EXHIBIT 10.1

Execution Version

LEASE

RREEF AMERICA REIT III-Z1 LLC,

Landlord,

and

SOAPSTONE NETWORKS INCORPORATED

Tenant

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TABLE OF CONTENTS

 

          Page

  1.

   USE AND RESTRICTIONS ON USE    1

  2.

   TERM    2

  3.

   RENT    3

  4.

   RENT ADJUSTMENTS    4

  5.

   SECURITY DEPOSIT    7

  6.

   ALTERATIONS    9

  7.

   REPAIR    10

  8.

   LIENS    10

  9.

   ASSIGNMENT AND SUBLETTING    11

10.

   INDEMNIFICATION    12

11.

   INSURANCE    13

12.

   WAIVER OF SUBROGATION    13

13.

   SERVICES AND UTILITIES    14

14.

   HOLDING OVER    14

15.

   SUBORDINATION    14

16.

   RULES AND REGULATIONS    15

17.

   REENTRY BY LANDLORD    15

18.

   DEFAULT    15

19.

   REMEDIES    16

20.

   TENANT’S BANKRUPTCY OR INSOLVENCY    19

21.

   QUIET ENJOYMENT    19

22.

   CASUALTY    19

23.

   EMINENT DOMAIN    20

24.

   SALE BY LANDLORD    21

25.

   ESTOPPEL CERTIFICATES    21

26.

   SURRENDER OF PREMISES    21

27.

   NOTICES    22

 

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TABLE OF CONTENTS

(continued)

 

          Page

28.

   TAXES PAYABLE BY TENANT    22

29.

   INTENTIONALLY DELETED    22

30.

   INTENTIONALLY DELETED    22

31.

   DEFINED TERMS AND HEADINGS    22

32.

   TENANT’S AUTHORITY    22

33.

   FINANCIAL STATEMENTS AND CREDIT REPORTS    23

34.

   COMMISSIONS    23

35.

   TIME AND APPLICABLE LAW    23

36.

   SUCCESSORS AND ASSIGNS    23

37.

   ENTIRE AGREEMENT    23

38.

   EXAMINATION NOT OPTION    23

39.

   RECORDATION    23

40.

   RENEWAL OPTION    23

41.

   CAFÉ.    24

42.

   ROOFTOP SATELLITE DISH    24

43.

   LIMITATION OF LANDLORD’S LIABILITY    26

EXHIBIT A—FLOOR PLAN DEPICTING THE PREMISES

   1

EXHIBIT A-1—SITE PLAN

   1

EXHIBIT B—INITIAL ALTERATIONS

   1

EXHIBIT C—COMMENCEMENT DATE MEMORANDUM

   1

EXHIBIT D—RULES AND REGULATIONS

   1

 

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NET OFFICE LEASE

REFERENCE PAGES

 

BUILDING:    One Federal Street, Billerica, MA LANDLORD:   

RREEF AMERICA REIT III-Z1 LLC,

a Delaware limited liability company

LANDLORD’S ADDRESS:   

c/o RREEF Management Company

4 Technology Drive, Westborough, MA 01851

WIRE INSTRUCTIONS AND/OR ADDRESS FOR RENT PAYMENT:    RREEF AMERICA REIT III-Z1
LLC 75 Remittance Drive, Suite 6836 Chicago, IL 60675-6836 LEASE REFERENCE DATE:
   April 3, 2008 TENANT:   

SOAPSTONE NETWORKS INCORPORATED

a Delaware corporation

TENANT’S NOTICE ADDRESS:   

(a) As of beginning of Term:

   One Federal Street, Billerica, MA

(b) Prior to beginning of Term (if different):

  

296 Concord Road, Suite 308

Billerica, MA 01821

PREMISES ADDRESS:    One Federal Street, Billerica, MA PREMISES RENTABLE AREA:
   A stipulated 45,808 sq. ft.(“Initial Space”) on the first and second floors
of the Building and an additional stipulated 11,256 sq. ft.(“Additional Space)
on the first floor (for outline of Premises see Exhibit A). SCHEDULED
COMMENCEMENT DATE:    September 1, 2008 TERM OF LEASE:    Approximately six (6)
years and two (2) months beginning on the Commencement Date and ending on the
Termination Date. The period from the Commencement Date to the last day of the
same month is the “Commencement Month.” TERMINATION DATE:    Subject to earlier
termination as provided in this Lease, the last day of the seventy fourth (74th)
full calendar month after (if the Commencement Month is not a full calendar
month), or from and including (if the Commencement Month is a full calendar
month), the Commencement Month, which shall be October 31, 2014 if the
Commencement Date (as defined in Section 2.1) occurs on the Scheduled
Commencement Date.

 

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ANNUAL RENT and MONTHLY INSTALLMENT OF RENT(Article 3):

 

Period    Rentable Square
Footage    Annual Rent
Per Square Foot    Annual Rent    Monthly Installment
of Rent from    through             9/1/2008    10/31/2008    45,808    $ 0.00
   $ 0.00    $ 0.00 11/1/2008    2/28/2009    45,808    $ 10.50    $ 480,984.00
   $ 40,082.00 3/1/2009    8/31/2009    57,064    $ 10.50    $ 599,172.00    $
49,931.00 9/1/2009    8/31/2010    57,064    $ 11.00    $ 627,704.00    $
52,308.67 9/1/2010    8/31/2011    57,064    $ 11.50    $ 656,236.00    $
54,686.33 9/1/2011    8/31/2012    57,064    $ 12.00    $ 684,768.00    $
57,064.00 9/1/2012    8/31/2013    57,064    $ 12.50    $ 713,300.00    $
59,441.67 9/1/2013    10/31/2014    57,064    $ 13.00    $ 741,832.00    $
61,819.33

Provided that Tenant is not then in default, the Monthly Installment of Rent for
the Initial Space (but not including the Rent Adjustments) will be abated for
the first two (2) full calendar months of the Term, but if Tenant is in default,
the Monthly Installment of Rent for each of the first two (2) full calendar
months of the Term shall be $40,082.00. Further, provided that Tenant is not
then in default, the Monthly Installment of Rent for the Additional Space will
be abated for the period of January 1, 2009 through February 28, 2009, but if
Tenant is in default, the Monthly Installment of Rent for the Additional Space
for January and February 2009 each shall be $9,849.00. The rent table set forth
above contemplates that the Commencement Date will occur on the Scheduled
Commencement Date. If the Commencement Date does not occur on the Scheduled
Commencement Date, the above-table shall be adjusted to reflect the actual
Commencement Date, with Tenant being entitled to two (2) full calendar months of
fully abated Rent for each of the Initial Space and the Additional Space as
described in the next sentence. If the month in which the Commencement Date
occurs (the “Commencement Month”) is a partial calendar month, prorated Rent for
the Commencement Month will be due and payable with the rent for the first full
calendar month after the rent abatement period for the Initial Space for which
rent is payable (by way of example only, if the Commencement Date were
September 15, 2008, then the Monthly Installment of Rent would be abated for the
two full calendar month period of October through November, 2008, and the
portion of the Monthly Installment of Rent for the partial month of September,
2008 would be due and payable with the January, 2009, the December, 2008 rent
having been prepaid per Section 3.1).

The actual dates are to be confirmed per Section 2.1.

 

TENANT’S PROPORTIONATE SHARE:    95.11 %, subject to Section 4.2. SECURITY
DEPOSIT:    $61,819.33 either in cash or in the form of an irrevocable letter of
credit and subject to other terms and provisions of Article 5.
ASSIGNMENT/SUBLETTING FEE    $ 1,000.00 PARKING    Tenant shall have the
non-exclusive use of the parking area serving the Building, which is available
at 3.5 cars per rentable square feet of Premises then leased, subject to the
terms and provisions contained in Section 1.3.. REAL ESTATE BROKER DUE
COMMISSION:    NAI Hunneman representing Tenant, and Cushman & Wakefield
representing Landlord

 

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TENANT’S SIC CODE:    7372 BUILDING BUSINESS HOURS:    N/A. AMORTIZATION RATE:
   9.00%

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The Reference Pages information is incorporated into and made a part of the
Lease. In the event of any conflict between any Reference Pages information and
the Lease, the Lease shall control. This Lease includes Exhibits A through D,
all of which are made a part of this Lease.

 

LANDLORD:     TENANT: RREEF AMERICA REIT III-Z1 LLC,
a Delaware limited liability company     SOAPSTONE NETWORKS INCORPORATED,
a Delaware corporation By:   RREEF Management Company, a Delaware
corporation, Authorized Agent       By:  

 

    By:  

 

Name:   David F. Crane     Name:  

 

Title:   Vice President/Regional Director     Title:  

 

Dated:                   , 2008     Dated:                   , 2008

 

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LEASE

By this Lease Landlord leases to Tenant and Tenant leases from Landlord, subject
to and upon the terms and provisions contained herein, the Premises in the
Building as set forth and described on the Reference Pages. The Premises are
depicted on the floor plan attached hereto as Exhibit A, and the Building is
depicted on the site plan attached hereto as Exhibit A-1. The Reference Pages,
including all terms defined thereon, are incorporated as part of this Lease.

1. USE AND RESTRICTIONS ON USE.

1.1 The Premises are to be used solely for the following purposes and no others:
general office, computer and electronics laboratory, research and development,
shipping and receiving and other related uses. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the operation of the Café (as defined in Section 41), or allow
the Premises to be used for any unlawful purpose, or commit any waste. Tenant
shall not do, permit or suffer in, on, or about the Premises the sale of any
alcoholic liquor without the written consent of Landlord first obtained. Tenant
shall comply with all governmental laws, ordinances and regulations applicable
to the use of the Premises and its occupancy and shall promptly comply with all
governmental orders and directions for the correction, prevention and abatement
of any violations in the Building or appurtenant land, caused or permitted by,
or resulting from the specific use by, Tenant, or in or upon, or in connection
with, the Premises, all at Tenant’s sole expense. Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything into the
Premises which will in any way increase the rate of (unless Tenant pays such
increased cost), invalidate or prevent the procuring of any commercially
reasonable insurance protecting against loss or damage to the Building or any of
its contents by fire or other casualty or against liability for damage to
property or injury to persons in or about the Building or any part thereof.

1.2 Tenant shall not, and shall not direct, suffer or permit any of its agents,
contractors, employees, licensees or invitees (collectively, the “Tenant
Entities”) to at any time handle, use, manufacture, store or dispose of in or
about the Premises or the Building any (collectively “Hazardous Materials”)
flammables, explosives, radioactive materials, hazardous wastes or materials,
toxic wastes or materials, or other similar substances, petroleum products or
derivatives or any substance subject to regulation by or under any federal,
state and local laws and ordinances relating to the protection of the
environment or the keeping, use or disposition of environmentally hazardous
materials, substances, or wastes, presently in effect or hereafter adopted, all
amendments to any of them, and all rules and regulations issued pursuant to any
of such laws or ordinances (collectively “Environmental Laws”), nor shall Tenant
suffer or permit any Hazardous Materials to be used in any manner not fully in
compliance with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with any
Hazardous Materials. Notwithstanding the foregoing, Tenant may handle, store,
use or dispose of products containing small quantities of Hazardous Materials
(such as aerosol cans containing insecticides, toner for copiers, paints, paint
remover and the like to the extent customary and necessary for the use of the
Premises for the purposes permitted under Section 1.1 above); provided that
Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building and appurtenant land or the environment.
Tenant shall protect, defend, indemnify and hold each and all of the Landlord
Entities (as defined in Article 30) harmless from and against any and all loss,
claims, liability or costs (including court costs and attorney’s fees) incurred
by reason of any actual or asserted failure of Tenant to fully comply with all
applicable Environmental Laws, or the presence, handling, use or disposition in
or from the Premises of any Hazardous Materials by Tenant or any Tenant Entity
(even though permissible under all applicable Environmental Laws or the
provisions of this Lease), or by reason of any actual or asserted failure of
Tenant to keep, observe, or perform any provision of this Section 1.2.

Landlord agrees to indemnify, defend and hold Tenant and its officers, partners,
directors, shareholders, employees and agents harmless from any claims,
judgments, damages, fines, penalties, costs (including attorney, consultant and
expert fees), liabilities (including sums paid in settlement of claims) or
losses which arise during or after the in connection with or arising directly or
indirectly out of Hazardous Materials (i) existing as of the Commencement Date
at the Lot, the Building, the Premises or in the soil, groundwater or soil vapor
on or under the Building or (ii) brought or introduced on or into the Lot or the
Building by Landlord or anyone acting by, through or under Landlord, unless such
Hazardous Materials are present as a result of the acts of Tenant, its officers,
employees or agents.

 

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1.3 Tenant and the Tenant Entities will be entitled to the non-exclusive use of
the common areas of the Building and the lot of land upon which the Building is
located (the “Lot”), as shown on Exhibit A-1, as they exist from time to time
during the Term, including, without limitation, the loading docks, common
hallway leading to the Café (hereinafter defined), bathrooms for the Cafe and
parking facilities, subject to Landlord’s reasonable and uniformly enforced
rules and regulations regarding such use (provided Tenant is provided written
notice thereof). However, in no event will Tenant or the Tenant Entities park
more vehicles in the parking facilities than Tenant’s Proportionate Share of the
total parking spaces located on the Lot. The foregoing shall not be deemed to
provide Tenant with an exclusive right to any parking spaces or any guaranty of
the availability of any particular parking spaces or any specific number of
parking spaces. However, Landlord shall use commercially reasonable efforts to
take such commercially reasonable measures as Tenant may reasonably request in
writing (such as issuing written notices to other tenants and to the owners or
occupancy of adjacent buildings) in order to ensure that tenants in other
buildings owned by Landlord or others in the vicinity of the Building do not
utilize the parking spaces on the Lot, other than in connection with the café.
If reasonably necessary, Landlord shall, at its expense, install signage
indicating that except for certain mutually agreeable parking spaces designated
for use by patrons of the Café (not to exceed an amount such that Tenant will
have its Proportionate Share of the parking on the Lot), all parking spaces on
the Lot are reserved for the exclusive use of Tenant. Tenant shall have
exclusive use of all bathrooms in the Building (except for the bathrooms shown
on Exhibit A as designated for the use of Café patrons) and exclusive use of the
main lobby of the Building. For purposes of this Section 1.3, the “term
:”reasonable efforts” shall not require Landlord to make any out-of-pocket,
third party expenditures or to initiate litigation against any third party.

2. TERM.

2.1 The Term of this Lease shall begin on the date (“Commencement Date”) which
shall be the later of the Scheduled Commencement Date as shown on the Reference
Pages and the date that Landlord shall tender possession of the Premises to
Tenant in compliance with the terms of this Section 2, and shall terminate on
the date as shown on the Reference Pages (“Termination Date”), unless sooner
terminated by the provisions of this Lease. Landlord shall tender possession of
the Premises (and it shall be a condition of the occurrence of the Commencement
Date) free and clear of all other tenants and occupants, in professionally
cleaned condition, and with all the work to be performed by Landlord pursuant to
the work letter (the “Work Letter”) attached as Exhibit B to this Lease
(collectively, “Landlord’s Work”) substantially completed, except for Landlord’s
Café Work purposes hereof, Landlord’s Work (other than the Landlord’s Café Work)
shall not be deemed substantially completed until such time as Tenant is
entitled to legally occupy the entire Premises for the uses permitted under
Section 1.1 above and any remaining items of incomplete Landlord’s Work are such
that there shall be no material interference with Tenant’s use of or access to
the Premises, provided, however, that if Tenant is not legally able to occupy
the Premises for the uses permitted under Section 1.1 on account of any work to
be performed by Tenant to prepare for its occupancy or on account of Tenant’s
failure to secure any license, permit or other approval required for a use other
than general office use, then the requirement that Tenant be “entitled to
legally occupy the entire Premises” for such uses shall not apply. Tenant shall
deliver a punch list of items of Landlord’s Work not completed within thirty
(30) days after Landlord tenders possession of the Premises and Landlord agrees
to proceed with due diligence to perform its obligations regarding such items
within thirty (30) days thereafter, but where an incomplete item of Landlord’s
Work cannot reasonably be completed within such time for seasonal or other
reasons, Landlord shall have such additional time as may be reasonably required
under the circumstances so long as it is proceeding diligently with such work to
completion and keeps Tenant reasonably informed as to the status of such items.
Following the occurrence of the Commencement Date, Tenant shall, at Landlord’s
request, execute and deliver a memorandum agreement provided by Landlord in the
form of Exhibit C attached hereto, setting forth the actual Commencement Date,
Termination Date and, if necessary, a revised rent schedule. Should Tenant fail
to do so within thirty (30) days after Landlord’s request, or respond in writing
to Landlord’s request setting forth any objection Tenant may have to Landlord’s
proposed Commencement Date, the information set forth in such memorandum
provided by Landlord shall be conclusively presumed to be agreed and correct.

2.2 Tenant agrees that in the event of the inability of Landlord to deliver
possession of the Premises on the Scheduled Commencement Date for any reason,
Landlord shall not be liable for any damage resulting from such inability, but
(a) Tenant shall not be liable for any rent until the date which is two (2) full
calendar months after Landlord, following at least two (2) business days prior
written notice to Tenant, delivers possession of the Premises to Tenant in the
condition required hereunder, and (b) if Landlord fails to deliver possession of
the Premises as required hereunder on or before the date which is fifteen
(15) business days after the Scheduled Commencement Date for any reason other
than a Tenant Delay (hereinafter defined) or Landlord’s inability to complete
the Landlord’s Lobby Work, then Tenant shall be entitled to an

 

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abatement of the Annual Fixed Rent that would otherwise be due under this Lease
in the amount of one (1) day’s Annual Fixed Rent for the Initial Premises for
each day of delay (after the initial 15 business days) through the date upon
which the Premises are so delivered. No such failure to give possession on the
Scheduled Commencement Date shall affect the other obligations of Tenant under
this Lease, except that if Landlord is unable to deliver possession of the
Premises within one hundred twenty (120) days after the Scheduled Commencement
Date (other than as a result of strikes, shortages of materials, holdover
tenancies or similar matters beyond the reasonable control of Landlord and
Tenant is notified by Landlord in writing as to such delay within ten (10) days
following the date Landlord becomes aware of such delay), Tenant shall have the
option to terminate this Lease unless said delay is as a result of: (i) Tenant’s
failure to respond with either approval of or reasonable comments to plans or
other documents described in the Work Letter within the applicable time therefor
as set forth in the Work Letter; (ii) Tenant’s request for materials, finishes
or installations which require long lead times (provided that Landlord informs
Tenant thereof at the time Tenant requests such materials, finishes or
installations) ; (iii) Tenant’s change in any plans or specifications once
approved in accordance with the terms of the Work Letter; or, (iv) performance
or completion by a party employed by Tenant (each of the foregoing, to the
extent the same causes an actual delay in the performance of Landlord’s Work, is
hereinafter referred to as a “Tenant Delay”). If any delay in the performance of
Landlord’s Work is the result of a Tenant Delay, the Commencement Date and the
payment of Rent under this Lease shall be accelerated by the number of days of
such Tenant Delay. Landlord shall notify Tenant of any Tenant Delay as promptly
as practicable once Landlord becomes aware that the Tenant Delay exists.

2.3 Tenant shall be permitted prior to the Commencement Date early access to the
Premises for the sole purpose of installing furniture, fixtures and equipment,
telecommunications wiring and otherwise preparing the Premises for its
occupancy, provided that Tenant does not materially interfere with Landlord’s
Work. Landlord shall cause its contractors performing Landlord’s Work to
reasonably cooperate with Tenant so as to coordinate Tenant’s preparations for
occupancy (i.e. permitting Tenant’s wiring to be installed when walls are open,
etc.). Such entry, use or occupancy shall be subject to all the provisions of
this Lease other than the payment of rent, including, without limitation,
Tenant’s compliance with the insurance requirements of Article 11. Said early
possession shall not advance the Termination Date.

3. RENT.

3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to time
by paying the Monthly Installment of Rent then in effect on or before the first
day of each full calendar month during the Term, except that the first full
month’s rent shall be paid upon the execution of this Lease. The Monthly
Installment of Rent in effect at any time shall be one-twelfth (1/12) of the
Annual Rent in effect at such time. Rent for any period during the Term which is
less than a full month shall be a prorated portion of the Monthly Installment of
Rent based upon the number of days in such month. Said rent shall be paid to
Landlord, without deduction or offset and without notice or demand (all except
as expressly provided in this Lease), at the Rent Payment Address, as set forth
on the Reference Pages, or to such other person or at such other place as
Landlord may from time to time designate in writing with at least ten (10) days
prior written notice. If an Event of Default occurs, Landlord may require by
written notice to Tenant that all subsequent rent payments be made by an
automatic payment from Tenant’s bank account to Landlord’s account, without cost
to Landlord. Tenant must implement such automatic payment system prior to the
next scheduled rent payment or within ten business (10) days after Landlord’s
notice, whichever is later. Unless specified in this Lease to the contrary, all
amounts and sums payable by Tenant to Landlord pursuant to this Lease shall be
deemed additional rent.

3.2 Tenant recognizes that late payment of any rent or other sum due under this
Lease will result in administrative expense to Landlord, the extent of which
additional expense is extremely difficult and economically impractical to
ascertain. Tenant therefore agrees that if rent or any other sum is not paid
when due and payable pursuant to this Lease, a late charge shall be imposed in
an amount equal to the greater of: (a) Fifty Dollars ($50.00), or (b) five
percent (5%) of the unpaid rent or other payment. However, no late charge shall
be payable on the first instance of late payment during any Lease Year
(hereinafter defined), provided that Tenant makes such payment within five
(5) business days following written notice from Landlord that the same is
overdue. The amount of the late charge to be paid by Tenant shall be reassessed
and added to Tenant’s obligation for each successive month until paid. The
provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay
rent or other payments on or before the date on which they are due, nor do the
terms of this Section 3.2 in any way affect Landlord’s remedies pursuant to
Article 19 of this Lease in the event said rent or other payment is unpaid after
date due.

 

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4. RENT ADJUSTMENTS.

4.1 For the purpose of this Article 4, the following terms are defined as
follows:

4.1.1 Lease Year: Each fiscal year (as determined by Landlord from time to time)
falling partly or wholly within the Term.

4.1.2 Expenses: Subject to the exclusions set forth in this Section 4.1.2, all
costs incurred by Landlord in connection with the operation, maintenance,
repair, replacement and management of the Building and the Lot, as determined in
accordance with generally accepted accounting principles, consistently applied
(“GAAP”“), including the following costs by way of illustration, but not
limitation: water and sewer charges; insurance charges of or relating to all
insurance policies and endorsements deemed by Landlord to be reasonably
necessary or desirable and relating in any manner to the protection,
preservation, or operation of the Building or any part thereof; utility costs,
including, but not limited to, the cost of heat, light, power, steam, gas; waste
disposal; the cost of janitorial services, if applicable; the cost of security
and alarm services (including any central station signaling system); costs of
cleaning, repairing, replacing and maintaining the common areas, including
parking and landscaping, window cleaning costs; labor costs; costs and expenses
of managing the Building including management fees; air conditioning maintenance
costs; elevator maintenance fees and supplies; material costs; equipment costs
including the cost of maintenance, repair and service agreements and rental and
leasing costs; purchase costs of equipment; current rental and leasing costs of
items which would be capital items if purchased; tool costs; licenses, permits
and inspection fees; wages and salaries; employee benefits and payroll taxes;
accounting and legal fees; any sales, use or service taxes incurred in
connection therewith. In addition, Landlord shall be entitled to include in
Expenses Tenant’s Proportionate Share of an allocable portion of the cost of
capital expense items (as determined under GAAP) which are either (i) incurred
to repair or replace the Building’s fire sprinklers, fire suppression system and
other life safety equipment, (ii) reasonably calculated to reduce Expenses; or
(ii) required under any governmental laws, regulations or ordinances which were
not applicable to the Building at the time it was constructed; but the costs
described in this sentence shall be amortized over the reasonable life of such
expenditures in accordance with such reasonable life and amortization schedules
as shall be determined by Landlord in accordance with generally accepted
accounting principles, with interest on the unamortized amount at one percent
(1%) in excess of the Wall Street Journal prime lending rate announced from time
to time. Landlord reserves the right to enter into joint agreements with other
ownership in the Fields Industrial Park (the “Fields”) to provide services, such
as common snow plowing, on property outside of the Building and within the
Fields, and the Building’s proportionate share of the cost of such services
shall be included in Expenses. The Building’s proportionate share of such
expenses shall be based on (i) the rentable square footage of all buildings
which are part of the Fields and owned by Landlord or any of its affiliates,
currently consisting of the Building and the properties presently known as Two
Federal Street and Five Federal Street and, and (ii) an equitable share (based
upon rentable floor area and/or such other commercially reasonable factors as
may be set forth in Landlord’s agreements with other ownership in the Fields)
allocated to buildings within the Fields owned by parties other than Landlord or
its affiliates and participating in such joint agreements, and is hereinafter
referred to as “Tenant’s Fields Share”) shall be included in the Expenses. It is
expressly agreed that Tenant’s Fields Share shall never be greater than 27.54%,
which is the percentage that the Building’s rentable floor area bears to the
total rentable floor area of the Building and the buildings at Two Federal
Street and Five Federal Street. In the event Tenant desires to provide any
services within the Building or on the Lot through provider(s) and under terms
that Landlord has received reasonable prior notice and approves (which approval
shall not be unreasonably withheld, conditioned or delayed), Landlord may grant
such approval, and thereafter the cost of such services shall be excluded from
Expenses, provided that Tenant shall be responsible for any and all termination
fees and/or penalties which Landlord incurs for terminating any and all existing
contracts for such services (but Landlord shall endeavor to advise Tenant when
Tenant proposes to provide services of such fees and/or penalties and endeavor
to coordinate the cessation of its contracts with Tenant’s provision of its own
services to minimize the same). Expenses shall not include depreciation or
amortization of the Building or equipment in the Building except as provided
herein, loan principal payments, leasing commissions, interest expenses on loans
or advertising costs and the following items:

 

  (i) the cost of capital expenses (except as set forth above and amortized as
required);

 

  (ii) principal payments of mortgage and other non-operating debts of Landlord,
together with other costs paid in connection with any such mortgage or operating
debts, such as late fees, penalties and reserves;

 

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  (iii) the cost of repairs, replacements or improvements or other work to the
extent Landlord is reimbursed by insurance, condemnation proceeds, warranty or
otherwise so that Landlord shall never recover for any item more than once;

 

  (iv) costs in connection with leasing, including, without limitation,
brokerage commissions, promotional expenses, preparation of leases;

 

  (v) lease concessions, rental abatements, expenses of relocating tenant(s) and
construction allowances granted to specific tenants, and the costs of painting,
decorating, renovating or otherwise improving rentable space to prepare the same
for a tenant’s occupancy or vacant rentable space, including all permit,
license, testing and inspection costs and the cost of supervising the leasehold
improvement work of other tenants;

 

  (vi) costs incurred in connection with the sale, financing or refinancing of
the Building or other buildings in the Fields;

 

  (vii) fines, interest and penalties incurred due to the late payment of Taxes
or Expenses, unless caused by Tenant’s late payment to Landlord on account
thereof;

 

  (viii) organizational expenses associated with the creation, maintenance and
operation of the entity which constitutes Landlord or any of its affiliates;

 

  (ix) any penalties or damages that Landlord pays to Tenant under this Lease or
to other tenants in the Building or the Fields under their respective leases;

 

  (x) wages, salaries or fringe benefits paid to any employees above the grade
of Senior Property Manager;

 

  (xi) ground lease rentals;

 

  (xii) attorney’s fees and other expenses incurred in connection with
negotiations or disputes with Tenant;

 

  (xiii) the cost or expense of any services or benefits provided generally to
other tenants in the Fields and not provided or available to Tenant;

 

  (xiv) any expenses for which Landlord has received actual reimbursement (other
than through Expenses);

 

  (xv) sums paid to subsidiaries or other affiliates of Landlord, but only to
the extent that the costs of such services exceed the competitive cost for such
services rendered by persons or entities of similar skill, competence and
experience;

 

  (xvi) costs incurred by Landlord in connection with the correction of defects
in design and original construction of the Building;

 

  (xvii) cost of environmental monitoring, compliance, testing and remediation;

 

  (xviii) costs incurred in connection with the repair, maintenance or
replacement of any structural elements of the Building (i.e., roof, foundation,
structural columns, etc.);

 

  (xviv) all costs of purchasing or leasing sculptures, paintings or other works
or objects of art;

 

  (xx) fines or penalties incurred as a result of violation by Landlord of any
applicable laws, unless caused by Tenant;

 

  (xxi) any legal or accounting fees incurred in connection with Landlord’s
obtaining of any debt or equity financing or in connection with any reports,
returns or other financial or tax reporting or accounting performed expressly
for the benefit of investors, partners or affiliates of Landlord (as opposed to
those performed for the benefit of Landlord);

 

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  (xxii) costs incurred in performing work or alterations exclusively to or for
the benefit of individual tenants;

 

  (xxiii) INTENTIONALLY OMITTED;

 

  (xxiv) INTENTIONALLY OMITTED;

 

  (xxv) Taxes (hereinafter defined);

 

  (xxxvi) any expenses not billed to Tenant within three (3) years of the date
the same were incurred.

 

  (xxvii) Costs attributable to services and materials provided to property
other than the Building and the Lot, except for Tenant’s Fields Share of
services provided to all buildings which are part of the Fields; and

 

  (xxviii) Costs attributable to the maintenance, operation or otherwise in
connection with the Café, except there shall be included in Expenses Tenant’s
Fields Share of the non-capital costs actually incurred by Landlord to repair
and maintain the Café and its associated hallway and bathrooms and to subsidize
the operation of the Cafe (including, without limitation, a reasonable amount of
overhead and profit or loss for the Café operator), all to the extent not offset
by profits from the Café. However, costs incurred in connection with the initial
design, construction and fixturing of the Café, or separately metering its
utilities from the remainder of the Building shall not be included in Expenses.

4.1.3 Taxes: Real estate taxes and any other taxes, charges and assessments by
governmental authority which are levied with respect to the Building or the Lot,
or with respect to any improvements, fixtures and equipment or other property of
Landlord, real or personal, located in the Building and used in connection with
the operation of the Building and said land, and all commercially reasonable
fees, expenses and costs incurred by Landlord in investigating, protesting,
contesting or in any way seeking to reduce or avoid increase in any assessments,
levies or the tax rate pertaining to any Taxes to be paid by Landlord in any
Lease Year. Taxes shall not include any corporate franchise, or estate,
inheritance or net income tax, or tax imposed upon any transfer by Landlord of
its interest in this Lease or the Building or any taxes to be paid by Tenant
pursuant to Article 28. Landlord agrees to consider in good faith any request by
Tenant for Landlord to seek an abatement of Taxes attributable to the Building.

4.2 Beginning as of the Commencement Date, Tenant shall pay as additional rent
for each Lease Year Tenant’s Proportionate Share of Expenses and Taxes incurred
for such Lease Year. Notwithstanding the foregoing, for the period beginning on
the Commencement Date and ending on the earlier to occur of: (a) December 31,
2008, or (b) the date upon which Tenant commences using any material portion of
the Additional Space for its business purposes, Tenant’s Proportionate Share
with respect to Expenses (other than utility costs) and Taxes shall be 76.35 %.
Tenant’s Proportionate Share with respect to utility costs included in Expenses
is 100% from the Commencement Date forward.

4.3 The annual determination of Expenses shall be made by Landlord, and shall be
binding upon Landlord and Tenant, subject to the provisions of this Section 4.3.
During the Term, Tenant may review, at Tenant’s sole cost and expense, the books
and records supporting such determination in an office of Landlord, or
Landlord’s agent, during normal business hours, upon giving Landlord five
(5) days advance written notice within one hundred eighty (180) days after
receipt of such determination, but in no event more often than once in any one
(1) year period, subject to execution of a confidentiality agreement reasonably
acceptable to Landlord, and provided that if Tenant utilizes an independent
accountant to perform such review it shall be one which is not compensated on a
contingency basis and is also subject to such confidentiality agreement. If
Tenant fails to object to Landlord’s determination of Expenses one hundred
eighty (180) days after receipt, or if any such objection fails to state the
reason for the objection, Tenant shall be deemed to have approved such
determination and shall have no further right to object to or contest such
determination

 

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4.4 Prior to the actual determination thereof for a Lease Year, Landlord may
from time to time (but not more than on two (2) occasions during any Lease Year)
estimate Tenant’s liability for Expenses and/or Taxes under Section 4.2, Article
6 and Article 28 for the Lease Year or portion thereof. Landlord will give
Tenant written notification of the amount of such estimate and Tenant agrees
that it will pay, by increase of its Monthly Installments of Rent due in such
Lease Year, additional rent in the amount of such estimate. Any such increased
rate of Monthly Installments of Rent pursuant to this Section 4.4 shall remain
in effect until further written notification to Tenant pursuant hereto.

4.5 When the above mentioned actual determination of Tenant’s liability for
Expenses and/or Taxes is made for any Lease Year and when Tenant is so notified
in writing, then:

4.5.1 If the total additional rent Tenant actually paid pursuant to Section 4.3
on account of Expenses and/or Taxes for the Lease Year is less than Tenant’s
liability for Expenses and/or Taxes, then Tenant shall pay such deficiency to
Landlord as additional rent in one lump sum within thirty (30) days of receipt
of Landlord’s bill therefor; and

4.5.2 If the total additional rent Tenant actually paid pursuant to Section 4.3
on account of Expenses and/or Taxes for the Lease Year is more than Tenant’s
liability for Expenses and/or Taxes, then Landlord shall credit the difference
against the then next due payments to be made by Tenant under this Article 4,
or, if the Lease has terminated, refund the difference in cash.

4.6 If the Commencement Date is other than January 1 or if the Termination Date
is other than December 31, Tenant’s liability for Expenses and Taxes for the
Lease Year in which said Date occurs shall be prorated based upon a three
hundred sixty-five (365) day year.

5. SECURITY DEPOSIT.

5.1 Tenant shall deposit the Security Deposit with Landlord upon the execution
of this Lease. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants and conditions of this Lease
to be kept and performed by Tenant and not as an advance rental deposit or as a
measure of Landlord’s damage in case of Tenant’s default. If Tenant defaults
with respect to any provision of this Lease beyond any applicable notice or cure
period, Landlord may use any part of the Security Deposit for the payment of any
rent or any other sum in default, or for the payment of any amount which
Landlord may spend or become obligated to spend by reason of Tenant’s default,
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason of Tenant’s default. If any portion is so used, Tenant shall within
five (5) business days after written demand therefor, deposit with Landlord an
amount sufficient to restore the Security Deposit to its original amount and
Tenant’s failure to do so shall be a material breach of this Lease. Except to
such extent, if any, as shall be required by law, Landlord shall not be required
to keep the Security Deposit separate from its general funds, and Tenant shall
not be entitled to interest on such deposit. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant at such time
after termination of this Lease when Landlord shall have determined that all of
Tenant’s obligations under this Lease have been fulfilled, but in no event
beyond the date which is 30 days from and after the expiration or earlier
termination of this Lease. In the event of a transfer of Landlord’s interest in
the Premises, Landlord shall transfer the Security Deposit to its transferee and
thereupon the Landlord shall, without any further agreement between the parties,
be released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of said security
deposit to a new landlord.

5.2 The required Security Deposit shall be either a cash security deposit or in
the form of an Irrevocable Standby Letter of Credit in favor of Landlord (the
“letter of credit”) in the amount set forth on the Reference Pages. Under any
circumstance under which Landlord is entitled to the use of all or a part of the
Security Deposit, then, Landlord, in addition to all other rights and remedies
provided under the Lease, shall have the right to draw down the full balance of
the letter of credit and retain the proceeds. The following terms and conditions
shall govern the letter of credit:

5.2.1 Upon expiration of the Term, the letter of credit shall be returned to
Tenant when Tenant is entitled to return of its Security Deposit.

 

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5.2.2 The letter of credit shall be in favor of Landlord, shall be issued by a
commercial bank reasonably acceptable to Landlord having a Standard & Poors
rating of “A” or better, shall comply with all of the terms and conditions of
this Section 5.2 and shall otherwise be in form reasonably acceptable to
Landlord. The initial letter of credit shall have an expiration date not earlier
than fifteen (15) months after the Commencement Date. A draft of the form of
letter of credit must be submitted to Landlord for its approval prior to
issuance.

5.2.3 The letter of credit or any replacement letter of credit shall be
irrevocable for the term thereof and shall automatically renew on a year to year
basis until a period ending not earlier than three (3) months after the
Termination Date (“End Date”) without any action whatsoever on the part of
Landlord; provided that the issuing bank shall have the right not to renew the
letter of credit by giving written notice to Landlord not less than sixty
(60) days prior to the expiration of the then current term of the letter of
credit that it does not intend to renew the letter of credit. Tenant understands
that the election by the issuing bank not to renew the letter of credit shall
not, in any event, diminish the obligation of Tenant to maintain such an
irrevocable letter of credit in favor of Landlord through such date.

5.2.4 Landlord, or its then managing agent, shall have the right from time to
time to make one or more draws on the letter of credit at any time that an Event
of Default has occurred. The letter of credit must state that it can be
presented for payment at the office of the issuer or an approved correspondent
in the Boston, Massachusetts area. Funds may be drawn down on the letter of
credit upon presentation to the issuing or corresponding bank of Landlord’s (or
Landlord’s then managing agent’s) certificate stating as follows:

“Beneficiary is entitled to draw on this credit pursuant to that certain Lease
dated for reference April 3, 2008 between RREEF AMERICA REIT III-Z1 LLC, a
Delaware limited liability company, as Landlord and SOAPSTONE NETWORKS
INCORPORATED, a Delaware corporation as Tenant, as amended from time to time.”

It is understood that if Landlord or its managing agent be a corporation,
partnership or other entity, then such statement shall be signed by an officer
(if a corporation), a general partner (if a partnership), or any authorized
party (if another entity).

5.2.5 Tenant acknowledges and agrees (and the letter of credit shall so state)
that the letter of credit shall be honored by the issuing bank without inquiry
as to the truth of the statements set forth in such draw request and regardless
of whether the Tenant disputes the content of such statement.

5.2.6 In the event of a transfer of Landlord’s interest in the Premises,
Landlord shall have the right to transfer the letter of credit to the transferee
and thereupon the Landlord shall, without any further agreement between the
parties, be released by Tenant from all liability therefor, and it is agreed
that the provisions hereof shall apply to every transfer or assignment of said
letter of credit to a new landlord; and Tenant shall pay all fees to the issuer
necessary to effect and evidence such transfer.

5.2.7 Without limiting the generality of the foregoing, if the letter of credit
expires earlier than the End Date, or the issuing bank notifies Landlord that it
will not renew the letter of credit, Landlord shall accept a renewal thereof or
substitute letter of credit (such renewal or substitute letter of credit to be
in effect not later than thirty (30) days prior to the expiration of the
expiring letter of credit), irrevocable and automatically renewable as above
provided to the End Date upon the same terms as the expiring letter of credit or
upon such other terms as may be acceptable to Landlord. However, if (i) the
letter of credit is not timely renewed, or (ii) a substitute letter of credit,
complying with all of the terms and conditions of this Section is not timely
received, then Landlord may present the expiring letter of credit to the issuing
bank, and the entire sum so obtained shall be paid to Landlord, to be held by
Landlord until Tenant would otherwise be entitled to the return of the letter of
credit, and to be retained by Landlord if a default occurs.

5.2.8 If, as disclosed by any of Tenant’s quarterly earnings reports, Tenant’s
cash-on-hand as of the expiration of any fiscal quarter is less than Fifty
Million Dollars ($50,000,000.00), Tenant shall (i) be required to so notify
Landlord in writing and failure to do so shall be a material default under this
Lease; and (ii) within ten (10) business days increase the Security Deposit by
increasing the amount of the letter of credit by (a) $123,638.66; plus (b) the
then unamortized balance of Landlord’s actual contribution towards the tenant
improvements pursuant to Exhibit B (not to exceed $25.00 per square foot of
Premises), leasing commissions incurred in connection with this Lease and free
rent provided under the Lease (collectively, “Lease Costs”), assuming
straight-line amortization in full of the Lease Costs without interest over the
initial Term of the Lease.

 

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6. ALTERATIONS.

6.1 Except for those, if any, specifically provided for in the Work Letter ,
Tenant shall not make or suffer to be made any alterations, additions, or
improvements (collectively, “Alterations”), including, but not limited to, the
attachment of any fixtures or equipment in, on, or to the Premises or any part
thereof or the making of any improvements as required by Article 7, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed. When applying for such consent, Tenant shall,
if requested by Landlord, furnish complete plans and specifications for such
alterations, additions and improvements. Provided that Tenant gives reasonable
prior notice to Landlord, Landlord’s consent shall not be required with respect
to the making of improvements or alterations which (i) are not structural in
nature, (ii) are not visible from the exterior of the Building, (iii) do not
affect or require material modification of the Building’s electrical,
mechanical, plumbing, HVAC or other systems, and (iv) in aggregate do not cost
more than $50,000 per Lease Year.

6.2 In the event Landlord consents to the making of any such alteration,
addition or improvement by Tenant, the same shall be made by using either
Landlord’s contractor or a contractor reasonably approved by Landlord (such
approval not to be unreasonably withheld or conditioned), in either event at
Tenant’s sole cost and expense. If Tenant shall employ any contractor other than
Landlord’s contractor and such other contractor or any subcontractor of such
other contractor shall employ any non-union labor or supplier, Tenant shall be
responsible for and hold Landlord harmless from any and all delays, damages and
extra costs suffered by Landlord as a result of any dispute with any labor
unions concerning the wage, hours, terms or conditions of the employment of any
such labor. In any event, if Landlord provides construction management services,
Landlord may charge Tenant a construction management fee not to exceed five
percent (5%) of the cost of such work to cover its overhead as it relates to
such proposed work, plus third-party costs actually incurred by Landlord in
connection with the proposed work and the design thereof, with all such amounts
being due thirty (30) days after Landlord’s demand.

6.3 All alterations, additions or improvements proposed by Tenant shall be
constructed in accordance with all government laws, ordinances, rules and
regulations, using Building standard materials (or equal or better quality)
where applicable, and Tenant shall, prior to construction, provide the
additional insurance required under Article 11 in such case, and also all such
assurances to Landlord as Landlord shall reasonably require to assure payment of
the costs thereof, including but not limited to, notices of non-responsibility,
waivers of lien (upon completion of work), surety company performance bonds and
funded construction escrows (both only for alterations expected to cost in
excess of $100,000.00) and to protect Landlord and the Building and appurtenant
land against any loss from any mechanic’s, materialmen’s or other liens. Tenant
shall pay in addition to any sums due pursuant to Article 4, any increase in
real estate taxes attributable to any such alteration, addition or improvement
for so long, during the Term, as such increase is ascertainable; at Landlord’s
election said sums shall be paid in the same way as sums due under Article 4.

6.4 Landlord’s consent to any alterations, additions and improvements may be
conditioned upon Landlord’s retaining the right to require the removal of same
or any portion thereof upon the expiration or sooner termination of the Term.
Tenant shall have the right to request of and receive from Landlord, at the time
of Landlord’s consent of any Alterations and also with respect to the initial
alterations done by Tenant pursuant to Exhibit B and any other Alterations not
requiring Landlord’s consent, a list (or designation on plans) of which items
Landlord will require to be removed upon the expiration or earlier termination
of the Term. If Tenant requests such list prior to making any Alterations and
Landlord does not advise Tenant in writing either at the time of its consent
thereto, or within ten (10) business days after Tenant’s request if Landlord’s
consent is not required, that such Alterations (or any specific components
thereof) will be required to be removed from the Premises upon the expiration or
sooner termination of the Term, then Landlord shall be deemed to have
irrevocably agreed that such Alterations may remain at the Premises upon the
expiration or sooner termination of the Term. Without limiting any of the
foregoing, with respect to any Alterations made by Tenant which do not require
Landlord’s consent, if Tenant fails to request of Landlord whether such
Alterations will be required to be removed from the Premises at the expiration
or sooner termination of the Term, then Landlord shall have the option upon the
expiration of the Term whether such Alterations (or any specific components
thereof) will be required to remain at the Premises or be removed by Tenant in
accordance with the terms and provisions contained in Section 26.2 below.
Notwithstanding any of the foregoing, it is

 

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expressly agreed that all components of the Landlord’s Premises Work, the
Landlord’s HVAC Work, the Landlord’s Lobby Work and the Landlord’s Café Work
shall all remain at the Premises upon the expiration or sooner termination of
this Lease, and Tenant shall not be required to remove the same.

7. REPAIR.

7.1 Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises, except as specified in Exhibit B and except that
Landlord shall, in a good and workmanlike manner and in compliance with all
applicable laws, statutes, rules. codes and regulations, repair, maintain and
replace as reasonably necessary (a) the structural portions of the Building
(roof, foundation, windows, structural columns, etc.), (b), the basic Building
systems (i.e. basic plumbing, fire suppression and other life safety, air
conditioning, heating and electrical systems installed or furnished by
Landlord), (c) the Café and all elements and systems thereof, including, without
limitation, the hallway and bathrooms for the same, and (d) the driveways,
access ways, landscaped areas and parking areas of the Lot and the Fields (where
owned by Landlord) which are reasonably necessary for access to the Building. By
taking possession of the Premises, Tenant accepts them as being in good order,
condition and repair and in the condition in which Landlord is obligated to
deliver them, except as set forth in the punch list to be delivered pursuant to
Section 2.1 and latent defects not discoverable with ordinary diligence
(provided that Landlord must be informed of such defects within ten (10) months
following the Commencement Date). It is hereby understood and agreed that no
representations respecting the condition of the Premises or the Building have
been made by Landlord to Tenant, except as specifically set forth in this Lease.
Landlord’s expenses incurred in performing its obligations under this
Section 7.1 shall, subject to the limitations set forth in Section 4.1.2, be
included in Expenses.

7.2 Tenant shall, at all times during the Term, keep all portions of the
Premises which are not Landlord’s responsibility under Section 7.1 above in good
condition and repair excepting damage by fire, other casualty or eminent domain,
and in compliance with all applicable governmental laws, ordinances and
regulations, promptly complying with all governmental orders and directives for
the correction, prevention and abatement of any violations or nuisances in or
upon, or connected with, the Premises, all at Tenant’s sole expense.

7.3 Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need of such repairs or maintenance is given to
Landlord by Tenant, not to exceed thirty (30) days unless a repair cannot
reasonably be performed in such time, in which case Landlord shall have such
additional time as may be reasonably necessary, so long as it is diligently
pursuing the repair to completion.

7.4 Except as provided in Articles 13, 22 and 23, there shall be no abatement of
rent and (except to the extent caused by the negligence or willful misconduct of
Landlord or any of its employees or contractors) no liability of Landlord by
reason of any injury to or interference with Tenant’s business arising from the
making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises or to fixtures, appurtenances and equipment in the
Building. Except as provided below and to the extent, if any, prohibited by law,
Tenant waives the right to make repairs at Landlord’s expense under any law,
statute or ordinance now or hereafter in effect, provided, however, that if
Landlord fails to make any repair or provide any services within the time
permitted under Section 7.3 above, then Tenant may, at its option, elect to cure
said breach following an additional ten (10) days written notice to Landlord,
and Landlord shall, within thirty (30) days following Tenant’s request
(accompanied by commercially reasonable documentation), reimburse Tenant for its
reasonable, out-of-pocket third party costs and expenses in effectuating such
cure (but it is expressly agreed that the foregoing provision does not permit
Tenant to deduct or offset against rent).

8. LIENS. Tenant shall keep the Premises, the Building and appurtenant land and
Tenant’s leasehold interest in the Premises free from any liens arising out of
any services, work or materials performed, furnished, or contracted for by
Tenant, or obligations incurred by Tenant. In the event that Tenant fails,
within ten (10) business days following the imposition of any such lien, to
either cause the same to be released of record or provide Landlord with
insurance against the same issued by a major title insurance or surety company
or such other protection against the same as Landlord shall accept (such failure
to constitute an Event of Default), Landlord shall have the right to cause the
same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith shall be payable to it by Tenant
within five (5) business days of Landlord’s demand.

 

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9. ASSIGNMENT AND SUBLETTING.

9.1 Tenant shall not have the right to assign or pledge this Lease or to sublet
the whole or any part of the Premises whether voluntarily or by operation of
law, or permit the use or occupancy of the Premises by anyone other than Tenant,
and shall not make, suffer or permit such assignment, subleasing or occupancy
without the prior written consent of Landlord, such consent not to be
unreasonably withheld, conditioned or delayed and said restrictions shall be
binding upon any and all assignees of the Lease and subtenants of the Premises.
In the event Tenant desires to sublet, or permit such occupancy of, the
Premises, or any portion thereof, or assign this Lease, Tenant shall, if
Landlord’s consent is required under this Article 9, give written notice thereof
to Landlord at least thirty (30) days but no more than one hundred twenty
(120) days prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed subtenant or
assignee, the relevant terms of any sublease or assignment and copies of
financial reports and other relevant financial information of the proposed
subtenant or assignee.

9.2 Notwithstanding any assignment or subletting, permitted or otherwise, Tenant
shall at all times remain directly, primarily and fully responsible and liable
for the payment of the rent specified in this Lease and for compliance with all
of its other obligations under the terms, provisions and covenants of this
Lease. Upon the occurrence of an Event of Default, if the Premises or any part
of them are then assigned or sublet, Landlord, in addition to any other remedies
provided in this Lease or provided by law, may, at its option, collect directly
from such assignee or subtenant all rents due and becoming due to Tenant under
such assignment or sublease and apply such rent against any sums due to Landlord
from Tenant under this Lease, and no such collection shall be construed to
constitute a novation or release of Tenant from the further performance of
Tenant’s obligations under this Lease.

9.3 In addition to Landlord’s right to approve of any subtenant or assignee,
Landlord shall have the option, in its sole discretion, in the event of any
proposed subletting or assignment, to terminate this Lease, or in the case of a
proposed subletting of more than 50% of the Premises, to recapture the portion
of the Premises to be sublet, as of the date the subletting or assignment is to
be effective. The option shall be exercised, if at all, by Landlord giving
Tenant written notice given by Landlord to Tenant within twenty (20) days
following Landlord’s receipt of Tenant’s written notice as required above.
However, if Tenant notifies Landlord, within five (5) days after receipt of
Landlord’s termination notice, that Tenant is rescinding its proposed assignment
or sublease, the termination notice shall be void and the Lease shall continue
in full force and effect. If this Lease shall be terminated with respect to the
entire Premises pursuant to this Section, the Term of this Lease shall end on
the date stated in Tenant’s notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures under this Section only a portion
of the Premises, the rent to be paid from time to time during the unexpired Term
shall abate proportionately based on the proportion by which the square footage
of the remaining portion of the Premises shall be less than that of the Premises
as of the date immediately prior to such recapture. Tenant shall, at Tenant’s
own cost and expense, discharge in full any outstanding commission obligation
which may be due and owing as a result of any proposed assignment or subletting
by Tenant, whether or not the Premises are recaptured pursuant to this
Section 9.3 and rented by Landlord to the proposed tenant or any other tenant
(but in no event shall Tenant be responsible for a commission if Landlord elects
to recapture as set forth herein).

9.4 In the event that Tenant sells, sublets, assigns or transfers this Lease,
Tenant shall pay to Landlord as additional rent an amount equal to fifty percent
(50%) of any Increased Rent (as defined below), less the Costs Component (as
defined below), when and as such Increased Rent is received by Tenant. As used
in this Section, “Increased Rent” shall mean the excess of (i) all rent and
other consideration which Tenant is entitled to receive by reason of any sale,
sublease, assignment or other transfer of this Lease, over (ii) the rent
otherwise payable by Tenant under this Lease at such time. For purposes of the
foregoing, any consideration received by Tenant in form other than cash shall be
valued at its fair market value as determined by Landlord in good faith. The
“Costs Component” is that amount which, if paid monthly, would fully amortize on
a straight-line basis, over the entire period for which Tenant is to receive
Increased Rent, the reasonable costs incurred by Tenant for leasing commissions
and tenant improvements in connection with such sublease, assignment or other
transfer.

9.5 Notwithstanding any other provision hereof, it shall be considered
reasonable for Landlord to withhold its consent to any assignment of this Lease
or sublease of any portion of the Premises if at the time of either Tenant’s
notice of the proposed assignment or sublease or the proposed commencement date
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Tenant or matter which will become a default of Tenant with passage of time
unless cured, or if the proposed assignee or sublessee is an entity: (a) with
which Landlord is already in negotiation for space in the Fields; (b) is already
an occupant of the Building unless Landlord is unable to provide the amount of
space in the Fields required by such occupant; (c) is a governmental agency;
(d) is incompatible with the character of occupancy of the Building; (e) with
which the payment for the sublease or assignment is determined in whole or in
part based upon its net income or profits; or (f) would subject the Premises to
a use which would: (i) involve increased personnel or wear upon the Building;
(ii) violate any exclusive right granted to another tenant of the Building;
(iii) require any addition to or modification of the Premises or the Building in
order to comply with building code or other governmental requirements; or,
(iv) involve a violation of Section 1.2. Tenant expressly agrees that for the
purposes of any statutory or other requirement of reasonableness on the part of
Landlord, Landlord’s refusal to consent to any assignment or sublease for any of
the reasons described in this Section 9.5, shall be conclusively deemed to be
reasonable.

9.6 Upon any request to assign or sublet for which Landlord’s consent is
required under this Lease, Tenant will pay to Landlord the Assignment/Subletting
Fee plus, within ten (10) business days following Landlord’s written demand, a
sum equal to all of Landlord’s reasonable, out-of-pocket, third party costs,
including reasonable attorney’s fees, actually incurred in investigating and
considering any proposed or purported assignment or pledge of this Lease or
sublease of any of the Premises, regardless of whether Landlord shall consent to
or refuse consent. Any purported sale, assignment, mortgage, transfer of this
Lease or subletting which does not comply with the provisions of this Article 9
shall be void

9.7 If Tenant is a corporation, limited liability company, partnership or trust
which is not publicly traded on NASDAQ or NYSE, any transfer or transfers of or
change or changes within any twelve (12) month period in the number of the
outstanding voting shares of the corporation or limited liability company, the
general partnership interests in the partnership or the identity of the persons
or entities controlling the activities of such partnership or trust resulting in
the persons or entities owning or controlling a majority of such shares,
partnership interests or activities of such partnership or trust at the
beginning of such period no longer having such ownership or control shall be
regarded as equivalent to an assignment of this Lease to the persons or entities
acquiring such ownership or control and shall be subject to all the provisions
of this Article 9 to the same extent and for all intents and purposes as though
such an assignment.

9.8 Notwithstanding the foregoing provisions of this Article to the contrary,
Tenant shall be permitted to assign this Lease, or sublet all or a portion of
the Premises, to an Affiliate of Tenant without the prior consent of Landlord,
if all of the following conditions are first satisfied:

9.8.1 Tenant shall not then be in default under this Lease beyond any applicable
notice or cure period;

9.8.2 a fully executed copy of such assignment or sublease, the assumption of
this Lease by the assignee or acceptance of the sublease by the sublessee, and
such other information regarding the assignment or sublease as Landlord may
reasonably request, shall have been delivered to Landlord; and

9.8.3 the Premises shall continue to be operated solely for the use specified in
the Reference Page (or a component thereof) or other use acceptable to Landlord
in its sole discretion; and

Tenant acknowledges (and, at Landlord’s request, at the time of such assignment
or subletting shall confirm) that in each instance Tenant shall remain liable
for performance of the terms and conditions of the Lease despite such assignment
or subletting. As used herein the term “Affiliate” shall mean an entity which
(i) directly or indirectly controls Tenant or (ii) is under the direct or
indirect control of Tenant or (iii) is under common direct or indirect control
with Tenant, or (iv) is the successor to Tenant by merger, consolidation or sale
of substantially all of Tenant’s stock or assets (directly or indirectly) so
long as the net worth of such successor, after completion of the entire series
of transactions contemplated in such merger, etc., are at least at great as was
the net worth of Tenant prior to commencement of such transactions. Control
shall mean ownership of fifty-one percent (51%) or more of the voting securities
or rights of the controlled entity.

10. INDEMNIFICATION. None of the Landlord Entities shall be liable and Tenant
hereby waives all claims against them for any damage to any property or any
injury to any person in or about the Premises or the Building by or from any
cause whatsoever (including without limiting the foregoing, rain or water
leakage of any character from the roof, windows, walls, basement, pipes,
plumbing works or appliances, the Building not being in good condition or
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electricity or theft), except to the extent caused by or arising from the
negligence or willful misconduct of Landlord or its agents, employees or
contractors. Subject to the waiver of subrogation set forth in Section 12 below,
and except to the extent arising from the negligence or willful misconduct of
Landlord or its agents, employees or contractors, Tenant shall protect,
indemnify and hold the Landlord Entities harmless from and against any and all
loss, claims, liability or costs (including court costs and attorney’s fees)
incurred by reason of (a) any damage to any property (including but not limited
to property of any Landlord Entity) or any injury (including but not limited to
death) to any person occurring in, on or about the Premises or the Building to
the extent that such injury or damage shall be caused by or arise from any
actual or alleged act, neglect, fault, or omission by or of Tenant or any Tenant
Entity to meet any standards imposed by any duty with respect to the injury or
damage; (b) the conduct or management of any work or thing whatsoever done by
the Tenant in or about the Premises or from transactions of the Tenant
concerning the Premises; (c) Tenant’s failure to comply with any and all
governmental laws, ordinances and regulations applicable to the condition or use
of the Premises or its occupancy; or (d) any breach or default on the part of
Tenant in the performance of any covenant or agreement on the part of the Tenant
to be performed pursuant to this Lease. The provisions of this Article shall
survive the termination of this Lease with respect to any claims or liability
accruing prior to such termination.

11. INSURANCE.

11.1 Tenant shall keep in force throughout the Term: (a) a Commercial General
Liability insurance policy or policies to protect the Landlord Entities against
any liability to the public or to any invitee of Tenant or a Landlord Entity
incidental to the use of or resulting from any accident occurring in or upon the
Premises with a limit of not less than $1,000,000 per occurrence and not less
than $2,000,000 in the annual aggregate, or such larger amount as Landlord may
prudently require from time to time, covering bodily injury and property damage
liability and $1,000,000 products/completed operations aggregate; (b) Business
Auto Liability covering owned, non-owned and hired vehicles with a limit of not
less than $1,000,000 per accident; (c) Worker’s Compensation Insurance with
limits as required by statute and Employers Liability with limits of $500,000
each accident, $500,000 disease policy limit, $500,000 disease—each employee;
(d) All Risk or Special Form coverage protecting Tenant against loss of or
damage to Tenant’s Alterations (where Landlord has advised Tenant pursuant to
Section 6.4 that the same will need to be removed from the Premises at the
expiration or earlier termination of this Lease), carpeting, floor coverings,
panelings, decorations, fixtures, inventory and other business personal property
situated in or about the Premises to the full replacement value of the property
so insured; and, (e) Business Interruption Insurance with limit of liability
representing loss of at least approximately six (6) months of income.

11.2 The aforesaid policies shall (a) be provided at Tenant’s expense; (b) name
the Landlord Entities as additional insureds (General Liability) and loss payee
(Property – Special Form) for all Alterations other than those which Landlord
has required to be removed from the Premises at the expiration or sooner
termination of this Lease under Section 6.4 above ; (c) be issued by an
insurance company with a minimum Best’s rating of “A-:VII” during the Term; and
(d) provide that said insurance shall not be canceled unless thirty (30) days
prior written notice (ten days for non-payment of premium) shall have been given
to Landlord; a certificate of Liability insurance on ACORD Form 25 and a
certificate of Property insurance on ACORD Form 27 shall be delivered to
Landlord by Tenant upon the Commencement Date and at least thirty (30) days
prior to each renewal of said insurance.

11.3 Whenever Tenant shall undertake any alterations, additions or improvements
in, to or about the Premises (“Work”) the aforesaid insurance protection must
extend to and include injuries to persons and damage to property arising in
connection with such Work, without limitation including liability under any
applicable structural work act, and such other insurance as Landlord shall
reasonably require; and the policies of or certificates evidencing such
insurance must be delivered to Landlord prior to the commencement of any such
Work.

11.4 So long as this Lease remains in full force and effect, Landlord shall
maintain an all risk extended policy of property insurance covering the Building
for its full replacement value (less foundations, footings and other uninsurable
amounts), but specifically including all Alterations of which Landlord has
received written notice and for which Landlord has not informed Tenant in
writing pursuant to Section 6.4 will need to be removed from the Premises at the
expiration or sooner termination of the Lease.

12. WAIVER OF SUBROGATION. So long as their respective insurers so permit,
Tenant and Landlord hereby mutually waive their respective rights of recovery
against each other for any loss insured by fire, extended coverage, All

 

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Risks or other insurance now or hereafter existing for the benefit of the
respective party but only to the extent of the net insurance proceeds payable
under such policies. Each party shall obtain any special endorsements required
by their insurer to evidence compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES.

13.1 Subject to the other provisions of this Lease, Landlord agrees to furnish
to the Premises the following services and utilities subject to the rules and
regulations of the Building prescribed from time to time: (a) hot and cold water
suitable for normal office use of the Premises; (b) heat and air conditioning
(which shall be controlled by Tenant); (c) cleaning and janitorial service;
(d) elevator service by nonattended automatic elevators, if applicable; and,
(e) equipment to bring to the Premises electricity for lighting, convenience
outlets and other normal office use. To the extent that Tenant is not billed
directly by a public utility, Tenant shall pay, within five (5) days of
Landlord’s demand, for all electricity used by Tenant in the Premises as
measured by sub-meter. The charge shall be at the rates charged for such
services by the local public utility, without mark-up. In the absence of
Landlord’s negligence or willful misconduct, Landlord shall not be liable for,
and Tenant shall not be entitled to, any abatement or reduction of rental by
reason of Landlord’s failure to furnish any of the foregoing. Where there is
negligence or willful misconduct by Landlord and the interruption in service
shall persist for an unreasonable time (in no event less than thirty (30) days)
after written notice of such failure is given to Landlord by Tenant and
materially interferes with Tenant’s use of or access to the Premises, Rent shall
abate from and after such thirty (30) day period until the applicable service is
resumed, but there shall be no abatement (and Landlord shall have no liability)
where the restoration of the interrupted service is beyond Landlord’s reasonable
control due to accident, breakage, repairs, labor disputes of any character,
energy usage restrictions or by any other cause, similar or dissimilar. Landlord
shall use reasonable efforts to remedy any interruption in the furnishing of
services and utilities.

13.2 Intentionally deleted.

13.3 Intentionally deleted.

13.4 If Tenant shall require water or electric current in excess of that usually
furnished or supplied for use of the Premises as normal office use, Tenant shall
procure the prior written consent of Landlord for the use thereof, which
Landlord shall not refuse if Tenant bears the costs of such excess service and
use. The cost of any such meters shall be paid for by Tenant as measured by
submetering as installed by Landlord. Tenant agrees to pay to Landlord within
five (5) days of Landlord’s demand , the cost of all such excess water and
electric current consumed (as shown by said meters, if any, or, if none, as
reasonably estimated by Landlord) at the rates charged for such services by the
local public utility or agency, without mark-up, as the case may be, furnishing
the same.

13.5 INTENTIONALLY OMITTED.

14. HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains
possession of the Premises or part of them after termination of this Lease by
lapse of time or otherwise at the rate (“Holdover Rate”) which shall be One
Hundred Fifty Percent (150%) of the greater of (a) the amount of the Annual Rent
for the last period prior to the date of such termination plus all Rent
Adjustments under Article 4; and (b) the then market rental value of the
Premises as reasonably determined by Landlord assuming a new lease of the
Premises of the then usual duration and other terms, in either case, prorated on
a daily basis, and also pay all damages sustained by Landlord by reason of such
retention. If Landlord gives notice to Tenant of Landlord’s election to such
effect, such holding over shall constitute renewal of this Lease for a period
from month to month at the Holdover Rate, but if the Landlord does not so elect,
no such renewal shall result notwithstanding acceptance by Landlord of any sums
due hereunder after such termination; and instead, a tenancy at sufferance at
the Holdover Rate shall be deemed to have been created. In any event, no
provision of this Article 14 shall be deemed to waive Landlord’s right of
reentry or any other right under this Lease or at law.

15. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to ground or underlying leases and
to the lien of any mortgages or deeds of trust now or hereafter placed on,
against or affecting the Building, Landlord’s interest or estate in the
Building, or any ground or underlying lease; provided, however, that if the
lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust
elects to have Tenant’s interest in this Lease be superior to any such
instrument, then,

 

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by notice to Tenant, this Lease shall be deemed superior, whether this Lease was
executed before or after said instrument. Notwithstanding the foregoing,
(i) Tenant covenants and agrees to execute and deliver within ten (10) days of
Landlord’s request such further instruments evidencing such subordination or
superiority of this Lease as may be required by Landlord, and (ii) any
subordination of this lease to any future mortgage or ground lease shall be
conditioned upon the mortgagee or ground lessor agreeing, on commercially
reasonable terms, not to interfere with Tenant’s occupancy or other rights under
this Lease, so long as Tenant is not in default beyond any applicable notice or
cure period.

16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all
the rules and regulations as set forth in Exhibit D to this Lease and all
reasonable and non-discriminatory modifications of and additions to them from
time to time put into effect by Landlord which are generally applicable to all
buildings in the Fields. Except for negligence and willful misconduct of
Landlord or any of its agents, employees or contractors, Landlord shall not be
responsible to Tenant for the non-performance by any other tenant or occupant of
the Building of any such rules and regulations.

17. REENTRY BY LANDLORD.

17.1 Landlord reserves and shall at all times, with reasonable prior notice
(except in the case of an emergency), have the right to re-enter the Premises to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant under this Lease, to show said Premises to prospective
purchasers, mortgagees or (during the last Lease Year) tenants, and to alter,
improve or repair the Premises and any portion of the Building, without
abatement of rent, and may for that purpose erect, use and maintain scaffolding,
pipes, conduits and other necessary structures and open any wall, ceiling or
floor in and through the Building and Premises where reasonably required by the
character of the work to be performed, provided entrance to the Premises shall
not be blocked thereby, and further provided that the business of Tenant shall
not be interfered with unreasonably. Landlord shall have the right at any time,
with at least 30 days prior notice to Tenant, to change the number or
designation by which the Building is commonly known. In the event that Landlord
damages any portion of any wall or wall covering, ceiling, or floor or floor
covering within the Premises, Landlord shall repair or replace the damaged
portion to match the original as nearly as commercially reasonable but shall not
be required to repair or replace more than the portion actually damaged. Except
to the extent caused by the negligence or willful misconduct of Landlord or any
of its agents, employees or contractors, Tenant hereby waives any claim for
damages for any injury or inconvenience to or interference with Tenant’s
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned by any action of Landlord authorized by this Article 17.

17.2 For each of the aforesaid purposes, Landlord shall at all times have and
retain a key with which to unlock all of the doors in the Premises, excluding
Tenant’s vaults and safes or special security areas (designated in advance), and
Landlord shall have the right to use any and all means which Landlord may
reasonably deem proper to open said doors in an emergency to obtain entry to any
portion of the Premises. As to any portion to which access cannot be had by
means of a key or keys in Landlord’s possession (other than said vaults, safes
and special security areas designated in advance), Landlord is authorized to
gain access by such means as Landlord shall elect and the cost of repairing any
damage occurring in doing so shall be borne by Tenant and paid to Landlord
within five (5) days of Landlord’s demand.

18. DEFAULT.

18.1 Except as otherwise provided in Article 20, the following events shall be
deemed to be Events of Default under this Lease:

18.1.1 Tenant shall fail to pay when due any sum of money becoming due to be
paid to Landlord under this Lease, whether such sum be any installment of the
rent reserved by this Lease, any other amount treated as additional rent under
this Lease, or any other payment or reimbursement to Landlord required by this
Lease, whether or not treated as additional rent under this Lease, and such
failure shall continue for a period of five (5) days after written notice that
such payment was not made when due, but if any such notice shall be given, for
the twelve (12) month period commencing with the date of such notice, the
failure to pay within five (5) days after due any additional sum of money
becoming due to be paid to Landlord under this Lease during such period shall be
an Event of Default, without notice.

18.1.2 Tenant shall fail to comply with any term, provision or covenant of this
Lease which is not provided for in another Section of this Article and shall not
cure such failure within thirty (30) days (forthwith, if the failure

 

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involves a hazardous condition) after written notice of such failure to Tenant
provided, however, that such failure shall not be an event of default if such
failure could not reasonably be cured during such thirty (30) day period, Tenant
has commenced the cure within such thirty (30) day period and thereafter is
diligently pursuing such cure to completion.

18.1.3 Tenant shall fail to vacate the Premises immediately upon termination of
this Lease, by lapse of time or otherwise, or upon termination of Tenant’s right
to possession only.

18.1.4 Tenant shall become insolvent, admit in writing its inability to pay its
debts generally as they become due, file a petition in bankruptcy or a petition
to take advantage of any insolvency statute, make an assignment for the benefit
of creditors, make a transfer in fraud of creditors, apply for or consent to the
appointment of a receiver of itself or of the whole or any substantial part of
its property, or file a petition or answer seeking reorganization or arrangement
under the federal bankruptcy laws, as now in effect or hereafter amended, or any
other applicable law or statute of the United States or any state thereof.

18.1.5 A court of competent jurisdiction shall enter an order, judgment or
decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of
the whole or any substantial part of its property, without the consent of
Tenant, or approving a petition filed against Tenant seeking reorganization or
arrangement of Tenant under the bankruptcy laws of the United States, as now in
effect or hereafter amended, or any state thereof, and such order, judgment or
decree shall not be vacated or set aside or stayed within sixty (60) days from
the date of entry thereof.

19. REMEDIES.

19.1 Except as otherwise provided in Article 20, upon the occurrence of any of
the Events of Default described or referred to in Article 18, Landlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever, concurrently or consecutively and not
alternatively:

19.1.1 Landlord may, at its election, terminate this Lease or terminate Tenant’s
right to possession only, without terminating the Lease.

19.1.2 Upon any termination of this Lease, whether by lapse of time or
otherwise, or upon any termination of Tenant’s right to possession without
termination of the Lease, Tenant shall surrender possession and vacate the
Premises immediately, and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter into and upon the
Premises in such event and to repossess Landlord of the Premises as of
Landlord’s former estate and to expel or remove Tenant and any others who may be
occupying or be within the Premises and to remove Tenant’s signs and other
evidence of tenancy and all other property of Tenant therefrom without being
deemed in any manner guilty of trespass, eviction or forcible entry or detainer,
and without incurring any liability for any damage resulting therefrom, Tenant
waiving any right to claim damages for such re-entry and expulsion, and without
relinquishing Landlord’s right to rent or any other right given to Landlord
under this Lease or by operation of law.

19.1.3 Upon any termination of this Lease, whether by lapse of time or
otherwise, Landlord shall be entitled to recover as damages, all rent, including
any amounts treated as additional rent under this Lease, and other sums due and
payable by Tenant on the date of termination, plus as liquidated damages and not
as a penalty, an amount equal to the sum of: (a) an amount equal to the then
present value of the rent reserved in this Lease for the residue of the stated
Term of this Lease including any amounts treated as additional rent under this
Lease and all other sums provided in this Lease to be paid by Tenant, minus the
fair rental value of the Premises for such residue; (b) the value of the time
and expense necessary to obtain a replacement tenant or tenants, and the
estimated expenses described in Section 19.1.4 relating to recovery of the
Premises, preparation for reletting and for reletting itself; and (c) the cost
of performing any other covenants which would have otherwise been performed by
Tenant.

19.1.4 Upon any termination of Tenant’s right to possession only without
termination of the Lease:

19.1.4.1 Neither such termination of Tenant’s right to possession nor Landlord’s
taking and holding possession thereof as provided in Section 19.1.2 shall
terminate the Lease or release Tenant, in whole or in part, from any obligation,
including Tenant’s obligation to pay the rent, including any amounts treated as
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Lease for the full Term, and if Landlord so elects Tenant shall continue to pay
to Landlord the entire amount of the rent as and when it becomes due, including
any amounts treated as additional rent under this Lease, for the remainder of
the Term plus any other sums provided in this Lease to be paid by Tenant for the
remainder of the Term.

19.1.4.2 Landlord shall use commercially reasonable efforts to relet the
Premises or portions thereof to the extent required by applicable law. Landlord
and Tenant agree that nevertheless Landlord shall at most be required to use
only the same efforts Landlord then uses to lease premises in the Building
generally and that in any case that Landlord shall not be required to give any
preference or priority to the showing or leasing of the Premises or portions
thereof over any other space that Landlord may be leasing or have available and
may place a suitable prospective tenant in any such other space regardless of
when such other space becomes available and that Landlord shall have the right
to relet the Premises for a greater or lesser term than that remaining under
this Lease, the right to relet only a portion of the Premises, or a portion of
the Premises or the entire Premises as a part of a larger area, and the right to
change the character or use of the Premises. In connection with or in
preparation for any reletting, Landlord may, but shall not be required to, make
repairs, alterations and additions in or to the Premises and redecorate the same
to the extent Landlord deems necessary or desirable, and Tenant shall pay the
cost thereof, together with Landlord’s expenses of reletting, including, without
limitation, any commission incurred by Landlord, within five (5) days of
Landlord’s demand. Landlord shall not be required to observe any instruction
given by Tenant about any reletting or accept any tenant offered by Tenant
unless such offered tenant has a credit-worthiness acceptable to Landlord and
leases the entire Premises upon terms and conditions including a rate of rent
(after giving effect to all expenditures by Landlord for tenant improvements,
broker’s commissions and other leasing costs) all no less favorable to Landlord
than as called for in this Lease, nor shall Landlord be required to make or
permit any assignment or sublease for more than the current term or which
Landlord would not be required to permit under the provisions of Article 9.
Notwithstanding any of the foregoing, if Landlord relets the Premises for a
period which is longer than the residue of the stated Term, Tenant’s liability
for alterations, additions and brokerage fees shall be proportionately adjusted
(but in all events Tenant shall be fully liable for the costs necessary to
repair any damage to the Premises required to put the Premises in the condition
required for surrender by Tenant under Section 26 below).

19.1.4.3 Until such time as Landlord shall elect to terminate the Lease and
shall thereupon be entitled to recover the amounts specified in such case in
Section 19.1.3, Tenant shall pay to Landlord upon demand the full amount of all
rent, including any amounts treated as additional rent under this Lease and
other sums reserved in this Lease for the remaining Term, together with the
costs of repairs, alterations, additions, redecorating and Landlord’s expenses
of reletting and the collection of the rent accruing therefrom (including
reasonable attorney’s fees and broker’s commissions), as the same shall then be
due or become due from time to time, less only such consideration as Landlord
may have received from any reletting of the Premises; and Tenant agrees that
Landlord may file suits from time to time to recover any sums falling due under
this Article 19 as they become due. Any proceeds of reletting by Landlord in
excess of the amount then owed by Tenant to Landlord from time to time shall be
credited against Tenant’s future obligations under this Lease but shall not
otherwise be refunded to Tenant or inure to Tenant’s benefit.

19.2 Upon the occurrence of an Event of Default, Landlord may (but shall not be
obligated to) cure such default at Tenant’s sole expense. Without limiting the
generality of the foregoing, Landlord may, at Landlord’s option, enter into and
upon the Premises to maintain, repair or replace anything for which Tenant is
responsible under this Lease or to otherwise effect compliance with its
obligations under this Lease and correct the same, without being deemed in any
manner guilty of trespass, eviction or forcible entry and detainer and without
incurring any liability for any damage or interruption of Tenant’s business
resulting therefrom and Tenant agrees to reimburse Landlord within five
(5) business days of Landlord’s demand as additional rent, for any expenses
which Landlord may incur in thus effecting compliance with Tenant’s obligations
under this Lease, plus interest from the date of expenditure by Landlord at the
Wall Street Journal prime rate.

19.3 Tenant understands and agrees that in entering into this Lease, Landlord is
relying upon receipt of all the Annual and Monthly Installments of Rent to
become due with respect to all the Premises originally leased hereunder over the
full Initial Term of this Lease for amortization, including interest at the
Amortization Rate. For purposes hereof, the “Concession Amount” shall be defined
as the aggregate of all amounts forgone or expended by Landlord as free rent
under the lease, under Exhibit B hereof for construction allowances (excluding
therefrom any amounts expended by Landlord for Landlord’s Work, as defined in
Exhibit B), and for brokers’ commissions payable by reason of this Lease.
Accordingly, Tenant agrees that if this Lease or Tenant’s right to possession of
the Premises leased hereunder shall be terminated as of any date (“Default
Termination Date”) prior to the expiration of the full Initial Term hereof by
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shall be due and owing to Landlord as of the day prior to the Default
Termination Date, as rent in addition to all other amounts owed by Tenant as of
such Date, the amount (“Unamortized Amount”) of the Concession Amount determined
as set forth below; provided, however, that in the event that such amounts are
recovered by Landlord pursuant to any other provision of this Article 19,
Landlord agrees that it shall not attempt to recover such amounts pursuant to
this Paragraph 19.3. For the purposes hereof, the Unamortized Amount shall be
determined in the same manner as the remaining principal balance of a mortgage
with interest at the Amortization Rate payable in level payments over the same
length of time as from the effectuation of the Concession concerned to the end
of the full Initial Term of this Lease would be determined. The foregoing
provisions shall also apply to and upon any reduction of space in the Premises,
as though such reduction were a termination for Tenant’s default, except that
(i) the Unamortized Amount shall be reduced by any amounts paid by Tenant to
Landlord to effectuate such reduction and (ii) the manner of application shall
be that the Unamortized Amount shall first be determined as though for a full
termination as of the Effective Date of the elimination of the portion, but then
the amount so determined shall be multiplied by the fraction of which the
numerator is the rentable square footage of the eliminated portion and the
denominator is the rentable square footage of the Premises originally leased
hereunder; and the amount thus obtained shall be the Unamortized Amount.

19.4 If, following an Event of Default, it shall become necessary or appropriate
for Landlord to employ or consult with an attorney or collection agency
concerning or to enforce or defend any of Landlord’s rights or remedies arising
under this Lease or to collect any sums due from Tenant, Tenant agrees to pay
all costs and fees so incurred by Landlord, including, without limitation,
reasonable attorneys’ fees and costs. TENANT EXPRESSLY WAIVES ANY RIGHT TO:
(A) TRIAL BY JURY; AND (B) SERVICE OF ANY NOTICE REQUIRED BY ANY PRESENT OR
FUTURE LAW OR ORDINANCE APPLICABLE TO LANDLORDS OR TENANTS BUT NOT REQUIRED BY
THE TERMS OF THIS LEASE.

19.5 Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies provided in this Lease or any other remedies provided by
law (all such remedies being cumulative), nor shall pursuit of any remedy
provided in this Lease constitute a forfeiture or waiver of any rent due to
Landlord under this Lease or of any damages accruing to Landlord by reason of
the violation of any of the terms, provisions and covenants contained in this
Lease.

19.6 No act or thing done by Landlord or its agents during the Term shall be
deemed a termination of this Lease or an acceptance of the surrender of the
Premises, and no agreement to terminate this Lease or accept a surrender of said
Premises shall be valid, unless in writing signed by Landlord. No waiver by
Landlord of any violation or breach of any of the terms, provisions and
covenants contained in this Lease shall be deemed or construed to constitute a
waiver of any other violation or breach of any of the terms, provisions and
covenants contained in this Lease. Landlord’s acceptance of the payment of
rental or other payments after the occurrence of an Event of Default shall not
be construed as a waiver of such Default, unless Landlord so notifies Tenant in
writing. Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or construed
to constitute a waiver of such Default or of Landlord’s right to enforce any
such remedies with respect to such Default or any subsequent Default.

19.7 INTENTIONALLY OMITTED.

19.8 Any and all property which may be removed from the Premises by Landlord
pursuant to the authority of this Lease or of law, to which Tenant is or may be
entitled, may be handled, removed and/or stored, as the case may be, by or at
the direction of Landlord but at the risk, cost and expense of Tenant, and
Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and all storage charges against such property
so long as the same shall be in Landlord’s possession or under Landlord’s
control. Any such property of Tenant not retaken by Tenant from storage within
thirty (30) days after removal from the Premises shall, at Landlord’s option, be
deemed conveyed by Tenant to Landlord under this Lease as by a bill of sale
without further payment or credit by Landlord to Tenant.

19.9 If more than one (1) Event of Default occurs during the Term or any renewal
thereof, Tenant’s renewal options, expansion options, purchase options and
rights of first offer and/or refusal, if any are provided for in this Lease,
shall be null and void.

 

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20. TENANT’S BANKRUPTCY OR INSOLVENCY.

20.1 If at any time and for so long as Tenant shall be subjected to the
provisions of the United States Bankruptcy Code or other law of the United
States or any state thereof for the protection of debtors as in effect at such
time (each a “Debtor’s Law”):

20.1.1 Tenant, Tenant as debtor-in-possession, and any trustee or receiver of
Tenant’s assets (each a “Tenant’s Representative”) shall have no greater right
to assume or assign this Lease or any interest in this Lease, or to sublease any
of the Premises than accorded to Tenant in Article 9, except to the extent
Landlord shall be required to permit such assumption, assignment or sublease by
the provisions of such Debtor’s Law. Without limitation of the generality of the
foregoing, any right of any Tenant’s Representative to assume or assign this
Lease or to sublease any of the Premises shall be subject to the conditions
that:

20.1.1.1 Such Debtor’s Law shall provide to Tenant’s Representative a right of
assumption of this Lease which Tenant’s Representative shall have timely
exercised and Tenant’s Representative shall have fully cured any default of
Tenant under this Lease.

20.1.1.2 Tenant’s Representative or the proposed assignee, as the case shall be,
shall have deposited with Landlord as security for the timely payment of rent an
amount equal to the larger of: (a) three (3) months’ rent and other monetary
charges accruing under this Lease; and (b) any sum specified in Article 5; and
shall have provided Landlord with adequate other assurance of the future
performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of assumption
of this Lease, demonstration to the satisfaction of the Landlord that Tenant’s
Representative has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that Tenant’s Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease; and, in the case of
assignment, submission of current financial statements of the proposed assignee,
audited by an independent certified public accountant reasonably acceptable to
Landlord and showing a net worth and working capital in amounts determined by
Landlord to be sufficient to assure the future performance by such assignee of
all of the Tenant’s obligations under this Lease.

20.1.1.3 The assumption or any contemplated assignment of this Lease or
subleasing any part of the Premises, as shall be the case, will not breach any
provision in any other lease, mortgage, financing agreement or other agreement
by which Landlord is bound.

20.1.1.4 Landlord shall have, or would have had absent the Debtor’s Law, no
right under Article 9 to refuse consent to the proposed assignment or sublease
by reason of the identity or nature of the proposed assignee or sublessee or the
proposed use of the Premises concerned.

21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and
authority to enter into this Lease and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or molestation from Landlord subject to the terms and provisions of
this Lease.

22. CASUALTY

22.1 In the event the Premises or the Building are damaged by fire or other
cause and in Landlord’s reasonable estimation such damage can be materially
restored within one hundred eighty (180) days from the date insurance proceeds
are made available to Landlord, Landlord shall forthwith repair the same and
this Lease shall remain in full force and effect, except that Tenant shall be
entitled to a proportionate abatement in rent and all additional rent from the
date of such damage. Such abatement of rent shall be made pro rata in accordance
with the extent to which the damage and the making of such repairs shall
interfere with the use and occupancy by Tenant of the Premises from time to
time, but having due regard for whether Tenant is required to vacate the entire
Premises (in which case there shall be a 100% abatement). Within forty-five
(45) days from the date of such damage, Landlord shall notify Tenant, in
writing, of Landlord’s reasonable estimation of the length of time within which
material restoration can be made, and Landlord’s determination shall be binding
on Tenant. For purposes of this Lease, the Building or Premises shall be deemed
“materially restored” if they are in such condition as would not prevent or
materially interfere with Tenant’s use of the Premises for the purpose for which
it was being used immediately before such damage.

 

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22.2 If such repairs cannot, in Landlord’s reasonable estimation, be made within
one hundred eighty (180) days from the date insurance proceeds are made
available to Landlord, Landlord and Tenant shall each have the option of giving
the other, at any time within ninety (90) days after such damage, notice
terminating this Lease as of the date of such damage. In the event of the giving
of such notice, this Lease shall expire and all interest of the Tenant in the
Premises shall terminate as of the date of such damage as if such date had been
originally fixed in this Lease for the expiration of the Term. In the event that
neither Landlord nor Tenant exercises its option to terminate this Lease, then
Landlord shall repair or restore such damage, this Lease continuing in full
force and effect, and the rent hereunder shall be proportionately abated as
provided in Section 22.1.

22.3 Except for (a) Landlord’s Work (specifically including the Landlord’s
Premises Work, Landlord’s Lobby Work, Landlord’s HVAC Work and Landlord’s Café
Work), and (b) any Alterations by Tenant for which (i) Landlord has received
written notice and (ii) has not required to be removed from the Premises at the
expiration or sooner termination of this Lease, Landlord shall not be required
to repair or replace any damage or loss by or from fire or other cause to any
panelings, decorations, partitions, additions, railings, ceilings, floor
coverings, office fixtures or any other property or improvements installed on
the Premises by, or belonging to, Tenant. Any insurance which may be carried by
Landlord or Tenant against loss or damage to the Building or Premises shall be
for the sole benefit of the party carrying such insurance and under its sole
control. However, to the extent Tenant receives any insurance proceeds on
account of items which Landlord is obligated to restore under this Section 22,
Tenant shall make such proceeds available to Landlord for such restoration.

22.4 In the event that Landlord should fail to complete such repairs and
material restoration within sixty (60) days after the date estimated by Landlord
therefor as extended by this Section 22.4, Tenant may at its option and as its
sole remedy terminate this Lease by delivering written notice to Landlord,
within fifteen (15) days after the expiration of said period of time, whereupon
the Lease shall end on the date of such notice or such later date fixed in such
notice as if the date of such notice was the date originally fixed in this Lease
for the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction requested by
Tenant, strikes, lockouts, casualties, Acts of God, war, material or labor
shortages, government regulation or control or other causes beyond the
reasonable control of Landlord, the period for restoration, repair or rebuilding
shall be extended for the amount of time Landlord is so delayed, not to exceed
an additional ninety (90) days.

22.5 Notwithstanding anything to the contrary contained in this Article:
(a) Landlord shall not have any obligation whatsoever to repair, reconstruct, or
restore the Premises when the damages resulting from any casualty covered by the
provisions of this Article 22 occur during the last twelve (12) months of the
Term or any extension thereof, but if Landlord determines not to repair such
damages Landlord shall notify Tenant and if such damages shall render any
material portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days after
receipt of Landlord’s notice; and (b) in the event the holder of any
indebtedness secured by a mortgage or deed of trust covering the Premises or
Building requires that any insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within fifteen (15) days after such requirement
is made by any such holder, whereupon this Lease shall end on the date of such
damage as if the date of such damage were the date originally fixed in this
Lease for the expiration of the Term.

22.6 In the event of any damage or destruction to the Building or Premises by
any peril covered by the provisions of this Article 22, it shall be Tenant’s
responsibility to properly secure the Premises and upon notice from Landlord to
remove forthwith, at its sole cost and expense, such portion of all of the
property belonging to Tenant or its licensees from such portion or all of the
Building or Premises as Landlord shall request.

23. EMINENT DOMAIN. If all or any substantial part of the Premises or the Lot
shall be taken or appropriated by any public or quasi-public authority under the
power of eminent domain, or conveyance in lieu of such appropriation, either
party to this Lease shall have the right, at its option, of giving the other, at
any time within thirty (30) days after such taking, notice terminating this
Lease, except that Tenant may only terminate this Lease by reason of taking or
appropriation, if such taking or appropriation shall be so substantial as to
materially interfere with Tenant’s use and occupancy of the Premises, access

 

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thereto or parking reasonably necessary for its use. If neither party to this
Lease shall so elect to terminate this Lease, the rental thereafter to be paid
shall be adjusted on a fair and equitable basis under the circumstances. In
addition to the rights of Landlord above, if any substantial part of the
Building shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain or conveyance in lieu thereof, and regardless
of whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this Lease.
Landlord shall be entitled to any and all income, rent, award, or any interest
whatsoever in or upon any such sum, which may be paid or made in connection with
any such public or quasi-public use or purpose (except Tenant shall be entitled
to its proportionate share of the unamortized value of Landlord’s Work set forth
in Exhibit B, to the extent of Tenant’s contribution thereto), and Tenant hereby
assigns to Landlord any interest it may have in or claim to all or any part of
such sums, other than any separate award which may be made with respect to
Tenant’s trade fixtures and moving expenses; Tenant shall make no claim for the
value of any unexpired Term.

24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the
Building, the same shall operate to release Landlord from any future liability
upon any of the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely to the
responsibility of the successor in interest of Landlord in and to this Lease.
Except as set forth in this Article 24, this Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or assignee. If any
security has been given by Tenant to secure the faithful performance of any of
the covenants of this Lease, Landlord may transfer or deliver said security, as
such, to Landlord’s successor in interest and thereupon Landlord shall be
discharged from any further liability with regard to said security.

25. ESTOPPEL CERTIFICATES. Within ten (10) days following any written request
which Landlord may make from time to time, Tenant shall execute and deliver to
Landlord or mortgagee or prospective mortgagee a sworn statement certifying:
(a) the date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been modifications to
this Lease, that this Lease is in full force and effect, as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease have been paid; (d) the fact that
there are no current defaults under this Lease by either Landlord or Tenant
except as specified in Tenant’s statement; and (e) such other matters as may be
requested by Landlord. Landlord and Tenant intend that any statement delivered
pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or
purchaser, and Tenant shall be liable for all loss, cost or expense resulting
from the failure of any sale or funding of any loan caused by any material
misstatement contained in such estoppel certificate. Tenant irrevocably agrees
that if Tenant fails to execute and deliver such certificate within such ten
(10) day period Landlord or Landlord’s beneficiary or agent may execute and
deliver such certificate on Tenant’s behalf, and that such certificate shall be
fully binding on Tenant.

26. SURRENDER OF PREMISES.

26.1 Tenant and Landlord shall arrange to meet for two (2) joint inspections of
the Premises, the first to occur at least thirty (30) days (but no more than
sixty (60) days) before the last day of the Term, and the second to occur not
later than forty-eight (48) hours after Tenant has vacated the Premises. In the
event of Tenant’s failure to attend such joint inspections and/or participate in
either such inspection after the same is scheduled, Landlord’s inspection at or
after Tenant’s vacating the Premises shall be conclusively deemed correct for
purposes of determining Tenant’s responsibility for repairs and restoration.

26.2 . At the end of the Term or any renewal of the Term or other sooner
termination of this Lease, Tenant will peaceably deliver up to Landlord
possession of the Premises, , in the same conditions received or first
installed, broom clean and free of all debris, excepting only ordinary wear and
tear and damage by fire or other casualty, or eminent domain. In addition,
Tenant must, at Tenant’s sole cost, remove upon termination of this Lease, any
and all of Tenant’s furniture, furnishings, equipment, movable partitions not
affixed to the Building (which shall not be deemed Alterations for purposes of
this Lease) and other trade fixtures and personal property (collectively,
“Personalty”, which shall specifically include any data/telecommunications
wiring, whether inside walls, under any raised floor or above any ceiling).
Personalty not so removed shall be deemed abandoned by the Tenant and title to
the same shall thereupon pass to Landlord under this Lease as by a bill of sale,
but Tenant shall remain responsible for the cost of removal and disposal of such
Personalty, as well as any damage caused by such removal. In addition, upon the
expiration or sooner termination of the Term, all Alterations (other than
Landlord’s Premises Work, the Landlord’s HVAC Work, the Landlord’s Lobby Work
and the Landlord’s Café Work) shall all remain at the Premises and become a part
of the realty and shall belong to Landlord without compensation, and title shall
pass to Landlord under this Lease as by a bill of sale, provided, however, that,
Landlord may require Tenant to remove certain Alterations from the Premises
subject to and in accordance with the terms and provisions contained in
Section 6.4 above.

 

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26.3 All obligations of Tenant under this Lease not fully performed as of the
expiration or earlier termination of the Term shall survive the expiration or
earlier termination of the Term.

27. NOTICES. Any notice or document required or permitted to be delivered under
this Lease shall be addressed to the intended recipient, by fully prepaid
registered or certified United States Mail return receipt requested, or by
reputable independent contract delivery service furnishing a written record of
attempted or actual delivery, and shall be deemed to be delivered when tendered
for delivery to the addressee at its address set forth on the Reference Pages,
or at such other address as it has then last specified by written notice
delivered in accordance with this Article 27, or if to Tenant at either its
aforesaid address or its last known registered office or home of a general
partner or individual owner, whether or not actually accepted or received by the
addressee. Any such notice or document may also be personally delivered if a
receipt is signed by and received from, the individual, if any, named in
Tenant’s Notice Address.

28. TAXES PAYABLE BY TENANT. In addition to rent and other charges to be paid by
Tenant under this Lease, Tenant shall reimburse to Landlord, upon demand, any
and all taxes payable by Landlord (other than net income taxes and other taxes
expressly excluded from the definition of Taxes under Section 4.1.3 above)
whether or not now customary or within the contemplation of the parties to this
Lease: (a) upon, allocable to, or measured by or on the gross or net rent
payable under this Lease, including without limitation any gross income tax or
excise tax levied by the State, any political subdivision thereof, or the
Federal Government with respect to the receipt of such rent; (b) upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of the Premises or any portion thereof,
including any sales, use or service tax imposed as a result thereof; (c) upon or
measured by the Tenant’s gross receipts or payroll or the value of Tenant’s
equipment, furniture, fixtures and other personal property of Tenant or
leasehold improvements, alterations or additions located in the Premises; or
(d) upon this transaction or any document to which Tenant is a party creating or
transferring any interest of Tenant in this Lease or the Premises. In addition
to the foregoing, Tenant agrees to pay, before delinquency, any and all taxes
levied or assessed against Tenant and which become payable during the term
hereof upon Tenant’s equipment, furniture, fixtures and other personal property
of Tenant located in the Premises.

29. INTENTIONALLY DELETED.

30. INTENTIONALLY DELETED.

31. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for
convenience of reference and shall in no way define, increase, limit or describe
the scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following “Landlord Entities”, being Landlord, Landlord’s investment manager,
and the trustees, boards of directors, officers, general partners,
beneficiaries, stockholders, employees and agents of each of them. Any option
granted to Landlord shall also include or be exercisable by Landlord’s trustee,
beneficiary, agents and employees, as the case may be. In any case where this
Lease is signed by more than one person, the obligations under this Lease shall
be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in
place thereof shall indicate and include the masculine or feminine, the singular
or plural number, individuals, firms or corporations, and their and each of
their respective successors, executors, administrators and permitted assigns,
according to the context hereof. The term “rentable area” shall mean the
rentable area of the Premises or the Building as calculated by the Landlord on
the basis of the plans and specifications of the Building including Tenant’s
Fields Share of the Café and its associated hallway and bathrooms. Tenant hereby
accepts and agrees to be bound by the figures for the rentable square footage of
the Premises and Tenant’s Proportionate Share shown on the Reference Pages;
however, Landlord may adjust Tenant’s Fields Share if there is addition or
subtraction to any other buildings in the Fields. The term “Building” refers to
the structure in which the Premises are located and the common areas (parking
lots, sidewalks, landscaping, etc.) appurtenant thereto on the Lot.

32. TENANT’S AUTHORITY. If Tenant signs as a corporation, partnership, trust or
other legal entity each of the persons executing this Lease on behalf of Tenant
represents and warrants that Tenant has been and is qualified to do business in
the state in which the Building is located, that the entity has full right and
authority to enter into this Lease, and that all persons signing on behalf of
the entity were authorized to do so by appropriate actions. Tenant agrees to
deliver to Landlord,

 

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simultaneously with the delivery of this Lease, a corporate resolution, proof of
due authorization by partners, opinion of counsel or other appropriate
documentation reasonably acceptable to Landlord evidencing the due authorization
of Tenant to enter into this Lease.

Tenant hereby represents and warrants that neither Tenant, nor any persons or
entities holding any legal or beneficial interest whatsoever in Tenant, are
(i) the target of any sanctions program that is established by Executive Order
of the President or published by the Office of Foreign Assets Control, U.S.
Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC
pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot
Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any
Executive Order of the President issued pursuant to such statutes; or
(iii) named on the following list that is published by OFAC: “List of Specially
Designated Nationals and Blocked Persons.” If the foregoing representation is
untrue at any time during the Term, an Event of Default will be deemed to have
occurred, without the necessity of notice to Tenant.

33. FINANCIAL STATEMENTS AND CREDIT REPORTS. In the event Tenant or its
Affiliate, if Tenant’s interest under the Lease is assigned, is not a publicly
traded entity on the NASDAQ or NYSE, at Landlord’s request, Tenant shall deliver
to Landlord a copy, certified by an officer of Tenant as being a true and
correct copy, of Tenant’s most recent audited financial statement, or, if
unaudited, certified by Tenant’s chief financial officer as being true, complete
and correct in all material respects. Tenant hereby authorizes Landlord to
obtain one or more credit reports on Tenant at any time, and shall execute such
further authorizations as Landlord may reasonably require in order to obtain a
credit report.

34. COMMISSIONS. Each of the parties represents and warrants to the other that
it has not dealt with any broker or finder in connection with this Lease, except
the Brokers as described on the Reference Pages which Brokers shall be
compensated by Landlord per separate agreement.

35. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
state in which the Building is located.

36. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of the heirs, successors, executors, administrators and assigns
of the parties to this Lease.

37. ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
agreements of the parties to this Lease and supersedes any previous
negotiations. There have been no representations made by the Landlord or any of
its representatives or understandings made between the parties other than those
set forth in this Lease and its exhibits. This Lease may not be modified except
by a written instrument duly executed by the parties to this Lease.

38. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a
reservation of the Premises. Landlord shall not be bound by this Lease until it
has received a copy of this Lease duly executed by Tenant and has delivered to
Tenant a copy of this Lease duly executed by Landlord, and until such delivery
Landlord reserves the right to exhibit and lease the Premises to other
prospective tenants. Notwithstanding anything contained in this Lease to the
contrary, Landlord may withhold delivery of possession of the Premises from
Tenant until such time as Tenant has paid to Landlord any security deposit
required by Article 5, the first month’s rent as set forth in Article 3 and any
sum owed pursuant to this Lease.

39. RECORDATION. Tenant may record a short form memorandum hereof in the
statutory form, and then shall pay all charges and taxes incident such recording
or registration, provided, however, that prior to such recording, Tenant shall
deliver a written release thereof in recordable form and in substance reasonably
satisfactory to Landlord’s counsel. Said release shall be held in escrow by
Landlord’s counsel and may be released from escrow and recorded by Landlord upon
the expiration or earlier termination of this Lease.

40. RENEWAL OPTION. Tenant shall, provided the Lease is in full force and effect
and Tenant is not in default beyond any applicable notice or cure period under
any of the other terms and conditions of the Lease at the time of notification
or commencement, have one (1) option to renew this Lease for a term of five
(5) years, for the portion of the Premises being leased by Tenant as of the date
the renewal term is to commence, on the same terms and conditions set forth in
the Lease, except as modified by the terms, covenants and conditions as set
forth below:

 

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40.1 If Tenant elects to exercise said option, then Tenant shall provide
Landlord with written notice no earlier than the date which is 365 days prior to
the expiration of the then current term of the Lease but no later than the date
which is 270 days prior to the expiration of the then current term of this
Lease. If Tenant fails to provide such notice, Tenant shall have no further or
additional right to extend or renew the term of the Lease.

40.2 The Annual Rent and Monthly Installment in effect at the expiration of the
then current term of the Lease shall reflect the current fair market rental for
comparable space in the Building and in other similar buildings in the same
rental market as of the date the renewal term is to commence, taking into
account the specific provisions of the Lease which will remain constant and the
fact that Tenant is the only tenant in the Building. Landlord shall advise
Tenant of the new Annual Rent and Monthly Installment for the Premises no later
than thirty (30 days after receipt of Tenant’s written request therefor. Said
request shall be made no earlier than thirty (30) days prior to the first date
on which Tenant may exercise its option under this Paragraph. Said notification
of the new Annual Rent may include a provision for its escalation to provide for
a change in fair market rental between the time of notification and the
commencement of the renewal term. If Tenant and Landlord are unable to agree on
a mutually acceptable rental rate not later than sixty (60) days prior to the
expiration of the then current term, then Landlord and Tenant shall each appoint
a qualified MAI appraiser doing business in the area, in turn those two
independent MAI appraisers shall appoint a third MAI appraiser and the majority
shall decide upon the fair market rental for the Premises as of the expiration
of the then current term. Landlord and Tenant shall equally share in the expense
of this appraisal except that in the event the Annual Rent and Monthly
Installment is found to be within seven and one-half percent (7.5%) of the
original rate quoted by Landlord, then Tenant shall bear the full cost of all
the appraisal process. In no event shall the Annual Rent and Monthly Installment
for any option period be less than the Annual Rent and Monthly Installment in
the preceding period.

40.3 This option is not transferable except to Affiliates (as defined in Article
9); the parties hereto acknowledge and agree that they intend that the aforesaid
option to renew this Lease shall be “personal” to Tenant as set forth above and
that in no event will any assignee or sublessee other than Affiliates have any
rights to exercise the aforesaid option to renew.

41. CAFÉ.

41.1 Landlord agrees to construct a full service café (the “Café”) on the first
floor of the Building with a separate entrance for non-Tenant users, endeavoring
to complete such café and cause it to open for business on or before the
Commencement Date. Menu, prices, services and hours of operation will all be at
the reasonable discretion of Landlord and its café operator. Upon opening,
Landlord agrees to provide Tenant non-exclusive access to the Café during the
Term and any extensions thereof. Provided that neither Tenant, nor any of its
agents, employees and visitors, interfere with or damage the operations or
equipment of the café, Landlord shall permit Tenant outside of the Café’s hours
of operations to utilize the seating area only of the Café subject to any
additional insurance requirements and reasonable rules that Landlord and/or the
operator of the Café may impose. Notwithstanding anything contained in this
Lease to the contrary, if Landlord does not complete and open the Café for
business on or before the date which is ninety (90) days (plus any additional
days for reasons beyond Landlord’s control) following the Commencement Date,
then from and after such time until the Café opens for business (and during any
month in which the Café is not open for business on more than five (5) business
days, except for (i) periods of restoration following a casualty or taking as
set forth in Sections 22 and 23 above; and (ii) periods of closure on account of
renovation and/or replacement of the Café operator on not more than one
(1) occasion in any three (3) year period, so long as such period of closure
does not exceed sixty (60) days), Tenant shall be entitled to deduct the sum of
Seven Thousand Five Hundred Thousand Dollars ($7,500.00) from each monthly
installment on account of Annual Fixed Rent. If Landlord ever desires to lease
the area of the Café for use other than as a full service cafeteria, Tenant
shall have a right of first refusal with respect thereto, at its fair market
rental value (with such amount to be determined in the same manner as rent
during the renewal term pursuant to Section 40 above).

42. ROOFTOP SATELLITE DISH. Landlord agrees that Tenant may install, at Tenant’s
expense and for its own internal business use (and not for the purpose of
granting access to others whether or not for profit), a satellite dish system on
the roof of the Building at a location chosen by Landlord. The installation,
size and location of such system must comply with all governmental requirements
(local, state and federal). Prior to installation of such system, Tenant shall
furnish plans

 

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and specifications for such system and its location and installation to Landlord
for its approval, which approval shall not be unreasonably withheld or delayed.
In addition, prior to installation of such system, Tenant shall obtain all
necessary governmental permits and approvals and deliver copies thereof to
Landlord. All costs related to such system shall be paid by Tenant, including
all costs of installation, screening (if required by Landlord or any
governmental entity), maintenance, repair, restoration and removal

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LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord under
this Lease shall be limited to and enforceable only against and to the extent of
Landlord’s interest in the Building and the rents and profits therefrom. The
obligations of Landlord under this Lease are not intended to be and shall not be
personally binding on, nor shall any resort be had to the private properties of,
any of its or its investment manager’s trustees, directors, officers, partners,
beneficiaries, members, stockholders, employees, or agents, except to the extent
of their interest in the Building, and in no case shall Landlord or Tenant be
liable to the other party hereunder for any lost profits, damage to business, or
any form of special, indirect or consequential damages

 

LANDLORD:      TENANT: RREEF AMERICA REIT III-Z1 LLC,      SOAPSTONE NETWORKS
INCORPORATED, a Delaware limited liability company      a Delaware corporation
By:   RREEF Management Company, a Delaware corporation, Authorized Agent       
By:  

 

     By:  

 

Name:   David F. Crane      Name:  

 

Title:   Vice President/Regional Director      Title:  

 

Dated:                       , 2008      Dated:                       , 2008

 

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