Document:

EXHIBIT 10.1

CATALYTICA
ENERGY SYSTEMS, INC./SCR-TECH LLC/CESI-SCR, INC.

EMPLOYMENT
AGREEMENT

This
Employment Agreement (the “Agreement”) is made and entered into between and
among William J. McMahon III (the “Employee”), Catalytica Energy Systems, Inc.
(the “Company”), SCR-Tech LLC (“SCR-Tech”)
and CESI-SCR, Inc., a
wholly-owned subsidiary of the Company and the manager of SCR-Tech (“CESI-SCR”),
effective as of January 1, 2007 (the “Effective Date”).  This Agreement replaces and supersedes in
their entirety (i) the letter agreement between the Company and Employee dated
March 16, 2005, and (ii) the SCR-Tech, LLC Change of Control Severance
Agreement between and among the Company, SCR-Tech LLC and Employee dated March 17, 2005 (the “Prior
Agreements”).

1.                                       Duties
and Scope of Employment.

(a)                                  Positions
and Duties.  As of the Effective Date, Employee will
continue to serve as President of
SCR-Tech.  Employee will render
such business and professional services in the performance of his duties,
consistent with Employee’s position within SCR-Tech, as shall reasonably be
assigned to him, by the Chief Executive Officer of the Company (the “CEO”), the
board of directors of CESI-SCR or their designee.  Moreover, Employee will remain a Section 16
executive officer for so long as the board of directors of the Company (the “Board)
determines, in its reasonable discretion and in consultation with its outside
counsel, that such designation is appropriate. The period of Employee’s
employment under this Agreement is referred to herein as the “Employment Term.”  The employee will continue to serve as President of CESI-SCR, to the extent
determined by the board of directors of CESI-SCR in its sole discretion

(b)                                 Obligations.  During the Employment Term, Employee will
perform his duties faithfully and to the best of his ability and will devote
his full business efforts and time to SCR-Tech and the Company.  For the duration of the Employment Term,
Employee agrees not to actively engage in any other employment, occupation or
consulting activity for any direct or indirect remuneration without the prior
approval of the CEO or the Board.  The
Board acknowledges that Employee currently serves on the Advisory Board of
Great Point Energy and as a member of the board of directors of CoalTec Energy
USA, Inc.  Employee agrees to notify the
Board or CEO in writing or by e-mail prior to receiving any additional
compensation from these entities, specifying the amount of the compensation.

2.                                       At-Will
Employment.  The Company, SCR-Tech
and CESI-SCR (together, the “Companies”) and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined
under applicable law.  If the Employee’s
employment terminates for any reason, including (without limitation) any
termination after an announcement of Change of Control and prior to twenty-four
(24) months following a Change of Control or the announcement of a Change of
Control, whichever comes later, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement.

 

3.                                       Compensation.

(a)                                  Base
Salary.  During the Employment Term,
the Company will pay Employee as compensation for his services a base salary at
the annualized rate of $200,000 until
January 1, 2007 when the amount shall increase to an annualized rate of
$215,000 (“Base Salary”).  The
Base Salary will be paid periodically in accordance with the Company’s normal
payroll practices and be subject to the usual, required withholding.

(b)                                 Annual
Bonus.  During the Employment Term,
Employee shall be eligible to receive an annual bonus with a target payment
equal to 50% of Base Salary based upon criteria developed by the Board or by
the Company’s Compensation Committee (the “Target Bonus”).

4.                                       Employee
Benefits.  During the Employment
Term, Employee will be entitled to participate in the employee benefit plans
currently and hereafter maintained by the Company of general applicability to
other senior executives of the Company. 
The Company reserves the right to cancel or change the benefit plans and
programs it offers to its employees at any time.

5.                                       Severance
Benefits.

(a)                                  Termination Not in Connection with a Change of
Control.  If the Employee’s employment with
SCR-Tech terminates as a result of Involuntary Termination (as defined below)
other than for Cause at any time prior to an announcement of a Change of
Control or on or after the date that is twenty-four (24) months following a
Change of Control or the announcement of a Change of Control, whichever comes
later (a “Non-Change of Control Severance Termination”), then, subject to
Employee (i) executing and not revoking a standard release of claims in favor
of the Company; provided, however, that such release shall preserve all
indemnification rights of Employee and all other rights of Employee under the
currently existing indemnification agreement or similar agreement with the
Company (a “Release”), and (ii) not breaching the provisions of Section 6
hereof, then Employee shall be entitled to receive the following severance and
non-competition benefits:

(i)             Severance Payments.  Following the Employment Termination Date the
Company shall pay Employee an aggregate amount equal to one hundred percent
(100%) of his Base Salary, less applicable taxes, ratably over the remaining
payroll periods in the same calendar year in which Employee terminated.   For example, if Employee terminates on June
30 of a particular year, he will receive his annual base salary amount, (e.g.,
$215,000) over the remaining six months of the year.

(ii)          Subsidized COBRA.  Subject to Employee timely electing
continuation coverage under Title X of the Consolidated Budget Reconciliation
Act of 1985 (“COBRA”), the Company shall subsidize Employee and his eligible
dependent’s COBRA premiums so that Employee pays the same premium as an active
employee of the Company for a period equal to the lesser of (i) twelve months
following the Employee’s termination date, or (ii) the date upon which Employee
becomes covered under the group health plans of another employer with
comparable group health benefits and levels of coverage.

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(b)                                 Termination
in Connection with a Change of Control. 
If the Employee’s employment terminates as a result of Involuntary
Termination (as defined below) other than for Cause at any time after an
announcement of a Change of Control and prior to twenty-four (24) months
following a Change of Control or the announcement of a Change of Control,
whichever comes later (the “Change of Control Period”) (a “Change of Control
Severance Termination”), then, subject to Employee (i) executing and not
revoking a Release, (ii) not breaching the provisions of Section 6 hereof, and
(iii) the provisions of Section 8 hereof, the Employee shall be entitled
to receive the following severance benefits:

(i)             Severance and Non-Competition Payment.  A cash payment in an amount equal to:

(1)                                  If the Company Value
is less than five million dollars, one hundred percent (100%) of the Employee’s
Annual Compensation.  Of this amount,
fifty percent (50%) of Employee’s Annual Compensation is paid specifically in
exchange for Employee entering into and not breaching the non-competition
provisions of Section 6 hereof.

(2)                                  If the Company Value
is at least five million dollars but less than ten million dollars, one hundred
and fifty percent (150%) of the Employee’s Annual Compensation.  Of this amount, seventy-five percent (75%) of
Employee’s Annual Compensation is paid specifically in exchange for Employee
entering into and not breaching the non-competition provisions of Section 6
hereof.

(3)                                  If the Company Value
is ten million dollars or more, two hundred percent (200%) of the Employee’s
Annual Compensation.  Of this amount, one
hundred percent (100%) of Employee’s Annual Compensation is paid specifically
in exchange for Employee entering into and not breaching the non-competition
provisions of Section 6 hereof.

(ii)          Continued Employee Benefits.  One hundred percent (100%) Company-paid
health, dental and life insurance coverage at the same level of coverage as was
provided to such employee immediately prior to the Change of Control Severance
Termination (the “Company-Paid Coverage”). 
If such coverage included the Employee’s dependents immediately prior to
the Change of Control Severance Termination, such dependents shall also be
covered at the Company’s expense. 
Company-Paid Coverage shall continue until the earlier of (i) two
years from the date of the Involuntary Termination or (ii) the date that
the Employee and his dependents become covered under another employer’s group
health, dental or life insurance plans that provide Employee and his dependents
with comparable benefits and levels of coverage.  For purposes of COBRA, the date of the “qualifying
event” for Employee and his dependents shall be the date upon which the Company-Paid
Coverage terminates.

(iii)       Timing of Severance & Non-Competition
Payments.  Any Change of Control
severance and non-competition payments to which Employee is entitled under
Section 5(b)(i) shall be paid by the Company to the Employee (or to the
Employee’s successor in interest, pursuant to Section 10(b)) in cash and
in full, not later than thirty (30) calendar days following the Termination
Date, subject to Sections 9(d) and 12(f).  Severance payments and

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benefits may be delayed
hereunder in order to comply with the provisions of Internal Revenue Code
Section 409A and the proposed or final regulations issued thereunder.

(c)                                  Voluntary
Resignation; Termination For Cause. 
If the Employee’s employment terminates by reason of the Employee’s
voluntary resignation (and is not an Involuntary Termination), or if the
Employee is terminated for Cause, then the Employee shall not be entitled to
receive severance or other benefits except for those (if any) as may then be
established under the Company’s then existing option, severance and benefits
plans and practices.

(d)                                 Disability;
Death.  If the Company terminates the
Employee’s employment as a result of the Employee’s Disability, or such
Employee’s employment is terminated due to the death of the Employee, then the
Employee shall not be entitled to receive severance or other benefits except
for those (if any) as may then be established under the Company’s then existing
severance and benefits plans and practices or pursuant to other agreements with
the Company.

(e)                                  Change in Status
with CESI-SCR or the Company. 
Employee’s termination as President of CESI-SCR shall not be deemed to
be a termination of employment with SCR-Tech, nor shall any such termination
trigger any payments under Section 5 or otherwise under this Agreement.  Notwithstanding the foregoing, if Employee’s
termination as President of CESI-SCR results in a significant reduction of
Employee’s duties, authority or responsibilities as the President of SCR-Tech,
then that shall constitute grounds for an Involuntary Termination pursuant to
Section 9(g) hereof, subject to the notice and opportunity to cure provisions
of such Section.

6.                                       Conditional
Nature of Section 5 Payments.

(a)                                  Noncompete.  Employee acknowledges that the nature of the
Company’s business is such that if Employee were to become employed by, or
substantially involved in, the business of a competitor of the Companies during
the 12 months following the termination of Employee’s employment, it would be
very difficult for Employee not to rely on or use the Company’s trade secrets
and confidential information.  Thus, to
avoid the inevitable disclosure of the Companies’ trade secrets and
confidential information, Employee agrees and acknowledges that Employee’s
right to receive the payments set forth in Section 5 (to the extent
Employee is otherwise entitled to such payments) shall be conditioned upon
Employee not directly or indirectly engaging in (whether as an employee,
consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), nor having any ownership interested in or
participating in the financing, operation, management or control of, any
person, firm, corporation or business that is in Competition with any of the
Companies or their affiliates; provided, however, that following his
termination of employment, Employee shall be permitted to work for an entity in
Competition with the Companies whose primary business is not providing products
or services competitive with
the products or services of the Companies, so long Employee does not
engage in a business that makes such entity in Competition with the
Companies.  Notwithstanding the
foregoing, Employee may, without violating this Section 6, own, as a passive
investment, shares of capital stock of a publicly-held corporation that engages
in Competition where the number of shares of such corporation’s capital stock
that are owned by Employee represent less than three percent of the total
number of shares of such corporation’s capital stock outstanding.  Further, if the Employee notifies the CEO or
the Board in writing about potential employment that may be construed as in
Competition, the CEO

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or Board agrees to
consider in good faith whether such potential employment may be construed as in
Competition and to notify Employee of its determination in writing or by e-mail
within a reasonable period of time.

(b)                                 Non-Solicitation. 
Until the date 12 months after the termination of Employee’s employment
hereunder for any reason, Employee agrees and acknowledges that Employee’s
right to receive the severance payments set forth in Section 5 (to the
extent Employee is otherwise entitled to such payments) shall be conditioned
upon Employee not either directly or indirectly soliciting, inducing,
recruiting or encouraging an employee to leave his or her employment either for
Employee or for any other entity or person with which or whom Employee has a
business relationship.

(c)                                  Understanding
of Covenants.  Employee represents
that he (i) is familiar with the foregoing covenants not to compete and
not to solicit, and (ii) is fully aware of his obligations hereunder,
including, without limitation, the reasonableness of the length of time, scope
and geographic coverage of these covenants.

(d)                                 Remedy
for Breach.  Upon any breach of this
section by Employee, all severance payments pursuant to Section 5 shall
immediately cease, and that shall be the sole remedy available to the Company
for such breach.

7.                                       Attorney
Fees, Costs and Expenses.  With
respect to any Change of Control Severance Termination only, the Company shall
reimburse Employee for the reasonable attorney fees, costs and expenses
incurred by the Employee in connection with any action brought by Employee to
enforce his rights hereunder, provided such action is not decided in favor of
the Company.

8.                                       Limitation
on Payments.

(a)                                  In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to the Employee (i) constitute “parachute payments”
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) and (ii) but for this Section 8, would be
subject to the excise tax imposed by Section 4999 of the Code, then the
Employee’s severance benefits under this Agreement shall be either

(A)                              delivered
in full, or

(B)                                delivered
as to such lesser extent which would result in no portion of such severance
benefits being subject to excise tax under Section 4999 of the Code,

whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the
receipt by the Employee on an after-tax basis, of the greatest amount of
severance benefits, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code.  Any taxes due under Section 4999 shall
be the responsibility of the employee.

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(b)                                 If
a reduction in the payments and benefits that would otherwise be paid or
provided to the Employee under the terms of this Agreement is necessary to
comply with the provisions of Section 8(a), the Employee shall be entitled
to select which payments or benefits will be reduced and the manner and method
of any such reduction of such payments or benefits subject to reasonable limitations
(including, for example, express provisions under the Companies’ benefit plans)
(so long as the requirements of Section 8(a) are met).  Within thirty (30) days after the amount of
any required reduction in payments and benefits is finally determined in accordance
with the provisions of Section 8(c), the Employee shall notify the Company
in writing regarding which payments or benefits are to be reduced.  If no notification is given by the Employee,
the Company will determine which amounts to reduce.  If, as a result of any reduction required by
Section 8(a), amounts previously paid to the Employee exceed the amount to
which the Employee is entitled, the Employee will promptly return the excess
amount to the Company.

(c)                                  Unless
the Company and the Employee otherwise agree in writing, any determination
required under this Section 8 shall be made in writing by the Company’s
primary outside tax advisors immediately prior to the Change of Control (the “Accountants”),
whose determination shall be conclusive and binding upon the Employee and the
Company for all purposes.  For purposes
of making the calculations required by this Section 8, the Accountants
may, after taking into account the information provided by the Employee, make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. 
The Companies and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. 
The Companies shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 8.

9.                                       Definition
of Terms.  The following terms
referred to in this Agreement shall have the following meanings:

(a)                                  Annual
Compensation.  “Annual Compensation”
means an amount equal to the greater of (i) Employee’s Base Salary for the
twelve (12) months preceding the Change of Control plus the Employee’s Target
Bonus for the same period, or (ii) Employee’s Base Salary on an annualized
basis and the Employee’s Target Bonus as of the Termination Date.

(b)                                 Cause.  “Cause” shall mean (i) any act of
personal dishonesty taken by the Employee in connection with his
responsibilities as an employee and intended to result in substantial personal
enrichment of the Employee, (ii) the conviction of or plea of nolo
contendere to a felony, (iii) a willful act by the Employee that
constitutes gross misconduct and that is injurious to the Company, or
(iv) for a period of not less than thirty (30) days following delivery to
the Employee of a written demand for performance from the Company that
describes the basis for the Company’s belief that the Employee has not
substantially performed his duties, continued violations by the Employee of the
Employee’s obligations to the Company that are demonstrably willful and
deliberate on the Employee’s part.  Any
dismissal for cause must be approved by the Company’s Board of Directors prior
to the dismissal date.

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(c)                                  Change
of Control.  “Change of Control”
means the occurrence of any of the following events:

(i)                                        Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities;

(ii)                                     Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than the Company, CESI-SCR or an affiliated entity,
becomes the “beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of SCR-Tech representing fifty
percent (50%) or more of the total voting power represented by the SCR-Tech’s
then outstanding voting securities;

(iii)                                  Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than the Company or an affiliated entity, becomes
the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of CESI-SCR representing fifty percent
(50%) or more of the total voting power represented by the CESI-SCR’s then
outstanding voting securities;

(iv)                                 A
change in the composition of the Company’s Board of Directors occurring within
a twelve-month period, as a result of which fewer than a majority of the
directors are Incumbent Directors.  “Incumbent
Directors” shall mean directors who either (A) are directors of the
Company as of the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination (but shall not
include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company);

(v)                                    The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or such surviving entity’s
parent) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity or such surviving
entity’s parent outstanding immediately after such merger or consolidation;

(vi)                                 The
consummation of a merger or consolidation of SCR Tech with any other
corporation (other than a merger or consolidation with the Company, CESI-SCR or
an affiliated entity), other than a merger or consolidation that would result
in the voting securities of SCR Tech outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or such surviving entity’s
parent) at least fifty percent (50%) of the total voting power represented by
the voting securities of SCR Tech or such surviving entity or such surviving
entity’s parent outstanding immediately after such merger or consolidation;

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(vii)                              The
consummation of the sale or disposition by the Company of all or seventy-five
percent (75%) or more of the Company’s assets, or

(viii)                           The
consummation of the sale or disposition by SCR-Tech of all or seventy-five
percent (75%) or more of SCR-Tech’s assets.

(d)                                 Company
Value.  “Company Value” shall mean
the value of the total consideration payable to the Companies or to the Company’s
stockholders, in the event of a Change of Control, less the value of any cash,
cash equivalents and short-term securities held by or on account of any of the
Companies or their affiliates immediately prior to such Change of Control.  The determination of Company
Value shall based upon consideration to be received by the Companies or by the
Company’s stockholders and shall be determined promptly following any termination of
Employee’s employment that would give rise to a severance payment under Section
5(b) hereof.  If part of the
consideration to be received by Companies or the Company’s stockholders in a
Change of Control consists of earn-out payments or other contingent payments,
the present value of such contingent payments, including a discount to reflect
the probability of such payments being made, shall be reasonably determined by
the acquirer.  In the event of a Change
of Control not involving the Company (i.e., a Change of Control involving
CESI-SCR and/or SCR-Tech but not the Company), Company Value shall be reduced
by the amount of any intra-company debt of CESI-SCR or SCR-Tech to the Company
or its affiliates that is forgiven by the Company or such affiliates in
contemplation of the Change of Control.

(e)                                  Competition.  “Competition” shall mean (i) SCR catalyst and
management services including, but not limited to the cleaning, rejuvenation
and regeneration of SCR catalysts and managing SCR catalysts for utilities and
independent power producers, and (ii) any other business engaged in by any of
the Companies that relates to the activities specified in subsection (i)
hereof.

(f)                                    Disability.  “Disability” shall mean that the Employee has
been unable to perform his Company duties as the result of his incapacity due
to physical or mental illness, and such inability, at least twenty-six (26)
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the
Employee or the Employee’s legal representative (such Agreement as to
acceptability not to be unreasonably withheld). 
Termination resulting from Disability may only be effected after at
least thirty (30) days’ written notice by the Company of its intention to
terminate the Employee’s employment.  In
the event that the Employee resumes the performance of substantially all of his
duties hereunder before the termination of his employment becomes effective,
the notice of intent to terminate shall automatically be deemed to have been
revoked.

(g)                                 Involuntary
Termination.  “Involuntary
Termination” shall mean (i) without the Employee’s express written
consent, the significant reduction of the Employee’s duties, authority or
responsibilities, relative to the Employee’s duties, authority or
responsibilities as in effect immediately prior to such reduction, or the
assignment to Employee of such reduced duties, authority or responsibilities;
provided, however, that so long as Employee remains the President of SCR-Tech,
or, following a Change of Control of SCR-Tech, whatever entity substantially
contains SCR-Tech’s business, in either case with the duties, authority and
responsibilities that are

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commensurate with such position, then Employee shall have no grounds
for an Involuntary Termination pursuant to this Section 9(g)(i) or Section 9(g)(viii);
provided, further, that if Employee reports to someone other than the Chief
Executive Officer of the Company, that shall not in and of itself constitute
grounds for an Involuntary Termination pursuant to this Section 9(g)(i) or Section
9(g)(viii); provided, further, that if Employee ceases to be a Section 16
officer pursuant to section 1(a) hereof, that shall not in and of itself
constitute grounds for an Involuntary Termination, (ii) without the
Employee’s express written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to the Employee immediately prior to such reduction;
(iii) a reduction by the Company in the base salary or target bonus of the
Employee as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the kind or level of employee benefits to which the
Employee was entitled immediately prior to such reduction with the result that
the Employee’s overall benefits package is significantly reduced; (v) the
relocation of the Employee to a facility or a location more than twenty-five
(25) miles from the Employee’s then present location, without the Employee’s
express written consent; (vi) any purported termination of the Employee by
the Company that is not effected for Disability or for Cause, or, during the
Change of Control Period only, any purported termination for which the grounds
relied upon are not valid; (vii) the failure of the Company to obtain the
assumption of this Agreement by any successors contemplated in Section 10(a)
below; or (viii) during the Change of Control Period only, any act or set
of facts or circumstances that would, under North Carolina case law or statute
constitute a constructive termination of the Employee.  However, with respect to any Non-Change of
Control Severance Termination, an Involuntary Termination shall not be deemed
to have occurred unless Employee provides written notice to the Company describing the
nature of the event that he believes forms the basis for Involuntary
Termination and the Company does not cure such event within ten (10) days
following receipt of such notice.

(h)                                 Termination
Date.  “Termination Date” shall mean
(i) if this Agreement is terminated by the Company for Disability, thirty
(30) days after notice of termination is given to the Employee (provided that
the Employee shall not have returned to the performance of the Employee’s
duties on a full-time basis during such thirty (30)-day period),
(ii) if the Employee’s employment is terminated by the Company for any
other reason, the date on which a notice of termination is given, provided that
if within thirty (30) days after the Company gives the Employee notice of
termination, the Employee notifies the Company that a dispute exists concerning
the termination or the benefits due pursuant to this Agreement, then the
Termination Date shall be the date on which such dispute is finally determined,
either by mutual written agreement of the parties, or a by final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected), or (iii) if
the Agreement is terminated by the Employee, the date on which the Employee
delivers the notice of termination to the Company.

10.                                 Successors.

(a)                                  Company’s
Successors.  Any successor to the
Company (whether direct or indirect and whether by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement
in the same manner and to the same extent as the Company would be required to
perform such obligations in the absence

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of a succession.  For all purposes under this Agreement, the
term “Company” shall include any successor to the Company’s business and/or
assets which executes and delivers the assumption agreement described in this
Section 10(a) or which becomes bound by the terms of this Agreement by
operation of law.

(b)                                 Employee’s
Successors.  The terms of this
Agreement and all rights of the Employee hereunder shall inure to the benefit
of, and be enforceable by, the Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.

11.                                 Notice.

(a)                                  General.  Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S.  registered or certified mail, return receipt
requested and postage prepaid.  In the
case of the Employee, mailed notices shall be addressed to him at the home
address which he most recently communicated to the Company in writing.  In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.

(b)                                 Notice
of Termination.  Any termination by
the Company for Cause or by the Employee as a result of a voluntary resignation
or an Involuntary Termination shall be communicated by a notice of termination
to the other party hereto given in accordance with Section 11(a) of this
Agreement.  Such notice shall indicate
the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
termination date (which shall be not more than thirty (30) days after the
giving of such notice).  The failure by
the Employee to include in the notice any fact or circumstance which
contributes to a showing of Involuntary Termination shall not waive any right
of the Employee hereunder or preclude the Employee from asserting such fact or
circumstance in enforcing his rights hereunder.

12.                                 Miscellaneous
Provisions.

(a)                                  No
Duty to Mitigate.  The Employee shall
not be required to mitigate the amount of any severance payment contemplated by
this Agreement, nor shall any such severance payment be reduced by any earnings
that the Employee may receive from any other source, provided Employee is in
compliance with all obligations that the Employee owes under this Agreement.

(b)                                 Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is agreed
to in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee).  No
waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver
of any other condition or provision or of the same condition or provision at
another time.

(c)                                  Whole
Agreement.  This Agreement represents
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes in their entirety all prior

 10
 

 

arrangements and
understandings regarding same, including the Prior Agreements and any offer
letter, promotion letter, employment agreement, oral representation or promise
or other agreement regarding Employee’s employment terms with the Company.  Other than this Agreement and the At-Will
Employment, Confidential Information and Invention Assignment Agreement, no
agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof.

(d)                                 Choice
of Law.  The validity,
interpretation, construction and performance of this Agreement shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of North Carolina without regard to
principles of conflicts of laws.

(e)                                  Severability.  The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

(f)                                    Withholding.  All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

(g)                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

 11
 

 

IN WITNESS WHEREOF, each
of the parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the day and year set forth below.

 

	
  COMPANY

  	
  CATALYTICA ENERGY SYSTEMS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT ZACK

  
	
   

  	
   

  	
  Robert Zack

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  January 10, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCR-Tech LLC

  	
  By: CESI-SCR, Inc., its Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT ZACK

  
	
   

  	
   

  	
  Robert Zack

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  January 10, 2007

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CESI-SCR, Inc.

  	
  By:

  	
  /s/ ROBERT ZACK

  
	
   

  	
   

  	
  Robert Zack

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its: Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  January 10, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EMPLOYEE

  	
  /s/ WILLIAM J. MCMAHON III

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  December 26, 2006

  	
   

  
									

 

 12Exhibit
10.1

DATE OF LEASE EXECUTION:  January 3, 2007

ARTICLE I

REFERENCE
DATA

1.1                               SUBJECTS REFERRED TO:

Each reference in
this Lease to any of the following subjects shall be construed to incorporate
the data stated for that subject in this Section 1.1:

	
  LANDLORD:

  	
  Farley White Wiggins, LLC

  
	
   

  	
   

  
	
  MANAGER:

  	
  Farley White Management Company, LLC, or such other
  manager appointed by Landlord from time to time

  
	
   

  	
   

  
	
   

  
	
  LANDLORD’S ADDRESS:

  
	
   

  	
  c/o Farley White Interests

  155 Federal Street, Suite 1200

  Boston, MA 02110

  Facsimile Number: 617-482-5509

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Wilmer Cutler Pickering Hale and Dorr LLP

  60 State Street

  Boston, MA 02109

  Facsimile Number: 617-526-5000

  
	
   

  	
   

  
	
  LANDLORD’S CONSTRUCTION REPRESENTATIVE:

  	
  Roger W. Altreuter

  617-654-9411

  
	
   

  	
   

  
	
  TENANT:

  	
  Anika Therapeutics, Inc., a Massachusetts
  corporation

  
			

 

 

 

	
  TENANT’S ADDRESS:

  	
  Anika Therapeutics, Inc.

  160 New Boston Street

  Woburn, MA 01801

  Attention: Charles H. Sherwood

  
	
   

  	
   

  
	
   

  	
  With a copy to: 

  
	
   

  	
   

  
	
   

  	
  Goodwin Procter LLP

  Exchange Place

  Boston, MA 02109

  Attention: David H. Henken, Esq.

  
	
   

  	
   

  
	
  TENANT’S CONSTRUCTION REPRESENTATIVE:

  	
  Frank Luppino

  (781) 932-6616 ext. 136

  
	
   

  	
   

  
	
  LOT:

  	
  The land known and numbered as 32 Wiggins Ave.,
  Bedford, Massachusetts, more particularly described on Exhibit A.

  
	
   

  	
   

  
	
  BUILDING AND PREMISES:

  	
  The building known and numbered as 32 Wiggins Ave.,
  Bedford, Massachusetts located on the Lot.

  
	
   

  	
   

  
	
  RENTABLE FLOOR AREA OF THE BUILDING PREMISES:

  	
  134,000 square feet, which the parties agree shall
  be conclusive for all purposes hereunder

  
	
   

  	
   

  
	
  TENANT ACCESS DATE:

  	
  The Date of Lease Execution.

  
	
   

  	
   

  
	
  TERM COMMENCEMENT DATE:

  	
  The earlier of (x) the later of (i) May 1, 2007 and
  (ii) the date of Substantial Completion of Landlord’s Work, as more
  particularly described in Section 3.1 and (y) the date Tenant
  occupies any portion of the Premises for the conduct of business. Promptly
  upon the occurrence of the Term Commencement Date, Tenant shall, upon
  Landlord’s request execute and deliver a Memorandum of Term Commencement Date
  in the form of Exhibit F.

  
	
   

  	
   

  
	
  TERM:

  	
  Commencing on the Term Commencement Date, a period
  of ten (10) years, plus six (6) months. The Term may be extended in
  accordance with the provisions of Section 2.3.

  

 

 2
 

 

 

	
  ANNUAL BASE RENT:

  	
  From the Commencement Date through the date which is
  one day prior to the first (1st) anniversary of the
  Commencement Date: $312,500 per annum, payable in monthly installments of
  $26,041.67.

  
	
   

  	
   

  
	
   

  	
  From the first (1st) anniversary of the
  Commencement Date through July 31, 2010: $562,500 per annum, payable in
  monthly installments of $46,875.

  
	
   

  	
   

  
	
   

  	
  From August 1, 2010 through the date which is
  one day prior to the fifth (5th) anniversary of the
  Commencement Date: $837,500 per annum, payable in monthly installments of
  $69,791.67.

  
	
   

  	
   

  
	
   

  	
  From the sixth (6th) anniversary of the
  Commencement Date through to the expiration of the Term: $971,500 per annum,
  payable in monthly installments of $80,958.33.

  
	
   

  	
   

  
	
   

  	
  In the event the Term Commencement Date occurs on a
  date other than the first day of the month, Tenant shall pay Annual Fixed
  Rent on the Term Commencement Date, prorated for the number of days between
  the Term Commencement Date and the last date of the month in which the Term
  Commencement Date occurs (inclusive of both dates).

  
	
   

  	
   

  
	
  SECURITY DEPOSIT AMOUNT:

  	
  $206,250

  
	
   

  	
   

  
	
  PERMITTED USES:

  	
  Subject to compliance by Tenant with local zoning
  by-laws, general offices, laboratory, medical product manufacturing, research
  and development, warehousing and any other lawful purpose accessory to the
  aforesaid principal uses.

  
	
   

  	
   

  
	
  COMMERCIAL GENERAL LIABILITY INSURANCE:

  	
  $3,000,000 combined single limit per occurrence;
  $3,000,000 annual aggregate.

  
	
   

  	
   

  
	
  BROKERS:

  	
  McCall & Almy, Inc. and Cushman & Wakefield

  

 

 3
 

 

 

1.2                               EXHIBITS.

The exhibits listed below in this section are
incorporated in this Lease by reference and are to be construed as part of this
Lease:

	
  EXHIBIT A

  	
  Description of Lot

  
	
   

  	
   

  
	
  EXHIBIT B

  	
  Plans and Specifications Describing Landlord’s Work

  
	
   

  	
   

  
	
  EXHIBIT C

  	
  Plans and Specifications describing Landscaping
  Improvement to be done by Landlord

  
	
   

  	
   

  
	
  EXHIBIT D

  	
  Rules and Regulations

  
	
   

  	
   

  
	
  EXHIBIT E

  	
  Form of Tenant Estoppel Certificate

  
	
   

  	
   

  
	
  EXHIBIT F

  	
  Form of Memorandum of Term Commencement Date

  
	
   

  	
   

  
	
  EXHIBIT G

  	
  Forms of SNDA

  

 

 4

 

 

	
  1.3

  	
   

  	
  TABLE OF CONTENTS

  	
   

  	
  PAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  I

  	
   

  	
  REFERENCE DATA

  	
   

  	
  1

  	
   

  
	
  1.1

  	
   

  	
  SUBJECTS REFERRED TO:

  	
   

  	
  1

  	
   

  
	
  1.2

  	
   

  	
  EXHIBITS

  	
   

  	
  4

  	
   

  
	
  1.3

  	
   

  	
  TABLE OF CONTENTS PAGE

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  II

  	
   

  	
  PREMISES AND TERM

  	
   

  	
  9

  	
   

  
	
  2.1

  	
   

  	
  DESCRIPTION OF PREMISES

  	
   

  	
  9

  	
   

  
	
  2.2

  	
   

  	
  TERM

  	
   

  	
  9

  	
   

  
	
  2.3

  	
   

  	
  EXTENSION OPTIONS

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  III

  	
   

  	
  CONSTRUCTION

  	
   

  	
  12

  	
   

  
	
  3.1

  	
   

  	
  DELIVERY OF PREMISES;
  LANDLORD WORK

  	
   

  	
  12

  	
   

  
	
  3.2

  	
   

  	
  PREPARATION OF PREMISES
  BY TENANT

  	
   

  	
  14

  	
   

  
	
  3.3

  	
   

  	
  GENERAL PROVISIONS
  APPLICABLE TO CONSTRUCTION

  	
   

  	
  15

  	
   

  
	
  3.4

  	
   

  	
  CONSTRUCTION REPRESENTATIVES

  	
   

  	
  15

  	
   

  
	
  3.5

  	
   

  	
  ALTERATIONS AND
  ADDITIONS

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IV

  	
   

  	
  RENT

  	
   

  	
  17

  	
   

  
	
  4.1

  	
   

  	
  RENT

  	
   

  	
  17

  	
   

  
	
  4.2

  	
   

  	
  OPERATING COSTS AND
  REAL ESTATE TAXES

  	
   

  	
  18

  	
   

  
	
  4.3

  	
   

  	
  ESTIMATED PREMISES
  EXPENSE PAYMENTS AND EXAMINATION RIGHTS

  	
   

  	
  21

  	
   

  
	
  4.4

  	
   

  	
  ELECTRICITY; UTILITIES

  	
   

  	
  21

  	
   

  
	
  4.5

  	
   

  	
  CHANGE OF FISCAL YEAR

  	
   

  	
  22

  	
   

  
	
  4.6

  	
   

  	
  PAYMENTS

  	
   

  	
  22

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  V

  	
   

  	
  LANDLORD’S COVENANTS

  	
   

  	
  22

  	
   

  
	
  5.1

  	
   

  	
  LANDLORD’S COVENANTS
  DURING THE TERM

  	
   

  	
  22

  	
   

  
	
  5.2

  	
   

  	
  INTERRUPTIONS

  	
   

  	
  24

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  VI

  	
   

  	
  TENANT’S COVENANTS

  	
   

  	
  25

  	
   

  
	
  6.1

  	
   

  	
  TENANT’S COVENANTS
  DURING THE TERM

  	
   

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  VII

  	
   

  	
  CASUALTY AND TAKING

  	
   

  	
  32

  	
   

  
	
  7.1

  	
   

  	
  CASUALTY AND TAKING

  	
   

  	
  32

  	
   

  
	
  7.2

  	
   

  	
  RESERVATION OF AWARD

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  VIII

  	
   

  	
  RIGHTS OF MORTGAGEE AND
  GROUND LESSOR

  	
   

  	
  34

  	
   

  
	
  8.1

  	
   

  	
  PRIORITY OF LEASE

  	
   

  	
  34

  	
   

  
	
  8.2

  	
   

  	
  RIGHTS OF HOLDERS OF
  SUPERIOR INTEREST TO CURE

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article
  IX

  	
   

  	
  DEFAULT

  	
   

  	
  35

  	
   

  
	
  9.1

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  35

  	
   

  
	
  9.2

  	
   

  	
  TENANT’S OBLIGATIONS AFTER TERMINATION

  	
   

  	
  36

  	
   

  

 5
 

 

 

	
  9.3

  	
   

  	
  LANDLORD DEFAULT

  	
   

  	
  37

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Article X

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  NO RECORDING

  	
   

  	
  38

  	
   

  
	
  10.2

  	
   

  	
  NOTICES FROM ONE
  PARTY TO THE OTHER

  	
   

  	
  38

  	
   

  
	
  10.3

  	
   

  	
  BIND AND INURE

  	
   

  	
  38

  	
   

  
	
  10.4

  	
   

  	
  LIMITATION ON
  LIABILITY

  	
   

  	
  39

  	
   

  
	
  10.5

  	
   

  	
  NO SURRENDER

  	
   

  	
  39

  	
   

  
	
  10.6

  	
   

  	
  NO WAIVER, ETC.

  	
   

  	
  39

  	
   

  
	
  10.7

  	
   

  	
  NO ACCORD AND
  SATISFACTION

  	
   

  	
  39

  	
   

  
	
  10.8

  	
   

  	
  CUMULATIVE
  REMEDIES

  	
   

  	
  40

  	
   

  
	
  10.9

  	
   

  	
  LANDLORD’S RIGHT
  TO CURE

  	
   

  	
  40

  	
   

  
	
  10.10

  	
   

  	
  ESTOPPEL
  CERTIFICATE

  	
   

  	
  40

  	
   

  
	
  10.11

  	
   

  	
  ACTS OF GOD

  	
   

  	
  41

  	
   

  
	
  10.12

  	
   

  	
  BROKERAGE

  	
   

  	
  41

  	
   

  
	
  10.13

  	
   

  	
  SUBMISSION NOT
  AN OFFER

  	
   

  	
  41

  	
   

  
	
  10.14

  	
   

  	
  APPLICABLE LAW
  AND CONSTRUCTION

  	
   

  	
  41

  	
   

  
	
  10.15

  	
   

  	
  AUTHORITY OF
  TENANT AND LANDLORD

  	
   

  	
  42

  	
   

  
	
  10.16

  	
   

  	
  PRIOR NOTICE TO
  TENANT OF SALE OF PROPERTY

  	
   

  	
  42

  	
   

  
	
  10.17

  	
   

  	
  LANDLORD’S FEES

  	
   

  	
  42

  	
   

  
	
  10.18

  	
   

  	
  WAIVER OF
  SUBROGATION

  	
   

  	
  43

  	
   

  
	
  10.19

  	
   

  	
  WAIVER OF JURY
  TRIAL

  	
   

  	
  43

  	
   

  
	
  10.20

  	
   

  	
  SECURITY DEPOSIT

  	
   

  	
  43

  	
   

  
	
  10.21

  	
   

  	
  USE OF ROOF

  	
   

  	
  44

  	
   

  

 

 6

 

 

INDEX
OF DEFINED TERMS

	
  Advance Determination of FMR

  	
  Section 2.3.3

  
	
  Agreed Upon Initial TI Work

  	
  Section 3.2

  
	
  Annual Base Rent

  	
  Section 1.1

  
	
  Appraisal Process

  	
  Section 2.3.3

  
	
  Appraiser

  	
  Section 2.3.4

  
	
  Assumption Document

  	
  Section 6.1.6

  
	
  Building and Premises

  	
  Section 1.1

  
	
  Brokers

  	
  Section 1.1

  
	
  Commercial General Liability Insurance

  	
  Section 1.1

  
	
  Cure Cap

  	
  Section 9.3

  
	
  Default Interest Rate

  	
  Section 4.6

  
	
  Environmental Laws

  	
  Section 6.1.3

  
	
  Estimated Monthly Expense Payments

  	
  Section 4.3

  
	
  Event of Default

  	
  Section 9.1

  
	
  Expenses

  	
  Section 4.3

  
	
  Extension Term

  	
  Section 2.3

  
	
  Fair Market Rent

  	
  Section 2.3.2

  
	
  Force Majeure Events

  	
  Section 10.11

  
	
  Hazardous Materials

  	
  Section 6.1.3

  
	
  Indemnified Parties

  	
  Section 6.1.7

  
	
  Initial Tenant Improvements

  	
  Section 3.2

  
	
  Landlord

  	
  Section 1.1

  
	
  Landlord’s Address

  	
  Section 1.1

  
	
  Landlord’s Construction Representative

  	
  Section 1.1

  
	
  Landlord Default

  	
  Section 9.2

  
	
  Landlord’s Operating Costs

  	
  Section 4.2.2

  
	
  Landlord’s Statement

  	
  Section 4.2.1

  
	
  Landlord’s Work

  	
  Section 3.1

  
	
  Lot

  	
  Section 1.1

  
	
  Manager

  	
  Section 1.1

  
	
  Material

  	
  Section 3.1

  
	
  Original Term

  	
  Section 2.3

  
	
  Parking Spaces

  	
  Section 2.1

  
	
  Permitted Transfer

  	
  Section 1.1

  
	
  Permitted Uses

  	
  Section 1.1

  
	
  Real Estate Taxes

  	
  Section 4.2.2

  
	
  Recognition Agreement

  	
  Section 8.1

  
	
  Removable Installations

  	
  Section 3.2

  
	
  Removed

  	
  Section 3.5

  
	
  Rentable Floor Area of the Building Premises

  	
  Section 1.1

  
	
  Roof Equipment

  	
  Section 10.21

  
	
  Security Deposit

  	
  Section 10.20

  
	
  Security Deposit Amount

  	
  Section 1.1

  

 

 7
 

 

 

	
  Substantially Complete

  	
  Section 3.1

  
	
  Superior Interest

  	
  Section 8.1

  
	
  Tenant

  	
  Section 1.1

  
	
  Tenant Access Date

  	
  Section 1.1

  
	
  Tenant Delay

  	
  Section 3.1

  
	
  Tenant Indemnified Parties

  	
  Section 5.1.7

  
	
  Tenant’s Address

  	
  Section 1.1

  
	
  Tenant’s Construction Representative

  	
  Section 1.1

  
	
  Tenant’s Property

  	
  Section 6.1.13

  
	
  Tenant’s Rent Notice

  	
  Section 2.3.3

  
	
  Term

  	
  Section 1.1

  
	
  Term Commencement Date

  	
  Section 1.1

  

 

 8

 

ARTICLE
II

PREMISES
AND TERM

2.1                               DESCRIPTION OF PREMISES.

Subject to and with the benefit of the provisions of
this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord,
the Premises.

Tenant shall have, as appurtenant to the Premises, (a)
the exclusive right to use all of the parking spaces now or hereafter located
on the Lot (“Parking Spaces”), and (b) the right to use portions of the Lot for
the installation and storage of equipment, subject to the provisions of
Article III hereof.  The parking
rights set forth in the preceding sentence are not transferable, except in
connection with a valid assignment or sublease as described in Section 6.1.6
hereunder.  Tenant shall not assign its
rights to the Parking Spaces or any interest therein, or sublease or otherwise
allow the use of all or any part of the Parking Spaces to or by any other
person (other than together with a Transfer in compliance with the provisions
of Section 6.1.6).

2.2                               TERM.

To have and to hold for a
period commencing on the Term Commencement Date (as defined in Section 1.1
hereof) and continuing for the Term, unless sooner terminated as provided
herein.  Notwithstanding the fact that
the Term shall not commence until the Term Commencement Date, from and after
the Tenant Access Date Tenant shall have access to the Premises for the
purposes of preparing the Premises for Tenant’s use and occupancy, including
constructing the Initial Tenant Improvements, subject to the provisions of
Article III, and installing furniture, fixtures, voice and data wiring and
equipment, and Tenant shall comply with all of the terms, provisions and
conditions of this Lease, other than the obligation to pay Annual Base Rent and
Rent on account of Landlord’s Operating Costs and Real Estate Taxes (as defined
in Article IV), provided, however, that from and after the Tenant Access Date
Tenant shall be responsible for all Landlord’s Operating Costs attributable to
trash removal, utilities and other expenses directly attributable to Tenant’s
construction activity.  Tenant shall keep
Landlord informed of its progress schedule with respect to the Initial Tenant
Improvements.  Tenant shall allow
Landlord to inspect the Initial Tenant Improvements from time to time.

2.3                               EXTENSION OPTIONS.

2.3.1        Tenant
shall have four successive options to extend the Term, the first three such
options for an additional period of five (5) years each and the subsequent
option for an additional period of six (6) years (each an “Extension Term”),
commencing upon the expiration of then current Term referred to in Section 2.2
(the “Original Term”), provided that Tenant shall give Landlord written notice
of Tenant’s irrevocable exercise of each such option at least one (1) year
prior to the expiration of the then current Term, and provided further that at
both the time of the giving such notice and at the time of the commencement of
the applicable Extension Term: (a) the Lease is in full force and effect, (b)
Tenant has not sublet more than sixty percent (60%) of the area of the Premises
(other than a Permitted Transfer (as defined below)) and (c) no Event of
Default shall have occurred that remains uncured.  Prior to the exercise by Tenant of such
option, 

 9
 

 

the expression “Term” shall mean the Original
Term, and after the exercise by Tenant of an extension option, the expression “Term”
shall mean the Original Term as it has been extended by one or more Extension
Terms.  All the terms, covenants,
conditions, provisions and agreements in the Lease contained shall be
applicable to each Extension Term, except that (i) Landlord shall not be
obligated to undertake any Landlord Work or leasehold improvements or otherwise
prepare the Premises for Tenant, (ii) the Annual Base Rent shall be as set
forth below, and (iii) in no event shall Tenant have the right to extend the
Term for more than four Extension Terms. 
If Tenant shall give notice of its exercise of said option to extend in
the manner and within the time period provided aforesaid, the Term shall be
extended upon the giving of such notice without the requirement of any further
action on the part of either Landlord or Tenant.  If Tenant shall fail to give timely notice of
the exercise of any such option as aforesaid, Tenant shall have no right to
extend the Term of this Lease, time being of the essence of the foregoing
provisions.

2.3.2        The
Annual Base Rent payable during each Extension Term shall be the amount which
is the greater of (i) the Annual Base Rent in effect for the Lease Year
immediately preceding the commencement of the Extension Term and (ii) the Fair
Market Rent for the Premises, as determined below, as of the commencement of
such Extension Term.  If for any reason
the Annual Base Rent payable during an Extension Term has not been determined as
of the commencement of the Extension Term, until the Annual Base Rent for the
Extension Term is determined Tenant shall continue to pay Annual Base Rent
payable during the immediately preceding year. 
Within thirty (30) days after determination of the Annual Base Rent in
accordance with the provisions hereof, an appropriate adjustment, if any, shall
be made between Landlord and Tenant.

For purposes hereof, the “Fair
Market Rent” shall mean the fair net rent for a comparable lease term
commencing on the first day of the applicable Extension Term determined on the
basis of then current rentals being charged for newly executed leases and
renewals for space of a size, quality and location comparable to the Building
in the 128 north area, taking into account, without limitation, the terms of
this Lease (other than the Basic Rent), but specifically excluding any
incremental value attributable to alterations, additions or improvements to the
Premises or Lot made by Tenant (whether in preparation for Tenant’s initial
occupancy of the Premises or at any time thereafter).  Fair Market Rent shall be based on the
Premises in its “as is” condition and shall take into account inducements (such
as “free” rent and tenant fitup allowances) then being offered to prospective
tenants in the market described above.

2.3.3        Landlord
agrees that if requested in writing by Tenant at any time after the date which
is eighteen (18) months prior to the expiration of the then current Term and
prior to the time which is seventeen (17) months prior to the expiration of the
then current Term, it shall provide to Tenant a non-binding estimate of fair
market rent for the period of the next Extension Term, Tenant agrees that
Landlord has agreed to do so solely because of and in reliance upon Tenant’s
agreement that (a) the provision of such non-binding estimate, and any
discussions between Landlord and Tenant and their agents regarding the same, is
and shall be an accommodation to Tenant by Landlord which shall not in any
circumstance whatsoever create any legal obligation for or liability of
Landlord, Tenant hereby irrevocably waiving its right to assert any such
obligation or liability, (b) Tenant will not rely upon such non-binding
estimate, and (c) Landlord may give a determination of fair market rent
pursuant to the procedures hereafter provided for which may vary from any
non-binding estimate and any such discussions.

 10
 

 

 

Upon Tenant’s written
request given no later than four hundred fifteen days prior the expiration of
the then current Term, Landlord shall give Tenant notice of its determination
of the fair market rent for the Premises for the applicable period (an “Advance
Determination of FMR”) by the later of (i) three hundred ninety five (395) days
prior to the expiration of the then current Term and (ii) thirty days after
Tenant’s written request.

If Tenant gives notice of
exercise of an option, and has not previously been given Landlord’s Advance
Determination of FMR pursuant to the immediately preceding paragraph, Landlord
shall give Tenant notice of its determination of the Fair Market Rent for the
Premises for the applicable period by the later of (i) three hundred
thirty-five (335) days prior to the commencement of the applicable Extension
Term, or (ii) thirty (30) days after Tenant notifies Landlord of its election
to exercise an extension option.  If
Tenant disagrees with Landlord’s determination of the Fair Market Rent, Tenant
may, by notice given to Landlord (a) at the time of exercise of the extension
option if Tenant has previously been given an Advance Determination of FMR by
Landlord, (b) otherwise within thirty (30) days after Landlord’s notice of the
Fair Market Rent is given (as applicable, “Tenant’s Rent Notice”), elect to
have the Fair Market Rent determined by the appraisal process (the “Appraisal
Process”) set forth in subparagraph 2.3.4 below, which Tenant’s Rent Notice
shall include the name of Tenant’s Appraiser (defined in subparagraph 2.3.4
below).  The Fair Market Rent
determination pursuant to Section 2.3 shall be binding on both Landlord and
Tenant.  If Tenant does not give a Tenant’s
Rent Notice by the time hereinabove required, Tenant shall be deemed to have
agreed with Landlord’s determination of the Fair Market Rent for the applicable
Extension Term, which determination shall be binding on both Landlord and
Tenant.

2.3.4        If
Tenant shall timely give a Tenant’s Rent Notice, the following procedures shall
apply to such determination:

(a)           Within fourteen (14)
days of Tenant’s Rent Notice, Landlord will choose one Appraiser.  “Appraiser” shall mean a disinterested real
estate professional of recognized competence in the greater Boston area to
determine Fair Market Rent who has at least ten (10) years experience in the
leasing or appraising of properties in the Route 128 North area.  If the two Appraisers are appointed by the
parties as stated in this Section, such Appraisers shall meet promptly and
attempt to set the Fair Market Rent.  If
such Appraisers are unable to agree within thirty (30) days after appointment
of the second Appraiser, the two Appraisers shall within ten (10) days after
the expiration of such 30-day period, appoint a third Appraiser satisfying the
above qualifications.  If the two
Appraisers cannot agree on a third Appraiser, they shall immediately apply to a
court of competent jurisdiction, to select a third Appraiser satisfying the
above qualifications.  The third
Appraiser, however selected, shall not have acted previously in any capacity
for either Landlord or Tenant.  If either
Landlord or Tenant fails to appoint an Appraiser within the allotted time, and
such failure continues for ten (10) business days after written notice given to
the failing party, the single Appraiser who has been appointed shall determine
the Fair Market Rent for the applicable Extension Period.  Each party shall bear the costs of its own
Appraiser and one-half of the cost of the third Appraiser.

(b)           The third Appraiser
shall conduct his own investigation of the Fair Market Rent, shall consider
relevant information supplied to him by Landlord or Tenant, and 

 11
 

 

shall be
instructed not to advise either party of his determination of the Fair Market
Rent except as follows:  When the third
Appraiser has made his determination, which shall occur within thirty (30) days
after the selection of the third Appraiser, he shall so advise Landlord and
Tenant and shall establish a date, at least five (5) days after the giving of
notice by the third Appraiser to Landlord and Tenant, on which he shall
disclose at a meeting his determination of the Fair Market Rent.  Such meeting shall take place in the third
Appraiser’s office unless otherwise agreed by the parties.  After having initialed a paper on which his
determination of Fair Market Rent is set forth, the third Appraiser shall place
his determination of the Fair Market Rent in a sealed envelope.  Landlord’s Appraiser and Tenant’s Appraiser
shall each set forth their determination of Fair Market Rent on a paper,
initial the same and place them in sealed envelopes.  Each of the three envelopes shall be marked
with the name of the party whose determination is inside the envelope.

In the presence of the
third Appraiser, the determination of the Fair Market Rent by Landlord’s
Appraiser and Tenant’s Appraiser shall be opened and examined.  If the higher of the two determinations is
105% or less of the amount set forth in the lower determination, the average of
the two determinations shall be the Fair Market Rent, the envelope containing
the determination of the Fair Market Rent by the third Appraiser shall be
destroyed, and the third Appraiser shall be instructed not to disclose his
determination.  If either party’s
envelope is blank, or does not set forth a determination of Fair Market Rent,
the determination of the other party shall prevail and be treated as the Fair
Market Rent.  If the higher of the two
determinations is more than 105% of the amount of the lower determination, the
envelope containing the third Appraiser’s determination shall be opened.  If the value determined by the third
Appraiser is the average of the values proposed by Landlord’s Appraiser and
Tenant’s Appraiser, the third Appraiser’s determination of Fair Market Rent
shall be the Fair Market Rent.  If such
is not the case, Fair Market Rent shall be the average of (a) the Fair
Market Rent proposed by the third Appraiser and (b) the Fair Market Rent
proposed by either Landlord’s Appraiser or Tenant’s Appraiser, whichever is
closest to the determination of Fair Market Rent by the third Appraiser.

ARTICLE
III

CONSTRUCTION

3.1                               DELIVERY OF PREMISES;
LANDLORD WORK.

Tenant acknowledges that Tenant has had an opportunity
to inspect the Premises.  The Premises
shall be delivered to Tenant “As Is,” “Where Is” with all faults and without
representation, warranty or guaranty of any kind by Landlord to Tenant, except
that Landlord shall, at its sole cost and expense, promptly commence and
diligently prosecute to completion, in a good and workmanlike manner, (a) the
work on the exterior of the Building and on the Lot described in the schematic
plans and specifications listed in Exhibit B, and (b) repair of the existing
roof leak in “Building B” (collectively, “Landlord’s Work”), Landlord hereby
agreeing to use diligent efforts to complete Landlord’s Work by May 1,
2007.  During construction of Landlord’s
Work, Landlord shall use reasonable efforts to protect the Building envelope
and interior portions of the 

 12
 

 

Building and shall be responsible for any damage
resulting from the freezing of pipes and damage to existing improvements Tenant
intends to retain other than improvements adjacent to Landlord’s Work.

Landlord shall provide to Tenant copies of the final
working drawings for Landlord’s Work, which shall be consistent with the
schematic plans and specifications listed in Exhibit B, prior to
commencement of Landlord’s Work. 
Landlord shall not make any material change in the scope of work
described in the plans and specifications listed in Exhibit B, or in the
final working drawings and specifications without Tenant’s consent, which
consent shall not be unreasonably withheld or delayed.  Tenant acknowledges that field conditions may
necessitate minor changes in such scope or final working drawings and
specifications.  For purposes of this
paragraph, “material” shall mean any change in the location, size or elevation
of windows and openings, any change in color or type of materials, but not any
change in the identity of a manufacturer which provides materials of equal
quality to those specified in Exhibit B.

Such Landlord’s Work shall be deemed to be “Substantially
Complete” when it is complete except for punch list and similar minor items,
the failure of which to be complete does not materially interfere with Tenant’s
ability to use and enjoy the Premises and Tenant’s appurtenant rights, provided
that if Tenant or its agents or contractors interfere with or delay the
completion of Landlord’s Work (“Tenant Delay”), such work shall be deemed to be
Substantially Complete on the date it would have been so complete but for such
interference or delay, provided that no such Tenant Delay shall be claimed for
any period of time prior to the date that Landlord delivers written notice to
Tenant describing the claimed delay. 
Upon Landlord’s written notice to Tenant that Landlord’s Work has been
Substantially Completed, Landlord and Tenant shall jointly inspect the Premises
to generate a punch list of items to be completed, and the estimated time for
completion, all of which Landlord shall use diligence to complete within thirty
(30) days or such earlier time as the parties may otherwise agree.

Landlord and Tenant shall reasonably cooperate with
each other and shall cause its contractors to cooperate with each other to
allow Tenant to commence demolition work and thereafter installations as part
of the Initial Tenant Improvements from and after the Tenant Access Date,
Tenant recognizing, however that the Building will not be weather-tight while
Landlord’s Work is being undertaken. 
Such cooperation shall include establishment of a schedule of target
dates for achievement of elements of Landlord’s Work and the Initial Tenant
Improvements, reasonably satisfactory to Landlord and Tenant.  However, Tenant shall be obligated not to
interfere with or delay the completion of Landlord’s Work as aforesaid and to
cause its contractors to work in harmony with any contractors doing Landlord’s
Work, and may not require schedule milestones unacceptable to Landlord or its
contractor, the parties having provided elsewhere in this Lease for deferral of
the commencement of Annual Base Rent and abatement of Annual Base Rent as the
remedies to Tenant in the event of delay in the completion of Landlord’s Work
and any resulting delay in the time when Tenant may commence or complete the
Initial Tenant Improvements.  Upon mutual
agreement upon such milestone dates, Landlord and Tenant shall use commercially
reasonable efforts to prosecute their respective work in accordance with such
schedule.  Notwithstanding the foregoing,
if Landlord’s Work has not been completed by July 1, 2007, Landlord shall cause
its contractor to cooperate with Tenant’s contractor so as to allow Tenant’s
contractor to proceed with its installation of Initial Tenant Improvements
without material interference from Landlord’s contractor.

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In the event Landlord is unable to substantially
complete the Landlord’s Work by May 1, 2007, subject to Tenant Delay, the Term
Commencement Date shall be delayed until Landlord is able to substantially
complete Landlord’s Work, or sooner pursuant to clause (y) of the definition of
Term Commencement Date.  Landlord agrees
to continue to use diligent efforts to complete the Landlord’s Work, but Tenant
shall have no right to terminate this Lease if Landlord fails to complete the
Landlord’s Work by such date.  In the
event the Term Commencement Date does not occur by August 15, 2007 except and
to the extent attributable to Tenant Delay, upon the Term Commencement Date
Tenant shall receive an abatement of Annual Base Rent next coming due for the
number of days between August 15, 2007 and October 31, 2007 that the Term
Commencement Date has not occurred, and in the event the Term Commencement Date
does not occur by November 1, 2007, except and to the extent attributable to
Tenant Delay, upon the Term Commencement Date Tenant shall receive an abatement
of Annual Base Rent next coming due for a number of days equal to the product
of (a) the number of days between November 1, 2007 and the Term Commencement
Date multiplied by (b) two.  The remedies
provided for in this paragraph shall be Tenant’s exclusive remedies for any
failure of Landlord to complete Landlord’s Work.

Landlord also shall make the landscaping improvements
to the Lot entrance, at the front of the Building and along the perimeter of
the Building and re-seal and re-stripe the parking lot  as shown on plans and specifications listed
on Exhibit C, and shall provide a general cleanup of the overall landscaping of
the Lot, including the portion of the Lot adjacent to Wiggins Avenue, Landlord
shall use diligent efforts to cause such work to be completed by June 1, 2007.

Landlord will also use reasonable efforts to encourage
landowners in the vicinity of the Lot to make general landscaping improvements
which will improve the overall aesthetics of Wiggins Avenue.

3.2                               PREPARATION OF PREMISES
BY TENANT.

Subject to the provisions of this Lease, Tenant shall
construct an initial build out of its Premises following the Tenant Access Date
for the purposes of preparing the Premises for Tenant’s use and occupancy (such
initial construction, in each instance, is referred to as the “Initial Tenant Improvements”).  The Initial Tenant Improvements shall be
constructed by Tenant in compliance with the provisions of the Lease, including
without limitation Sections 3.2 through 3.5. 
Subject to review of plans and specifications as provided in Section 3.5,
Landlord hereby agrees that the Initial Tenants Improvements work may, at
Tenant’s election (the “Agreed Upon Initial TI Work”) include the
following:  (a) construction of a
penthouse to be located on the rooftop for the purposes of housing mechanical
equipment; (b) relocation of loading docks and facility access doors and/or
excavation in front of the existing docks to provide tailboard access to the
existing docks; (c) installation of exterior equipment such as two above or
below ground solvent storage tanks, liquid nitrogen tanks and stand-by power
generators; (d) installation of other exterior amenities such as picnic tables
and areas for recreational activities, such as volleyball; and (e) potentially
reducing the number of Parking Spaces to accommodate the above.  The portions of the Agreed Upon Initial TI
Work described in clauses (c) through (e) above (the “Removable Installations”)
shall be subject to the rights of Landlord more particularly described in
Sections 3.5 to require the same to be removed at the expiration or termination
of the Lease and described in Section 6.1.2 to require the Premises to be
restored upon yield up, which in the 

 14
 

 

case of (e) above shall include restoration of any
Parking Spaces, but Landlord agrees that it shall not require the removal of
the items described in clauses (a) and (b) above.

No delay or failure of the Initial Tenant Improvements
to be constructed or completed shall affect the Term Commencement Date or any
obligations of Tenant under this Lease unless such delay is due to the gross
negligence or willful misconduct of Landlord occurring after substantial
completion of Landlord’s Work of which Landlord is given prompt written notice
by Tenant.

The Initial Tenant Improvements shall be constructed
by Tenant at its sole cost and expense;

3.3                               GENERAL PROVISIONS
APPLICABLE TO CONSTRUCTION.

All construction work required or permitted by this
Lease to be performed by Tenant shall be done in a good and workmanlike manner
and in compliance with all applicable laws and all lawful ordinances,
regulations and orders of governmental authority and insurers of the Building
and the Lot.  Either party may inspect
the work of the other at reasonable times upon reasonable prior notice and promptly
shall give notice of observed defects.

3.4                               CONSTRUCTION
REPRESENTATIVES.

In connection with the parties’ respective rights and
obligations under this Article III, each party authorizes the other to rely
upon approvals and other actions given or made on such party’s behalf by any
person designated as its Construction Representative in Section 1.1
hereof.  Each party may change its
Construction Representative by notice to the other.

3.5                               ALTERATIONS AND
ADDITIONS.

This Section 3.5 shall apply before and during the
Term.  Tenant shall not make any material
alterations and/or additions to the Premises except in compliance with plans
and specifications first approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. 
Alterations and/or additions shall be considered material if they alter
any structural or exterior element of the Building, floor slab or foundation,
roof drainage, or the electrical services and switchboards, sprinkler system,
water service, gas service or sanitary sewer service (not including the
distribution of the electrical, sprinkler, water, gas and sewer systems
throughout the Building), or convert any sections of so-called “Buildings B and
C”, or the second floor of so-called Building A, from office, manufacturing or
laboratory use to warehouse use (“Building A” is the most westerly portion of
the Building, “Building B” is the middle portion of the Building and “Building
C” is the most easterly portion of the Building).  Tenant shall submit to Landlord both paper
and electronic versions of plans and specifications whenever it seeks Landlord’s
approval thereof or gives notice to Landlord of alterations and additions for
which approval is not required.  If Landlord denies any approval, the reason
therefore must be stated with specificity and included in the denial so Tenant
can make corrective changes, if necessary. 
If Landlord grants any approval, it shall state in such approval which
alterations and additions must be removed by Tenant upon yield up of the
Premises (but Landlord shall not be permitted to approve of the construction of
office or warehouse space and also require that the same be removed upon yield
up of the Premises), and if it fails to so state it shall be deemed to have
agreed that such alterations and additions shall remain a part of the Premises
upon yield up.  If Landlord shall fail to
respond in the manner required hereunder to an initial request for consent 

 15
 

 

within 10 business days, or
fails to respond within five business days to a subsequent request regarding
changes to previously submitted plans, in each case if the plans are plainly
marked or designated in bold type as submitted for Landlord’s approval,
Landlord’s consent shall be deemed given upon the condition that the
alterations and additions shall remain as part of the Premises upon yield up of
the Premises.

Regardless of whether
approval is required for any alteration or addition, Tenant shall provide
advance written notice to Landlord of any alteration or addition it is
undertaking, other than minor cosmetic work such as painting and patching, the
cost of which is less than Fifty Thousand ($50,000) Dollars (in 2007
dollars).  Landlord agrees that it will,
upon request prior to the installation of any alteration and addition for which
Landlord’s approval is not required, specify whether any alteration or addition
for which Landlord’s approval is not required must be removed by Tenant upon
yield up of the Premises.  If Tenant does
not make such a request, Landlord will advise Tenant prior to the end of the
Term whether such alteration or addition must be removed.

Landlord’s approval of any plans or specifications
shall not be deemed its opinion that the plans and specifications or the work
depicted thereon comply with any or all applicable laws, ordinances,
regulations or orders of governmental authorities or requirements of insurers
of the Building and the Lot.  At Landlord’s
request, Tenant will cause its architect to certify that its plans and
specifications and the work depicted thereon (regardless of whether Landlord’s
approval therefore is required) comply with such laws, ordinances, regulations
and orders of governmental authorities. 
After Landlord has approved plans and specifications, Tenant may not
permit any material changes thereto without Landlord’s consent, which shall be
given in accordance with the provisions of the second sentence of this Section
3.5.  Except with respect to the Initial
Tenant Improvements, Tenant shall pay Landlord’s reasonable out of pocket costs
of reviewing or inspecting any proposed material alterations and/or additions
and the plans therefore, such as costs and fees of third party consultants
hired by Landlord.  No construction
management fee shall be claimed by Landlord in connection with any alterations
or additions to be performed by Tenant. 
All alterations and
additions, including without limitation the Initial Tenant Improvements, shall
remain a part of the Premises at the end of the Term, other than those
alterations and additions which Landlord has required to be removed in accordance
with the terms of this Lease.  For
purposes of this Lease, “removed” shall mean removal of the alterations and
additions to return the Premises or applicable portion thereof to a shell
condition, with bare concrete floors and lighting, and in compliance with
building and other codes and legal requirements.  Tenant shall be responsible for any damage to
the Building caused by the malfunction of its equipment or the removal of its
property as aforesaid.

All of Tenant’s alterations and additions and installation
and delivery of telephone systems, furnishings, and equipment shall not cause
any damage to the Building or interference with Building construction or
operation, and, except for installation of furnishings, equipment and telephone
systems, shall be performed by contractors approved in writing by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed.  Landlord hereby approves The Richmond Group
as Tenant’s contractor for the Initial Tenant Improvements.  Tenant shall cause its contractors to work in
harmony with any other contractors doing work at the Building, including the
contractors doing Landlord’s Work.

 16
 

 

 

Landlord may post any notices it considers necessary
to protect it from responsibility or liability for any alteration, addition or
other work by Tenant, its agents, employees, or independent contractors, and
Tenant shall give sufficient notice to Landlord to permit such posting.  Before sending any material alteration or addition
work out for bid to contractors, Tenant shall provide Landlord with a list of
proposed contractors for Landlord’s review; Landlord shall have seven (7)
business days to approve or disapprove such contractors (which approval shall
not be unreasonably withheld or delayed); if Landlord does not so timely
approve, such contractors shall be presumptively deemed approved by
Landlord.  Before commencing any work
Tenant shall: secure all licenses, governmental approvals and permits necessary
therefore and ensure that the same comply with all laws, ordinances, codes,
regulations and orders of governmental authorities, including without
limitations the Americans with Disabilities Act and requirements of the
Massachusetts Architectural Access Board; deliver to Landlord a statement of
the names of all its contractors (the identity of which must have been
previously approved by Landlord as hereinabove contemplated) and the estimated
cost of all labor and material to be furnished by them; and cause each
contractor and subcontractor to carry (i) workers’ compensation insurance in
statutory amounts covering all the contractor’s and subcontractor’s employees,
(ii) commercial general liability insurance with such amounts as Landlord
may reasonably require, Landlord and Tenant hereby agreeing that the following
minimum are reasonable as of the date hereof: 
a combined single limit of $2,000,000 per occurrence for any general
contractor and $1,000,000 for any subcontractor, (all such insurance to be
written in companies reasonably approved by Landlord and naming Landlord,
Manager and Tenant as additional insureds), and to deliver to Landlord,
certificates of all such insurance naming Landlord, Manager and Tenant as
additional insureds as their interests may appear with respect to commercial
general liability coverage.  Tenant
agrees to pay promptly when due, and to defend and indemnify Landlord from and
against, any cost, claim or liability arising from any work done on the
Premises by Tenant, its agents, employees or independent contractors, and
immediately (following actual notice thereof) to discharge or bond off any
liens for labor or materials performed or furnished in connection therewith
which may so attach.  Tenant shall be
solely responsible for the effect of any alterations, additions or other work
on the Building’s structure and systems, whether or not Landlord has consented
thereto.  Upon completion of any material
alteration or addition, Tenant shall provide Landlord with a complete set of
reproducible “as built” plans therefor, which may consist of a mark-up of any
plans previously prepared for such work showing actual construction.

ARTICLE
IV

RENT

4.1                               RENT.

Tenant agrees to pay rent to Landlord at the address
set forth in Section 1.1 without any offset or reduction whatsoever, except as
may be provided in Article V and Article VII, equal to 1/12th of the Annual
Base Rent in equal monthly installments in advance on the first day of each
calendar month included in the Term after the Term Commencement Date; and for
any portion of a calendar month which includes the Term Commencement Date or at
the end of the Term, at the proportionate rate payable for such portion, in
advance.  The obligations of Tenant in
this Article IV are independent covenants and Tenant shall have no right to
withhold or abate any payment 

 17
 

 

of Annual Base rent, additional rent or other payment,
or to set off any amount against the Annual Base Rent, additional rent or other
payment then due and payable, or to terminate this Lease, because of any breach
or alleged breach by Landlord of its obligations in this Lease, except as
expressly provided in Article VI.

4.2                               OPERATING COSTS AND REAL
ESTATE TAXES.

4.2.1        Landlord’s
Operating Costs.  Tenant shall pay to
Landlord, as additional rent, all of Landlord’s Operating Costs attributable to
the Term of this Lease, on or before the thirtieth (30th) day following receipt by
Tenant of Landlord’s Statement (as defined below).  Within one hundred twenty (120) days after
the end of each calendar year ending during the Term and after Lease
termination, Landlord shall render a statement (“Landlord’s Statement”) in
reasonable detail and according to Landlord’s usual accounting practices, which
shall be in accordance with generally accepted accounting practices, showing
for the preceding calendar year or fraction thereof, as the case may be, “Landlord’s
Operating Costs” together with Real Estate Taxes (as defined in Section 4.2.2
hereof).

Landlord’s Operating Costs shall mean the reasonable
costs incurred by Landlord in:

(1)           Maintaining, repairing and operating
the Building, including the exterior of the Building including its roof and
structural elements, the parking lot, and the Lot,

(2)           Providing snow removal and
landscaping for the Lot;

(3)           premiums for insurance (including,
without limitation, all-risk commercial property, rental value, and liability
insurance, and insurance required to be carried by any mortgage lender), and
deductible amounts thereunder (to the extent otherwise permitted or required
under this Lease), excluding any premiums for insurance on portions of the
Property that Tenant is required to insure under this Lease, including without
limitation the Initial Tenant Improvements and any alterations or additions
undertaken by Tenant;

(4)           a management fee to a property
manager (“Manager”) not in excess of the lesser of (a) three percent (3%) of
gross income from the Property or (b) commercially reasonable third party
charges for comparable facilities, it being agreed that management may be
provided by Landlord, or an affiliate thereof;

(5)           payments under service contracts for
any of the foregoing.

If Landlord installs a new or replacement capital item
in order to comply with a legal requirement or interpretation thereof first
arising after the date of this Lease, or for the purposes of reducing Operating
Costs, the cost thereof as reasonably amortized by Landlord over the useful
life of the item together with interest at the rate of interest actually
charged to Landlord for borrowing funds to finance such item, (or the
prevailing market interest rate Landlord reasonably determines would have been
charged if Landlord does not finance such item) on the unamortized amount,
shall be included in Landlord’s Operating Costs, except that the amortized
amount of any capital expense for the purpose of reducing Operating Costs shall
be limited by the amount of actual savings achieved each year.

 18
 

 

 

If Landlord leases any items of capital equipment
which is intended to reduce expenses which would otherwise be included in
Operating Costs, or is for the purpose of complying with a legal requirement or
interpretation thereof first arising after the date of this Lease, then the
rentals and other costs paid pursuant to such leasing shall be included in
Operating Costs for the year in which they were incurred, except that the
rentals and other costs incurred for the purpose of reducing Operating Costs
shall be limited by the amount of actual savings achieved each year.

Landlord’s Operating Costs shall exclude the following:

(1)                                  Real
Estate Taxes;

(2)           the interest and amortization on
mortgages for the Building and the Lot or leasehold interests therein;

(3)           ground rent; depreciation on the
Building or equipment or systems therein;

(4)           costs in connection with leasing,
releasing, or subleasing space at the Building (including but not limited to
legal fees and brokerage commissions);

(5)           costs incurred in connection with the
sale, financing or refinancing of the Building and/or the Lot;

(6)           the cost of repairs or other work to
the extent Landlord is reimbursed by insurance or condemnation proceeds or by
any other third party or any tenant (including Tenant); costs incurred in
enforcing leases against other tenants;

(7)           the cost of special services rendered
to tenants (including Tenant) for which a special charge is made.

(8)           Salaries or benefits for Landlord’s
executives and employees;

(9)           Capital expenditures except as
expressly provided above;

(10)         Advertising and promotional
expenditures;

(11)         Bad debt loss, rent loss, or reserves
of any kind;

(12)         Costs of compliance, fines or penalties
incurred by Landlord due to violations of or non-compliance with any applicable
legal requirements except to the extent such violation or non-compliance is
caused by Tenant, its employees, invitees, agents or contractors;

(13)         Costs incurred in the removal,
abatement or other treatment of underground storage tanks or Hazardous
Materials present in the Building or on the Property except to the extent
attributable to the act or omission of Tenant, its employees, invitees, agents
or contractors;

(14)         Costs associated with the operation of
the business of the entity which constitutes Landlord as the same are
distinguished from the costs of operation of the Building, including, without
limitation, accounting and legal expenses, costs of selling, syndicating,
financing, 

 19
 

 

mortgaging or hypothecating Landlord’s interest in the
Building, costs of any disputes between Landlord and its employees, or building
managers;

(15)         Lessor’s general overhead and
administrative expenses not related to the Building;

(16)         Expenses for any item or service which
Tenant pays in full directly to a third party or separately pays in full to
Landlord; and

(17)         Costs and expenses for Landlord’s Work.

4.2.2        Real
Estate Taxes.  Landlord shall
reasonably cooperate with Tenant at Tenant’s request to allow Tenant to cause
all Real Estate Tax bills to be put in the name of Tenant so that such bills
shall be sent directly to Tenant.  Tenant
shall pay directly to the governmental authority charged with the collection
thereof prior to the date such sums would be delinquent, all Real Estate Taxes
attributable to the Term, and provide evidence of such payment to Landlord
promptly thereafter.  Notwithstanding the
foregoing, from time to time Landlord may elect for Tenant, in lieu of complying
with the immediately preceding sentence, to pay to Landlord, as additional
rent, all Real Estate Taxes attributable to the Term on or before the thirtieth
(30th) day
following receipt by Tenant of Landlord’s Statement.  The term “Real Estate Taxes” as used herein
shall mean all taxes, impositions and charges of every kind and nature assessed
by any governmental authority on the Lot, Building and improvements, and the
reasonable expenses incurred by Landlord in connection with any proceedings for
abatement of taxes and assessments with respect to any calendar year or
fraction of a calendar year; which Landlord shall become obligated to pay
because of or in connection with the ownership and operation of the Lot,
Building and improvements, together with installments and interest on
assessments for public betterments or public improvements (Landlord hereby
agreeing to elect to pay any such assessments over the maximum period of time
allowed by law), subject to the following: There shall be excluded from Real
Estate Taxes all income taxes, excise taxes, franchise taxes, and estate,
succession, inheritance and transfer taxes, provided, however, that if at any
time during the Term the present system of ad valorem taxation of real property
shall be changed so that in lieu of the whole or any part of the ad valorem tax
on real property, there shall be assessed on Landlord a capital levy or other
tax on the gross rents received with respect to the Lot, Building and
improvements, or both, or a federal, state, county, municipal, or other local
income, franchise, excise or similar tax, assessment, levy or charge (distinct
from any now in effect) measured by or based, in whole or in part, upon any
such gross rents, then any and all of such taxes, assessments, levies or charges,
to the extent so measured or based, shall be deemed to be included within the
term “Real Estate Taxes.”  Tenant, at its
sole cost and expense, shall be entitled to seek an abatement from time to time
of any Real Estate Taxes for which it is responsible, and Landlord agrees that,
it shall upon Tenant’s written request reasonably cooperate with Tenant in
connection therewith, provided that Tenant shall reimburse Landlord for its
reasonable out of pocket costs therefor.

4.2.3        Landlord’s
Estimates at End of Term. 
Notwithstanding any other provision of this Section 4.2, if the Term
expires or is terminated as of a date other than the last day of a calendar
year, then for such fraction of a calendar year at the end of the Term, Tenant’s
last payment to Landlord under this Section 4.2 shall be made on the basis of
Landlord’s best 

 20
 

 

estimate of the items otherwise includable in
Landlord’s Statement and shall be made no later than thirty (30) days after
Landlord delivers such estimate to Tenant, with an appropriate payment or
refund to be made upon submission of Landlord’s Statement.

4.3                               ESTIMATED PREMISES
EXPENSE PAYMENTS AND EXAMINATION RIGHTS.

With respect to each calendar year or fraction thereof
during the Term, Tenant shall pay, as additional rent, on the first day of each
month of such calendar year and each ensuing calendar year thereafter,
estimated monthly payments (hereafter, “Estimated Monthly Expense Payments”) of
Landlord’s Operating Costs and Real Estate Taxes (collectively, “Expenses”) for
which Tenant will be liable, equal to 1/12th of
Landlord’s estimate of such Expenses for the respective calendar year, with an
appropriate additional payment (or credit by Landlord against Tenant’s future
payments of Expenses or, if at expiration of the Term, promptly refunded to
Tenant) to be made within thirty (30) days after Landlord’s Statement is
delivered to Tenant.  Landlord may
reasonably adjust such Estimated Monthly Expense Payments from time to time and
at any time during a calendar year, and Tenant shall pay, as additional rent,
on the first day of each month following receipt of Landlord’s written notice
thereof, (provided it receives at least thirty (30) days’ advance notice), the
adjusted Estimated Monthly Expense Payment.

Landlord
agrees to make its books and records relating to Landlord’s Operating Costs and
Real Estate Taxes available for examination during normal business hours upon
reasonable notice by Tenant and its representatives; provided that any such
examination shall be by Tenant’s employees or by third parties not compensated
on a contingent fee basis, shall be at Tenant’s sole cost and expense, and
shall be conducted with respect to any particular fiscal year pursuant to a
notice sent by Tenant not later than one hundred eighty (180) days following
delivery of Landlord’s Statement with respect to such fiscal year; provided
further, that if the examination discloses a discrepancy which the parties
agree (or a court of competent jurisdiction determines) involves an overcharge
to Tenant, Landlord shall promptly rebate the same to Tenant with interest at
the Default Interest Rate.  If Tenant
fails to notify Landlord of its desire to conduct such an examination within
such one hundred eighty (180) days period, then the calculation of Landlord’s
Operating Costs and Real Estate Taxes reflected in the Landlord’s Statement
shall be final and conclusive for all purposes. 
Also, if the examination discloses a discrepancy which the parties agree
(or a court of competent jurisdiction determines) involves an overcharge to
Tenant of more than five (5%) percent, Landlord shall pay the reasonable
expenses incurred by Tenant for such audit.

4.4                               ELECTRICITY; UTILITIES

Commencing on the Commencement Date, but subject to
the provisions of Section 2.2, Tenant shall pay all electric, water, sewer,
gas, telecommunications, telephone, and other utility charges for the Building,
the Premises and the Lot directly to the applicable utility company before they
become delinquent, and upon Landlord’s request shall provide evidence of such
payment to Landlord.  Tenant shall make
arrangements for its own telephone, telecommunications and other utility
service, using the existing connection to the Building and Landlord shall
cooperate with Tenant in such effort, provided that, if for any reason Landlord
receives the bill therefor, Tenant shall pay for all charges for utility
consumption in the Building, the Premises and the Lot, but without mark-up
above actual cost, within thirty (30) days of Landlord’s invoice therefor.

 21

 

Landlord shall not in any way be liable or responsible
to Tenant for any loss or damage or expense which Tenant may sustain or incur
if, during the Term of this Lease, either the quantity or character of electric
current is changed or electric current is no longer available or suitable for
Tenant’s requirements due to a factor or cause beyond Landlord’s reasonable
control.

4.5                               CHANGE
OF FISCAL YEAR.

Upon at least 30 days prior written notice to Tenant,
Landlord shall have the right from time to time to change the periods of
accounting under Section 4.2 to any annual period other than a calendar year,
and upon any such change all items referred to in this Section 4.5 shall be
appropriately apportioned and Landlord shall provide Tenant with any reasonably
available backup information and calculations performed by Landlord.  In all Landlord’s Statements rendered under
this Section 4.5, amounts for periods partially within and partially without
the accounting periods shall be appropriately apportioned, and any items which
are not determinable at the time of a Landlord’s Statement shall be included
therein on the basis of Landlord’s estimate, and with respect thereto Landlord
shall render promptly after determination a supplemental Landlord’s Statement,
and appropriate adjustment shall be made according thereto.  All Landlord’s Statements shall be prepared
on a cash basis of accounting.

4.6                               PAYMENTS.

All payments, fees, charges or other monetary
obligations due from Tenant to Landlord under this Lease (other than Annual
Base Rent) shall constitute additional rent. 
All payments of Annual Base Rent and additional rent shall be made to
Manager, or to such other person as Landlord may from time to time designate.  If any installment of Annual Base Rent or
additional rent is not paid within five (5) days after the due date thereof,
more than once in any twelve month period, Tenant shall pay to Landlord, as
additional rent, a late fee equal to four percent (4%) of the past due
amount.  Additionally, if any installment
of Annual Base Rent or additional rent is paid more than ten (10) days
after the due date thereof, at Landlord’s election, it shall bear interest at a
rate equal to the prime rate (as published from time to time by The Wall Street Journal as the prime rate)
plus four percent (4%), or if less, the maximum amount permitted by law (the “Default
Interest Rate”) from such due date, which interest shall be immediately due and
payable as further additional rent.

Article V

LANDLORD’S
COVENANTS

5.1                               LANDLORD’S COVENANTS DURING
THE TERM.

Landlord covenants during the Term:

5.1.1        Building
and Lot Services.  To provide snow
removal and landscape maintenance to the Lot, the cost of which shall be part
of Landlord’s Operating costs.  Landlord
will meet with Tenant upon its request to discuss operational requirements,
proposed budgets for operating costs for the upcoming year, and any reasonable
changes in the scope of services required by Tenant.  Landlord agrees that it will bid out its third-party
service contracts (other than building 

 22
 

 

management services) and Tenant shall have the right
to consent to the bid to be accepted, such consent not to be unreasonably
withheld or delayed.

5.1.2        Tenant
Access.  To permit Tenant to have
access to the Building twenty-four (24) hours a day, three hundred sixty-five
(365) days a year.  Landlord is not and
shall not be required to furnish to Tenant or any other occupant of the
Premises telephone or other communication service.

Tenant may, as part of the
Initial Tenant Improvements, install a card access or other security
system.  Tenant acknowledges and agrees
that any existing or additional security system, while intended to deter crime
may not in given instances prevent theft or other criminal acts, and that
Tenant has not requested that the Building be provided with a security guard or
service.  Tenant agrees that Landlord
shall not be liable to Tenant for, and Tenant waives any claim against Landlord
with respect to, any loss by theft or any other damage suffered or incurred by
Tenant in connection with any unauthorized entry into the Premises or any other
breach of security with respect to the Premises unless due to the gross
negligence or willful misconduct of Landlord. 
Tenant shall be solely responsible for the personal safety of Tenant’s
officers, employees, agents, contractors, guests and invitees while any such
person is in, on or about the Premises and/or the Building.  Tenant shall at Tenant’s cost obtain
insurance coverage to the extent Tenant desires protection against such criminal
acts.

5.1.3        Repairs.  Except as otherwise provided in Article VII,
to make such repairs and replacements to the roof and structural elements of
the Building, including without limitation, exterior walls, floor slabs, and
Lot (including without limitation the parking lot) as may be necessary to keep
them in good working order and repair, reasonable wear and tear excepted but
expressly excluding the matters which are the responsibility of Tenant under
Section 6.1.2.

5.1.4        Insurance.  To maintain such property, rental value, and
liability and other insurance as shall be required by any mortgage lender or
otherwise as is maintained by similar landlords for comparable properties.  At a minimum Landlord shall maintain (i) “All
Risk” or Special Form property insurance including, but not limited to, fire,
extended coverage, vandalism and malicious mischief coverage upon the Building
(excluding the Initial Tenant Improvements and any alterations or additions
undertaken by Tenant), in the full replacement cost thereof with customary
deductibles, containing a waiver of any right of subrogation against Tenant,
its agents, employees, and representatives which might arise for any reason;
(ii) Commercial General Liability Insurance to include personal injury, bodily
injury, property damage liability (with a broadening endorsement),
premises/operations, blanket contractual liability, in limits not less than
Three Million Dollars ($3,000,000.00) per occurrence; the limit can be
satisfied through a combination of a primary general liability policy and an
umbrella liability policy; (iv) if Landlord has any employees Workers’
Compensation insurance in the amounts required by law; and (v) Rental
Interruption Insurance in amounts at least equal to one year of Base Rent and
additional rent under this Lease.

5.1.5        Tenant
Signage.  To allow Tenant, at its
sole cost and expense, subject to Tenant obtaining all governmental permits and
approvals and Landlord’s approval (not to be unreasonably withheld, conditioned
or delayed) of the design thereof, to install Tenant signage (including Tenant’s
corporate name and logo) in two locations on the exterior of the Building 

 23
 

 

and on a new monument sign.  Tenant shall remove any of its signage at the
expiration or termination of this Lease.

5.1.6        Quiet
Enjoyment.  That Landlord has the
right to make this Lease and that Tenant provided Tenant is not in default
following any notice and any opportunity to cure expressly provided for herein
shall peacefully and quietly have, hold and enjoy the Premises throughout the
Term without any manner of hindrance or molestation from Landlord or anyone
claiming under Landlord, subject however to all the terms and provisions
hereof.

5.1.7        Landlord’s
Indemnity.  To defend, with counsel
reasonably approved by Tenant, all actions against Tenant, any partner, member,
trustee, stockholder, officer, director, employee or beneficiary of Tenant (“Tenant
Indemnified Parties”) with respect to, and to pay, protect, indemnify and save
harmless, to the extent permitted by law, all Indemnified Parties from and
against, any and all liabilities, losses, damages, costs, expenses (including
reasonable attorneys’ fees and expenses), causes of action, suits, claims,
demands or judgments of any nature arising from the negligence or willful
misconduct of Landlord, its agents, employees, invitees or contractors.

5.1.8        Landlord Waivers.  Landlord agrees from time to time to execute
and deliver to Lenders providing financing on Tenant’s equipment and trade
fixtures, commercially reasonable forms of so-called “Landlord’s Waivers,” or
similar documents waiving any Landlord’s lien on such equipment and trade
fixtures which are pledged to such lenders as collateral.  Tenant shall reimburse Landlord for its
reasonable legal and other out of pocket expenses in connection with any
request for Landlord to execute any such document.

5.2                               INTERRUPTIONS.

Landlord shall not be liable to Tenant for any
compensation or reduction of rent by reason of inconvenience or annoyance or
for loss of business arising from power losses or shortages or from the
necessity of Landlord’s entering the Premises for any of the purposes in this
Lease authorized, or for repairing the Premises or any portion of the Building,
the Lot, or any common facilities appurtenant thereto.  In case Landlord is prevented or delayed from
making any repairs, alterations or improvements, or furnishing any service or
performing any other covenant or duty to be performed on Landlord’s part, by
reason of any cause beyond Landlord’s reasonable control, Landlord shall not be
liable to Tenant therefor, nor shall Tenant be entitled to any abatement or
reduction of rent by reason thereof, nor shall the same give rise to a claim in
Tenant’s favor that such failure constitutes actual or constructive total or
partial, eviction from the Premises.

Landlord reserves the right to stop any service or
utility system by reason of accident or emergency or until routine or other
maintenance or repairs have been completed, provided and on condition that,
except in case of emergency repairs, Landlord will give Tenant reasonable
advance notice of any contemplated stoppage, will coordinate such stoppage for
a time that is reasonably acceptable to Tenant, and will use reasonable efforts
to avoid unnecessary inconvenience to Tenant by reason thereof.

 24
 

 

 

Article VI

TENANT’S
COVENANTS

6.1                               TENANT’S COVENANTS
DURING THE TERM.

Tenant covenants during the Term and such further time
as Tenant occupies any part of the Premises:

6.1.1        Tenant’s
Payments.  To pay when due (a) all
Annual Base Rent on a monthly basis on the first day of each month and all
additional rent, (b) all taxes which may be imposed on Tenant’s personal
property in the Premises (including, without limitation, Tenant’s fixtures and
equipment) regardless to whomever assessed, and (c) all charges by public
utilities for electricity, telephone (including service inspections therefor)
and other services rendered to the Premises not otherwise required hereunder to
be furnished by Landlord without charge. 
All charges, fees, monetary obligations and other amounts payable by
Tenant under this Lease other than Annual Base Rent shall constitute “additional
rent” hereunder.

6.1.2        Repairs
and Yielding Up.  Except as otherwise
provided in Article VII and Section 5.1.3, to keep the Premises, the Building
and the Lot (including without limitation HVAC and other building systems,
elevators, generators, UPS Systems and any equipment installed by Tenant,
interior and exterior windows, fixtures and interior walls, floors, ceilings and
doors) in good order, repair and condition, reasonable wear and tear and damage
by fire or other casualty excepted.  In
connection therewith, Tenant shall either (a) keep in force and effect
throughout the Term commercially customary maintenance contracts for the
Building’s HVAC system with reputable third party service providers, and
provide current copies thereof to Landlord, or (b) maintain such system with
its own staff pursuant to a maintenance schedule and in accordance with
maintenance standards equivalent to what would have been provided under such
contracts, and provide Landlord with copies of such schedule on an annual basis
and evidence of such maintenance as Landlord may reasonably request.

At the expiration or
termination of this Lease peaceably to yield up the Premises in such order,
repair and condition, first removing all goods and effects of Tenant and, to
the extent and in the condition required by Section 3.5, any alterations and
additions, and repairing all damage caused by such removal and leaving them
clean and neat and free from trash and debris.

6.1.3        Occupancy
and Use.  To use and occupy the
Premises only for the Permitted Uses; not to injure or deface the Building or
the Lot to keep the Premises clean and in a neat and orderly condition; and not
to permit in the Building any use thereof which is improper, offensive or
contrary to law or ordinances, or creates a nuisance or that invalidates or
increases the premiums for any insurance on the Building or its contents; not
to dump, flush, or in any way introduce any Hazardous Materials into the sewage
or other waste disposal system serving the Premises, and not to use or permit
the use of any Hazardous Materials in or on the Premises or the Lot except in
accordance with Tenant’s normal business practice and in compliance with all
applicable Environmental Laws; to notify Landlord of any incident which would
require the filing of a notice under applicable federal, state, or local law on
the Premises, the Lot or any common facilities appurtenant thereto; and to
cause the interior of the Premises to comply with 

 25
 

 

the Americans with
Disabilities Act; to comply with all laws, regulations and orders of
governmental authorities, including without limitation those relating to
zoning, building, fire, health and safety, applicable to Tenant’s particular
use of the Premises, the Lot or any common facilities appurtenant thereto.  As used herein, “Hazardous Materials” shall
mean and include, but shall not be limited to, any petroleum product and all
hazardous or toxic wastes or substances, any substances which because of their
quantitative concentration, chemical, radioactive, flammable, explosive,
infectious or other characteristics, constitute or may reasonably be expected
to constitute or contribute to a danger or hazard to public health, safety or
welfare or to the environment, including, without limitation, any toxic mold,
asbestos (whether or not friable) and any asbestos-containing materials, waste
oils, solvents and chlorinated oils, polychlorinated biphenyls (PCBs), toxic
metals, etchants, pickling and plating wastes, explosives, reactive metals and
compounds, pesticides, herbicides, radon gas, urea formaldehyde foam insulation
and chemical, biological and radioactive wastes, or any other similar materials
or any hazardous or toxic wastes or substances which are included under or
regulated by any federal, state or local law, rule or regulation (whether now
existing or hereafter enacted or promulgated, as they may be amended from time
to time) pertaining to environmental regulations, contamination, clean-up or
disclosures, and any judicial or administrative interpretation thereof,
including any judicial or administrative orders or judgments including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 et
seq. (“CERCLA”); the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq. (“RCRA”); Superfund Amendments and
Reauthorization Act of 1986, Public Law No. 99-499 (signed into law October 17,
1986) (“SARA”); Toxic Substances Control Act, 15 U.S.C. Section 2601 et  seq. (“TSCA”);
Massachusetts Oil and Hazardous Material Release Prevention and Response Act,
M.G.L. c. 21E; Massachusetts Hazardous Waste Management Act, M.G.L. c. 21C; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et  seq.; or any
other state superlien or environmental clean-up or disclosure statutes (all
such laws, rules and regulations being referred to collectively as the “Environmental
Laws”).  Upon written request from
Landlord, Tenant shall provide to Landlord on an annual basis, a management
plan listing all Hazardous Materials it keeps and maintains and Tenant’s
procedures for handling the same in compliance with law.  Tenant shall immediately notify Landlord of
any spill or release of Hazardous Materials that is reportable to applicable
authorities under Environmental Laws and shall in all cases remedy such spill
or release in compliance with Environmental Laws.  At the expiration or termination of this
Lease, Tenant shall provide to Landlord at Landlord’s request, an environmental
site assessment reasonably satisfactory to Landlord prepared by a Massachusetts
Licensed Site Professional, and a decommissioning report prepared by an
industrial hygienist reasonably satisfactory to Landlord, each identifying any
Hazardous Materials in or about the Premises or the Lot, and Tenant shall be
responsible for the remediation thereof in compliance with law except to the
extent the presence of such Hazardous Materials was not caused by Tenant, its
agents, employees, invitees or contractors. 
If Tenant discovers the presence of any Hazardous Materials in violation
of Environmental Laws in the course of performing Initial Tenant Improvements,
it shall promptly advise Landlord and Landlord shall be responsible for
remediation and removal thereof to the extent required by, and in compliance
with, Environmental Laws.

6.1.4        Rules
and Regulations.  To comply with the
Rules and Regulations set forth in Exhibit D
and all other Rules and Regulations reasonably acceptable to Tenant of which
Tenant has been given prior written notice, for the care and use of the
Building and the Lot and their 

 26
 

 

facilities and approaches.  In the event any rule or regulation set forth
in Exhibit D or hereafter promulgated by Landlord is inconsistent with the
terms of this Lease, the terms of this Lease shall prevail.

6.1.5        Safety
Appliances.  To keep the Premises
equipped with all safety appliances required by law or ordinance or any other
regulation of any public authority and to procure all licenses and permits
required because of Tenant’s specific use, and to do any work so required, it
being understood that the foregoing provisions shall not be construed to
broaden in any way Tenant’s Permitted Uses. 
Tenant shall also comply with the requirements of all laws, orders and
regulations of all governmental authorities, Federal, State or Municipal,
having jurisdiction over the Premises or Building or the operation of Tenant’s
business.

6.1.6        Assignment
and Subletting.

(a)           Tenant shall not
assign, mortgage, pledge or otherwise transfer this Lease or make any sublease
of the Premises, or permit occupancy of any part thereof by anyone other than
Tenant (any such act being referred to herein as a “Transfer” and the other
party with whom Tenant undertakes such act being referred to herein as a “Transferee”)
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed as hereinafter provided.  Notwithstanding the foregoing, Landlord may
refuse consent in its sole discretion (a) to any Transfer to any governmental
or quasi-governmental authority or agency, to any entity in connection with use
by or affiliation with a foreign government, or to an entity for the provision
of social or clinical services, or (b) any Transfer in connection with a
proposed use other than the Permitted Use. 
In all other cases, Landlord agrees that it shall not unreasonably
withhold, condition or delay its consent to any proposed Transfer of the
Premises by Tenant, pending Landlord’s satisfactory review of the information
to be supplied by Tenant regarding, among other matters, all material terms of
the proposed Transfer, the proposed Transferee’s creditworthiness, and its
intended use of the Premises.  Any
request by Tenant for such consent shall be in writing and shall include the
name of the proposed Transferee, the nature of its business and proposed use of
the Premises, reasonable information as to its financial condition and
prospects, and all material terms and conditions of the proposed Transfer.  Tenant shall supply such additional
information about the proposed Transfer and Transferee as the Landlord reasonably
requests.  Tenant shall reimburse Landlord
for its reasonable legal and other out of pocket expenses in connection with
any request for consent.  Tenant may
without Landlord’s consent (A) assign its entire interest under this Lease to a
successor to Tenant by purchase of all or substantially all of the stock or
assets of Tenant, or by corporate merger, and (B) assign this Lease or sublet
all or a portion of the Premises to an entity controlling, controlled by or
under common control with Tenant or permitted successor thereto (but such consent
shall be required if at any time such entity is no longer controlling,
controlled by or under common control with the originally named Tenant or any
permitted successor thereto), provided in all cases under (A) and (B) that all
of the following conditions are satisfied and provided an Assumption Document
(hereafter defined) is executed by the assignee and delivered to Landlord (a “Permitted
Transfer”):  (i) Tenant is not in default
under this Lease following any applicable notice and cure period, (ii) Tenant’s
successor in the case of sale or merger or reorganization, shall own all or
substantially all of the assets or the stock of Tenant; (iii) Tenant’s
successor in the case of sale or merger, shall have a net worth which is at
least equal to Tenant’s net worth immediately prior to the assignment, and (iv)
Tenant shall give 

 27
 

 

Landlord written notice at least twenty (20) days
prior to the effective date of the proposed transaction.  Tenant’s notice to Landlord shall include
information and documentation showing that each of the above conditions has
been satisfied.

(b)           Any Transfer shall
specifically make applicable to the Transferee all of the provisions of this
Section so that Landlord shall have against the Transferee all rights with
respect to any further Transfer which are set forth herein.  No Transfer (including without limitation a
Permitted Transfer and any Transfer subsequent to a prior Transfer) shall
affect the continuing primary liability of Tenant (including without limitation
the originally named Tenant and any successor), which continuing primary
liability shall be joint and several with each Transferee.  No consent to any Transfer in a specific
instance shall operate as a waiver in a subsequent instance. No Transfer shall
be binding upon Landlord or its successors, unless Tenant shall deliver to
Landlord a recordable instrument satisfactory to Landlord (an “Assumption
Document”) containing a covenant of assumption of all of the obligations of
Tenant hereunder by the Transferee running to Landlord and all persons claiming
by, through or under Landlord, provided that Landlord shall be under no
obligation to recognize any subtenant upon termination of this Lease.  The Transferee’s failure to execute such
instrument shall not, however, release or discharge Transferee from its
liability as a Transferee hereunder. 
Tenant shall not enter into any Transfer that provides for rental or
other payment based on the net income or profits derived from the Premises.  With respect to any Transfer other than a Permitted
Transfer, Landlord shall be entitled to receive fifty percent (50%) of any
consideration, however realized, which is received by Tenant on account of such
Transfer in excess of the Annual Base Rent and additional rent reserved in this
Lease applicable to the space being Transferred, after deducting therefrom all
reasonable and customary expenses (including but not limited to brokerage fees,
rental concessions, fit-up expenses including costs of constructing, demising
walls, architectural fees and attorneys’ fees) directly incurred by Tenant
attributable to the Transfer.  The
provisions of this paragraph (b) apply equally to Permitted Transfers and
Transfers for which Landlord’s consent is required.

(c)           Landlord Option.

(1)           Right to Cancel.  Notwithstanding any contrary provision of
this Section 6.1.6 in connection with any proposed Transfer other than a
Permitted Transfer, Landlord shall have an option to cancel and terminate this
Lease by written notice to Tenant if the request is to assign the Lease or to
sublet all of the Premises; or, if the request is to sublet a portion of the
Premises in excess of sixty percent (60%) of the Premises (taking into account
all existing subleases), to cancel and terminate this Lease with respect to
such portion.  Landlord may exercise said
option in writing within forty-five (45) days after Landlord’s receipt from
Tenant of a request to assign or sublet, and such cancellation or termination
shall occur as of the date set forth in Landlord’s notice of exercise of such
option, which shall not be less than thirty (30) days nor more than ninety (90)
days following the giving of such notice. 
If
Landlord fails to exercise its option to cancel within such time period, it
shall be deemed to have waived the same.

(2)           Cancellation.  If Landlord exercises Landlord’s option to
cancel this Lease or any portion thereof, Tenant shall surrender possession of
the Premises, or the portion thereof, which is the subject of the option, as
the case may be, on the date set 

 28
 

 

forth in such
notice in accordance with the provisions of this Lease relating to surrender of
the Premises at the expiration of the Term. 
If this Lease is cancelled as to a portion of the Premises only, (i)
Annual Base Rent after the date of cancellation shall be abated on a pro rata
basis, and (ii) Landlord shall have the right to construct a demising wall
between Tenant’s remaining Premises and the premises for which the Lease was
cancelled.  Tenant shall reimburse
Landlord as additional rent for the cost to construct such demising wall within
ten (10) days following notice from Landlord.

(d)           Any agreement by
which Tenant agrees to enter into or execute any Transfer at the direction of
any other party, or assigns its rights in the income arising from any Transfer
to any other party, shall itself constitute a Transfer hereunder.

(e)           Any Transfer or
attempted Transfer not in compliance with all of the terms and conditions set
forth above shall be void, and shall be a default under this Lease.

(f)            Notwithstanding any
contrary provision of this Lease, Tenant shall have no right to assign this
Lease or sublet all or any portion of the Premises and any such assignment or
sublease shall be void unless on both (i) the date on which Tenant notifies
Landlord of its intent to enter into any assignment or sublease and (ii) the
date on which such assignment or sublease is to take effect, Tenant is not in
default of any of its obligations under this Lease following any applicable
notice and cure period; provided, however, that Landlord shall retain the right
to waive the provisions of this Section 6.1.6(f).

(g)           The acceptance by
the Landlord of the payment of Annual Base Rent, additional rent or other
charges following an assignment, subletting or other Transfer prohibited by
this Section 6.1.6 shall not be deemed to be a consent by the Landlord to any
such assignment, subletting or other Transfer, nor shall the same constitute a
waiver of any right or remedy of the Landlord.

6.1.7        Indemnity.  To defend, with counsel reasonably approved by
Landlord, all actions against Landlord, Manager, any partner, member, trustee,
stockholder, officer, director, employee or beneficiary of Landlord or Manager,
holders of mortgages secured by the Premises or the Building or Lot and any
other party having an interest in the Premises or the Lot (“Indemnified Parties”)
with respect to, and to pay, protect, indemnify and save harmless, to the
extent permitted by law, all Indemnified Parties from and against, any and all
liabilities, losses, damages, costs, expenses (including reasonable attorneys’
fees and expenses), causes of action, suits, claims, demands or judgments of
any nature, (a) arising from Tenant’s use and occupancy of the Premises or any
activity done or permitted or suffered to be done by Tenant in, on, or about
the Premises, (b) arising from any breach or default by Tenant of its
obligations under this Lease, (c) arising from any negligence or willful
misconduct of Tenant, its agents, employees, invitees or contractors, or (d)
arising from the existence, use, generation, storage or disposal of Hazardous
Materials (as defined in Section 6.1.3 hereof) on, in or about the Premises,
the Lot or any common facilities appurtenant thereto or any surrounding area if
the same is caused by Tenant or any agent, employee, contractor, licensee,
sublessee or invitee of Tenant, including, without limitation, any and all
liabilities, losses, damages, costs, expenses (including reasonable attorneys’
fees and expenses), causes of action, suits, claims, demands or judgments of
any nature arising from or related to removal of or other remediation
respecting any and all such 

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Hazardous Materials to the extent caused by Tenant, or
any agent, employee, contractor, licensee, sublessee or invitee of Tenant.

6.1.8        Tenant’s
Insurance.  To maintain the following
insurance throughout the Term:  (i)
Builder’s risk insurance during any period of construction of alterations and
additions by Tenant, including without limitation the Initial Tenant
Improvements, and “All Risk” or Special Form property insurance including, but
not limited to, fire, extended coverage, vandalism and malicious mischief
coverage upon all property owned by Tenant and located in the Building, all
Initial Tenant Improvements and any alterations and additions undertaken by
Tenant, all in the full replacement cost thereof; (ii) Extra Expense or, if
applicable, Business Income Insurance in an amount sufficient to reimburse
Tenant for loss of use of the Premises attributable to the prevention of access
to the Building or Premises as a result of the perils insured in
clause (i) above; (iii) Commercial General Liability Insurance to
include personal injury, bodily injury, property damage liability (with a
broadening endorsement), premises/operations, blanket contractual liability, in
limits not less than Three Million Dollars ($3,000,000.00) per occurrence,
inclusive with a deductible not to exceed One Hundred Thousand ($100,000)
Dollars; the limit can be satisfied through a combination of a primary general
liability policy and an umbrella liability policy; (iv) Workers’
Compensation insurance with limits at least as required by applicable law and
Employers Liability insurance with limits of at least $1,000,000 each accident,
$1,000,000 each employee, and $1,000,000 policy limit for disease; and (v)
Business Interruption Insurance as presently carried by Tenant or such higher
amounts as Landlord may reasonably require. 
The Landlord shall have the right from time to time to require additional
insurance or coverages or increase such minimum limits as Landlord may
reasonably require, upon notice to the Tenant.

All policies shall be taken out with insurers
acceptable to Landlord, in form reasonably satisfactory to Landlord, and shall
(i) include Landlord, Manager and any mortgagee of Landlord as additional
insureds, as their interests may appear, (ii) be written on an occurrence
based form, (iii) contain a waiver of any right of subrogation against
Landlord, its agents, employees, and representatives which might arise for any reason,
(iv) contain a cross-liability endorsement, (v) contain a provision that
any coverage afforded thereby shall  be
primary and noncontributing with respect to any insurance carried by Landlord,
and any insurance carried by Landlord shall be excess and noncontributing, and
(vi) contain an endorsement requiring at least thirty (30) days written
notice to Landlord, and any mortgagee of Landlord of which Tenant has been
given notice, of any material change, reduction, cancellation or other termination.  Tenant shall provide certificates of
insurance in form reasonably satisfactory to Landlord before the Commencement
Date, and shall provide certificates evidencing renewal at least ten (10) days
before the expiration of such policy.

6.1.9        Tenant’s
Worker’s Compensation Insurance.  To
keep all of Tenant’s employees working in the Premises covered by worker’s
compensation insurance in statutory amounts and to furnish Landlord with
certificates thereof.

6.1.10      Landlord’s
Right of Entry.  To permit Landlord
and Landlord’s agents entry: to examine the Premises at reasonable times upon
at least 24 hours advance written notice to Tenant (except in cases of
emergency where only notice reasonable under the circumstances shall be
required) and to make repairs, alterations, substitutions or replacements of
those portions 

 30
 

 

of the Premises the maintenance of which are the
responsibility of Landlord hereunder; and to show the Premises to mortgagees,
prospective purchasers and prospective tenants (during the last twelve (12)
months of the Term only) upon reasonable advance notice and otherwise in
accordance with Section 2.1.  In
exercising such rights, Landlord shall use reasonable efforts to minimize
interference with the normal operation of Tenant’s business.  Landlord, and any third parties entering the
Premises at Landlord’s invitation or request, shall at all times observe Tenant’s
reasonable rules relating to security on the Premises of which Landlord has
been given advance written notice. 
Landlord acknowledges that such security requirements may include
certain areas of the Premises that will be off-limits and that Landlord will
coordinate such access with Tenant so as to provide accompaniment to Landlord
by a representative of Tenant at all times.

6.1.11     
Loading.  Not to place Tenant’s
Property, as defined in Section 6.1.13, upon the second floor of the Premises
so as to exceed a rate of one hundred twenty-five (125) pounds of live load per square foot.

6.1.12      Landlord’s
Costs.  In case Landlord or Manager
shall be made party to any litigation commenced by or against Tenant or by or
against any parties in possession of the Premises or any part thereof claiming
under Tenant, Tenant agrees to pay, as additional rent, all reasonable costs,
including, without implied limitation, reasonable counsel fees, incurred by or
imposed upon Landlord in connection with such litigation, unless and to the
extent it is finally determined by a court of competent jurisdiction that there
was fault on the part of Landlord or Manager.

6.1.13      Tenant’s
Property.  All the furnishings,
fixtures, equipment, effects and property of every kind, nature and description
of Tenant and of all persons claiming by, through or under Tenant
(collectively, “Tenant’s Property”) which, during the continuance of this Lease
or any occupancy of the Premises by Tenant or anyone claiming under Tenant, may
be on the Premises or elsewhere in the Building or on the Lot shall be at the
sole risk and hazard of Tenant, and if the whole or any part thereof shall be
destroyed or damaged by fire, water or otherwise, or by the leakage or bursting
of water pipes, steam pipes, or other pipes, by theft, or from any other cause,
no part of said loss or damage is to be charged to or to be borne by Landlord.

6.1.14      Labor
or Materialmen’s Liens.  To pay
promptly when due the entire cost of any work done on the Premises by or for
Tenant, its agents, employees or independent contractors; not to cause or
permit any liens for labor or materials performed or furnished in connection
therewith to attach to the Premises; and, within fifteen (15) days following
Tenant’s actual notice thereof, to discharge or bond off any such liens which
may so attach.

6.1.15      Changes
or Additions.  Not to make any
alterations or improvements except in accordance with Article III hereto.

6.1.16      Holdover.  To pay to Landlord during the first thirty
(30) days after expiration or termination of this Lease one hundred fifty
(150%) percent, and thereafter two hundred (200%) percent, of the greater of
(a) the Annual Base Rent and all applicable additional rent (and all other sums
otherwise due hereunder) applicable at the end of the Term and (b) the then
fair market monthly rent as determined by Landlord for each month or portion
thereof Tenant shall 

 31
 

 

retain possession of the Premises or any part thereof
after the termination of this Lease, whether by lapse of time or
otherwise.  In addition, if Tenant shall
so retain possession of the Premises or any portion thereof for more than thirty
(30) days after expiration or termination of this Lease, Tenant shall also pay
all expenses and damages incurred or sustained by Landlord on account
thereof.  The provisions of this
subsection shall not operate as a waiver by Landlord of the right of re-entry
provided in this Lease.

6.1.17      Security.  To indemnify, and save Landlord and Manager
harmless from any claim for injury to person or damage to property asserted by
any personnel, employee, guest, invitee or agent of Tenant which is suffered or
occurs in or about the Premises or in or about the Building or the Lot or the
common facilities appurtenant thereto by reason of the act of any intruder or
any other person in or about the Premises, the Building, the Lot or such common
facilities.

6.1.18      Financial
Statements.  During any period of
time that the shares of Tenant’s stock are not listed or traded on a national
securities exchange, to furnish to Landlord, upon Landlord’s written request
given no more than annually, Tenant’s most recent audited financial statements
(including any notes to them) or, if no such audited statements have been
prepared, such other financial statements (and notes to them) as may have been
most recently prepared by an independent certified public accountant or, if no
such statements have been prepared, current internally prepared financial
statements in form customarily prepared by Tenant for its internal purposes,
certified by Tenant’s Chief Financial Officer. 
Tenant will discuss its financial statements with Landlord upon
request.  Tenant agrees that in the event
Tenant’s corporate structure is altered through merger, acquisition or the
like, such that Tenant becomes a parent, division, or subsidiary of another
corporate entity, any and all financial statements delivered by Tenant pursuant
to this Section will contain financial information pertaining only to Tenant’s
operations and not to any such parent, division, or subsidiary.  The foregoing shall not be deemed to
constitute Landlord’s consent to any Transfer or in any way derogate from the
provisions of Section 6.1.6.  Tenant
represents and warrants that any financial statements provided by it to
Landlord were true, correct and materially complete when provided, and that no
material adverse change has occurred since that date which would render them
inaccurate or misleading, and each delivery of financial statements hereunder
to Landlord shall be deemed a representation and warranty that such statements
are true, correct and materially complete as of the date of delivery to
Landlord.  Without limitation of any
other obligation under this Lease, the parties agree that this Section 6.1.18
shall apply to each person or entity which is liable to Landlord under this
Lease.  Landlord agrees to keep
confidential any non-public financial statements provided by Tenant, provided
that it may provide copies of the same to its current and prospective lenders,
investors and purchasers.

Article VII

CASUALTY
AND TAKING

7.1                               CASUALTY AND TAKING.

7.1.1        Substantial
damage.  In case during the Term all
or any substantial part of the Premises, Building, Lot or common facilities
appurtenant thereto, or any one or more of them, 

 32
 

 

are damaged materially by fire or any other cause
(meaning damage of a type that will require longer than 365 days to restore),
or by action of the public or other authority in consequence thereof or are
taken by eminent domain by reason of anything lawfully done in pursuance of
public or other authority, this Lease shall terminate at the election of either
party, which may be made, notwithstanding Landlord’s entire interest may have
been divested, by notice to the other party within sixty (60) days after the
occurrence of the event giving rise to the election to terminate, which notice
shall specify the effective date of termination which shall be not less than thirty
(30) nor more than sixty (60) days after the date of notice of such
termination.  The determination of the
time required to restore shall be made by a contractor selected by Landlord
with Tenant’s consent, which consent shall not be unreasonably withheld and
shall be deemed given unless Tenant reasonably objects thereto within three (3)
business days of receipt of notice thereof. 
Rent shall abate to the extent hereinafter provided as of the date of
such casualty or taking.

7.1.2        Restoration.  If in any such case the Premises are rendered
unfit for use and occupation for the Permitted Uses and the Lease is not
terminated, and Tenant is not then in default of any of its monetary
obligations or material non-monetary obligations under the Lease following any
applicable notice and cure period, Landlord shall, with due diligence, restore
the Building to its condition before the casualty or taking (excluding any
items installed or paid for by Tenant, including without limitation the Initial
Tenant Improvements and any alterations and additions undertaken by Tenant) to
the extent permitted by zoning and other codes and regulations and by the net
award of insurance or damages available to and actually received by Landlord,
plus any applicable deductible, and a just proportion of the Annual Base Rent
and additional rent according to the nature and extent of the injury shall be
abated until such portion of the Building or such remainder shall have been put
by Landlord in such condition, and in case of a taking which permanently
reduces the area of the Premises, a just proportion of the Annual Base Rent and
additional rent shall be abated for the remainder of the Term.  If neither party elects to terminate this
Lease as provided herein, Tenant shall, at its own cost and expense, repair and
restore the Premises in accordance with the provisions of Section 6.1.15
hereof, including, but not limited to, the repairing and/or replacement of its
trade fixtures, alterations and additions, furnishings and equipment in a manner
and to at least a condition equal to that prior to its damage or
destruction.  Tenant agrees to commence
the performance of its work when notified by Landlord in writing that the work
to be performed by Tenant can, in accordance with good construction practices,
then be commenced and Tenant shall complete such work as promptly thereafter as
is practicable.

If, for any reason, restoration
required by Landlord hereunder is not completed within twelve (12) months after
such casualty or taking, as Tenant’s exclusive remedy therefor, Tenant shall
have the right to terminate this Lease by giving written notice to Landlord
within the fifteen (15) day period following the expiration of such twelve (12)
months, in which event this Lease shall terminate thirty (30) days after the
date of such notice unless Landlord completes such restoration before the end
of such thirty (30) day period.  Such
termination right shall be exercised by Tenant, if at all, within fifteen (15)
days after the expiration of such twelve (12) month period, and if Tenant fails
to exercise such termination right within such twelve (12) month period, Tenant
shall be deemed to have irrevocably waived such right.

 33

 

7.1.3        Temporary
Taking.  Notwithstanding any other
provision hereof, in the event of any taking of the Premises or any part
thereof for temporary use that is less than 180 days, this Lease shall be and
remain unaffected thereby and rent shall not abate, provided that Tenant may
claim the entire amount of the award for such taking.

7.2                               RESERVATION OF AWARD.

Except as set forth above
for a temporary taking, Landlord reserves to itself any and all rights to
receive awards made for damages to the Premises, Building, Lot or common
facilities appurtenant thereto and the leasehold hereby created, or any one or
more of them, accruing by reason of exercise of eminent domain or by reason of
anything lawfully done in pursuance of public or other authority.  Tenant hereby releases and assigns to
Landlord all Tenant’s rights to such awards, and covenants to deliver such
further assignments and assurances thereof as Landlord may from time to time
request.  It is agreed and understood,
however, that Landlord does not reserve to itself, and Tenant does not assign
to Landlord, any damages payable for (i) movable trade fixtures installed by
Tenant or anybody claiming under Tenant, at its own expense, (ii) relocation
expenses recoverable by Tenant from such authority in a separate action; and
(iii) the unamortized value of the Initial Tenant Improvements other than the
Removable Installations and any other installations Tenant is required to
remove at the end of the Term, provided and only to the extent that, in the
case of (i), (ii) and (iii), such damages payable to Tenant do not reduce the
award otherwise available to the holder of any mortgage of the Property or the
ground lessor, any such holder and ground lessor first being paid so much of
the award to which they are entitled, and provided further that any damages to
which Tenant shall be entitled shall not exceed the pro rata portion of its
claim under (i), (ii) and (iii) in relation to the claim of Landlord for the
value of its interest in the Property, in the event that the total award is
insufficient to pay to Landlord and Tenant the full value of their respective
claims.

Article VIII

RIGHTS OF MORTGAGEE AND GROUND LESSOR

8.1                               PRIORITY OF LEASE.

This Lease shall be
subject and subordinate to any mortgage or ground lease (“Superior Interest”)
now or hereinafter placed on or affecting the Lot, the Building, or both, or
any portion or portions thereof or interest therein, which are separately and
together hereinafter in this Article VIII referred to as the “affected
premises,” and to each advance made or hereafter to be made under any Mortgage,
and to all renewals, modifications, consolidations, replacements and extensions
thereof and all substitutions of any Superior Interest in any case, provided
that Landlord shall obtain from any present or future holder of a Superior
Interest on Tenant’s behalf, a customary and commercially reasonable written
subordination and recognition agreement which Tenant shall execute and deliver
upon Landlord’s request (“Recognition Agreement”), providing that so long as
Tenant performs all of the terms, covenants and conditions of this Lease and
agrees to attorn to such holder, Tenant’s rights under this Lease shall not be
disturbed and shall remain in full force and effect for the Term and Tenant shall
not be joined by such holder in any action or proceeding to foreclose or
terminate thereunder, Tenant agrees that the 

 34
 

 

forms of Recognition
Agreement required by Landlord’s current mortgagee and ground lessor attached
hereto as Exhibit G are commercially reasonable and satisfactory.

In the event that the
holder of any Superior Interest or its successor in title shall succeed to the
interest of Landlord, then Tenant shall and does hereby agree to attorn to such
holder or successor and to recognize such holder or successor as its Landlord.

Tenant shall execute and deliver any such agreement
within ten (10) days after request of Landlord.

Landlord represents and warrants that, as of the date
hereof, the only holder of a Superior Interest to this Lease is Eyk van
Oterloo, holder of a mortgage on the Premises and First Camelot Limited
Partnership, holder of a ground lease on the Lot.

Notwithstanding the foregoing, the holder of any
Superior Interest may at its election subordinate its Superior Interest to this
Lease without the consent or approval of Tenant.

8.2                               RIGHTS OF HOLDERS OF
SUPERIOR INTEREST TO CURE.

No act or failure to act on the part of Landlord which
would entitle Tenant, under the terms of this Lease or as a matter of law, to
be released from Tenant’s obligations hereunder or to terminate this Lease
shall result in a release of such obligations or a termination of this Lease
unless Tenant first gives written notice of and a specific description of
Landlord’s act or failure to act to each holder of a Superior Interest of whom
Tenant has been given written notice, if any and such holder fails to cure such
default within thirty (30) days after receipt of such notice.  However, if such cure reasonably requires more
than thirty (30) days to effect, such holder shall have such additional time as
is reasonably necessary in the circumstances, including time to take possession
of the Lot and Building, provided such holder is using commercially reasonable
efforts to procure a cure.  This Section
shall not impose any obligation on any such holder.

Article IX

DEFAULT

9.1                               EVENTS OF DEFAULT.

If Tenant fails to pay
any installment of Annual Base Rent when due and such default continues for ten
(10) days following written notice from Landlord (provided that no such notice
shall be required if notice of default in payment of Annual Base Rent has been
given in the preceding twelve month period), or if Tenant fails to pay any
installment of additional rent or any other monetary obligation to Landlord
when due, and such default continues for ten (10) days following written notice
from Landlord, or if any representation or warranty of Tenant is not true in
all material respects when made, or if Tenant fails to provide an estoppel
certificate or subordination and non-disturbance agreement to Landlord within
the time period provided and otherwise in accordance with Sections10.9 and 8.1
hereof, or if Tenant fails to timely procure and maintain any insurance as
required by any provision of this Lease, or if Tenant assigns this Lease or
subleases any portion of the Premises in violation of Section 6.1.6, or if any
other default under this Lease continues for more than thirty (30) days after
notice, except that if the 

 35
 

 

default cannot be cured
within the thirty (30) day period, it shall not be considered an Event of
Default if Tenant commences to cure such default within such thirty (30) day
period and proceeds diligently thereafter to seek to effect such cure and in
all events cures such default within ninety (90) days after notice; or if
Tenant becomes insolvent, fails to pay its debts as they become due, files a
petition under any chapter of the U.S. Bankruptcy Code, 11 U.S.C. 101 et seq.,
as it may be amended (or any similar petition under any insolvency law of any
jurisdiction), or if such petition is filed against Tenant and not dismissed
within sixty (60) days; or if Tenant proposes any dissolution, liquidation,
composition, financial reorganization or recapitalization with creditors, makes
an assignment or trust mortgage for benefit of creditors, or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to any property of Tenant; or if the leasehold hereby created is taken
on execution or other process of law in any action against Tenant (each of the
foregoing being referred to herein as an “Event of Default”); then, and in any
such case, or in the case of any other Event of Default so identified in this
Lease, Landlord and the agents and servants of Landlord may, in addition to and
not in derogation of any remedies for any preceding breach of covenant,
immediately or at any time thereafter and without further notice, at Landlord’s
election, do any one or more of the following: (1) give Tenant written notice
stating that the Lease is terminated, effective upon the giving of such notice
or upon a date stated in such notice, as Landlord may elect, in which event the
Lease shall be irrevocably extinguished and terminated as stated in such notice
without any further action, and (2) with due process of law enter and repossess
the Premises as of Landlord’s former estate, and expel Tenant and those
claiming through or under Tenant, and remove its and their effects, without
being guilty of trespass, in which event the Lease shall be irrevocably extinguished
and terminated at the time of such entry, and (3) pursue any other rights or
remedies permitted by law.  Any such
termination of the Lease shall be without prejudice to any remedies which might
otherwise be used for arrears of rent or prior breach of covenant, and in the
event of such termination Tenant shall remain liable under this Lease as
hereinafter provided.  Tenant hereby
waives all statutory rights (including, without limitation, rights of redemption,
if any) to the extent such rights may be lawfully waived, and Landlord, without
notice to Tenant, may store Tenant’s effects and those of any person claiming
through or under Tenant at the expense and risk of Tenant and, if Landlord so
elects, may sell such effects at public auction or private sale and apply the
net proceeds to the payment of all sums due to Landlord from Tenant, if any,
and pay over the balance, if any, to Tenant.

9.2                               TENANT’S OBLIGATIONS
AFTER TERMINATION.

In the event that this
Lease is terminated under any of the provisions contained in Section 9.1 or
shall be otherwise terminated for breach of any obligation of Tenant, Tenant
covenants to pay forthwith to Landlord, as compensation, the excess of the
total rent reserved for the residue of the Term over the rental value of the
Premises for said residue of the Term as reasonably determined by
Landlord.  In calculating the rent
reserved, there shall be included, in addition to the Annual Base Rent and all
additional rent, the value of all other consideration agreed to be paid or
performed by Tenant for said residue. 
Tenant further covenants as an additional and cumulative obligation
after any such ending to pay punctually to Landlord all the sums (including
without limitation, Annual Base Rent and additional rent) and perform all the
obligations which Tenant covenants in this Lease to pay and to perform in the
same manner and to the same extent and at the same time as if this Lease had
not been terminated.  In calculating the
amounts to be paid by Tenant under the immediately preceding sentence, Tenant
shall be credited with any amount paid 

 36
 

 

to Landlord as
compensation as provided in the first sentence of this Section 9.2 and also
with the net proceeds of any rents obtained by Landlord by reletting the
Premises, after deducting all Landlord’s customary expenses in connection with
such reletting, including, without implied limitation, all repossession costs,
brokerage commissions, fees for legal services and expenses of preparing the
Premises for such reletting, it being agreed by Tenant that Landlord may (i)
relet the Premises or any part or parts thereof for a term or terms which may
at Landlord’s option be equal to or less than or exceed the period which would
otherwise have constituted the balance of the Term and may grant such
concessions and free rent as Landlord in its good faith judgment considers
advisable or necessary to relet the same and (ii) make such alterations,
repairs and decorations in the Premises as Landlord in its reasonably judgment
considers advisable or necessary to relet the same, and no action of Landlord
in accordance with the foregoing or failure to relet or to collect rent under
reletting shall operate or be construed to release or reduce Tenant’s liability
as aforesaid.  Landlord shall use
commercially reasonable efforts to relet the Premises.

In lieu of full recovery
by Landlord of all sums payable under the foregoing provisions of this Section
9.2, Landlord may by written notice to Tenant, at any time after this Lease is
terminated under any of the provisions contained in Section 9.1, or is
otherwise terminated for breach of any obligation of Tenant and before such
full recovery, elect to recover and Tenant shall thereupon pay, as liquidated
damages, an amount equal to the sum of (A) the amount of Annual Base Rent
and additional rent of any kind accrued and unpaid at the time of termination,
plus (B) an amount equal to the Annual Base Rent and additional rent under
Article IV which would have come due in the next twelve (12) months.

Nothing contained in this
Lease shall, however, limit or prejudice the right of Landlord to prove and
obtain in proceedings for bankruptcy or insolvency by reason of the termination
of this Lease, an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, the
damages are to be proved, whether or not the amount be greater, equal to, or
less than the amount of the loss or damages referred to above.

Landlord shall not be
deemed to be in default in the performance of any of its obligations hereunder
unless it shall fail to perform such obligations and such failure shall
continue for a period of thirty (30) days following receipt of notice from
Tenant or such additional time as is reasonably required to correct any such
default after notice has been given by Tenant to Landlord specifying the nature
of Landlord’s alleged default provided Landlord commences to cure the default
within the thirty (30) day period or such longer period of time as may be
reasonable in the circumstances and proceeds diligently thereafter to seek to
effect such cure (a “Landlord Default”), Tenant shall have no right to
terminate this Lease for any default by Landlord hereunder and, except as
expressly set forth in this Lease, no right, for any such default, to offset or
counterclaim against any rent due hereunder.

9.3                               LANDLORD DEFAULT.

If Landlord defaults in
the performance of any obligation under this Lease, such default continues for
a period of thirty (30) days after notice from Tenant of such default (or such
longer period of time, not to exceed ninety (90) days in total, as may be
reasonably necessary to cure 

 37
 

 

such default provided
Landlord commences a cure within said thirty (30) days and diligently
prosecutes the same to completion) and such default has a material adverse
effect on Tenant’s business operations (a “Landlord Default”), then upon ten
(10) days’ written notice (except in an emergency of which Landlord is given
written notice and if Landlord fails promptly to respond in the circumstances,
where less notice may be appropriate) given by Tenant to Landlord and to the
holder of any mortgage whose address has been provided by Landlord to Tenant,
Tenant shall have the right to spend up to One Hundred Thousand ($100,000) Dollars
(in 2007 dollars) (the “Cure Cap”) in any twelve (12) month period to cure such
Landlord Default, and Landlord shall reimburse to Tenant, within thirty (30)
days after Landlord receives a written demand from Tenant, any sums expended by
Tenant in effecting such cure up to the Cure Cap.  If Landlord fails to so reimburse Tenant
within such thirty (30) day period Tenant may set off against Annual Base Rent
next coming due up to twenty (20%) percent of each monthly payment of Annual
Base Rent to reimburse itself for the amount required to cure such Landlord
Default (but in no event more than the Cure Cap).  The rights granted to Tenant under this
Section 9.3 are not intended to preclude Tenant from pursuing any other rights
and remedies under applicable law, subject to the terms of this Lease.

Article X

MISCELLANEOUS

10.1                        NO RECORDING.

Tenant agrees that it
shall not record this Lease, provided that upon request of Tenant Landlord and
Tenant shall execute and deliver, and Tenant may record, a notice of this Lease
in the statutory form.

10.2                        NOTICES FROM ONE PARTY TO THE
OTHER.

All notices required or
permitted hereunder shall be in writing and addressed, if to the Tenant, at
Tenant’s Address set forth in Section 1.1 or such other address as Tenant shall
have last designated by notice in writing to Landlord and, if to Landlord, at
Landlord’s & Manager’s Address set forth in Section 1.1 or such other
addresses as Landlord shall have last designated by notice in writing to
Tenant.  Any notice shall have been deemed
duly given if mailed to such address postage prepaid, registered or certified
mail, return receipt requested, three (3) business days after the same is
deposited with the U.S. Postal Service, or if delivered to such address by
hand, when delivery is first attempted, or if sent by nationally recognized
overnight courier service, fees prepaid, on the first business day after the
date deposited with such courier service.

10.3                        BIND AND INURE.

The obligations of this
Lease shall run with the land, and this Lease shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Landlord named herein and each successive owner of the
Premises shall be liable only for the obligations accruing during the period of
its ownership.

 38
 

 

 

10.4                        LIMITATION ON LIABILITY.

10.4.1      The
obligations of Landlord do not constitute personal obligations of the trustees,
partners, members, managers, directors, officers or shareholders of Landlord or
any constituent entity thereof, and Tenant shall not seek recourse against and
no judgment will be taken against the trustees, partners, directors, officers
or shareholders of Landlord, or any constituent entity thereof or any of their
personal assets for satisfaction of any liability with respect to this Lease or
otherwise.

10.4.2      Tenant’s
sole and exclusive remedy shall be against the Landlord’s interest in the
Building and Lot and any sale, condemnation or insurance proceeds thereof.

10.4.3      These
covenants and agreements are enforceable by Landlord and all persons or
entities described above and shall bind Tenant and its successors and assigns.

10.4.4      In
no event shall either party be liable to the other for any incidental,
indirect, special or consequential damages, provided that Tenant shall be
liable for such damages arising out of its holding over and failure to yield up
the Premises upon the expiration of the Term of the termination of this Lease
as provided in Section 6.1.16 hereof.

10.5                        NO SURRENDER.

The delivery of keys to
any employee of Landlord or to Manager or any employee or agent thereof shall
not operate as a termination of this Lease or a surrender of the Premises.  No act by Landlord or Manager or any employee
or agent thereof shall be deemed an acceptance of a surrender of the Premises.

10.6                        NO WAIVER, ETC.

The failure of Landlord
to seek redress for violation of, or to insist upon the strict performance of
any covenant or condition of this Lease or any of the Rules and Regulations
referred to in Section 6.1.4, whether heretofore or hereafter adopted by
Landlord, shall not be deemed a waiver of such violation nor prevent a
subsequent act, which would have originally constituted a violation, from
having all the force and effect of an original violation, nor shall the failure
of Landlord to enforce any of said Rules and Regulations against any other
tenant in the Building be deemed a waiver of any such Rules or
Regulations.  The receipt by Landlord of
Annual Base Rent or additional rent with knowledge of the breach of any
covenant of this Lease shall not be deemed a waiver of such breach by Landlord,
unless such waiver be in writing and signed by Landlord.  No consent or waiver, express or implied, by
Landlord to or of any breach of any agreement or duty shall be construed as a
waiver or consent to or of any other breach of the same or any other agreement
or duty.

10.7                        NO ACCORD AND SATISFACTION.

No acceptance by Landlord
of a lesser sum than the Annual Base Rent and additional rent then due shall be
deemed to be other than on account of the earliest installment of such rent
due, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed as accord and satisfaction,
and Landlord may accept such check or 

 39
 

 

payment without prejudice
to Landlord’s right to recover the balance of such installment or pursue any
other remedy in this Lease provided.

10.8                        CUMULATIVE REMEDIES.

The specific remedies to
which Landlord may resort under the terms of this Lease are cumulative and are
not intended to be exclusive of any other remedies or means of redress to which
it may be lawfully entitled in case of any breach or threatened breach by
Tenant of any provisions of this Lease. 
In addition to the other remedies provided in this Lease, Landlord shall
be entitled to the restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of this
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.

10.9                        LANDLORD’S RIGHT TO CURE.

If Tenant shall at any
time default in the performance of any obligation under this Lease following
any applicable notice and cure period (except in cases of emergency), Landlord
shall have the right, but shall not be obligated, to enter upon the Premises
and to perform such obligation, notwithstanding the fact that no specific
provision for such substituted performance by Landlord is made in this Lease
with respect to such default.  In
performing such obligation, Landlord may make any payment of money or perform
any other act as Landlord deems reasonably advisable.  All reasonable sums so paid by Landlord
(together with interest at the Default Interest Rate) and all incidental costs
and expenses in connection with the performance of any such act by Landlord
(together with interest at the Default Interest Rate), shall be deemed to be
additional rent under this Lease and shall be payable to Landlord within thirty
(30) days of written demand therefor. 
Landlord may exercise the foregoing rights without waiving any other of
its rights or releasing Tenant from any of its obligations under this Lease.

10.10                 ESTOPPEL CERTIFICATE.

Tenant agrees, from time
to time, upon not less than ten (10) days’ prior written request by Landlord,
to execute, acknowledge and deliver to Landlord a statement in writing in the
form attached hereto as Exhibit E, or in such other reasonable form as may
be requested by Landlord, certifying that this Lease is unmodified and in full
force and effect; that Tenant has no defenses, offsets or counterclaims against
its obligations to pay the Annual Base Rent and additional rent and to perform
its other covenants under this Lease; that there are no uncured defaults of
Landlord or Tenant under this Lease (or, if there have been modifications, that
this Lease is in full force and effect as modified and stating the
modifications, and, if there are any defenses, offsets, counterclaims, or
defaults, setting them forth in reasonable detail);  the dates to which the Annual Base Rent,
additional rent and other charges have been paid; and any other information
reasonably requested by Landlord.  Any
such statement delivered pursuant to this Section 10.10 shall be in a form
reasonably acceptable to and may be relied upon by Landlord, or any prospective
purchaser, mortgagee or ground lessor of premises which include the Premises or
any portion thereof or any prospective assignee of any such mortgagee or ground
lessor.  Landlord agrees, from time to
time, upon not less than ten (10) days’ prior written request by Tenant to
execute, acknowledge and deliver to Tenant a similar statement.

 40
 

 

 

10.11                 ACTS OF GOD.

In any case where either
party is required to do any act, other than the payment of money, delays caused
by or resulting from Acts of God, war, civil commotion, fire, flood or other
casualty, labor difficulties, shortages of labor, materials or equipment,
government regulations, unusually severe weather, or other causes beyond
Landlord’s reasonable control (“Force Majeure Events”) shall not be counted in
determining the time during which work shall be completed, whether such time be
designated by a fixed date, a fixed time or a “reasonable time”, and such time
shall be deemed to be extended by the period of such delay.

10.12                 BROKERAGE.

Tenant and Landlord each
represents and warrants to the other that it dealt with no brokers in
connection with this transaction other than the Broker, as designated in
Section 1.1, and agrees to defend, with counsel approved by the other,
indemnify and save the other harmless from and against any and all cost,
expense or liability in the event such representation in false or alleged to be
false.  Landlord shall be responsible for
paying Brokers a commission for this Lease on the terms and conditions provided
in separate written instruments to which each Broker is a party.

10.13                 SUBMISSION NOT AN OFFER.

The submission of a draft
of this Lease or a summary of some or all of its provisions, or the acceptance
of a letter of intent to lease, does not constitute an offer to lease or demise
the Premises or bind the Landlord and Tenant, it being understood and agreed
that neither Landlord nor Tenant shall be legally bound with respect to the
leasing of the Premises unless and until this Lease in form satisfactory to
Landlord and Tenant, each in its sole discretion, has been executed by both
Landlord and Tenant and a fully executed copy has been delivered to each of
them.

10.14                 APPLICABLE LAW AND CONSTRUCTION.

This Lease shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.  If any term, covenant,
condition or provision of this Lease or the application thereof to any person
or circumstances shall be declared invalid or unenforceable by the final ruling
of a court of competent jurisdiction having final review, the remaining terms,
covenants, conditions and provisions of this Lease and their application to
other persons or circumstances shall not be affected thereby and shall continue
to be enforced and recognized as valid agreements of the parties, and in the
place of such invalid or unenforceable provision, there shall be substituted a
like, but valid and enforceable provision which comports to the findings of the
aforesaid court and most nearly accomplishes the original intention of the
parties.

There are no oral or
written agreements between Landlord and Tenant affecting this Lease.  Landlord has made no representation or
warranty regarding the Building, the Premises, the Lot or the subject matter of
this Lease.  This Lease may be amended,
and the provisions hereof may be waived or modified, only by instruments in
writing executed by Landlord and Tenant.

The titles of the several
Articles and Sections contained herein are for convenience only and shall not
be considered in construing this Lease.

 41
 

 

 

Unless repugnant to the
context, the words “Landlord” and “Tenant” appearing in this Lease shall be
construed to mean those named above and their respective heirs, executors,
administrators, successors and assigns, and those claiming through or under
them respectively.  If there be more than
one tenant, the obligations imposed by this Lease upon Tenant shall be joint
and several.

10.15                 AUTHORITY OF TENANT AND LANDLORD.

Tenant represents and
warrants to Landlord (which representations and warranties shall survive the
delivery of this Lease) that:  (a) Tenant
(i) is duly organized, validly existing and in good standing under the
laws of its state of incorporation or creation, (ii) has the corporate or
other power and authority to carry on businesses now being conducted and is
qualified to do business in every jurisdiction where such qualification is
necessary, and (iii) has the corporate or other power to execute and
deliver and perform its obligations under this Lease, and (b) the
execution, delivery and performance by Tenant of its obligations under this
Lease have been duly authorized by all requisite corporate or other action and
will not violate any provision of law, any order of any court or other agency of
government, the corporate charter or by-laws or other governing documents
of the Tenant or any indenture, agreement or other instrument to which it is a
party or by which it is bound.

Landlord represents and warrants to Tenant that it has
full right, power and authority to enter into this Lease without the consent or
approval of any other entity or person and makes these representations knowing
that Tenant will rely thereon.  The
execution, delivery and performance of this Lease by Landlord does not conflict
with the rights of any third parties under any written agreement which is
binding upon Landlord.  The signatory on
behalf of Landlord further represents and warrants that he has full right,
power and authority to act for and on behalf of Landlord in entering into this
Lease.

10.16                 PRIOR NOTICE TO TENANT OF SALE OF
PROPERTY.

Landlord agrees that it
shall not enter into a binding agreement to sell or assign its interest in the
Property (except in connection with any financing or to an entity in which it
or any of its members, partners, beneficiaries, shareholders or owners have a
direct or indirect interest, or to any affiliate of it or any of the foregoing)
without first giving Tenant prior written notice of its intention to do so.  This agreement shall not be construed to
obligate Landlord to give to Tenant any right of first refusal, right of first
offer or similar right, to provide to Tenant any information regarding any
sale, or to obligate Landlord to consider, negotiate or accept any offer to
purchase the Property made by Tenant. 
This Section shall not be binding upon the holder of any Superior
Interest or anyone claiming by, through or under such holder.

10.17                 LANDLORD’S FEES.

Whenever Tenant requests
Landlord to take any action or give any consent required or permitted under
this Lease, Tenant will reimburse Landlord for Landlord’s reasonable out of
pocket costs incurred in reviewing the proposed action or consent, including
without limitation reasonable attorneys’, engineers’ or architects’ fees, upon
demand.  Tenant will be obligated to make
such reimbursement without regard to whether Landlord consents to any such
proposed action.

 42
 

 

 

10.18                 WAIVER OF SUBROGATION.

Any property insurance carried by either party with
respect to the Premises, the Building, or property therein or occurrences
thereon shall include a clause or endorsement denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by
the insured prior to occurrence of injury or loss.  Each party, notwithstanding any provisions of
this Lease to the contrary, hereby waives any rights of recovery against the
other for injury or loss due to hazards covered by such insurance to the extent
of the indemnification received thereunder.

10.19                 WAIVER OF JURY TRIAL.

LANDLORD AND TENANT AGREE THAT, TO THE EXTENT
PERMITTED BY LAW AND BY APPLICABLE POLICIES OF INSURANCE, EACH SHALL, AND
HEREBY DOES, WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE.

10.20                 SECURITY DEPOSIT.

Tenant shall deliver to Landlord,  concurrent with Tenant’s execution of this
Lease, cash in the amount of the Security Deposit Amount (the “Security Deposit”),
which Landlord shall hold as security for the faithful performance by Tenant of
all the terms, covenants, and conditions of this Lease to be kept and performed
by Tenant during the Term.  If Tenant
defaults with respect to any provisions of this Lease, including, but not
limited to, the provisions relating to the payment of rent,  Landlord may, but shall not be required to,
draw upon all or any portion of the Security Deposit for payment of any rent or
any other sum in default, or for the payment of any amount that Landlord may spend
or may become obligated to spend by reason of Tenant’s default; or to
compensate Landlord for any other loss, cost or damage that Landlord may suffer
by reason of Tenant’s default.  The use,
application or retention of the Security Deposit, or any portion thereof, by
Landlord shall not prevent Landlord from exercising any other right or remedy
provided by this Lease or by law.  The
parties agree that Landlord shall not first be required to proceed against the
Security Deposit and the Security Deposit shall not operate as a limitation on
any recovery to which Landlord may otherwise be entitled.  If any portion of the Security Deposit is
drawn upon, Tenant shall, within five (5) business days after written demand therefor,
reinstate the Security Deposit to the amount then required under this Lease,
and Tenant’s failure to do so shall be an Event of Default under this
Lease.  The Security Deposit, or any
balance thereof remaining after cure of any default, shall be returned to
Tenant within forty-five (45) days following the later of the expiration of the
Term or the vacating of the Premises by Tenant.

Upon any conveyance by Landlord of its interest under
this Lease, the Security Deposit shall be delivered by Landlord to Landlord’s
grantee or transferee.  Upon any such
delivery, Tenant hereby releases Landlord herein named of and from any and all
liability with respect to the Security Deposit, its application and return, and
Tenant agrees to look solely to such grantee or transferee with respect
thereto.  This provision shall also apply
to subsequent grantees and transferees.

 43
 

 

 

Provided that Tenant is not then in default beyond
applicable notice and cure periods, if any, the Security Deposit Amount shall
be reduced to $68,750 on the third anniversary of the Term Commencement Date .

10.21                 USE OF ROOF.

Tenant shall have the right to use the roof of the
Building and building structure required by Tenant from time to time for
installation and use of equipment exclusively in connection with its operations
in the Premises, including, without limitation, HVAC equipment, microwave dish
or other communications radio antenna and associated equipment (“Roof Equipment”).  Tenant shall have no obligation to pay Rent
for such right, but Tenant shall, at its sole cost and expense, maintain any
Roof Equipment in good condition and repair, and comply with the terms and
conditions set forth in this Lease with respect to the installation of the Roof
Equipment (including Article III), and the use of the roof and building
structure.  Prior to the installation of
any Roof  Equipment, Tenant shall notify
Landlord of Tenant’s plans with respect to the Roof Equipment along with plans
and specifications showing the size, location, height, weight and function for
the Roof Equipment, together with copies of any required licenses and permits
required from applicable governmental authorities therefore, and if applicable
shall comply with the applicable provisions of Article III.  Any roof penetrations shall be subject to the
approval of Landlord in its reasonable discretion.  At the expiration or termination of this
Lease, Tenant shall remove all Roof Equipment and restore the roof and building
structure to the condition it was in prior to the installation of the Roof
Equipment, unless Landlord and Tenant otherwise agree.

 44
 

 

 

EXECUTED as a sealed instrument in two or more
counterparts on the day and year first above written.

	
  

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FARLEY WHITE
  WIGGINS, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger W. Altreuter

  	
   

  
	
   

  	
   

  	
  Name: Roger W.
  Altreuter

  	
   

  
	
   

  	
   

  	
  Title: Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ANIKA
  THERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles H.
  Sherwood

  	
   

  
	
   

  	
   

  	
  Name: Charles H.
  Sherwood

  	
   

  
	
   

  	
   

  	
  Title: CEO

  	
   

  
	
   

  	
   

  	
  Hereunto duly authorized

  	
   

  

 

 45

 

EXHIBIT A

Description of Lot

LEGAL DESCRIPTION OF THE
LOT

Two certain contiguous parcels of land situated on the
westerly side of Wiggins Avenue in the Town of Bedford, County of Middlesex,
Commonwealth of Massachusetts, shown as Lots A.1 and A.2 on a plan entitled “Plan
of Land in Bedford, Mass.”  (Middlesex
County) for Griffith Realty Corp. dated March 28, 1978, drawn by Joseph W.
Moore Co., Inc., Land Surveyors, Civil Engineers, 16 Railroad Avenue, Bedford,
Massachusetts, recorded with the Middlesex South Registry of Deeds as Plan No.
737 of 1979 in Book 13735, Page 32, said parcels being more particularly
together described as follows:

	
  BEGINNING

  	
   

  	
  at a point on the northeasterly corner of said
  parcel, said point being on the westerly side-line of Wiggins Avenue at land
  shown on said plan as now or formerly of Little;

  
	
  THENCE

  	
   

  	
  running along the
  westerly sideline of Wiggins Avenue S 09° 39’ 39” E Eight Hundred Forty-Five
  and 73/100 (845.73) feet to a point;

  
	
  THENCE

  	
   

  	
  turning and running S
  66° 28’ 52” W Six Hundred Ninety-Six and 81/100 (696.81) feet to a point;

  
	
  THENCE

  	
   

  	
  turning and running N
  25° 08’ 08” W Four Hundred Sixty and 88/100 (460.88) feet to a point;

  
	
  THENCE

  	
   

  	
  turning and running N
  44° 55’ 27” Nine Hundred Eight-One and 01/100 (981.01) feet to the point of
  beginning.

  

 

EXCEPTING AND EXCLUDING
the land as set forth in Order of Taking by the Town of Bedford dated August 7,
1967 and recorded with said Deeds in Book 11370, Page 284.

 46
 

 

EXHIBIT B

Plans and Specifications Describing Landlord’s Work

 47
 

 

EXHIBIT C

Plans and Specifications

Describing Landscaping Improvements to be Done by
Landlord

 48
 

 

EXHIBIT D

Rules and Regulations

A.  The
entrances, lobbies, passages, corridors, elevators, halls, courts, sidewalks,
vestibules, and stairways shall not be encumbered or obstructed by Tenant,
Tenant’s agents, servants, employees, licensees or visitors or used by them for
any purposes other than ingress or egress to and from the Premises.

B.  Tenant,
or the employees, agents, servants, visitors or licensees of Tenant shall not
at any time place, leave or discard any rubbish, paper, articles, or objects of
any kind whatsoever outside the doors of the Premises or in the corridors or
passageways of the Building.

C.  Tenant
shall not use the Premises: (a) for lodging or for any illegal purposes;
(b) to engage in the manufacture or sale of spirituous, fermented, intoxicating
or alcoholic beverages on the Premises; (c) to engage in the manufacture or
sale of, or permit the use of, any illegal drugs on the Premises; or
(d) for any retail use.

D.  No
awning or other projections shall be attached to the outside walls or windows.

E.  Door
keys for doors in the Premises will be furnished at the Commencement of the
Lease by Landlord.

F.  Tenant
assumes full responsibility for protecting its space from theft, robbery and
pilferage, which includes keeping doors locked and other means of entry to the
Premises closed and secured.

G.  The
water and wash closets and other plumbing fixtures shall not be used for any
purposes other than those for which they were constructed, and no sweepings,
rubbish, rags, or other substances shall be thrown therein.

 49

 

EXHIBIT E

Tenant Estoppel Certificate

Ladies and Gentlemen:

This estoppel certificate
and agreement (“Agreement”) is furnished by                           
(“Tenant”), a                       
organized under the laws of                     ,
with a principal place of business of                                     .  Tenant understands that                                              
(“Landlord”) and                                are
relying upon Tenant’s statements and agreements herein in connection with                                                                   .

The Tenant hereby
represents and certifies to, and agrees with, Landlord and                                
as set forth below:

	
  1.

  	
   

  	
  A true and complete copy of the Lease between
  Landlord and Tenant of premises at                                             including,
  if any, all amendments and modifications, is attached hereto as Exhibit
  A (the “Lease”). There are no side letters or other arrangements,
  promises, understanding or commitments between Landlord and Tenant relating
  to the Lease or the Premises (as defined in the Lease). Tenant has not given
  Landlord any notice of termination under the Lease.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The Lease has not been assigned, amended or modified
  in any way, nor have the Premises been sublet in whole or in part, except
  for the following [if no exceptions are stated, there are NONE]:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  The Lease is presently in full force and effect
  according to its terms and is the valid and binding obligation of Tenant. The
  Lease Term commenced on                            .
  The Lease expires on                        .

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Neither Tenant nor Landlord is in default under the
  Lease nor does any state of facts exist which with the passage of time or the
  giving of notice, or both, would constitute a default under the Lease, except
  for the following [if no exceptions are stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
					

 

 50
 

 

 

	
  

  	
   

  	
   

  
	
  5.

  	
   

  	
  All conditions and obligations under the Lease to be
  satisfied or performed by Landlord as of the date hereof (including, without
  limitation, all work, if any, to be performed by Landlord in the Premises or
  the Property) have been satisfied and performed to the satisfaction of
  Tenant, and all contributions, if any, required to be paid by Landlord under
  the Lease to date for improvements to the Premises have been paid except
  as hereafter stated [if no exceptions are stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Tenant is in possession of the Premises and is fully
  obligated to pay and is paying the rent and other charges due under the Lease
  and is fully obligated to perform and is performing all of the other
  obligations of Tenant under the Lease, except as hereafter stated [if no
  exceptions are stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  The Lease does not provide for any payments
  (including, without limitation, rent credits) by Landlord to Tenant which are
  presently due and payable, or which are due and payable in the future, except
  as hereafter stated [if no such payments or credits are stated, there are
  NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  There are no existing defenses, offsets,
  counterclaims or credits which Tenant has against the enforcement of the
  Lease by Landlord or the obligation of Tenant to pay Annual Base Rent and
  additional rent, except as hereafter stated [if no exceptions are
  stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  The Annual Base Rent currently being paid under the
  Lease is $                  per month ($              per annum). All Annual Base Rent, additional rent and other changes by Tenant
  under the Lease have been paid through and including                      .
  Except as hereafter stated, no rent has been paid more than one (1)
  month in advance of the due date and no security or other advance payments
  have been deposited with the Landlord [if no advance rents or security
  deposits are stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
								

 

 51
 

 

 

	
  

  	
   

  	
   

  
	
  10.

  	
   

  	
  Tenant has no options, rights of first offer or
  rights of first refusal with respect to extension of the Term, expansion of
  the Premises, purchase of the Building or otherwise, except as hereinafter
  stated [if no exceptions are stated, there are NONE]: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  .

  
	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  There are no actions, whether voluntary or otherwise,
  pending or threatened against the Tenant pursuant to the bankruptcy or
  insolvency laws of the United States or any similar state laws. Tenant does
  not currently intend to and is not currently contemplating filing for
  bankruptcy or similar protection from creditors.

  
	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  The amount of the Security Deposit currently held
  under the Lease is                        .

  
	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Tenant has no option or right to purchase the
  property of which the Premises are a part, or any portion thereof.

  
	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  The person signing this certificate on behalf of
  Tenant is duly authorized and fully qualified to execute this instrument on
  behalf of Tenant thereby legally binding Tenant.

  

 

EXECUTED as an instrument
under seal as of                            ,
        .

	
  

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Its:

  
	
   

  	
   

  	
  Hereunto Duly Authorized

  
	
   

  	
   

  	
  Date Executed by Tenant:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary/Clerk

  	
   

  	
   

  
				

 

 52

 

EXHIBIT F

FORM OF MEMORANDUM OF
TERM AND COMMENCEMENT DATE

THIS MEMORANDUM OF TERM
AND COMMENCEMENT DATE (the “Memorandum”) is made and entered into this     
day of                     ,
200  , by and between Farley Wiggins, LLC (“Landlord”), and Anika Therapeutics,
Inc. (“Tenant”) with regard to that certain Lease dated                     
(the “Lease”) relating to property located at 33 Wiggins Avenue, Bedford,
Massachusetts.

Landlord and Tenant agree
as follows:

1.  Definitions. 
Unless otherwise defined herein, capitalized terms used herein shall
have the same meanings as set forth for those terms in the Lease.

2.  Rental Commencement Date.  It is agreed that the Term Commencement date
for all purposes under the Lease is                     ,
and that Annual Base Rent commenced to accrue on that date in the amount of $                    .  The monthly Annual Base Rent is                     .

3.  Termination Date.  It is agreed that the scheduled expiration
date under the Lease is                     ,
subject to Tenant’s extension options set forth in the Lease.

4.  Full Force and Effect.  The parties agree that the Lease is and
remains in full force and effect.

IN WITNESS WHEREOF, the
parties hereto have executed this Memorandum as of the day and year first
appearing above.

	
  Landlord

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FARLEY WHITE WIGGINS, LLC

  	
   

  	
  ANIKA THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  	
  Name

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
  Hereunto duly authorized

  	
   

  	
   

  	
  Hereunto duly authorized

  

 

 53
 

 

EXHIBIT G

FORMS OF SNDA

 54

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