Document:

Exhibit 10.2

 

 

 

LEASE

 

 

dated January 9, 2006

 

between

 

NORTH STREET ASSOCIATES LLC

 

as Lessor

 

and

 

 

ATLANTIC EXPRESS TRANSPORTATION CORP.

 

as Lessee

 

Affecting
premises commonly known as 7 NORTH STREET, 3 NORTH STREET,

2153 RICHMOND TERRACE, in Staten Island, New York.

 

 

 

 

	
  1 — Demised Premises and
  Lease Term

  	
   

  
	
  2 — Rent

  	
   

  
	
  3 — No Counterclaim or
  Abatement

  	
   

  
	
  4 — Use of Demised
  Premises

  	
   

  
	
  5 — Condition of Demised
  Premises

  	
   

  
	
  6 — Maintenance and Repair

  	
   

  
	
  7 — Alterations and
  Additions

  	
   

  
	
  8 — Impositions

  	
   

  
	
  9 — Compliance With
  Requirements

  	
   

  
	
   10 — Liens

  	
   

  
	
   11 — Permitted Contests

  	
   

  
	
   12 — Utility Services

  	
   

  
	
   13 — Insurance

  	
   

  
	
   14 — Indemnification By Lessee

  	
   

  
	
   15 — Damage or Destruction

  	
   

  
	
   16 — Taking of the Demised Premises

  	
   

  
	
   17 — Quiet Enjoyment

  	
   

  
	
   18 — Right to Cure Lessee’s Default

  	
   

  
	
   19 — Events of Default and Termination

  	
   

  
	
   20 — Repossession

  	
   

  
	
   21 — Reletting

  	
   

  
	
   22 — Assignment of Subrents

  	
   

  
	
   23 — Lessee’s Equipment

  	
   

  
	
   24 — Security Deposit

  	
   

  
	
   25 — Survival of Obligations; Damages

  	
   

  
	
   26 — Injunction

  	
   

  
	
   27 — Waivers

  	
   

  
	
   28 — Lessor’s Remedies Cumulative

  	
   

  
	
   29 — Assignment and Subletting

  	
   

  
	
   30 — Subordination and Attornment

  	
   

  
	
   31 — Entry by Lessor

  	
   

  
	
   32 — Conveyance by Lessor

  	
   

  
	
   33 — No Merger of Title

  	
   

  
	
   34 — Acceptance of Surrender

  	
   

  
	
   35 – Holdover Tenancy

  	
   

  
	
   36 — End of Lease Term

  	
   

  
	
   37 — Option to Extend Lease Term

  	
   

  
	
   38 — Brokerage

  	
   

  
	
   39 — Definitions

  	
   

  
	
   40 — Notices

  	
   

  
	
   41 – Communications Tower

  	
   

  
	
   42 – Miscellaneous

  	
   

  
	
   Exhibit A — Description of Land

  	
   

  

 

 

LEASE

 

LEASE,
dated January 9, 2006, between NORTH STREET ASSOCIATES LLC, a NEW YORK
limited liability company, having an address at 55 West 47th Street,
New York, New York 10036 (“Lessor”), and ATLANTIC EXPRESS TRANSPORTATION CORP.,
a NEW YORK corporation, having an address at 7 NORTH STREET, STATEN ISLAND, NEW
YORK 10302 (“Lessee”).

 

1.  The Demised
Premises and Lease Term

 

In
consideration of the Rent hereinafter reserved and the terms, covenants and
conditions set forth in this Lease to be observed and performed by Lessee,
Lessor hereby demises and leases to Lessee, and Lessee hereby rents and takes
from Lessor, the following property (collectively hereinafter referred to as
the “Demised Premises”):  (a) all
the land (the “Land”) described in Exhibit A hereto and designated as Section 5,
Block 1070, Lots 1, 31 and 20 ; (b) all buildings, structures and other
improvements (the “Improvements”) now or hereafter located on the Land, other
than Lessee’s Equipment as hereinafter defined; and (c) all rights of way
or of use, servitudes, licenses, tenements, appurtenances and easements now or
hereafter belonging or pertaining to any of the foregoing; TO HAVE AND TO HOLD the Demised Premises
unto Lessee, and the permitted successors and assigns of Lessee, upon and
subject to all of the terms, covenants and conditions herein contained, for a
term (the “Lease Term”) of TEN YEARS, commencing on January 9, 2006 and
expiring on December 31, 2015, unless the Lease Term shall sooner
terminate pursuant to any of the conditional limitations or other provisions of
this Lease.

 

2.  Rent

 

Lessee
covenants to pay to Lessor as a net minimum rent (the “Fixed Rent”) during the
Lease Term $357,000.00 per annum for the principal of the Lease Term which
precedes December 31, 2006, and $364,140.00 per annum from January 1,
2007 until December 31, 2007, and $371,422.80 per annum from January 1,
2008 until December 31, 2008, and $378,851.26 per annum from January 1,
2009 until December 31, 2009, and $386,428.29 per annum from January 1,
2010 until December 31, 2010, and $394,156.86 per annum from January 1,
2011 until December 31, 2011, and $402,039.99 per annum from January 1,
2012 until December 31, 2012, and $410,080.80 per annum from January 1,
2013 until December 31, 2013, and $418,282.41 per annum from January 1,
2014 until December 31, 2014, and $426,648.06 per annum from January 1,
2015 until December 31, 2015.

 

The
Fixed Rent shall be payable in advance in equal monthly installments on the
first day of each calendar month.  If the
Lease Term does not commence on the first day of a

 

 

month, the Fixed Rent for
the month in which the Lease Term commences shall be appropriately
apportioned.  The first installment of
Fixed Rent shall be paid simultaneously with the execution of this Lease.  Each date on which Fixed Rent is payable
hereunder is hereinafter referred to as a “Rent Payment Date”.

 

Lessee
also covenants to pay, from time to time as provided in this Lease, as
Additional Rent:  all other amounts and
obligations which Lessee assumes or agrees to pay under this Lease; interest at
the rate of ten percent per annum on such of the foregoing amounts and
obligations as are payable to Lessor and are not paid within ten days after the
due date (or, if a demand therefor is required by the terms of this Lease,
within ten days after such demand), from the due date or such demand, as the
case may be, until the payment thereof; and interest at the rate of ten percent
per annum on all installments of Fixed Rent not paid on the due date, from the
due date until paid.  If Lessee fails to
pay any such Additional Rent, Lessor shall have all the rights, powers and
remedies provided for in this Lease or at law or in equity or otherwise in the
case of nonpayment of rent. Additional Rent shall specifically include any and
all utilities, whether paid directly to the providers or to Landlord, full
amount of real estate taxes and any and all expenses incurred in connection
with environmental issues relating to the Premises.

 

All
Fixed Rent and Additional Rent (collectively hereinafter referred to as “Rent”)
shall be paid in such coin or currency (or, subject to collection, by good
check payable in such coin or currency) of the United States of America as at
the time shall be legal tender for the payment of public and private debts, at
the office of Lessor as set forth above, or at such place and to such person as
Lessor from time to time may designate.

 

3.  No
Counterclaim or Abatement

 

All
Rent shall be absolutely net to Lessor so that this Lease shall yield to Lessor
the full amount of the installments thereof throughout the Lease Term without
deduction.  All Rent shall be paid to
Lessor without notice, demand, counterclaim, setoff, deduction or defense, and
nothing shall suspend, defer, diminish, abate or reduce any Rent, except as
otherwise specifically provided in this Lease.

 

The
obligations and liabilities of Lessee hereunder in no way shall be released,
discharged or otherwise affected (except as expressly provided herein) by
reason of:  any damage to or destruction
of or any Taking of the Demised Premises or any part thereof; any restriction
or prevention of or interference with any use of the Demised Premises or any
part thereof; any title defect or encumbrance or any eviction from the Demised
Premises or any part thereof by title paramount or otherwise; any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to Lessor, or any action taken with respect
to this Lease by any trustee or receiver of Lessor, or by any court, in any
such proceeding; any claim which Lessee has or might have against Lessor; any
failure on the part of Lessor to comply with or perform any of the terms hereof
or of any other agreement with Lessee; or any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Lessee shall
have notice or knowledge of any of the foregoing.  Except as expressly provided herein, Lessee
waives all rights now or hereafter conferred by statute or otherwise to quit,

 

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terminate or surrender this
Lease or the Demised Premises or any part thereof, or to receive any abatement,
suspension, deferment, diminution or reduction of any Rent payable by Lessee
hereunder.

 

4.  Use of
Demised Premises

 

Lessee
covenants that the Demised Premises shall be used solely for VEHICLE AND BUS
PARKING, MAINTENANCE AND REPAIR, administrative offices, lodging with respect
to 3 North Street and for no other purpose, unless approved in writing by
Lessor.

 

Lessee
shall not do or permit any act or thing which is contrary to any Legal
Requirements or Insurance Requirements, or which might impair the value or
usefulness of the Demised Premises or any part thereof.  Lessee shall not use, or allow the Demised
Premises or any part thereof or any Improvements now or hereafter erected
thereon or any appurtenances thereto to be used or occupied, for any unlawful
purpose or in violation of any certificate of occupancy, and shall not suffer
any act to be done or any condition to exist within the Demised Premises or any
part thereof, or in any Improvements now or hereafter erected thereon, or on
any appurtenance to the Demised Premises, or permit any article to be
brought therein, which may be dangerous, unless safeguarded as required by law,
or which may constitute a nuisance, public or private, or which may make void
or voidable any insurance in force with respect thereto.

 

Lessee
shall not do or suffer any waste, damage, disfigurement or injury to the
Demised Premises.

 

Lessee
shall not permit the spilling, discharge, release, deposit or placement on the
Demised Premises or any part thereof, whether in containers or other
impoundments, of any substance which is a hazardous or toxic substance within
the meaning of any applicable environmental law.

 

Landlord
shall be authorized to build a dock on the Premises and utilize it in a way to
receive income.

 

5.  Condition of
Demised Premises

 

Lessee
represents that Lessee has examined and is fully familiar with the physical
condition of the Demised Premises, the Improvements thereon, the sidewalks and
structures adjoining the same, subsurface conditions, and uses thereof.  Lessee accepts the same, without recourse to
Lessor, in the condition and state in which they now are, and agrees that the
Demised Premises complies in all respects with all requirements of this
Lease.  Lessor makes no representation or
warranty, express or implied in fact or by law, as to the nature or condition
of the Demised Premises, or its fitness or availability for any particular use,
or the income from or expenses of operation of the Demised Premises.  Lessor shall not be liable for any latent or
patent defect therein.

 

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6.  Maintenance
and Repair

 

Lessee,
at all times during the Lease Term and at Lessee’s expense, shall keep the
Demised Premises, and all Improvements now or hereafter located thereon, and
all facilities and equipment thereon, and the adjoining sidewalks, curbs,
vaults and vault space, if any, streets and ways, and all appurtenances to the
Demised Premises, in a good and clean order and condition and in such condition
as may be required by all Legal Requirements and Insurance Requirements, and
promptly shall make all necessary or appropriate repairs, replacements and
renewals thereof, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, or foreseen or unforeseen.  All repairs, replacements and renewals shall
be equal in quality and class to the original work.  Lessee waives any right created by any law
now or hereafter in force to make repairs to the Demised Premises at Lessor’s
expense.

 

Lessee,
at Lessee’s expense, shall do or cause others to do every act necessary or
appropriate for the preservation and safety of the Demised Premises by reason
of or in connection with any excavation or other building operation upon the
Demised Premises or any adjoining property, including without limitation all
shoring of foundations and walls of the Improvements or of the ground adjacent
thereto, whether or not the owner of the Demised Premises shall be required by
any Legal Requirement to take such action or shall be liable for failure to do
so.

 

7.  Alterations
and Additions

 

Lessee
shall not be entitled to make any alterations of or additions to the Demised
Premises without the prior written consent of Lessor in each instance.

 

The
title to all additions, repairs and replacements to any Improvements made
during the Lease Term and any renewal thereof, forthwith shall vest in Lessor,
and said Improvements, additions, repairs and replacements shall be and become
the sole and absolute property of Lessor, without any obligation of payment by
Lessor therefor.

 

8.  Impositions

 

Subject
to Article 11 relating to contests, Lessee, at Lessee’s expense, shall bear,
pay and discharge all Impositions at least twenty days prior to the last day
upon which the same may be paid without any interest, penalty, fine or cost
being added for the late payment thereof, and shall furnish to Lessor for
inspection within thirty days after request, official receipts of the
appropriate taxing authority or other proof satisfactory to Lessor evidencing
such payment.  If by law any Imposition
may be paid in installments, Lessee shall be obligated to pay only those
installments as they become due from time to time before any interest, penalty,
fine or cost may be added thereto.  Any
Imposition relating to the fiscal period of the taxing authority, part of which
is included within the Lease Term and a part of which precedes or extends beyond
the Lease Term, shall, if Lessee shall not be in default hereunder, be
apportioned between Lessor

 

4

 

and Lessee as of the
commencement or expiration, as the case may be, of the Lease Term.  An official certificate or statement issued
or given by any sovereign or governmental authority or agency, or any public
utility, showing the existence of any Imposition, or interest or penalties
thereof, the payment of which is the obligation of Lessee as provided herein,
shall be prima facia evidence for all purposes of this Lease of the
existence, amount and validity of such Imposition.

 

Upon
the occurrence and continuance of an event of default, at the option of Lessor,
which may be exercised by written notice to Lessee, Lessee shall pay to Lessor,
on each Rent Payment Date during the Lease Term, an amount equal to one twelfth
(1/12th) of all Impositions becoming due within the ensuing twelve months, as
reasonably estimated by Lessor.  Such
estimate, and consequently the monthly installments, may be adjusted at any
time by Lessor.  Each year Lessor shall
provide to Lessee an accounting, and if such accounting shows that the total of
the monies received hereunder exceeds the amounts paid by Lessor for all
Imposition, Lessee shall be credited for the difference against the next
installments becoming due hereunder.  If
immediately prior to any Rent Payment Date any Imposition is due, in whole or
in part, or if on the rendering of an accounting as aforesaid a deficiency
exists or may reasonably be expected, Lessee shall pay the same to Lessor on
demand.  The obligations of the parties
hereunder shall survive the expiration or termination of the Lease Term.

 

9.  Compliance
With Requirements

 

Subject
to Article 11 relating to contests, Lessee, at all times during the Lease
Term and at Lessee’s expense, promptly and diligently shall:  comply with all Legal Requirements and
Insurance Requirements, whether or not compliance therewith shall require
structural changes in the Improvements or interfere with the use and enjoyment
of the Demised Premises or any part thereof; comply with any instruments of
record at the time affecting the Demised Premises or any part thereof;  and procure, maintain and comply with all
permits, licenses, franchises and other authorizations required for any use of
the Demised Premises or any part thereof then being made, including without
limitation all permits, licenses, and franchises which Lessee is required to
obtain for the proper erection, installation, operation or maintenance of the
Improvements or Lessee’s Equipment or any part thereof.

 

From
time to time at the request of Lessor, Lessee at Lessee’s expense shall
execute, file and record such certificates of compliance, continuation
statements, and other documents and certificates, and shall pay such fees and
comply with such laws and regulations, as are necessary or appropriate to
preserve and protect any right of Lessor under this Lease.  Lessee shall furnish to Lessor an opinion
satisfactory to Lessor, of counsel satisfactory to Lessor, with respect to the
adequacy of such filings and recording.

 

If
Lessee’s use of the Demised Premises is or becomes a legal nonconforming use
under any Legal Requirement, Lessee shall continually occupy and use the
Demised Premises without interruption and comply with such other requirements
as may be necessary or appropriate so that such use does not become illegal and
may be continued by future occupants of the Demised Premises following the
expiration or termination of the Lease Term.

 

5

 

Lessee
shall not permit all or any part of the Demised Premises to be availed of to
qualify for fulfillment of any municipal or governmental requirements for the
construction or maintenance of any buildings or other improvements on property
other than the Demised Premises, and no building or other improvement
constructed on the Demised Premises shall rely on other property not demised
hereunder in order to qualify for fulfillment of any governmental
requirements.  Lessee shall not by act or
omission impair the integrity of the Demised Premises as a zoning lot or lots
separate and apart from all other property. 
Any attempt by Lessee to take any action which would violate any
provision of this paragraph shall be null and void.

 

During
any period of the Lease Term when any perimeter portion of the Demised Premises
shall be unimproved by any structure, wall, fence or gate, Lessee shall prevent
the same from being used by the public, as such, without restriction or in such
manner as might tend to impair Lessor’s title to the Demised Premises or any
part thereof, or in such manner as might create an enforceable claim or claims
of adverse use or possession by the public, or of implied dedication, of the
Demised Premises or any part thereof. 
Such perimeter portion of the Demised Premises so unimproved at all
times shall be subject to such rules or directions as Lessor from time to
time may make or give in writing with respect to the maintenance and use
thereof, consistent with Lessor’s protection against a claim or claims of the
public.  All such rules and
directions so made or given shall be deemed to be and become incorporated in
this Lease by reference and shall be complied with and performed fully and
promptly by Lessee at Lessee’s expense. 
Lessee hereby acknowledges that Lessor does not hereby consent,
expressly or by implication, to the unrestricted use or possession of any
portion of the Demised Premises by the public.

 

10.  Liens

 

Lessee
shall not directly or indirectly create or permit to be created or to remain,
and shall discharge, any mortgage, lien, security interest, encumbrance or
charge on, pledge of or conditional sale or other retention agreement with
respect to the Demised Premises or any part thereof, Lessee’s interest therein,
or any Fixed Rent or other Rent payable under this Lease, other than:  liens for Impositions not yet payable, or
payable without the addition of any fine, penalty, interest or cost for
nonpayment, or being contested as permitted in Article 11 hereof; and the
liens of mechanics, materialmen, suppliers or vendors, or right thereto,
incurred in the ordinary course of business for sums which under the terms of
the related contract are not at the time due, provided that adequate provision
for the payment thereof shall have been made and provisions of the following
paragraph are complied with.

 

If,
in connection with any work being performed by or for Lessee or any subtenant
or in connection with any materials being furnished to Lessee or any subtenant,
any mechanic’s lien or other lien or charge shall be filed or made against the
Demised Premises or any part thereof, or if any such lien or charge shall be
filed or made against Lessor, then Lessee, at Lessee’s expense, within thirty
days after such lien or charge shall have been filed or made, shall cause the
same to be canceled and discharged of record by payment thereof or filing a
bond or otherwise.  Lessee promptly and
diligently shall defend any suit, action or proceeding which may be brought for
the enforcement of such lien or charge; shall satisfy and discharge any

 

6

 

judgment entered therein
within thirty days from the entering of such judgment by payment thereof or
filing a bond or otherwise; and on demand shall pay all damages, costs and
expenses, including reasonable attorneys’ fees, suffered or incurred by Lessor
in connection therewith.

 

Nothing
contained in this Lease shall constitute any consent or request by Lessor,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Demised
Premises or any part thereof, nor as giving Lessee any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in any fashion that would
permit the filing or making of any lien or claim against Lessor or the Demised
Premises.  Lessor shall have the right,
from time to time, to place upon the Demised Premises in a conspicuous place
such sign or other notice as Lessor may deem necessary so as to give notice to
others of the provisions of the preceding sentence.

 

11.  Permitted
Contests

 

Lessee,
at Lessee’s expense, after prior written notice to Lessor, may contest, by
appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any Imposition
or any Legal Requirement, or the application of any instrument of record
referred to in Article 9 hereof, provided that:  Lessee shall first make all contested
payments, under protest if Lessee desires, unless such proceedings shall
suspend the collection thereof from Lessor, from any Rent and from the Demised
Premises; neither the Demised Premises, nor any part thereof or interest
therein, nor any Rent would be in any danger of being sold, forfeited, lost or
interfered with; in the case of a Legal Requirement, Lessor would not be in any
danger of any additional civil or criminal liability for failure to comply
therewith and the Demised Premises would not be subject to the imposition of
any lien as a result of such failure; and Lessee shall have furnished such
security, if any, as may be reasonably requested by Lessor.

 

Prior
to any Imposition being contested becoming due, and from time to time
thereafter until payment thereof shall be made or shall be determined not to be
payable by the appropriate body having jurisdiction, Lessee shall deposit and
maintain with Lessor an amount of money, or other security satisfactory to
Lessor, sufficient to pay the items so contested or intended to be contested
together with the interest and penalties thereon which may accrue during such
contest, which amount shall be held by Lessor and may be applied by Lessor to
the payment of such items, interest and penalties, when finally fixed and
determined.  If the amount deposited with
Lessor shall exceed the amount of such items, and any interest and penalties,
any excess remaining in Lessor’s hands after the payment thereof shall be
returned to Lessee.  At any time, prior
to or during any such contest, Lessor, after written notice to Lessee, may pay
and apply said money, or so much thereof as may be required, to the payment of
any Impositions, interest and penalties which, in Lessor’s judgment, should be
paid to prevent the sale of the Demised Premises or any part thereof or of the
lien created thereby, or to prevent the commencement of any action of
foreclosure or otherwise, by the holder of any such lien.  To the extent that the amount of money so
deposited with Lessor shall be insufficient fully to satisfy and discharge any
such Imposition, and interest and penalties thereon, Lessor may pay the same
and

 

7

 

the deficiency so paid by
Lessor shall be and become immediately due and payable by Lessee to Lessor.

 

12.  Utility
Services

 

Lessee
shall pay all charges for all public or private utility services and all
sprinkler systems and protection services at any time rendered to or in
connection with the Demised Premises or any part thereof; shall comply with all
contracts relating to any such services; and shall do all other things required
for the maintenance and continuance of all such services.

 

13.  Insurance

 

Lessee,
at all times during the Lease Term and at Lessee’s expense, shall provide and
maintain in full force and effect with insurers approved by Lessor:  (a) insurance with respect to the
Improvements against loss or damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending strike, civil commotion, aircraft, vehicles,
smoke and other risks from time to time included under “extended coverage”
policies, in an amount equal to at least 100% of the full replacement value of
the Improvements, and in any event in an amount sufficient to prevent Lessor or
Lessee from becoming a coinsurer of any loss under applicable policies, which
shall be written on a replacement cost basis; (b) public liability and
property damage insurance protecting Lessor against any and all liability
occasioned by negligence, occurrence, accident or disaster in or about the
Demised Premises or any part thereof, or the Improvements now or hereafter
erected thereon, or adjoining sidewalks, curbs, vaults and vault space, if any,
streets or ways, or any appurtenances thereto, in amounts approved from time to
time by Lessor, which amounts at the date hereof shall be, in the case of
public liability, $1,000,000 per person and $3,000,000 per accident, and in the
case of property damage, $500,000; (c) explosion insurance in respect of
any steam and pressure boilers and similar apparatus located on the Demised
Premises in amounts approved by Lessor, which amount at the date hereof shall
be $500,000; (d) war risk insurance when and to the extent obtainable from
the Federal government or any agency thereof; (e) appropriate workers’
compensation or other insurance against liability arising from claims of
workers in respect of and during the period of any work on or about the Demised
Premises; (f) if the Demised Premises are located in an area which has
been identified by the Secretary of Housing and Urban Development as a flood
hazard area, flood insurance in an amount at least equal to the maximum limit
of coverage available for the Demised Premises under the National Flood
Insurance Act of 1968; and (g) insurance against such other hazards and in
such amounts as is customarily carried by prudent owners and operators of
similar properties, and as Lessor reasonably may request.  Lessee shall comply with such other
requirements as Lessor from time to time reasonably may request for the
protection by insurance of Lessor’s interests.

 

All
insurance maintained by Lessee pursuant to this Article 13:  (a) shall, except for workers’
compensation insurance, name Lessor and Lessee as insureds, as their respective
interests may appear, and shall include an effective waiver by the issuer of
all rights of subrogation against any named insured or such insured’s interest
in the Demised Premises or any income derived therefrom; (b) shall provide
that all insurance claims for losses of less than

 

8

 

$50,000 shall be adjusted by
Lessee, and all insurance claims for losses of such amount or more, except for
workers’ compensation insurance which shall be adjusted by Lessee, shall be
adjusted by Lessor; (c) shall provide, except in the case of public
liability and workers’ compensation insurance, that insurance proceeds shall be
payable to Lessor for the benefit of Lessor and Lessee, as their respective
interests may appear; (d) shall provide that any losses shall be payable
notwithstanding any act or failure to act or negligence of Lessor or Lessee or
any other person; (e) shall provide that no cancellation, reduction in
amount or material change in coverage thereof shall be effective until at least
ten days after receipt by Lessor and Lessee of written notice thereof; and (f) shall
be satisfactory in all other respects to Lessor acting reasonably.  Any such insurance, at Lessee’s option, may
be provided through a blanket policy or policies in form and substance
satisfactory to Lessor, provided such policies shall provide in a manner
satisfactory to Lessor for specific allocation to the Demised Premises of the
coverage afforded by such blanket policy or policies, and provided further that
such blanket policy or policies give to Lessor no less protection than that
which would be afforded by separate policies.

 

Upon
the execution of this Lease and thereafter not less than fifteen days prior to
the expiration date of any policy delivered pursuant to this Article 13,
Lessee shall deliver to Lessor certificates of the insurer, in form and
substance satisfactory to Lessor, as to the issuance and effectiveness of such
policies and the amounts of coverage afforded thereby, accompanied by copies of
such policies.

 

If
at any time Lessee shall neglect or fail to provide or maintain insurance or to
deliver insurance policies in accordance with this Article 13, Lessor may
effect such insurance as agent for Lessee, by taking out policies in companies
selected by Lessor, and the amount of the premiums paid for such insurance
shall be paid by Lessee to Lessor on demand. 
Lessor, in addition to Lessor’s other rights and remedies, shall be
entitled to recover as damages for any breach of this Article 13 the
uninsured amount of any loss, liability, damage, claim, costs and expenses
suffered or incurred by Lessor, and shall not be limited in the proof of damages
to the amount of the insurance premium not paid by Lessee for such insurance.

 

14. 
Indemnification By Lessee

 

Lessee
shall indemnify and hold Lessor harmless from and against all liabilities,
obligations, claims, damages, fines, penalties, interest, causes of action,
costs and expenses, including reasonable attorneys’ fees (but excluding any
income or excess profits or franchise taxes of Lessor determined on the basis
of general income or revenue or any interest or penalties in respect thereof),
imposed upon or incurred by or asserted against Lessor or the Demised Premises
by reason of the occurrence or existence of any of the following, whether or
not resulting from any negligent act or omission of Lessor:  Lessee’s use and operation of the Demised
Premises or any interest therein, or Lessee’s receipt of any rent or other sum
therefrom; any accident, injury to or death of persons (including workers) or
loss of or damage to property occurring, or claimed to have occurred, on or
about the Demised Premises or any part thereof, or any Improvements now or
hereafter erected thereon, or the adjoining sidewalks, curbs, vaults or vault
spaces, if any, streets or ways, or appurtenances thereto; any use or condition
of the Demised Premises or any part thereof, or any Improvements now or
hereafter erect thereon, or

 

9

 

the adjoining sidewalks,
curbs, vaults and vault spaces, if any, streets or ways, or appurtenances
thereto; any failure on the part of Lessee promptly and fully to comply with or
perform any of the terms, covenants or conditions of this Lease; or performance
of any labor or services or the furnishing of any materials or other property
in respect of the Demised Premises or any part thereof.  In the case any suit, action or proceeding is
brought against Lessor or filed against the Demised Premises or any part
thereof by reason of any such occurrence, Lessee, upon Lessor’s request and at
Lessee’s expense, shall resist and defend such suit, action or proceeding, or
cause the same to be resisted and defended by counsel designated by Lessee
subject to Lessor’s approval which approval shall not be unreasonably withheld.

 

Tenant
shall indemnify and hold harmless Landlord and its successors and assigns from
all costs, damages, expenses, liability and harm resulting from any spill,
release or presence of toxic or hazardous materials (hereinafter an “Environmental
Conditions”) and the violation of any federal, state or local laws addressing
environmental matters (hereinafter “Environmental Law”) occurring or existing
with respect to any portion of the demised premises, prior to the date on which
the Tenant first commenced occupancy of such Premises.

 

The
obligations of Lessee under this Article 14 shall survive the expiration
or termination of the Lease Term.

 

15.  Damage to
or Destruction of the Demised Premises

 

If
there is any material damage to or destruction of the Demised Premises or any
part thereof, Lessee promptly shall give written notice thereof to Lessor,
generally describing the nature and extent of such damage or destruction.

 

If
there is any damage to or destruction of the Demised Premises or any part
thereof, Lessee, at Lessee’s expense whether or not the insurance proceeds, if
any, on account of such damage or destruction shall be sufficient for the
purpose, promptly shall commence and complete, subject to Unavoidable Delays,
the restoration, replacement or rebuilding of the Demised Premises as nearly as
possible to its value, condition and character immediately prior to such damage
or destruction, with such alterations and additions as may be made at Lessee’s
election pursuant to and subject to the terms, covenants and conditions of Article 7.  Pending the completion of such Restoration,
Lessee shall perform all temporary work and take all such actions as may be
necessary or desirable to protect and preserve the Demised Premises.

 

Insurance
proceeds received by Lessor on account of any damage to or destruction of the
Demised Premises or any part thereof, less the costs and expenses incurred by
Lessor or Lessee in the collection thereof, including without limitation fees
and expenses of adjusters and attorneys, shall be applied as hereinafter
provided.

 

Net
insurance proceeds received on account of any damage to or destruction of the
Demised Premises or any part thereof, unless Lessee is in default under this
Lease, shall be paid to Lessee or as Lessee may direct, from time to time as
Restoration progresses, to pay or to reimburse Lessee for the cost of Restoration,
upon written request of Lessee accompanied by

 

10

 

evidence, satisfactory to
Lessor that the amount requested has been paid or is then due and payable and
is properly a part of such cost, that there are no mechanics’ or similar liens
for labor or materials theretofore supplied in connection with the Restoration,
and that the balance of said proceeds after making the payment requested will
be sufficient to pay the balance of the cost of Restoration.  Upon receipt by Lessor of evidence
satisfactory to Lessor that the Restoration has been completed and the cost
thereof has been paid in full, and that there are no mechanics’ or similar
liens for labor or materials supplied in connection therewith, the balance, if
any, of such proceeds shall be paid to Lessor.

 

Any
insurance proceeds held by Lessor on any termination of this Lease and not
required to be paid to Lessee pursuant to this Article 15, shall be paid
to and retained by Lessor.

 

16.  Taking of
the Demised Premises

 

If
there is a Taking of the fee of the entire Demised Premises, other than for a
temporary use, this Lease shall terminate as of the date of such Taking.  In case of a Taking, other than for temporary
use, of such perpetual easement on the entire Demised Premises, or of such a
substantial part of the Demised Premises, as shall result, in the good faith
judgment of Lessor, in the Demised Premises remaining after such Taking (even
after Restoration where made) being unsuitable for the use contemplated in this
Lease, Lessee may terminate this Lease by written notice to Lessor given within
sixty days after such Taking, as of a date specified in such notice within
ninety days after such Taking.  Any
Taking of the Demised Premises of the character referred to in this Article 16,
which results in the termination of this Lease, is referred to herein as a “Total
Taking”.

 

If
there is a Taking of the Demised Premises other than a Total Taking, this Lease
shall remain in full force and effect as to the principal of the Demised
Premises remaining immediately after such Taking, without any abatement or
reduction of Rent, except as may be expressly provided in this Article 16,
and Lessee, at Lessee’s expense whether or not the awards or payments, if any,
on account of such Taking will be sufficient for the purpose, promptly shall
commence and complete, subject to Unavoidable Delays, Restoration of the
Demised Premises as nearly as possible to its value, condition and character
immediately prior to such Taking, except for any reduction in area caused
thereby, provided that in case of a Taking for temporary use Lessee shall not
be required to effect Restoration (other than temporary work and actions
necessary or desirable for the protection of the Demised Premises) until such
Taking for a temporary use is terminated.

 

Awards
and other payments on account of a Taking, less fees, costs and expenses
incurred in connection therewith, shall be applied as follows:

 

(a) 
Net awards and payments received on account of a Taking, other than a Taking
for temporary use or a Total Taking, shall be held and applied from time to
time as Restoration progresses, to pay or to reimburse Lessee for the cost of
Restoration, upon written request of Lessee accompanied by evidence, satisfactory
to Lessor, that the amount requested has been paid or is then due and

 

11

 

payable
and is properly a part of such cost, that there are no mechanics’ or similar
liens for labor or materials theretofore supplied in connection with the
Restoration, and that the balance of said proceeds after making the payment
requested will be sufficient to pay the balance of the cost of
Restoration.  Upon the completion of the
Restoration, the balance, if any, of such awards and payments shall be paid to
and retained by Lessor.

 

(b) 
Net awards and payments received on account of a Taking for temporary use shall
be held and applied to the payment of Rent until such Taking for temporary use
is terminated and Restoration, if any, has been completed, provided that, if
any portion of such award or payment is made by reason of any damage to or
destruction of the Demised Premises, such portion shall be held and applied as
provided in the first sentence of clause (a) of this Article 16.  The balance, if any, of such awards and
payments, unless Lessee is in default hereunder, shall be paid to Lessee.

 

(c) 
All awards and payments received on account of a Total Taking shall be paid to
Lessor.

 

Notwithstanding
the foregoing, if at the time of any Taking or at any time thereafter, Lessee
shall be in default under this Lease and such default shall be continuing,
Lessor is hereby authorized and empowered, in the name and on behalf of Lessee
and otherwise, to file and prosecute Lessee’s claim, if any, for an award on
account of any Taking and to collect such award and apply the same, after
deducting all fees, costs and expenses incident to the collection thereof, to
the curing of any then existing default under this Lease.

 

If
any portion of an award or other payment received on account of a Taking shall
be paid to Lessor pursuant to the second sentence of clause (a) of this Article 16,
each installment of Fixed Rent hereunder shall be reduced, commencing with the
first Rent Payment Date following the date of such payment, by an amount to be
computed by multiplying such installment in effect prior to such date by a
fraction, the numerator of which is the amount of the award or payment made to
Lessor in connection with such Taking after deduction of Lessor’s expenses in
the collection of such awards and payments, including without limitation fees
and expenses of appraisers and attorneys, and the denominator of which is the
fair market value of the Demised Premises as of the commencement date of this
Lease as determined by Lessor, acting reasonably, as reduced by the amount of
any other such award or payment previously made to Lessor pursuant to the
second sentence of clause (a) of this Article 16.

 

Revocation
by any public authority of any license or permit to maintain or use any vault
or other area within the streets adjoining the Demised Premises, shall not
affect this Lease, or diminish any Rent payable by Lessee hereunder, or
diminish any of Lessee’s other obligations hereunder.  Lessee shall comply with and perform all
laws, rules, orders, ordinances, regulations and requirements relating to said
vaults and other street areas.  Lessee
shall pay all fees, charges, taxes and other amounts imposed by reason of the
existence or use of said vaults or other street areas.

 

12

 

17.  Quiet
Enjoyment

 

Lessor
covenants that so long as Lessee is not in default hereunder in the payment of
any Rent or compliance with or the performance of any of the terms, covenants
or conditions of this Lease on Lessee’s part to be complied with or performed,
Lessee shall not be hindered or molested by Lessor in Lessee’s enjoyment of the
Demised Premises.

 

18.  Right to
Cure Lessee’s Default

 

If
Lessee fails to make any payment or to comply with or perform any term,
covenant or condition of this Lease to be complied with or performed by Lessee,
Lessor may, but shall be under no obligation to, after thirty days’ notice to
Lessee (or upon shorter notice, or without notice, if necessary to meet an
emergency situation or time limitation of a Legal Requirement), make such
payment or perform or cause to be performed such work, labor, services, acts or
things, and take such other steps as Lessor may deem advisable, to comply with
any such term, covenant or condition which is in default.  Entry by Lessor upon the Demised Premises for
such purpose shall not waive or release Lessee from any obligation or default
hereunder.  Lessee shall reimburse Lessor
(with interest at the rate of ten percent per annum) for all sums so paid by
Lessor and all costs and expenses incurred by Lessor in connection with the
making of any payments, the performance of any act or other steps taken by
Lessor pursuant to this Article 18.

 

19.  Events of
Default and Termination

 

If
any one or more of the following events (“Events of Default”) shall occur:

 

(a) 
if Lessee shall fail to pay any Fixed Rent when as the same becomes due and
payable and such failure shall continue for more than five days after notice to
Lessee; or

 

(b) 
if Lessee shall fail to pay any Rent, other than Fixed Rent, when and as the
same becomes due and payable and such failure shall continue for more than ten
days after notice to Lessee; or

 

(c) 
if Lessee shall fail to comply with or perform any term, covenant or condition
of Articles 8, 9, 10 or 13, and such failure shall continue for more than
thirty days after Lessee receives notice of such failure, regardless of the
source of such notice; or

 

(d) 
if Lessee shall fail to comply with or perform any other term, covenant or
condition hereof, and such failure shall continue for more than thirty days
after notice thereof from Lessor, and Lessee within said period, subject to
Unavoidable 

 

13

 

Delays,
shall not commence with due diligence and dispatch the curing of such default,
or, having so commenced, thereafter shall fail or neglect to prosecute or
complete with due diligence and dispatch the curing of such default for reasons
other than Unavoidable Delays; or

 

(e) 
if Lessee shall make a general assignment for the benefit of creditors, or
shall admit in writing Lessee’s inability to pay Lessee’s debts as they become
due, or shall file a petition in bankruptcy, or shall be adjudicated a bankrupt
or insolvent, or shall file a petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, or shall file an answer
admitting, or shall fail to contest, the material allegations of a petition
filed against Lessee in any such proceeding, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of Lessee
or any material part of Lessee’s properties; or

 

(f) 
if, within ninety days after the commencement of any proceeding against Lessee
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed, or if, within
ninety days after the appointment without the consent of acquiescence of
Lessee, of any trustee, receiver or liquidator of Lessee or of any material
part of Lessee’s properties, such appointment shall not have been vacated; or

 

(g) 
if a final judgment for the payment of money in excess of $50,000 shall be
rendered against Lessee and, within sixty days after the entry thereof, such
judgment shall not have been discharged or execution thereof stayed pending appeal,
or if, within sixty days after the expiration of any such stay, such judgment
shall not have been discharged;

 

then, and in any such Event of Default, regardless
of the pendency of any proceeding which has or might have the effect of
preventing Lessee from complying with the terms, covenants or conditions of
this Lease, Lessor, at any time thereafter may give a written termination
notice to Lessee, and on the date specified in such notice (which shall be not
less than 15 days after such notice) this Lease shall terminate and, subject to
Article 25, the Lease Term shall expire and terminate by limitation, and
all rights of Lessee under this Lease shall cease, unless before such date (i) all
arrears of Rent (with interest at the rate of ten percent per annum) and all
costs and expenses, including reasonable attorneys’ fees, incurred by or on
behalf of Lessor hereunder, shall have been paid by Lessee, and (ii) all
other defaults at the time existing under this Lease shall have been fully
remedied to the satisfaction of Lessor. 
Lessee shall reimburse Lessor for all costs and expenses, including
reasonable attorneys’ fees, incurred by or on behalf of Lessor occasioned by or
in connection with any default by Lessee under this Lease.

 

14

 

20. 
Repossession

 

If
an Event of Default shall have occurred and be continuing, Lessor, whether or
not the Lease Term shall have been terminated pursuant to Article 19, may
enter upon and repossess the Demised Premises or any part thereof by force,
summary proceedings, ejectment or otherwise, and may remove Lessee and all
other persons and any and all property therefrom.

 

21.  Reletting

 

At
any time or from time to time after the repossession of the Demised Premises or
any part thereof pursuant to Article 20, whether or not the Lease Term
shall have been terminated pursuant to Article 19, Lessor may (but shall
be under no obligation to) relet the Demised Premises or any part thereof for
the account of Lessee, for such term or terms (which may be greater than or
less than the period which would otherwise have constituted the balance of the
Lease Term) and on such conditions (which may include concessions or free rent)
and for such uses as Lessor, in Lessor’s absolute discretion, may determine,
and may collect and receive the rents therefrom.  Lessor, at Lessor’s option, may make such
alterations and decorations in the Demised Premises as Lessor, in Lessor’s sole
judgment, considers necessary or advisable for the purpose of reletting the
Demised Premises or any part thereof, and the making of such alterations and
decorations shall not operate or be construed to release Lessee from any
liability under this Lease.  Lessor shall
not be responsible or liable for any failure to relet the Demised Premises or
any part thereof or for any failure to collect any rent due upon any such
reletting.

 

22.  Assignment
of Subrents

 

Lessee
hereby irrevocably assigns to Lessor all rents due or to become due from any
assignee of Lessee’s interest hereunder and any sublessee or any tenant or
occupant of the Demised Premises or any part thereof, together with the right
to collect and receive such rents, provided that, so long as Lessee is not in
default under this Lease, such assignment shall not become effective and Lessee
shall have the right to collect such rents for Lessee’s own use and
purposes.  Upon any default by Lessee
under this Lease, Lessor shall have absolute title to such rents and the
absolute right to collect the same. 
Lessor shall apply to the Rent due under this Lease the net amount
(after deducting all costs and expenses incident to the collection thereof and
the operation and maintenance, including repairs, of the Demised Premises) of
any rents so collected and received by Lessor. 
Lessee shall not demand or accept from any sublessee, tenant or occupant
of the Demised Premises or any part thereof, any payment, prepayment or advance
payment in respect of more than one rental period under the applicable sublease
and in no event shall Lessee demand or accept any payment, prepayment or
advance payment for a period exceeding one month.

 

23.  Lessee’s
Equipment

 

All
Lessee’s Equipment shall be the property of Lessee.

 

Any
Lessee’s Equipment not removed by Lessee, at Lessee’s expense, within thirty days
after any repossession of the Demised Premises, whether or not this Lease has
been

 

15

 

terminated, shall be
considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor without notice to Lessee and without obligation
to account therefor; and Lessee shall pay Lessor, on demand, all costs and
expenses incurred by Lessor in removing, storing or disposing of any of Lessee’s
Equipment.  Lessee shall immediately repair
at Lessee’s expense all damage to the Demised Premises caused by any removal of
Lessee’s Equipment therefrom, whether effected by Lessee or by any other
person.  Lessor shall not be responsible
for any loss or damage to Lessee’s Equipment.

 

24.  Security
Deposit

 

Lessee
has deposited with Lessor the sum of $59,500.00 as security for the full and
faithful observance and performance by Lessee of the terms, covenants and
conditions of this Lease.  If Lessee
defaults in the observance or performance of any term, covenant or condition of
this Lease, including without limitation the payment of Rent, Lessor may use,
apply or retain the whole or any part of the security so deposited to the
extent required for the payment of any Rent or any other sum as to which Lessee
is in default or for any sum which Lessor may expend or may be required to
expend by reason of Lessee’s default, including without limitation any damages
or deficiency accrued before or after summary proceedings or other reentry by
Lessor.  If Lessee shall fully and
faithfully observe and perform all of the terms, covenants and conditions of
this Lease, the security, without interest, shall be returned to Lessee after
the end of the Lease Term and after delivery of entire possession of the
Demised Premises to Lessor.

 

In
the event of a sale, transfer or leasing of the Demised Premises by Lessor,
Lessor shall have the right to transfer the security to the vendee, transferee
or lessee, and Lessor thereupon shall be released by Lessee from all liability for
the return of such security.  Lessee
agrees to look solely to such new owner or landlord for the return of said
security.  The provisions of this
paragraph shall apply to every transfer or assignment of the security to a new
owner or landlord.  Lessee shall not
assign or encumber or attempt to assign or encumber the security, and neither
Lessor nor the successors or assigns of Lessee shall be bound by any such
assignment, encumbrance, or attempted assignment or encumbrance.

 

If
Lessor applies or retains all or any portion of the security, Lessee on demand
shall pay to Lessor the amount so applied or retained which shall be added to
the security so that the same shall be replenished to its former amount and so
that at all times the amount deposited shall be $59,500.00.

 

25.  Survival of
Lessee’s Obligations and Damages

 

No
expiration or termination of the Lease Term pursuant to this Lease, by
operation of law or otherwise (except as expressly provided herein), and no
repossession of the Demised Premises or any part thereof pursuant to this Lease
or otherwise, shall relieve Lessee of Lessee’s obligations or liabilities
hereunder, all of which shall survive such expiration, termination or
repossession.

 

16

 

In
the event of any such expiration, termination or repossession, Lessee shall pay
to Lessor all Rent up to the time of such expiration, termination or
repossession, together with all costs and expenses incurred by Lessor in
connection with such termination or repossession including attorneys’ fees, and
thereafter Lessee, until the end of what would have been the Lease Term in the
absence of such expiration, termination or repossession, and whether or not the
Demised Premises or any part thereof shall have been relet, shall be liable to
Lessor for, and shall pay to Lessor, as liquidated and agreed and current
damages for Lessee’s default, (a) all Rent which would be payable under
this Lease by Lessee in the absence of such expiration, termination or
repossession, less (b) all net rents collected by Lessor from the tenants
or subtenants of the Demised Premises, if any, and the net proceeds, if any, of
any reletting affected for the account of Lessee pursuant to Article 21
after deducting from such proceeds all Lessor’s expenses in connection with
such reletting and other sums owed Lessor, including without limitation all
repossession costs, brokerage commissions, legal and accounting expenses,
attorneys’ fees, employees’ expenses, promotional expenses, reasonable alteration
costs, and expenses of preparation for such reletting.  Lessee shall pay such current damages monthly
on the Rent Payment Dates applicable in the absence of such expiration,
termination or repossession, and Lessor shall be entitled to recover the same
from Lessee on each such date.  Any suit
brought to collect said amounts for any month or months shall not prejudice in
any way the rights of Lessor to collect the deficiency for any subsequent month
by similar action or proceeding.

 

At
any time after such expiration, termination or repossession, whether or not
Lessor shall have collected any current damages as aforesaid, Lessor shall be
entitled to recover from Lessee, and Lessee shall pay to Lessor on demand, as
and for liquidated and agreed final damages for Lessee’s default and in lieu of
all current damages beyond the date of such demand, an amount equal to the
excess, if any, of (a) all Rent which would be payable under this Lease
from the date of such demand (or, if it be earlier, the date to which Lessee
shall have satisfied in full Lessee’s obligation under the preceding paragraph
of this Article 25 to pay current damages) until what would be the then
unexpired Lease Term in the absence of such expiration, termination or
repossession, over (b) the then fair net rental value of the Demised
Premises for the same period.  In
determining said fair net rental value, the rent realized by any reletting of
the Demised Premises, if such reletting is upon terms (other than rental
amounts) generally comparable to the terms of this Lease, shall be deemed to be
said fair net rental value.  Upon the
payment of such final damages, this Lease, if not already terminated, shall be
deemed terminated.  If any statute or rule of
law shall validly limit the amount of such liquidated final damages to less
than the amount above agreed upon, Lessor shall be entitled to the maximum
amount allowable under such statute or rule of law.

 

26.  Injunction

 

Lessor,
in addition to all other rights, powers and remedies and notwithstanding the
concurrent pendency of summary or other dispossess proceedings, at Lessor’s
option, shall have the right at all times during the Lease Term to restrain by
injunction any violation or attempted violation by Lessee of any of the terms,
covenants or conditions of this Lease, and to enforce by injunction any of such
terms, covenants or conditions.

 

17

 

27.  Waivers

 

To
the extent permitted by law, Lessee waives: 
any notice of reentry or of the institution of legal proceedings to that
end; any right of redemption, reentry or repossession; any right to trial by
jury in any action or proceeding or in any matter in any way connected with
this Lease or the Demised Premises; and the benefit of any laws now or
hereafter in force exempting property for rent or for debt.

 

No
failure by Lessor or Lessee to insist upon the strict performance of and
compliance with any term, covenant or condition hereof or to exercise or
enforce any right, power or remedy consequent upon a breach thereof, and no
submission by Lessee or acceptance by Lessor of full or partial Rent during the
continuance of any such breach, shall constitute a waiver of any such breach or
of any such term, covenant or condition. 
No waiver of any breach of any term, covenant or condition of this Lease
shall affect or alter this Lease, which shall continue in full force and
effect, or the respective rights, powers or remedies of Lessor or Lessee with
respect to any other then existing or subsequent breach.

 

28.  Lessor’s
Remedies Cumulative

 

All
of the rights, powers and remedies of Lessor provided for in this Lease or now
or hereafter existing at law or in equity, or by statute or otherwise, shall be
deemed to be separate, distinct, cumulative and concurrent.  No one or more of such rights, powers or
remedies, nor any mention of reference to any one or more of them in this
Lease, shall be deemed to be in the exclusion of, or a waiver of, any other
rights, powers or remedies provided for in this Lease, or now or hereafter
existing at law or in equity, or by statute or otherwise.  The exercise or enforcement by Lessor of any
one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise or enforcement by Lessor of any or all of such
other rights, powers or remedies.

 

29.  Assignment,
Subletting and Mortgages

 

Lessee
expressly covenants that Lessee shall not voluntarily or involuntarily assign,
encumber, mortgage or otherwise transfer this Lease, or sublet the Demised Premises
or any part thereof, or suffer or permit the Demised Premises or any part
thereof to be used or occupied by others (other than to an affiliate of the
Lessee and to a residential sub-tenant of 3 North Street), by operation of law
or otherwise, without the prior written consent of Lessor in each instance
which consent shall not be unreasonably withheld.  Absent such consent, any act or instrument
purporting to do any of the foregoing shall be null and void.

 

If
this Lease is assigned, whether or not in violation of the terms of this Article 29,
Lessor may collect Rent from the assignee. 
If the Demised Premises or any part thereof are sublet or occupied by
anybody other than Lessee, Lessor, after any default by Lessee, may

 

18

 

collect rent from the
subtenant or occupant, and apply the net amount collected to the Rent due
hereunder.  Such collection of rent by
Lessor shall not be deemed a waiver of the provisions hereof, the acceptance of
the assignee, subtenant or occupant as a tenant, or a release of Lessee from
the further observance and performance by Lessee of the terms, covenants and
conditions of this Lease.

 

The
consent by Lessor to an assignment, encumbrance, transfer or subletting shall
not in any way be deemed consent to any further assignment, encumbrance,
transfer or subletting.  In no event
shall any permitted sublessee assign or encumber its sublease or further sublet
all or any portion of its sublet space, or otherwise suffer or permit the sublet
space or any part thereof to be used or occupied by others, without the prior
written consent of Lessor in each instance, and each permitted sublease shall
so provide in its terms.

 

If
Lessee requests Lessor’s consent to a specific assignment or subletting, Lessee
shall first submit to Lessor in writing: 
the name and address of the proposed assignee or sublessee; a
counterpart of the proposed agreement of assignment or sublease and all other
instruments or agreements pertaining thereto; such information as to the nature
and character of the business of the proposed assignee or sublessee and as to
the nature of its proposed use of the space, as Lessor reasonably may request;
banking, financial or other credit information relating to the proposed
assignee or sublessee sufficient to enable Lessor to determine the financial
responsibility and character of the proposed assignee or sublessee; and a
statement of all sums or other consideration paid or to be paid to Lessee by or
for the account of the assignee or sublessee for or in connection with such
assignment or sublease, including without limitation sums paid or to be paid
for the sale or rental of Lessee’s fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property.

 

Any
such consent of Lessor shall be subject to the terms of this Lease and
conditional upon there being no default by Lessee, beyond any grace period,
under any term, covenant or condition of this Lease at the time that Lessor’s
consent is requested and on the date of the commencement of the term of any
such proposed sublease or the effective date of any such proposed assignment.

 

Upon
receiving Lessor’s written consent, a duly executed copy of the sublease or
assignment shall be delivered to Lessor within thirty days after execution
thereof.  Any such sublease shall provide
that the sublessee shall comply with all applicable terms, covenants and
conditions of this Lease to be observed or performed by Lessee hereunder.  Any such assignment shall contain an assumption
by the assignee of all of the terms, covenants and conditions of this Lease to
be observed or performed by Lessee.

 

The
transfer of a majority of the issued and outstanding capital stock of any
corporate tenant or subtenant of this Lease or of a majority of the total
interest in any partnership tenant or subtenant, however accomplished, and
whether in a single transaction or in a series of related or unrelated
transactions, shall be deemed an assignment of this Lease or of such sublease.  The transfer of outstanding capital stock of
any corporate tenant or subtenant, for purposes of this Article 29, shall
not include a sale of such stock by persons other than those

 

19

 

deemed “insiders” within the
meaning of the Securities Exchange Act of 1934 as amended, effected through any
“over the counter” market or recognized stock exchange.

 

30. 
Subordination and Attornment

 

This
Lease, and all rights of Lessee hereunder, are and shall be subject and
subordinate in all respects to all mortgages which may now or hereafter affect
the Demised Premises, whether or not such mortgages shall also cover other
lands or buildings, to each and every advance made or hereafter to be made
under such mortgages and to all renewals, modifications, replacements,
spreaders, consolidations and extensions of such mortgages provided such
mortgage shall include a non disturbance provision with respect to this
Lease.  In the event of any sale of the
Demised Premises in a foreclosure of any such mortgage or the exercise by the
holder of any such mortgages of any other remedies provided for by law or in
such mortgage, Lessee, upon written request of the holder of the mortgage or
the purchaser at such foreclosure or any person succeeding to the interest of
the holder of the mortgage, shall attorn to such holder, purchaser or successor
in interest, as the case may be, without change in the terms, covenants or
conditions of this Lease.  This Lease
shall not be deemed to be terminated by any foreclosure proceedings or other
remedies for the enforcement of the mortgage by such holder, purchaser or
successor in interest.  The provisions of
this Article 30 shall be self-operative and no further instrument of
subordination and/or attornment shall be required.  In confirmation of such subordination and/or
attornment, Lessee promptly shall execute and deliver at Lessee’s expense any
instrument that Lessor or the holder of any such mortgage may reasonably
request to evidence such subordination and/or attornment; and Lessee hereby
irrevocably constitutes and appoints Lessor as Lessee’s attorney-in-fact,
coupled with an interest, to execute, acknowledge and deliver any such
instruments for and on behalf of Lessee.

 

31.  Entry by
Lessor

 

Lessor
and the authorized representatives of Lessor shall have the right to enter the
Demised Premises at all reasonable times for the purpose of inspecting the same
or for the purpose of doing any work permitted to be done by Lessor under this
Lease, and to take all such actions thereon as may be necessary or appropriate
for any other purpose.  Nothing contained
in this Lease shall create or imply any duty on the part of Lessor to make any
such inspection or do any such act. 
Lessor and representatives of Lessor shall have the right to enter the
Demised Premises at all reasonable times for the purpose of showing the Demised
Premises to prospective purchasers or mortgagees, and at any time during the
twelve month period preceding the expiration or termination of this Lease for
the purpose of showing the same to prospective tenants, and within said period
to display on the Demised Premises advertisements for sale or letting if such
advertisements do not interfere unreasonably with the business then conducted
on the Demised Premises.  No such entry
shall constitute an eviction of Lessee.

 

20

 

32.  Conveyance
by Lessor

 

If
the original or any successor Lessor shall convey or otherwise dispose of the
Land and Improvements, Lessor shall thereupon be released from all obligations
and liabilities of Lessor under this Lease (except those accruing prior to such
conveyance or other disposition), and such obligations and liabilities shall be
binding solely on the then owner of the Land and Improvements.

 

In
any action brought to enforce the obligations or liabilities of Lessor under
this Lease, any judgment or decree shall be enforceable against Lessor only to
the extent of Lessor’s interest in the Land and Improvements, and no such
judgment shall be the basis of execution on, or be a lien on, assets of Lessor
other that Lessor’s interest in the Land and Improvements.

 

33.  No Merger
of Title

 

There
shall be no merger of the leasehold estate created by this Lease with the fee
estate in the Demised Premises by reason of the fact that the same person may
own or hold (a) the leasehold estate created by this Lease or any interest
therein, and (b) the fee estate in the Demised Premises or any interest in
such fee estate.  No such merger shall
occur unless and until all persons having any interest in the leasehold estate
created by this Lease, and in the fee estate in the Demised Premises, shall
join in a written instrument effecting such merger and shall duly record the
same.

 

34.  Acceptance
of Surrender

 

No
modification, termination or surrender of this Lease or surrender of the
Demised Premises or any part thereof or of any interest therein by Lessee shall
be valid or effective unless agreed to and accepted in writing by Lessor, and
no act by any representative or agent of Lessor, other than such a written
agreement and acceptance, shall constitute an acceptance thereof.

 

35.  Holdover
Tenancy

 

If
Tenant holds possession of the Premises after the term of this Lease, Tenant
shall become a tenant from month to month under the provisions herein provided,
but at a monthly rental of One Hundred Fifty Percent (150%) of the rent for the
last month of the expired term without the requirement for demand or notice by
Landlord to Tenant demanding delivery of possession of said Premises which sum
shall be payable in advance on the first day of each month, and such tenancy
shall continue until terminated by Landlord, or until Tenant shall have vacated
the Premises.

 

21

 

36.  End of
Lease Term

 

Upon
the expiration or termination of the Lease Term, Lessee shall quit, surrender
and deliver to Lessor the Demised Premises with the Improvements thereon in
good order and condition, ordinary wear and tear excepted, and shall remove all
Lessee’s Equipment therefrom.

 

If
Lessee vacates the Demised Premises at any time prior to the expiration or
termination of this Lease, Lessee shall cause the Demised Premises to be
patrolled by armed guards on a 24 hour basis so as to prevent vandalism or
other damage to the Demised Premises.

 

37.  Options to
Extend Lease Term

 

Lessee
shall have two options to extend the Lease Term each for an additional FIVE
YEARS, subject to all of the terms, covenants and conditions of this
Lease.  During the first such five year
extension period, Lessee shall pay fixed rent at the rate of $450,000 per annum
and shall pay all other items of Rent during the first extension period.

 

If
the aforesaid first option has been duly exercised, Lessee shall have a second
option to extend the Lease Term for an additional FIVE YEARS, subject to all of
the terms, covenants and conditions of this Lease.  During said second extension of the Lease
Term, Lessee shall pay Fixed Rent at the greater of (i) the Fixed Rent in
effect on the last day of the first extension period or (ii) the fair
market value rent at the time of the exercise of the second option and shall
pay all other items of Rent during the second extension period.

 

To
be effective, Lessee must give Lessor written notice of Lessee’s election to
extend the Lease Term not less than 180 DAYS prior to the expiration of the
then existing Lease Term.  Lessee’s right
to extend the Lease Term pursuant to this Article 36 shall be conditioned
upon there being no default by Lessee in the observance or performance of any
of the terms, covenants and conditions of this Lease either at the time of the
exercise of the option or on the expiration of the then existing Lease Term.

 

38.  Brokerage

 

Lessor
and Lessee each represents and warrants to the other that such party has not
dealt with any broker or finder in connection with the Demised Premises or this
Lease.  Lessor and Lessee each agrees to
indemnify and hold the other harmless from and against any and all commission,
liability, claim, loss, damage or expense, including reasonable attorneys’
fees, arising from any claims for brokerage or any other fee or commission by
any person with whom such party has dealt.

 

39.  Definitions

 

As
used in this Lease, the following terms have the following respective meanings:

 

22

 

“default”
— any condition or event which constitutes, or which after notice or lapse of
time or both would constitute, an Event of Default.

 

“Demised
Premises” — as defined in Article 1.

 

“Event
of Default” — as defined in Article 19.

 

“Fixed
Rent” — as defined in Article 2.

 

“Impositions”
— all taxes, assessments (including without limitation all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof and whether or not to be completed within the Lease Term),
water and sewer rents and charges, charges for public utilities, excises,
levies, license fees, permit fees, inspection fees and other authorization fees
and other charges of every nature and kind whatsoever (including all interest
and penalties thereon), in each case, whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character, which at any time
during or in respect of the Lease Term may be assessed, levied, charged,
confirmed or imposed on or in respect of or be a lien upon (a) the Demised
Premises or any part thereof or any rent therefrom or any estate, right or
interest therein, or (b) any occupancy, use or possession of or activity
conducted on the Demised Premises or any part thereof.  The term “Impositions” shall exclude,
however, any income taxes assessed against Lessor, franchise, estate,
inheritance or transfer taxes of Lessor, or any tax or charge in replacement or
substitution of the foregoing or of a similar character; provided, however,
that if at any time during the Lease Term the then prevailing method of
taxation or assessment shall be changed so that the whole or any part of the
Impositions theretofore payable by Lessee as above provided, shall instead be
levied, charged, assessed or imposed whole or partially on the rents received
by Lessor from the Demised Premises, or shall otherwise be imposed against
Lessor in the form of a franchise tax or otherwise, then Lessee shall pay the
same (and the same shall be deemed Impositions) at least twenty days prior to
the last day upon which the same may be paid without interest or penalty for
the late payment thereof.

 

“Improvements”
— as defined in Article 1.  The term
“Improvements” shall include all fixtures, equipment and machinery now situate
on or appurtenant to the Improvements referred to in Article 1, other than
Lessee’s Equipment.

 

“Insurance
Requirements” — all terms of any insurance policy covering or applicable to the
Demised Premises or any part thereof, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters, or its successor or any other body
exercising similar functions, applicable to or affecting the Demised Premises
or any part thereof or any use or condition of the Demised Premises or any part
thereof.

 

23

 

“Land”
— as defined in Article 1.

 

“Lease”
— this Lease, as at the time amended, modified or supplemented.

 

“Lease
Term” — as defined in Article 1, as the same may be extended or renewed.

 

“Legal
Requirements” — all laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, permits, licenses, authorizations,
directions and requirements of all governments, departments, commissions,
boards, courts, authorities, agencies, officials and officers, foreseen or
unforeseen, ordinary or extraordinary, which now or at any time hereafter may
be applicable to the Demised Premises or any part thereof, or the Improvements
now or hereafter located thereon, or the facilities or equipment therein, or
any of the adjoining sidewalks, curbs, vaults or vault space, if any, streets
or ways, or the appurtenances to the Demised Premises or the franchises and
privileges connected therewith, or any use or condition of the Demised Premises
or any part thereof.  Legal Requirements
shall include the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., and all other applicable
environmental laws and regulations, and all requirements to be complied with
pursuant to any certificate of occupancy affecting the Demised Premises.

 

“Lessee’s
Equipment” — all fixtures, machinery, apparatus, furniture, furnishings and
other equipment and all temporary or auxiliary structures installed by or at
the request of Lessee in or about the Demised Premises or any part thereof,
which (a) are not used and are not procured for use, in whole or in part,
in connection with the operation, maintenance or protection of the Demised
Premises, and (b) are removable provided any damage to the Demised
Premises caused by such removal shall be repaired at Lessee’s expense.

 

“person”
— an individual, a corporation, an association, a partnership, a joint venture,
an organization, or other business entity, or a governmental or political unit
or agency.

 

“Rent
Payment Date” — as defined in Article 2.

 

“Restoration”
— all restorations, replacements, rebuildings, alterations, additions,
temporary repairs and property protection to be performed in connection with a
Taking of the Demised Premises or the damage to or destruction of the Demised
Premises.

 

“Taking”
— a taking during the Lease Term of all or any part of the Demised Premises, or
any leasehold or other interest therein or right accruing thereto, as the
result of the exercise of the right of condemnation or eminent domain or a sale

 

24

 

in
lieu or in anticipation of such exercise or a change or grade affecting the
Demised Premises or any part thereof.

 

“Total
Taking” — as defined in Article 16.

 

“Unavoidable
Delays” — delays due to strikes, acts of God, governmental restrictions, enemy
action, riot, civil commotion, fire, unavoidable casualty or other causes
beyond the control of Lessee, provided that no delay shall be deemed an
Unavoidable Delay if the Demised Premises or any part thereof or interest
therein or any Rent would be in any danger of being sold, forfeited, lost or
interfered with, or if Lessor or Lessee would be in danger of incurring any
civil or criminal liability for failure to perform the required act.  Lack of funds shall not be deemed a cause
beyond the control of Lessee.

 

40.  Notices

 

All
notices, demands, elections and other communications desired or required to be
delivered or given under this Lease shall be in writing, and shall be deemed to
have been delivered and given when delivered by hand, or on the third business
day after the same have been mailed by first class registered or certified
mail, postage prepaid, enclosed in a securely sealed envelop addressed to the
party to which the same is to be delivered or given at such party’s address as
set forth in this Lease or at such other address as said party shall have
designated in writing in accordance with this Article 39.

 

41. 
Communications Tower

 

Landlord
shall have the right to locate communication tower or towers on the Premises
provided structure and related equipment housing and related constructions does
not materially interfere with Tenant’s business. Landlord reserves the right
for reasonable access for itself and other in connection with such Tower(s).

 

41. 
Miscellaneous

 

All
rights, powers and remedies provided herein may be exercised only to the extent
that the exercise thereof does not violate any applicable law, and are intended
to be limited to the extent necessary so that they will not render this Lease
invalid, unenforceable or not entitled to be recorded under any applicable
law.  If any term, covenant or condition
of this Lease shall be held to be invalid, illegal or unenforceable, the
validity of the other terms, covenants and conditions of this Lease shall in no
way be affected thereby.  If any interest
provided for herein shall be deemed to be in excess of the maximum amount
permitted under applicable law, Lessee shall be deemed to be entitled to the
maximum amount permitted under applicable law.

 

25

 

Lessor
and Lessee agree that a memorandum of this Lease, but not this Lease, may be
recorded by Lessee, at Lessee’s expense.

 

The
headings in this Lease are for purposes of reference only and shall not limit
or define the meaning hereof.  This Lease
may be executed in any number of counterparts, each of which is an original,
but all of which shall constitute one instrument.

 

This
Lease may be changed or modified only by an instrument in writing signed by the
party against which enforcement of such change or modification is sought.

 

Subject
to Articles 29 and 32, this Lease shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.

 

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease on the date first above
written.

 

 

	
   

  	
  NORTH STREET ASSOCIATES
  LLC

  
	
  ATTEST:

  	
  By: Hempstead LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Simon
  Alishayev

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC EXPRESS
  TRANSPORTATION

  
	
   

  	
  CORP.

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Domenic
  Gatto

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  

 

26Exhibit 10.1

 

 

LEASE AGREEMENT BETWEEN

 

 

SFI I, LLC,

 

 

AS LANDLORD, AND

 

 

OMTOOL, LTD.,

 

 

AS TENANT

 

 

DATED JANUARY 6, 2006

 

 

SIX RIVERSIDE DRIVE

ANDOVER, MASSACHUSETTS

 

 

BASIC LEASE INFORMATION

 

	
  Lease Date:

  	
   

  	
  January 6, 2006

  
	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
  SFI I, LLC, a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  OMTOOL, LTD., a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  That certain space containing approximately
  forty-four thousand forty-eight (44,048) rentable square feet and comprising
  a portion of the first (1st) floor and the entire second (2nd)
  floor of the office building commonly known as 6 Riverside Drive, Andover,
  Massachusetts (the “Building”).  The Premises are outlined on the plan
  attached to the Lease as Exhibit A (the “Premises”).  The
  land on which the Building is located (the “Land”)
  is described on Exhibit B.  The
  term “Project” shall
  collectively refer to the Building, the Land and the driveways, parking
  facilities, and similar improvements and easements associated with the
  foregoing or the operation thereof.

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  Approximately one hundred twenty (120) months,
  commencing on the Commencement Date and ending at 5:00 p.m. local time
  on the last day of the one hundred twentieth (120th) full calendar
  month following the Commencement Date, subject to adjustment and earlier
  termination as provided in the Lease.

  
	
   

  	
   

  	
   

  
	
  Commencement Date:

  	
   

  	
  The earlier of (a) the date on which Tenant
  occupies any portion of the Premises and begins conducting business therein,
  or (b) May 21, 2006.

  
	
   

  	
   

  	
   

  
	
  Basic Rent

  	
   

  	
  Basic Rent shall be the following amounts for the
  following periods of time:

  

 

	
  Lease Month

  	
   

  	
  Annualized per RSF

  	
   

  	
  Monthly Basic Rent

  	
   

  
	
  1-6

  	
   

  	
   

  	
  $

  	
  8.60

  	
   

  	
  $

  	
  31,567.73

  	
   

  
	
   

  	
   

  	
   

  	
  (Abated, subject to
  Section 26(a)

  	
   

  	
  (Abated, subject to
  Section 26(a)

  	
   

  
	
  7 - 36

  	
   

  	
   

  	
  $

  	
  8.60

  	
   

  	
  $

  	
  31,567.73

  	
   

  
	
  37-60

  	
   

  	
   

  	
  $

  	
  9.10

  	
   

  	
  $

  	
  33,403.07

  	
   

  
	
  61-84

  	
   

  	
   

  	
  $

  	
  10.10

  	
   

  	
  $

  	
  37,073.73

  	
   

  
	
  85-120

  	
   

  	
   

  	
  $

  	
  11.10

  	
   

  	
  $

  	
  40,744.40

  	
   

  

 

	
   

  	
   

  	
  As used herein, the term “Lease Month”
  shall mean each calendar month during the Term (and if the Commencement Date
  does not occur on the first day of a calendar month, the period from the
  Commencement Date to the first day of the next calendar month shall be
  included in the first Lease Month for purposes of determining the duration of
  the Term and the monthly Basic Rent rate applicable for such partial month).

  
	
   

  	
   

  	
   

  
	
  Security Deposit:

  	
   

  	
  $31,567.73

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rent:

  	
   

  	
  Basic Rent, Tenant’s Proportionate Share of Taxes,
  Additional Rent, and all other sums that Tenant may owe to Landlord or
  otherwise be required to pay under the Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Permitted Use:

  	
   

  	
  General office use.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s Proportionate Share:

  	
   

  	
  57.17%, which is the percentage obtained by dividing
  (a) the number of  rentable square
  feet in the Premises as stated above by (b) the 77,048 rentable square
  feet in the Project.  Landlord and
  Tenant stipulate that the number of rentable square feet in the Premises and
  in the Project set forth above is conclusive and shall be binding upon them.

  

 

i

 

	
  Expense Stop:

  	
   

  	
  Not applicable.

  
	
   

  	
   

  	
   

  
	
  Base Tax Year:

  	
   

  	
  Not applicable.

  
	
   

  	
   

  	
   

  
	
  Initial Liability Insurance Amount:

  	
   

  	
  $3,000,000.00

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s Address:

  	
   

  	
  Prior to Commencement Date:

  8A Industrial Way

  Salem, NH 03079

  

  Attention: Daniel A. Coccoluto

  Telephone: 603-898-8900

  Telecopy: 603-890-1986

  	
   

  	
  Following Commencement Date:

  

  AT THE PREMISES  

  

  Attention: Daniel A. Coccoluto

  Telephone:

  Telecopy:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Landlord’s Address:

  	
   

  	
  For All Notices:

  

  SFI I, LLC

  c/o iStar Financial Inc.

  3480 Preston Ridge Road, Ste 575

  Alpharetta, GA 30005

  Attention: Kristen L. Vance

  Telephone: 678-339-2004

  Telecopy: 678-249-1204

  	
   

  	
  With a copy to:

  

  Alston & Bird LLP

  One Atlantic Center

  1201 West Peachtree Street

  Atlanta, Georgia  30309

  Attention:  Christina Braisted Rogers

  Telephone:  404-881-7654

  Telecopy:  404-881-7777

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Send Rental Payments to:

  	
   

  	
  SFI I, LLC

  Bank of America – SFI I, LLC

  P.O. Box 402760

  Atlanta, GA

  30384-2760

  	
   

  	
   

  

 

ii

 

The foregoing Basic Lease Information is incorporated
into and made a part of the Lease identified above.  If any conflict exists between any Basic
Lease Information and the Lease, then the Lease shall control.

 

	
  LANDLORD:

  	
  SFI I, LLC, a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By:  iSTAR
  FINANCIAL, INC., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen Vance

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kristen Vance

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
  OMTOOL, LTD., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A. Coccoluto

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Daniel A. Coccoluto

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
								

 

iii

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and Basic Provisions

  	
  1

  
	
  2.

  	
  Lease Grant

  	
  1

  
	
  3.

  	
  Tender of Possession

  	
  1

  
	
  4.

  	
  Rent

  	
  1

  
	
  (a)

  	
  Payment

  	
  1

  
	
  (b)

  	
  Operating Costs;
  Taxes

  	
  2

  
	
  5.

  	
  Delinquent Payment; Handling Charges

  	
  3

  
	
  6.

  	
  Security Deposit

  	
  4

  
	
  7.

  	
  Landlord’s Obligations

  	
  4

  
	
  (a)

  	
  Services

  	
  4

  
	
  (b)

  	
  Excess Utility
  Use

  	
  4

  
	
  (c)

  	
  Restoration of
  Services; Abatement

  	
  5

  
	
  8.

  	
  Improvements;
  Alterations; Repairs; Maintenance

  	
  5

  
	
  (a)

  	
  Improvements;
  Alterations

  	
  5

  
	
  (b)

  	
  Repairs;
  Maintenance

  	
  5

  
	
  (c)

  	
  Performance of
  Work

  	
  5

  
	
  (d)

  	
  Mechanic’s Liens

  	
  6

  
	
  9.

  	
  Use

  	
  6

  
	
  10.

  	
  Assignment and
  Subletting

  	
  7

  
	
  (a)

  	
  Transfers

  	
  7

  
	
  (b)

  	
  Consent
  Standards

  	
  7

  
	
  (c)

  	
  Request for
  Consent

  	
  7

  
	
  (d)

  	
  Conditions to
  Consent

  	
  7

  
	
  (e)

  	
  Attornment by
  Subtenants

  	
  8

  
	
  (f)

  	
  Cancellation

  	
  8

  
	
  (g)

  	
  Additional
  Compensation

  	
  8

  
	
  (h)

  	
  Permitted
  Transfers

  	
  8

  
	
  11.

  	
  Insurance; Waivers;
  Subrogation; Indemnity

  	
  9

  
	
  (a)

  	
  Tenant’s
  Insurance

  	
  9

  
	
  (b)

  	
  Landlord’s
  Insurance

  	
  9

  
	
  (c)

  	
  No Subrogation

  	
  10

  
	
  (d)

  	
  Indemnity

  	
  10

  
	
  12.

  	
  Subordination;
  Attornment; Notice to Landlord’s Mortgagee

  	
  10

  
	
  (a)

  	
  Subordination

  	
  10

  
	
  (b)

  	
  Attornment

  	
  11

  
	
  (c)

  	
  Notice to Landlord’s
  Mortgagee

  	
  11

  
	
  (d)

  	
  Landlord’s
  Mortgagee’s Protection Provisions

  	
  11

  
	
  13.

  	
  Rules and
  Regulations

  	
  11

  
	
  14.

  	
  Condemnation

  	
  11

  
	
  (a)

  	
  Total Taking

  	
  11

  
	
  (b)

  	
  Partial Taking -
  Tenant’s Rights

  	
  11

  
	
  (c)

  	
  Partial Taking -
  Landlord’s Rights

  	
  12

  
	
  (d)

  	
  Award

  	
  12

  
	
  15.

  	
  Fire or Other
  Casualty

  	
  12

  
	
  (a)

  	
  Repair Estimate

  	
  12

  
	
  (b)

  	
  Tenant’s Rights

  	
  12

  
	
  (c)

  	
  Landlord’s
  Rights

  	
  12

  
	
  (d)

  	
  Repair
  Obligation

  	
  12

  
	
  (e)

  	
  Abatement of
  Rent

  	
  12

  
	
  16.

  	
  Personal
  Property Taxes

  	
  13

  
	
  17.

  	
  Events of
  Default

  	
  13

  
	
  (a)

  	
  Payment Default

  	
  13

  

 

iv

 

	
  (b)

  	
  Abandonment

  	
  13

  
	
  (c)

  	
  Estoppel

  	
  13

  
	
  (d)

  	
  Insurance

  	
  13

  
	
  (e)

  	
  Mechanic’s Liens

  	
  13

  
	
  (f)

  	
  Other Defaults

  	
  13

  
	
  (g)

  	
  Insolvency

  	
  13

  
	
  18.

  	
  Remedies

  	
  14

  
	
  (a)

  	
  Termination of
  Lease

  	
  14

  
	
  (b)

  	
  Termination of
  Possession

  	
  14

  
	
  (c)

  	
  Perform Acts on
  Behalf of Tenant

  	
  14

  
	
  (d)

  	
  Alteration of
  Locks

  	
  14

  
	
  19.

  	
  Payment by
  Tenant; Non-Waiver; Cumulative Remedies

  	
  14

  
	
  (a)

  	
  Payment by
  Tenant

  	
  14

  
	
  (b)

  	
  No Waiver

  	
  15

  
	
  (c)

  	
  Cumulative
  Remedies

  	
  15

  
	
  20.

  	
  Intentionally
  Omitted

  	
  15

  
	
  21.

  	
  Surrender of
  Premises

  	
  15

  
	
  22.

  	
  Holding Over

  	
  15

  
	
  23.

  	
  Certain Rights
  Reserved by Landlord

  	
  16

  
	
  (a)

  	
  Building
  Operations

  	
  16

  
	
  (b)

  	
  Security

  	
  16

  
	
  (c)

  	
  Prospective
  Purchasers and Lenders

  	
  16

  
	
  (d)

  	
  Prospective
  Tenants

  	
  16

  
	
  24.

  	
  Intentionally
  Omitted

  	
  16

  
	
  25.

  	
  Miscellaneous

  	
  16

  
	
  (a)

  	
  Landlord
  Transfer

  	
  16

  
	
  (b)

  	
  Landlord’s
  Liability

  	
  16

  
	
  (c)

  	
  Force Majeure

  	
  16

  
	
  (d)

  	
  Brokerage

  	
  16

  
	
  (e)

  	
  Estoppel
  Certificates

  	
  17

  
	
  (f)

  	
  Notices

  	
  17

  
	
  (g)

  	
  Separability

  	
  17

  
	
  (h)

  	
  Amendments;
  Binding Effect

  	
  17

  
	
  (i)

  	
  Quiet Enjoyment

  	
  17

  
	
  (j)

  	
  No Merger

  	
  17

  
	
  (k)

  	
  No Offer

  	
  17

  
	
  (l)

  	
  Entire Agreement

  	
  17

  
	
  (m)

  	
  Waiver of Jury
  Trial

  	
  18

  
	
  (n)

  	
  Governing Law

  	
  18

  
	
  (o)

  	
  Recording

  	
  18

  
	
  (p)

  	
  Joint and
  Several Liability

  	
  18

  
	
  (q)

  	
  Financial
  Reports

  	
  18

  
	
  (r)

  	
  Landlord’s Fees

  	
  18

  
	
  (s)

  	
  Telecommunications

  	
  18

  
	
  (t)

  	
  Confidentiality

  	
  19

  
	
  (u)

  	
  Authority

  	
  19

  
	
  (v)

  	
  Hazardous
  Materials

  	
  19

  
	
  (w)

  	
  List of Exhibits

  	
  19

  
	
  26.

  	
  Other Provisions

  	
  19

  
	
  (a)

  	
  Rent Abatement

  	
  19

  
	
  (b)

  	
  Right of First
  Offer

  	
  20

  
	
  (c)

  	
  Back- Up
  Generator

  	
  20

  
	
  (d)

  	
  Tenant’s Access

  	
  21

  
	
  (e)

  	
  Americans with
  Disabilities Act

  	
  21

  
	
  (f)

  	
  Landlord Default

  	
  21

  

 

v

 

LIST OF DEFINED TERMS

 

	
   

  	
  Page No.

  
	
   

  	
   

  
	
  Additional Rent

  	
  2

  
	
  Affiliate

  	
  1

  
	
  Approval Criteria

  	
  2

  
	
  Architect

  	
  1

  
	
  Base Tax Year

  	
  ii

  
	
  Basic Lease Information

  	
  1

  
	
  Basic Rent

  	
  i

  
	
  Building’s Structure

  	
  1

  
	
  Building’s Systems

  	
  1

  
	
  Casualty

  	
  12

  
	
  Commencement Date

  	
  i

  
	
  Completed Application for Payment

  	
  3

  
	
  Construction Allowance

  	
  3

  
	
  Damage Notice

  	
  12

  
	
  Default Rate

  	
  3

  
	
  Disabilities Acts

  	
  6, 21

  
	
  Effective Termination Date

  	
  1

  
	
  Estimated Delivery Date

  	
  1

  
	
  Event of Default

  	
  13

  
	
  Expense Stop

  	
  ii

  
	
  GAAP

  	
  9

  
	
  Hazardous Materials

  	
  19

  
	
  HVAC

  	
  4

  
	
  Initial Appraiser

  	
  1

  
	
  Initial Liability Insurance Amount

  	
  ii

  
	
  Land

  	
  i

  
	
  Landlord

  	
  1

  
	
  Landlord’s Mortgagee

  	
  10

  
	
  Law

  	
  1

  
	
  Laws

  	
  1

  
	
  Lease

  	
  1

  
	
  Lease Month

  	
  i

  
	
  Loss

  	
  10

  
	
  Manager

  	
  1

  
	
  Mortgage

  	
  10

  
	
  Operating Costs

  	
  2

  
	
  Operating Costs and Tax Statement

  	
  3

  
	
  Permitted Transfer

  	
  8

  
	
  Permitted Transferee

  	
  8

  
	
  Permitted Use

  	
  i

  
	
  Premises

  	
  i

  
	
  Primary Lease

  	
  10

  
	
  Project

  	
  i

  
	
  Rent

  	
  i

  
	
  Repair Period

  	
  12

  
	
  Security Deposit

  	
  i

  
	
  Space Plans

  	
  1

  
	
  Space Plans Delivery Deadline

  	
  1

  
	
  Substantial Completion

  	
  3

  
	
  Substantially Completed

  	
  3

  
	
  Taking

  	
  11

  
	
  Tangible Net Worth

  	
  9

  

 

vi

 

	
  Taxes

  	
  3

  
	
  Telecommunications Services

  	
  18

  
	
  Tenant

  	
  1

  
	
  Tenant Party

  	
  1

  
	
  Tenant’s Off-Premises Equipment

  	
  1

  
	
  Tenant’s Proportionate Share

  	
  i

  
	
  Term

  	
  i

  
	
  Total Construction Costs

  	
  3

  
	
  Transfer

  	
  7

  
	
  Work

  	
  2

  
	
  Working Drawings

  	
  2

  
	
  Working Drawings Delivery Deadline

  	
  1

  

 

vii

 

LEASE

 

This Lease Agreement (this “Lease”) is entered into
as of January 6, 2006, between SFI I, LLC, a Delaware limited liability company (“Landlord”),
and OMTOOL, LTD., a Delaware corporation (“Tenant”).

 

1.                                      Definitions
and Basic Provisions.  The
definitions and basic provisions set forth in the Basic Lease Information (the “Basic Lease
Information”) executed by Landlord and Tenant contemporaneously
herewith are incorporated herein by reference for all purposes.  Additionally, the following terms shall have
the following meanings when used in this Lease: “Affiliate” means any
person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; “Building’s Structure” means the Building’s exterior
walls, roof, elevator shafts, footings, foundations, structural portions of
load-bearing walls, structural floors and subfloors, and structural columns and
beams; “Building’s
Systems” means the Building’s HVAC, life-safety, plumbing,
electrical, and mechanical systems; “including” means including, without
limitation; “Laws”
means all federal, state, and local laws, ordinances, rules and
regulations, all court orders, governmental directives, and governmental orders
and all interpretations of the foregoing, and all restrictive covenants
affecting the Project, and “Law” shall mean any of the foregoing; “Tenant’s
Off-Premises Equipment” means any of Tenant’s equipment or other
property that may be located on or about the Project (other than inside the
Premises); and “Tenant
Party” means any of the following persons:  Tenant; any assignees claiming by, through,
or under Tenant; any subtenants claiming by, through, or under Tenant; and any
of their respective agents, contractors, employees, and invitees.

 

2.                                      Lease
Grant.  Subject
to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises. 

 

3.                                      Tender
of Possession.  Landlord and Tenant presently
anticipate that possession of the Premises will be tendered to Tenant in the
condition required by this Lease on or about January 3, 2006 (the “Estimated
Delivery Date”), free and clear of any occupancy rights of third
parties.  If Landlord is unable to tender
possession of the Premises in such condition to Tenant by the Estimated
Delivery Date, then, provided Landlord uses diligent good faith efforts to
tender possession of the Premises in such condition as soon thereafter as is practicable,
(a) the validity of this Lease shall not be affected or impaired thereby, (b) Landlord
shall not be in default hereunder or be liable for damages therefor, and (c) Tenant
shall accept possession of the Premises when Landlord tenders possession thereof
to Tenant. By occupying the Premises, Tenant shall be deemed to have accepted
the Premises in their condition as of the date of such occupancy, subject to
the performance of punch-list items that remain to be performed by Landlord, if
any.  Within ten days after request by Landlord,
Tenant shall execute and deliver to Landlord a letter substantially in the form
of Exhibit E hereto confirming (1) the
Commencement Date and the expiration date of the initial Term, (2) that
Tenant has accepted the Premises, and (3) that Landlord has performed all
of its obligations with respect to the Premises (except for punch-list items
specified in such letter); however, the failure of the parties to execute such
letter shall not defer the Commencement Date or otherwise invalidate this
Lease.  This Lease shall create the
relationship of landlord and tenant between Landlord and Tenant; no estate
shall pass out of Landlord, and Tenant has only a usufruct which is not subject
to levy or sale.  Landlord discloses to
Tenant, and Tenant acknowledges, that Landlord is the owner of record of the
Building and of the Premises and that iStar Real Estate Services (the “Manager”)
is authorized to manage the Building and the Premises on behalf of
Landlord.  The address of Landlord and
the address of the Manager is set forth in the Basic Lease Information.  Occupancy of the Premises by Tenant prior to
the Commencement Date shall be subject to all of the provisions of this Lease
excepting only those requiring the payment of Basic Rent, Additional Rent and
Taxes (each as defined herein).  In the
event the Premises have been vacated by the prior tenant prior to the Estimated
Delivery Date, if and to the extent permitted by applicable laws, rules and
ordinances, Tenant shall have the right to enter the Premises prior to the
Estimated Delivery Date in order to perform the Work pursuant to the Work
Letter attached hereto as Exhibit D and otherwise prepare the
Premises for occupancy.  

 

4.                                      Rent.

 

(a)                                  Payment.  Tenant shall timely pay to Landlord Rent,
without notice, demand, deduction or set off (except as otherwise expressly
provided herein), by good and sufficient check drawn on a national banking
association at Landlord’s address provided for in this Lease or as otherwise
specified by Landlord and shall be

 

 

accompanied by all
applicable state and local sales or use taxes. 
The obligations of Tenant to pay Basic Rent and other sums to Landlord
and the obligations of Landlord under this Lease are independent obligations.  Basic Rent, adjusted as herein provided,
shall be payable monthly in advance. 
Basic Rent shall be payable on the first day of each month beginning on
the first day of the seventh full calendar month of the Term.  The monthly Basic Rent for any partial month
at the beginning of the Term shall equal the product of 1/365 of the annual
Basic Rent in effect during the partial month and the number of days in the
partial month and shall be due on the Commencement Date.  Payments of Basic Rent for any fractional
calendar month at the end of the Term shall be similarly prorated.  Tenant shall pay Additional Rent at the same
time and in the same manner as Basic Rent.

 

(b)                                 Operating
Costs; Taxes.

 

(1)                                  Tenant
shall pay to Landlord as additional rent (“Additional Rent”) Tenant’s
Proportionate Share of the annual Operating Costs (defined below).  Landlord may make a good faith estimate of
the Additional Rent to be due by Tenant for any calendar year or part thereof
during the Term.  During each calendar
year or partial calendar year of the Term, Tenant shall pay to Landlord, in
advance concurrently with each monthly installment of Basic Rent, an amount
equal to the estimated Additional Rent for such calendar year or part thereof
divided by the number of months therein. 
From time to time, Landlord may estimate and re-estimate the Additional
Rent to be due by Tenant and deliver a copy of the estimate or re-estimate to
Tenant.  Thereafter, the monthly
installments of Additional Rent payable by Tenant shall be appropriately
adjusted in accordance with the estimations so that, by the end of the calendar
year in question, Tenant shall have paid all of the Additional Rent as
estimated by Landlord.  Any amounts paid
based on such an estimate shall be subject to adjustment as herein provided
when actual Operating Costs are available for each calendar year.

 

(2)                                  The
term “Operating
Costs” shall mean all expenses and disbursements (subject to the
limitations set forth below) that Landlord incurs in connection with the
ownership, operation, and maintenance of the Project, determined in accordance
with sound accounting principles consistently applied, including the following
costs: (A) wages and salaries of all on-site employees at or below the
grade of senior building manager engaged in the operation, maintenance or
security of the Project (together with Landlord’s reasonable allocation of
expenses of off-site employees at or below the grade of senior building manager
who perform a portion of their services in connection with the operation,
maintenance or security of the Project), including taxes, insurance and
benefits relating thereto; (B) all supplies and materials used in the
operation, maintenance, repair, replacement, and security of the Project; (C) costs
for improvements made to the Project which, although capital in nature, are
expected to reduce the normal operating costs (including all utility costs) of
the Project, as amortized using a commercially reasonable interest rate over
the time period reasonably estimated by Landlord to recover the costs thereof
taking into consideration the anticipated cost savings, as determined by
Landlord using its good faith, commercially reasonable judgment, as well as
capital improvements made in order to comply with any Law hereafter promulgated
by any governmental authority or any interpretation hereafter rendered with
respect to any existing Law, as amortized using a commercially reasonable
interest rate over the useful economic life of such improvements as determined
by Landlord in its reasonable discretion; (D) cost of all utilities,
except the cost of utilities reimbursable to Landlord by the Project’s tenants
other than pursuant to a provision similar to this Section 4(b); (E) insurance
expenses; (F) repairs, replacements, and general maintenance of the
Project; (G) fair market rental and other costs with respect to the
management office for the Project; and (H) service, maintenance and
management contracts with independent contractors for the operation,
maintenance, management, repair, replacement, or security of the Project
(including alarm service, window cleaning, and elevator maintenance).

 

Operating Costs shall not
include costs for (i) capital improvements made to the Project, other than
capital improvements described in Section 4(b)(2)(C) and except for
items which are generally considered maintenance and repair items, such as
painting of common areas, replacement of carpet in elevator lobbies, and the
like; (ii) repair, replacements and general maintenance paid by proceeds
of insurance or by Tenant or other third parties; (iii) interest,
amortization or other payments on loans to Landlord; (iv) depreciation; (v) leasing
commissions; (vi) legal expenses for services, other than those that
benefit the Project tenants generally (e.g., tax disputes); (vii) renovating
or otherwise improving space for occupants of the Project or vacant space in
the Project; (viii) Taxes; (ix) federal income taxes imposed on or
measured by the income

 

2

 

of Landlord from the
operation of the Project; (x) management fees (whether or not paid to
subsidiaries or affiliates of Landlord) to the extent in excess of competitive
rates; (xi) costs attributable to obtaining or retaining tenants, including,
advertising expenses, improvement costs, brokerage commissions, engineering
fees, architectural fees and attorneys’ fees; (xii) reserves for anticipated
future expenses; (xiii) the cost of any work or service performed for any
tenant (including Tenant) at such tenant’s cost; (xiv) any expenses for repairs
or maintenance which are covered by warranties and service contracts, to the
extent such maintenance and repairs are made at no cost to Landlord; (xv)
advertising, marketing or promotional expenditures; (xvi) costs or expenses
which Tenant proves are the result of the gross negligence or willful
misconduct of Landlord, its agents or employees; (xvii) costs, fines and
penalties incurred to the extent due to violations by Landlord or other tenants
of the Building of applicable governmental laws, rules or regulations in
force and effect as of the date of this Lease; (xviii) costs of title
insurance, automobile insurance, or key man insurance;  and (xix) wages, salaries and fringe benefits
of executive personnel, officers, executives and employees of Landlord above
the level of Building manager (regardless of the title of such
individual).  Increases in controllable
Operating Expenses charged to Tenant hereunder shall be capped at five percent
(5%) annually.

 

(3)                                  Tenant
shall also pay Tenant’s Proportionate Share of Taxes for each year and partial
year falling within the Term.  Tenant
shall pay Tenant’s Proportionate Share of Taxes in the same manner as provided
above for Tenant’s Proportionate Share of Operating Costs.  “Taxes” shall mean taxes,
assessments, and governmental charges or fees whether federal, state, county or
municipal, and whether they be by taxing districts or authorities presently
taxing or by others, subsequently created or otherwise, and any other taxes and
assessments (including non-governmental assessments for common charges under a
restrictive covenant or other private agreement that are not treated as part of
Operating Costs) now or hereafter attributable to the Project (or its
operation), excluding, however, penalties and interest thereon and federal and
state taxes on income (if the present method of taxation changes so that in
lieu of or in addition to the whole or any part of any Taxes, there is levied
on Landlord a capital tax directly on the rents received therefrom or a franchise
tax, assessment, or charge based, in whole or in part, upon such rents for the
Project, then all such taxes, assessments, or charges, or the part thereof so
based, shall be deemed to be included within the term “Taxes” for purposes
hereof).  Taxes shall include the costs
of consultants retained in an effort to lower taxes and all costs incurred in
disputing any taxes or in seeking to lower the tax valuation of the
Project.  For property tax purposes,
Tenant waives all rights to protest or appeal the appraised value of the
Premises, as well as the Project, and all rights to receive notices of
reappraisement.

 

(4)                                  Intentionally
Deleted.

 

(5)                                  By
May 1 of each calendar year, or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of Operating Costs for the
previous year, and of the Taxes for the previous year (the “Operating Costs
and Tax Statement”).  If
Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for
the year covered by the Operating Costs and Tax Statement exceed Tenant’s share
of such items as indicated in the Operating Costs and Tax Statement, then
Landlord shall promptly credit or reimburse Tenant for such excess; likewise,
if Tenant’s estimated payments of Operating Costs or Taxes under this Section 4(b) for
such year are less than Tenant’s share of such items as indicated in the
Operating Costs and Tax Statement, then Tenant shall, within not more than
fifteen (15) business days, pay Landlord such deficiency.

 

(6)                                  Notwithstanding
the foregoing, Tenant shall be responsible for reimbursing Landlord for one
hundred percent (100%) of the cost of any services provided by Landlord that
benefit the Leased Premises exclusively.

 

5.                                      Delinquent
Payment; Handling Charges.  All past due payments required of
Tenant hereunder shall bear interest from the date due until paid at the lesser
of eighteen percent per annum or the maximum lawful rate of interest (such
lesser amount is referred to herein as the “Default Rate”);
additionally, Landlord, in addition to all other rights and remedies available
to it, may charge Tenant a fee equal to the greater of (a) $50.00 or (b) five
percent of the delinquent payment to reimburse Landlord for its cost and
inconvenience incurred as a consequence of Tenant’s delinquency.  In no event, however, shall the charges
permitted under this Section 5 or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of

 

3

 

interest.  Notwithstanding the foregoing, the late fee
referenced above shall not be charged with respect to the first occurrence (but
not any subsequent occurrence) during any 12-month period that Tenant fails to
make payment when due, until five days after Landlord delivers written notice
of such delinquency to Tenant.

 

6.                                      Security
Deposit.  Contemporaneously
with the execution of this Lease, Tenant shall pay to Landlord the Security
Deposit, which shall be held by Landlord to secure Tenant’s performance of its
obligations under this Lease.  The
Security Deposit is not an advance payment of Rent or a measure or limit of
Landlord’s damages upon an Event of Default (as defined herein).  Landlord may, from time to time following an
Event of Default and without prejudice to any other remedy, use all or a part
of the Security Deposit to perform any obligation Tenant fails to perform
hereunder.  Following any such
application of the Security Deposit, Tenant shall pay to Landlord on demand the
amount so applied in order to restore the Security Deposit to its original
amount.  Provided that Tenant has
performed all of its obligations hereunder, Landlord shall, within 30 days
after the expiration of the Term and Tenant’s surrender of the Premises in
compliance with the provisions of this Lease, return to Tenant the portion of
the Security Deposit which was not applied to satisfy Tenant’s
obligations.  The Security Deposit may be
commingled with other funds, and no interest shall be paid thereon.  If Landlord transfers its interest in the
Premises, then Landlord shall assign the Security Deposit to the transferee
and, upon assumption by such transferee of Landlord’s obligations under the
Lease, Landlord thereafter shall have no further liability for the return of
the Security Deposit.

 

7.                                      Landlord’s
Obligations.

 

(a)                                  Services.  Landlord shall use all reasonable efforts
to furnish to Tenant (1) water at those points of supply provided for
general use of tenants of the Building; (2) heated and refrigerated air
conditioning (“HVAC”)
as appropriate, at such temperatures and in such amounts as are standard for
comparable buildings in the vicinity of the Building; (3) janitorial
service to the Premises on weekdays, other than holidays, for Building-standard
installations and such window washing as may from time to time be reasonably
required; (4) elevators for ingress and egress to the floor on which the
Premises are located, in common with other tenants, provided that Landlord may
reasonably limit the number of operating elevators during non-business hours
and holidays; and (5) electrical current during normal business hours for
equipment that does not require more than 110 volts and whose electrical energy
consumption does not exceed normal office usage.  Landlord shall, at Landlord’s expense and as
part of the Work to be performed pursuant to the Work Letter attached hereto as
Exhibit D, submeter the electricity usage of the Premises and after
such submetering, invoice Tenant directly for its electrical usage.  Tenant shall pay the costs of any electricity
usage at the Premises within 30 days after Landlord has delivered to Tenant an
invoice therefor.  Landlord shall
maintain the common areas of the Building in reasonably good order and
condition, except for damage caused by a Tenant Party.     

 

(b)                                 Excess
Utility Use.  Landlord shall not
be required to furnish electrical current 
for equipment that requires more than 110 volts or other equipment whose
electrical energy consumption exceeds normal office usage.  If Tenant’s requirements for or consumption
of electricity exceed the electricity to be provided by Landlord as described
in Section7(a), Landlord shall, at Tenant’s expense, make reasonable efforts to
supply such service through the then-existing feeders and risers serving the
Building and the Premises, and Tenant shall pay to Landlord the cost of such
service within 30 days after Landlord has delivered to Tenant an invoice
therefor.  Landlord may determine the
amount of such additional consumption and potential consumption by any
verifiable method, including installation of a separate meter in the Premises
installed, maintained, and read by Landlord, at Tenant’s expense.  Tenant shall not install any electrical
equipment requiring special wiring or requiring voltage in excess of 110 volts
unless approved in advance by Landlord, which approval shall not be
unreasonably withheld.  Tenant shall not
install any electrical equipment requiring voltage in excess of Building
capacity unless approved in advance by Landlord, which approval may be withheld
in Landlord’s sole discretion.  The use
of electricity in the Premises shall not exceed the capacity of existing
feeders and risers to or wiring in the Premises.  Any risers or wiring required to meet Tenant’s
excess electrical requirements shall, upon Tenant’s written request, be
installed by Landlord, at Tenant’s cost, if, in Landlord’s judgment, the same
are necessary and shall not cause permanent damage to the Building or the
Premises, cause or create a dangerous or hazardous condition, entail excessive
or unreasonable alterations, repairs, or expenses, or interfere with or disturb
other tenants of the Building.  If Tenant
uses machines or equipment in the Premises which affect the temperature
otherwise maintained by the air conditioning system or otherwise overload any
utility, Landlord may install supplemental air conditioning units or other
supplemental

 

4

 

equipment in the
Premises, and the cost thereof, including the cost of installation, operation,
use, and maintenance, shall be paid by Tenant to Landlord within 30 days after
Landlord has delivered to Tenant an invoice therefor.

 

(c)                                  Restoration
of Services; Abatement.  Landlord
shall use reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant’s obligations hereunder.  If, however, Tenant is prevented from using
the Premises because of the unavailability of any such service for a period of
20 consecutive business days following Landlord’s receipt from Tenant of a
written notice regarding such unavailability and such unavailability was not
caused by a Tenant Party or a governmental directive, then Tenant shall, as its
exclusive remedy be entitled to a reasonable abatement of Rent for each consecutive
day (after such 20-day period) that Tenant is so prevented from using the
Premises.

 

8.                                      Improvements;
Alterations; Repairs; Maintenance.

 

(a)                                  Improvements;
Alterations.  Improvements to the Premises shall
be installed at Tenant’s expense only in accordance with plans and
specifications which have been previously submitted to and approved in writing
by Landlord, which approval shall be governed by the provisions set forth in
this Section 8(a).  No alterations
or physical additions in or to the Premises may be made without Landlord’s
prior written consent, which shall not be unreasonably withheld or delayed;
however, Landlord may withhold its consent to any alteration or addition that
would adversely affect (in the reasonable discretion of Landlord) the (1) Building’s
Structure or the Building’s Systems (including the Building’s restrooms or
mechanical rooms), (2) exterior appearance of the Building, (3) appearance
of the Building’s common areas or elevator lobby areas, or (4) provision
of services to other occupants of the Building. 
Tenant shall not paint or install lighting or decorations, signs, window
or door lettering, or advertising media of any type visible from the exterior
of the Premises without the prior written consent of Landlord, which consent
may be withheld in Landlord’s sole and absolute discretion.  All alterations, additions, and improvements
shall be constructed, maintained, and used by Tenant, at its risk and expense,
in accordance with all Laws; Landlord’s consent to or approval of any
alterations, additions or improvements (or the plans therefor) shall not
constitute a representation or warranty by Landlord, nor Landlord’s acceptance,
that the same comply with sound architectural and/or engineering practices or
with all applicable Laws, and Tenant shall be solely responsible for ensuring
all such compliance.

 

(b)                                 Repairs;
Maintenance.  Tenant shall maintain the Premises
in a clean, safe, and operable condition, and shall not permit or allow to
remain any waste or damage to any portion of the Premises.  Additionally, Tenant, at its sole expense,
shall repair, replace and maintain in good condition and in accordance with all
Laws and the equipment manufacturer’s suggested service programs, all portions
of the Premises, Tenant’s Off-Premises Equipment and all areas, improvements
and systems exclusively serving the Premises, subject, however to reasonable
wear and tear and damage by casualty and eminent domain.  Tenant shall repair or replace, subject to
Landlord’s direction and supervision, any damage to the Building caused by a
Tenant Party.  If Tenant fails to make
such repairs or replacements within 30 days after the occurrence of such
damage, then Landlord may make the same at Tenant’s cost.  If any such damage occurs outside of the
Premises, then Landlord may elect to repair such damage at Tenant’s expense,
rather than having Tenant repair such damage. 
The cost of all maintenance, repair or replacement work performed by
Landlord under this Section 8 shall be paid by Tenant to Landlord within
30 days after Landlord has invoiced Tenant therefor.  To the extent that Tenant or its agents or
employees discover any water leakage, water damage, or mold in or about the
Premises or Building, Tenant shall promptly notify Landlord thereof in writing.

 

(c)                                  Performance
of Work.  All
work described in this Section 8 shall be performed only by Landlord or by
contractors and subcontractors approved in writing by Landlord.  Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord,
Landlord’s property management company and Landlord’s asset management company
as additional insureds against such risks, in such amounts, and with such
companies as Landlord may reasonably require. 
Tenant shall provide Landlord with the identities, mailing addresses and
telephone numbers of all persons performing work or supplying materials prior
to beginning such construction and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable Laws.  All such work shall be performed in
accordance with all Laws and in a good and workmanlike manner so as not to
damage the Building (including the Premises, the Building’s Structure and the
Building’s

 

5

 

Systems).  All such work which may affect the Building’s
Structure or the Building’s Systems must be approved by the Building’s engineer
of record, at Tenant’s expense and, at Landlord’s election, must be performed
by Landlord’s usual contractor for such work. 
All work affecting the roof of the Building must be performed by
Landlord’s roofing contractor and no such work will be permitted if it would
void or reduce the warranty on the roof.

 

(d)                                 Mechanic’s
Liens.  All
work performed, materials furnished, or obligations incurred by or at the
request of a Tenant Party shall be deemed authorized and ordered by Tenant
only, and Tenant shall not permit any mechanic’s liens to be filed against the
Premises or the Project in connection therewith.  Upon completion of any such work, Tenant
shall deliver to Landlord final lien waivers from all contractors,
subcontractors and materialmen who performed such work.  If such a lien is filed, then Tenant shall,
within ten days after Landlord has delivered notice of the filing thereof to
Tenant (or such earlier time period as may be necessary to prevent the
forfeiture of the Premises, Project or any interest of Landlord therein or the
imposition of a civil or criminal fine with respect thereto), either (1) pay
the amount of the lien and cause the lien to be released of record, or (2) diligently
contest such lien and deliver to Landlord a bond or other security reasonably
satisfactory to Landlord.  If Tenant
fails to timely take either such action, then Landlord may pay the lien claim,
and any amounts so paid, including expenses and interest, shall be paid by
Tenant to Landlord within ten days after Landlord has invoiced Tenant
therefor.  Landlord and Tenant
acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant”
(thereby excluding a relationship of “owner-contractor,” “owner-agent” or other
similar relationships).  Accordingly, all
materialmen, contractors, artisans, mechanics, laborers and any other persons
now or hereafter contracting with Tenant, any contractor or subcontractor of
Tenant or any other Tenant Party for the furnishing of any labor, services,
materials, supplies or equipment with respect to any portion of the Premises,
at any time from the date hereof until the end of the Term, are hereby charged
with notice that they look exclusively to Tenant to obtain payment for
same.  Nothing herein shall be deemed a
consent by Landlord to any liens being placed upon the Premises, Project or
Landlord’s interest therein due to any work performed by or for Tenant or
deemed to give any contractor or subcontractor or materialman any right or
interest in any funds held by Landlord to reimburse Tenant for any portion of
the cost of such work.  Tenant shall
defend, indemnify and hold harmless Landlord and its agents and representatives
from and against all claims, demands, causes of action, suits, judgments,
damages and expenses (including attorneys’ fees) in any way arising from or
relating to the failure by any Tenant Party to pay for any work performed,
materials furnished, or obligations incurred by or at the request of a Tenant
Party.  This indemnity provision shall
survive termination or expiration of this Lease.

 

(e)                                  Landlord’s Maintenance Obligations.  Except as provided in Sections 8(b) and
8(c) above, Landlord shall maintain and repair the Building’s Structure
and Building’s Systems, the parking
areas, and other common areas of the Building, including driveways, alleys,
landscape and grounds surrounding the Building (including snow removal)
in a neat and clean, first-class condition consistent with other similar class
buildings in the market area in which the Building is located throughout the
Term.  All costs in performing the work described in the
foregoing sentence shall be included in Operating Costs as set forth in Section 4(b).  Notwithstanding anything to the contrary
contained herein, Landlord shall, in its sole and absolute discretion,
determine the appropriate remedial action required of it to satisfy its
maintenance obligations hereunder (e.g., Landlord shall, in its sole
discretion, determine whether, and to the extent, repairs or replacements are
the appropriate remedial action). Except as provided in Section 15
and Section 7(c), there shall be no abatement of Rent, nor shall there be
any liability of Landlord, by reason of any injury or inconvenience to, or
interference with, Tenant’s business or operations arising from the making of,
or failure to make, any maintenance or repairs in or to any portion of the
Building.

 

9.                                      Use.  Tenant shall
continuously occupy and use the Premises only for the Permitted Use and shall
comply with all Laws relating to the use, condition, access to, and occupancy
of the Premises and will not commit waste, overload the Building’s Structure or
the Building’s Systems or subject the Premises to use that would damage the
Premises.  The population density within
the Premises as a whole shall at no time exceed one person for each 200
rentable square feet in the Premises. 
Tenant shall not conduct second or third shift operations within the
Premises; however, Tenant may use the Premises after normal business hours, so
long as Tenant is not generally conducting business from the Premises after
normal business hours.  Notwithstanding
anything in this Lease to the contrary, as between Landlord and Tenant, (a) Tenant
shall bear the risk of complying with Title III of the Americans With
Disabilities Act of 1990, any state laws governing handicapped access or
architectural barriers, and all rules, regulations, and guidelines promulgated
under such laws, as amended from time to time (the “Disabilities Acts”) in
the Premises, and (b) Landlord shall bear the risk of complying with the
Disabilities Acts in the common areas of the Building, other than compliance that
is necessitated by the use of the Premises for other than the

 

6

 

Permitted Use or
as a result of any alterations or additions made by or on behalf of Tenant or a
Tenant Party  (which risk and responsibility
shall be borne by Tenant).  The Premises
shall not be used for any use which is disreputable, creates extraordinary fire
hazards, or results in an increased rate of insurance on the Building or its
contents, or for the storage of any Hazardous Materials (other than typical
office supplies [e.g., photocopier toner] and then only in compliance with all
Laws).  Tenant shall not use any
substantial portion of the Premises for a “call center,” any other
telemarketing use, or any credit processing use.  If, because of a Tenant Party’s acts or
because Tenant vacates the Premises, the rate of insurance on the Building or
its contents increases, then such acts shall be an Event of Default, Tenant
shall pay to Landlord the amount of such increase on demand, and acceptance of
such payment shall not waive any of Landlord’s other rights.  Tenant shall conduct its business and control
each other Tenant Party so as not to create any nuisance or unreasonably
interfere with other tenants or Landlord in its management of the Building.

 

10.                               Assignment
and Subletting.

 

(a)                                  Transfers.  Except as provided
in Section 10(h), Tenant shall not, without the prior written consent of
Landlord, (1) assign, transfer, or encumber this Lease or any estate or
interest herein, whether directly or by operation of law, (2) permit any
other entity to become Tenant hereunder by merger, consolidation, or other
reorganization, (3) if Tenant is an entity other than a corporation whose
stock is publicly traded, permit the transfer of an ownership interest in
Tenant so as to result in a change in the current control of Tenant, (4) sublet
any portion of the Premises, (5) grant any license, concession, or other
right of occupancy of any portion of the Premises, or (6) permit the use
of the Premises by any parties other than Tenant (any of the events listed in Section 10(a)(1) through
10(a)(6) being a “Transfer”).

 

(b)                                 Consent
Standards.  Landlord shall not unreasonably
withhold its consent to any assignment or subletting of the Premises, provided
that the proposed transferee (1) is creditworthy, (2) has a good
reputation in the business community, (3) will use the Premises for the
Permitted Use (thus, excluding, without limitation, uses for credit processing
and telemarketing) and will not use the Premises in any manner that would
conflict with any exclusive use agreement or other similar agreement entered
into by Landlord with any other tenant of the Building, (4) will not use
the Premises, Building or Project in a manner that would materially increase the
pedestrian or vehicular traffic to the Premises, Building or Project, (5) is
not a governmental entity, or subdivision or agency thereof, (6) is not
another occupant of the Building, and (7) is not a person or entity with
whom Landlord is then, or has been within the six-month period prior to the
time Tenant seeks to enter into such assignment or subletting, negotiating to
lease space in the Building or any Affiliate of any such person or entity;
otherwise, Landlord may withhold its consent in its sole discretion.  Further, Landlord shall not unreasonably
withhold its consent to any collateral assignment of this Lease in connection
with any leasehold financing by Tenant, so long as Tenant’s lender agrees in
writing that upon any succession to Tenant’s interest under this Lease, it
shall be bound by all of the terms of this Lease, including, without
limitation, the Permitted Use, Section 9, and this Section 10.  Additionally, Landlord may withhold its
consent in its sole discretion to any proposed Transfer if any Event of Default
by Tenant then exists.

 

(c)                                  Request
for Consent.  If Tenant requests Landlord’s
consent to a Transfer, then, at least 15 business days prior to the effective
date of the proposed Transfer, Tenant shall provide Landlord with a written
description of all terms and conditions of the proposed Transfer, copies of the
proposed documentation, and the following information about the proposed
transferee: name and address; reasonably satisfactory information about its
business and business history; its proposed use of the Premises; banking,
financial, and other credit information; and general references sufficient to
enable Landlord to determine the proposed transferee’s creditworthiness and
character.  Concurrently with Tenant’s
notice of any request for consent to a Transfer, Tenant shall pay to Landlord a
fee of $1,000 to defray Landlord’s expenses in reviewing such request, and
Tenant shall also reimburse Landlord immediately upon request for its
reasonable attorneys’ fees incurred in connection with considering any request
for consent to a Transfer.

 

(d)                                 Conditions
to Consent.  If Landlord consents to a proposed
Transfer, then the proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes Tenant’s obligations hereunder; however,
any transferee of less than all of the space in the Premises shall be liable
only for obligations under this Lease that are properly allocable to the space
subject to the Transfer for the period of the Transfer.  No Transfer shall release Tenant from its
obligations under this Lease, but rather Tenant and its transferee shall be

 

7

 

jointly and
severally liable therefor.  Landlord’s
consent to any Transfer shall not waive Landlord’s rights as to any subsequent
Transfers.  If an Event of Default occurs
while the Premises or any part thereof are subject to a Transfer, then
Landlord, in addition to its other remedies, may collect directly from such transferee
all rents becoming due to Tenant and apply such rents against Rent.  Tenant authorizes its transferees to make
payments of rent directly to Landlord upon receipt of notice from Landlord to
do so following the occurrence of an Event of Default hereunder.  Tenant shall pay for the cost of any demising
walls or other improvements necessitated by a proposed subletting or
assignment.

 

(e)                                  Attornment
by Subtenants.  Each sublease by
Tenant hereunder shall be subject and subordinate to this Lease and to the
matters to which this Lease is or shall be subordinate, and each subtenant by
entering into a sublease is deemed to have agreed that in the event of
termination, re-entry or dispossession by Landlord under this Lease, Landlord
may, at its option, take over all of the right, title and interest of Tenant,
as sublandlord, under such sublease, and such subtenant shall, at Landlord’s
option, attorn to Landlord pursuant to the then executory provisions of such
sublease, except that Landlord shall not be (1) liable for any previous
act or omission of Tenant under such sublease, (2) subject to any
counterclaim, offset or defense that such subtenant might have against Tenant, (3) bound
by any previous modification of such sublease or by any rent or additional rent
or advance rent which such subtenant might have paid for more than the current
month to Tenant, and all such rent shall remain due and owing, notwithstanding
such advance payment, (4) bound by any security or advance rental deposit
made by such subtenant which is not delivered or paid over to Landlord and with
respect to which such subtenant shall look solely to Tenant for refund or
reimbursement, or (5) obligated to perform any work in the subleased space
or to prepare it for occupancy, and in connection with such attornment, the
subtenant shall execute and deliver to Landlord any instruments Landlord may
reasonably request to evidence and confirm such attornment.  Each subtenant or licensee of Tenant shall be
deemed, automatically upon and as a condition of its occupying or using the
Premises or any part thereof, to have agreed to be bound by the terms and
conditions set forth in this Section 10(e).  The provisions of this Section 10(e) shall
be self-operative, and no further instrument shall be required to give effect
to this provision.

 

(f)                                    Cancellation.  Landlord may, within
30 days after submission of Tenant’s written request for Landlord’s consent to
an assignment or subletting, cancel this Lease as to the portion of the
Premises proposed to be sublet or assigned as of the date the proposed Transfer
is to be effective; provided, however, if Landlord notifies Tenant that
Landlord elects to exercise this recapture right, Tenant may, within five (5) business
days of its receipt of Landlord’s notice, notify Landlord that Tenant withdraws
its request to sublease or assign, in which case Tenant shall continue to lease
all of the Premises, subject to the terms of this Lease and Landlord’s
recapture notice shall be null and void. 
If Landlord cancels this Lease as to any portion of the Premises, then this
Lease shall cease for such portion of the Premises and Tenant shall pay to
Landlord all Rent accrued through the cancellation date relating to the portion
of the Premises covered by the proposed Transfer.  Thereafter, Landlord may lease such portion of
the Premises to the prospective transferee (or to any other person) without
liability to Tenant.

 

(g)                                 Additional
Compensation.  Tenant shall pay to Landlord,
immediately upon receipt thereof, the excess of (1) all compensation
received by Tenant for a Transfer less the actual out of pocket costs
reasonably incurred by Tenant with unaffiliated third parties in connection
with such Transfer (i.e., brokerage commissions and tenant finish work), with
such costs to be amortized on a straight line basis over the term of the
Transfer in question, over (2) the Rent allocable to the portion of the
Premises covered thereby.

 

(h)                                 Permitted
Transfers.  Notwithstanding Section 10(a),
Tenant may Transfer all or part of its interest in this Lease or all or part of
the Premises (a “Permitted
Transfer”) to the following types of entities (a “Permitted
Transferee”) without the written consent of Landlord:

 

(1)                                  an
Affiliate of Tenant;

 

(2)                                  any
corporation, limited partnership, limited liability partnership, limited
liability company or other business entity in which or with which Tenant, or
its corporate successors or assigns, is merged or consolidated, in accordance
with applicable statutory provisions governing merger and consolidation of
business entities, so long as (A) Tenant’s obligations hereunder are
assumed by the entity surviving such merger or created by such consolidation;
and (B) the Tangible Net Worth of the surviving or created entity is not
less than the Tangible Net Worth of Tenant as of the date hereof; or

 

8

 

(3)                                  any
corporation, limited partnership, limited liability partnership, limited
liability company or other business entity acquiring all or substantially all
of Tenant’s assets if such entity’s Tangible Net Worth after such acquisition
is not less than the Tangible Net Worth of Tenant as of the date hereof.

 

Tenant shall promptly
notify Landlord of any such Permitted Transfer. 
Tenant shall remain liable for the performance of all of the obligations
of Tenant hereunder, or if Tenant no longer exists because of a merger,
consolidation, or acquisition, the surviving or acquiring entity shall
expressly assume in writing the obligations of Tenant hereunder.  Additionally, the Permitted Transferee shall
comply with all of the terms and conditions of this Lease, including the
Permitted Use, and the use of the Premises by the Permitted Transferee may not
violate any other agreements affecting the Premises, the Building, Landlord or
other tenants of the Building.  No later
than 30 days after the effective date of any Permitted Transfer, Tenant agrees
to furnish Landlord with (A) copies of the instrument effecting any of the
foregoing Transfers, (B) documentation establishing Tenant’s satisfaction
of the requirements set forth above applicable to any such Transfer, and (C) evidence
of insurance as required under this Lease with respect to the Permitted
Transferee.  The occurrence of a
Permitted Transfer shall not waive Landlord’s rights as to any subsequent
Transfers. “Tangible
Net Worth” means the excess of total assets over total
liabilities, in each case as determined in accordance with generally accepted
accounting principles consistently applied (“GAAP”), excluding,
however, from the determination of total assets all assets which would be
classified as intangible assets under GAAP including goodwill, licenses,
patents, trademarks, trade names, copyrights, and franchises.  Any subsequent Transfer by a Permitted
Transferee shall be subject to the terms of this Section 10.

 

11.                               Insurance;
Waivers; Subrogation; Indemnity.

 

(a)                                  Tenant’s
Insurance.  Effective as of the earlier of (1) the
date Tenant enters or occupies the Premises, or (2) the Commencement Date,
and continuing throughout the Term, Tenant shall maintain the following
insurance policies: (A) commercial general liability insurance in amounts
of $3,000,000 per occurrence or, following the expiration of the initial Term,
such other amounts as Landlord may from time to time reasonably require (and,
if the use and occupancy of the Premises include any activity or matter that is
or may be excluded from coverage under a commercial general liability policy
[e.g., the sale, service or consumption of alcoholic beverages], Tenant shall
obtain such endorsements to the commercial general liability policy or
otherwise obtain insurance to insure all liability arising from such activity
or matter [including liquor liability, if applicable] in such amounts as
Landlord may reasonably require), insuring Tenant, Landlord, Landlord’s property
management company and Landlord’s asset management company against all
liability for injury to or death of a person or persons or damage to property
arising from the use and occupancy of the Premises and (without implying any
consent by Landlord to the installation thereof) the installation, operation,
maintenance, repair or removal of Tenant’s Off-Premises Equipment, (B) insurance
covering the full value of all alterations and improvements and betterments in
the Premises, naming Landlord and Landlord’s Mortgagee as additional loss
payees as their interests may appear, (C) insurance covering the full
value of all furniture, trade fixtures and personal property (including
property of Tenant or others) in the Premises or otherwise placed in the Project
by or on behalf of a Tenant Party (including Tenant’s Off-Premises Equipment), (D) contractual
liability insurance sufficient to cover Tenant’s indemnity obligations
hereunder (but only if such contractual liability insurance is not already
included in Tenant’s commercial general liability insurance policy), (E) worker’s
compensation insurance, and (F) business interruption insurance.  Tenant’s insurance shall provide primary
coverage to Landlord when any policy issued to Landlord provides duplicate or
similar coverage, and in such circumstance Landlord’s policy will be excess
over Tenant’s policy.  Tenant shall
furnish to Landlord certificates of such insurance and such other evidence
satisfactory to Landlord of the maintenance of all insurance coverages required
hereunder at least ten days prior to the earlier of the Commencement Date or
the date Tenant enters or occupies the Premises, and at least 15 days prior to
each renewal of said insurance, and Tenant shall obtain a written obligation on
the part of each insurance company to notify Landlord at least 30 days before
cancellation or a material change of any such insurance policies.  All such insurance policies shall be in form,
and issued by companies reasonably satisfactory to Landlord.  If Tenant fails to comply with the foregoing
insurance requirements or to deliver to Landlord the certificates or evidence
of coverage required herein, Landlord, in addition to any other remedy
available pursuant to this Lease or otherwise, may, but shall not be obligated
to, obtain such insurance and Tenant shall pay to Landlord on demand the
premium costs thereof, plus an administrative fee of 15% of such cost.

 

(b)                                 Landlord’s
Insurance.  Throughout the Term of this Lease,
Landlord shall maintain, as a minimum, the following insurance policies:  (1) property insurance for the Building’s
replacement value (excluding

 

9

 

property required
to be insured by Tenant), less a commercially-reasonable deductible if Landlord
so chooses, and (2) commercial general liability insurance in an amount of
not less than $3,000,000.  Landlord may,
but is not obligated to, maintain such other insurance and additional coverages
as it may deem necessary.  The cost of
all insurance carried by Landlord with respect to the Building shall be
included in Operating Costs.  The
foregoing insurance policies and any other insurance carried by Landlord shall
be for the sole benefit of Landlord and under Landlord’s sole control, and
Tenant shall have no right or claim to any proceeds thereof or any other rights
thereunder.

 

(c)                                  No
Subrogation.  Landlord and Tenant each waives
any claim it might have against the other for any damage to or theft,
destruction, loss, or loss of use of any property, to the extent the same is
insured against under any insurance policy that covers the Building, the
Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold
improvements, or business, or is required to be insured against under the terms
hereof, regardless of
whether the negligence of the other party caused such Loss (defined below).  Each party shall
cause its insurance carrier to endorse all applicable policies waiving the
carrier’s rights of recovery under subrogation or otherwise against the other
party.

 

(d)                                 Indemnity.  Subject to Section 11(c),
Tenant shall defend, indemnify, and hold harmless Landlord and its
representatives and agents from and against all claims, demands, liabilities,
causes of action, suits, judgments, damages, and expenses (including attorneys’
fees) arising from (1) any injury to or death of any person or the damage
to or theft, destruction, loss, or loss of use of any property or inconvenience
(a “Loss”),
arising from any occurrence on the Premises or arising out of the installation,
operation, maintenance, repair or removal of any of Tenant’s Off-Premises
Equipment or (2) Tenant’s failure to perform its obligations under this
Lease, in each case even
though caused or alleged to be caused by the negligence or fault of Landlord or
its agents (other than a Loss arising from the sole or gross negligence of
Landlord or its agents), and even though any such claim, cause of action, or
suit is based upon or alleged to be based upon the strict liability of Landlord
or its agents.  This indemnity is
intended to indemnify Landlord and its agents against the consequences of their
own negligence or fault as provided above when Landlord or its agents are
jointly, comparatively, contributively, or concurrently negligent with Tenant.  Subject to Section 11(c),
Landlord shall defend, indemnify, and hold harmless Tenant and its agents from
and against all claims, demands, liabilities, causes of action, suits,
judgments, and expenses (including attorneys’ fees) for any Loss arising from
any occurrence in the Building’s common areas, even though caused or alleged to be caused by the
negligence or fault of Tenant or its agents (other than a Loss arising from the
sole or gross negligence of Tenant or its agents or arising out of the
installation, operation, maintenance, repair or removal of any of Tenant’s
Off-Premises Equipment), and even though any such claim, cause of action, or
suit is based upon or alleged to be based upon the strict liability of Tenant
or its agents.  This indemnity is
intended to indemnify Tenant and its agents against the consequences of their
own negligence or fault as provided above when Tenant or its agents are
jointly, comparatively, contributively, or concurrently negligent with Landlord.  The indemnities set
forth in this Section 11(d) shall survive termination or expiration
of this Lease and shall not terminate or be waived, diminished or affected in
any manner by any abatement or apportionment of Rent under any provision of
this Lease.  If any proceeding is filed
for which indemnity is required hereunder, the indemnifying party agrees, upon
request therefor, to defend the indemnified party in such proceeding at its
sole cost utilizing counsel satisfactory to the indemnified party.

 

12.                               Subordination;
Attornment; Notice to Landlord’s Mortgagee.

 

(a)                                  Subordination.  This Lease shall be subordinate to any deed
of trust, mortgage, or other security instrument (each, a “Mortgage”),
or any ground lease, master lease, or primary lease (each, a “Primary Lease”),
that now or hereafter covers all or any part of the Premises (the mortgagee
under any such Mortgage, beneficiary under any such deed of trust, or the
lessor under any such Primary Lease is referred to herein as a “Landlord’s
Mortgagee”).  Any Landlord’s
Mortgagee may elect, at any time, unilaterally, to make this Lease superior to
its Mortgage, Primary Lease, or other interest in the Premises by so notifying
Tenant in writing.  The provisions of
this Section shall be self-operative and no further instrument of
subordination shall be required; however, in confirmation of such
subordination, Tenant shall execute and return to Landlord (or such other party
designated by Landlord) within ten days after written request therefor such
documentation, in recordable form if required, as a Landlord’s Mortgagee may
reasonably request to evidence the subordination of this Lease to such Landlord’s
Mortgagee’s Mortgage or Primary Lease (including a subordination,
non-disturbance and attornment

 

10

 

agreement) or, if
the Landlord’s Mortgagee so elects, the subordination of such Landlord’s
Mortgagee’s Mortgage or Primary Lease to this Lease.

 

(b)                                 Attornment.  Tenant shall attorn to any party succeeding
to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed
in lieu of foreclosure, power of sale, termination of lease, or otherwise, upon
such party’s request, and shall execute such agreements confirming such
attornment as such party may reasonably request.  Landlord agrees to use its commercially
reasonable efforts to obtain from any such Landlord’s Mortgagee a
non-disturbance agreement in favor of Tenant (a “Non-Disturbance
Agreement”) providing that so long as
there exists no Event of Default, Landlord’s Mortgagee shall not interfere
with, hinder or reduce Tenant’s right to quiet enjoyment under this Lease, nor
the right of Tenant to continue to occupy the Premises, and all portions
thereof, and to conduct its business thereon in accordance with the covenants,
conditions, provisions, terms and agreements of this Lease.

 

(c)                                  Notice
to Landlord’s Mortgagee.  Tenant
shall not seek to enforce any remedy it may have for any default on the part of
Landlord without first giving written notice by certified mail, return receipt
requested, specifying the default in reasonable detail, to any Landlord’s
Mortgagee whose address has been given to Tenant, and affording such Landlord’s
Mortgagee a reasonable opportunity to perform Landlord’s obligations hereunder.

 

(d)                                 Landlord’s
Mortgagee’s Protection Provisions.  If Landlord’s Mortgagee shall
succeed to the interest of Landlord under this Lease, Landlord’s Mortgagee
shall not be: (1) liable for any act or omission of any prior lessor
(including Landlord); (2) bound by any rent or additional rent or advance
rent which Tenant might have paid for more than the current month to any prior
lessor (including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment; (3) bound by any security or advance
rental deposit made by Tenant which is not delivered or paid over to Landlord’s
Mortgagee and with respect to which Tenant shall look solely to Landlord for
refund or reimbursement; (4) bound by any termination, amendment or
modification of this Lease made without Landlord’s Mortgagee’s consent and
written approval, except for those terminations, amendments and modifications
permitted to be made by Landlord without Landlord’s Mortgagee’s consent
pursuant to the terms of the loan documents between Landlord and Landlord’s
Mortgagee; (5) subject to the defenses which Tenant might have against any
prior lessor (including Landlord); and (6) subject to the offsets which
Tenant might have against any prior lessor (including Landlord) except for
those offset rights which (A) are expressly provided in this Lease, (B) relate
to periods of time following the acquisition of the Building by Landlord’s
Mortgagee, and (C) Tenant has provided written notice to Landlord’s
Mortgagee and provided Landlord’s Mortgagee a reasonable opportunity to cure
the event giving rise to such offset event. 
Landlord’s Mortgagee shall have no liability or responsibility under or
pursuant to the terms of this Lease or otherwise after it ceases to own an
interest in the Building.  Nothing in
this Lease shall be construed to require Landlord’s Mortgagee to see to the
application of the proceeds of any loan, and Tenant’s agreements set forth
herein shall not be impaired on account of any modification of the documents
evidencing and securing any loan.

 

13.                               Rules and
Regulations.  Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C.  Landlord may, from time to time, change such rules and
regulations for the safety, care, or cleanliness of the Building and related
facilities, provided that such changes are applicable to all tenants of the
Building, will not unreasonably interfere with Tenant’s use of the Premises and
are enforced by Landlord in a non-discriminatory manner.  Tenant shall be responsible for the
compliance with such rules and regulations by each Tenant Party.

 

14.                               Condemnation.

 

(a)                                  Total
Taking.  If the entire Building
or Premises are taken by right of eminent domain or conveyed in lieu thereof (a
“Taking”),
this Lease shall terminate as of the date of the Taking.

 

(b)                                 Partial
Taking - Tenant’s Rights.  If any
part of the Building becomes subject to a Taking and such Taking will prevent
Tenant from conducting its business in the Premises in a manner reasonably
comparable to that conducted immediately before such Taking for a period of
more than 180 days, then Tenant may terminate this Lease as of the date of such
Taking by giving written notice to Landlord within 30 days after the Taking,
and Basic Rent and Additional Rent shall be apportioned as of the date of such
Taking.  If Tenant does not

 

11

 

terminate this
Lease, then Rent shall be abated on a reasonable basis as to that portion of
the Premises rendered untenantable by the Taking.

 

(c)                                  Partial
Taking - Landlord’s Rights.  If
any material portion, but less than all, of the Building becomes subject to a
Taking, or if Landlord is required to pay any of the proceeds arising from a
Taking to a Landlord’s Mortgagee, then Landlord may terminate this Lease by
delivering written notice thereof to Tenant within 30 days after such Taking,
and Basic Rent and Additional Rent shall be apportioned as of the date of such
Taking.  If Landlord does not so
terminate this Lease, then this Lease will continue, but if any portion of the
Premises has been taken, Rent shall abate as provided in the last sentence of Section 14(b).

 

(d)                                 Award.  If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the Land, the Building, and
other improvements taken; however, Tenant may separately pursue a claim (to the
extent it will not reduce Landlord’s award) against the condemnor for the value
of Tenant’s personal property which Tenant is entitled to remove under this
Lease, moving costs, loss of business, and other claims it may have.

 

15.                               Fire
or Other Casualty.

 

(a)                                  Repair
Estimate.  If the Premises or the
Building are damaged by fire or other casualty (a “Casualty”), Landlord
shall, within 60 days after such Casualty, deliver to Tenant a good faith
estimate (the “Damage
Notice”) of the time needed to repair the damage caused by such
Casualty.

 

(b)                                 Tenant’s
Rights.  If a material portion of
the Premises is damaged by Casualty such that Tenant is prevented from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Casualty and Landlord estimates that the
damage caused thereby cannot be repaired within 210 days after the commencement
of repairs (the “Repair
Period”), then Tenant may terminate this Lease by delivering
written notice to Landlord of its election to terminate within 30 days after
the Damage Notice has been delivered to Tenant.

 

(c)                                  Landlord’s
Rights.  If a Casualty damages
the Premises or a material portion of the Building and (1) Landlord
estimates that the damage to the Premises cannot be repaired within the Repair
Period, (2) the damage to the Premises exceeds 50% of the replacement cost
thereof (excluding foundations and footings), as estimated by Landlord, and
such damage occurs during the last two years of the Term, (3) regardless
of the extent of damage to the Premises, Landlord makes a good faith
determination that restoring the Building would be uneconomical, or (4) Landlord
is required to pay any insurance proceeds arising out of the Casualty to a
Landlord’s Mortgagee, then Landlord may terminate this Lease by giving written
notice of its election to terminate within 30 days after the Damage Notice has
been delivered to Tenant.

 

(d)                                 Repair
Obligation.  If neither party
elects to terminate this Lease following a Casualty, then Landlord shall,
within a reasonable time after such Casualty, begin to repair the Premises and
shall proceed with reasonable diligence to restore the Premises to
substantially the same condition as they existed immediately before such
Casualty; however, Landlord shall not be required to repair or replace any
alterations or betterments within the Premises (which shall be promptly and
with due diligence repaired and restored by Tenant at Tenant’s sole cost and expense)
or any furniture, equipment, trade fixtures or personal property of Tenant or
others in the Premises or the Building, and Landlord’s obligation to repair or
restore the Premises shall be limited to the extent of the insurance proceeds
actually received by Landlord for the Casualty in question.  If this Lease is terminated under the
provisions of this Section 15, Landlord shall be entitled to the full
proceeds of the insurance policies providing coverage for all alterations,
improvements and betterments in the Premises (and, if Tenant has failed to
maintain insurance on such items as required by this Lease, Tenant shall pay
Landlord an amount equal to the proceeds Landlord would have received had
Tenant maintained insurance on such items as required by this Lease).

 

(e)                                  Abatement
of Rent.  If the Premises are
damaged by Casualty, Rent for the portion of the Premises rendered untenantable
by the damage shall be abated on a reasonable basis from the date of damage
until the completion of Landlord’s repairs (or until the date of termination of
this Lease by Landlord or Tenant as provided above, as the case may be), unless
a Tenant Party negligently or willfully caused such damage, in which case,
Tenant shall continue to pay Rent without abatement until such time as Landlord
has collected sufficient

 

12

 

insurance proceeds
to compensate Landlord for loss of Tenant’s Rent during such repair period, at
which point previously collected Rent reimbursed to Landlord by such insurance
proceeds shall be refunded to Tenant, and thereafter Tenant’s Rent shall abate
as provided herein to the extent of the insurance proceeds received by
Landlord.

 

16.                               Personal
Property Taxes.  Tenant shall be liable for all
taxes levied or assessed against personal property, furniture, or fixtures
placed by Tenant in the Premises or in or on the Building or Project.  If any taxes for which Tenant is liable are
levied or assessed against Landlord or Landlord’s property and Landlord elects
to pay the same, or if the assessed value of Landlord’s property is increased
by inclusion of such personal property, furniture or fixtures and Landlord
elects to pay the taxes based on such increase, then Tenant shall pay to
Landlord, within 30 days following written request therefor, the part of such
taxes for which Tenant is primarily liable hereunder; however, Landlord shall
not pay such amount if Tenant notifies Landlord that it will contest the
validity or amount of such taxes before Landlord makes such payment, and
thereafter diligently proceeds with such contest in accordance with Law and if
the non-payment thereof does not pose a threat of loss or seizure of the
Project or interest of Landlord therein or impose any fee or penalty against
Landlord.

 

17.                               Events
of Default.  Each of the following occurrences
shall be an “Event
of Default”:

 

(a)                                  Payment
Default.  Tenant’s failure to pay
Rent within five days after Landlord has delivered written notice to Tenant
that the same is due; however, an Event of Default shall occur hereunder
without any obligation of Landlord to give any notice if Tenant fails to pay
Rent when due and, during the 12 month interval preceding such failure,
Landlord has given Tenant written notice of failure to pay Rent on one or more occasions;

 

(b)                                 Abandonment.  Tenant (1) abandons or vacates the
Premises or any substantial portion thereof; provided, however, Tenant shall
not be deemed to have abandoned the Premises merely by discontinuing its
business operations at the Premises, provided Tenant maintains sufficient
security measures to discourage vandalism, and Tenant otherwise complies with
Tenant’s obligations hereunder;

 

(c)                                  Estoppel.  Tenant fails to provide any estoppel
certificate after Landlord’s written request therefor pursuant to Section 25(e) and
such failure shall continue for five days after Landlord’s second written
notice thereof to Tenant;

 

(d)                                 Insurance.  Tenant fails to procure, maintain and deliver
to Landlord evidence of the insurance policies and coverages as required under Section 11(a);

 

(e)                                  Mechanic’s
Liens.  Tenant fails to pay and
release of record, or diligently contest and bond around, any mechanic’s lien
filed against the Premises or the Project for any work performed, materials
furnished, or obligation incurred by or at the request of Tenant, within the
time and in the manner required by Section 8(d);

 

(f)                                    Other
Defaults.  Tenant’s failure to
perform, comply with, or observe any other agreement or obligation of Tenant
under this Lease and the continuance of such failure for a period of more than
30 days after Landlord has delivered to Tenant written notice thereof (in the
case of a default which cannot with due diligence be cured within a period of
30 days, Tenant shall have such additional time, but in no event to exceed 90
days in the aggregate, to cure same as may reasonably be necessary, provided
Tenant commences curing such default within the 30-day period and proceeds
promptly, effectively, continuously and with due diligence to cure such default
after delivery of said notice); and

 

(g)                                 Insolvency.  The filing of a petition by or against Tenant
(the term “Tenant” shall include, for the purpose of this Section 17(g),
any guarantor of Tenant’s obligations hereunder) (1) in any bankruptcy or
other insolvency proceeding; (2) seeking any relief under any state or
federal debtor relief law; (3) for the appointment of a liquidator or
receiver for all or substantially all of Tenant’s property or for Tenant’s
interest in this Lease; or (4) for the reorganization or modification of
Tenant’s capital structure; however, if such a petition is filed against
Tenant, then such filing shall not be an Event of Default unless Tenant fails
to have the proceedings initiated by such petition dismissed within 90 days
after the filing thereof.

 

13

 

18.                               Remedies.  Upon any Event of
Default, Landlord may, in addition to all other rights and remedies afforded
Landlord hereunder or by law or equity, take any one or more of the following
actions:

 

(a)                                  Termination
of Lease.  Terminate this Lease
by giving Tenant written notice thereof, in which event Tenant shall pay to
Landlord the sum of (1) all Rent accrued hereunder through the date of
termination, (2) all amounts due under Section 19(a), and (3) an
amount equal to (A) the total Rent that Tenant would have been required to
pay for the remainder of the Term discounted to present value at a per annum
rate equal to the “Prime Rate” as published on the date this Lease is
terminated by The
Wall Street Journal, Southeast Edition, in its listing of “Money
Rates” minus one percent, minus (B) the then present fair rental value of
the Premises for such period, similarly discounted;

 

(b)                                 Termination
of Possession.  Terminate Tenant’s
right to possess the Premises without terminating this Lease by giving written
notice thereof to Tenant, in which event Tenant shall pay to Landlord (1) all
Rent and other amounts accrued hereunder to the date of termination of
possession, (2) all amounts due from time to time under Section 19(a),
and (3) all Rent and other net sums required hereunder to be paid by
Tenant during the remainder of the Term, diminished by any net sums thereafter
received by Landlord through reletting the Premises during such period, after
deducting all costs incurred by Landlord in reletting the Premises.  If Landlord elects to proceed under this Section 18(b),
Landlord may remove all of Tenant’s property from the Premises and store the
same in a public warehouse or elsewhere at the cost of, and for the account of,
Tenant, without becoming liable for any loss or damage which may be occasioned
thereby.  Landlord shall use reasonable
efforts to relet the Premises on such terms as Landlord in its sole discretion
may determine (including a term different from the Term, rental concessions,
and alterations to, and improvement of, the Premises); however, Landlord shall
not be obligated to relet the Premises before leasing other portions of the
Building and Landlord shall not be obligated to accept any prospective tenant
proposed by Tenant unless such proposed tenant meets all of Landlord’s leasing
criteria.  Landlord shall not be liable
for, nor shall Tenant’s obligations hereunder be diminished because of,
Landlord’s failure to relet the Premises or to collect rent due for such
reletting.  Tenant shall not be entitled
to the excess of any consideration obtained by reletting over the Rent due
hereunder.  Reentry by Landlord in the
Premises shall not affect Tenant’s obligations hereunder for the unexpired Term;
rather, Landlord may, from time to time, bring an action against Tenant to
collect amounts due by Tenant, without the necessity of Landlord’s waiting
until the expiration of the Term.  Unless
Landlord delivers written notice to Tenant expressly stating that it has
elected to terminate this Lease, all actions taken by Landlord to dispossess or
exclude Tenant from the Premises shall be deemed to be taken under this Section 18(b).  If Landlord elects to proceed under this Section 18(b),
it may at any time elect to terminate this Lease under Section 18(a);

 

(c)                                  Perform
Acts on Behalf of Tenant. 
Perform any act Tenant is obligated to perform under the terms of this
Lease (and enter upon the Premises in connection therewith if necessary) in
Tenant’s name and on Tenant’s behalf, without being liable for any claim for
damages therefor, and Tenant shall reimburse Landlord on demand for any actual
expenses which Landlord may incur in thus effecting compliance with Tenant’s
obligations under this Lease (including, but not limited to, collection costs
and reasonable legal expenses), plus interest thereon at the Default Rate; or

 

(d)                                 Alteration
of Locks.  Additionally, with or
without notice, and to the extent permitted by Law, Landlord may alter locks or
other security devices at the Premises to deprive Tenant of access thereto, and
Landlord shall not be required to provide a new key or right of access to
Tenant.

 

19.                               Payment
by Tenant; Non-Waiver; Cumulative Remedies.

 

(a)                                  Payment
by Tenant.  Upon any Event of
Default, Tenant shall pay to Landlord all costs incurred by Landlord (including
court costs and reasonable attorneys’ fees and expenses) in (1) obtaining
possession of the Premises, (2) removing and storing Tenant’s or any other
occupant’s property, (3) repairing, restoring, altering, remodeling, or
otherwise putting the Premises into condition acceptable to a new tenant, (4) if
Tenant is dispossessed of the Premises and this Lease is not terminated,
reletting all or any part of the Premises (including brokerage commissions,
cost of tenant finish work, and other costs incidental to such reletting), (5) performing
Tenant’s obligations which Tenant failed to perform, and (6) enforcing, or
advising Landlord of, its rights, remedies, and recourses arising out of the Event
of Default.  To the full extent permitted
by law, Landlord and Tenant agree

 

14

 

the federal and
state courts of the state in which the Premises are located shall have
exclusive jurisdiction over any matter relating to or arising from this Lease
and the parties’ rights and obligations under this Lease.

 

(b)                                 No
Waiver.  Landlord’s acceptance of
Rent following an Event of Default shall not waive Landlord’s rights regarding
such Event of Default.  No waiver by
Landlord of any violation or breach of any of the terms contained herein shall
waive Landlord’s rights regarding any future violation of such term.  Landlord’s acceptance of any partial payment
of Rent shall not waive Landlord’s rights with regard to the remaining portion
of the Rent that is due, regardless of any endorsement or other statement on
any instrument delivered in payment of Rent or any writing delivered in
connection therewith; accordingly, Landlord’s acceptance of a partial payment
of Rent shall not constitute an accord and satisfaction of the full amount of
the Rent that is due.

 

(c)                                  Cumulative
Remedies.  Any and all remedies
set forth in this Lease:  (1) shall
be in addition to any and all other remedies Landlord may have at law or in
equity, (2) shall be cumulative, and (3) may be pursued successively
or concurrently as Landlord may elect. 
The exercise of any remedy by Landlord shall not be deemed an election
of remedies or preclude Landlord from exercising any other remedies in the future.

 

20.                               Intentionally
Omitted.  

 

21.                               Surrender
of Premises.  No act by Landlord shall be deemed
an acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord.  At the expiration or
termination of this Lease, Tenant shall deliver to Landlord the Premises with
all improvements located therein in good repair and condition, free of
Hazardous Materials placed on the Premises during the Term, broom-clean,
reasonable wear and tear (and condemnation and Casualty damage not caused by
Tenant, as to which Sections 14 and 15 shall control) excepted, and shall
deliver to Landlord all keys to the Premises. 
Provided that Tenant has performed all of its obligations hereunder,
Tenant may remove all unattached trade fixtures, furniture, and personal
property placed in the Premises or elsewhere in the Building by Tenant (but
Tenant may not remove any such item which was paid for, in whole or in part, by
Landlord or any wiring or cabling unless Landlord requires such removal).  Additionally, at Landlord’s option, Tenant
shall remove such alterations, additions, improvements, trade fixtures,
personal property, equipment, wiring, conduits, cabling, and furniture
(including Tenant’s Off-Premises Equipment) as Landlord may request; however,
Tenant shall not be required to remove any addition or improvement to the
Premises or the Project if Landlord has specifically agreed in writing that the
improvement or addition in question need not be removed.  With respect to alterations or improvements
to the Premises made by Tenant pursuant to Section 8, at Tenant’s request,
Landlord shall specify, at the time it consents to such alteration or
improvement, whether Tenant will be required to remove such alteration or
improvement at the expiration of the Term. 
Tenant hereby agrees that if instructed by Landlord in writing prior to
the end of the Term, Tenant shall remove, at its sole cost and expense, all cabling
installed in the Premises or Building by or on behalf of Tenant.  Tenant shall repair all damage caused by such
removal.  All items not so removed shall,
at Landlord’s option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items;
any such disposition shall not be considered a strict foreclosure or other
exercise of Landlord’s rights in respect of the security interest granted under
Section 20.  The provisions of this Section 21
shall survive the end of the Term.

 

22.                               Holding
Over.  If
Tenant fails to vacate the Premises at the end of the Term, then Tenant shall
be a tenant at sufferance and, in addition to all other damages and remedies to
which Landlord may be entitled for such holding over, (a) Tenant shall
pay, in addition to the other Rent, Basic Rent equal to the greater of (1) 200%
of the Basic Rent payable during the last month of the Term, or (2) 125%
of the prevailing rental rate in the Building for similar space, and (b) Tenant
shall otherwise continue to be subject to all of Tenant’s obligations under
this Lease.  The provisions of this Section 22
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. 
If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys’ fees) and
liability resulting from such failure, including any claims made by any
succeeding tenant founded upon such failure to surrender, and any lost profits
to Landlord resulting therefrom.

 

15

 

23.                               Certain
Rights Reserved by Landlord.  Provided that the exercise of such
rights does not unreasonably interfere with Tenant’s occupancy of the Premises,
Landlord shall have the following rights:

 

(a)                                  Building
Operations.  To decorate and to
make inspections, repairs, alterations, additions, changes, or improvements,
whether structural or otherwise, in and about the Project, or any part thereof;
to enter upon the Premises (after giving Tenant reasonable notice thereof,
which may be oral notice, except in cases of real or apparent emergency, in
which case no notice shall be required) and, during the continuance of any such
work, to temporarily close doors, entryways, public space, and corridors in the
Building; to interrupt or temporarily suspend Building services and facilities;
to change the name of the Building; and to change the arrangement and location
of entrances or passageways, doors, and doorways, corridors, elevators, stairs,
restrooms, or other public parts of the Building;

 

(b)                                 Security.  To take such reasonable measures as Landlord
deems advisable for the security of the Building and its occupants; evacuating
the Building for cause, suspected cause, or for drill purposes; temporarily
denying access to the Building; and closing the Building after normal business
hours and on Sundays and holidays, subject, however, to Tenant’s right to enter
when the Building is closed after normal business hours under such reasonable
regulations as Landlord may prescribe from time to time;

 

(c)                                  Prospective
Purchasers and Lenders.  To enter
the Premises at all reasonable hours to show the Premises to prospective
purchasers or lenders; and

 

(d)                                 Prospective
Tenants.  At any time during the
last 12 months of the Term (or earlier if Tenant has notified Landlord in
writing that it does not desire to renew the Term) or at any time following the
occurrence of an Event of Default, to enter the Premises at all reasonable
hours to show the Premises to prospective tenants.

 

24.                               Intentionally
Omitted.  

 

25.                               Miscellaneous.

 

(a)                                  Landlord
Transfer.  Landlord may transfer
any portion of the Building and any of its rights under this Lease.  If Landlord assigns its rights under this
Lease, then Landlord shall thereby be released from any further obligations
hereunder arising after the date of transfer, provided that the assignee
assumes Landlord’s obligations hereunder in writing.

 

(b)                                 Landlord’s
Liability.  The liability of
Landlord (and its partners, shareholders or members) to Tenant (or any person
or entity claiming by, through or under Tenant) for any default by Landlord
under the terms of this Lease or any matter relating to or arising out of the
occupancy or use of the Premises and/or other areas of the Building shall be limited
to Tenant’s actual direct, but not consequential, damages therefor and shall be
recoverable only from the interest of Landlord in the Building, and Landlord
(and its partners, shareholders or members) shall not be personally liable for
any deficiency.

 

(c)                                  Force
Majeure.  Other than for Tenant’s
obligations under this Lease that can be performed by the payment of money
(e.g., payment of Rent and maintenance of insurance), whenever a period of time
is herein prescribed for action to be taken by either party hereto, such party
shall not be liable or responsible for, and there shall be excluded from the
computation of any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, terrorist acts or activities,
governmental laws, regulations, or restrictions, or any other causes of any
kind whatsoever which are beyond the control of such party.

 

(d)                                 Brokerage.  Neither Landlord nor Tenant has dealt with
any broker or agent in connection with the negotiation or execution of this
Lease, other than CB Richard Ellis – New England, representative of Landlord,
and Stubblebine Company, representative of Tenant, whose commission(s) shall be
paid by Landlord pursuant to a separate written agreement(s).  Tenant and Landlord shall each indemnify the
other against all costs, expenses, attorneys’ fees, liens and other liability
for commissions or other compensation claimed by any broker or agent claiming
the same by, through, or under the indemnifying party.

 

16

 

(e)               Estoppel
Certificates. From time to time, Tenant shall furnish to any party
designated by Landlord, within ten business days after Landlord has made a
request therefor, a certificate signed by Tenant confirming and containing such
factual certifications and representations as to this Lease as Landlord may
reasonably request. Unless otherwise required by Landlord’s Mortgagee or a
prospective purchaser or mortgagee of the Building, the initial form of
estoppel certificate to be signed by Tenant is attached hereto as Exhibit F. If Tenant does not deliver to
Landlord the certificate signed by Tenant within such time period, Landlord,
Landlord’s Mortgagee and any prospective purchaser or mortgagee, may
conclusively presume and rely upon the following facts: (1) this Lease is
in full force and effect, (2) the terms and provisions of this Lease have
not been changed except as otherwise represented by Landlord, (3) not more
than one monthly installment of Basic Rent and other charges have been paid in
advance, (4) there are no claims against Landlord nor any defenses or
rights of offset against collection of Rent or other charges, and (5) Landlord
is not in default under this Lease. In such event, Tenant shall be estopped
from denying the truth of the presumed facts. From time to time, but no more
than twice during the Term, at Tenant’s request, Landlord shall furnish to
Tenant a certificate signed by Landlord, confirming that (1) this Lease is
in full force and effect, except as otherwise specified by Landlord, (2) the
terms and provisions of this Lease have not been changed, except as otherwise
represented by Landlord, and (3) Tenant is not in default of this Lease
and to Landlord’s knowledge, no facts or circumstances exist that, with the
giving of notice or passage of time, or both, would constitute a default under
this Lease, except as otherwise represented by Landlord.

 

(f)                 Notices.
All notices and other communications given pursuant to this Lease shall be in
writing and shall be (1) mailed by first class, United States Mail,
postage prepaid, certified, with return receipt requested, and addressed to the
parties hereto at the address specified in the Basic Lease Information, (2) hand
delivered to the intended addressee, (3) sent by a nationally recognized
overnight courier service, or (4) sent by facsimile transmission during
normal business hours followed by a confirmatory letter sent in another manner
permitted hereunder. All notices shall be effective upon delivery to the
address of the addressee. The parties hereto may change their addresses by
giving notice thereof to the other in conformity with this provision.

 

(g)              Separability.
If any clause or provision of this Lease is illegal, invalid, or unenforceable
under present or future laws, then the remainder of this Lease shall not be
affected thereby and in lieu of such clause or provision, there shall be added
as a part of this Lease a clause or provision as similar in terms to such
illegal, invalid, or unenforceable clause or provision as may be possible and
be legal, valid, and enforceable.

 

(h)              Amendments;
Binding Effect. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by Landlord or Tenant unless such waiver is
in writing signed by such waiving party, and no custom or practice which may
evolve between the parties in the administration of the terms hereof shall
waive or diminish the right of each party to insist upon the performance by the
other party in strict accordance with the terms hereof. The terms and
conditions contained in this Lease shall inure to the benefit of and be binding
upon the parties hereto, and upon their respective successors in interest and
legal representatives, except as otherwise herein expressly provided. This
Lease is for the sole benefit of Landlord and Tenant, and, other than Landlord’s
Mortgagee, no third party shall be deemed a third party beneficiary hereof.

 

(i)                  Quiet
Enjoyment. Provided Tenant has performed all of its obligations
hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for
the Term, without hindrance from Landlord or any party claiming by, through, or
under Landlord, but not otherwise, subject to the terms and conditions of this
Lease.

 

(j)                  No Merger.
There shall be no merger of the leasehold estate hereby created with the fee
estate in the Premises or any part thereof if the same person acquires or
holds, directly or indirectly, this Lease or any interest in this Lease and the
fee estate in the leasehold Premises or any interest in such fee estate.

 

(k)               No Offer.
The submission of this Lease to Tenant shall not be construed as an offer, and
Tenant shall not have any rights under this Lease unless Landlord executes a
copy of this Lease and delivers it to Tenant.

 

(l)                  Entire
Agreement. This Lease constitutes the entire agreement between Landlord
and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord

 

17

 

or Tenant to the other with respect to this Lease or
the obligations of Landlord or Tenant in connection therewith. The normal rule of
construction that any ambiguities be resolved against the drafting party shall
not apply to the interpretation of this Lease or any exhibits or amendments
hereto.

 

(m)            Waiver of
Jury Trial.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED HERETO.

 

(n)              Governing Law.
This Lease shall be governed by and construed in accordance with the laws of
the state in which the Premises are located.

 

(o)              Recording.
Tenant shall not record this Lease or any memorandum of this Lease without the
prior written consent of Landlord, which consent may be withheld or denied in
the sole and absolute discretion of Landlord, and any recordation by Tenant
shall be a material breach of this Lease. Tenant grants to Landlord a power of
attorney to execute and record a release releasing any such recorded instrument
of record that was recorded without the prior written consent of Landlord. Notwithstanding
the foregoing, Landlord and Tenant agree that if either party so desires to
record a memorandum of this Lease, the parties agree that they shall execute a
memorandum, in recordable form, specifying the Commencement Date and the
Expiration Date hereof and the Premises, Building and Property. Any cost
associated with such recording shall be at such requesting party’s expense.

 

(p)              Joint and Several
Liability. If Tenant is comprised of more than one party, each such
party shall be jointly and severally liable for Tenant’s obligations under this
Lease. All unperformed obligations of Tenant hereunder not fully performed at
the end of the Term shall survive the end of the Term, including payment
obligations with respect to Rent and all obligations concerning the condition
and repair of the Premises.

 

(q)              Financial Reports.
Within 15 days after Landlord’s request, Tenant will furnish Tenant’s most
recent audited financial statements (including any notes to them) to Landlord,
or, if no such audited statements have been prepared, such other financial
statements (and notes to them) as may have been prepared by an independent
certified public accountant or, failing those, Tenant’s internally prepared
financial statements. If Tenant is a publicly traded corporation, Tenant may
satisfy its obligations hereunder by providing to Landlord Tenant’s most recent
annual and quarterly reports. Tenant will discuss its financial statements with
Landlord and, following the occurrence of an Event of Default hereunder, will
give Landlord access to Tenant’s books and records in order to enable Landlord
to verify the financial statements. Landlord will not disclose any aspect of
Tenant’s financial statements that Tenant designates to Landlord as
confidential except (1) to Landlord’s Mortgagee or prospective mortgagees
or purchasers of the Building, (2) in litigation between Landlord and
Tenant, and (3) if required by court order. Tenant shall not be required
to deliver the financial statements required under this Section 25(q) more
than once in any 12-month period unless requested by Landlord’s Mortgagee or a
prospective buyer or lender of the Building or an Event of Default occurs.

 

(r)                 Landlord’s
Fees. Whenever Tenant requests Landlord to take any action not required
of it hereunder or give any consent required or permitted under this Lease,
Tenant will reimburse Landlord for Landlord’s reasonable, out-of-pocket costs
payable to third parties and incurred by Landlord in reviewing the proposed
action or consent, including reasonable attorneys’, engineers’ or architects’
fees, within 30 days after Landlord’s delivery to Tenant of a statement of such
costs. Tenant will be obligated to make such reimbursement without regard to
whether Landlord consents to any such proposed action.

 

(s)               Telecommunications.
Tenant and its telecommunications companies, including local exchange telecommunications
companies and alternative access vendor services companies, shall have no right
of access to and within the Building, for the installation and operation of
telecommunications systems, including voice, video, data, Internet, and any
other services provided over wire, fiber optic, microwave, wireless, and any
other transmission systems (“Telecommunications Services”), for part or all of
Tenant’s telecommunications within the Building and from the Building to any
other location without Landlord’s prior written consent, which consent shall

 

18

 

not be unreasonably withheld, conditioned or delayed. All
providers of Telecommunications Services shall be required to comply with the rules and
regulations of the Building, applicable Laws and Landlord’s policies and
practices for the Building. Tenant acknowledges that Landlord shall not be
required to provide or arrange for any Telecommunications Services and that
Landlord shall have no liability to any Tenant Party in connection with the
installation, operation or maintenance of Telecommunications Services or any
equipment or facilities relating thereto. Tenant, at its cost and for its own
account, shall be solely responsible for obtaining all Telecommunications
Services.

 

(t)                 Confidentiality.
Tenant acknowledges that the terms and conditions of this Lease are to remain
confidential for Landlord’s benefit, and may not be disclosed by Tenant to
anyone, by any manner or means, directly or indirectly, without Landlord’s
prior written consent, except in accordance and compliance with Laws. The
consent by Landlord to any disclosures shall not be deemed to be a waiver on
the part of Landlord of any prohibition against any future disclosure.

 

(u)              Authority.
Tenant (if a corporation, partnership or other business entity) hereby
represents and warrants to Landlord that Tenant is a duly formed and existing
entity qualified to do business in the state in which the Premises are located,
that Tenant has full right and authority to execute and deliver this Lease, and
that each person signing on behalf of Tenant is authorized to do so. Landlord
hereby represents and warrants to Tenant that Landlord is a duly formed and
existing entity qualified to do business in the state in which the Premises are
located, that Landlord has full right and authority to execute and deliver this
Lease, and that each person signing on behalf of Landlord is authorized to do
so.

 

(v)              Hazardous
Materials. The term “Hazardous Materials” means any substance, material,
or waste which is now or hereafter classified or considered to be hazardous,
toxic, or dangerous under any Law relating to pollution or the protection or
regulation of human health, natural resources or the environment, or poses or
threatens to pose a hazard to the health or safety of persons on the Premises
or in the Building. Tenant shall not use, generate, store, or dispose of, or
permit the use, generation, storage or disposal of Hazardous Materials on or
about the Premises or the Building except in a manner and quantity necessary
for the ordinary performance of Tenant’s business, and then in compliance with
all Laws. If Tenant breaches its obligations under this Section 25(v),
Landlord may immediately take any and all action reasonably appropriate to
remedy the same, including taking all appropriate action to clean up or
remediate any contamination resulting from Tenant’s use, generation, storage or
disposal of Hazardous Materials. Tenant shall defend, indemnify, and hold
harmless Landlord and its representatives and agents from and against any and
all claims, demands, liabilities, causes of action, suits, judgments, damages
and expenses (including reasonable attorneys’ fees and cost of clean up and
remediation) arising from Tenant’s failure to comply with the provisions of
this Section 25(v). This indemnity provision shall survive termination or
expiration of this Lease.

 

(w)            List of Exhibits.
All exhibits and attachments attached hereto are incorporated herein by this
reference.

 

Exhibit A -                                        Outline
of Premises

Exhibit B -                                          Description
of the Land

Exhibit C -                                          Building
Rules and Regulations

Exhibit D -                                         Tenant
Finish-Work

Exhibit E -                                           Form of
Confirmation of Commencement Date Letter

Exhibit F -                                           Form of
Tenant Estoppel Certificate

Exhibit G -                                          Parking

Exhibit H -                                         Renewal
Option

Exhibit I -                                              Form of
Offer Notice

Exhibit J -                                             Termination
Option

 

26.                               Other
Provisions.

 

(a)               Rent Abatement.
Basic Rent shall be conditionally abated during the first six (6) months
of the Term. Commencing with the first day of the seventh (7th)
month of the Term, Tenant shall make Basic Rent payments as otherwise provided
in the Lease. Notwithstanding such abatement of Basic Rent (a) all other
sums due

 

19

 

under the Lease, including without limitation
Additional Rent and Tenant’s Proportionate Share of Taxes shall be payable as
provided in the Lease, and (b) any increases in Basic Rent set forth in
the Lease shall occur on the dates scheduled therefor.

 

The abatement of Basic
Rent provided for in this Section 26(a) is conditioned upon Tenant’s
full and timely performance of all of its obligations under the Lease. If at
any time during the Term an Event of Default by Tenant occurs, then the
abatement of Basic Rent provided for in this Section 26(a) shall
immediately become void, and Tenant shall promptly pay to Landlord, in addition
to all other amounts due to Landlord under this Lease, the full amount of all
Basic Rent herein abated.

 

(b)              Right of First
Offer. Subject to renewal or expansion options of other tenants
existing as of the date of this Lease, and provided no Event of Default then
exists, Landlord shall, prior to offering the same to any party (other than the
then-current tenant therein), first offer to lease to Tenant any of the
remaining space in the Building (the “Offer Space”) in an “AS-IS” condition; such offer shall
be in writing and specify the lease terms for the Offer Space, including the
rent to be paid for the Offer Space and the date on which the Offer Space shall
be included in the Premises (the “Offer Notice”). The Offer
Notice shall be substantially similar to the Offer Notice attached to this
Lease as Exhibit I. Tenant shall notify Landlord in writing whether Tenant
elects to lease the entire Offer Space on the terms set forth in the Offer
Notice, within ten (10) days after Landlord delivers to Tenant the Offer
Notice. If Tenant timely elects to lease the Offer Space, then Landlord and
Tenant shall execute an amendment to this Lease, effective as of the date the
Offer Space is to be included in the Premises, on the terms set forth in the
Offer Notice and, to the extent not inconsistent with the Offer Notice terms,
the terms of this Lease; however, Tenant shall accept the Offer Space in an “AS-IS” condition and Landlord shall
not provide to Tenant any allowances (e.g., moving allowance, construction
allowance, and the like) or other tenant inducements except as specifically
provided in the Offer Notice.

 

If Tenant fails or is
unable to timely exercise its right hereunder, then such right shall lapse,
time being of the essence with respect to the exercise thereof (it being
understood that Tenant’s right hereunder is a one-time right only), and
Landlord may lease all or a portion of the Offer Space to third parties on such
terms as Landlord may elect provided that they are not materially more
favorable than the terms contained in the Offer Notice (if such standard is not
met, the provisions hereof will again be triggered requiring Landlord to
deliver the Offer Notice as modified by such materially more favorable terms
whereupon the offer and response process described herein shall begin again). Tenant
may not exercise its rights under this Section 26 (b) if an Event of
Default exists or Tenant is not then occupying the entire Premises. For
purposes hereof, if an Offer Notice is delivered for less than all of the Offer
Space but such notice provides for an expansion, right of first refusal, or
other preferential right to lease some of the remaining portion of the Offer
Space, then such remaining portion of the Offer Space shall thereafter be
excluded from the provisions of this Section 26 (b). In no event shall
Landlord be obligated to pay a commission with respect to any space leased by
Tenant under this Section 26 (b), and Tenant and Landlord shall each
indemnify the other against all costs, expenses, attorneys’ fees, and other
liability for commissions or other compensation claimed by any broker or agent
claiming the same by, through, or under the indemnifying party.

 

Tenant’s rights under
this Section 26 (b) shall terminate if (i) this Lease or Tenant’s
right to possession of the Premises is terminated, (ii) Tenant assigns any
of its interest in this Lease or sublets any portion of the Premises other than
pursuant to a Permitted Transfer, or (iii) less than two (2) full
calendar years remain in the initial Term of this Lease unless Tenant has
exercised its Renewal Option as set forth in Exhibit H attached hereto
(and Tenant shall have the right to accelerate its election to extend the Term
to take advantage of the right of first offer set forth herein.

 

(c)               Back- Up
Generator. Landlord hereby acknowledges that Tenant is contemplating
the installation of a back-up generator for use by the Premises, and Landlord
hereby agrees that Tenant, at Tenant’s cost, shall have the right to install
such a generator upon Landlord’s prior written approval of the plans, permits,
specifications and proposed location of the generator.  The Generator shall be constructed, installed
and maintained at Tenant’s sole cost and expense and in accordance with Section 8
of this Lease, all environmental laws, all Federal, State and local
governmental regulations, and any protective covenants affecting the Premises. The
Generator shall remain the personal property of Tenant and shall be removed
from the Project in accordance with all environmental laws and all Federal,
State and local governmental regulations upon the expiration or earlier
termination of this Lease. Pursuant to Section 11 (d) of this Lease,
Tenant agrees to indemnify Landlord for any and

 

20

 

all expense, loss, and liability suffered by Landlord
in connection with the installation, maintenance or use of the Generator by
Tenant or Tenant’s Affiliates. The indemnity contained in this Section 26 (c) shall
survive the expiration or earlier termination of this Lease.

 

(d)              Tenant’s Access.
Subject to force majeure events, casualty, condemnation, emergency, repairs,
maintenance, replacements, safety/security precautions and Landlord’s
reasonable rules and regulations regarding after-hours entry, Tenant shall
have access to the Building and the Premises seven (7) days per week,
twenty-four (24) hours per day, every day of the year. Access to the Building
other than during “normal business hours” will be subject to such rules and
regulations as Landlord reasonably requires. Tenant shall have exclusive access
to one loading dock on the first floor of the Building and non-exclusive access
to a restroom with showers on the first floor of the Building.

 

(e)               Americans with
Disabilities Act. Notwithstanding anything in this Lease to the
contrary, as between Landlord and Tenant, (a) Tenant shall bear the risk
of complying with Title III of the Americans With Disabilities Act of 1990, any
state laws governing handicapped access or architectural barriers, and all
rules, regulations, and guidelines promulgated under such laws, as amended from
time to time (the “Disabilities Acts”) in the Premises, and (b) Landlord
shall bear the risk of complying with the Disabilities Acts in the common areas
of the Building, other than compliance that is necessitated by the use of the
Premises for other than the Permitted Use or as a result of any alterations or
additions, including any initial tenant improvement work, made by or on behalf
of a Tenant Party (which risk and responsibility shall be borne by Tenant).

 

(f)                 Landlord
Default. Landlord shall be in default under this Lease if Landlord
fails to perform any of its obligations hereunder and said failure continues
for a period of thirty (30) days after Tenant delivers written notice thereof
to Landlord (to each of the addresses required by the Lease) and each mortgagee
who has a lien against any portion of the Property and whose name and address
has been provided to Tenant, provided that if such failure cannot reasonably be
cured within said thirty (30) day period, Landlord shall not be in default
hereunder if the curative action is commenced within said thirty (30) day period
and is thereafter diligently pursued until cured.  In no event shall (i) Tenant
claim a constructive or actual eviction or that the Premises have become
unsuitable hereunder or (ii) a constructive or actual eviction or breach
of the implied warranty of suitability be deemed to have occurred under this
Lease, prior to the expiration of the notice and cure periods provided under
this Section 26(e).  Any notice of a failure to perform by Landlord
shall be sent to Landlord at the addresses and to the attention of the parties
set forth in the Basic Lease Information.  Any notice of a failure to
perform by Landlord not sent to Landlord at all addresses and/or to the
attention of all parties required under this Section and to each mortgagee
who is entitled to notice or not sent in compliance with Section 12(c) below
shall be of no force or effect.

 

21

 

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED
WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED COMMERCIAL
PURPOSE, AND TENANT’S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON
THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS
HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL
CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, DEMAND, SETOFF OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLIED.

 

This Lease is executed on
the respective dates set forth below, but for reference purposes, this Lease
shall be dated as of the date first above written. If the execution date is
left blank, this Lease shall be deemed executed as of the date first written
above.

 

 

	
  LANDLORD:

  	
  SFI I,
  LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By: iSTAR FINANCIAL.
  INC., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristen Vance

  	
   

  
	
   

  	
   

  	
  Kristen Vance

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
  TENANT:

  	
  OMTOOL,
  LTD., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel A.
  Coccoluto

  	
   

  
	
   

  	
   

  	
  Daniel A.
  Coccoluto

  
	
   

  	
   

  	
  Chief Financial
  Officer

  
							

 

22

 

EXHIBIT A

OUTLINE OF PREMISES

 

 

A-1

 

 

A-2

 

EXHIBIT B

 

DESCRIPTION OF THE
LAND

 

EXHIBIT A

 

All of
the land located in Andover, Essex County, Massachusetts, and shown as Lot C6-1B
and Lot C5-1 on a plan entitled “Plan of Land in Andover, Mass.  Scale: 1”=80’ November 3, 1988” drawn by
Hayes Engineering, Inc., which plan is duly recorded with Essex County
North District Registry of Deeds as Plan No. 11358.

 

Said
land is more particularly bounded and described according to said plan as
follows:

 

Beginning
at the southerly most corner of the premises and running N 35°44’47” E, 458.84
feet to a point; thence turning and running N 56°10’03” W, 807.16 feet to a
point; thence turning and running S 28°16’10” W along a stone wall, 244.95 feet
to a point; thence turning and running S 28°7’55” W along said stone wall,
257.61 feet to a point; thence turning and running S 61°52’05” E, 274 feet to a
point; thence turning and running S 61°52’05” E, 62.61 feet to a point on the
northeasterly side of Riverside Drive; thence turning and running along said
side of Riverside Drive along a curved line having a radius of 60 feet, 138.94
feet to a point; thence turning and running S 62°13’45” E, 315.22 feet to the
point and place of beginning.

 

Said
land contains 372,784 square feet or 8.55 acres according to said plan, ±.

 

There
is conveyed herewith, as appurtenant to said premises the right and easement to
use, in common with all others entitled thereto, including all abutters thereto
and all others to whom the Developer may grant the right, Riverside Drive as
shown on said plan (including its extension to River Road as shown on Plan No. 8302
recorded with Essex (N.D.) Deeds on February 15, 1980) for all purposes
for which streets and ways are commonly used in the Town of Andover. In
addition there is also conveyed herewith the right and easement as appurtenant
to said premises to lay, install and maintain in said Riverside Drive, as so
extended, utilities, including but not limited to water, gas, electricity and
telephone.

 

B-1

 

EXHIBIT C

 

BUILDING RULES AND
REGULATIONS

 

The following rules and
regulations shall apply to the Premises, the Building, the parking garage
associated therewith, and the appurtenances thereto:

 

1.                                       Sidewalks,
doorways, vestibules, halls, stairways, and other similar areas shall not be
obstructed by tenants or used by any tenant for purposes other than ingress and
egress to and from their respective leased premises and for going from one to
another part of the Building.

 

2.                                       Plumbing,
fixtures and appliances shall be used only for the purposes for which designed,
and no sweepings, rubbish, rags or other unsuitable material shall be thrown or
deposited therein. Damage resulting to any such fixtures or appliances from
misuse by a tenant or its agents, employees or invitees, shall be paid by such
tenant.

 

3.                                       No
signs, advertisements or notices (other than those that are not visible outside
the Premises) shall be painted or affixed on or to any windows or doors or
other part of the Building without the prior written consent of Landlord. No
nails, hooks or screws (other than those which are necessary to hang paintings,
prints, pictures, or other similar items on the Premises’ interior walls) shall
be driven or inserted in any part of the Building except by Building
maintenance personnel. Except as consented to in writing by Landlord or in
accordance with Tenant’s building standard improvements, no draperies,
curtains, blinds, shades, screens or other devices shall be hung at or used in
connection with any window or exterior door or doors of the Premises. No awning
shall be permitted on any part of the Premises. Tenant shall not place anything
against or near glass partitions or doors, or windows which might appear
unsightly from outside the Premises.

 

4.                                       Landlord
shall provide all door locks in each tenant’s leased premises, at the cost of
such tenant, and no tenant shall place any additional door locks in its leased
premises without Landlord’s prior written consent. Landlord shall furnish to
each tenant a reasonable number of keys to such tenant’s leased premises, at
such tenant’s cost, and no tenant shall make a duplicate thereof.

 

5.                                       Movement
in or out of the Building of furniture or office equipment, or dispatch or
receipt by tenants of any bulky material, merchandise or materials which
require use of elevators or stairways, or movement through the Building
entrances or lobby shall be conducted under Landlord’s supervision at such
times and in such a manner as Landlord may reasonably require. Each tenant
assumes all risks of and shall be liable for all damage to articles moved and
injury to persons or public engaged or not engaged in such movement, including
equipment, property and personnel of Landlord if damaged or injured as a result
of acts in connection with carrying out this service for such tenant.

 

6.                                       Landlord
may prescribe weight limitations and determine the locations for safes and
other heavy equipment or items, which shall in all cases be placed in the
Building so as to distribute weight in a manner acceptable to Landlord which
may include the use of such supporting devices as Landlord may require. All
damages to the Building caused by the installation or removal of any property
of a tenant, or done by a tenant’s property while in the Building, shall be
repaired at the expense of such tenant.

 

7.                                       Corridor
doors, when not in use, shall be kept closed. Nothing shall be swept or thrown
into the corridors, halls, elevator shafts or stairways. No birds or animals
(other than seeing-eye dogs) shall be brought into or kept in, on or about any
tenant’s leased premises. No portion of any tenant’s leased premises shall at
any time be used or occupied as sleeping or lodging quarters.

 

8.                                       Tenant
shall cooperate with Landlord’s employees in keeping its leased premises neat
and clean. Tenants shall not employ any person for the purpose of such cleaning
other than the Building’s cleaning and maintenance personnel.

 

9.                                       To
ensure orderly operation of the Building, no ice, mineral or other water,
towels, newspapers, etc. shall be delivered to any leased area except by
persons approved by Landlord.

 

C-1

 

10.                                 Tenant
shall not make or permit any vibration or improper, objectionable or unpleasant
noises or odors in the Building or otherwise interfere in any way with other
tenants or persons having business with them. Tenant shall not introduce,
disturb or release asbestos or PCB’s into or from the Premises.

 

11.                                 No
machinery of any kind (other than normal office equipment) shall be operated by
any tenant on its leased area without Landlord’s prior written consent, nor
shall any tenant use or keep in the Building any flammable or explosive fluid
or substance (other than typical office supplies [e.g., photocopier toner] used
in compliance with all Laws). The use of oil, gas or inflammable liquids for
heating, lighting or any other purpose is expressly prohibited. Explosives or
other articles deemed extra hazardous shall not be brought into the Building.

 

12.                                 Landlord
will not be responsible for lost or stolen personal property, money or jewelry
from tenant’s leased premises or public or common areas regardless of whether
such loss occurs when the area is locked against entry or not.

 

13.                                 No
vending or dispensing machines of any kind may be maintained in any leased
premises without the prior written permission of Landlord.

 

14.                                 Tenant
shall not conduct any activity on or about the Premises or Building which will
draw pickets, demonstrators, or the like.

 

15.                                 All
vehicles are to be currently licensed, in good operating condition, parked for
business purposes having to do with Tenant’s business operated in the Premises,
parked within designated parking spaces, one vehicle to each space. No vehicle
shall be parked as a “billboard” vehicle in the parking lot. Any vehicle parked
improperly may be towed away. Tenant, Tenant’s agents, employees, vendors and
customers who do not operate or park their vehicles as required shall subject
the vehicle to being towed at the expense of the owner or driver. Landlord may
place a “boot” on the vehicle to immobilize it and may levy a charge of $50.00
to remove the “boot.” Tenant shall indemnify, hold and save harmless Landlord
of any liability arising from the towing or booting of any vehicles belonging
to a Tenant Party.

 

16.                                 No
tenant may enter into phone rooms, electrical rooms, mechanical rooms, or other
service areas of the Building unless accompanied by Landlord or the Building
manager.

 

17.                                 Tenant
will not permit any Tenant Party to bring onto the Project any handgun, firearm
or other weapons of any kind, illegal drugs or, unless expressly permitted by
Landlord in writing, alcoholic beverages. Tenant shall not permit its
employees, invitees or guests to smoke in the Premises or the lobbies,
passages, corridors, elevators, vending rooms, rest rooms, stairways or any
other area shared in common with other tenants in the Building. Nor shall the
tenant permit its employees, invitees, or guests to loiter at the Building
entrances for the purposes of smoking. Landlord may, but shall not be required
to, designate an area for smoking outside the Building.

 

C-2

 

EXHIBIT D

 

TENANT FINISH-WORK: ALLOWANCE

(Tenant Performs the
Work)

 

1.                                       Acceptance of
Premises. Except as set forth in this Exhibit, Tenant accepts
the Premises in their “AS-IS” condition on the date that this Lease is
entered into; provided, however, that Landlord agrees that the Premises will be
tendered to Tenant with a watertight roof.

 

2.                                       Space Plans.

 

(a)                                  Preparation and
Delivery. On or before the tenth day following the date of this
Lease (such earlier date is referred to herein as the “Space Plans
Delivery Deadline”), Tenant shall deliver to Landlord a space
plan prepared by ___________

________________ or another design consultant reasonably acceptable to Landlord
(the “Architect”)
depicting improvements to be installed in the Premises (the “Space Plans”).

 

(b)                                 Approval Process.
Landlord shall notify Tenant whether it approves of the submitted Space Plans
within five business days after Tenant’s submission thereof. If Landlord
disapproves of such Space Plans, then Landlord shall notify Tenant thereof
specifying in reasonable detail the reasons for such disapproval, in which case
Tenant shall, within three business days after such notice, revise such Space
Plans in accordance with Landlord’s objections and submit to Landlord for its
review and approval. Landlord shall notify Tenant in writing whether it
approves of the resubmitted Space Plans within three business days after its
receipt thereof. This process shall be repeated until the Space Plans have been
finally approved by Landlord and Tenant. If Landlord fails to notify Tenant
that it disapproves of the initial Space Plans within five business days (or,
in the case of resubmitted Space Plans, within three business days) after the
submission thereof, then Landlord shall be deemed to have approved the Space
Plans in question.

 

3.                                       Working Drawings.

 

(a)                                  Preparation and
Delivery. On or before the tenth day following the date on which
the Space Plans are approved (or deemed approved) by Landlord and Tenant (such
earlier date is referred to herein as the “Working Drawings Delivery Deadline”),
Tenant shall provide to Landlord for its approval final working drawings,
prepared by the Architect, of all improvements that Tenant proposes to install
in the Premises; such working drawings shall include the partition layout,
ceiling plan, electrical outlets and switches, telephone outlets, drawings for
any modifications to the mechanical and plumbing systems of the Building, and
detailed plans and specifications for the construction of the improvements
called for under this Exhibit in accordance with all applicable Laws.

 

(b)                                 Approval Process.
Landlord shall notify Tenant whether it approves of the submitted working
drawings within ten business days after Tenant’s submission thereof. If
Landlord disapproves of such working drawings, then Landlord shall notify
Tenant thereof specifying in reasonable detail the reasons for such
disapproval, in which case Tenant shall, within three business days after such
notice, revise such working drawings in accordance with Landlord’s objections
and submit the revised working drawings to Landlord for its review and
approval. Landlord shall notify Tenant in writing whether it approves of the
resubmitted working drawings within five business days after its receipt
thereof. This process shall be repeated until the working drawings have been
finally approved by Tenant and Landlord. If Landlord fails to notify Tenant
that it disapproves of the initial working drawings within ten business days
(or, in the case of resubmitted working drawings, within five business days)
after the submission thereof, then Landlord shall be deemed to have approved
the working drawings in question.

 

(c)                                  Landlord’s
Approval; Performance of Work. If any of Tenant’s proposed
construction work will affect the Building’s Structure or the Building’s
Systems, then the working drawings pertaining thereto must be approved by the
Building’s engineer of record. Landlord’s approval of such working drawings
shall not be unreasonably withheld, provided that (1) they comply with all
Laws, (2) the improvements depicted thereon do not adversely affect (in
the reasonable discretion of Landlord) the Building’s Structure or the Building’s
Systems (including the Building’s restrooms or mechanical rooms), the exterior
appearance of the Building, or the appearance

 

D-1

 

of the Building’s common areas or elevator lobby
areas, (3) such working drawings are sufficiently detailed to allow
construction of the improvements in a good and workmanlike manner, and (4) the
improvements depicted thereon conform to the rules and regulations
promulgated from time to time by Landlord for the construction of tenant
improvements (a copy of which has been delivered to Tenant). As used herein, “Working Drawings”
means the final working drawings approved by Landlord, as amended from time to
time by any approved changes thereto, and “Work” means all
improvements to be constructed in accordance with and as indicated on the
Working Drawings, together with any work required by governmental authorities
to be made to other areas of the Building as a result of the improvements
indicated by the Working Drawings. Landlord’s approval of the Working Drawings
shall not be a representation or warranty of Landlord that such drawings are
adequate for any use or comply with any Law, but shall merely be the consent of
Landlord thereto. Tenant shall, at Landlord’s request, sign the Working
Drawings to evidence its review and approval thereof. After the Working
Drawings have been approved, Tenant shall cause the Work to be performed in
accordance with the Working Drawings.

 

4.                                       Contractors;
Performance of Work. The Work shall be performed only by
licensed contractors and subcontractors approved in writing by Landlord, which
approval shall not be unreasonably withheld. All contractors and subcontractors
shall be required to procure and maintain insurance against such risks, in such
amounts, and with such companies as Landlord may reasonably require. Certificates
of such insurance, with paid receipts therefor, must be received by Landlord
before the Work is commenced. The Work shall be performed in a good and
workmanlike manner free of defects, shall conform strictly with the Working
Drawings, and shall be performed in such a manner and at such times as and not
to interfere with or delay Landlord’s other contractors, the operation of the
Building, and the occupancy thereof by other tenants. All contractors and subcontractors
shall contact Landlord and schedule time periods during which they may use
Building facilities in connection with the Work (e.g., elevators, excess
electricity, etc.).

 

5.                                       Construction
Contracts.

 

(a)                                  Tenant’s General
Contractor. Tenant shall enter into a construction contract with
a general contractor selected by Tenant and approved by Landlord in a form
acceptable to Tenant’s representative for the Work, which shall comply with the
provisions of this Section 5 and provide for, among other things, (1) a
one-year warranty for all defective Work; (2) a requirement that the
contractor maintain general commercial liability insurance of not less than a
combined single limit of $5,000,000, naming Landlord, Landlord’s property
management company, Landlord’s asset management company, Landlord’s Mortgagee,
Tenant, and each of their respective Affiliates as additional insureds; (3) a
requirement that the contractor perform the Work in substantial accordance with
the Space Plans and the Working Drawings and in a good and workmanlike manner; (4) a
requirement that the contractor is responsible for daily cleanup work and final
clean up (including removal of debris); and (5) those items described in Section 5(b) (collectively,
the “Approval
Criteria”). Tenant shall present any proposed construction
contracts to Landlord, and Landlord shall have three business days to notify
Tenant whether it approves the proposed construction contracts. If Landlord
disapproves of the proposed construction contracts, then it shall specify in
reasonable detail the reasons for such disapproval, in which case Tenant shall
revise the proposed construction contracts to correct the objections and
resubmit them to Landlord within two business days after Landlord notifies
Tenant of its objections thereto, following which Landlord shall have two
business days to notify Tenant whether it approves the revised construction
contracts. If Landlord fails to notify Tenant that it disapproves of the
construction contracts within three business days after the initial
construction contracts or two business days after the revised construction
contracts (as the case may be) are delivered to Landlord, then Landlord shall
be deemed to have approved the construction contracts.

 

(b)                                 All Construction
Contracts. Unless otherwise agreed in writing by Landlord and
Tenant, each construction contract shall: (1) provide a schedule and
sequence of construction activities and completion reasonably acceptable to
Landlord, (2) be in a contract form that satisfies the Approval Criteria, (3) require
the contractor and each subcontractor to name Landlord, Landlord’s property
management company, Landlord’s asset management company, and Tenant as
additional insured on such contractor’s insurance maintained in connection with
the construction of the Work, (4) be assignable following an Event of
Default by Tenant under this Lease to Landlord and Landlord’s Mortgagees, and (5) contain
at least a one-year warranty for all workmanship and materials.

 

D-2

 

6.                                       Change Orders.
Tenant may initiate changes in the Work. Each such change must receive the
prior written approval of Landlord, such approval not to be unreasonably
withheld or delayed; however, (a) if such requested change would adversely
affect (in the reasonable discretion of Landlord) (1) the Building’s
Structure or the Building’s Systems (including the Building’s restrooms or
mechanical rooms), (2) the exterior appearance of the Building, or (3) the
appearance of the Building’s common areas or elevator lobby areas, or (b) if
any such requested change might delay the Commencement Date, Landlord may
withhold its consent in its sole and absolute discretion. Tenant shall, upon
completion of the Work, furnish Landlord with an accurate architectural “as-built”
plan of the Work as constructed, which plan shall be incorporated into this EXHIBIT D by this reference
for all purposes. If Tenant requests any changes to the Work described in the
Space Plans or the Working Drawings, then such increased costs and any
additional design costs incurred in connection therewith as the result of any
such change shall be added to the Total Construction Costs.

 

7.                                       Definitions.
As used herein “Substantial
Completion,” “Substantially Completed,” and any derivations thereof
mean the Work in the Premises is substantially completed in accordance with the
Working Drawings so as to allow Tenant to lawfully occupy the Premises, as
evidenced by a temporary certificate of occupancy issued by the applicable
governmental authority. Substantial Completion shall have occurred even though
minor details of construction, decoration, landscaping and mechanical
adjustments remain to be completed.

 

8.                                       Walk-Through;
Punchlist. When Tenant considers the Work in the Premises to be
Substantially Completed, Tenant will notify Landlord and within three business
days thereafter, Landlord’s representative and Tenant’s representative shall
conduct a walk-through of the Premises and identify any necessary touch-up
work, repairs and minor completion items that are necessary for final
completion of the Work. Neither Landlord’s representative nor Tenant’s
representative shall unreasonably withhold his or her agreement on punchlist
items. Tenant shall use reasonable efforts to cause the contractor performing
the Work to complete all punchlist items within 30 days after agreement
thereon.

 

9.                                       Excess Costs.
The entire cost of performing the Work (including design of and space planning
for the Work and preparation of the Working Drawings, costs of construction
labor and materials, electrical usage during construction, additional
janitorial services, general tenant signage, related taxes and insurance costs,
licenses, permits, certifications, surveys and other approvals required by Law,
and the construction supervision fee referenced in Section 11 of this
Exhibit, all of which costs are herein collectively called the “Total
Construction Costs”) in excess of the Construction Allowance
(hereinafter defined) shall be paid by Tenant. Upon approval of the Working
Drawings and selection of a contractor, Tenant shall promptly execute a work
order agreement which identifies such drawings and itemizes the Total
Construction Costs and sets forth the Construction Allowance.

 

10.                                 Construction
Allowance. Landlord shall provide to Tenant a construction
allowance not to exceed $7.00 per rentable square foot in the Premises (the “Construction
Allowance”) to be applied toward the Total Construction Costs,
as adjusted for any changes to the Work. No advance of the Construction
Allowance shall be made by Landlord until Tenant has first paid to the
contractor from its own funds (and provided reasonable evidence thereof to
Landlord) the anticipated amount by which the projected Total Construction
Costs exceed the amount of the Construction Allowance. Thereafter, Landlord
shall pay to Tenant the Construction Allowance in multiple disbursements (but
not more than once in any calendar month) following the receipt by Landlord of
the following items: (a) a request for payment, (b) final or partial
lien waivers, as the case may be, from all persons performing work or supplying
or fabricating materials for the Work, fully executed, acknowledged and in
recordable form, and (c) the Architect’s certification that the Work for
which reimbursement has been requested has been finally completed, including
(with respect to the last application for payment only) any punch-list items,
on the appropriate AIA form or another form approved by Landlord, and, with
respect to the disbursement of the last 20% of the Construction Allowance, (1) the
permanent certificate of occupancy issued for the Premises, (2) Tenant’s
occupancy of the Premises, (3) delivery of the architectural “as-built”
plan for the Work as constructed (as set forth above) to Landlord’s
construction representative (set forth below), and (4) an estoppel
certificate confirming such factual matters as Landlord or Landlord’s Mortgagee
may reasonably request (collectively, a “Completed Application for Payment”).
Landlord shall pay the amount requested in the applicable Completed Application
for Payment to Tenant within 30 days following Tenant’s submission of the
Completed Application for Payment. If, however, the Completed Application for
Payment is incomplete or incorrect, Landlord’s payment of such request shall be
deferred until 30 days following Landlord’s receipt of the Completed
Application for Payment. Notwithstanding anything to the contrary contained in
this Exhibit, Landlord shall not be obligated to make any

 

D-3

 

disbursement of the Construction Allowance during the
pendency of any of the following: (A) Landlord has received written notice
of any unpaid claims relating to any portion of the Work or materials in
connection therewith, other than claims which will be paid in full from such
disbursement, (B) there is an unbonded lien outstanding against the
Building or the Premises or Tenant’s interest therein by reason of work done,
or claimed to have been done, or materials supplied or specifically fabricated,
claimed to have been supplied or specifically fabricated, to or for Tenant or
the Premises, (C) the conditions to the advance of the Construction
Allowance are not satisfied, or (D) an Event of Default by Tenant exists. The
Construction Allowance must be used (that is, the Work must be fully complete
and the Construction Allowance disbursed) within twelve (12) months following
the Commencement Date or shall be deemed forfeited with no further obligation
by Landlord with respect thereto.

 

11.                                 Construction
Management. Landlord or its Affiliate or agent shall have the
right to supervise the Work and coordinate the relationship between the Work,
the Building and the Building’s Systems. In consideration for Landlord’s
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to $.20 per rentable square foot of the Premises,

 

12.                                 Construction
Representatives. Landlord’s and Tenant’s representatives for
coordination of construction and approval of change orders will be as follows,
provided that either party may change its representative upon written notice to
the other:

 

	
  Landlord’s
  Representative:

  	
   

  	
  Paul Amato

  
	
   

  	
   

  	
  c/o iStar Financial Inc.

  
	
   

  	
   

  	
  3840 Preston
  Ridge Road, Suite 575

  
	
   

  	
   

  	
  Alpharetta,
  Georgia 30005

  
	
   

  	
   

  	
  Telephone: (678)
  339-2012

  
	
   

  	
   

  	
  Telecopy: (678)
  339-0101

  
	
   

  	
   

  	
   

  
	
  Tenant’s
  Representative:

  	
   

  	
  Prism Builders

  
	
   

  	
   

  	
  107 Audubon Road
  – Building 1

  
	
   

  	
   

  	
  Wakefield,
  Massachusetts 01880

  
	
   

  	
   

  	
  Attention: M.
  deVincent

  
	
   

  	
   

  	
  Telephone: (781)
  246-1900

  
	
   

  	
   

  	
  Telecopy: (781) 246-0901

  

 

13.                                 Miscellaneous.
To the extent not inconsistent with this Exhibit, Sections 8(a) and
22 of this Lease shall govern the performance of the Work and Landlord’s and
Tenant’s respective rights and obligations regarding the improvements installed
pursuant thereto.

 

D-4

 

EXHIBIT E

 

CONFIRMATION OF
COMMENCEMENT DATE

 

_______________, 200_

 

_________________________

_________________________

_________________________

_________________________

 

Re:                               Lease
Agreement (the “Lease”)
dated ________________, 2006, between SFI I, LLC, a
Delaware limited liability company (“Landlord”), and Omtool, Ltd., a Delaware corporation (“Tenant”).
Capitalized terms used herein but not defined shall be given the meanings
assigned to them in the Lease.

 

Ladies and Gentlemen:

 

Landlord and Tenant agree
as follows:

 

1.                                       Condition of Premises. Tenant has
accepted possession of the Premises pursuant to the Lease. Any improvements
required by the terms of the Lease to be made by Landlord have been completed
to the full and complete satisfaction of Tenant in all respects except for the
punchlist items described on Exhibit A
hereto (the “Punchlist
Items”), and except for such Punchlist Items, Landlord has
fulfilled all of its duties under the Lease with respect to such initial tenant
improvements. Furthermore, Tenant acknowledges that the Premises are suitable
for the Permitted Use.

 

2.                                       Commencement Date. The Commencement
Date of the Lease is ______________, 200_.

 

3.                                       Expiration Date. The Term is
scheduled to expire on the last day of the ___th full calendar month of the
Term, which date is ________________, 200_.

 

4.                                       Contact Person. Tenant’s contact
person in the Premises is:

 

________________________________

________________________________

________________________________

Attention:________________________

Telephone:_______________________

Telecopy:________________________

 

5.                                       Ratification. Tenant hereby
ratifies and confirms its obligations under the Lease, and represents and
warrants to Landlord that it has no defenses thereto. Additionally, Tenant
further confirms and ratifies that, as of the date hereof, (a) the Lease
is and remains in good standing and in full force and effect, and (b) Tenant
has no claims, counterclaims, set-offs or defenses against Landlord arising out
of the Lease or in any way relating thereto or arising out of any other
transaction between Landlord and Tenant.

 

6.                                       Binding Effect; Governing Law. Except
as modified hereby, the Lease shall remain in full effect and this letter shall
be binding upon Landlord and Tenant and their respective successors and 

 

E-1

 

assigns. If any
inconsistency exists or arises between the terms of this letter and the terms
of the Lease, the terms of this letter shall prevail. This letter shall be
governed by the laws of the state in which the Premises are located.

 

Please indicate your
agreement to the above matters by signing this letter in the space indicated
below and returning an executed original to us.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
  GRUBB &
  ELLIS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Agreed and
  accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OMTOOL,
  LTD., a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  
												

 

E-2

 

EXHIBIT A

 

PUNCHLIST ITEMS

 

Please insert any
punchlist items that remain to be performed by Landlord. If no items are listed
below by Tenant, none shall be deemed to exist.

 

E-3

 

EXHIBIT F

 

FORM OF TENANT
ESTOPPEL CERTIFICATE

 

The undersigned is the
Tenant under the Lease (defined below) between ________________________, a ___________

_________________, as Landlord, and the undersigned as Tenant, for the Premises
on the ____________ floor(s) of the office building located at ___________________,
___________ and commonly known as _______________________, and hereby certifies
as follows:

 

1.                                       The
Lease consists of the original Lease Agreement dated as of _____________, 200__
between Tenant and Landlord [‘s
predecessor-in-interest] and the following amendments or
modifications thereto (if none, please state “none”):

 

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

 

The documents listed
above are herein collectively referred to as the “Lease” and represent the
entire agreement between the parties with respect to the Premises. All
capitalized terms used herein but not defined shall be given the meaning
assigned to them in the Lease.

 

2.                                       The
Lease is in full force and effect and has not been modified, supplemented or
amended in any way except as provided in Section 1 above.

 

3.                                       The
Term commenced on _____________________, 200_ and the Term expires, excluding
any renewal options, on ____________________, 200_, and Tenant has no option to
purchase all or any part of the Premises or the Building or, except as
expressly set forth in the Lease, any option to terminate or cancel the Lease.

 

4.                                       Tenant
currently occupies the Premises described in the Lease and Tenant has not
transferred, assigned, or sublet any portion of the Premises nor entered into
any license or concession agreements with respect thereto except as follows (if
none, please state “none”):

 

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

____________________________________________________________________________________________________________

 

5.                                       All
monthly installments of Basic Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through ________________.
The current monthly installment of Basic Rent is $______________.

 

6.                                       All
conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, Tenant has not delivered any notice to Landlord
regarding a default by Landlord thereunder.

 

7.                                       As
of the date hereof, there are no existing defenses or offsets, or, to the
undersigned’s knowledge, claims or any basis for a claim, that the undersigned
has against Landlord and no event has occurred and no condition exists, which,
with the giving of notice or the passage of time, or both, will constitute a
default under the Lease.

 

8.                                       No
rental has been paid more than 30 days in advance and no security deposit has
been delivered to Landlord except as provided in the Lease.

 

9.                                       If
Tenant is a corporation, partnership or other business entity, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and
warrants that Tenant is a duly 

 

F-1

 

formed and
existing entity qualified to do business in the state in which the Premises are
located and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.

 

10.                                 There
are no actions pending against Tenant under any bankruptcy or similar laws of
the United States or any state.

 

11.                                 Other
than in compliance with all applicable laws and incidental to the ordinary
course of the use of the Premises, the undersigned has not used or stored any
hazardous substances in the Premises.

 

12.                                 All
tenant improvement work to be performed by Landlord under the Lease has been
completed in accordance with the Lease and has been accepted by the undersigned
and all reimbursements and allowances due to the undersigned under the Lease in
connection with any tenant improvement work have been paid in full.

 

Tenant acknowledges that
this Estoppel Certificate may be delivered to Landlord, Landlord’s Mortgagee or
to a prospective mortgagee or prospective purchaser, and their respective
successors and assigns, and acknowledges that Landlord, Landlord’s Mortgagee
and/or such prospective mortgagee or prospective purchaser will be relying upon
the statements contained herein in disbursing loan advances or making a new
loan or acquiring the property of which the Premises are a part and that
receipt by it of this certificate is a condition of disbursing loan advances or
making such loan or acquiring such property.

 

Executed as of ___________________,
200_.

 

 

	
  TENANT:

  	
   

  
	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							

 

F-2

 

EXHIBIT G

 

PARKING

 

Tenant shall have the use
of one hundred fifty-four (154) undesignated parking spaces in the parking
garage/area associated with the Building (the “Parking Area”) during the
initial Term subject to such terms, conditions and regulations as are from time
to time applicable to patrons of the Parking Area.

 

G-1

 

EXHIBIT H

 

RENEWAL OPTION

 

Provided no Event of
Default exists and Tenant is occupying the entire Premises at the time of such
election, Tenant may renew this Lease for one additional period of five (5) years,
by delivering written notice of the exercise thereof to Landlord not earlier
than twelve (12) months nor later than nine (9) months before the
expiration of the Term. The Basic Rent payable for each month during such
extended Term shall be the greater of (the “Extended Term Rental Rate”) (i) the
prevailing rental rate at the commencement of such extended Term, for renewals
of space in the Building of equivalent quality, size, utility and location,
with the length of the extended Term and the credit standing of Tenant to be
taken into account, and (ii) the Basic Rent in effect at the expiration of
the original Term. Within 30 days after receipt of Tenant’s notice to renew,
Landlord shall deliver to Tenant written notice of the Extended Term Rental
Rate and shall advise Tenant of the required adjustment to Basic Rent, if any,
and the other terms and conditions offered. Tenant shall, within ten days after
receipt of Landlord’s notice, notify Landlord in writing whether Tenant accepts
or rejects Landlord’s determination of the Extended Term Rental Rate. If Tenant
timely notifies Landlord that Tenant accepts Landlord’s determination of the
Extended Term Rental Rate, then, on or before the commencement date of the
extended Term, Landlord and Tenant shall execute an amendment to this Lease
extending the Term on the same terms provided in this Lease, except as follows:

 

(a)                                  Basic
Rent shall be adjusted to the Extended Term Rental Rate;

 

(b)                                 Tenant
shall have no further renewal option unless expressly granted by Landlord in
writing;

 

(c)                                  Landlord
shall lease to Tenant the Premises in their then-current condition, and Landlord
shall not provide to Tenant any allowances (e.g., moving allowance,
construction allowance, and the like) or other tenant inducements; and

 

(d)                                 Tenant
shall pay for the parking spaces which it is entitled to use at the rates from
time to time charged to patrons of the Parking Area and/or any other parking
area associated with the Building during the extended Term (plus all applicable
taxes).

 

If Tenant rejects Landlord’s determination of the
Extended Term Rental Rate, upon receipt of Tenant’s objection, Landlord and
Tenant shall negotiate for a period of thirty (30) additional days (the “Negotiation
Period”) to agree to the Extended Term Rental Rate, with each acting in good
faith.  If such negotiations are successful, the rate so negotiated by the
parties will be deemed to be the Extended Term Rental Rate for the renewal
term.  If such negotiations are not successful, the Extended Term Rental
Rate will be determined in accordance with the following arbitration procedure:

 

Within five (5) days after the expiration of
the Negotiation Period, Tenant shall notify Landlord of Tenant’s selection of a
real estate broker who shall act on Tenant’s behalf in determining the Extended
Term Rental Rate.  After Tenant delivers its notice to Landlord as set
forth above, Landlord shall notify Tenant of Landlord’s selection of a real
estate broker who shall act on Landlord behalf in determining the Extended Term
Rental Rate.  Within twenty (20) days after the selection of Tenant’s and
Landlord’s broker, the two (2) brokers shall render a joint written
determination of the Extended Term Rental Rate, which joint determination shall
be final, conclusive and binding for the renewal term.  If the two (2) brokers
are unable to agree upon a joint written determination within said twenty (20)
day period, the two brokers shall select a third broker within such twenty (20)
day period and shall each submit a determination of the Extended Term Rental
Rate to such third broker.  In the event the two brokers cannot agree on a
third, Landlord or Tenant may request that the local chapter of the Board of
Realtors appoint a party to act as the third broker.  Within ten (10) days
after the appointment of the third broker, the third broker shall render a
written determination of the Extended Term Rental Rate, which must be either
the Landlord’s broker’s determination as submitted or the Tenant’s broker’s
determination as submitted, but no other amount and no compromise between the
two, with the third broker’s determination being final, conclusive and binding
on both parties.  All brokers selected or appointed in accordance with
this subparagraph shall have at least ten (10) years prior experience in
the commercial office leasing market of the Andover, Massachusetts Market
Area.  If either Landlord or Tenant fails or 

 

H-1

 

refuses to select a broker, the other broker shall
alone determine the Extended Term Rental Rate.  Landlord and Tenant agree
that they shall be bound by the determination of Extended Term Rental Rate
pursuant to this paragraph.  Landlord shall bear the fee and expenses of
its broker; Tenant shall bear the fee and expenses of its broker; and Landlord
and Tenant shall share equally the fee and expenses of the third broker, if any.

 

 If Tenant fails to timely notify Landlord in
writing that Tenant accepts or rejects Landlord’s determination of the Extended
Term Rental Rate, time being of the essence with respect thereto, Tenant’s
rights under this Exhibit shall terminate and Tenant shall have no right
to renew this Lease.

 

Tenant’s rights under
this Exhibit shall terminate if (1) this Lease or Tenant’s right to
possession of the Premises is terminated, (2) Tenant assigns any of its
interest in this Lease or sublets any portion of the Premises other than a
Permitted Transfer, (3) Tenant fails to timely exercise its option under
this Exhibit, time being of the essence with respect to Tenant’s exercise
thereof, or (4) Landlord determines, in its sole but reasonable
discretion, that Tenant’s financial condition or creditworthiness has
materially deteriorated since the date of this Lease.

 

H-2

 

EXHIBIT I

 

FORM OF OFFER
NOTICE

 

[Insert Date of Notice]

 

BY TELECOPY AND FEDERAL
EXPRESS

__________________________________                                                  [TENANT’S ADDRESS]

__________________________________

__________________________________

__________________________________

 

Re:                               Lease
Agreement (the “Lease”)
dated _______________, 200_, between ________ Real Estate Limited Partnership,
a Delaware limited partnership (“Landlord”), and ___________________, a __________________
(“Tenant”).
Capitalized terms used herein but not defined shall be given the meanings
assigned to them in the Lease.

 

Ladies and Gentlemen:

 

Pursuant to the Right of
First Offer attached to the Lease, enclosed please find an Offer Notice on Suite
_________.  The basic terms and
conditions are as follows:

 

	
  LOCATION:

  	
  ____________________________________

  
	
   

  	
   

  
	
  SIZE:

  	
  ________________ rentable square feet

  
	
   

  	
   

  
	
  BASIC
  RENT RATE:

  	
  $_________ per month

  
	
   

  	
   

  
	
  TERM:

  	
  ____________________________________

  
	
   

  	
   

  
	
  IMPROVEMENTS:

  	
  ____________________________________

  
	
   

  	
   

  
	
  COMMENCEMENT:

  	
  ____________________________________

  
	
   

  	
   

  
	
  PARKING
  TERMS:

  	
  ____________________________________

  
	
   

  	
   

  
	
  OTHER
  MATERIAL TERMS:

  	
  ____________________________________

  

 

Under the terms of the
Right of First Offer, you must exercise your rights, if at all, as to the Offer
Space on the depiction attached to this Offer Notice within ________ days after
Landlord delivers such Offer Notice. Accordingly, you have until 5:00 p.m.
local time on _________________, 200_, to exercise your rights under the Right
of First Offer and accept the terms as contained herein, failing which your
rights under the Right of First Offer shall terminate and Landlord shall be
free to lease the Offer Space to any third party. If possible, any earlier
response would be appreciated. Please note that your acceptance of this Offer
Notice shall be irrevocable and may not be rescinded.

 

Upon receipt of your
acceptance herein, Landlord and Tenant shall execute an amendment to the Lease
memorializing the terms of this Offer Notice including the inclusion of the
Offer Space in the Premises; provided, however, that the failure by Landlord
and Tenant to execute such amendment shall not affect the inclusion of such
Offer Space in the Premises in accordance with this Offer Notice.

 

I-1

 

THE FAILURE TO ACCEPT
THIS OFFER NOTICE BY (1) DESIGNATING THE “ACCEPTED” BOX, AND (2) EXECUTING
AND RETURNING THIS OFFER NOTICE TO LANDLORD WITHOUT MODIFICATION WITHIN SUCH
TIME PERIOD SHALL BE DEEMED A WAIVER OF TENANT’S RIGHTS UNDER THE RIGHT OF
FIRST OFFER, AND TENANT SHALL HAVE NO FURTHER RIGHTS TO THE OFFER SPACE. THE
FAILURE TO EXECUTE THIS LETTER WITHIN SUCH TIME PERIOD SHALL BE DEEMED A WAIVER
OF THIS OFFER NOTICE.

 

Should you have any
questions, do not hesitate to call.

 

Sincerely,

 

 

_________________________________

_________________________________

_________________________________

 

[please
check appropriate box]

 

ACCEPTED                                o

REJECTED                                     o

 

[TENANT’S
SIGNATURE BLOCK]

 

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
				

 

Enclosure [attach
depiction of Offer Space]

 

I-2

 

EXHIBIT J

 

TERMINATION OPTION

 

Landlord
hereby grants to Tenant the right to terminate this Lease with or without cause
on the following terms and conditions:

 

Provided
that no Event of Default exists at the time Tenant gives notice of its election
or on the Effective Termination Date, Tenant shall have a one-time right to
terminate the Lease (“Termination Option”)
effective as of the end of the seventy-second (72nd) Lease Month of
the Term (the “Effective Termination Date”).
To exercise the Termination Option, Tenant shall provide Landlord with at least
twelve (12) months prior written notice of its exercise of the Termination
Option, and shall pay to Landlord at the time it gives such notice one quarter
of a termination fee equal to (i) the Unamortized Portion of the
Construction Allowance paid by Landlord hereunder, plus (ii) six (6) months
Basic Rent at the rate in effect as of the Effective Termination Date. The
remainder of such termination fee shall be paid to Landlord on or prior to the
Effective Termination Date. The “Unamortized Portion” shall be defined as the
amount of principal which would remain unpaid as of the Effective Termination
Date with respect to a loan in an original principal amount equal to the
portion of the Construction Allowance actually disbursed by Landlord and which
is repaid in equal monthly payments of principal and interest using a
mortgage-style basis of amortization having a term equal to the initial term of
the Lease with an interest at a rate of eight (8%) percent per annum. For
example, if Landlord fully disbursed the Construction Allowance of $278,908.00,
then the Unamortized Portion as of the Effective Termination Date would equal
$227,785.00. Except for a Permitted Transfer, Tenant’s rights under this Exhibit shall
terminate if Tenant assigns any of its interest in this Lease or sublets any
portion of the Premises.

 

J-1

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