Document:

exv10w27

EXHIBIT 10.27

EMPLOYMENT AGREEMENT

     THIS AGREEMENT, dated August 7, 2007, is between CARRIAGE SERVICES, INC., a Delaware
corporation (the “Company”), and J. Bradley Green, a resident of Harris County, Texas (the
“Employee”).

     1. Employment Term. The Company hereby continues the employment of the Employee for a
term commencing as of the date first above written and, subject to earlier termination or extension
as provided in Section 7 hereof, continuing until August 6, 2010 (such term being herein referred
to as the “term of this Agreement”). The term of this Agreement shall automatically be renewed on
an annual basis thereafter, unless terminated by either party upon sixty (60) days’ written notice
prior to the end of the term then in effect. The Employee agrees to accept such employment and to
perform the services specified herein, all upon the terms and conditions hereinafter stated.

     2. Duties. The Employee shall serve the Company and shall report to, and be subject
to the general direction and control of the Chief Executive Officer of the Company. The Employee
shall faithfully, diligently, competently, and to the best of Employee’s ability, perform the
management and administrative duties of Vice President, General Counsel, and Secretary. The
Employee shall also serve as Vice President, General Counsel, and Secretary of any subsidiary of
the Company as requested by the Company, and the Employee shall perform such other duties as are
from time to time assigned to him by the Chief Executive Officer as are not inconsistent with the
provisions hereof. The Employee represents and warrants to the Company that Employee is not
subject to any obligation to any third party that would restrict or interfere with Employee’s
ability to perform hereunder.

     3. Extent of Service. The Employee shall devote his full business time and attention
to the business of the Company, and, except as may be specifically permitted by the Company, shall
not be engaged in any other business activity during the term of this Agreement. The foregoing
shall not be construed as preventing the Employee (i) from making passive investments in other
businesses or enterprises, and (ii) from engaging in other civic, charitable and business
activities, provided, however, that such investments and activities will not require services on
the part of the Employee which would in any way impair the performance of his duties under this
Agreement.

     4. Compensation. During the term of this Agreement, the Company shall pay the
Employee an annual salary of not less than $230,000.00 per full calendar year of service completed
(“Base Salary”), appropriately prorated for partial months at the commencement and end of the term
of this Agreement. The Employee’s salary and benefits will be reviewed annually, and any increase
therein shall remain in the sole discretion of the Company, acting through the Compensation
Committee of its Board of Directors if required. The salary set forth herein shall not be subject
to reduction and shall be payable in bi-weekly installments in accordance with the payroll
policies of the Company in effect from time to time during the term of this Agreement. The
Company shall have the right to deduct from any payment of all

 

 

compensation to the Employee hereunder (x) any federal, state or local taxes required by law to be
withheld with respect to such payments, and (y) any other amounts specifically authorized to be
withheld or deducted by the Employee.

     5. Benefits. In addition to the Base Salary, the Employee shall be entitled to participate in the following benefits during the term of this Agreement:

     (i) Consideration for an annual performance-based bonus within the sole discretion of
the Company, as may be recommended by the Chief Executive Officer and approved by the
Compensation Committee of the Company’s Board of Directors. A target bonus will be set by
the Company, and approved by the Compensation Committee of the Company’s Board of
Directors, on an annual basis.

     (ii) Eligibility for consideration of Awards of Restricted Stock or other
incentive-based compensation under the terms of the Company’s 2006 Long Term Incentive Plan
or one or more of the Company’s other incentive plans, as the Chief Executive Officer in his
sole discretion may determine and subject to approval of the Company’s Compensation
Committee.

     (iii) Four weeks of paid vacation in each calendar year, subject to the Company’s
personnel policies respecting such matters.

     (iv) Participation in the Company’s group health and hospitalization program, and
inclusion in such other employee benefits, as are available generally to executive-level
employees of the Company.

     (v) Reimbursement for travel, lodging and other out-of-pocket expenses reasonably
incurred by Employee in the exercise of Employee’s duties under this Agreement which are
approved by the Company in advance and are duly substantiated in accordance with the
Company’s policies as to reimbursement. In order to assure compliance with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), such reimbursements shall be
made as soon as practicable, but in no event later than the last day of the calendar year
following the calendar year in which the expense was incurred.

     6. Certain Additional Matters. The Employee agrees that at all times during the term
of this Agreement and for a period of two years following any cessation of employment with
the Company:

     (a) The Employee will not knowingly or intentionally do or say any act or thing which
will or may impair, damage or destroy the goodwill and esteem for the Company held by its
suppliers, employees, patrons, customers and others who may at any time have or have had
business relations with the Company.

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     (b) The Employee will not knowingly or intentionally do any act or thing detrimental to the
Company or its business.

     Nothing herein shall be construed to prevent the Employee from complying with any requirements
of law or legal process or taking such actions as the Company may consent to in writing.

     7. Termination.

     (a) Death. If the Employee dies during the term of this Agreement and while in the
employ of the Company, this Agreement shall automatically terminate and the Company shall have no
further obligation to the Employee or his estate except that the Company shall pay the Employee’s
estate (i) that portion of the Employee’s Base Salary accrued through the date on which the
Employee’s death occurred, (ii) a pro rata amount of the annual bonus described in Section 5(i)
above, based on the number of days the Employee was employed in the year in comparison to 365, and
(iii) all benefits payable under the governing provisions of any benefit plan or program of the
Company. Such payment of Base Salary and bonus to the Employee’s estate shall be made in the same
manner and at the same times as they would have been paid to the Employee had he not died.

     (b) Disability. If during the term of this Agreement, the Employee shall be prevented
from performing his duties hereunder by reason of disability, and such disability shall continue
for a period of six months, then the Company may terminate this Agreement at any time after the
expiration of such six-month period. For purposes of this Agreement, the Employee shall be deemed
to have become disabled when the Company, upon the advice of a qualified physician, shall have
determined that the Employee is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months. In the event of a
termination pursuant to this paragraph (b), the Company shall be relieved of all its obligations
under this Agreement, except that the Company shall pay to the Employee (or his estate in the
event of his subsequent death), (i) the Employee’s Base Salary through the date on which such
termination shall have occurred, reduced during such period by the amount of any benefits received
under any disability policy maintained by the Company, (ii) a pro rata amount of the annual bonus
described in Section 5(i) above, based on the number of days the Employee was employed in the year
in comparison to 365, and (iii) all benefits payable under the governing provisions of any benefit
plan or program of the Company. All such payments to the Employee or his estate shall be made in
the same manner and at the same times as they would have been paid to the Employee had he not
become disabled. No such termination pursuant to this paragraph (b) will relieve the Employee of
his obligations under Sections 6, 8 and 9 hereunder.

     (c) Discharge for Cause. Prior to the end of the term of this Agreement, the Company
may discharge the Employee for Cause and terminate this Agreement. In such

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case this Agreement shall automatically terminate and the Company shall have no further obligation
to the Employee or his estate other than to pay to the Employee (or his estate in the event of his
subsequent death) that portion of the Employee’s salary accrued through the date of termination.

     For purposes of this Agreement, the Company shall have “Cause” to discharge the Employee or
terminate the Employee’s employment hereunder upon (i) the Employee’s conviction of any felony or
any other crime involving moral turpitude, (ii) the Employee’s repeated failure or refusal to
perform all of his duties, obligations and agreements herein contained or imposed by law, including
his fiduciary duties, to the reasonable satisfaction of the Company’s Board of Directors, (iii) the
Employee’s commission of acts amounting to gross negligence or willful misconduct to the detriment
of the Company, or (iv) the Employee’s material breach of any provision of this Agreement or
uniformly applied provisions of the Company’s employee handbook or other personnel policies,
including without limitation, its Code of Business Conduct and Ethics. Such determination of
“Cause” shall be made by the Company’s Board of Directors, and in the event of circumstances
described in (ii) or (iv), the Board shall give written notice to the Employee specifying such
circumstances and providing a period of 30 days in which the Employee shall be allowed to cure such
circumstances.

     Any such termination by virtue of this paragraph (c) shall not prejudice any remedy that the
Company may have at law, in equity, or under this Agreement, for breach hereof by Employee. No
such termination pursuant to this paragraph (c) will relieve the Employee of his obligations under
Sections 6, 8 and 9 hereunder.

     (d) Discharge Without Cause. Prior to the end of the term of this Agreement, the
Company may discharge the Employee without Cause (as defined in paragraph (c) above) and terminate
this Agreement. In such case this Agreement shall automatically terminate and the Company shall
have no further obligation to the Employee or his estate, except that the Company shall continue
to pay to the Employee (or his estate in the event of his subsequent death), (i) the Employee’s
Base Salary for a period of 18 months following the date of discharge, (ii) 50% of the annual
target bonus described in Section 5(i) above for the year of termination, and (iii) all benefits
payable under the governing provisions of any benefit plan or program of the Company. In addition,
if following the date of such discharge, the Employee becomes eligible to elect continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) and properly elects
such coverage, the Company shall reimburse the Employee or pay on the Employee’s behalf 100% of
applicable medical continuation premiums for the benefit of the Employee (and his covered
dependents as of the date of his termination, if any) under the Employee’s then-current plan
election, with such coverage to be provided under the closest comparable plan as offered by the
Company from time to time, for so long during the 18-month period following termination as he
remains eligible for and elects COBRA coverage, except as otherwise provided in paragraph (e)
below. All such payments to the Employee or his estate shall be made in the same manner and at the
same times as they would have been paid to the Employee had he not been discharged. No such
termination

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pursuant to this paragraph (d) will relieve the Employee of his obligations under Sections
6, 8 and 9 hereunder.

     (e) Corporate Change. If following a Corporate Change (as defined in the
Company’s 2006 Long-Term Incentive Plan), the Employee voluntarily terminates his employment
for Good Reason (as defined below) or the Employee is discharged without Cause, in either
case within 24 months following the Corporate Change, then this Agreement shall
automatically terminate and the Company shall have no further obligation to the Employee or
his estate, except that the Company shall pay to the Employee (or his estate in the event of
his subsequent death), (i) a lump sum payment payable following such termination equal to
one and one-half times the Employee’s Base Salary, (ii) 50% of the annual target bonus
described in Section 5(i) above for the year of termination and (iii) all benefits payable
under the governing provisions of any benefit plan or program of the Company. In addition,
if following the date of such resignation or discharge, the Employee becomes eligible to
elect continuation coverage under COBRA and properly elects such coverage, the Company shall
reimburse the Employee or pay on the Employee’s behalf 100% of applicable medical
continuation premiums for the benefit of the Employee (and his covered dependents as of the
date of his termination, if any) under the Employee’s then-current plan election, with such
coverage to be provided under the closest comparable plan as offered by the Company from
time to time, for so long during the 18-month period following the date of resignation or
discharge as he remains eligible for and elects COBRA coverage. No such termination pursuant
to this paragraph (e) will relieve the Employee of his obligations under Sections 6 and 9
hereunder.

          “Good Reason” means any of the following actions if taken without the Employee’s prior
written consent: (A) any material breach by the Company to comply with its obligations
under the terms of the Agreement; (B) any material diminution in the Employee’s
responsibilities, authority or duties, (C) a material diminution in the Employee’s Base
Salary; or (D) any material change in the permanent location at which the Employee performs
services for the Company. The Employee shall give written notice to the Board specifying
such actions within 90 days of the existence of such action and providing a period of 30
days in which the Company shall be allowed to cure such circumstances.

     8. Restrictive Covenants. The Company has provided and shall provide in the future to
the Employee, confidential and proprietary information as that term is defined in Section 9 of
this Agreement (“Confidential Information”). The Employee acknowledges that in the course of his
employment with the Company as a member of the Company’s senior executive and management team, he
shall be given possession of and access to Confidential Information of the Company and its
affiliates, and will develop through such employment business systems, methods of doing business,
and contacts within the death care industry, all of which will help to identify him with the
business and goodwill of the Company. Consequently, it is important that the Company protect its
interests in regard to such matters from unfair competition. In consideration of the Confidential
Information that has been received and that the Company covenants to provide the Employee in
the future, the sufficiency of which is hereby

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acknowledged by the Employee, the Employee agrees to enter into the covenants contained in this
Agreement. The parties therefore agree that for so long as the Employee shall remain employed by
the Company and, if the employment of the Employee ceases for any reason (including voluntary
resignation), then for a period of two (2) years thereafter, the Employee shall not, directly or
indirectly:

     (i) alone or for his own account, or as a officer, director, shareholder, partner,
member, trustee, employee, consultant, advisor, agent or any other capacity of any
corporation, partnership, joint venture, trust, or other business organization or entity,
encourage, support, finance, be engaged in, interested in, or concerned with (x) any of the
companies and entities described on Schedule I hereto, except to the extent that any
activities in connection therewith are confined exclusively outside the continental United
States, or (y) any other business within the death care industry having an office or being
conducted within a radius of fifty (50) miles of any funeral home, cemetery or other death
care business owned or operated by the Company or any of its subsidiaries at the time of
such termination;

     (ii) induce or assist anyone in inducing in any way any employee of the Company or any
of its subsidiaries to resign or sever his or her employment or to breach an employment
contract with the Company or any such subsidiary; or

     (iii) own, manage, advise, encourage, support, finance, operate, join, control, or
participate in the ownership, management, operation, or control of or be connected in any
manner with any business which is or may be in the funeral, mortuary, crematory, cemetery
or burial insurance business or in any business related thereto (x) as part of any of the
companies or entities listed on Schedule I, or (y) otherwise within a radius of fifty (50)
miles of any funeral home, cemetery or other death care business owned or operated by the
Company or any of its subsidiaries at the time of such termination.

     Notwithstanding the foregoing, the above covenants shall not prohibit the passive ownership
of not more than one percent (1%) of the outstanding voting securities of any entity within the
death care industry. The foregoing covenants shall not be held invalid or unenforceable because of
the scope of the territory or actions subject hereto or restricted hereby, or the period of time
within which such covenants respectively are operative, but the maximum territory, the action
subject to such covenants and the period of time they are enforceable are subject to any
determination by a final judgment of any court which has jurisdiction over the parties and subject
matter.

     9. Confidential Information; Copyrightable Material. The Employee acknowledges that
in the course of his employment by the Company he shall receive and access certain trade secrets,
management methods, financial and accounting data (including, but not limited to, reports,
studies, analyses, spreadsheets and other materials and information), operating techniques,
prospective acquisitions, employee lists, training manuals and procedures, personnel evaluation
procedures, and other confidential information and knowledge concerning the business of the
Company and its affiliates (hereinafter collectively referred to as “Confidential

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Information”) which the Company desires to protect. The Employee understands that the Confidential
Information is confidential and he agrees not to reveal the Confidential Information to anyone
outside the Company so long as the confidential or secret nature of the Confidential Information
shall continue, except as required by law or legal process. The Employee further agrees that he
will at no time use the Confidential Information in competing with the Company. Upon termination of
this Agreement, the Employee shall surrender to the Company all papers, documents, writings and
other property produced by him or coming into his possession by or through his employment or
relating to the Confidential Information and the Employee agrees that all such materials will at
all times remain the property of the Company. The Employee acknowledges that all materials and
other copyrightable works and subject matter (regardless of whether or not constituting
“Confidential Information”) produced by the Employee within the scope of his employment (regardless
of whether or not denoted as copyrighted material) shall be deemed “works made for hire” and shall
be owned by and proprietary to the Company and may not be used or reproduced in whole or in part
without the Company’s prior written consent.

     10. Remedies. The parties recognize that the services to be rendered under this
Agreement by the Employee are special, unique, and of extraordinary character, and that in the
event of the breach by the Employee of the covenants contained in Section 8 or Section 9 hereof,
the Company may suffer irreparable harm as a result. The parties therefore agree that, in the
event of any breach or threatened breach of any of such covenants, the Company shall be entitled
to specific performance or injunctive relief, or both, and may, in addition to and not in lieu of
any claim or proceeding for damages, institute and prosecute proceedings in any court of competent
jurisdiction to enforce through injunctive relief such covenants. In addition, the Company may, if
it so elects, suspend (if applicable) any payments due under this Agreement pending any such
breach and offset against any future payments the amount of the Company’s damages arising from any
such breach. The Employee agrees to waive and hereby waives any requirement for the Company to
secure any bond in connection with the obtaining of such injunction or other equitable relief.

     11. Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been delivered on the date personally
delivered or three business days after the date mailed, postage prepaid, by certified mail, return
receipt requested, or when sent by electronic means or facsimile and receipt is confirmed, if
addressed to the respective parties as follows:

	 	If to the Employee:	 	J. Bradley Green

3032 Del Monte Dr.

Houston, TX 77019
	 
	 	If to the Company:	 	Carriage Services, Inc.

3040 Post Oak Blvd, Suite 300

Houston, Texas 77056

Attn: Chief Executive Officer

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Either party hereto may designate a different address by providing written notice of such new
address to the other party hereto.

     12. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such provision or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     13. Assignment. This Agreement may not be assigned by the Employee. Neither the
Employee nor his estate shall have any right to commute, encumber or dispose of any right to
receive payments hereunder, it being agreed that such payments and the right thereto are
nonassignable and nontransferable.

     14. Binding Effect. Subject to the provisions of Section 13 of this Agreement, this
Agreement shall be binding upon and inure to the benefit of the parties hereto, the Employee’s
heirs and personal representatives, and the successors and assigns of the Company.

     15. Captions. The section and paragraph headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     16. Complete Agreement. This Agreement represents the entire agreement between the
parties concerning the subject hereof and supersedes all prior agreements and arrangements between
the parties concerning the subject thereof.

     17. Governing Law; Venue. A substantial portion of the Employee’s duties under this
Agreement shall be performed at the Company’s corporate headquarters in Houston, Texas, and this
Agreement has been substantially negotiated and is being executed and delivered in the State of
Texas. This Agreement shall be construed and enforced in accordance with and governed by the laws
of the State of Texas. Any suit, claim or proceeding arising under or in connection with this
Agreement or the employment relationship evidenced hereby must be brought, if at all, in a state
district court in Harris County, Texas or federal district court in the Southern District of
Texas, Houston Division. Each party submits to the jurisdiction of such courts and agrees not to
raise any objection to such jurisdiction.

     18. Survival. The provisions of Sections 6, 8 and 9 shall survive any termination of
this Agreement or the employment relationship of the Company and Employee; provided, however, if
such termination is the result of Corporate Change as provided in Section 7(e) hereof, Employee
shall not thereafter be bound by the provisions of Section 8 hereof.

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

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     20. Time of Payments. All amounts payable under Sections 7(d) and (e) of this
Agreement shall be paid within 10 days after the Employee’s execution without revocation of a
release in a form satisfactory to the Company and within the time period prescribed by the Company
(which may not be less than 21 days after the date of termination of employment). If the Employee
is a “specified employee,” as such term is defined in Section 409A of the Code and related
regulations and Treasury pronouncements (“Section 409A”) and determined as described below in this
Section 20, any payments payable as a result of the Employee’s termination (other than death) shall
not be payable before the earliest of (i) the date that is six months after the Employee’s
termination, (ii) the date of the Employee’s death, or (iii) the date that otherwise complies with
the requirements of Section 409A. This Section 20 shall be applied by accumulating all payments
that otherwise would have been paid within six months of the Employee’s termination and paying such
accumulated amounts at the earliest date which complies with the requirements of Section 409A. The
Employee shall be a “specified employee” for the twelve-month period beginning on April 1 of a year
if the Employee is a “key employee” as defined in Section 416(i) of the Code (without regard to
Section 416(i)(5)) as of December 31 of the preceding year or using such dates as designated by the
Company in accordance with Section 409A and in a manner that is consistent with respect to all of
the Company’s nonqualified deferred compensation plans. For purposes of determining the identity of
specified employees, the Company may establish procedures as it deems appropriate in accordance
with Section 409 A.

     21. Income, Excise or Other Tax Liability. The Company may withhold from any benefits
and payments made pursuant to this Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling and all other normal employee
deductions made with respect to the Company’s employees generally. Notwithstanding anything in
this Agreement to the contrary, in the event it shall be determined that any payment or
distribution by the Company to the Employee or for his benefit, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or
penalties with respect to such excise tax (such excise tax, together with any such interest or
penalties, are hereinafter collectively referred to as the “Excise Tax”), the Company shall pay to
the Employee an additional payment (a “Gross-up Payment” ) in an amount such that after payment by
the Employee of all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed on any Gross-up Payment, the Employee retains an amount
of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. All determinations
required to be made under this Section 21 shall be made by the Company’s accounting firm (the
“Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations both to the
Company and the Employee. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Absent manifest error, any determination by the Accounting Firm shall be binding upon
the Company and the Employee.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written.

	 	 	 	 	 
	 	CARRIAGE SERVICES, INC.

 	 
	 	By:  	/s/ Melvin C. Payne
 	 
	 	 	MELVIN C. PAYNE, Chief Executive Officer 	 
	 	 	 	 
	 
	 	 	 
	 	                                           /s/ J. Bradley Green
 	 
	 	J. Bradley Green 	 
	 	 	 

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SCHEDULE I

TO

EMPLOYMENT AGREEMENT

	1.	 	The following entities, together with all Affiliates thereof:

Service Corporation International

Alderwoods Group, Inc.

Stewart Enterprises, Inc. 

Keystone North America, Inc. 

Meridian Mortuary Group, Inc. 

StoneMor Partners LP

Saber Management LLC 

Thomas Pierce & Co. 

Legacy Funeral Holdings, LLC

Northstar Memorial Group, LLC

	 	 	For purposes of the foregoing, an “Affiliate” of an entity is a person that directly or
indirectly controls, is under the control of or is under common control with such entity.

	2.	 	Any new entity which may hereafter be established which acquires any combination of ten or
more funeral homes and/or cemeteries from any of the entities described in 1 above.
	 
	3.	 	Any funeral home, cemetery or other death care enterprise which is managed by any entity
described in 1 or 2 above.

-11-exv10w24b

Exhibit 10.24B

SUB-LEASE AGREEMENT

Made and Entered into on the 4th of December, 2008.

	 	 	 
	Between:

	 	BigBand Networks Ltd.

A Private Regd. Co. No. 512751074

(hereinafter: “the Lessee”);
	 
	 	 
	 

	 	The First Party
	 
	 	 
	And:

	 	Prime Sense Ltd.

A Private Regd. Co. No. 513684761

(hereinafter: (“the Sub-Lessee”);
	 
	 	 
	 

	 	The Second Party
	 
	 	 
	Whereas

	 	On 25/07/2007 a Lease Agreement was signed between U. Dori
Engineering Works Co., Ltd. (hereinafter: “U. Dori”) and the
Lessee (hereinafter: “the Original Lease Agreement”) for a period
starting on 01/02/2008 and ending on 31/01/2013 relating to a unit
in an area of approximately 6,580 m2 gross, plus store
rooms and parking places, in the building known as “Arazim House”
located at 28 Habarzel Street in Ramat Hachayal, Tel Aviv, and
known as Parcel 108 in Block 6639 (hereinafter: “the Leased
Premises”);
	 
	 	 
	 

	 	The Original Lease Agreement, including the Management Agreement
and the other appendices are attached hereto as Appendix A of this
Agreement and constitute an integral part hereof; and
	 
	Whereas

	 	U. Dori has assigned all its rights and obligations under the
Original Lease Agreement to Clal Insurance Co., Ltd., a Public
Registered Company No. 520024647 (hereinafter: “the Lessor”),
pursuant to a document of assignment of rights, a copy of which is
attached hereto

 

 

 2

	 	 	 
	 

	 	as Appendix B of this Agreement and constitutes an
integral part hereof; and
	 
	 	 
	Whereas

	 	The Lessor has provided its permission and consent to the Lessee
to lease out the Leased Premises and/or to give a right of use
and/or possession in a part/parts of the Leased Premises to the
Sub-Lessee, pursuant to the written consent, a copy of which is
attached hereto as Appendix C of this Agreement; and
	 
	 	 
	Whereas

	 	The Sub-Lessee is interested in the renting of the fourth floor in
the Leased Premises in an area of approximately 1,645
m2 gross and also 35 parking places included in the
Leased Premises as marked in the plans of the Sub-Leased Premises
attached hereto as Appendix D of this Agreement and constituting
an integral part hereof (hereinafter: “the Sub-Leased Premises”),
and the Lessee is interested in renting out the Sub-Leased
Premises to the Sub-Lessee as stipulated, all in accordance with
the terms and conditions detailed below in this Agreement; and
	 
	 	 
	Whereas

	 	The parties have agreed between them that the Sub-Lease which is
the subject matter of this Agreement will not be a lease protected
under the Law;

Therefore It Is Declared and Stipulated Between the Parties as Follows:

	1.	 	The preamble and the appendices attached to this Agreement constitute an integral part of the
body of the Agreement.
	 
	2.	 	The provisions of the Original Lease Agreement and all of its appendices, including the
Management Agreement, shall apply, in full, mutatis mutandis, with respect of the area of the
Sub-Leased Premises under this Agreement.

 

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	3.	 	The Original Lease Agreement: The Sub-Lessee undertakes that, save where otherwise
stated in this Agreement in all matters relating to the Sub-Leased Premises, the Sub-Lessee
shall be responsible for the fulfillment of all the obligations and undertakings imposed on
the Lessee under the Original Lease Agreement and all of its appendices, mutatis mutandis, and
that wherever the Original Lease Agreement refers to the Sub-Leased Premises and where the
word “Lessee” is mentioned, the Sub-Lessee must be referred to, and all being in accordance
with the context of such.
	 
	4.	 	The Purpose of the Sub-Lease: The Sub-Lessee undertakes to use the Sub-Leased
Premises only for the purpose of high tech industries. The Lessee declares that the Sub-Leased
Premises pursuant to its designation is appropriate for the purpose of the Sub-Lease.
	 
	5.	 	The Rent: The monthly rent under this Agreement: NIS Sixty-Four (64) per
m2, is linked to the change of the Consumer Price Index known on the date of
payment compared with the Basic Index which is the index for the month of August 2008
published on 15/09/08, plus VAT as required by law, plus NIS Four Hundred and Forty (440) for
each one of the 35 parking places, linked to the change of the Consumer Price Index known on
the date of payment compared with the Basic Index which is the index for the month of March
2007 published on 15/04/07, plus VAT as required by law, (the rent, including payment for the
parking places, linkage differential accruals to the index and VAT, shall hereinafter be
referred to as: “the Rent”). The Sub-Lessee will pay the Rent (including rent for the
Additional Lease Term and the Third Lease Term) in advance for every 3 months of lease plus
VAT as required by law, by the 5th of the first month, for such 3 months.
Notwithstanding the above said, it is clarified that for the month of December 2010 the Lessee
will not pay monthly rent, however it will bear the payment for the parking places.
	 
	6.	 	The Sub-Lessee shall have an option, by prior notice to the Lessee of 30 days, to rent up to
15 additional parking places which shall constitute an integral part of the Sub-Leased
Premises from the moment of delivery to the Sub-Lessee under identical conditions to the terms
and conditions of the Sub-Lease in this Agreement.

 

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	 	 	All payments for the Rent as defined below shall be paid into Account No. 307500/02
managed at the 804 branch of Bank Leumi in the name of the Lessee.
	 
	 	 	In the event that the Lessee wishes to vacate the Leased Premises, or any part thereof, and
the Sub — Lessee wishes to lease additional space within the Leased Premises, the Lessee
would reasonably assist the Sub — Lessee in a way of addressing the Lessor and raising the
option to enable the Sub Lessee to lease additional space in the Leased Premises directly
from the Lessor. Without derogating from the aforementioned, in the event that the Lessee
wishes to sub lease to third parties any further space, or parts thereof, in addition to the
Sub Leased Premises, the Lessee shall make efforts but shall not be committed to notify the
Sub — Lessee.
	 
	7.	 	The Lease Term: The Lease Term shall start on 25/12/2008 and up until 24/01/2013
(hereinafter: “the Lease Term”). Without derogating from the above, the Sub — Lessee shall
have the right to begin the Adaptation Works listed in section 15 prior to the Lease Period,
subject to Clal’s approval.
	 
	8.	 	Management Fees: The Sub-Lessee will pay the Facilone Co., Ltd. (“the Management
Company”) which provides management services for the building, management fees as stated in
the Management Contract which shall be signed between it and the Management Company, directly
to the Management Company for the providing of the management services to the Sub-Leased
Premises as of the beginning of the Lease Term. For the avoidance of doubt, the Management
Agreement that will be signed between the Management Company and the Sub — Lessee will be
identical to the Management Agreement attached to the Original Lease Agreement mutatis
mutandis.
	 
	9.	 	Expenses: The Sub-Lessee will bear all taxes, levies, fees and other payments of any
kind and sort imposed and/or to be imposed in the future on the holders of possession of the
Sub-Leased Premises, for its share in the Sub-Leased Premises only, and also its proportionate
share in the expenses to be imposed, if any, on the common areas.
	 
	10.	 	Electricity, Water, Municipal Rates and Taxes, Telephone and Other Expenses:
Electricity, water, telephone expenses, municipal rates and taxes and any other expense
relating to the use of the Sub-Leased Premises and its operation will be paid by the Sub-

 

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	 	 	Lessee directly in accordance with its engagements with such entities and/or contracts
signed with them, as follows:
	 
	 	 	Water expenses — Proportional in accordance with the area of the Sub-Leased
Premises.
	 
	 	 	Electricity expenses — In accordance with actual consumption (measured by a separate
electricity meter to be installed in the Sub-Leased Premises by the Lessee and at the
expense of the Sub-Lessee), including additional costs for Air Conditioning that will be
charged separately from the regular monthly bill for electricity.
	 
	 	 	Municipal rates and taxes — The Lessee will notify the Tel Aviv Municipality about
the Sub-Lease under this Agreement, however, it is clarified that the liability, for all
intents and purposes, for the payment of municipal rates and taxes in the Sub-Leased
Premises, including in the matter of the use thereof, is imposed on the Sub-Lessee only, and
will be in accordance with the use.
	 
	 	 	Telephone — In accordance with actual consumption.
	 
	11.	 	Guarantee: To secure the fulfillment of the undertakings of the Sub-Lessee under this
Agreement and in accordance with the Original Lease Agreement including all its appendices,
the Sub-Lessee will provide the Lessee, at the time of the signing of this Agreement, with an
autonomous financial bank guarantee covering the amount of the Rent for a period of 4 months,
namely, the sum of NIS 547,836 .
	 
	 	 	In the event of the Lessee seeking to forfeit and/or set off any amount whatsoever from the
Guarantee, it will notify the Sub-Lessee in writing 14 days in advance of its intent, unless
delivering such notice was impossible or unreasonable under the circumstances of the matter.
	 
	 	 	The Guarantee shall be returned to the Sub-Lessee within 30 days after the end of the Lease
Term under this Agreement, and after it is proven to the satisfaction of the Lessee that the
Sub-Lessee has complied with all its obligations and undertakings as stipulated above.
	 
	12.	 	Assignment of Rights: It is clarified that the area of the Sub-Leased Premises is
leased for the use and needs of the Sub-Lessee only. The Sub-Lessee is not entitled to assign
or transfer all or part of its rights to any other party, in any way whatsoever. It is
clarified

 

6

	 	 	that the transfer of all and/or any part of the shares of the Sub-Lessee and/or the sale of
the activities of the Sub-Lessee and/or part thereof, will not be considered as a transfer
of rights for the purpose of this Agreement, and will not require the obtaining of the prior
written consent of the Lessee, provided that notice to that effect is delivered to the
Lessee; and the Lessee and/or the Lessor are not harmed as a result of such sale and/or
transfer.
	 
	 	 	The Sub-Lessee shall be entitled to sub-lease part of the Sub-Leased Premises, provided that
it has obtained the prior written consent of the Lessor and the Lessee. The Lessee may
refuse such sub — lease on reasonable grounds and in writing only, including without
limitations in case that after a review of the sublessee’s financial condition, Lessee
determines that the sublessee does not satisfy Lessee’s reasonable expectations of financial
viability. The Lessee will make reasonable efforts in order to assist the Sub-Lessee in
obtaining the Lessor’s approval for such sub-lease.
	 
	13.	 	Insurance: The parties agree that the Sub-Lessee will maintain, throughout the
Agreement Term, all the insurance policies as detailed in Appendix E (the Insurance Appendix)
of the Original Lease Agreement, and that the Sub — Lessee will provide the certification from
its insurer in accordance with the wording attached in the said Appendix E of the Original
Agreement of Lease.
	 
	14.	 	Signage: The Sub-Lessee may install signs at the locations set forth in Appendix
E — the Signage Appendix. All the costs involved with the placement of the signs,
including the installation of the signs and/or sign fees and/or others shall apply in full to
the Sub-Lessee.
	 
	15.	 	Adaptation Works: Save for the adaptation works as set forth in Appendix F
(“Adaptation Works”), which will be executed at the responsibility and expense of the
Sub-Lessee, the Sub-Lessee shall not be entitled to make any internal or external changes or
additions to the Leased Premises, its installations and systems, without obtaining the prior
written consent of the Lessee and the Lessor. At the end of Lease Term, the Lessee will vacate
the Sub-Leased Premises of any object belonging to it and which has been placed by it in the
Sub-Leased Premises, save for those which have been agreed upon in advance to remain in the
Leased Premises at the end of the Lease Term. Notwithstanding

 

7

	 	 	the above said it is clarified that the Sub-Lessee shall be entitled, without obtaining the
prior written consent of the Lessee and the Lessor, to introduce office furniture and
equipment and mobile equipment into the Sub-Leased Premises.
	 
	 	 	The Sub- Lessee undertakes that every new electrical wiring that would be added to the
Sub-Leased Premises during the term of the Sub- Lease will be connected solely and
exclusively to the electrical gauge of the Sub Lessee.
	 
	16.	 	The Lessee undertakes to ensure the repair of any damage and/or breakage to the shell of the
Sub-Leased Premises and/or the systems in the building of which the Sub-Leased Premises
constitutes a part, such as the water, electricity, sewage systems, etc., which has been
caused by the Lessor and/or someone on its behalf and/or arising from a fault and/or defect in
the construction of the shell and/or the building of which the Sub-Leased Premises constitutes
a part, within 21 days from the date of notice of such in writing from the Sub-Lessee, and in
urgent cases — immediately upon the receiving of notice of such from the Sub-Lessee. In the
event the Lessee does not comply with its duties to repair such defects and faults under its
responsibility within 21 days, and in urgent cases — immediately, then the Sub-Lessee shall
be entitled, after having given the Lessee prior written notice of 7 days (or in urgent cases
 — immediately), and after providing the Lessee the opportunity to repair the damage within
the aforesaid period of time, and after the Lessee has not done so, carry out any repair
and/or take any reasonable action to repair the damage and/or to bring the Leased Premises to
their previous condition. The Lessee will refund the Sub-Lessee the costs for the repairing of
the said damage against the presentation of receipts for the execution of the works.
	 
	17.	 	Eviction of the Sub Lease Premises: upon termination of the Sub —Lease term, the Sub Lessee
will return the Sub — Leased Premises to the Lessee free and clear of all persons and objects,
in good and proper condition, in the same manner that was handed to the Sub — Lessee
excluding reasonable amortization.
	 
	18.	 	Any amendment to the terms and conditions of this Agreement or any waiver of the rights of a
party hereunder, will only be done in writing signed by those authorized to bind that party.

 

8

	19.	 	Sub Lessee hereby acknowledges that this Agreement is subject to the approval of Lessor. The
Lessee will take reasonable commercial efforts to obtain the consent of the Lessor to this
Agreement and will update the Sub Lessee from time to time and upon request with respect to
the development of the process with the Lessor. It agreed and understood that in the event
that Lessor’s consent to this Agreement is not provided within 45 from the date of its
execution, for any reason whatsoever, each party will be entitled to immediately terminate
this Agreement upon written notice to the other party. Upon such termination neither party
shall have any claim against the other party including, without limitation, any claim for
damages, specific performance or any other remedy.
	 
	20.	 	Any notices required or permitted by this Agreement shall be in writing and shall be
delivered, with notice deemed given, as follows: (a) by personal delivery, when delivered
personally; (b) by certified or registered mail, return receipt requested, upon 72 hours after
pull postage payment have been fully paid in advance . Notice shall be sent to the contacts
and addresses set forth herein or to such other addresses as either party may specify in
writing.

Sub  — Lessee:

	 	 	Prime Sense Ltd.
	 	 	28 Habarzel Street
	 	 	Ramat Hachayal, Tel Aviv
	 	 	Att: CFO

Lessee:

	 	 	BigBand Networks, Ltd.
	 	 	28 Habarzel Street
	 	 	Ramat Hachayal, Tel Aviv
	 	 	c/o BigBand Networks, Inc.
	 	 	475 Broadway Street

 

9

	 	 	Redwood City, CA 94063
	 
	 	 	     Att: General Counsel

In Witness Whereof the Parties Have Set Their Hand:

	 	 	 	 	 	 	 
	/s/ Rob Horton
 

The Lessee

	 	 	 	/s/ PrimeSense Ltd.
 

The Sub-Lessee
	 	 

 

10

Appendix A — The Original Lease Agreement

 

11

Appendix B — Document of Assignment of Rights

 

12

Appendix C — Lessor’s Consent

Appendix D — Plans of the Area of the Sub-Lease and the Parking Places

 

13

Appendix E — Signage Appendix

1. Prime Sense sign with logo in size of               in the lobby of the building 

2. Prime Sense sign with logo in size of               in the elevator’s lobby in the forth
floor 

3. Prime Sense sign in the building directory in the same font and size as the
remaining tenants of the building.

4. Small signs in the parking spaces indicating “Prime Sense”

 

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Appendix F — Adaptation Works

	1.	 	Cancellation of room number 233 in favor of enlarging the front desk.
	 
	2.	 	Cancellation of separation wall between room number 428 to 429.
	 
	3.	 	Adding additional door to room 425
	 
	4.	 	Adding door between room number 432 and 451
	 
	5.	 	Adding door between room number 451 and 447
	 
	6.	 	Building a wall between the elevators and the bridge
	 
	7.	 	Deviding room 415 into 2 separate rooms

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