be prorated (so that Tenant is not liable for Real Property Taxes relating to the period prior to the Possession Date or relating to the period following the expiration of the Term). Tenant's obligations for Real Property Taxes for the last full and/or partial year(s) of the Term shall survive the expiration or early termination of the Lease.

If in Landlord's reasonable judgment the assessed value of the Building or the land for Real Property Tax purposes is higher than the actual fair market value, Landlord shall have the right to appeal or institute such other proceedings as it may consider appropriate to effect a reduction or abatement in any Real Property Tax levied upon the Building and/or the land. If Landlord does not so elect to undertake such an appeal or institute such other proceedings, at Tenant's option, Tenant may, at Tenant's cost and expense, appeal or institute such other proceedings as it may consider appropriate to effect a reduction or abatement in any Real Property Tax levied upon the Building and/or the land upon which the Building is located. If Tenant undertakes such an appeal, Landlord shall reasonably cooperate with Tenant in making such appeal, provided that Landlord shall be under no obligation to incur any expenses or other liabilities in doing so and Tenant shall reimburse Landlord upon demand for all reasonable, out-of-pocket expenses incurred by Landlord in connection therewith. In the event that a “Net Refund” (as hereinafter defined) is obtained for any Real Property Tax for which Tenant previously reimbursed Landlord, Landlord shall promptly pay Tenant its pro rata share of such Net Refund. As used herein, the term “Net Refund” shall mean the amount of any refund of Real Property Taxes less amounts incurred by Landlord in obtaining such Net Refund.

5.3    Personal Property Taxes. Prior to delinquency, Tenant shall pay all taxes and assessments levied upon trade fixtures, alterations, additions, improvements, inventories and other personal property located and/or installed on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts for payment of all such taxes and assessments. To the extent any such taxes are not separately assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.

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6.    OPERATING EXPENSES.

6.1    Operating Expenses. Beginning on the Commencement Date (projected to be April 1, 2013) Tenant shall pay to Landlord Tenant's Share of the Operating Expenses for each full or partial calendar year during the Lease Term, payable monthly, as provided in Section 7.1.

6.2    Definition of Operating Expenses. "Operating Expenses" means the total costs and expenses incurred by Landlord in the ownership, operation, maintenance, repair and management of the Common Area and the Building, including, but not limited to, repair, maintenance, utility costs and landscaping of the Common Area, including, but not limited to, any and all costs of maintenance, repair and replacement of all driveways (including, sweeping, striping and slurry coating), loading and unloading areas, trash areas, outdoor lighting, sidewalks, walkways, snow removal, landscaping (including, without limitation, tree trimming), irrigation systems, monument signs, fences and gates, and other costs which are allocable to the Building or the real property of which the Premises are a part including any costs under the terms of any CC&Rs affecting the real property, insurance deductibles and the costs relating to the insurance maintained by Landlord with respect to the Building, including, without limitation, Landlord's cost of any self insurance deductible or retention in any year); trash collection; and capital improvements made to or capital assets acquired for the Building after the Commencement Date that are intended to reduce Operating Expenses or are reasonably necessary for the health and safety of the occupants of the Project or are required under any governmental law or regulation, which capital costs, or an allocable portion thereof, shall be amortized over the period reasonably determined by Landlord, together with interest on the unamortized balance at no greater than eight percent (8%) per annum; and (g) any other costs incurred by Landlord related to the Project. Operating Expenses shall also include an administrative fee to Landlord for accounting and project management services relating to the Building in an amount not to exceed three percent (3%) of the sum of Net Rent (i.e. management fees and salaries will be calculated at 3% of Net Rent).

Operating Expenses shall not include (i) replacement, structural repairs allocated to Landlord in Section 9.2 of this Lease (for example, repairs to the roof including gutters, the exterior walls of the Building and any other structural components of the Building); (ii) repairs to the extent covered by insurance proceeds, or paid by Tenant or other third parties; (iii) alterations solely attributable to tenants of the Project other than Tenant; (iv) costs or expenses allocated to Landlord in other provisions of this Lease (for example, repairs assigned to Landlord in Section 8 of the Work Letter and capital costs allocated to Landlord in Section 11 of this Lease); or (v) marketing expenses.

Landlord agrees to limit any increases in Tenant's Share of controllable Operating Expenses (i.e. all Operating Expenses excluding common utilities, Real Property Taxes, snow removal and insurance premiums). Tenant will pay the actual amount of controllable Operating Expenses during the first Lease Year; but increases in all subsequent Lease Years during the Term will be limited to 5% in any given year, cumulative and compounding. For example, Tenant's Share of controllable Operating Expenses during the second Lease Year will not, under any circumstances, be greater than 105% of the amount charged to Tenant for controllable Operating Expenses during the first Lease Year; and Tenant's Share of controllable Operating Expenses during the third Lease Year will not, under any circumstances, be greater than 110% of the amount charged to Tenant for controllable Operating Expenses during the first Lease Year, etc.

7. ESTIMATED EXPENSES/ADDITIONAL RENT.

7.1    Payment. "Estimated Expenses" for any particular year shall mean Landlord's estimate of Operating Expenses and Real Property Taxes for that calendar year. Tenant shall pay Tenant's Share of the Estimated Expenses with installments of Net Rent in monthly install-ments of one-twelfth (1/12th) thereof on the first day of each calendar month during such year. These monthly installments are referred to as Additional Rent in the Basic Lease information Sheet. If at any time Landlord determines that Operating Expenses and Real Property Taxes are projected to vary from the then Estimated Expenses, Landlord may, by notice to Tenant, revise such Estimated Expenses, and Tenant's monthly installments for the remainder of such year shall be adjusted so that by the end of such calendar year Tenant has paid to Landlord Tenant's Share of the revised Estimated Expenses for such year.

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7.2    Adjustment. "Operating Expenses and Real Property Taxes Adjustment" (or "Adjustment") shall mean the difference between Tenant's Share of Estimated Expenses and Tenant's Share of Operating Expenses and Real Property Taxes for any calendar year. After the end of each calendar year, Landlord shall deliver to Tenant a statement of Tenant's Share of Operating Expenses and Real Property Taxes for such calendar year, accompanied by a computation of the Adjustment, together with supporting data. If Tenant's payments are less than Tenant's Share, then Tenant shall pay the difference within 45 days after receipt of such statement. Tenant's obligation to pay such amount shall survive the expiration or termination of this Lease. If Tenant's payments exceed Tenant's Share, then (provided that Tenant is not in default), Landlord shall credit such excess amount to future installments of Tenant's Share for the next calendar year (except that after the last year of the Term, Landlord shall write a check for any such excess amount). If Tenant is in default, Landlord may, but shall not be required to, credit such amount to Rent arrearages. If during any calendar year the Building is not at least 100% occupied, Operating Expenses for such year shall be calculated based on a 100% occupancy rate for the Building.

7.3    Audit Rights. In the event of any dispute as to the amount of Tenant's Share of Operating Expenses, Tenant will have the right, by prior written notice ("Audit Notice") given within ninety (90) days ("Audit Period") following receipt of an actual statement of Operating Expenses ("Actual Statement"), to audit Landlord's accounting records with respect to Operating Expenses relative to the year to which such Actual Statement relates. The audit shall be conducted by an accounting firm engaged by Tenant and shall be conducted at the office of Landlord at which records are kept or, at Landlord's election, the office of Landlord's property manager (if any). The audit shall be conducted at reasonable times during normal business hours. In no event will Landlord or its property manager be required to (i) photocopy any accounting records or other items or contracts (but Tenant and its agents will be permitted to make photocopies, at their expense), (ii) create any ledgers or schedules not already in existence, (iii) incur any costs or expenses relative to such inspection, or (iv) perform any other tasks other than making available such accounting records as aforesaid. Neither Tenant nor its auditor may leave the office of Landlord with originals of any materials supplied by Landlord, but they may take photocopies (and Landlord shall make photocopy equipment available for that purpose). Tenant must pay Tenant's Share of Operating Expenses when due pursuant to the terms of this Lease and may not withhold payment of Operating Expenses or any other rent pending results of the audit. The audit must be completed within thirty (30) days of the date Landlord makes such accounting records available to Tenant and the results of such audit shall be delivered to Landlord within fifteen (15) days after such audit completion. If such audit or review reveals that Landlord has overcharged Tenant, then within thirty (30) days after the results of such audit are made available to Landlord, Landlord shall refund to Tenant the amount of such overcharge. If the audit reveals that Tenant was undercharged, then within thirty (30) days after the results of the audit are made available to Tenant, Tenant agrees to reimburse Landlord the amount of such undercharge. Tenant agrees to pay the cost of such audit, provided that if the audit reveals that Landlord's determination of Tenant's Share of Operating Expenses as set forth in the relevant Actual Statement was in error in Landlord's favor by more than five percent (5%) of the amount charged by Landlord to Tenant pursuant to such Actual Statement, then Landlord agrees to pay the reasonable, third-party cost of such audit incurred by Tenant. To the extent Landlord must pay the cost of such audit, such cost shall not exceed a reasonable hourly charge for a reasonable amount of hours spent by such third -party in connection with the audit, and in no event will the costs which Landlord is so obligated to pay exceed the amount of the error. Tenant agrees to keep the results of the audit confidential and will cause its agents, employees and contractors to keep such results confidential. To that end, Landlord may require Tenant and its auditor to execute a commercially reasonable form of confidentiality agreement provided by Landlord.

8. INSURANCE.

8.1    Landlord. Landlord shall maintain insurance through individual or blanket policies insuring the Building against fire and extended coverage (including, if Landlord elects, “all risk” coverage, earthquake/volcanic action, flood and/or surface water insurance) for the full replacement cost of the Building (“Landlord's Insurance”), with deductibles (not to exceed $25,000 per occurrence) and the form and endorsements of such coverage as selected by Landlord, together with rental abatement insurance against loss of Rent in an amount equal to the amount of Rent for a period of at least twelve (12) months commencing on the date of loss. The amounts and types of coverages, and the amount of any deductibles under such policies, shall be commercially reasonable. Landlord may also carry such other insurance (“Extra Insurance”) as Landlord may deem prudent or advisable, including, without limitation, liability insurance in such amounts and on such terms as is customary in the industry for similar buildings with similar use; provided that premiums for any such “Extra Insurance will be classified as

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controllable Operating Expenses, and will be subject to the limit on increases in such amounts in any Lease Year (as opposed to premiums for the Landlord's Insurance, which are classified as non-controllable Operating Expenses and are not subject to any limit).

8.2    Tenant. Tenant shall, at Tenant's expense, obtain and keep in force at all times the following insurance:

8.2.1    Commercial General Liability Insurance (Occurrence Form). A policy of commercial general liability insurance (occurrence form), having a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, providing coverage for, among other things, blanket contractual liability, personal and advertising injury, with an “Additional Insured Lessors of Premises Endorsement”.

8.2.2    Automobile Liability Insurance. Comprehensive automobile liability insurance having a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance, or use of any owned, hired, borrowed or non-owned automobiles.

8.2.3    Workers' Compensation and Employer's Liability Insurance. Workers' compensation insurance having limits not less than those required by applicable state statute and federal statute and covering all persons employed by Tenant in the conduct of its operations on the Premises (including the all states endorsement and, if applicable, the volunteers endorsement), together with employer's liability insurance coverage in the amount of at least One Million Dollars ($1,000,000) each accident for bodily injury by accident and One Million Dollars ($1,000,000) each employee for bodily injury by disease.

8.2.5    Property Insurance. “All risk” property insurance including boiler and machinery comprehensive form, if applicable, including coverage for vandalism, malicious mischief and sprinkler leakage, covering damage to or loss of any of Tenant's personal property, fixtures, equipment, merchandise, inventory and alterations, including electronic data processing equipment (collectively “Tenant's Property”) in an amount equal to the full replacement cost thereof (Tenant shall re-determine the same as frequently as necessary to comply herewith), and including, if applicable (meaning if the property of Tenant's invitee is to be kept in the Premises), warehouser's legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitee and located in the Premises.

8.3    General.

8.3.1    Insurance Companies. Insurance required to be maintained by Tenant shall be written by companies licensed to do business in the state in which the Premises are located and having a “General Policyholders Rating” of at least A:VII, as issued by A.M. Best.

8.3.2    Certificates of Insurance. Tenant shall deliver to Landlord certificates of insurance for all insurance required to be maintained by and additional insured endorsements no later than seven (7) days prior to the date of possession of the Premises. Each certificate shall expressly provide that the carrier will endeavor to give thirty (30) days prior written notice of cancellation or other modification of such policies to the parties named as additional insureds in this Lease. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for all losses and costs suffered or incurred by Landlord (including litigation costs and attorneys' fees and expenses) resulting from said failure. Failure of Landlord to demand such certificates, endorsements or other evidence of full compliance with the insurance requirements of this Section 8, or failure of Landlord to identify a deficiency from evidence provided will not be construed as a waiver of the Tenant's obligation to maintain such insurance. The acceptance of delivery by Tenant of any certificates, endorsements or other evidence of insurance does not constitute approval or agreement by Landlord that the insurance requirements have been met, that the insurance policies evidenced are in compliance with these requirements, or that the insurance requirements are sufficient to fully protect Tenant from liability.

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8.3.4    Primary Coverage. All insurance to be maintained by Tenant shall, except for workers' compensation and employer's liability insurance, be primary, without right of contribution from insurance of any additional insured.

8.3.6    Notification of Incidents. Tenant shall use commercially reasonable efforts to notify Landlord within two (2) business days after the occurrence of any accidents or incidents in the Premises, the Building, Common Areas or the Project which, in Tenant's opinion, are likely to give rise to a claim under any of the insurance policies required under this Section 8.

8.4    Indemnity Tenant shall indemnify, protect, defend (by counsel reasonably acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon, arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (i) any default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or (ii) Tenant's use of the Premises, the conduct of Tenant's business or any activity, work or things done, permitted or suffered by Tenant or any Tenant Party in or about the Premises, the Building, the Common Area except for claims to the extent caused by Landlord's negligence or willful misconduct or arising under other indemnifications given by Landlord in this Lease. The obligations of Tenant under this Section 8.4 shall survive the termination of this Lease with respect to any claims or liability arising prior to such termination.

Landlord shall indemnify, protect, defend (by counsel reasonably acceptable to Tenant) and hold harmless Tenant and Tenant's affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon, arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (i) any default in the performance of any obligation on Landlord's part to be performed under the terms of this Lease, or (ii)  the conduct of Landlord's business or any activity, work or things done, permitted or suffered by Landlord or any Landlord Party in or about the Premises, the Building, the Common Area, except for claims to the extent caused by Tenant's negligence or willful misconduct, or arising under other indemnifications given by Tenant in this Lease.

8.5    Waiver of Subrogation. All insurance carried by either party in connection with this Lease will contain waivers of subrogation, which will be confirmed in the Certificates furnished as provided above. At Tenant's request, Landlord will provide a confirming certificate to Tenant in connection with each policy carried pursuant to Section 8.1. To the extent permitted by law, Landlord and Tenant each waive any right to recover against the other on account of any and all claims Landlord or Tenant may have against the other with respect to property insurance actually carried or required to be carried under this Lease, to the extent of the proceeds realized from such insurance coverage.

8.6    Exemption of Landlord from Liability. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to its property and for illness or injury to persons in and upon the Premises, and Tenant's exclusive parking areas, arising from any cause, and Tenant hereby expressly releases Landlord and waives all claims in respect thereof against Landlord, except only to the extent such claims are caused by Landlord's negligence or willful misconduct, or arise under other indemnifications given by Landlord in this Lease. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income there from or for damage to the property of Tenant, or injury to or illness or death of Tenant or any Tenant Party or any other person within the Premises, whether such damage, illness or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, ventilation, plumbing, air conditioning or lighting fixtures, or from any other cause, and whether said damage, illness or injury results from conditions arising upon the Premises, upon other portions of the Building or from other sources or places, and regardless of whether the cause of such damage, illness or injury or the means of repairing the same is inaccessible to Tenant, except only damage, illness or injury to the extent caused by Landlord's negligence or willful misconduct, or obligations arising under other indemnifications given by Landlord in this Lease.

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9. REPAIRS AND MAINTENANCE.

9.1    Tenant. Tenant, at Tenant's sole cost and expense, shall keep and maintain the Premises (interior and exterior, excluding roofing and exterior walls including painting), including, without limitation, loading docks, roll up doors and ramps, floors, floor coverings, walls, drywall and wall coverings, doors, windows, glass, plate glass, locks, ceilings, lighting systems, interior plumbing, electrical and mechanical systems and wiring, appliances and devices using or containing refrigerants, Tenant's exclusive parking lots, fixtures and equipment in good repair and in a clean and safe condition, and repair and/or replace any and all of the foregoing in a clean and safe condition, in good order, condition and repair, reasonable wear and tear excepted. Without limiting the foregoing, Tenant shall, at Tenant's sole expense, immediately replace all broken glass in the Premises with glass equal to or in excess of the specification and quality of the original glass; and repair any area damaged by Tenant, Tenant's agents, employees, invitees and visitors, including any damage caused by any roof penetration caused by Tenant or Tenant's agents, whether or not such roof penetration was approved by Landlord. All repairs and replacements by Tenant shall be made and performed: (a) at Tenant's cost and expense and at such time and in such manner as Landlord may reasonably designate, (b) by contractors or mechanics reasonably approved by Landlord, (c) in a manner and using equipment and materials that will not interfere with or impair the operations, use or occupation of the Building or any of the mechanical, electrical, plumbing or other systems in the Building, and (d) in accordance with the Rules and Regulations and all Applicable Laws (as defined in Section 11). In the event Tenant fails, in the reasonable judgment of Landlord, to maintain the Premises in accordance with the obligations under the Lease, which failure continues at the end of ten (10) days following Tenant's receipt of written notice from Landlord stating the nature of the failure, Landlord shall have the right to enter the Premises and perform such maintenance, repairs or refurbishing at Tenant's sole cost and expense (including a sum for overhead to Landlord equal to ten percent (10%) of the costs of maintenance, repairs or refurbishing). Tenant shall maintain written records of maintenance and repairs, as required by any Applicable Law, and shall use certified technicians to perform such maintenance and repairs, as so required. Within one hundred twenty (120) days after the Commencement Date, Tenant shall obtain and deliver full and complete copies of all the service or maintenance contracts listed on the attached Exhibit F.

Landlord confirms that: (i) so long as Tenant maintains the preventive maintenance contracts listed on Exhibit F, Tenant will be conclusively deemed to have satisfied its obligation to keep and maintain building systems (including the electrical and mechanical systems and wiring, HVAC, and appliances and devices using or containing refrigerants; and (ii) so long as Tenant patches asphalt and repairs potholes in Tenant's exclusive parking area, Tenant will be conclusively deemed to have satisfied its obligation to keep and maintain that area.

9.2    Landlord. Landlord shall: (a) at Landlord's sole cost and expense (without reimbursement from Tenant or inclusion in Operating Expenses unless specified in Section 6.2), subject to the following limitations, repair or replace the roof and roof membrane (including roof structure, integrity, impermeability and moisture protection), foundation and structural portions of load-bearing portions of exterior walls (excluding drywall, wall coverings, painting, glass and doors) of the Building, and any other structural components of the Building, and, (b) as a reimbursable Operating Expense as heretofore defined and limited, to replace components of material building systems, including but not limited to compressors and any other repairs and replacements that are not covered by the service or maintenance contracts listed on Exhibit F; (c) as a reimbursable Operating Expense as heretofore defined and limited, maintain the Common Areas in good condition and state of repair; provided, if such damage is caused by an act or omission of Tenant, or any Tenant Party, then such repairs shall be at Tenant's sole expense. With respect to phrase (b), Landlord confirms that it will replace material components at any time that the costs of repairing any such item during the next rolling 12 month period are reasonably projected to exceed the cost of replacing that item. With respect to phrase (c), Landlord confirms that its responsibilities for the Common Areas include, without limitation, the duties to maintain all landscaping, to sweep and to remove snow and ice from all driveways and parking areas, and to stripe, repave and otherwise maintain such areas in good condition and repair throughout the Term. Landlord shall not be required to make any repair resulting from (i) any alteration or modification to the Building or to mechanical equipment within the Building performed by, for or because of Tenant or to special equipment or systems installed by, for or because of Tenant, (ii) the installation, use or operation of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's property in or out of the Building or in and about the Premises, (iv) Tenant's use or occupancy of the Premises in violation of Section 11 of this Lease or in the manner not contemplated by the parties at the time of the execution of this Lease, (v) the acts or omissions of Tenant or any Tenant Party, (vi) fire and other casualty, except as provided by Section 13 of this Lease or (vii) condemnation, except as provided in Section 14 of this Lease. Landlord shall have no obligation to make

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repairs under this Section 9.2 until a reasonable time after receipt of written notice from Tenant of the need for such repairs, but Landlord shall promptly make such repairs as are the responsibility of Landlord under this Lease after Landlord's learning of the need for such repairs and, in any case, within no more than 45 days after receipt of Tenant's notice.There shall be no abatement of Rent during the performance of such work. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or condition of the Premises, nor for any damage that may result from interruption of Tenant's use of the Premises during any repairs by Landlord unless caused by Landlord or Landlord's Party's gross negligence or willful misconduct.

10. ALTERATIONS.

10.1    Trade Fixtures; Alterations. Tenant may install necessary trade fixtures, equipment, racking, and furniture in the Premises, provided that such items are installed and are removable without structural damage to the Premises, the Building, the Common Area or the Project. Tenant shall not construct, nor allow to be constructed, any alterations or physical additions in, about or to the Premises that cannot be installed and removed without structural damage to the Premises, the Building, the Common Area or the Project without, in each case, obtaining the reasonable prior written consent of Landlord. For example, Tenant may perform certain interior decorating or other non-structural alterations to the Premises such as carpeting, painting (so long as the odors from the same do not materially or unreasonably interfere with any other tenant's operations), hanging artwork or wall coverings, installing non-affixed furniture systems, installing non-load bearing partitions, or other similar interior decorating improvements or non-structural alterations, without obtaining Landlord's consent therefor (but subject to the remaining requirements of this Section 10.1), but only if: (i) such items do not adversely affect the Building structure or systems, the public areas of the Building or any other tenant space; (ii) such items are not visible from outside of the Premises; (iii) Tenant gives at least ten (10) days prior written notice to Landlord of such items, including a description of the contemplated work and the types of materials to be used; and (iv) Tenant agrees that upon Landlord's written request, Tenant will remove all such items before the end of of the Term. Approval of plans and specifications shall not be required for the foregoing interior decorating or non-structural items, where plans and specifications are not reasonably appropriate for the work to be performed. If Landlord's consent is required Tenant shall submit plans and specifications to Landlord with Tenant's request for approval and shall reimburse Landlord for all reasonable costs which Landlord may incur in connection with granting approval to Tenant for any such alterations and additions, including any reasonable costs or expenses which Landlord may incur in electing to have outside architects and engineers review said matters, up to a maximum reimbursement of $1,000 per request. If Landlord does not respond to a written request from Tenant within ten (10) business days, then Landlord shall be deemed to approve such request. In the event Tenant makes any alterations to the Premises that trigger or give rise to a requirement that the Building or the Premises come into compliance with any governmental laws, ordinances, statutes, orders and/or regulations (such as ADA requirements), Tenant shall be fully responsible for complying, at its sole cost and expense, with same. Tenant shall file a notice of completion after completion of such work and provide Landlord with a copy thereof. Tenant shall provide Landlord with a set of "as-built" drawings for any such work.

10.2    Damage; Removal. Tenant shall repair all damage to the Premises, the Building, the Common Area or the Project caused by the installation or removal of Tenant's fixtures, equipment, furniture or alterations. Upon the termination of this Lease, Tenant shall remove any or all trade fixtures, alterations, additions, improvements and partitions made or installed by Tenant and restore the Premises to its condition existing prior to the construc-tion of any such items (except that Tenant shall not be required to remove such items installed by Tenant as to which Landlord agreed by written notice to Tenant at the time of Tenant's installation of the applicable item that such removal would not be so required, and Landlord hereby agrees to notify Tenant promptly following receipt of request therefore whether such removal shall be required as to a particular proposed item); provided, however, Landlord has the absolute right to require Tenant to have all or any portion of such items reasonably designated by Landlord to remain on the Premises, in which event they shall be and become the property of Landlord upon the termination of this Lease. All such removals and restoration shall be accomplished in a good and workmanlike manner and so as not to cause any damage to the Premises, the Building, the Common Area whatsoever.

10.3    Liens. Tenant shall promptly pay and discharge all claims for labor performed, supplies furnished and services rendered at the request of Tenant and shall keep the Premises free of all mechanics' and materialmen's liens in connection therewith. If any lien is filed, Tenant shall cause such lien to be released and removed within twenty (20) days after the date of filing, and if Tenant fails to do so, Landlord may take such action as may be

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necessary to remove such lien and Tenant shall pay Landlord such amounts expended by Landlord together with interest thereon at the Applicable Interest Rate from the date of expenditure.

10.4    Standard of Work. All work to be performed by or for Tenant pursuant hereto shall be performed diligently and in a first class, workmanlike manner, and in compliance with all Applicable Laws, and/or Tenant and Landlord's insurance carriers. Landlord shall have the right, but not the obligation, to inspect periodically the work on the Premises and Landlord may require changes in the method or quality of the work.

11. USE.

The Premises shall be used only for the Permitted Uses set forth in the Basic Lease Information and for no other uses. Tenant's use of the Premises shall be in compliance with and subject to all applicable laws, statutes, codes, ordinances, orders, rules, regulations, conditions of approval and requirements of all federal, state, county, municipal and governmental authorities and all administrative or judicial orders or decrees and all permits, licenses, approvals and other entitlements issued by governmental entities, and rules of common law, relating to or affecting the Project, the Premises or the Building or the use or operation thereof, whether now existing, including, without limitation, the Americans with Disabilities Act of 1990, 42 USC 12111 et seq. (the “ADA”) as the same may be amended from time to time, all Environmental Laws (as defined in Section 12.1), the CC&Rs and any supplement thereto which is permitted as provided in Section 1.3, and recorded in the official public records with respect to the Building or any portion thereof (“Applicable Laws”). Subject to limitations below, Tenant, at Tenant's sole cost and expense, shall comply with all Applicable Laws, which compliance obligation shall include the alteration of the Premises and/or any interior improvements or fixtures in order to comply with such Applicable Laws. Landlord shall be responsible for obtaining the certificate of occupancy or comparable governmental sign-off sufficient to permit occupancy of the Premises, and Tenant shall be responsible for obtaining any other business license, or other permits or licenses required by any governmental agency permitting Tenant's use or occupancy of the Premises. Landlord shall reasonably cooperate with Tenant in Tenant's efforts to obtain any governmental permit, license or approval which is the responsibility of Tenant hereunder, at no cost, expense or liability to Landlord. Notwithstanding anything to the contrary contained in this Lease, Landlord (and not Tenant) shall be required to make: (a) at Landlord's cost, without inclusion in Operating Expenses, all alterations, repairs and replacements to conform the Premises to Applicable Laws in effect as of the Effective Date; and (b) at Landlord's cost but subject to inclusion of such costs in Operating Expenses to the extent permitted under the definition of Operating Expenses in Section 6 above, any capital improvements to the Premises required in order to cause the Premises to comply with Applicable Laws enacted after the Effective Date, except that if such compliance work is necessitated by the particular use of, or alterations or improvements to, the Premises by Tenant or any Tenant Parties, then Tenant shall perform such compliance work at Tenant's sole cost. In no event shall the Premises be used for any of the Prohibited Uses set forth on Exhibit D attached hereto. Tenant shall comply with the rules and regulations attached hereto as Exhibit E, together with such additional rules and regulations as Landlord may from time to time reasonably prescribe (so long as they do not materially interfere with Tenant's use of the Premises or impose additional material monetary obligations on Tenant). Tenant shall not commit waste, overload the floors or structure of the Building, permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, take any action which would obstruct or endanger any other tenants, take any action which would abrogate any warranties, or use or allow the Premises to be used for any unlawful purpose. Landlord shall not be responsible for non-compliance by any other tenant or occupant of the Project with, or Landlord's failure to enforce, any of the rules or regulations or CC&Rs or any other terms or provisions of such tenant's or occupant's lease, but Landlord shall use commercially reasonable efforts to enforce the CC&Rs and other rules and regulations with respect to all Project tenants in a non-discriminatory manner (provided that nothing contained herein shall obligate Landlord to commence any litigation or other proceeding in pursuing such enforcement). Tenant shall promptly comply with the reasonable requirements of any board of fire insurance underwriters or other similar body now or hereafter constituted. Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Premises, the Building or the Project.

12. ENVIRONMENTAL MATTERS.

12.1    Landlord Representation. Landlord hereby represents that to the best of Landlord's knowledge, which is defined as the Phase 1 Environmental report prepared by K&E and dated March 11, 2013, to Tenant that

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there are no Hazardous Materials located on or under the Premises at levels which exceed requirements of Applicable Laws.

12.2    Landlord Hold Harmless. Landlord shall hold harmless Tenant from and against any and all orders, penalties, fines, administrative actions, or other proceedings (collectively, a "Compliance Obligation") commenced by any governmental agency including, without limitation, the United States Environmental Protection Agency, arising at any time to the extent that such Compliance Obligation results from any environmental condition (as defined in Section 12.1) (a) that exists as of the date of delivery of possession of the Premises to Tenant (a "Pre-existing Condition"), (b) that is the result of a Pre-existing Condition that worsens following the delivery of possession, or (c) that is the result of a sub-surface migration of Hazardous Materials (any such Environmental Condition referenced in the foregoing clause (a), (b) or (c) is referred to herein as a “Landlord Environmental Condition”), except to the extent that such Landlord Environmental Condition is caused or aggravated by the act or omission of Tenant and/or its employees or agents. Landlord's obligations pursuant to the foregoing hold harmless obligation shall survive the termination of this Lease.

12.3    Tenant Indemnification. Tenant shall indemnify, protect, defend (by counsel acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns (individually and collectively, "Indemnitees") from and against any and all claims, judgments, causes of action, damages, penalties, fines, taxes, costs, liabilities, losses and expenses (including, without limitation, attorneys' fees, expenses and court costs) arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (a) Tenant and/or any Tenant Party's breach of this Section 12, or (b) the presence of Hazardous Materials on, under or about the Premises or other property as a result (directly or indirectly) of Tenant's and/or any Tenant Party's activities, or failure to act, in connection with the Premises. This indemnity shall include, without limitation, reasonable attorneys' and experts' fees and costs, costs of litigation and governmental oversight costs, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by Landlord to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by Tenant with all Environmental Laws, shall excuse Tenant from Tenant's obligation of indemnification pursuant hereto. Tenant's obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.

13. DAMAGE AND DESTRUCTION.

13.1    Casualty. If the Premises or Building or the Project should be damaged or destroyed by fire or other casualty, Tenant shall give immediate written notice to Landlord. Within thirty (30) days after receipt from Tenant of such written notice, Landlord shall notify Tenant whether the necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in more than ninety (90) days but in less than one hundred eighty (180) days; or (c) in more than one hundred eighty (180) days, in each case after the date of the issuance of permits for the necessary repair or reconstruction of the portion of the Building or Premises or the Project which was damaged or destroyed. If Landlord does not exercise a right to terminate this Lease, Landlord shall promptly apply for the permit(s) necessary to restore the Premises, the Building, and the Project (the “Permits”).

13.1.1 Less Than 90 Days. If the Premises or Building should be damaged only to such extent that rebuilding or repairs can reasonably be completed within ninety (90) days after the issuance of Permits for the necessary repair or reconstruction of the portion of the Building or Premises or Project which was damaged or destroyed, this Lease shall not terminate and, provided that insurance proceeds are available to fully repair the damage, Landlord shall repair the Premises, except that Landlord shall not be required to rebuild, repair or replace Tenant's Property which may have been placed in, on or about the Premises by or for the benefit of Tenant. If Tenant is required to vacate all or a portion of the Premises during Landlord's repair thereof, the Rent payable hereunder shall be abated propor-tionately on the basis of the size of the area of the Premises that is vacated (i.e, the number of square feet of floor area of the Premises that is vacated compared to the total square footage of the floor area of the Premises) from the date Tenant vacates all or a portion of the Premises that was damaged only during the period the Premises are unfit for occupancy as reasonably determined by Tenant. However if the Premises are damaged to such an extent that Tenant, in its reasonable discretion, determines that it cannot reasonably conduct its

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business in a substantial way, the Rent payable hereunder shall be abated during the period the Premises are in such condition.

13.1.2 Greater Than 90 Days. If the Premises or Building or Project should be damaged only to such extent that rebuilding or repairs can reasonably be completed in more than ninety (90) days but in less than one hundred eighty (180) days after the issuance of Permits for the necessary repair or reconstruction of the portion of the Building or Premises which was damaged or destroyed, then Landlord shall have the option of: (a) terminating the Lease effective upon the occurrence of such damage, in which event the Rent shall be abated from the date Tenant vacates the Premises; or (b) electing to repair the Premises, the Building and the Project, provided insurance proceeds are available to fully repair the damage (except that Landlord shall not be required to rebuild, repair or replace Tenant's Property which may have been placed in, on or about the Premises by or for the benefit of Tenant). If Tenant, in its reasonable discretion, determines that it must vacate all or a portion of the Premises during Landlord's repair thereof, the Rent payable hereunder shall be abated proportionately on the basis of the size of the area of the Premises that is vacated (i.e., the number of square feet of floor area of the Premises that is vacated compared to the total square footage of the floor area of the Premises) from the date Tenant vacates all or a portion of the Premises only during the period the Premises are unfit for occupancy as reasonably determined by Tenant. However if the Premises are damaged to such an extent that Tenant, in its reasonable discretion, determines that it cannot reasonably conduct its business in a substantial way, the Rent payable hereunder shall be abated during the period the Premises are in such condition as reasonably determined by Tenant. In the event that Landlord should fail to obtain the Permits within 60 days after the date of the casualty, or to substantially complete such repairs within one hundred eighty (180) days after the issuance of Permits for the necessary repair or reconstruction of the portion of the Building or Premises which was damaged or destroyed, (such period to be extended for delays caused by Tenant or because of any items of Force Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises, Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days after the expiration of such 60 day period, or one hundred eighty (180) day period, as applicable, and provided that such Permits have not been issued, or such repairs have not been substantially completed (as applicable) within such ten (10) day period, to terminate this Lease by delivering written notice to Landlord as Tenant's exclusive remedy, whereupon this Lease will be terminated retroactive to the date of the casualty.

13.1.3    Greater Than 180 Days. If the Premises or Building or Project should be so damaged that rebuilding or repairs cannot be completed within one hundred eighty (180) days after the issuance of Permits for the necessary repair or reconstruction of the portion of the Building or Premises or Project which was damaged or destroyed, either Landlord or Tenant may terminate this Lease by giving written notice within ten (10) days after notice from Landlord specifying such time period of repair; and this Lease shall terminate and the Rent shall be abated from the date of the casualty. In the event that neither party elects to terminate this Lease, Landlord shall promptly commence and diligently prosecute to completion the repairs to the Building or Premises or Project, provided insurance proceeds are available to repair the damage (except that Landlord shall not be required to rebuild, repair or replace Tenant's Property which may have been placed in, on or about the Premises by or for the benefit of Tenant). If Tenant, in its reasonable discretion, determines that it must vacate all or a portion of the Premises during Landlord's repair thereof, the Rent payable hereunder shall be abated proportionately on the basis of the size of the area of the Premises that is vacated (i.e., the number of square feet of floor area of the Premises that is vacated compared to the total square footage of the floor area of the Premises), from the date Tenant vacates all or a portion of the Premises that was vacated only during the period that the Premises are unfit for occupancy as reasonably determined by Tenant. In the event that Landlord should fail to obtain the Permits within 60 days after the date of the casualty, or to substantially complete such repairs within the time period estimated in Landlord's notice delivered pursuant to Section 13.1, Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days after the expiration of such 60 day period, or the estimated completion period, as applicable, and provided that such Permits have not been issued, or such repairs have not been substantially completed (as applicable) within such ten (10) day period, to terminate this Lease by delivering written notice to Landlord as Tenant's exclusive remedy, whereupon this Lease will be terminated retroactive to the date of the casualty.

13.1.4    Casualty During the Last Year of the Lease Term. Notwithstanding any other provisions hereof, if the Premises or the Building or Project shall be damaged within the last year of the Lease Term, and if the cost to repair or reconstruct the portion of the Building or the Premises or Project which was damaged or destroyed shall exceed $250,000, then, irrespective of the time necessary to complete such repair or reconstruction, either party shall have the right, in its sole discretion, to terminate the Lease effective upon the occurrence of such damage, in

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which event the Rent shall be abated from the date Tenant of the casualty. The foregoing right shall be in addition to any other right and option of either party under this Section 13.

13.2 Tenant's Fault. If the premises or any portion of the building is damaged solely as the result of the negligence or breach of this Lease by Tenant or Tenant Parties, Rent shall abate during the 12 month period following the casualty, but if this Lease has not been terminated, and the Premises has not been restored for any reason other than Landlord's failure to diligently prosecute the repairs and restoration, then Tenant will be liable to Landlord for Rent accruing after the 12^th month following the date of the casualty (i.e., the date when the loss of rent coverage under Landlord's Insurance is scheduled to end).

13.3    Uninsured Casualty. Tenant shall be responsible for and shall pay to Landlord Tenant's Share of any deductible or retention amount payable under the property insurance for the Building, up to a maximum of $25,000 per casualty incident. In the event that the Premises or any portion of the Building or the Project is damaged to the extent Tenant is unable to use the Premises and such damage is not covered by insurance proceeds received by Landlord, then Landlord shall have the right at Landlord's option either (i) to repair such damage as soon as reasonably possible at Landlord's expense, or (ii) to give written notice to Tenant within thirty (30) days after the date of the occurrence of such damage of Landlord's intention to terminate this Lease as of the date of the occurrence of such damage. In the event Landlord elects to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice to give written notice to Landlord of Tenant's commitment to pay the cost of repair of such damage, in which event this Lease shall continue in full force and effect, and Landlord shall make such repairs as soon as reasonably possible subject to the following conditions: Tenant shall deposit with Landlord Landlord's estimated cost of such repairs not later than ten (10) days prior to Landlord's commencement of the repair work. If the cost of such repairs exceeds the amount deposited, Tenant shall reimburse Landlord for such excess cost within fifteen (15) days after receipt of an invoice from Landlord. Any amount deposited by Tenant in excess of the cost of such repairs shall be refunded within thirty (30) days of Landlord's final payment to Landlord's contractor. If Tenant does not give such notice within the ten (10) day period, or fails to make such deposit as required, this Lease shall terminate automatically as of the date of the occurrence of the damage.

13.4    Waiver. With respect to any damage or destruction which Landlord is obligated to repair or may elect to repair, Tenant waives all rights to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by Applicable Laws.

14. EMINENT DOMAIN.

14.1    Total Condemnation. If all of the Premises is condemned by eminent domain, inversely condemned or sold under threat of condemnation for any public or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of the earlier of the date the condemning authority takes title to or possession of the Premises, and Rent shall be adjusted to the date of termination.

14.2    Partial Condemnation. If any portion of the Premises or the Building or the Project is Condemned and such partial condemnation materially impairs Tenant's ability to use the Premises for Tenant's business as reasonably determined by the parties, this Lease shall terminate as of the earlier of the date title vests in the condemning authority or as of the date an order of immediate possession is issued and Rent shall be adjusted to the date of termination. If such partial condemnation does not materially impair Tenant's ability to use the Premises for the business of Tenant, Landlord shall promptly restore the Premises and the Project to the extent of any con-demnation proceeds recovered by Landlord, excluding the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting or order of immediate possession Rent and Tenant's Share shall be adjusted as reasonably deter-mined by Landlord and Tenant. However if the Premises or the Building or the Project are partially condemned to such an extent that Tenant cannot reasonably conduct its business in a substantial way, Tenant may terminate this Agreement.

14.3    Award. If the Premises or Project are wholly or partially Condemned, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any claim to any part of the award from Landlord or the condemning authority; provided, however, Tenant shall have the right to recover from the condemning authority such compensation as may be separately awarded to Tenant in connection with costs in removing Tenant's merchandise, furniture, fixtures, leasehold improvements and equipment to a new location. No

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condemnation of any kind shall be construed to constitute an actual or constructive eviction of Tenant or a breach of any express or implied covenant of quiet enjoyment. Landlord and Tenant hereby waive the provisions of any statutes or court decisions which provide a party to a lease with a right to abatement of rent or termination of the lease or establish the manner of allocation of the condemnation award when leased property is condemned or taken and agree that such event shall be exclusively governed by the terms of this Lease.

14.4    Temporary Condemnation. In the event of a temporary condemnation not extending beyond the Term, this Lease shall remain in effect, Tenant shall continue to pay Rent and Tenant shall receive any award made for such condemnation except damages to any of Landlord's property. If a temporary condemnation is for a period which extends beyond the Term, this Lease shall terminate as of the date of initial occupancy by the condemning authority and any such award shall be distributed in accordance with the preceding section. If a temporary condemnation remains in effect at the expiration or earlier termination of this Lease, Tenant shall pay Landlord the reasonable cost of performing any obligations required of Tenant with respect to the surrender of the Premises.

15. DEFAULT.

15.1    Events of Defaults. The occurrence of any of the following events shall, at Landlord's option, constitute an "Event of Default":

15.1.1 Abandonment. Abandonment of the Premises for a period of thirty (30) consecutive days (For clarity, Landlord agrees that Tenant will not be deemed to have abandoned the Premises, so long as Tenant pays the Rent due to Landlord, maintains the utilities, secures the Premises, and routinely inspects the Premises at least once per week);

15.1.2 Failure to pay Rent within 5 days after receipt of Landlord's written notice that the amount is past due;

15.1.3 Failure to perform Tenant's covenants and obligations hereunder (except default in the payment of Rent) where such failure continues for a period of thirty (30) days after written notice from Landlord; provided, however, if the nature of the default is such that more than thirty (30) days are reasonably required for its cure, Tenant shall not be deemed to be in default if Tenant commences the cure within twenty (20) days after written notice from Landlord and diligently and continuously prosecutes such cure to completion;

15.1.4 The making of a general assignment by Tenant for the benefit of creditors; the filing of a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant's creditors seeking the rehabilitation, liquidation or reorganization of Tenant under any law relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary action, the failure to remove or discharge the same within sixty (60) days of such filing; the appointment of a receiver or other custodian to take possession of substantially all of Tenant's assets or this leasehold; Tenant's insolvency or inability to pay Tenant's debts or failure generally to pay Tenant's debts when due; any court entering a decree or order directing the winding up or liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking any action toward the dissolution or winding up of Tenant's affairs; the cessation or suspension of Tenant's use of the Premises; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets or this leasehold; or

15.1.5 The making of any material misrepresentation or omission by Tenant or any successor in interest of Tenant in any materials delivered by or on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease.

15.2    Remedies.

15.2.1    Termination. In the event of the occur-rence of any Event of Default, Landlord shall have the right to give a written termination notice to Tenant (which notice may be the notice given under Section 15.1 above, if applicable, and which notice shall be in lieu of, and not in addition to, any notice required by Applicable Laws) and, on the date specified in such notice, this Lease shall terminate unless on or before such date all arrears of Rent and all other sums payable by Tenant under this Lease and all costs and expenses incurred by or on behalf of

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Landlord here-under shall have been paid by Tenant and all other Events of Default at the time existing shall have been fully remedied to the satisfaction of Landlord.

15.2.1.1 Repossession. Following termination, without prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any other persons occupying the Premises, using such legal proceedings as may be available; (ii) repossess the Premises or relet the Premises or any part thereof for such term (which may be for a term extending beyond the Term), at such rental and upon such other terms and condi-tions as Landlord in Landlord's sole discretion shall determine, with the right to make reasonable alterations and repairs to the Premises; and (iii) remove all personal property therefrom.

15.2.1.2 Unpaid Rent. Landlord shall have all the rights and remedies of a landlord provided by Applicable Law, including the right to recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent that had been earned at the time of termination, (b) the worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after the date of termination until the time of award exceeds the amount of loss of rent that Tenant proves could have been reasonably avoided, (c) the worth, at the time of award, of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided, and (d) any other amount, and court costs, necessary to com-pensate Landlord for all detriment proximately caused by Tenant's default. The phrase "worth, at the time of award," as used in (a) and (b) above, shall be com-puted at the Applicable Interest Rate, and as used in (c) above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

15.2.2    Continuation. Even though an Event of Default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession; and Landlord may enforce all of Landlord's rights and remedies under this Lease, including, without limitation, the right to recover Rent as it becomes due; so long as, at Tenant's request, Landlord commences commercially reasonable efforts to mitigate the damages accruing under this Lease. Upon receipt of any such request, Landlord shall, without terminating this Lease, during the period Tenant is in default, enter the Premises and relet the same, or any portion thereof, to third parties for Tenant's account and Tenant shall be liable to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses of remodeling the Premises and like costs. Reletting may be for a period shorter or longer than the remaining Term. Tenant shall continue to pay the Rent on the date the same is due. No act by Landlord hereunder, including acts of maintenance, preservation or efforts to lease the Premises or the appointment of a receiver upon application of Landlord to protect Landlord's interest under this Lease, shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. In the event that Landlord elects to relet the Premises, the rent that Landlord receives from reletting shall be applied to the payment of, first, any indebtedness from Tenant to Landlord other than Net Rent and Tenant's Share of Operating Expenses and Real Property Taxes; second, all costs, including maintenance, incurred by Landlord in reletting; and, third, Net Rent and Tenant's Share of Operating Expenses and Real Property Taxes under this Lease. After deducting the payments referred to above, any sum remaining from the rental Landlord receives from reletting shall be held by Landlord and applied in payment of future Rent as Rent becomes due under this Lease. In no event, and notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled to any excess rent received by Landlord. If, on the date Rent is due under this Lease, the rent received from the reletting is less than the Rent due on that date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all costs, including mainte-nance, which Landlord incurred in reletting the Premises that remain after applying the rent received from reletting as provided hereinabove. So long as this Lease is not terminated, Landlord shall have the right to remedy any default of Tenant, to maintain or improve the Premises, to cause a receiver to be appointed to administer the Premises and new or existing subleases and to add to the Rent payable hereunder all of Landlord's reasonable costs in so doing, with interest at the Applicable Interest Rate from the date of such expenditure. Landlord shall have no duty to relet the Premises so long as it has other unleased space available in the Project.

15.3    Cumulative. Each right and remedy of Landlord provided for herein or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and shall not preclude Landlord from exercising any other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity, by statute or otherwise. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment as Rent shall be deemed an accord and satisfaction of full payment of Rent;

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and Landlord may accept such payment without prejudice to Landlord's right to recover the balance of such Rent or to pursue other remedies.

16. ASSIGNMENT AND SUBLETTING.

16.1    Landlord's Consent Required. Tenant shall not voluntarily or by operation of law assign, transfer, mortgage, sublet or otherwise transfer or encumber all or any part of Tenant's interest in this Lease or in the Premises, without Landlord's prior written consent, which Landlord shall not unreasonably withhold, delay or condition. Landlord shall respond to Tenant's request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void and shall constitute a breach of this Lease.

16.2    Tenant Affiliate and Other Permitted Transfers.    Notwithstanding the provisions of Section 16.1 hereof, Tenant may assign its interest under this Lease or sublet the Premises, or any portion thereof, without Landlord's consent, (a) to any legal entity which controls, is controlled by or is under common control with Tenant, or (b) to any legal entity resulting from the merger or consolidation with Tenant, (c) or to any person or entity which acquires all of the assets of Tenant as a going concern of the business that is being conducted on the Premises, or (d) to any person or entity acquiring all the shares of Tenant; provided that said assignee assumes, in full, the obligations of Tenant under this Lease. Any such assignment shall not, in any way, affect or limit the liability of Tenant under the terms of this Lease.

16.3    No Release of Tenant. Regardless of Landlord's consent, no subletting or assignment shall release Tenant of Tenant's obligation or alter the primary liability of Tenant to pay the Rent and to perform all the other obligations by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default of any assignee of Tenant or successor of Tenant, in performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against said assignee. Landlord may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with the assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent thereto.

17. ESTOPPEL, ATTORNMENT AND SUBORDINATION.

17.1    Estoppel. Within 18 days after written request by Landlord, Tenant shall deliver an estoppel certificate duly executed (and acknowledged if required by any lender), to any proposed mortgagee, purchaser or Landlord. Tenant's failure to deliver said state-ment in such time period shall be an Event of Default hereunder. For the purpose of this requirement, the term estoppels certificate means a statement that (a) this Lease is in full force and effect, without modification except as may be represented by Landlord; (b) there are no uncured defaults in Landlord's performance and Tenant has no right of offset, counterclaim or deduction against Rent here-under; and (c) no more than one month's Net Rent has been paid in advance.

17.2    Subordination. This Lease shall be subject and subordinate to all ground leases and master leases and the lien of all mortgages and deeds of trust which now or hereafter affect the Premises or the Project or Landlord's interest therein, and all amendments thereto, all without the necessity of Tenant's executing further instruments to effect such subordination. If requested, Tenant shall execute and deliver to Landlord within fifteen (15) days after Landlord's request whatever documentation that may reasonably be required to further effect the provisions of this paragraph including a Subordination, Nondisturbance and Attornment Agreement. Tenant's failure to deliver said documentation in such time period shall be an Event of Default hereunder. Notwithstanding anything to the contrary contained in the foregoing, Tenant's obligation to hereafter subordinate this Lease to any ground lease or master lease hereafter encumbering the Project or the Building or the lien of any future mortgagee or trust deed beneficiary under a mortgage or deed of trust hereafter encumbering the Project or Building or to hereafter attorn to such ground lessor, master lessor, mortgagee or beneficiary shall be conditioned upon the willingness of such ground lessor, master lessor, mortgagee or beneficiary to enter into a Subordination, Nondisturbance and Attornment Agreement with Tenant. In addition, Landlord covenants that Eclipse is the only current lienholder with rights superior to this Lease, and there are no other existing mortgagees, trust deed beneficiaries, ground lessors or master lessors with respect to the Project. Landlord covenants and agrees to provide

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Tenant, prior to the Commencement Date, a Subordination, Nondisturbance and Attornment Agreement fully executed by such lienholder, a copy of which will be attached as Exhibit H.

17.3    Non-Disturbance. So long as Tenant is in compliance with the terms of this Agreement, Landlord shall ensure that and warrant that Tenant has peaceful and undisturbed possession of the Premises.

18. MISCELLANEOUS.

18.1    General.

18.1.1 Entire Agreement. This Lease sets forth all the agreements between Landlord and Tenant concerning the Premises; and there are no agreements either oral or written other than as set forth herein.

18.1.2 Time of Essence. Time is of the essence of this Lease.

18.1.3 Attorneys' Fees; Jury Trial Waiver. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the non-prevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys' fees and costs. Any judgment or order entered in any final judgment shall contain a specific provision providing for the recovery of all costs and expenses of suit, including reasonable attorneys' fees (collectively "Costs") incurred in enforcing, perfecting and executing such judgment. For the purposes of this paragraph, Costs shall include, without limitation, attorneys' fees, costs and expenses incurred in (i) post-judgment motions, (ii) contempt proceeding, (iii) garnishment, levy, and debtor and third party examination, (iv) discovery, and (v) bankruptcy litigation. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

18.1.4 Severability. If any provision of this Lease or the application of any such provision shall be held by a court of competent jurisdiction to be invalid, void or unenforceable to any extent, the remaining provisions of this Lease and the application thereof shall remain in full force and effect and shall not be affected, impaired or invalidated.

18.1.5 Law. This Lease shall be construed and enforced in accordance with the laws of the state in which the Premises are located.

18.1.6 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of the successors and assigns of Landlord and, subject to compliance with the terms of Section 16, Tenant.

18.1.7 Third Party Beneficiaries. Nothing herein is intended to create any third party benefit.

18.1.8 Memorandum of Lease. Tenant shall not record this Lease or a short form memorandum hereof without Landlord's prior written consent which Landlord may withhold in its sole discretion.

18.1.9 Agency, Partnership or Joint Venture. Nothing contained herein nor any acts of the parties hereto shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture by the parties hereto or any relationship other than the relationship of landlord and tenant.

18.1.10 Headings. Section headings have been inserted solely as a matter of convenience and are not intended to define or limit the scope of any of the provisions contained therein.

18.1.11    Security Measures. After the Commencement Date, Tenant hereby acknowledges that Landlord shall have no obligation to provide a guard service or other security measures. Tenant assumes all responsibility for the protection of the Premises, Tenant, its agents and invitees and their property from the acts of third parties.

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18.2    Signs. All signs and graphics of every kind visible in or from public view or corridors, the Common Areas or the exterior of the Premises (whether located inside or outside of the Premises) shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld, delayed or conditioned, and shall be subject to any applicable governmental laws, ordinances, and regulations and in compliance with Landlord's signage program. Tenant shall remove all such signs and graphics prior to the termination of this Lease. Such installations and removals shall be made in such manner as to avoid injury or defacement of the Premises; and Tenant shall repair any injury or defacement, including without limitation, discoloration caused by such installation or removal.

18.3    Waiver. No waiver of any default or breach hereunder shall be implied from any omission to take action on account thereof, notwithstanding any custom and practice or course of dealing. No waiver by either party of any provision under this Lease shall be effective unless in writing and signed by such party. No waiver shall affect any default other than the default specified in the waiver and then such waiver shall be operative only for the time and to the extent therein stated. Waivers of any cove-nant shall not be construed as a waiver of any subsequent breach of the same.

18.4    Limitation of Liability. The obligations of Landlord under this Lease are not personal obligations of the individual partners, members, managers, directors, officers, shareholders, agents or employees of Landlord; and Tenant shall not seek recourse against the assets of the directors, officers, shareholders, agents or employees of Landlord. Whenever Landlord trans-fers its interest in the Project, Landlord shall be automatically released from further performance under this Lease and from all further liabilities and expenses accruing from and after the date of the transfer of its interest, but only so long as and to the extent that the transferee of Landlord's interest assumes all such liabilities and obligations of Landlord hereunder from the date of such transfer.

18.5    Notices. All notices to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by overnight express mail delivery carrier providing tracking service, or delivered by personal or courier delivery, or sent by e-mail or facsimile, electronically confirmed, (and in the case of e-mail or facsimile immediately followed by one of the preceding methods), to Landlord's Address and Tenant's Address, or to such other place as Landlord or Tenant may designate in a writ-ten notice given to the other party. Notices shall be deemed served upon receipt (or in the case of e-mail or facsimile, on confirmation of receipt).

18.6    Brokerage Commission. Landlord shall pay a brokerage commission to Landlord's Broker and to Tenant's Broker specified in the Basic Lease Information in accordance with separate agreements between Landlord and Landlord's Broker and Tenant's Broker. Landlord shall have no further or separate obligation for payment of any commissions or fees to any other broker or finder. Tenant warrants to Landlord that Tenant's sole contact with Landlord or with the Premises in connection with this transaction has been directly with Landlord, Landlord's Broker and Tenant's Broker specified in the Basic Lease Information, and that no other broker or finder can properly claim a right to a commission or a finder's fee based upon contacts between the claimant and Tenant. Subject to the foregoing, Tenant agrees to indemnify and hold Landlord harmless from any claims or liability, including reasonable attorneys' fees, in connection with a claim by any person for a real estate broker's commission, finder's fee or other compensation based upon any statement, representation or agreement of Tenant, and Landlord agrees to indemnify and hold Tenant harmless from any such claims or liability, including reasonable attorneys' fees, based upon any statement, representation or agreement of Landlord.

18.7    Authorization. Each individual executing this Lease on behalf of Tenant or Landlord represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of such party and that such execution is binding upon such party.

18.8    Holding Over; Surrender.

18.8.1 Holding Over. If Tenant holds over the Premises or any part thereof after expiration of the Term, such holding over shall, at Landlord's option, constitute a month-to-month tenancy, at a Net Rent equal to one hundred twenty-five percent (125%) of the Net Rent in effect immediately prior to such holding over for the first two months and one hundred fifty percent (150%) thereafter, and shall otherwise be on all the other terms and conditions of this Lease. This paragraph shall not be construed as Landlord's permission for Tenant to hold over. Acceptance of Rent by Landlord following expiration or termination shall not constitute a renewal of this Lease or

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extension of the Term except as specifically set forth above. Landlord will not be entitled to consequential damages for any holding over unless Landlord has first delivered written notice (a “Damages Notice”) to Tenant disclosing the amount of consequential damages Landlord is likely to sustain if Tenant fails to vacate the Premises on the expiration date or any later date specified in the notice (the “Mandatory Surrender Date”). Landlord may deliver a Damages Notice at any time during the last year of the Term or during any subsequent period of holding over, so long as the Damages Notice is delivered at least 30 days before the Mandatory Surrender Date. If Tenant receives a Damages Notice and subsequently fails to surrender the Premises by the Mandatory Surrender Date, then Tenant shall indemnify and hold Landlord harmless from and against consequential damages arising out of Tenant's failure to surrender the Premises by the Mandatory Surrender Date, including, but not limited to, any amounts required to be paid to any tenant or prospective tenant who was to have occupied the Premises after the Mandatory Surrender Date and any related attorneys' fees and brokerage commissions.

18.8.2 Surrender. Upon the termination of this Lease or Tenant's right to possession of the Premises, Tenant will surrender the Premises broom clean, together with all keys, in good condition and repair, subject to reasonable wear and tear, and conditions or damages which Landlord is required to repair or restore. Tenant shall patch and fill all holes within the Premises caused by Tenant's use, and all penetrations of the roof caused by Tenant shall be resealed to a watertight condition. In no event may Tenant remove from the Premises any mechanical or electrical systems or any wiring or any other aspect of any systems within the Premises. Conditions existing because of Tenant's failure to maintain the contracts listed on Exhibit F shall not be deemed "reasonable wear and tear." At Tenant's request, Landlord will participate in a joint walk-through inspection of the Premises within three business days after Tenant surrenders the space, and the parties will identify all remaining obligations of Tenant (if any) and the dates by which Tenant will complete such remaining work.

18.9    Joint and Several. If Tenant consists of more than one person, the obligation of all such persons shall be joint and several.

18.10    Covenants and Conditions. Each provision to be performed by Tenant hereunder shall be deemed to be both a covenant and a condition.

18.11    Auctions. Tenant shall not conduct, nor permit to be conducted, any auction upon the Premises without Landlord's prior written consent. Landlord shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

18.12    Consents. Landlord's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Event of Default or breach by Tenant of this Lease exists, nor shall such consent be deemed a waiver of any then existing Event of Default or breach, except as may be otherwise specifically stated in writing by Landlord at the time of such consent. Except as otherwise set forth herein, the failure to specify herein any particular condition to Landlord's consent shall not preclude the imposition by Landlord at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.

18.13    Force Majeure. "Force Majeure" as used herein means delays resulting from causes beyond the reasonable control of the other party, including, without limitation, any delay caused by any action, inaction, order, ruling, moratorium, regulation, statute, condition or other decision of any private party or governmental agency having jurisdiction over any portion of the Project, over the construction anticipated to occur thereon or over any uses thereof, or by delays in inspections or in issuing approvals by private parties or permits by governmental agencies, or by fire, flood, inclement weather, strikes, lockouts or other labor or industrial disturbance (whether or not on the part of agents or employees of either party hereto engaged in the construction of the Premises), civil disturbance, order of any government, court or regulatory body claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage, blockage, embargo, failure or inability to secure materials, supplies or labor through ordinary sources by reason of shortages or priority, discovery of hazardous or toxic materials, earthquake, or other natural disaster, delays caused by any dispute resolution process, or any cause whatsoever beyond the reasonable control (excluding financial inability) of the party whose performance is required, or any of its contractors or other representatives, whether or not similar to any of the causes hereinabove stated.

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18.14    Addenda. The Addenda attached hereto, if any, and identified with this Lease are incorporated herein by this reference as if fully set forth herein.

19. NET RENT ABATEMENT PERIOD.

Tenant's obliga-tion to pay Net Rent for the Premises shall be abated during the first four months of the Term (the "Net Rent Abatement Period"), which the parties anticipate will begin on April 1, 2013 and end on July 31, 2013. However, if Landlord's Work (defined in the Work Letter) is not completed by April 1, 2013, then the Commencement Date and the Net Rent Abatement Period and the Rent Commencement Date will be correspondingly extended by the same number of days. Other than during the Net Rent Abatement Period, and as except as set forth herein, Tenant shall pay Net Rent as and when due under this Lease. Such abatement during the Net Rent Abatement Period shall apply to Net Rent only and shall not apply to Additional Rent payable under this Lease at any time during the Term.

20.    LEASE CONTINGENCY.

This Lease is conditioned on Landlord signing and delivering the Landlord's Lien Waiver in the form attached as Exhibit G.

21. OPTION TO EXPAND.

21.1 Terms of Option. Provided Tenant is not in an uncured monetary default under the terms of this Lease at the time the option is exercised, Tenant shall have the an ongoing option at any time during the then existing Term to expand the area of the Premises (the “Expansion Option”) by a minimum of approximately one hundred and fifteen thousand (115,000) rentable square feet, (the “Expansion Area”) provided said space is available for lease.

21.2    Exercise of Option and Delivery of Expansion Area. Promptly following Tenant's exercise of the Expansion Option pursuant hereto, the parties shall meet and work in good faith to reach agreement within thirty (30) days thereafter.

21.3    Lease Terms. The Expansion Area shall be leased upon the same terms and conditions applicable to the original Premises, with the following provisions:

21.3.1    Tenant shall lease the Expansion Area for a term of not less than three (3) years and shall be coterminous with and at the same then current Net Rent as the original Premises. In the event the remaining Term for the original Premises is less than three (3) years, then Term for the original Premises and the Expansion Area will be extended to achieve a three (3) year minimum balance of Term.

21.3.2    The annual Net Rent payable for the Expansion Area shall commence on the date of occupancy by Tenant following execution of an amendment to this lease (the “Expansion Area Commencement Date”).

21.3.3    Operating Expenses and Real Property Taxes. In addition to the Net Rent for the Expansion Area, Tenant shall be responsible for its prorata share of Additional Rent on the Expansion area which will include all Operating Expenses and Real Property Taxes as defined in the Original Lease starting from the Expansion Area commencement date.

22. OPTION TO TERMINATE LEASE.

Provided Tenant is not then in an uncured monetary default, Tenant may terminate this Lease in its entirety (the “Termination Option”) effective on July 31, 2018 (the last day of the sixty-forth (64^th) full calendar month of the Term; the “Early Termination Date”) by delivering written notice of its intent to terminate this Lease (the “Termination Notice”) to Landlord on or before January 31, 2018 (the last day of the fifth-eighth (58th) full calendar month of the Term) and payment of the Termination Fee (as defined below) to Landlord within ninety (90) days after the date of Tenant's Termination Notice. If Tenant properly exercises its Termination Option, this Lease

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shall terminate as of the EarlyTermination Date. The “Termination Fee” shall be $394,295; which the parties agree is the sum of the unamortized balance of the allowance available to Tenant (as indicated herein in Exhibit B-1), two months Net Rent and the portion of the Brokerage Commissions paid on the 6^th and 7^th year of the full lease term. Tenant shall deliver the Premises to Landlord on or before the EarlyTermination Date in accordance with the terms and conditions of Section 18.8.2 of this Lease the same as if such EarlyTermination Date were the original expiration date of the Term of this Lease. If Tenant properly exercises the Termination Option, such termination shall not affect Tenant's liability for (i) post-Term adjustments in Taxes and Operating Expenses applicable to the period prior to the EarlyTermination Date; (ii) obligations which accrue prior to the EarlyTermination Date; and (iii) obligations which by their terms survive the EarlyTermination Date.

23. RIGHT OF FIRST REFUSAL.

Provided Tenant is not in an uncured monetary default at the time of notice, Landlord will notify Tenant of any third party's counteroffer or letter of intent to lease any specific amount of square footage available for lease in the Building (the “Additional Space”). Tenant shall have ten (10) business days in which to notify Landlord of its intent to lease at least the same amount of square footage. If Tenant elects to lease the Additional Space, Landlord and Tenant shall execute an amendment to the Lease within ten (10) business days, based upon the same terms and conditions as outlined in the Option to Expand as indicated in Section 21.1 herein. Tenant agrees to keep any information regarding the prospective tenant confidential. This right is on-going and shall continue in force in each and every instance in which Landlord has a prospective party seriously interested in any available space within the Building. This Right of First Refusal terminates April 1, 2016 or sooner if Tenant vacates Premises.

24. COUNTERPARTS.

This Lease may be signed in counterparts, and when all counterpart documents are signed, they will constitute a single binding instrument. The delivery of an unexecuted (or partially executed) version of this Lease will not be construed as an offer to lease, and this Lease will not be binding on either party until it has been executed and delivered by both parties.

See next pages for signatures.

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IN WITNESS WHEREOF, the parties have executed this Lease as of the date set forth above.

"Landlord" River Ridge Crossdock 700, LLC a Indiana limited liability company By: /s/ Lee C. Wilburn      Name: Lee C. Wilburn      Its: Managing Member Date: 3/12/13 "Tenant" The Standard Register Company By: /s/ Joseph P. Morgan Name: Joseph P. Morgan
Its: President & CEO

Date: 3/20/13

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EXHIBIT A

PREMISES

A-1

EXHIBIT B

WORK LETTER

THIS WORK LETTER ("Work Letter") is a part of that certain Tenant Industrial Triple Net Lease (the "Lease"), by

and between River Ridge Crossdock 700, LLC, a Indiana limited liability company ("Landlord"), and The Standard Register Company ("Tenant"). Capitalized terms not defined in this Work Letter shall have the meanings given to such terms in the Lease.

1.    Definitions. As used in this Work Letter and in the Lease, the term "Tenant Improvements" shall mean those improvements set forth in Exhibit B-1 or Tenant Specifications. The construction and installation of the Tenant Improvements is sometimes referred to herein as the "Work".

2.    Completion of Tenant Improvements. Subject to the terms of the Lease and this Work Letter, Landlord shall use its commercially reasonable and diligent efforts to cause to complete the construction and installation of the Tenant Improvements in accordance with the terms of this Work Letter.

3.    Designation of Representatives. With respect to the planning, design and construction of the Tenant Improvements, Landlord hereby designates Lee C. Wilburn as "Landlord's Representative" and Tenant hereby designates David Clapper as "Tenant's Representative." Tenant hereby confirms that Tenant's Representative has full authority to act on behalf of and to bind Tenant with respect to all matters pertaining to the planning, design and construction of the Improvements. Landlord hereby confirms that Landlord's Representative has full authority to act on behalf of Landlord with respect to matters pertaining to the planning, design and construction of the Improvements. Either party may change its designated representative upon five (5) days prior written notice to the other party.

3.1    No Representations. Notwithstanding anything to the contrary contained in the Lease or herein, Landlord's participation in the preparation of the Tenant Improvements, the cost estimates for the Tenant Improvements and the construction thereof shall not constitute any representation or warranty, express or implied, that the Improvements, if built in accordance with the Work, will be suitable for Tenant's intended purpose. Tenant acknowledges and agrees that the Tenant Improvements are intended for use by Tenant and the specifications and design requirements for such Tenant Improvements are provided to Landlord by Tenant. Landlord's sole obligation shall be to perform the Landlord's Work identified on Exhibit B-1.

4.    Change Orders. After the parties approve the Tenant Improvements and a building permit for the Tenant Improvements is issued, any further changes to the Work shall require the prior written approval of Tenant and Landlord, not to be unreasonably withheld, conditioned or delayed.

5.    Selection of Contractor. Tenant shall enter into a construction contract ("Construction Contract") with one or more contractors chosen by Tenant.

6.    Tenant Improvements; Target Completion Date. Landlord shall use commercially reasonable efforts to complete Landlord's Work by April 1, 2013. Tenant shall complete the Tenant Improvements on or before March 31, 2015. Tenant's work will not delay Lease Commencement.

7.    Tenant's Inspection Rights. At Tenant's request, Landlord shall schedule a walk-through with the Tenant to discuss the progress of Landlord's Work. Landlord shall give Tenant at least forty-eight (48) hours prior notice (written or telephonic) of the Meeting. Tenant or its agents shall have the right to inspect the work in progress ("Inspection") for the purpose of reviewing whether the Landlord's Work is completed to its satisfaction. Tenant agrees to protect, hold harmless and indemnify Landlord from all claims, demands, costs and liabilities (including reasonable attorneys' fees) arising from Tenant's or Tenant's agents entry onto the Land for the purpose of conducting Inspections.

8.    No Representations. Landlord does not warrant that the Building or any component thereof will be free of latent defects or that it will not require maintenance and/or repair within any particular period

B-1

of time, except as expressly provided herein. Notwithstanding the foregoing, Landlord shall repair or replace, as needed, for the first year of the Term, all HVAC, plumbing, electrical, mechanical, building systems, and overhead doors and their component parts, excluding Tenant's trade fixtures, equipment or other improvements by Tenant, provided Tenant has maintained proper preventive maintenance contracts as provided in the Lease and that the necessary repair or replacement is not caused by Tenant's abuse. Landlord will provide the driveways and exclusive Tenant parking areas for Tenant with a two year contractor warranty.

B-2

EXHIBIT B-1

SPECIFICATIONS

BUILDING SIZE

The building contains approximately 450,535 square feet

TENANT IMPROVEMENTS - (TO BE CONSTRUCTED BY TENANT)

Building Tenant Improvements for the 335,535 SF currently exceed Tenant's requirements and Tenant

takes the property AS IS, with the following exceptions:

Landlord will provide a Tenant Finish Allowance equal to $100,000 which Tenant will have the right to use for costs of improvements to the Building to better suit the Premises for Tenant's use (“Tenant Improvements”). For example, the Tenant Improvements may (but are not required to) include: dock locks, conversion of employee break rooms to more traditional use, and paint and carpet of office area. Landlord will not be required to reimburse Tenant for any costs for Tenant's furniture, removable fixtures or equipment in the Premises.

Tenant shall contract for the work and seek reimbursement from the Landlord by presenting paid invoices. Landlord will not be required to reimburse Tenant for Tenant Improvements that: (a) were not approved by Landlord before commencement of the work (or, in any case, prior to reimbursement); or (b) were not completed before March 31, 2015. If Tenant has not submitted applications for the full amount of the Tenant Finish Allowance by April 30, 2015 (based on work performed before March 31, 2015), then Tenant will relinquish its rights to the balance of the $100,000, and Tenant will not be permitted to apply the unused balance as a credit against Rent due under the Lease. Tenant's work will not delay executing the Commencement Date Memorandum or Lease Commencement.    

LANDLORD'S WORK - (TO BE COMPLETED BY LANDLORD)

Landlord will complete the following work (“Landlord's Work”) at Landlord's sole cost and expense:

• Installation of separate meters for all utilities serving the Premises, and

• Installation of T5 lighting for the entire 335,535 SF within the Premises.

B-3

EXHIBIT C

COMMENCEMENT DATE MEMORANDUM

With respect to that certain lease ("Lease") dated ____________, 2013, between The Standard Register Company ("Tenant"), and River Ridge Crossdock 700, LLC, an Indiana limited liability company ("Landlord"), whereby Landlord leased to Tenant and Tenant leased from Landlord approximately 335,535 rentable square feet of the building located at 700 Patrol Road, Jeffersonville, Indiana ("Premises"), Tenant hereby acknowledges and certifies to Landlord as follows:

(1)    Landlord delivered possession of the Premises to Tenant Substantially Complete on _____________________ ("Possession Date");

(2)    The Lease commenced on _______________________ ("Commencement Date");

(3)    The Premises contain _________ square feet of space; and

(4)    Tenant has accepted and is currently in possession of the Premises and the Premises are acceptable for Tenant's use.

IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this ___ day of ________________, 2013.

"Tenant"

The Standard Register Company

By: _______________________                    

Its: _____________________                

C-1

EXHIBIT D

PROHIBITED USES

The following types of operations and activities are expressly prohibited on the Premises:

1.    automobile/truck maintenance, repair or fueling;

2.    battery manufacturing or reclamation;

3.    ceramics and jewelry manufacturing or finishing;

4.    chemical (organic or inorganic) storage, use or manufacturing;

5.    drum recycling;

6.    dry cleaning;

7.    electronic components manufacturing;

8.    electroplating and metal finishing;

9.    explosives manufacturing, use or storage;

10.    hazardous waste treatment, storage, or disposal;

11.    leather production, tanning or finishing;

12.    machinery and tool manufacturing;

13.    medical equipment manufacturing and hospitals;

14.    metal shredding, recycling or reclamation;

15.    metal smelting and refining;

16.    mining;

17.    paint, pigment and coating operations;

18.    petroleum refining;

19.    plastic and synthetic materials manufacturing;

20.    solvent reclamation;

21.    tire and rubber manufacturing;

22.    above- and/or underground storage tanks; and

23.    residential use or occupancy.

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EXHIBIT E

RULES AND REGULATIONS

[Attached]

E-1

DEVELOPMENT COVENANTS

RIVER RIDGE COMMERCE CENTER

INAAP REUSE AUTHORITY

June 22, 2007

This Declaration of Covenants (Covenants) is made this 22 day of June, 2007, by the INAAP Reuse Authority, (Authority) a body corporate and politic, under the laws of the State of Indiana and is adopted by the Authority to impose development standards to insure the real estate and facilities to be constructed at the River Ridge Commerce Center will be of benefit to the community, state, and region.

1.River Ridge Commerce Center (RRCC) - The real estate and facilities that are the subject of these Covenants is the real property known as the River Ridge Commerce Center, a business park located at the former Indiana Army Ammunition Plant (INAAP) in Clark County, Indiana. The RRCC business park shall be the INAAP vacant land designated by the U.S. Army as being of Category 1 Environmental Condition as of now or so designated in the future.

2.Developer - All persons, firms, partnerships and corporations who own, lease, use, or acquire an interest in any portion of the RRCC shall be referred to as the Developer and be bound by these Covenants that shall run with the land. The Authority shall not be deemed a developer.

3.Development Standards Any Developer who constructs real estate improvements or uses the land or buildings at the RRCC shall be bound by the following development standards:

Permitted Uses -	general manufacturing, warehousing, distribution, office, retail & wholesale sales, & research uses as specifically approved by the Authority
Prohibited Uses -	residential, commercial incineration, junk yard, waste dump, outside storage yard, slaughter house, or smelting of ores
Highway Access -	lot access required to be from interior roads and not directly from Indiana Highway 62
Minimum Lot Size -	3 acres for industrial use 1 acre for commercial use
Minimum Lot Dimensions -	width - 250 feet depth - 2.5 times width lot frontage - 200 feet
Minimum Front Building Set Back -	75 feet from property line or right of way line
Minimum Side & Rear Building Setback -	50 feet from property line or right of way line
Minimum Setback From Body of Water -	50 feet from mean shoreline of any body of water
Maximum Ratio of Floor Area to Lot Area -	50% (one-half)
Maximum Building Height -	60 feet (4 stores)
Permitted Building Materials -	masonry, concrete, metal, or glass materials, harmonious in appearance with adjoining properties.

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Permitted Building Identification Wall Signs -	5% of area of building elevation if located within 100 feet of property line, not to exceed 200 sq. ft. 10% of area of building elevation if located between 101 feet & 300 feet of property line, not to exceed 350 sq. ft. 15% of area of building elevation, if located over 300 feet from property line, not to exceed 500 sq. ft.
Permitted Tenant Identification Signs -	1 nameplate sign not more than 9 square feet in area for each tenant, mounted on a building face.
Permitted Free-Standing Monument Signs -	1 sign not to exceed 32 square feet of area and 4 feet in height
Permitted Traffic Signs -	only standard traffic sign types allowed by the Indiana Department of Transportation
Permitted Temporary Signs -	real estate for sale or lease signs on sites or buildings to be sold or leaseed, not to exceed 32 sq. ft.
Prohibited Signs -	billboard, advertising, flashing, rotating, or pylon signs
Proximity of Signs to Street Intersection -	no closer than 90 feet to any corner of a street intersection if not a traffic sign
Permitted Fences -	screening or security fences only as approved by the Authority
Site Drainage -	pipes & culverts are required for drainage under paved areas to permit natural drainage ways
Storm Water Discharge -	all roof and paved area drainage must be discharged into a storm sewer, swale, or detention area, and not a sanitary sewer
Sanitary Sewage -	restricted to discharge into a sanitary sewer system.
Parking Location -	required to be off-street and no closer than 10 feet from any street or right of way easement.
Minimum Parking Spaces -	one space for each employee, visitor, or customer at peak hours of operation as may vary over time.
Maximum Parking Spaces -	one space for each employee, visitor, or customer at peak hours of operation as may vary over time
Parking Space Distribution -	front yard - 30% maximum side yard - 70% maximum rear yard - 10% minimum
Drive, Loading & Parking Area Surface Material -	concrete or asphalt material.

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Parking Space Dimensions -	minimum space shall be 9 feet wide & 18 feet deep, divided by painted lines, with 24 feet minimum aisle widths
Loading Area Requirements -	1 off-street loading space for each 25,000 sq. ft of building area, no closer than 75 feet from a lot line, screened by landscaping or berms.
Minimum Landscaped Lot Area -	35% of lot area must be landscaped with, trees, shrubs, and ground cover to improve appearance from street & surrounding buildings.
Minimum Parking Lot Landscaping -	10% of the interior area of parking lot must be landscaped if it includes over 10 spaces.
Time to Complete Landscaping -	must be completed within 120 days of completion of building construction & may be extended solely to allow for proper planting time.
Use of Utility Easements -	must be free of buildings & structures and accessible for repair and maintenance.
Utility Line Locations -	all utility lines must be located underground & not overhead
Outdoor Storage Requirements -	outdoor storage must be screened from view by walls, fence, landscaping or berms.
Refuse Collection Areas -	must be visually screened from view from street and adjacent lots.
Mineral Exploration -	only permitted where & if approved by Authority to create necessary storm water retention areas.
Minimum Distance From Karst Features -	construction disturbance permitted no closer than 100 feet from caves & sinkholes
Minimum Distance from Cemeteries -	construction disturbance permitted no closer than 100 feet from a cemetery boundary
Disturbance of Human Remains -	disturbance prohibited & if found, notification of Authority required
Nuisances Prohibited -	uses shall be in conformance with applicable federal, state, and local standards relative to fire & safety hazards, radioactivity, smoke, fumes, dust, odors, vibration, noise, waste discharge, or other nuisance factors identified by the Authority
Streets & Drainage Requirements -	minimum road construction & drainage standards shall be as required by applicable city or county
Zoning & Building Codes -	land use & construction plans must conform to zoning & building codes of the state & applicable city or county

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Required Plan Approvals -	written approval required from the Authority & U.S. Army Corps of Engineers before construction
Army Requirements -	conformance required with all covenants & restrictions required by Army master lease or deeds

4. Development Plan Requirements - The developer shall submit to the Authority 3 sets of site plans and building elevations sufficient in detail to show how the proposed construction and use of improvements on any lot will conform to the development standards described above in Section 3. The use of the plans by the Authority will be solely to verify their conformance with the development standards. The Developer must obtain written approval of the Authority certifying the plans' conformance with these development standards prior to construction. As a minimum, the plans will include the following information:

name, address, & telephone number of developer

name, address, & telephone number of plan preparer

plan preparation date

lot dimensions & identification

proposed uses of buildings, structures, & lot

building setback from each property line

location of proposed easements

location of proposed buildings and structures

location and dimensions of off street parking spaces and areas

location and dimensions of off street loading spaces and areas

location and specification for all outdoor lighting fixtures

location, size, and description of all proposed signs

location and type of all paving and curbing

location and type of all storm water drainage facilities, including proposed drainage patterns

location and type of all landscaping, fences, wall, and berms

location of all structures within 300 feet of the lot

E-5

location and dimensions of any caves or sinkholes on or within 100 feet of the lot

specifications for exterior building materials to be used

location of existing & proposed utilities

any other features required by the Authority

5.Maintenance of Property - The Developer shall maintain and keep all buildings, improvements, and accessory uses on the lot in a safe and clean condition and in compliance with all applicable federal, state, and local government health, fire, safety, and environmental regulations. The Developer shall at regular and frequent intervals remove at its own expense any rubbish, garbage, or trash from the lot and its buildings.

6.Right of Inspection - The Developer shall allow the Authority or its representative to enter the affected property at all reasonable hours for the purpose of inspecting the real estate, improvements, and accessories to verify compliance with these Covenants. Such inspections shall not unreasonably interfere with the conduct of the Developer's business on the premises.

7.Enforcement - The Authority may enforce these Covenants by injunctive process or may utilize any other legal or equitable remedy at the sole cost and expense of the Developer violating these Covenants. The cost of such expenses shall become a lien on the affected property subject to foreclosure. The failure of the Authority to take action with respect to any breach or failure shall not be deemed to be a waiver of these Covenants. These Covenants run with the land and shall be binding on all heirs, successors, or assigns of the Developer and Authority.

8.Amendments - The Authority reserves the right to unilaterally make reasonable changes to these Covenants to clarify the intent of the Covenants or to make more effective their administration.

9.Development Covenant Exceptions - The Authority by unanimous approval of its members may grant exceptions to the dimensions, quantities, and materials required by the above-described Development Standards where in its opinion the exceptions are necessary for the use of the site and would not adversely affect the quality of development and surrounding property values.

10.Additions to the Property - The Authority may unilaterally add additional land to the definition of the "Property" herein, by amendment to Deed of Restrictions.

IN WITNESS WHEREOF, the INAAP Reuse Authority has approved and executed these Covenants as of the date written above.

RIVER RIDGE DEVELOPMENT AUTHORITY

By:/s/ R. Marc Elliott

R. Marc Elliott, Executive Director

E-6

EXHIBIT F

SCHEDULE OF REQUIRED MAINTENANCE CONTRACTS

HVAC

Sprinkler

Roof

F-1

EXHIBIT G

LANDLORD'S LIEN WAIVER

The Standard Register Company( “Obligor”) now does or hereafter may store certain of its merchandise, inventory, or other of its personal property at premises (the “Premises”) owned by the undersigned (the “Landlord”), and located in the River Ridge Commerce Center at 700 Patrol Road, Jeffersonville, Indiana, which the Landlord leases to the Obligor pursuant to the terms of a lease agreement between the Landlord and the Obligor (the “Lease”), a copy of which is attached as Schedule I hereto.

The Obligor and certain of its affiliates, as Borrowers (collectively, the “Borrowers”) have entered or may enter into certain financing arrangements (as modified, renewed, extended, supplemented and replaced from time to time, the “Credit Facility”) with certain financial institutions (together with the Agent described below, the “Lenders”) and Bank of America, N.A., as agent for the Lenders (in such capacity, together with its successors and assigns, the “Agent”) and, as a condition to the Lenders entering into any such Credit Facility with the Borrowers, the Lenders require, among other things, that the Obligor grant the Agent, for and on behalf of the Lenders, a security interest in and lien on all of Obligor's personal property located on the Premises from time to time (the “Collateral”).

To induce the Lenders (together with their respective agents and assigns) to provide said Credit Facility, and for other good and valuable consideration, the Landlord hereby agrees that:

1.The Lease is in full force and effect and has not been assigned, modified, supplemented or amended in any way.

2.To the best knowledge of the Landlord, neither the Obligor nor the Landlord is in default under the Lease, and no event or circumstance has occurred or exists which, with the passage of time or the giving of notice or both, would constitute a default under the Lease.

3.The Landlord agrees that: (a) the Agent's lien upon or security interest in the Collateral is prior and superior to any interest, lien or claim of any nature the Landlord may now have or hereafter obtain in the Collateral whether by operation of law, contract or otherwise and the Landlord hereby subordinates to the Agent, for the benefit of the Agent and the Lenders, any rights, liens or claims it has with respect to the Collateral; (b) either the Obligor or the Agent may enter the Premises and remove the Collateral from the Premises at any time without hindrance on the part of the Landlord, provided that the Agent shall be responsible for any damage to the Landlord's property as the result of such removal; and (c) the Landlord shall deem the Collateral to be personal property and not fixtures, notwithstanding the manner or mode of the attachment of the Collateral to the land.

4.The Landlord shall send to the Agent (in the manner provided herein) a copy of any notice or statement sent to the Obligor by the Landlord asserting a default under the Lease. Such copy shall be sent to the Agent at the same time such notice or statement is sent to the Obligor. Notices shall be sent to the Agent by prepaid, registered or certified mail, addressed to the Agent at the following address, or such other address as the Agent shall designate to the Landlord in writing:

Bank of America, N.A.

300 Galleria Parkway, Suite 800

Atlanta, Georgia 30339

Attention: Andrew A. Doherty

Telephone: (404) 607-3219

Telecopy: (312) 453-4665

5.The Landlord shall not terminate the Lease or pursue any other right or remedy under the Lease by reason of any default of the Obligor under the Lease, until the Landlord shall have given a copy of such written notice to the Agent as provided above and, in the event any such default is not cured by the Obligor within any time period provided for under the terms and conditions of the Lease, the Landlord will allow the Agent (a) thirty (30)

G-1

days from the expiration of the Obligor's cure period under the Lease within which the Agent shall have the right, but shall not be obligated, to remedy such act, omission or other default and Landlord will accept such performance by the Agent and (b) up to an additional ninety (90) days to occupy the Premises; provided that during such period of occupation the Agent shall pay to the Landlord the basic rent due under the Lease pro-rated on a per diem basis determined on a 30-day month (provided, that such rent shall exclude any rent adjustments, indemnity payments or similar amounts payable under the Lease for default, holdover status or similar charges).

6.The agreements contained herein shall continue in force until all of Obligor's obligations and liabilities to the Lenders and the Agent are paid and satisfied in full and all financing and/or security arrangements among the Lenders, the Agent and the Obligor have been terminated.

7.The undersigned will notify all successor owners, transferees, purchasers and mortgagees of the Premises of the existence of this agreement. The agreements contained herein may not be modified or terminated orally and shall be binding upon the successors, assigns and personal representatives of the undersigned, upon any successor owner or transferee of the Premises, and upon any purchasers, including any mortgagee, from the undersigned.

EXECUTED under seal as of the date written below.

LANDLORD:

RIVER RIDGE CROSSDOCK 700, LLC, an Indiana limited liability company

By: /s/ Lee C. Wilburn

Name: Lee C. Wilburn

Title: Managing Member

Date: 3/12/13

G-2

Schedule I to Landlord Lien Waiver Agreement

Copy of Lease

G-3

EXHIBIT H

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

[ECLIPSE]

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

This AGREEMENT (the “Agreement”) is made as of the 20th day of March, 2013 (the “Effective Date”), between ECLIPSE BANK, INC. (together with its successors or assigns in interest, collectively the “Lender”) and THE STANDARD REGISTER COMPANY, an Ohio corporation (“Tenant”), for the benefit of RIVER RIDGE CROSSDOCK 700, LLC, an Indiana limited liability company (together with its successors and assigns under the lease, collectively, the “Landlord”).

Preamble

A.    Landlord and Tenant are parties to a Lease dated March 20, 2013, a copy of which, together with all amendments, is attached as Exhibit A (the “Lease”), under which Tenant has leased the premises described in the Lease (the “Demised Premises”).

B.    Lender is the owner and the holder of a loan evidenced by a Promissory Note dated February 26, 201 in the face amount of $10,924,988.28 (the “Note”). The Note is secured by a mortgage dated the same date as said Note (the “Mortgage”), recorded March 5, 2013 in the Real Property Records of Clark County, Indiana, covering the real property described in the Lease.

C.    Tenant and Lender desire to confirm their understanding with respect to the Lease and the Mortgage, as follows:

Agreement

1.    Subordination. The Lease is now, and will at all times and for all purposes be, subject and subordinate, in every respect, to the lien of the Mortgage, including but not limited to any and all increases, renewals, modifications, extensions, substitutions, replacements and/or consolidations of the Mortgage, (collectively a “Modification”), and all other loan documents securing the Note, provided that any and all Modifications shall nevertheless be subject to the terms of this Agreement.

2.    Non-Disturbance. So long as Tenant complies with all of its obligations under the Lease within the applicable cure periods set forth in the Lease, Lender shall not disturb or interfere with Tenant's possession of the Demised Premises, and neither the Lease nor the Term of the Lease will be terminated or otherwise affected by any foreclosure, suit, action or other proceeding to enforce the Mortgage or the Note or any obligation secured by the Mortgage or any loan documents, or by the judicial sale or execution or other sale of the Demised Premises, or by any deed given in lieu of foreclosure, or by the exercise of any other rights given to the Lender by any other documents or as a matter of law, or any default under the Mortgage or the Note.

3.    Attornment. If Lender or any other party succeeds to the interest of Landlord under the Lease in any manner, including but not limited to foreclosure, exercise of any power of sale, succession by deed in lieu or other conveyance (a “Succession”), Tenant will attorn to and be bound to such party (whether Lender or another party) upon such Succession and will recognize Lender or such other party as the landlord under the Lease. Any such attornment will be effective and self-operative without the execution of any further instrument, so long as the successor delivers written notice (including appropriate evidence of the Succession) to Tenant. Tenant waives the provisions of any statute or rule of law that which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect the Lease and the obligations of Tenant as a result of any proceeding in connection with the Mortgage, including foreclosure or trustee's sale.

H-1

4.    Limitation On Lender's Liability. Upon any Succession, Lender and any other party succeeding as Landlord shall not be: (a) liable for any act or omission of the Landlord under the Lease occurring before the date of the Succession; (b) subject to any offsets or defenses which Tenant may have against the Landlord in connection with events occurring before the date of the Succession; (c) bound by any rent or additional rent which Tenant may have paid to Landlord more than one month in advance (except security deposits and other amounts which Tenant may have been required to pay in advance pursuant to the terms of the Lease); or (d) liable for payment of any leasing commissions, if the triggering event for payment of the commissions occurred before the date of the Succession. However, each party succeeding as Landlord after any Succession shall be liable for the performance of the obligations of the Landlord under the Lease during the period such party owns the Demised Premises.

5.    Tenant's Warranty. Tenant warrants to Lender that as of the Effective Date: (a) the document attached as Exhibit A constitutes a true, correct and complete copy of the Lease; (b) Tenant has no knowledge that Landlord is in default under the Lease; (c) the Lease is a complete statement of the agreement of the parties with respect to the leasing of the Demised Premises; (d) the Lease is validly executed by Tenant and in full force and effect; (e) all conditions to the Lease have been satisfied, except conditions which are not required to have been satisfied by the Effective Date; and (f) Tenant has not subordinated the Lease or any of its rights under the Lease to any other lien or mortgage.

6.    Lender Cure Rights. Tenant will deliver copies of all notices of default to Lender at the address the following address, or any other address designated by Lender.

President and CE

Eclipse Bank

3827 Shelbyville Road

Louisville, KY 40207

All notices will be delivered consistent with the requirements of the notice provisions in the Lease. If default described in Tenant's notice would entitle Tenant to cancel the Lease or abate the rent payable thereunder, Tenant agrees not to exercise the remedy of Lease termination or Rent abatement until the later of the cure period specified in the Lease, or 20 days after the notice of default is delivered to Lender. If Lender cures any Landlord default, Tenant agrees to accept the cure under the Lease.

7.    Rent Payment. Upon written notice to Tenant and Landlord confirming: (a) that Lender is exercising its rights under the Mortgage or any other loan documents acting to secure the Note following a default under the Loan, or (b) Lender's Succession to the Landlord's interest under the Lease, Tenant agrees to pay all rents due under the Lease in accordance with Lender's written directions, which may include instructions to pay directly to Lender.

8.    No Oral Modification/Binding Effect. This Agreement may not be modified orally or in any manner other than by an agreement in writing signed by the parties or their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties and their successors and assigns.

9.    Laws. This Agreement shall be construed in accordance with the laws of the jurisdiction in which the Demised Premises are located.

H-2

IN WITNESS WHEREOF, the parties executed this Agreement as of the Effective Date.

TENANT:

THE STANDARD REGISTER COMPANY,

an Ohio corporation

By: /s/ Joseph P. Morgan Jr.

Name: Joseph P. Morgan Jr.

Title: President & CEO                    

LENDER:

Eclipse Bank, Inc.

By: /s/ Howard Hogue

Name: Howard Hogue

Title: SVP        

LANDLORD:

RIVER RIDGE CROSSDOCK 700, LLC,

an Indiana limited liability company

By: /s/ Lee C. Wilburn

Name: Lee C. Wilburn

Title: Managing Member    

H-3

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

We have made a review, in accordance with standards established by the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of The Standard Register Company for the thirteen week period ended March 31, 2013, as indicated in our report dated May 3, 2013; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, is incorporated by reference in this Form 10-Q, into the Company's previously filed Registration Statements File No.'s 333-02683, 333-05231, 333-15851, 333-43055, 333-51189, 333-51181, 333-57779, 333-84483, 333-86492 and 333-173805.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/S/ BATTELLE & BATTELLE LLP

Dayton, Ohio

May 3, 2013

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph P. Morgan, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Standard Register Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,

d. Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and,

5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the Audit Committee of the Registrant's Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and,

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: May 3, 2013

/s/ JOSEPH P. MORGAN, JR.

Joseph P. Morgan, Jr.

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert M. Ginnan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Standard Register Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and,

d. Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and,

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize, and report financial information; and,

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:  May 3, 2013

/s/ ROBERT M. GINNAN

Robert M. Ginnan

Vice President, Treasurer and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Standard Register Company (the “Company”) on Form 10-Q for the period ending March 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph P. Morgan, Jr., President and Chief Executive Officer, and I, Robert M. Ginnan, Vice President, Treasurer and Chief Financial Officer, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and,

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  May 3, 2013

/s/ JOSEPH P. MORGAN, JR.

Joseph P. Morgan, Jr.

President and Chief Executive Officer

/s/ ROBERT M. GINNAN

Robert M. Ginnan

Vice President, Treasurer and Chief Financial Officer

EX-99.1

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Board of Directors

The Standard Register Company

Dayton, Ohio

We have reviewed the accompanying consolidated balance sheet of The Standard Register Company as of March 31, 2013, the related consolidated statements of income, comprehensive income, and cash flows for the thirteen week periods ended March 31, 2013 and April 1, 2012. These financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based upon our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of The Standard Register Company as of December 30, 2012, and the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated March 8, 2013, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as ofDecember 30, 2012 is fairly stated, in all material respects.

/S/BATTELLE & BATTELLE LLP

Dayton, Ohio

May 3, 2013

XML

SEGMENT REPORTING - Information about Operations by Reportable Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Segment Reporting Information [Line Items]
Revenue from external customers	$ 141,620	$ 157,649
Operating income	5,070	3,240
Healthcare
Segment Reporting Information [Line Items]
Revenue from external customers	49,495	57,050
Operating income	2,136	2,568
Business Solutions
Segment Reporting Information [Line Items]
Revenue from external customers	92,125	100,599
Operating income	$ 2,934	$ 672

XML

OTHER CURRENT LIABILITIES - Summary of Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 30, 2012
Other Liabilities Disclosure [Abstract]
Accrued compensation	$ 13,309	$ 13,996
Deferred revenue	5,198	6,020
Accrued non-income taxes	3,714	3,885
Current portion of pension	2,058	2,058
Accrued customer rebates	4,876	4,814
Other current liabilities	12,870	12,461
Total	$ 42,025	$ 43,234

XML

EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Number of Shares Outstanding for Calculation of Earnings Per Share (EPS)

The number of shares outstanding for calculation of earnings per share (EPS) is as follows:

	13 Weeks Ended
(Shares in thousands)	March 31, 2013	April 1, 2012
Weighted-average shares outstanding - basic and diluted	29,358	29,117

XML

SHARE-BASED COMPENSATION - Narrative (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Share-based Compensation [Abstract]
Total compensation expense	$ 469	$ 703

XML

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncement or Change in Accounting Principle, Retrospective Adjustments [Abstract]

RECENTLY UPDATED ACCOUNTING PRONOUNCEMENTS [Text Block]

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In 2013, we adopted Accounting Standards Update (ASU) 2013-2, which requires additional disclosure of information related to changes in our accumulated other comprehensive loss by component and significant items reclassified out of our accumulated other comprehensive loss.

Changes in accumulated other comprehensive loss, net of deferred taxes, for the period ended March 31, 2013 consist of the following:

	Foreign Currency Translation			Defined Benefit Pension Plans			Total
Balance beginning of period	$	(192	)	$	(231,426	)	$	(231,618	)
Other comprehensive income before reclassifications	246			—			246
Amounts reclassified from accumulated other comprehensive loss	—			6,898			6,898
Net current-period other comprehensive income	246			6,898			7,144
Balance end of period	$	54		$	(224,528	)	$	(224,474	)

During 2013, 6,898 of net actuarial loss was amortized from accumulated other comprehensive loss into net periodic benefit cost (see Note 8 Pension Plans). Because of the valuation allowance against our deferred tax assets, there was no federal or state income-based tax expense or benefit related to amounts recorded to or reclassified out of accumulated other comprehensive loss.

XML

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS Changes in Other Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance	$ (231,618)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract]
Other Comprehensive Income (Loss), Before Reclassifications, Net of Tax	246
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	6,898
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	7,144
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance	(224,474)
Accumulated Translation Adjustment
Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance	(192)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract]
Other Comprehensive Income (Loss), Before Reclassifications, Net of Tax	246
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	246
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance	54
Accumulated Defined Benefit Plans Adjustment
Change in Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance	(231,426)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract]
Other Comprehensive Income (Loss), Before Reclassifications, Net of Tax	0
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	6,898
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	6,898
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance	$ (224,528)

XML

REVERSE STOCK SPLIT (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended					3 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 Common Stock	Dec. 30, 2012 Common Stock	Mar. 31, 2013 Common Class A	Dec. 30, 2012 Common Class A	Mar. 31, 2013 Before Reverse Stock Split Common Stock	Mar. 31, 2013 Before Reverse Stock Split Common Class A	Mar. 31, 2013 After Reverse Stock Split	Mar. 31, 2013 After Reverse Stock Split Common Stock	Mar. 31, 2013 After Reverse Stock Split Common Class A
Class of Stock [Line Items]
Reverse Stock Split Conversion Ratio	5
Stock Issued During Period, Shares, Reverse Stock Splits						26,876,000	4,725,000		5,375,000	945,000
Common stock, par value		$ 1.00	$ 1.00	$ 1.00	$ 1.00			$ 1.00
Adjustments to Additional Paid in Capital, Stock Split								$ 25,281

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RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS Reclassifications from Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Reclassification Out Of Accumulated Other Comprehensive Income [Line Items]
Defined Benefit Plan, Amortization of Gains (Losses)	$ (6,898)	$ (5,785)

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RESTRUCTURING AND OTHER EXIT COSTS - Components of Restructuring and Other Exit Costs (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Restructuring Cost and Reserve [Line Items]
Total 2013 Expense	$ 626	$ 1,122
Restructuring Fiscal Twenty Thirteen Plan
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	2,600
Total 2013 Expense	601
Cumulative To-Date Expense	601
Restructuring Fiscal Twenty Thirteen Plan | Employee separation costs
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	875
Total 2013 Expense	601
Cumulative To-Date Expense	601
Restructuring Fiscal Twenty Thirteen Plan | Other associated exit costs
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	1,725
Total 2013 Expense	0
Cumulative To-Date Expense	0
Restructuring Fiscal Twenty Eleven Plan
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	10,034
Total 2013 Expense	25
Cumulative To-Date Expense	9,749
Restructuring Fiscal Twenty Eleven Plan | Employee separation costs
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	6,177
Total 2013 Expense	0
Cumulative To-Date Expense	6,177
Restructuring Fiscal Twenty Eleven Plan | Contract exit and termination costs
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	557
Total 2013 Expense	0
Cumulative To-Date Expense	247
Restructuring Fiscal Twenty Eleven Plan | Other associated exit costs
Restructuring Cost and Reserve [Line Items]
Total Expected Costs	3,300
Total 2013 Expense	25
Cumulative To-Date Expense	$ 3,325

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REVERSE STOCK SPLIT

3 Months Ended

Mar. 31, 2013

Reverse Stock Split [Abstract]

CAPITAL STRUCTURE

REVERSE STOCK SPLIT

On April 25, 2013, our shareholders approved a 1-for-5 reverse stock split of our outstanding shares of Common and Class A Stock that will be effective May 10, 2013. This will result in a reduction of our Common Stock issued and outstanding from 26,876 shares to approximately 5,375 shares, and a reduction in our Class A Stock issued and outstanding from 4,725 shares to approximately 945 shares. The reverse stock split will affect all shareholders of the Company's stock uniformly, but should not materially affect any shareholder’s percentage of ownership interest. The par value of our Common Stock and Class A Stock will remain unchanged at $1.00 per share and the number of authorized shares will remain the same after the reverse stock split.

As the par value per share of the Company's stock will remain unchanged at $1.00 per share, approximately $25,281 will be reclassified to capital in excess of par value. In connection with this reverse stock split, the number of shares of Common Stock underlying outstanding share-based awards will also be proportionately reduced while the exercise prices of stock options will be proportionately increased.

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RESTRUCTURING AND OTHER EXIT COSTS - Summary of Accrual Activity (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Restructuring Reserve [Roll Forward]
Accrued restructuring and other exit costs, beginning balance	$ 1,371
Accrued restructuring and other exit costs, accrued	601
Accrued restructuring and other exit costs, incurred	(540)
Accrued restructuring and other exit costs, ending balance	1,432
Employee separation costs
Restructuring Reserve [Roll Forward]
Accrued restructuring and other exit costs, beginning balance	1,350
Accrued restructuring and other exit costs, accrued	601
Accrued restructuring and other exit costs, incurred	(524)
Accrued restructuring and other exit costs, ending balance	1,427
Contract exit and termination costs
Restructuring Reserve [Roll Forward]
Accrued restructuring and other exit costs, beginning balance	21
Accrued restructuring and other exit costs, accrued	0
Accrued restructuring and other exit costs, incurred	(16)
Accrued restructuring and other exit costs, ending balance	$ 5

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SEGMENT REPORTING - Reconciling Information Between Reportable Segments and Consolidated Financial Statements (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Segment operating income	$ 5,070	$ 3,240
Restructuring and other exit costs	(626)	(1,122)
Net pension periodic benefit cost	(6,242)	(6,184)
Other unallocated	500	(53)
Total other expense	(625)	(688)
LOSS BEFORE INCOME TAXES	$ (1,923)	$ (4,807)

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
REVENUE
Products	$ 125,260	$ 138,901
Services	16,360	18,748
Total revenue	141,620	157,649
COST OF SALES
Products	90,441	98,104
Services	9,259	11,344
Total cost of sales	99,700	109,448
GROSS MARGIN	41,920	48,201
OPERATING EXPENSES
Selling, general and administrative	42,592	50,215
Pension settlement	0	983
Restructuring and other exit costs	626	1,122
Total operating expenses	43,218	52,320
LOSS FROM OPERATIONS	(1,298)	(4,119)
OTHER INCOME (EXPENSE)
Interest expense	(624)	(704)
Investment and other income (expense)	(1)	16
Total other expense	(625)	(688)
LOSS BEFORE INCOME TAXES	(1,923)	(4,807)
INCOME TAX EXPENSE	127	305
NET LOSS	$ (2,050)	$ (5,112)
BASIC AND DILUTED LOSS PER SHARE	$ (0.07)	$ (0.18)
Dividends per share declared for the period	$ 0.00	$ 0.05

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (2,050)	$ (5,112)
Adjustments to reconcile net (loss) income to cash provided by operating activities
Depreciation and amortization	5,066	5,822
Restructuring and other exit costs	626	1,122
Pension benefit cost	6,242	6,184
Other	285	1,043
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts and notes receivable	4,688	5,722
Inventories	(437)	(2,374)
Restructuring payments	(565)	(1,653)
Accounts payable and other current liabilities	(780)	7,829
Pension contributions	(6,660)	(9,010)
Other assets and liabilities	(1,542)	(3,121)
Net cash provided by operating activities	4,873	6,452
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to plant and equipment	(4,389)	(713)
Proceeds from sale of equipment	77	8
Net cash used in investing activities	(4,312)	(705)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in borrowings under revolving credit facility	(629)	(3,389)
Additions to short-term notes payable	500	0
Principal payments on long-term debt	(592)	(724)
Dividends paid	0	(1,470)
Other	0	(5)
Net cash (used in) provided by financing activities	(721)	(5,588)
Effect of exchange rate changes on cash	211	(194)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	51	(35)
Cash and cash equivalents at beginning of period	1,012	1,569
CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,063	1,534
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Capital leases	$ 138	$ 0

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EARNINGS PER SHARE - Summary of Number of Shares Outstanding for Calculation of Earnings Per Share (EPS) (Details) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Earnings Per Share [Abstract]
Weighted-average shares outstanding - basic	29,358	29,117

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RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS (Tables)

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncement or Change in Accounting Principle, Current Period Disclosures [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Changes in accumulated other comprehensive loss, net of deferred taxes, for the period ended March 31, 2013 consist of the following:

	Foreign Currency Translation			Defined Benefit Pension Plans			Total
Balance beginning of period	$	(192	)	$	(231,426	)	$	(231,618	)
Other comprehensive income before reclassifications	246			—			246
Amounts reclassified from accumulated other comprehensive loss	—			6,898			6,898
Net current-period other comprehensive income	246			6,898			7,144
Balance end of period	$	54		$	(224,528	)	$	(224,474	)

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EARNINGS PER SHARE - Narrative (Details)	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0

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OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2013

Other Liabilities Disclosure [Abstract]

Summary of other current liabilities

Other current liabilities consist of the following:

	March 31, 2013		December 30, 2012
Accrued compensation	$	13,309	$	13,996
Deferred revenue	5,198		6,020
Accrued non-income taxes	3,714		3,885
Current portion of pension	2,058		2,058
Accrued customer rebates	4,876		4,814
Other current liabilities	12,870		12,461
Total	$	42,025	$	43,234

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of The Standard Register Company and its wholly-owned subsidiaries (collectively, the Company) after elimination of intercompany transactions, profits, and balances. The consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 30, 2012 (Annual Report). In our opinion, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of trends or of results to be expected for a full year.

Certain prior-year amounts have been reclassified to conform to the current-year presentation.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Net loss	$ (2,050)	$ (5,112)
Actuarial loss	0	(392)
Actuarial loss reclassification	6,898	6,395
Cumulative translation adjustment	246	(183)
Total other comprehensive income, net of tax	7,144	5,820
COMPREHENSIVE INCOME	$ 5,094	$ 708

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

In March 2013, we entered into an operating lease for a new digital print, kitting, and distribution center. The term of the lease is seven years but includes an exit right after five years with payment of an exit fee. Payments under the lease are approximately $1,400 per year and will begin April 1, 2013.

Contingencies

The Company has participated with other Potentially Responsible Parties (“PRPs”) in the investigation, study, and remediation of the Pasco Sanitary Landfill Superfund Site (the “Pasco Site”) in eastern Washington State since 1998. The Company was a member of a PRP Group known as the Industrial Waste Area Generators Group II (the “IWAG Group”). In 2000, the IWAG Group and several other PRP groups entered into agreed orders with the Department of Ecology for implementation of interim remedial actions and expansion of groundwater monitoring. In September 2010, the group entered into a new agreement creating the IWAG Group III. The new agreement changed the allocation of responsibility among the members, which resulted in a significant decrease in our level of participation. Based upon new investigations, it was also deemed probable that the level of participation by certain other PRPs would increase for costs expected to be incurred after 2010. At this time, an agreement has not yet been reached on the final remediation approach. We have accrued our best estimate of our obligation and have an undiscounted long-term liability of $1,213 that we currently believe is adequate to cover our portion of the total future potential costs of remediation. We expect the costs to be incurred over a period of 60 years; however, the current proposed remediation approach could require monitoring for a longer period of time. This estimate is contingent upon the final remedy agreed upon, the participation of other PRPs not currently in the IWAG Group III, the length of monitoring required, and the final agreed upon allocation. Until a final remediation approach is approved and a final agreement is reached among all PRPs, it is reasonably possible that one or more of these factors could change our estimate; however, we are unable to determine the impact at this time.

The Company participates with other PRPs in the investigation, study, and remediation of the Valleycrest Landfill Site (the “Valleycrest Site”) in western Ohio. The Company is a member of a PRP Group known as the Valleycrest Landfill Site Group (the “VLSG”). A remedial investigation and feasibility study was conducted by the VLSG which indicated a range of viable remedial approaches. At this time, a final remediation approach has not been selected, and we have accrued the estimate of our obligation based on the most likely approach being considered by the U.S. Environmental Protection Agency. We have an undiscounted long-term liability of $2,382 that we currently believe is adequate to cover our portion of the total future potential costs of remediation, which are expected to be incurred over a period of 30 years. This estimate is contingent upon the final remedy agreed upon, the participation of other PRPs not currently in the VLSG, and the final agreed upon allocation. Until a final remediation approach is approved and a final agreement is reached among all PRPs, it is reasonably possible that one or more of these factors could change our estimate; however, we are unable to determine the impact at this time.

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DOCUMENT AND ENTITY INFORMATION	3 Months Ended
	Mar. 31, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	SR
Entity Registrant Name	STANDARD REGISTER CO
Entity Central Index Key	0000093456
Current Fiscal Year End Date	--12-29
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	26,173,540
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	4,725,000

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FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

We have financial assets and liabilities that are not recorded at fair value but which require disclosure of their fair value. The carrying value of cash equivalents approximates fair value due to the short-term maturity of these instruments and is not material. The carrying value of outstanding amounts under our secured revolving credit facility and capital lease obligation approximate fair value based on currently available market rates.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 30, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 1,063	$ 1,012
Accounts receivable, net of allowance of $2,227 and $2,312	99,768	104,513
Inventories, net	44,718	44,281
Prepaid expense	10,244	9,248
Total current assets	155,793	159,054
PLANT AND EQUIPMENT
Land	1,900	1,900
Buildings and improvements	65,370	65,259
Machinery and equipment	182,090	182,830
Office equipment	157,779	156,596
Construction in progress	5,465	2,886
Total	412,604	409,471
Less accumulated depreciation	353,931	350,548
Total plant and equipment, net	58,673	58,923
OTHER ASSETS
Goodwill	7,456	7,456
Intangible assets, net	5,660	5,933
Deferred tax asset	22,765	22,765
Other	5,424	5,773
Total assets	255,771	259,904
CURRENT LIABILITIES
Current portion of long-term debt	45,957	2,361
Accounts payable	29,108	29,237
Other current liabilities	42,025	43,234
Total current liabilities	117,090	74,832
LONG-TERM LIABILITIES
Long-term debt	4,980	49,159
Pension benefit liability	245,349	252,665
Deferred compensation	3,345	3,498
Environmental liabilities	3,697	3,986
Other long-term liabilities	2,608	2,624
Total long-term liabilities	259,979	311,932
COMMITMENTS AND CONTINGENCIES - See Note 11
SHAREHOLDERS' DEFICIT
Capital in excess of par value	68,000	67,880
Accumulated other comprehensive losses	(224,474)	(231,618)
Retained earnings	53,811	55,861
Treasury stock at cost: 2,021 shares	(50,236)	(50,236)
Total shareholders' deficit	(121,298)	(126,860)
Total liabilities and shareholders' deficit	255,771	259,904
Common Stock
SHAREHOLDERS' DEFICIT
Common stock	26,876	26,528
Common Class A
SHAREHOLDERS' DEFICIT
Common stock	$ 4,725	$ 4,725

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LONG TERM DEBT

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Long-term Debt

LONG TERM DEBT

Our existing credit facility expires in March 2014; therefore, the $43,000 of debt currently outstanding on this facility is classified as a current liability in the accompanying consolidated balance sheet. We are currently renegotiating with our banking partners and anticipate completing a new credit agreement later in 2013 or early 2014.

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OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2013

Other Liabilities Disclosure [Abstract]

OTHER CURRENT LIABILITIES

OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

	March 31, 2013		December 30, 2012
Accrued compensation	$	13,309	$	13,996
Deferred revenue	5,198		6,020
Accrued non-income taxes	3,714		3,885
Current portion of pension	2,058		2,058
Accrued customer rebates	4,876		4,814
Other current liabilities	12,870		12,461
Total	$	42,025	$	43,234

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RESTRUCTURING AND OTHER EXIT COSTS (Tables)

3 Months Ended

Mar. 31, 2013

Schedule of summary of accrual activity

A summary of activity in the restructuring liability is as follows:

	Balance 2012		Accrued in 2013		Incurred in 2013			Balance 2013
Employee separation costs	$	1,350	$	601	$	(524	)	$	1,427
Contract exit and termination costs	21		—		(16		)	5
Total	$	1,371	$	601	$	(540	)	$	1,432

Restructuring Fiscal Twenty Eleven Plan

Schedule of components of restructuring and other exit costs

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	6,177	$	—	$	6,177
Contract exit and termination costs	557		—		247
Other associated exit costs	3,300		25		3,325
Total	$	10,034	$	25	$	9,749

Restructuring Fiscal Twenty Thirteen Plan

Schedule of components of restructuring and other exit costs

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	875	$	601	$	601
Other associated exit costs	1,725		—		—
Total	$	2,600	$	601	$	601

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INCOME TAXES

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Because of the valuation allowance against our deferred tax assets, there was no federal or state income-based tax expense or benefit. Tax expense for 2013 and 2012 reflects state tax liabilities derived from a tax base other than net income and foreign taxes in Mexico.

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PENSION PLANS

3 Months Ended

Mar. 31, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure

PENSION PLANS

Net periodic benefit cost includes the following components:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Interest cost	$	4,552		$	5,042
Expected return on plan assets	(5,208		)	(5,626		)
Amortization of net actuarial losses	6,898			5,785
Settlement loss	—			983
Total	$	6,242		$	6,184

As a result of associates retiring in 2012 and electing a lump-sum payment of their pension benefits under our non-qualified retirement plan, we recognized a non-cash settlement loss during the first quarter of 2012. A pension settlement is recorded when the total lump sum payments for a year exceed total service and interest costs to be recognized for that year. As part of the settlement, we recognized a pro-rata portion of the unrecognized net losses included in accumulated other comprehensive loss equal to the percentage reduction in the pension benefit obligation.

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The number of shares outstanding for calculation of earnings per share (EPS) is as follows:

	13 Weeks Ended
(Shares in thousands)	March 31, 2013	April 1, 2012
Weighted-average shares outstanding - basic and diluted	29,358	29,117

Due to the net loss incurred for the 13-week periods ending on March 31, 2013, and April 1, 2012, no outstanding options or nonvested shares were included in the diluted EPS computation because they would automatically result in anti-dilution.

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SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

Total share-based compensation expense was $469 and $703 for the periods ended March 31, 2013, and April 1, 2012.

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

Information about our operations by reportable segment for the 13-week periods ended March 31, 2013 and April 1, 2012 is as follows:

		Healthcare		Business Solutions		Total
Revenue from external customers	2013	$	49,495	$	92,125	$	141,620
	2012	57,050		100,599		157,649
Operating income	2013	$	2,136	$	2,934	$	5,070
	2012	2,568		672		3,240

Reconciling information between reportable segments and our consolidated financial statements is as follows:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Segment operating income	$	5,070		$	3,240
Restructuring and other exit costs	(626		)	(1,122		)
Net pension periodic benefit cost	(6,242		)	(6,184		)
Other unallocated	500			(53		)
Total other expense	(625		)	(688		)
Loss before income taxes	$	(1,923	)	$	(4,807	)

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LONG TERM DEBT (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Debt Disclosure [Abstract]
Line of Credit Facility, Amount Outstanding	$ 43,000

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BASIS OF PRESENTATION (Policies)

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting, Policy [Policy Text Block]

The accompanying consolidated financial statements include the accounts of The Standard Register Company and its wholly-owned subsidiaries (collectively, the Company) after elimination of intercompany transactions, profits, and balances. The consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required for complete annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 30, 2012 (Annual Report). In our opinion, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation have been included. The results for interim periods are not necessarily indicative of trends or of results to be expected for a full year.

Certain prior-year amounts have been reclassified to conform to the current-year presentation.

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PENSION PLANS (Tables)

3 Months Ended

Mar. 31, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Schedule of Net Benefit Costs

Net periodic benefit cost includes the following components:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Interest cost	$	4,552		$	5,042
Expected return on plan assets	(5,208		)	(5,626		)
Amortization of net actuarial losses	6,898			5,785
Settlement loss	—			983
Total	$	6,242		$	6,184

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COMMITMENTS AND CONTINGENCIES - Narrative (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Pasco Sanitary Landfill Superfund Site
Commitments and Contingencies Disclosure [Line Items]
Environmental liabilities	$ 1,213
Period of time over which remdiation costs are expected to be incurred	P60Y
Valleycrest Landfill Site
Commitments and Contingencies Disclosure [Line Items]
Environmental liabilities	2,382
Period of time over which remdiation costs are expected to be incurred	P30Y
Jeffersonville, Indiana Operating Lease
Commitments and Contingencies Disclosure [Line Items]
Operating Leases Future Annual Payments Due	$ 1,400
Operating Lease Term in Years	7
Operating Lease Minimum Term In Years Before Cancellation Option	5

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 30, 2012
Allowance for Doubtful Accounts Receivable, Current	$ 2,227	$ 2,312
Treasury stock, shares	2,021,000	2,021,000
Common Stock
Common stock, par value	$ 1.00	$ 1.00
Common stock, Authorized	101,000,000	101,000,000
Common stock, Issued	26,876,000	26,528,000
Common Class A
Common stock, par value	$ 1.00	$ 1.00
Common stock, Authorized	9,450,000	9,450,000
Common stock, Issued	4,725,000	4,725,000

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RESTRUCTURING AND OTHER EXIT COSTS

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND OTHER EXIT COSTS

RESTRUCTURING AND OTHER EXIT COSTS

In late 2011, we developed a strategic restructuring program that was announced in January 2012. Costs of the two-year program include employee separation costs for severance related to the workforce reductions, contract exit and termination costs related to lease terminations, and other associated exit costs that include fees to third parties to assist with the program implementation and certain costs related to implementation of an ERP system that will replace select software applications.

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	6,177	$	—	$	6,177
Contract exit and termination costs	557		—		247
Other associated exit costs	3,300		25		3,325
Total	$	10,034	$	25	$	9,749

In March of 2013 we announced plans for a new digital print, kitting, and distribution center which is expected to be operational by the third quarter of 2013. To take full advantage of the enhanced capabilities and to support customer requirements, some operations from existing facilities will be transferred to the new center. While certain facilities will close at the end of their current lease term, the company will maintain local presence in the current manufacturing and distribution network to meet customer needs, but in a smaller footprint. Costs of the initiative include employee separation costs for severance and relocation expense as we move a portion of our operations to the new facility and other associated exit costs, primarily for equipment and inventory relocation.

Components of the restructuring and other exit costs consist of the following:

	Total Expected Costs		Total 2013 Expense		Cumulative To-Date Expense
Employee separation costs	$	875	$	601	$	601
Other associated exit costs	1,725		—		—
Total	$	2,600	$	601	$	601

Restructuring and other exit costs in 2012 also included costs from a completed restructuring plan that were required to be expensed as incurred. These amounts were not material.

Restructuring Liability

A summary of activity in the restructuring liability is as follows:

	Balance 2012		Accrued in 2013		Incurred in 2013			Balance 2013
Employee separation costs	$	1,350	$	601	$	(524	)	$	1,427
Contract exit and termination costs	21		—		(16		)	5
Total	$	1,371	$	601	$	(540	)	$	1,432

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Schedule of information about operations by reportable segment

Information about our operations by reportable segment for the 13-week periods ended March 31, 2013 and April 1, 2012 is as follows:

		Healthcare		Business Solutions		Total
Revenue from external customers	2013	$	49,495	$	92,125	$	141,620
	2012	57,050		100,599		157,649
Operating income	2013	$	2,136	$	2,934	$	5,070
	2012	2,568		672		3,240

Schedule of reconciling information between reportable segments and consolidated financial statements

Reconciling information between reportable segments and our consolidated financial statements is as follows:

	13 Weeks Ended
	March 31, 2013			April 1, 2012
Segment operating income	$	5,070		$	3,240
Restructuring and other exit costs	(626		)	(1,122		)
Net pension periodic benefit cost	(6,242		)	(6,184		)
Other unallocated	500			(53		)
Total other expense	(625		)	(688		)
Loss before income taxes	$	(1,923	)	$	(4,807	)

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PENSION PLANS - Net Periodic Benefit Cost Components, Pension Plans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Apr. 01, 2012
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Interest Cost	$ 4,552	$ 5,042
Expected Return on Plan Assets	(5,208)	(5,626)
Amortization of Net Actuarial Losses	6,898	5,785
Pension settlement	0	983
Total Net Periodic Benefit Cost	$ 6,242	$ 6,184

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company has evaluated for disclosure all subsequent events through the date the financial statements were issued and filed with the United States Securities and Exchange Commission.