-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SNLWDClnfVF7DPXP59/r88OPinx/Tesma4JO72IWHBmui7q8dpygnf+vqKswX/Pd 5U2kcYuAMJhCBTiWHhJ1Dg== 0000718976-95-000015.txt : 19951121 0000718976-95-000015.hdr.sgml : 19951121 ACCESSION NUMBER: 0000718976-95-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19951026 ITEM INFORMATION: Other events FILED AS OF DATE: 19951117 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BGS SYSTEMS INC CENTRAL INDEX KEY: 0000718976 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042559993 STATE OF INCORPORATION: MA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12192 FILM NUMBER: 95594725 BUSINESS ADDRESS: STREET 1: 128 TECHNOLOGY CENTER CITY: WALTHAM STATE: MA ZIP: 02254 BUSINESS PHONE: 6178910000 MAIL ADDRESS: STREET 1: 128 TECHNOLOGY CENTER CITY: WALTHAM STATE: MA ZIP: 02254-9111 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM 8-K CURRENT REPORT -------------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 -------------------- BGS SYSTEMS, INC. (Exact name of Registrant as specified in its charter) Date of Report (Date of earliest event reported) October 26, 1995 MASSACHUSETTS 0-02192 04-2559993 (State of (Commission File (I.R.S. Employer incorporation) Number) Identification Number) 128 TECHNOLOGY CENTER, WALTHAM, MASSACHUSETTS 02254-9111 (Address of Principal Executive Office) -------------------- Registrant's telephone number including area code (617) 891-0000 ITEM 5. Other Events. On October 26, 1995, the registrant, executed a Contract of Sale ("Agreement") for the purchase of the land, building and improvements (collectively the "Property") known as 580 Winter Street, Waltham, Massachusetts. The land consists of approximately 4.45 acres improved by an 80,000 s.f. single-story, brick building. 580 Winter Street is owned by 580 Winter Street Corp., a Massachusetts corporation having offices c/o Svenska Handlesbanken, 599 Lexington Avenue, New York, New York 10022 (the "Seller"). There is no material relationship between 580 Winter Street Corp. and the registrant or any of its affiliates, any director or officer of the registrant, or any associate of any such director or officer. One of the most important determinations by the registrant in connection with its decision to purchase the Property was the environmental assessment. The Property is not completely free of all contaminants and is located near a public drinking water supply. The registrant's decision-making process is summarized below, and that information is qualified in its entirety by the materials filed as exhibits hereto. The Property is listed on the Massachusetts Department of Environmental Protection's List of Confirmed Disposal Sites and Locations to be Inspected ("Investigation List"). The registrant has reviewed reports of environmental engineers concerning their investigation of the Property. These reports indicate (i) the Property was placed on the Investigation List because heating oil contaminated soil was found on the site when a 10,000 gallon oil tank was removed in 1987 (the heating fuel was converted to natural gas), (ii) the storage tank was intact (iii) approximately 190 cubic yards of contaminated soil was removed, (iv) investigation was undertaken pursuant to the Massachusetts Contingency Plan (v) a Notice of Audit Findings/Notice of Non-Compliance ("Notice") asserted that an initial LSP Evaluation opinion failed to identify the applicable groundwater category for the site, (vi) The Notice to the Seller asserted that because of the site's proximity to the Cambridge Reservoir, the appropriate water quality standard was RCGW-1, (vii) The Notice noted that the levels of trichloroethene and Total Petroleum Hydrocarbons exceeded the RCGW-1 standard, (viii) The Notice required, among other things, submission of a revised LSP Evaluation Opinion indicating that a release subject to notification requirements occurred or may have occurred at the subject site and that further response actions are necessary, (ix)the Licensed Site Professional submitted a revised opinion including groundwater category identification and analysis of the levels of fuel oil and trichloroethene in the groundwater (x) the revised opinion concluded that the proper water quality for the site was not RCGW-1 because, among other things, the site was downgradient from the reservoir and groundwater from the site does not flow into the reservoir, and (xi) the Licensed Site Professional Response Action Outcome Statement and supporting documentation concluded that all compounds at the site were below the applicable standards, that no significant risk is posed by the presence of residual contamination and that the site meets the groundwater environmental requirements applicable thereto. Under the Massachusetts Contingency Plan, state inspection is performed by "privatized inspectors" who become certified by the State as "Licensed Site Professionals." Their opinions may be audited by the Department of Environmental Protection for a period of five years from the date of filing of the Report. According to the Licensed Site Professional interviewed by the Registrant, specific regulations provide that sites located near wells and water bearing aquifers used as public drinking water sources but which are downgradient therefrom are not required to meet the RCGW-1 standard by virtue of their proximity. At the moment no such regulations have been written to cover the similar situation relative to reservoirs. On the basis of its review of the foregoing materials, the registrant has executed the Contract of Sale, which provides in part that the registrant has examined various reports and correspondence related to this matter and is fully satisfied with the testing, remediation, DEP disposition and environmental conditions at the premises. The privatization of the environmental inspection and implementation process, the highly sensitive nature of environmental laws, the importance of protecting the public drinking water supplies and the evolution of the application and interpretation of regulations under the Massachusetts Contingency Plan are but a few of the areas of uncertainty facing the registrant in making its decision. The registrant has made the judgment to rely on the findings of the License Site Professional--with whom the registrant engaged in due diligence discussions at the site--that the site is in compliance with all applicable requirements. The registrant expects that managing environmental issues will be an ongoing aspect of its property management activities. The purchase price is Five Million Fifty Thousand Dollars ($5,050,000.00). Of this amount, Five Hundred Five Thousand Dollars ($505,000.00) has been paid to the escrow agent and counsel to Seller, Sullivan & Worcester, a Registered Limited Liability Partnership and the balance of which is due on the closing. The closing is scheduled to take place on December 28, 1995. The registrant expects to use some of its current assets which may include cash, cash equivalents, and/or marketable securities to fund the entire acquisition, renovation, refurbishment and relocation costs (expected to be in the approximate range of $9.0 million). The registrant expects that the cost of ownership and operation of the building over the long term will be similar to what the registrant currently pays for its present offices even though the new facility of approximately 80,000 s.f. will accommodate a substantial increase in the number of employees. The registrant's lease for its current space of approximately 46,000 s.f. expires in January 1997. The new Property is used as rental property by the Seller and as office space by the tenants. The registrant intends to use the Property primarily as its world-wide headquarters and to lease portions of it to tenants from time to time. Two such tenants are leasing such space at the present time under leases covering approximately 41,000 s.f. One lease (covering approximately 15,000 s.f.) is for a term of fifteen and one half years commencing October 1994 (with two five year options). The other lease is on its first (of two) three year extension terms (which began in July 1995). The operation of a facility by the registrant is a new area of endeavor for the employees and involves the development and practice of new skills to be done well. Additionally, the accounting treatment of owned facilities is significantly different and dependent on variable tax laws and accounting standards. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The Exhibits listed on the Exhibit Index (on page 6) are incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BGS SYSTEMS, INC. (Registrant) By: /S/ C. RUSSEL HANSEN, JR. ------------------------------- Vice President and General Counsel INDEX TO EXHIBITS 10.1 Contract of Sale between BGS Systems, Inc. and 580 Winter Street Corp. 10.2 Lease between 580 Winter Street Limited Partnership, as Lessor and Harte-Hanks Communications, Inc. d/b/a Harte-Hanks Community Newspapers, Massachusetts, as Lessee, dated March 20, 1990. 10.3 Lease Agreement by and between 580 Winter Street Corp. and MFS Intelenet of Massachusetts, Inc., dated October 20, 1994. 10.4 Massachusetts Department of Environmental Protection's, Notice of Noncompliance, Notice of Audit Findings, dated October 10, 1995 10.5 Massachusetts Department of Environmental Protection's Response Action Outcome (RAO) Statement & Downgradient Property Status Transmittal Form 10.6 Environmental Science Services' Report, Documentation Supporting Response Action Outcome, dated October 2, 1995 EX-10.1 2 CONTRACT OF SALE EXHIBIT 10.1 CONTRACT OF SALE ("Agreement"), dated as of October 26, 1995, between 580 WINTER STREET CORP., a Massachusetts corporation ("Seller"), having offices c/o Svenska Handelsbanken, 599 Lexington Avenue, New York, New York 10022 and BGS SYSTEMS, INC., a Massachusetts corporation ("Purchaser") having offices at 128 Technology Center, Waltham, Massachusetts 02254-9111. RECITALS: A. Seller is the owner of the land ("Land") described in Exhibit A annexed hereto and the building and improvements situated thereon or appurtenant thereto (collectively, the "Improvements"; together with the Land, collectively, "Premises") known as 580 Winter Street, Waltham, Massachusetts. B. Seller desires to sell and Purchaser desires to purchase the Premises on the terms and subject to the conditions set forth in this Agreement. AGREEMENT: Seller and Purchaser agree as follows: 1. Certain Definitions. Whenever used in this Agreement, the words and phrases set forth below shall have the following meanings: 1.1 "Closing" means the closing pursuant to the terms and conditions set forth in this Agreement, at which closing title to the Premises shall be transferred to Purchaser. 1.2 "Contract Date" means the date on which this Agreement is executed. 1.3 "Downpayment" shall mean the initial sum of $505,000 paid by Purchaser to Escrow Agent on account of this Agreement in accordance with Article 3, together with any interest accrued on such sum from time to time. 1.4 "Escrow Agent" shall mean Sullivan & Worcester, a Registered Limited Liability Partnership, counsel to Seller. 1.5 "Improvements" has the meaning set forth in Recital A. 1.6 "Initial Notice" shall have the meaning set forth in Section 10.1. 1.7 "Land" means the land located in Middlesex County, Massachusetts, described by metes and bounds on Exhibit A hereto. 1.8 "Leases" means, collectively, (a) the lease, dated March 20, 1990, by 580 Winter Street Limited Partnership ("580 LP"), as landlord, to Harte-Hanks Communications, Inc. ("HHC"), as tenant, as amended by a First Amendment to Lease, dated September 1, 1992, between 580 LP and HHC, as tenant, as amended by a First Amendment to Lease, dated September 1, 1992, between 580 LP and HHC and a Second Amendment to Lease, dated October 3, 1994. betweem Seller and HHC, and (b) the lease, dated October 20, 1994, by Seller, as landlord, to MFS Intelenet of Massachusetts, Inc., as tenant, copies of which leases have been delivered to Purchaser for its examination prior to execution of this Agreement. 1.9 "Permitted Encumbrances" means the matters set forth in Section 2.2, any matters arising therefrom or relating thereto, to the extent the same may be of force or effect or affect title to the Premises as of the Closing Date, and such other matters as are customarily contained in the standard exceptions from fee title insurance coverage in the State of Massachusetts. 1.10 "Premises" means the Land and the Improvements. 1.11 "Qualified Bank" means a bank or trust company having a banking office in the City of Boston, Massachusetts, or which is a member of the New York Clearing House Association. 1.26 "Title Company" means any reputable title insurance company duly licensed in the State of Massachusetts. 2. Sale of Premises; Permitted Encumbrances. 2.1 Seller shall sell and convey good, clear, record and marketable title to the Premises to Purchaser and Purchaser shall purchase the Premises from Seller, on the terms and subject to the conditions set forth in this Agreement. The Premises shall be conveyed to Purchaser free and clear of all liens and encumbrances (other than the Permitted Encumbrances), and shall include all of Seller's right, title and interest, if any, in and to the following: 2.1.1 Any land lying in the bed of any street, road or avenue opened or proposed, in front of or adjoining the premises, to the center line thereof, and all right, title and interest of Seller in and to any award made or to be made in lieu thereof and in and to any unpaid award for damages to the premises by reason of change of grade of any street and any right of reversion. 2.1.2 All fixtures attached to the Land or Improvements and present at the time of execution of this Agreement and those fixtures which may be attached between the date hereof and the Closing Date. 2.2 The Premises shall be sold and conveyed subject to the following (collectively, the "Permitted Encumbrances"): 2.2.1 Zoning regulations and ordinances which are not violated by existing structures or improvements or present use therefor. 2.2.2 Consents by Seller or any former owner of the Premises for the erection of any structure or structures on, under or above any street or streets on which the Premises may abut. 2.2.3 Encroachments of stoops, areas, cellar steps, trim and cornices, lintels, window sills, awnings, canopies, ledges, fences, coping, retaining walls and wires projecting from the Premises over any street or highway or over any adjoining property and encroachments of similar elements projecting from adjoining property over the Premises. 2.2.4 Rights of telephone, electric, gas, water and sewer and other utility companies to lay, maintain, install and repair poles, wires, mains, lines, pipes, conduits, cable boxes, cables and related equipment on, over, along, and under the Premises or the streets abutting the Premises, and any such utility service facilities running to any building or improvement on the Premises. 2.2.5 Revocability or lack of right to maintain vaults, coal chutes, excavations or subsurface equipment beyond the line of the Premises. 2.2.6 Restrictive Agreement, dated October 14, 1954, recorded in the land records of the Middlesex County, Massachusetts ("Land Records") in Deeds, Book 8364, pg. 325. 2.2.7 Restrictions in Deed by Gerald W. Blakely, dated July 26, 1956, recorded in the Land Records in Deeds, Book 8777, pg. 524; Agreement Concerning Restrictions, dated December 20, 1960, recorded in the Land Records in Deeds, Book 9775, pg. 529; as affected by agreement, dated March 14, 1961, recorded in the Land Records in Deeds, Book 9775, pg. 531; as further affected by agreement, dated October 2, 1964, recorded in the Land Records in Deeds, Book 10660, pg. 38; and any additional covenants, agreements, licenses, easements and restrictions of record, provided that such additional covenants, agreements, licenses, easements, and restrictions do not prohibit the present use of the Premises. 2.2.8 State of facts shown on a survey of the Premises dated September 15, 1988 and last revised June 20, 1989 (the "Survey"), a copy of which has been reviewed by the Purchaser, and any changes therefrom an accurate survey of the Premises through the date of Closing would show, provided that no such changes render title unmarketable. 2.2.9 The Leases. 2.2.10 Any notice of lease of a tenant no longer in possession provided that the Title Company shall be willing to insure against the lease being enforced against the Premises. 2.2.11 Real estate taxes and assessments and unpaid installments of assessments, which are a lien but not yet due and payable on the Closing Date. 2.2.12 Financing statements, chattel mortgages and liens on personalty filed more than five (5) years prior to the Closing Date and not renewed, or filed against property or equipment no longer located on the Premises or owned by tenants. 2.2.13 Rights of utility companies to lay, maintain, install and repair pipes, lines, poles, conduits, cable boxes and related equipment on, over and under the Premises, provided that none of such rights imposes any monetary obligation on the owner of the Premises. 3. Purchase Price 3.1 The purchase price ("Purchase Price") is FIVE MILLION FIFTY THOUSAND DOLLARS and is payable by Purchaser to Seller as follows: 3.1.1 FIVE HUNDRED FIVE THOUSAND DOLLARS by delivery on or before execution of this Agreement of Purchaser's check, subject to collection (together with any interest accrued on such deposit from time to time, the"Downpayment"), payable to the order of Escrow Agent, as payee to be held by Escrow Agent in accordance with the escrow provisions set forth in Article 16; and 3.1.2 FOUR MILLION FIVE HUNDRED FORTY-FIVE THOUSAND DOLLARS at Closing, subject to adjustment in accordance with Article 8. 3.2 At Closing, any interest earned on the Downpayment shall be paid to the party entitled to the Downpayment. 3.3 All amounts payable at Closing shall be paid by (i) unendorsed certified checks of Purchaser or any person making a purchase money loan to Purchaser drawn on a Qualified Bank to the order of Seller, or (ii) unendorsed official bank checks drawn by any Qualified Bank to the order of Seller. At the option of either Purchaser or Seller, all or any part of the amounts payable at Closing shall be paid by a wire transfer of Federal Funds for same day value to an account or accounts designated by Seller. 3.4 If any instrument for the payment of the Downpayment fails of collection, Seller shall have the right to sue on the uncollected instrument. In addition, such failure of collection shall be a default under this Agreement, provided Seller gives Purchaser notice of such failure of collection and, within three (3) days after such notice, Escrowee does not receive from Purchaser an unendorsed certified check, bank check or immediately available funds in the amount of the uncollected funds. Failure to cure such default shall entitle Seller to the remedy set forth in the case of default by Purchaser and to retain all sums as may be collected and/or recovered. Time shall be of the essence with respect to the time periods set forth in this Section. 4. Physical Condition; Personal Property; Operating Pending Closing. 4.1 Purchaser has made such examination of the operation, income, expenses and physical condition of the Premises and the legal, zoning, land use, environmental, toxic and hazardous materials, water and sewer availability, development potential, reclamation and other matters affecting or relating to this transaction as Purchaser deemed necessary or as were required by law, rule, regulation or otherwise or Purchaser has waived such examination. In entering into this Agreement, Purchaser has not been induced by and has not relied upon any representations, warranties, guarantees or promises, whether express or implied, made by Seller or any agent, employee or other representative of Seller or by any broker or any other person representing or purporting to represent Seller, which are not expressly set forth in this Agreement, whether or not any such representations, warranties, guarantees, promises, or statements were made in writing or orally. Purchaser confirms that it has examined a current environmental inspection report of the Premises prepared by Environmental Science Services ("ESS"), and the correspondence of Seller and ESS with the Massachusetts Department of Environmental Protection ("DEP") concerning the conditions described in such examination, and that Seller has afforded Purchaser full opportunity to examine the premises and discuss such matters with ESS. Purchaser is fully satisfied with the testing, remediation, DEP disposition and environmental conditions at the Premises. 4.2 The sale under this Agreement includes the following fixtures and articles of personal property, to the extent presently existing at the Premises and owned by Seller: heating, ventilating and air conditioning equipment, plumbing and electrical equipment and fixtures, carpets and other floor coverings, curtains, drapes, blinds and related window treatments, partitions, fire safety devices, and fire protection and burglar alarm equipment. 4.3 Between the date of this Agreement and Closing, Seller shall not enter into any new lease affecting the premises, or modify or amend any existing lease, provided that Seller shall have the right to comply with and enforce the terms of any existing Lease, to waive default by the tenant thereunder or to exercise any rights and remedies of the Landlord thereunder, including the right to terminate the Lease for default of the tenant thereunder. Seller shall have no obligation to extend the term of any existing Lease. 5. Casualty and Eminent Domain 5.1 Seller is responsible for any damage to the Premises, other than for ordinary use, wear, tear and natural deterioration, until the Closing. If the Premises are damaged by fire, vandalism, storm, flood or any other casualty between the date of this Agreement and Closing, Seller shall promptly notify Purchaser and the parties shall obtain an estimate of the cost of repairing the damage from an unaffiliated contractor of their mutual choice. If the estimated cost is less than $50,000 Seller shall repair the damage at Seller's expense, the Closing shall take place as provided herein and Seller shall be entitled to receive all insurance proceeds as a result of the casualty. If the estimated cost is more than $50,000, Seller shall forthwith proceed to commence and complete the necessary repairs and the Closing shall take place as provided herein; provided, however, that if Seller has not commenced such repairs as of the scheduled date of Closing or the repairs are reasonably estimated to take more than four months after the Closing to complete, then, at Purchaser's option, the Closing shall be delayed until the work is completed, or if the Closing shall occur, the Purchase Price shall be reduced by an amount equal to the deductible on Seller's insurance policy, and there shall be assigned to Purchaser at the Closing, all of Seller's right, title and interest in and to the remaining insurance proceeds to the extent such proceeds relate to restoration and repair of the Premises to be conveyed hereunder, net of such sums as have reasonably been expended by Seller on such repairs. In addition, at Closing, Seller shall assign to Purchaser and Purchaser shall assume all construction contracts for such repair and restoration, to the extent such contracts are assignable and relate to the Premises to be conveyed hereunder. If, for any reason, insurance proceeds are not received on account of the damage or destruction, the parties shall agree upon the amount necessary to repair the damage, and such amount shall be credited against the Purchase Price. In addition, if Seller's mortgagee does not release all or a portion of such insurance proceeds, Seller shall credit against the Purchase Price the amount of such proceeds withheld to the extent that such proceeds relate to restoration and repair of the Premises to be conveyed hereunder. 5.2 If prior to Closing there shall be a taking of all or any portion of the Premises by a governmental or other public authority by eminent domain, condemnation or otherwise (collectively "Condemnation") which shall prevent continued use of the premises (to include a loss of all access of the remaining portion of the Premises to a public highway or street) for substantially the same purposes and substantially in the same manner to substantially the same extent as prior to Closing (a "Total Condemnation"), Purchaser shall either: 5.2.1 Accept title to the premises pursuant to the terms of this Agreement upon payment of the full Purchase Price without any credit against or abatement of the Purchase Price by reason of the Condemnation (except as hereinafter provided), but with an assignment by Seller (without recourse or warranty) of Seller's right, title and interest as owner of the Premises in the award or awards resulting from the condemnation and in the proceeds thereof, and Seller shall deliver to Purchaser at Closing any such proceeds received by Seller; provided, however, that if any such Condemnation award is payable to the holder of any mortgage or other lien on the Premises, then the Purchase Price shall be reduced by the amount of such Condemnation award payable to such mortgagee; or 5.2.2. Terminate this Agreement, and upon such election, Seller shall return any amounts theretofore paid on account of the Purchase Price with any interest earned thereon, and Seller and Purchaser shall be released and discharged from any and all further liability and obligation under this Agreement. 5.3 If, prior to Closing, there shall be a Condemnation other than a Total Condemnation, Seller shall assign and pay over to Purchaser at Closing the entire proceeds of the payment by the condemning authority and any right to receive the same and title shall pass to Purchaser at Closing; provided, however, that if any such Condemnation award has been paid to the holder of any mortgage or any other lien on the Premises, then the Purchase Price shall be reduced by the amount of such Condemnation award payable to such mortgagee. 5.4 The provisions of this Article shall survive the Closing and are in lieu of the provisions of any otherwise applicable statute. 6. Representations and Covenants of Parties. 6.1 Seller makes the following representations: 6.1.1 Seller is a corporation duly organized, validly existing and in good standing under the laws of the state of Massachusetts. 6.1.2 Seller has full power, authority and legal right to execute and deliver this Agreement and the documents contemplated hereunder to be delivered by it and to perform and observe the terms and provisions of this Agreement and such other documents on its part to be performed or observed. 6.1.3 The execution and delivery by Seller of this Agreement and all the other documents contemplated to be delivered by it hereunder, and the performance and observance by it of the terms of this Agreement and the other documents and instruments on its part to be performed or observed, have been duly authorized by all necessary action (corporate or otherwise), including without limitation, all necessary administrative and other governmental action, and do not contravene (i) any law, rule, regulation, order, writ, judgment, award, injunction or similar legal restriction applicable to Seller, (ii) any contractual restriction which binds or affects or purports to bind or affect Seller, or (iii) its certificate of incorporation or by-laws. 6.1.4 There are no leases of all or any portion of the Premises other than the Leases. The Leases have not been amended except as set forth in the definition of "Leases." 6.1.5 No brokerage, leasing or other commissions are due with respect to any Lease. There are no alterations, improvements or other work required to be performed by Seller as landlord under any lease which have not been completed and paid for in full. Seller is not in material default of any obligation of the landlord under any lease. 6.1.6 This Agreement has been duly executed and delivered by Seller and is, and the other documents contemplated hereunder when executed and delivered by it hereunder will be, the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their terms. 6.1.7 Exhibit B attached hereto constitutes a complete list of any service contracts (collectively, the "Service Contracts") now affecting the Premises. 6.1.8 All fixtures, equipment and articles of personal property included in this sale will, at Closing, be owned by Seller free from all liens and encumbrances other than the Permitted Encumbrances. 6.2 Purchaser makes the following representations: 6.2.1 Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Massachusetts. 6.2.2 Purchaser has full power, authority and legal right to execute and deliver this Agreement and the documents contemplated hereunder to be delivered by it and to perform and observe the terms and provisions of this Agreement and of such other documents on its part to be performed or observed. 6.2.3 The execution and delivery by Purchaser of this Agreement and all the other documents contemplated to be delivered by it hereunder and the performance and observance by it of the terms of this Agreement and the other documents and instruments on its part to be performed or observed, have been duly authorized by all necessary action (corporate or otherwise), including, without limitation, all necessary administrative and other governmental action and do not contravene (i) any law, rule, regulation, order, writ, judgment, award, injunction or similar legal restriction applicable to Purchaser, (ii) any contractual restriction which binds or affects or purports to bind or affect Purchaser or (iii) its certificate of incorporation or by-laws. 6.2.4 This Agreement has been duly executed and delivered by Purchaser and is, and the other documents contemplated hereunder when executed and delivered by it hereunder will be, the legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their terms. 6.2.5 Purchaser has inspected the Premises and is fully familiar with its physical condition and state of repair, and except as may otherwise be expressly set forth in this Agreement, shall accept the Premises "as is" and in its present condition, subject to Seller's express obligations under this Agreement, and subject to reasonable use, wear, tear and natural deterioration between now and Closing, without any reduction in the Purchase Price for any change in such condition by reason thereof subsequent to the date of this Agreement. 6.2.6 Purchaser has made such examination of the operation, income and expenses of the Premises and all other matters affecting or relating to this transaction as Purchaser deemed necessary. In entering into this Agreement, Purchaser has not been induced by and has not relied upon any representations, warranties, guarantees or promises, whether express or implied, made by Seller or any agent, employee or other representative of Seller or by any broker or any other person representing or purporting to represent Seller, which are not expressly set forth in this Agreement, whether or not any such representations, warranties, guarantees, promises, or statements were made in writing or orally. 6.3 The representations contained in Sections 6.1.4 and 6.1.5 shall survive the Closing for a period of six (6) months. 6.4 Seller covenants to terminate the Service Contracts on or prior to the Closing Date. 6.5 The representations, warranties, covenants, indemnities and agreements of Seller and Purchaser contained in this Agreement or contained in any certificate or document delivered in connection with the Closing by or on behalf of the Purchaser or the Seller, shall not survive the Closing under this Agreement unless specifically stated to survive in this Agreement or unless, pursuant to this Agreement or such certificate or document in which it is contained, such covenant or agreement is to be performed after the Closing Date. Purchaser's sole remedy for any breach of any representation or warranty of Seller known to Purchaser prior to Closing shall be to terminate this Agreement and to be reimbursed for the actual cost for Buyer's title examination and survey inspection and the Downpayment, if made, and all other remedies are waived by Purchaser; and such known breach shall not survive the Closing. 7. Litigation; Plans; Maintenance. 7.1 Seller represents that there is no pending litigation related to the Premises by or against Seller. To Seller's best knowledge, no litigation is threatened against Seller with respect to the Premises nor is there any actual or threatened condemnation of the Premises. Seller further represents that there are no presently pending applications or appeals for reduction of assessments or real estate taxes. 7.2 At Closing, Seller will deliver to Purchaser all existing plans and specifications for the Improvements and any permits and licenses assigned to Purchaser hereunder, to the extent such items are in the possession of Seller. 7.3 If mechanic's or materialman's liens are filed against the Premises prior to Closing for materials, labor or other services alleged to have been delivered to or performed at the request of Seller, Seller shall discharge or satisfy such liens at or prior to Closing, or deliver such assurances to Purchaser's Title Company as may be required to permit the issuance of title insurance to Purchaser either free of any such liens or with insurance against enforcement of same out of the Premises. 7.4 The sole obligation of Seller with respect to the physical condition of the Premises until Closing shall be to maintain the Premises in its present condition, and in compliance with all applicable laws, rules, regulations and ordinances subject to reasonable use, wear, tear and natural deterioration. 8. Adjustments 8.1 The following shall be apportioned between Seller and Purchaser as of the midnight prior to the Closing Date and net thereof in favor of Seller or Purchaser ("Net Adjustment") shall be paid by Purchaser or credited against the Purchase Price, as the case may be: 8.1.1 Permit and license fees of assignable permits and licenses, if any, and inspection charges. 8.1.2 Utility charges, based on the most recent available meter readings, if final readings cannot be obtained as of the Closing Date, any unfixed utility charges based thereon for the intervening period shall be apportioned on the basis of such reading. 8.1.3 value of fuel oil stored on the Premises, at the price then charged by Seller's supplier, including any taxes; 8.1.4 prepaid rents; 8.1.5 permitted administrative charges, if any, on tenants' security deposits; 8.1.6 Real estate taxes on the basis of the fiscal year for which assessed. If the tax for the fiscal year in which the Closing occurs has not been fixed as of the Closing Date, then the apportionment thereof shall be based on the tax rate for the next preceding year applied to the latest assessed valuation, and the same shall be readjusted after Closing based upon the actual taxes. 8.1.7 Seller shall be entitled to any and all real estate tax savings or refunds for the tax fiscal years ending prior to the Closing Date. If any proceeding for reduction of the assessed valuation of the Premises has been or is hereafter filed affecting a tax period containing any period prior to the Closing Date, the net tax savings for such period shall be apportioned as of the Closing Date. If such proceeding was commenced by Seller, it shall be continued by Seller's attorney whose charges, fees and disbursements shall be paid pro rata by the parties. If, after the Closing Date, Purchaser receives any such tax savings as a credit against taxes payable in a subsequent tax period in lieu of a refund, Purchaser shall promptly pay to Seller the pro-rata share of the net tax savings to which Seller is entitled. If any such tax savings received by Purchaser result from any proceedings commenced by Purchaser, Purchaser's attorneys charges, fees and disbursements shall be paid pro rata by the parties. 8.1.8 Water and sewer charges, based on the most recent available meter readings, any unfixed meter charge and any unfixed sewer rent based thereon for the intervening period, shall be apportioned on the basis of such reading. 8.1.9 wages, of all persons employed at the Premises whose employment was not terminated at or prior to the Closing. 8.1.10 municipal license charges, if any. 8.1.11 management fees of the managing agent of the Premises, unless such managing agent's employment is terminated at or prior to the Closing. 8.1.12 Assessments, in accordance with the provisions of Section 8.5. 8.1.13 Payments required under any service contracts not cancelled at or before Closing. 8.2 Any errors or omissions made in computing apportionments at Closing shall be corrected. The provisions of this Article 8 shall survive Closing. 8.3 If any tenant is in arrears in the payment of rent on the Closing Date, rents received from such tenant after the Closing shall be applied in the following order of priority; (a) first to the month preceding the month in which the Closing occurred; (b) then to the month in which the Closing occurred; (c) then to any month or months following the month in which the Closing occurred; and (d) then to the period prior to the month preceding the month in which the Closing occurred. If rents or any portion thereof received by Seller or Purchaser after the Closing are payable to the other party by reason of this allocation, the appropriate sum, less a proportionate share of any reasonable attorneys' fees, costs and expenses of collection thereof, shall be promptly paid to the other party, which obligation shall survive the Closing. 8.4 At Closing, certified or official bank checks payable to the order of the appropriate State, City or County officer in the amount of any applicable Massachusetts Realty Transfer Tax and any other applicable excise, transfer and/or recording tax payable by reason of the delivery or recording of the deed shall be delivered by the party required by law or by this Agreement to pay such excise, transfer and/or recording tax, together with any required tax returns or affidavits duly executed and sworn to, and such party shall cause any such checks and returns to be delivered to the appropriate officer promptly after Closing. The obligation to pay any additional tax or deficiency and any interest or penalties thereon shall survive Closing. At Seller's option, Purchaser shall pay on Seller's behalf any such tax imposed in the first instance on Seller and receive a credit against the Purchase Price. 8.4.1 If at the Closing Date, there may be any other liens or encumbrances which Seller is obligated to pay and discharge, including any outstanding mortgages, Seller may use any portion of the balance of the Purchase Price to satisfy the same, provided Seller shall simultaneously either deliver to Purchaser title instruments in recordable form and sufficient to satisfy such liens and encumbrances of record together with the cost of recording or filing said instruments, or deposit with the Title Company sufficient monies, acceptable to and required by it to insure obtaining and the recording of such satisfactions and the issuance of title insurance to Purchaser either free of any such liens and encumbrances, or with insurance against enforcement of same out of the Premises. If requested at least one (1) day prior to Closing, Purchaser agrees to provide at Closing separate certified or cashier's checks or wire transfers of Federal Funds for same day value as requested, aggregating not more than the amount of the balance of the Purchase Price to facilitate the satisfaction of any such liens or encumbrances. The existence of any such taxes or other liens and encumbrances shall not be deemed objections to title if Seller shall comply with the foregoing requirements. 8.5 If, at Closing the Premises or any part thereof are subject to any assessment or assessments for municipal improvements (each, an "Assessment") which are or may become payable in annual installments, the first installment of which is than a charge or lien or has been paid, any installment payable for the year in which the Closing takes place shall be adjusted at the Closing, and Purchaser shall assume the obligation to pay the unpaid installments of such Assessment which are to become due and payable after Closing. 9. Closing. 9.1 The Closing shall take place at 10:00 a.m. on December 28, 1995 (the "Closing Date"), or on such other date set by agreement between the parties. The Closing shall be held at the offices of purchaser's attorneys, Peabody & Brown, 101 Federal Street, Boston, Massachusetts. Any agreement setting or adjourning the date set for the Closing may be made in a writing signed by the parties' attorneys. 9.2 The deed shall be a good and sufficient quitclaim deed in proper form for recording and shall be duly executed and acknowledged so as to convey to Purchaser good, clear, record and marketable title to the Premises, free of all encumbrances except the Permitted Encumbrances. Seller will deliver to Purchaser the following additional documents at Closing: 9.2.1 Any required transfer tax returns, certificates and affidavits required by governmental authorities in connection with this transaction, executed by Seller. 9.2.2 A resolution of Seller's Board of Directors authorizing the sale and delivery of the deed and a certificate by its Secretary or Assistant Secretary certifying such resolution. 9.2.3 An affidavit of title verified by one of Seller's officers certifying to any facts reasonably required by the Title Company in order to certify title as required hereunder. 9.2.4 A non-foreign person affidavit in accordance with the Foreign Investment in Real Property Tax Act of 1980 as amended by the Tax Reform Act of 1984. 9.2.5 Certificates or telegrams from the Secretary of State of Massachusetts stating that Seller is in good standing, dated after the date of this Agreement. 9.2.6 An assignment of the Leases and any security deposits held thereunder, effective the Closing Date, together with delivery of any original guaranty of a Lease then held by Seller. 9.2.7 An assignment of any and all service agreements and equipment guarantees and warranties, if any, relating solely to the property sold to Purchaser hereunder, which assignment shall state that it is without representation, warranty or recourse. 9.2.8 An estoppel certificate or pay-off letter from the holder of any mortgage against the Premises, which shall state the amount required to either pay such mortgage in full or to obtain a release of the lien thereof on the premises, or an executed satisfaction of mortgage in statutory form for recording from the holder of any such mortgage. 9.2.9 A bill of sale for any personal property located in the Premises, which bill of sale shall state that the personal property is sold "as is", and that such sale is without representation, warranty or recourse. 9.2.10 Estoppel letters, in the form annexed as Exhibit C, from each tenant under a Lease, dated no earlier than forty-five (45) days prior to Closing, provided that if any estoppel letter shall not be obtained from any such tenant after diligent effort by Seller, Seller may deliver in its place a certificate by Seller setting forth the same matters and stating that Seller has no reason to believe that an estoppel letter, if given, would have disclosed any material defaults. 9.2.11 A letter by Seller to the tenants under the Leases informing them of the conveyance and the address designated by Purchaser for the payment of future rents and delivery of future communications under the Lease. 9.2.12 Copies of al current real estate tax and utility bills, or if unpaid, then the original bills. 9.3 At Closing, Purchaser will deliver the following to Seller: 9.3.1 Checks or the appropriate wire transfers in payment of the Purchase Price, as provided in this Agreement. 9.3.2 Any required transfer tax returns, certificates and affidavits required by governmental authorities in connection with this transaction executed by Purchaser. 9.3.3 An acceptance of assignment and assumption of the Leases, and receipt for security deposits thereunder, effective from and after the Closing Date. 9.3.4 The agreement of Broker to release Seller from any obligation for any brokerage fees or other compensation due in connection with this transaction. 9.4 The parties shall also execute such documents and make such payments as are required pursuant to this Agreement at the Closing Date, and shall perform or cause to be performed such other acts as shall be required to effectuate the Closing, all subject to and in accordance with the terms and provisions of this Agreement. 10. Objections to Title; Default. 10.1 Upon receipt of an executed counterpart of this Agreement, Purchaser will promptly order a title commitment from a Title Company and promptly after such commitment is received shall deliver a copy to Seller's attorney. If there shall be any objection to title, Purchaser shall, not later than thirty (30) days prior to Closing, provide Seller with a Notice (as hereinafter defined) identifying such objection and specifying the nature thereof ("Initial Notice"). Thereafter, Purchaser may give Seller written Notice of objections to title arising after the date of the Initial Notice, but shall have waived objection to matters disclosed by the Title Company prior to such date. If no Notice of objections is timely given by Purchaser, Purchaser shall accept title subject to any objections which may then affect the Premises. Seller shall be entitled to an adjournment or adjournments of Closing for up to ninety (90) days to remove any objection to title. 10.2 If Seller shall be unable to convey title to the Premises in accordance with the provisions of this Agreement, or if Purchaser has other valid grounds for refusing to close, whether by reason of liens, encumbrances or other objections to title or otherwise, other than those subject to which Purchaser is obligated to accept title hereunder, or if any of Seller's representations or warranties shall not be true, or if Seller is otherwise unable to comply with this Agreement for any reason other than Seller's willful default (such matters, collectively "Title Defects"), the sole remedy of Purchaser shall be to terminate this Agreement and the sole liability of Seller shall be to return or cause Escrow Agent to return the Downpayment to Purchaser. Upon such refund and reimbursement, this Agreement shall be null and void and the parties shall be relieved of all further obligations and liability other than any liability arising under Article 11. Seller shall not be required to bring any action or proceeding or incur any expense to cure any Title Defect or to enable Seller otherwise to comply with the provisions of this Agreement, except that Seller shall discharge any mortgage, monetary judgment or other lien in a liquidated amount encumbering the premises. 10.3 Seller shall give and Purchaser shall accept such title as the Title Company or another reputable title insurance company licensed in the State of Massachusetts will be willing to insure in accordance with the standard form of fee title insurance policy approved by the regulatory authorities of the State of Massachusetts, subject only to the Permitted Encumbrances. 10.4 Any unpaid water charges, sewer rents or other similar charges, together with any interests and penalties thereon, and any other liens or encumbrances that relate to the Premises and which Seller is obligated to pay and discharge or which are against corporations, estates or other persons in the chain of title, together with the cost of recording or filing any instruments necessary to discharge such liens or encumbrances of record, may be paid out of the funds to be delivered by Purchaser at Closing in payment of the Purchase Price. Upon request of Seller, Purchaser shall provide at Closing separate checks for the foregoing payable to the order of such persons as Seller shall designate. 10.5 Purchaser shall take title subject to all notes or notices of violations of law or municipal ordinances, orders or requirements noted or issued by any governmental department having authority as to lands, housing, buildings, fire, streets, health, environmental and labor conditions affecting the Premises. Seller shall furnish Purchaser with any authorizations necessary to make the searches that could easily disclose these matters. 10.6 Any transfer, franchise, license or other similar taxes or liens on the Premises shall not be deemed an objection to title if the Title Company issues or binds itself to issue its fee owner's policy insuring Purchaser against collection of such taxes or lien out of the Premises. 10.7 Notwithstanding any other provision of this Agreement, Purchaser shall have the option to waive Purchaser's objections to all Title Defects and accept the Premises in its then present condition with such title and performance as Seller can deliver and to pay therefor the Purchase Price, without reduction or abatement, provided that, if the Premises have been damaged by fire or other casualty, Seller shall deliver and assign to Purchaser any and all recovery and right of recovery under existing policies of insurance covering such casualty. 10.8 Seller and Purchaser agree that if the Closing shall not occur as and when provided hereby due to the failure by Purchaser to perform, satisfy or comply with any of the obligations, provisions, terms, agreements or conditions of this Agreement to be performed, satisfied or complied with by Purchaser, Seller as its sole and exclusive remedy shall be entitled to receive and retain the Downpayment and all other amounts, if any, paid by Purchaser on account of the Purchase Price or otherwise, including the interest accrued thereon, as and for liquidated damages, which liquidated damages the parties presently contemplate as being fair and reasonable under the circumstances described in this Section. As a special inducement for the execution hereof by Seller, Purchaser covenants that it shall not contest the amount of such liquidated damages or seek the return of any such payments to or for the account of Purchaser, or seek to prevent or delay payment to Seller of any such payments. Upon receipt of such liquidated damages by Seller, neither party shall have any further rights hereunder or otherwise against the other, except as set forth in Article 11. 11. Broker. Seller and Purchaser each represent and warrant that neither has dealt with any broker in connection with the transaction contemplated by this Agreement other than Whittier Partners ("Broker"). Purchaser agrees to pay Broker any commission or other compensation due Broker in connection with this transaction pursuant to Purchaser's separate agreement with Broker. Each party shall indemnify and hold harmless the other from and against any costs, claims or expenses, including, without limitation, attorneys' fees arising out of the breach by such party of its representation, warranty and agreement contained in this Article. The provisions of this Article shall survive Closing and any termination of this Agreement. 12. Integrated Contract. It is understood and agreed that all prior understandings and agreements between Seller and Purchaser are merged in this Agreement, which alone fully and completely expresses their agreement, and that the same is entered into after full investigation, neither party relying upon any statement, representation or covenant not embodied in this Agreement. 13. No Memorandum of Contract of Sale. The parties shall not record this Agreement or any memorandum of this Agreement in the Land Records. 14. Notices. Any notice, election, report, demand, direction or other communication (each, a "notice") authorized or required to be given or furnished shall be deemed given or furnished (i) when addressed to the party intended to receive the same, at the address of such party as set forth below, and delivered at such address or (ii) three (3) days after the same is deposited in the United States mail as first class certified mail, return receipt requested, postage paid or (iii) when delivered by overnight nationwide commercial courier service, one (1) business day after the date of delivery of such notice to the courier service or (iv) when transmitted by telecopy to the telecopier number set forth below, to the party intended to receive same, provided that such transmission is confirmed by duplicate notice in such other manner as permitted above, upon receipt at such telecopier number: (a) if to Seller: 580 Winter Street Corp. c/o Svenska Handelsbanken 599 Lexington Avenue New York, NY 10022 Attention: Harry Roberts Telecopy No.: (212) 326-5100 Telephone No.: (212) 326-2725 with a copy to: Sullivan & Worcester 767 Third Avenue New York, NY 10017 Attention: Charles Dubroff and Steve M. Bederman Telecopy No.: (212) 758-2151 Telephone No.: (212) 486-8200 (b) if to Purchaser: BGS Systems, Inc. 128 Technology Center Waltham, Massachusetts 02254-9111 Attention: C. Russel Hansen, Jr. Telecopy No.: (617) 890-0000 Telephone No.: (617) 891-0000 with a copy to: Peabody & Brown 101 Federal Street Boston, Massachusetts 02110 Attention: William A. Kuncik Telecopy No.: (617) 345-1000 Telephone No.: (617) 345-1300 Any party may change the address to which any such notice, report, demand or other instrument is to be delivered or mailed, by furnishing written notice of such change to the other parties, but no such notice of change shall be effective unless and until received by such other parties. Rejection or refusal to accept or inability to deliver because of changed address, or because no notice of changed address was given, shall be deemed to be receipt of any such notice. 15. Miscellaneous. 15.1 This Agreement may be modified only by an agreement in writing signed by Seller and Purchaser, and no provision or condition herein may be waived other than by a writing signed by the party waiving such provision or condition. 15.2 This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of Seller and Purchaser. 15.3 Article and Section headings in this Agreement are for the sole purpose of convenient reference and in no way define, limit or prescribe the scope or intent of this Agreement or any part thereof, and such headings shall not be considered in interpreting or construing this Agreement. 15.4 Neither party may assign this Agreement or its rights hereunder without the other party's consent in writing. Purchaser shall be entitled to assign this Agreement to a wholly owned special purpose subsidiary of Purchaser on the Closing Date and direct that the deed and other conveyance documents be conveyed to such subsidiary, provided, that Purchaser shall give no less than ten (10) business days' prior written notice to Seller specifying the name, address and situs of incorporation of such subsidiary receiving the deed and shall provide to Seller at Closing an original counterpart of the assignment between Purchaser and the subsidiary. 15.5 This Agreement, together with the exhibits hereto, constitutes the entire agreement of the parties regarding the subject matter of this Agreement and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are hereby merged herein. 15.6 This Agreement (but not any informational Exhibits hereto) shall not be construed more strictly against one party than against the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized both Purchaser and Seller have contributed substantially and materially to the preparation of this Agreement. 15.7 This Agreement and the documents contemplated hereunder shall be governed by, and construed in accordance with the laws of the State of Massachusetts. 15.8 This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts together shall constitute but one and the same instrument. 16. Escrow Provisions. 16.1 Escrow Agent shall hold the Downpayment for Seller's account in escrow in its master escrow account at The Bank of New York, 360 Park Avenue, New York, New York, until Closing or sooner termination of this Agreement and shall pay over or apply the Downpayment in accordance with the terms of this Article. Escrow Agent shall hold the Downpayment in an interest-bearing account for the benefit of the parties. Any interest received shall be paid (a) to Purchaser, if the Closing shall take place pursuant to this Agreement, or (b) in any other instance to the party entitled to the Downpayment. The party receiving the interest shall pay any income taxes thereon. The Social Security or Federal Tax Identification numbers of the parties shall be furnished to Escrow Agent upon request. At Closing, the Downpayment shall be paid by Escrow Agent to Seller. If for any reason Closing does not occur and either party gives Notice to Escrow Agent demanding payment of the Downpayment, Escrow Agent shall give prompt Notice to the other party of such demand. If Escrow Agent does not receive Notice of objection from such other party to the proposed payment within 5 days after the giving of such Notice, Escrow Agent is hereby authorized and directed to make such payment. If Escrow Agent does receive such Notice of objection within such 5 day period or if for any other reason, Escrow Agent in good faith shall elect not to make such payment, Escrow Agent shall continue to hold such amount until otherwise directed by Notice from the parties to this Agreement or a final, nonappealable judgment, order or decree of a court. However, Escrow Agent shall have the right at any time to deposit the Downpayment and the interest thereon with the clerk of a court in the County in which the Premises are located and shall give Notice of such deposit to Seller and Purchaser. Upon such deposit or other disbursement in accordance with the terms of this Article, Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder. 16.2 The parties acknowledge that, although Escrow Agent is holding the Downpayment for Seller's account, for all other purposes Escrow Agent is acting solely as a stakeholder at their request and for their convenience and that Escrow Agent shall not be liable to either party for any act or omission on its part unless taken or suffered in bad faith or in willful disregard of this Agreement. Seller and Purchaser jointly and severally agree to defend, indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses (including reasonable attorneys' fees) incurred in connection with the performance of Escrow Agent's duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith or in willful disregard of this Agreement. 16.3 Escrow Agent may act or refrain from acting in respect of any matter referred to herein in full reliance upon and with the advice of counsel which may be selected by it (including any member of its firm) and shall be fully protected in so acting or refraining from action upon the advice of such counsel. 16.4 Escrow Agent acknowledges receipt of the Downpayment by check subject to collection and Escrow Agent's agreement to the provisions of this Article by signing in the place indicated on this signature page of this Agreement. 16.5 Escrow Agent or any member of its firm shall be permitted to act as counsel for Seller in any dispute as to the disbursement of the Downpayment or any other dispute between the parties whether or not Escrow Agent is in possession of the Downpayment and continues to act as Escrow Agent. IN WITNESS WHEREOF, this Agreement has been duly executed by Seller and Purchaser as of the day and year first above written. 580 WINTER STREET CORP., Seller By: /s/ CHARLES DUBROFF ----------------------------------- Name: Charles Dubroff Office: Director Tax ID No. 04-3197748 BGS SYSTEMS, INC., Purchaser By: /s/ JAMES S. MCGUIRE ----------------------------------- - ------- James S. McGuire Chief Operating Officer Tax ID No. 04-2559993 Receipt on November 1, 1995, of the $505,000.00 Downpayment (if by check, subject to collection) is acknowledged and the undersigned agrees to act in accordance with the provisions of Article 16: SULLIVAN & WORCESTER, A REGISTERED LIMITED LIABILITY PARTNERSHIP By: /s/ CHARLES DUBROFF - ---------------------------------------------------------- a member EXHIBIT A The Land The land referred to in this Agreement is the land at Winter Street, West Street and First Avenue, Waltham, Middlesex County, Massachusetts, more particularly bounded and described as follows: Westerly by West Street by four lines measuring respectively 40.25 feet, 59.78 feet, 131.95 feet and 82.81 feet; Northerly by land formerly of Griggs shown as Lot 10A on a Plan dated July 23, 1960 by Raymond C. Pressey, Inc., Registered Land Surveyors, recorded with said Deeds, Book 9735 End, 207.12 feet; Westerly again, by the same land, 403.81 feet; Northerly again, by the new line of Winter Street, 245.5 feet; Northeasterly by a curved line forming the Southwesterly Junction of Winter Street and First Avenue, 80.95 feet; Easterly by the Westerly line of First Avenue, 385.74 feet; Southerly by land now or late of Crucible Center Company, 295 feet Easterly again, by the same land, 255.27 feet; and Southerly again, by Lot 6 as shown on a Plan dated February 1958 duly recorded in Book 9111, Page 385, 200 feet. EXHIBIT B Service Contracts EXHIBIT C Form of Tenant Estoppel The undersigned, having the power and authority to do so, certifies as follows to all persons to whom this statement may be presented: 1. The undersigned, (the "Tenant") is the tenant under a lease, dated 199 , between , as landlord, and Tenant, as tenant (including any amendments listed below, the "Lease"), for premises consisting of [all] [a portion] of the floor (the "Premises") in the building located at 580 Winter Street, Waltham, Massachusetts. 2. As of the date of this certificate, the Lease is in full force and effect and, except as specifically set forth below, has not been amended, modified, or extended in any manner whatsoever: [List amendments, if any, and their dates below] 3. Attached hereto as Exhibit A is a true and complete copy of the Lease. 4. The current fixed minimum rental under the lease is $ per month and has been paid to and including the month of , 1995. Tenant has not prepaid any sums payable to the landlord under the Lease beyond the current month. 5. Tenant is not in default of any of its obligations under the Lease and, to the best knowledge of Tenant, landlord is not in default under any of its obligations under the Lease. 6. Tenant (i) has no present right of offset or defense against any rent, additional rent, or other sums which are due or to become due from Tenant under the Lease, (ii) has no actions, claims, proceedings or suits pending or threatened against the landlord or relating to the Premises (iii) is not entitled to any rent concessions or abatements. 7. There is currently on deposit under the Lease a security deposit of $ . Very truly yours, [Tenant]: By: EX-10.2 3 HARTE-HANKS LEASE LEASE Between 580 WINTER STREET LIMITED PARTNERSHIP, as LESSOR and HARTE-HANKS COMMUNICATIONS, INC. d/b/a HARTE-HANKS COMMUNITY NEWSPAPERS, MASSACHUSETTS, as LESSEE DATED AS OF MARCH 20, 1990 This Lease, dated as of March 20, 1990 (this "Lease"), is by and between 580 WINTER STREET LIMITED PARTNERSHIP, a Massachusetts limited partnership ("LESSOR"), and HARTE-HANKS COMMUNICATIONS, INC., a Delaware corporation d/b/a HARTE-HANKS COMMUNITY NEWSPAPERS, MASSACHUSETTS ("LESSEE"). In consideration of the rent to be paid and the covenants to be performed by LESSEE, LESSOR hereby leases to LESSEE, and LESSEE hereby leases from LESSOR, the Leased Premises (as hereinafter defined), upon the terms and conditions hereinafter set forth, 1. LEASED PREMISES, (a) The leased premises, which are shown on the plan annexed hereto as Exhibit A (the "Leased Premises"), are a portion of the building owned by LESSOR and located at 580 Winter Street, Waltham, Middlesex County, Massachusetts (the "Building"). The Building, together with the land owned by LESSOR in connection with the Building, is hereinafter referred to as the "Property," The Building contains approximately seventy-eight thousand six hundred eighty (78,680) square feet of rentable floor area (the "Building Rentable Floor Area"), and the Leased Premises comprise approximately twenty- four thousand four hundred seventy-five (24,475) square feet on the first floor of the Building ("Lessee's Rentable Floor Area"), For purposes of this Lease, the term "Lessee's Proportionate Share" shall mean that percentage calculated by dividing Lessee's Rentable Floor Area, as it may be changed by amendment to this Lease, by the Building Rentable Floor Area, Lessee's Proportionate Share as of the date of this Lease is thirty-one percent (31%), It shall be LESSOR's sole responsibility to ensure that the portion of the Leased Premises occupied by Thermo Electron Company as of the date of this Lease is vacated in a timely manner so as not to delay the Term Commencement Date (as defined in Section 4(a) below). (b) LESSEE shall have, as appurtenant to the Leased Premises, rights to use in common with others entitled thereto, (i) those common facilities in the Building, including common lobbies and walkways, and (ii) to the extent described in Section l(c) below, the public parking facilities provided for the Building, LESSEE's use of the Leased Premises and the aforementioned appurtenant areas shall be subject to rules and regulations which have general applicability to tenants of the Building and of which Tenant is given notice (collectively, the "Rules and Regulations"). The initial Rules and Regulations are annexed as Exhibit B to this Lease, (c) LESSOR warrants that it will provide paved vehicular parking for the Building, lighted from dusk until dawn, in the areas shown on Exhibit A hereto, LESSEE shall have the exclusive use of twenty (20) parking spaces in the front of the Building, as shown on said Exhibit A. and such spaces will be designated by signage or marking as being for LESSEE's sole use. LESSEE shall also have the non- exclusive use of seventy (70) additional parking spaces in the parking area located near the rear of the Building, which use shall be in common with other tenants of the Buiding. However, such 70 parking spaces at the rear of the Building shall include any spaces occupied by the trash dumpster described in Section 3(c) hereof and any additional spaces utilized in connection with such dumpster, 2. INITIAL CONSTRUCTION. (a) LESSOR shall use its best efforts to complete, at its expense and prior to the Term Commencement Date (as defined in Section 4 below), the following work (collectively, the "Initial Improvements"): (i) the improvements, modifications and other work to the Leased Premises and the Property described on the plan annexed hereto as Exhibit C (the "Plan") and (ii) the itemized list of above-standard buildout requirements described in Exhibit D annexed hereto (the "Buildout List"). LESSOR agrees to complete the Initial Improvements at its cost and expense, in a neat and workmanlike manner, and in compliance with the Plan and the Buildout List, LESSOR further covenants that all such work shall be carried out in accordance with the requirements, orders, and limitations of all local, state or federal departments or bureaus having jurisdiction over the Property, and upon completion the Leased Premises may be used by LESSEE for the purposes set forth in Section 3(a) below, All permits and licenses and the necessary insurance required in connection with the Initial Improvements are to be obtained and paid for by LESSOR. (b) LESSOR shall complete, at its expense and prior to the Term Commencement Date, the production and installation of the signage as shown on Exhibit E annexed hereto, with the freestanding sign to be located as shown on Exhibit A hereto. The cost of producing and installing such signage shall be paid by LESSOR, but LESSEE shall reimburse LESSOR the amount of Five Thousand Dollars ($5,000) as an additional payment on the Term Commencement Date, 3. USE OF LEASED PREMISES, (a) LESSEE shall use the Leased Premises only for the purpose of manufacturing, sales and distribution of newspapers and/or advertising publications and the like, but LESSEE shall not use the Leased Premises for the printing of any newspapers and/or advertising publications or the like, LESSEE shall not permit any use of the Leased Premises which will adversely affect or make voidable or increase the cost of any insurance on the property of which the Leased Premises are a part, or any insurance on the contents of said property, or which may be contrary to any law or regulation from time to time established by appropriate authorities or casualty insurance underwriters (any such use being referred to as an "Adverse Use"), LESSEE shall on demand reimburse LESSOR and all other tenants of the Building for any extra insurance premiums caused by any Adverse Use. LESSEE shall not vacate the Leased Premises or permit them to be unoccupied other than during LESSEE's customary non-business days or hours, LESSEE shall not be deemed to be in default or to have vacated the Leased Premises prior to the end of the Term of this Lease notwithstanding that LESSEE has moved its facilities from the Leased Premises, if LESSEE continues to pay rent and perform its other obligations under this Lease, (b) No trade, occupation, or activity shall be conducted in the Leased Premises or use made thereof which will be unlawful, improper, noisy or offensive, or contrary to any status, regulation, or ordinance in force in the city or town in which the Property is situated, No pet or other animal may be kept in the Leased Premises. LESSEE shall keep all LESSEE's employees working in the Leased Premises covered with Worker's Compensation Insurance, LESSEE agrees to use reasonable care in preventing damage to heating, ventilation and air conditioning equipment from harmful solvents, degreasers, chemicals, and the like, which may be used within the Leased Premises. No hazardous materials, hazardous wastes and chemical wastes, as such terms are defined under local, state and federal laws and regulations, shall be stored, treated or disposed of, or allowed to remain within the Leased Premises at any time except for those chemicals and other materials which are actually used by LESSEE in the production of photographic materials used in LESSEE's business operations. LESSEE shall bear the sole responsibility for storing, handling and disposing of such chemicals in accordance with local, state and federal regulations, including the procurement of any necessary permit or approval. LESSEE shall be solely responsible for any and all liabilities and damages associated with LESSEE's failure to comply with the provisions of this Section 3(b). (c) Without express written approval from LESSOR, no goods, equipment, or things of any type or description shall be held or stored outside the Leased Premises at any time except for (i) personal motor vehicles used by LESSEE or its employees or visitors (none of which shall be stored or kept outside the Leased Premises for more than one night), (ii) not more than two (2) pieces of equipment necessary for the handling of palletized materials (which shall be stored or kept when not in use in one or more locations behind the Building as may be specified by LESSOR) and (iii) a dumpster or a combination compactor/dumpster with a capacity of not more than thirty (30) cubic yards to service LESSEE's trash disposal needs, which dumpster (x) shall be placed near the rear of the Building in such location as shall be reasonably specified by LESSOR, (y) shall, if required by LESSOR, be covered and/or placed within an enclosure approved by LESSOR to provide visual shielding of such dumpster (provided, however, that any such requirement for an enclosure shall be reasonably consistent with similar requirements imposed upon other tenants of the Building), and (z) shall be emptied and maintained so as to comply with LESSEE's other obligations under this Lease. All costs associated with the dumpster, including the cost of constructing and maintaining any enclosure and the cost of trash removal, shall be LESSEE's sole responsbility. Except as expressly permitted by this Section 3(c), any such goods, equipment or things left or stored outside the Leased Premises without LESSOR's prior written consent shall be deemed abandoned and may be removed by LESSOR if not removed as soon as possible by LESSEE after notice by LESSOR. LESSEE agrees to pay all reasonable charges associated with said removal and any resulting storage or disposal, (d) No curtains, blinds, shades, or screens, other than those furnished by LESSOR, shall be attached to, hung in or on, or used in connection with any exterior window, exterior door or exterior wall of the Leased Premises, if same shall be visible from the outside of the Building, without the prior written consent of LESSOR, which consent shall not be unreasonably withheld. No sign or display of any kind shall be attached to, hung in or on, or used in connection with any exterior window of the Leased Premises, and all window areas shall be kept clear of any materials visible from the outside of the Building, Notwithstanding the foregoing, LESSEE shall have the right to locate desks and other furniture adjacent to such window areas even if such furniture is visible from the outside the Building. However, LESSEE shall keep all window areas in a neat and orderly fashion and shall not locate designated storage areas adjacent to the window areas of any exterior walls. LESSEE shall not be obligated to obtain the approval of LESSOR for interior signs, except for those which may be located in common areas, and LESSEE shall not be obligated to obtain the approval of LESSOR for drapes, curtains or the like if not visible from the outside of the Building, Other than the signage described in Section 2(b) and Exhibit E hereto, interior and exterior signs on doors or any exterior wall of the Building, or any exterior freestanding sign, shall be painted, fabricated and/or installed or affixed for LESSEE by LESSOR or at LESSOR's direction, at the sole expense of LESSEE, and shall be of a size, color and style acceptable to LESSOR in its sole judgment and discretion. (e) LESSOR warrants and covenants that the Leased Premises may be used for the purposes set forth in Section 3(a) above throughout the Term of this Lease and any extension thereof. (f) LESSOR warrants and covenants that it will not lease, or consent to the assignment or subletting, or otherwise permit any other portion of the Property to be used by any person or other entity whose business would be the same as, or substantially similar to, any use permitted to be made by LESSEE pursuant to Section 3(a) above, 4. TERM. (a) Base Term, The base term of this Lease (the "Base Term") shall commence at 12:01 A.M. on July 5, 1990 (the 'Term Commencement Date,) provided that (i) by March 16, 1990, LESSEE has supplied its specifications for the Leased Premises to LESSOR and has mutually agreed with LESSOR upon the Initial Improvements and (ii) by March 20, 1990 LESSEE has executed and delivered this Lease; and the Base Term shall expire at midnight on August 31, 1995 unless sooner terminated pursuant to the terms of this Lease. If the conditions set forth in the preceding sentence have not been satisfied as of March 16, 1990 and March 20, 1990, respectively, the Term Commencement Date shall be postponed day by day until such conditions have been satisfied. (b) Delay of Term Commencement Date, For purposes of this Lease, the term "Ready For Occupancy" shall mean that point in time at which (i) the Initial Improvements have been completed except for minor work such as would be reasonably expected to be noted on a routine punch list, (ii) the Leased Premises are available for LESSEE's occupancy and (iii) if a Certificate of Occupancy from the City of Waltham is required for the Leased Premises, the Initial Improvements and the Leased Premises have satisfactorily passed those inspections required for the issuance of such Certificate of occupancy (with the actual Certificate of Occupancy to be obtained as soon thereafter as possible with diligent efforts), At least fifteen (15) days before the Term Commencement Date, LESSOR shall notify LESSEE whether the Leased Premises are expected to be Ready for Occupancy on the Term Commencement Date (the "Readiness Notice"). If LESSOR states in such notice that the Leased Premises are not expected to be Ready for Occupancy on the Term Commencement Date, the Term Commencement Date shall be postponed until the later of the date specified by LESSOR in such notice or that date which is fifteen (15) days after LESSOR shall have given a new notice to LESSEE that the Leased Premises are Ready for Occupancy, If LESSOR is not able to deliver possession of the Leased Premises Ready For Occupancy on the Term Commencement Date, and LESSOR has failed to so notify LESSEE at least fifteen (15) days prior thereto as set forth above, LESSEE shall not be obligated to take possession on the Term Commencement Date but shall have the option to postpone the Term Commencement Date for a period not to exceed fifteen (15) days from the date that LESSEE is notified that the Leased Premises are Ready For Occupancy, If the Leased Premises are not Ready for Occupancy by August 5, 1990, LESSEE shall have the option, exerciseable by notice given to LESSOR by August 10, 1990, to terminate this Lease. (c) Extension Terms, Subject to the provisions set forth below in this Section 4(b), LESSEE shall have the right and option to extend the term of this Lease beyond the Base Term for two additional and separate terms of three (3) years each (the "Extension Terms") unless and until this Lease shall be sooner terminated pursuant to its terms. The first Extension Term shall commence on the date immediately succeeding the expiration date of the Base Term and shall end at midnight on the day immediately preceding the third anniversary of such commencement date (the "First Extension Term"), The second Extension Term shall commence on the date immediately succeeding the expiration date of the First Extension Term and shall end at midnight on the day immediately preceding the third anniversary of such commencement date (the "Second Extension Term"), (d) Exercise of Option for Extension Terms, At least fifteen (15) months before the end of the term then in effect, LESSEE shall give notice to LESSOR whether LESSEE intends to exercise its option for the First Extension Term or the Second Extension Term, as the case may be, If LESSEE gives notice of its intent to exercise such option (the "Extension Notice'), LESSOR shall designate the Base Rent for the First Extension Term or Second Extension Term, as the case may be, and the estimated Additional Rent for the first year thereof, by notice given to LESSEE (including information to support such designation of Base Rent) at least fourteen (14) months before the end of the term then in effect, Such Base Rent shall be determined as set forth in Section 5(b) below, and Additional Rent shall be estimated by calculating, to the extent practicable, the Additional Rent that would have been payable during the annual period preceding the Extension Notice if the provisions of Section 6(c) below had been applicable to such period. Within one (1) month after receipt of such notice, LESSEE shall give notice to LESSOR (the "Reply Notice") whether LESSEE accepts such Base Rent, but if LESSEE does not accept it, LESSEE shall include with the Reply Notice the data and information supporting LESSEE's determination of such Base Rent, If LESSOR and LESSEE are not able thereafter to agree on such Base Rent, LESSEE shall have the option, exerciseable by notice to LESSOR at least one (1) year before the end of the term then in effect, (i) to withdraw and cancel the Extension Notice (in which event LESSEE shall have no option to extend the Term of this Lease) or (ii) have such Base Rent determined by arbitration as set forth in Exhibit F annexed hereto (in which event this Lease shall be extended for the First Extension Term or the Second Extension Term, as the case may be, and no other instrument of renewal need by executed. (e) Other Conditions for Extension Terms. If LESSEE fails to give the Extension Notice to LESSOR as specified in Section 4(d) above, LESSEE shall have no option to extend the Term of this Lease, In addition, if an Event of Default under this Lease shall have occurred and be continuing either at the time of the Extension Notice or at any time thereafter during the Base Term or any Extension Term, LESSOR shall have the option, exercisable by notice to LESSEE, to terminate such option, whereupon such option shall be void and of no further force or effect, If LESSEE does not exercise its option to extend the Term of this Lease for any Extension Term as provided in Section 4(d), or if such option is terminated as provided herein, then LESSOR shall have the right during the remainder of the Base Term or first Extension Term, as the case may be, to advertise the availability of the Leased Premises for reletting. 5. BASE RENT. (a) No Base Rent shall be payable for the first month of the Base Term, Thereafter, (i) for the next fifty-eight (58) months, LESSEE shall pay LESSOR, as base rent for the Base Term, the sum of Two Hundred Eighty- One Thousand Four Hundred Sixty-Two and 50/100 Dollars ($281,462.50) per year, payable in advance in equal monthly installments of Twenty-Three Thousand Four Hundred Fifty-Five and 20/100 Dollars ($23,455.20), (ii) for the 60th month, no Base Rent shall be payable, and (iii) for the 61st and 62nd months, the Base Rent shall be Twenty-Six Thousand Five Hundred Fourteen and 60/100 Dollars ($26,514.60), in each case on the first day in each calendar month, The first monthly payment of Base Rent shall be prorated for any portion of a month at the commencement of the term. (b) LESSEE shall pay LESSOR, as annual base rent for any Extension Term, an amount equal to the greater of (i) Thirteen Dollars ($13,00) per square foot of Lessee's Rentable Floor Area, or (ii) the fair market rental value of the Leased Premises as determined in accordance with paragraph (a) of Exhibit F hereto, The payments of base rent required pursuant to this Section 5 are referred to in this Lease as "Base Rent," and all payments of Base Rent and Additional Rent (as defined in Section 6 below) shall be made to LESSOR in immediately available U.S. dollars at Eight Faneuil Hall Marketplace, Boston, Massachusetts 02109, or at such other place as LESSOR shall from time to time designate in writing. 6. ADDITIONAL RENT. (a) LESSEE shall pay LESSOR, as additional rent, Lessee's Proportionate Share of the real estate taxes (or other payments imposed by governmental authorities in the nature of or in lieu of real estate taxes) or betterments assessments levied against the Property, and LESSEE shall make such payment to LESSOR within twenty (20) days after notice from LESSOR that any installment of such taxes or betterments assessment has been paid to the appropriate taxing authority. Any such payment shall be prorated if this Lease terminates before the end of the tax period to which such payment relates. (b) LESSEE shall also pay LESSOR, as additional rent, (i) during the first three (3) years after the Term Commencement Date, a monthly management fee equal to five percent (5%) of the Base Rent payable for such month by LESSEE, (ii) thirty-one percent (31%) of LESSOR's payments under service contracts with independent contractors for services to the Building or the Leased Premises, provided that LESSEE's obligations under this clause (ii) shall not exceed One Thousand Five Hundred Dollars ($1,500) per year, and (iii) Lessee's Proportionate Share of LESSOR's expenses for electricity, gas, water, and sewer use charges not separately chargeable to other tenants of the Building. (c) During any Extension Term, LESSEE shall pay LESSOR, as additional rent, Lessee's Proportionate Share of Lessor's Operating Expenses for any calendar year during such Extension Term, prorated for any portion of a calendar year occurring at the beginning and end of such Extension Term, For purposes of this Lease, the term "Lessor's Operating Expenses" shall mean those expenses of LESSOR not separately chargeable to tenants of the Building and incurred in connection with the operation and maintenance of the Property, including: (1) electricity, water, gas, sewer and other utility charges not separately chargeable to tenants; (2) cost of maintenance and repairs, including engineering services, landscaping, grounds maintenance and snow removal; (3) payments under the service contracts with independent contractors, including security service; (4) payments for management services of not more than five percent (5%) of collected base rents from the Property; and (5) the cost of maintaining insurance on the Property. (d) Any additional rent payments due by LESSEE shall be made within twenty (20) days after LESSOR shall have given LESSEE notice thereof, accomplished by a reasonable accounting, where applicable, of the determination of such additional rent. (e) The payments of additional rent required pursuant to this Section 6 are referred to in this Lease as "Additional Rent"). 7. NET LEASE: LATE PAYMENT. This Lease is intended to be a net lease, and the payments of Base Rent and Additional Rent by LESSEE shall be made without any offset, abatement or deduction whatsoever except as may be expressly provided for under the terms of this Lease, LESSEE shall pay interest at an annual rate of eighteen (18) percent, from the date due, for any installment of rent or other payment which is not received by LESSOR within seven (7) days after said due date. 8. OCCUPANCY. (a) If LESSEE takes possession of the Leased Premises prior to the Term Commencement Date, LESSEE will perform and observe all of LESSEE's covenants from the date upon which LESSEE takes possession. LESSEE shall not remove LESSEE's goods or property from the Leased Premises other than in the ordinary and usual course of business, without having first paid and satisfied LESSOR for all rent and other sums which may be due as of the date of any such removal. If LESSEE continues to occupy or control all or any part of the Leased Premises after the agreed termination date of this Lease without the written permission of LESSOR, all other terms of this Lease shall continue to apply except that LESSEE shall be liable to LESSOR for any and all loss, damages or expenses incurred by LESSOR caused by such holding over, and rent shall be due on a prorated, per diem basis at a rate of one hundred fifty (150) percent of the Base Rent and Additional Rent which would otherwise be due under this Lease, LESSEE's control or occupancy of all or any part of the Leased Premises beyond midnight on the last day of any monthly rental period shall constitute LESSEE's occupancy. (b) For purposes of this Lease, LESSEE will not be deemed to have taken possession of the Leased Premises if, prior to the Term Commencement Date, (i) LESSEE causes to have telephone wires and/or computer wires or the like installed throughout the Leased Premises, or (ii) LESSEE causes telephone equipment or computer equipment to be installed in the computer room as shown on Exhibit C hereto. LESSEE shall have a right of access for such installation beginning June 5, 1990. 9. UTILITIES. LESSOR shall provide equipment sufficient to heat and cool the Leased Premises so that normal warm and cool temperatures are maintained throughout the Leased Premises, twenty-four (24) hours a day, seven (7) days a week. LESSEE shall have access to all utilities servicing the Building, specifically including but not limited to water, heat and electricity, twenty-four (24) hours a day, seven (7) days a week. In addition, LESSOR agrees to provide outside lighting (including the parking area) and lighting in the common areas serving the Leased Premises so that said areas are lighted from dusk until dawn, The Leased Premises shall be separately metered for electricity usage within the Leased Premises, and if permitted by the applicable utility, LESSEE shall pay directly to the such utility all charges for electricity and gas used in the Leased Premises, If the applicable utility does not permit such direct payment, LESSEE shall pay LESSOR the amount of such charges within ten (10) days after delivery to LESSEE of the applicable invoice for such charges from such utility, Except in an emergency situation, no plumbing, electrical, heating, ventilation or air conditioning work of any type shall be done without LESSOR's approval and the appropriate municipal permit and inspector's approval, Sewer for domestic type sanitary purposes (only) and water shall be supplied by LESSOR, and the cost thereof shall be included in Lessor's Operating Expenses (as defined in Section 6(c) hereof. 10. MAINTENANCE OF PREMISES. LESSOR will be responsible for all structural maintenance of the Leased Premises and for the normal maintenance of all heating and cooling equipment, doors, locks, plumbing, electrical wiring, and the parking areas and exterior lighting fixtures but specifically excluding damage caused by the careless, malicious, willful, or negligent acts of LESSEE or its agents, employees or visitors, LESSEE agrees to maintain at its expense all other aspects of the Leased Premises in the same condition as they are at the commencement of the term or as they may be put in during the term of this Lease, normal wear and tear and damage by fire or other casualty only excepted. Whenever necessary, LESSEE shall replace light bulbs, plate glass and other glass therein, acknowledging that the Leased Premises are in good order and the light bulbs and glass whole as of the Term Commencement Date, LESSEE shall ensure that the Leased Premises and are kept in a neat and clean condition, depositing all waste in appropriate receptacles, and LESSEE shall be responsible, at its expense, for the cleaning of the Leased Premises and the removal of all its trash and waste from the Property, LESSEE shall not permit the Leased Premises to be overloaded, damaged, stripped or defaced, nor suffer any waste, Any increase in air conditioning equipment or electrical capacity, or any mechanical maintenance which is necessitated by some specific aspect of LESSEE's use of the Leased Premises shall be at LESSEE's expense unless included within the Initial Improvements or unless otherwise agreed to in writing by LESSOR, All maintenance provided by LESSOR shall,. to the extent practicable, be accomplished during normal business hours. 11. ALTERATIONS DURING THE TERM: GENERAL STANDARDS. (a) LESSEE shall not make structural alterations or structural additions of any kind to the Leased Premises, but may make non-structural alterations provided LESSOR consents thereto in writing, which consent shall not be unreasonably withheld, delayed or qualified, and the consent of LESSOR will be deemed given unless, within ton (10) days after receiving a request for approval, LESSOR responds in writing to the contrary, Notwithstanding the foregoing, LESSEE shall have the right, without the consent of LESSOR but only after notice to LESSOR, to make non- structural alterations provided the alterations do not adversely affect the Building's appearance, its structural integrity, the Building systems, or other tenants, and the costs of any such alteration is less than Five Thousand Dollars ($5,000,00), All such allowed alterations shall be at LESSEE's expense and shall be in quality at least equal to the general standard within the Building, If LESSOR performs any services for LESSEE in connection with such alterations or otherwise, LESSOR's reasonable expenses related thereto shall be promptly paid after invoicing by LESSOR, LESSEE shall not permit any mechanics' liens or similar liens to remain upon the Leased Premises in connection with work of any character performed or claimed to have been performed at the direction of LESSEE and shall cause any such lien to be released or removed forthwith without cost to LESSOR. Any alterations or improvements shall become part of the real estate and the property of LESSOR unless otherwise agreed to in writing by LESSOR at the time such alternatives or improvements are made (those alterations or improvements agreed to as belonging to LESSEE being referred to as "Lessee's Alterations"). Any alterations completed by LESSOR shall be 'building standard" unless noted otherwise, LESSOR shall have the right at any time to change the arrangement of parking areas, stairs, walkways or other common areas of the Building so long as (i) said changes do not adversely affect or impact the business operations of LESSEE, (ii) the number of parking spaces provided for LESSEE under this Lease is not reduced and the location of the twenty (20) parking spaces in the front of the Building is not changed, and (iii) access to the Leased Premises is not impaired or made materially less convenient. (b) All construction work required or permitted by this Lease, whether by LESSOR or LESSEE, 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 authorities and insurers of the Building, Any such work being performed by or on behalf of LESSEE shall be coordinated with any work being performed by LESSOR and in such manner as to maintain harmonious labor relations and not to damage the Property (specifically including the computer system) or interfere with Building operation and, except for installation of furnishings, shall be performed by a general contractor licensed in Massachusetts or by other contractors or workmen, in each case first approved by LESSOR. LESSOR's approval shall not be unreasonably withheld, delayed or qualified and shall be deemed given unless LESSOR responds in writing to the contrary within ten (10) days after reasonable information on such contractor or workmen has been supplied to LESSOR. Except for work by LESSOR's general contractor, LESSEE, before its work is started, shall (i) secure all licenses and permits necessary therefor; (ii) deliver to LESSOR a statement of the names and business addresses of all its contractors and subcontractors and the estimated cost of all labor and material to be furnished by them; (iii) cause each contractor to carry workmen's compensation insurance in statutory amounts covering all of the contractor's and subcontractor's employees, together with comprehensive public liability insurance with limits of at least $2,000,000 comprehensive single limit and property damage insurance with limits of at least $500,000 (all such insurance to be written insuring LESSOR AND LESSEE as well as the contractors); and (iv) deliver to LESSOR certificates of all such insurance, LESSOR agrees that no such certificate shall be required in connection with LESSEE's initial leasehold improvements in the Leased Premises. 12. ASSIGNMENT OR SUBLEASING. (a) LESSEE shall not assign this Lease or sublet or allow any other firm or individual to occupy the whole or any part of the Leased Premises without LESSOR's prior written consent, which consent shall not be unreasonably withheld or delayed so long as (i) such assignment or sublease shall be for a term expiring on or before the expiration of the Term of this Lease then in effect, (ii) LESSEE shall have disclosed to LESSOR the financial terms of the proposed sublease or assignment and (iii) LESSEE shall have provided LESSOR with such information on the proposed assignee or sublessee as LESSOR Shall have reasonably requested, and LESSOR shall have determined, in its judgment reasonably exercised, that the use of the Leased Premises by the proposed assignee or sublessee is not incompatible with the other uses in the Building and that the proposed assignee or sublessee is at least as creditworthy as LESSEE was on the Term Commencement Date, In lieu of giving its consent, LESSOR shall have the option to enter into a direct lease with the proposed sublessee or assignee on substantially the same terms and conditions as are contained in this Lease, except for rent, which shall be as set forth in LESSEE's disclosure of financial terms to LESSOR, LESSOR shall exercise such option by notice given to LESSEE within three (3) weeks after the information described in clause (iii) above has been supplied to LESSOR, but in no event shall LESSOR be required to exercise such option until one (1) week after the information described in clause (ii) above has also been supplied to LESSOR, If LESSOR exercises such option, this Lease shall terminate on the effective date of such new lease, If LESSOR does not exercise such option, LESSEE shall be entitled to proceed with its sublease or assignment, but only with the same party and on the same terms and conditions as were disclosed to LESSOR. (b) If LESSEE enters into a sublease as permitted under Section 12(a) above, LESSEE and any guarantor of this Lease shall remain liable to LESSOR for the payment of all rent and for the full performance of the covenants and conditions of this Lease unless released from such obligations by LESSOR in writing, Without LESSOR's consent, but only after at least ten (10) days advance notice to LESSOR, LESSEE may assign this Lease or sublet all or any portion of the Leased Premises to or permit occupancy of the Leased Premises to or permit occupancy of the Leased Premises or any portion thereof by, an affiliated person or affiliated entity. For purposes of this Section, the term affiliated person" shall mean any person who ownes more than a twenty-five percent (25%) interest in LESSEE, and the term 'affiliated entity" shall mean any corporation or other entity which, directly or indirectly, controls or is controlled by, or is under common control with, LESSEE, The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of another entity through ownership of voting securities. 13. SUBORDINATION. This Lease shall be subject and subordinate to any and all mortgages and other instruments in the nature of a mortgage, now or at any time hereafter secured by the Property or any portion thereof, and LESSEE shall, when requested, promptly execute and deliver such written instruments as shall be necessary to show the subordination of this Lease to said mortgages or other such instruments in the nature of a mortgage, provided that (i) the mortgagee or holder of any other instruments in the nature of a mortgage shall execute a non-disturbance agreement in favor of LESSEE to provide that in the event of the foreclosure of such mortgage, LESSEE's rights under this Lease shall not be affected so long as LESSEE continues to pay the rent provided for in this Lease and otherwise complies with the terms and provisions hereof, and (ii) the lien of such mortgage shall not cover any of LESSEE's personal property or any of the LESSEE's fixtures, furnishings, alterations or improvements which LESSEE is permitted to remove from the Leased Premises pursuant to the terms of this Lease, In confirmation of such subordination, LESSEE shall execute promptly any agreement which LESSOR or its mortgagee may request with respect thereto, If LESSEE fails, neglects or refuses to do so within seven (7) days after written request therefor from LESSOR or the mortgagee, LESSOR shall have the right and is hereby authorized to execute any such instrument on behalf of LESSEE. 14. LESSOR'S RESERVATIONS AND ACCESS, (a) LESSOR reserves the right from time to time, without unreasonable interference with LESSEE's use of the Leased Premises and upon at least twenty-four (24) hours telephonic or written notice in non-emergency situations: (i) to install, repair, replace, use, maintain and relocate for service to the Leased Premises and to other parts of the Building, pipes, ducts, conduits, wires and appurtenant fixtures wherever located in the Building, and (ii) to alter or relocate any other common facility, provided that the substitutions are substantially equivalent to or better than such common facility before its alteration or relocation, Installations, replacements and relocations referred to in this Section shall be located, to the extent practicable, in the core areas, above ceiling surfaces, below floor surfaces or within the perimeter walls of the Building. (b) LESSOR or agents of LESSOR may at reasonable times enter to view the Leased Premises and may remove any signs not approved and affixed as herein provided, and may make repairs and alterations which LESSEE is required but has failed to do, and may show the Leased Premises to others within one year prior to the end of the term of this Lease unless LESSEE's option with respect to the Expansion Space has been exercised and is in effect under the terms of this Lease. 15. LIABILITY: INSURANCE. (a) From and after the date upon which LESSEE takes occupancy, LESSEE shall be solely responsible as between LESSOR and LESSEE for deaths, personal injuries or property damage occurring in or on the Leased Premises (including any extension thereof) from whatever cause arising out of the use, control, condition or occupation of the Leased Premises by LESSEE; and LESSEE agrees to indemnity and save harmless LESSOR from any and all liability, reasonable expense, direct (but not consequential) damage, causes of action, suits, claims or judgments caused by or in any way arising out of any such matter, except for death, personal injuries or property damage resulting from the negligence of LESSOR or its agents. LESSOR agrees to indemnify and hold LESSEE harmless from any and all liability, reasonable expense, direct (but not consequential) damage, causes of action, suits, claims or judgments caused by LESSOR's negligence or the negligence of its agents or employees. LESSEE will secure and carry at its own expense a comprehensive general liability policy insuring LESSEE and LESSOR against any claims arising out of the matters described in the foregoing sentence, such policy to insure LESSEE and LESSOR against any claim up to Three Million ($3,000,000) Dollars in the case of any one accident involving bodily injury (including death), and up to One Million ($1,000,000) Dollars against any claim for damage to property, LESSOR shall be included in such policy as a named insured, LESSEE will promptly file with LESSOR certificates showing that such insurance is in force, and thereafter will file renewal certificates prior to the expiration of any such policies, All such insurance certificates shall provide that such policies shall not be cancelled or the coverage thereunder reduced without at least ten (10) days prior written notice to each insured named therein. (b) Unless caused by the negligence of LESSOR or its agents or employees, LESSOR shall not be held liable to anyone for loss or damage caused in any way by the use, leakage, seepage or escape of water from any source, or for the cessation of any service rendered customarily to said premises or buildings, or agreed to by the terms of this Lease, due to any accident, to the making of repairs, alterations or improvements, to labor difficults, weather conditions, or mechanical breakdowns, to trouble or scarcity in obtaining fuel, electricity, service or supplies from the sources from which they are usually obtained for the Building, or to any cause beyond LESSOR's immediate control. (c) If the Leased Premises are rendered untenantable for a period of three (3) or more consecutive days due to the unavailability of utility services to be provided by LESSOR, then LESSEE shall be entitled to a pro-rata abatement of rent until such time as said services are restored. l6. FIRE, CASUALTY, EMINENT DOMAIN. If a substantial portion of the Leased Premises or the Property is substantially damaged by fire or other casualty, or is taken by eminent domain, LESSOR shall have the option to terminate this Lease by giving notice of termination to LESSEE within thirty (30) days after such casualty or taking has occurred. When such fire, casualty, or taking renders the Leased Premises unsuitable for their intended use, a just and proportionate abatement of rent shall be made; and LESSEE may elect to terminate this Lease if (a) LESSOR fails to give written notice, within thirty (30) days after such casualty or taking has occurred, of its intention to restore the Leased Premises, or (b) LESSOR fails to restore the Leased Premises to a condition substantially suitable for their intended use within ninety (90) days after such casualty or taking. LESSEE's election must be exercised by notice given to LESSOR within twenty (20) days after the expiration of such 30-day or 90-day period, as the case may be. LESSOR reserves all rights for damages or injury to the Leased Premises and for any taking by eminent domain, except for any award or proceeds directly attributable to LESSEE's fixtures, equipment or other tangible personal property. 17. EVENTS OF DEFAULT: REMEDIES. (a) The occurence of any one or more of the following shall be an Event of Default under this Lease: (i) LESSEE shall default in the payment of rent or any other sum due under the provisions of this Lease and such default shall continue for seven (7) days after written notice thereof (provided, however, that LESSEE shall not be entitled to any such notice after notice has been given with respect to two other payment defaults within the prior twelve-month period); (ii) LESSEE shall default in the observance or performance of any of LESSEE's other covenants, agreements, or obligations under this Lease, and such default shall continue for fifteen (15) days after written notice thereof, provided, however, that if LESSEE has begun to cure such default within such 15-day period and continues thereafter to attempt to cure such default with diligent efforts, LESSEE shall have such additional period of time, not to exceed an additional fifteen (15) days, as shall be required to cure such default; (iii) LESSEE vacates the Leased Premises or permits them to be unoccupied in the normal conduct of LESSEE's business for more than ten (10) consecutive days (or six (6) consecutive months so long as LESSEE continues to pay all rent and perform all of its other obligations under this Lease); or (iv) LESSEE shall be declared bankrupt or insolvent according to law, or if any assignment shall be made of LESSEE's property for the benefit of creditors. (b) During the continuance of an Event of Default, LESSOR shall have the right (i) without demand or further notice, to re-enter and take complete possession of the Leased Premises and to remove and store LESSEE's effects, at LESSEE's expense and without being guilty of any manner of trespass and without prejudice to any other remedies LESSOR may have, and (ii) upon notice to LESSEE, to declare the term of this Lease ended, in which event the entire balance of Base Rent which would otherwise accrue under this Lease (the "Rent Balance") shall become immediately due and payable. However, if LESSEE pays the Rent Balance to LESSOR, and if during the remainder of the term then in effect. LESSOR relets the Leased Premises or any portion thereof, at the end of such term LESSOR shall credit and pay LESSEE the amount of Base Rent paid to LESSOR with respect to the Leased Premises during the remainder of such term, after deducting all LESSOR's expenses in connection with such reletting, including, without limitation, all repossession costs and brokerage commissions, LESSEE agrees that LESSOR in its sole discretion may relet the Leased Premises or any portion thereof, for a term or terms which may at LESSOR's option be equal to or less than or exceed the period which would otherwise have constituted the balance of the applicable term, and for such consideration or rent as LESSOR solely shall determine, Although LESSOR agrees to use reasonable efforts to relet the Leased Premises, LESSOR shall have no liability or obligation to LESSEE in the event the Leased Premises or any portion thereof are not relet. (c) LESSOR, without being under any obligation to do so and without thereby waiving any Event of Default, may, however, remedy same for the account and at the expense of LESSEE, If LESSOR pays or incurs any obligations for the payment of money in connection therewith, including but not limited to reasonable attorney's fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations incurred plus interest at the rate of eighteen (18) percent per annum and costs, shall be paid to LESSOR by LESSEE as additional rent, Any sums received by LESSOR shall be applied first to any unamortized improvements completed for LESSEE's occupancy, then to offset any outstanding invoice or other payment due to LESSOR, with the balance applied to outstanding rent, Notwithstanding the foregoing, LESSEE agrees to pay reasonable attorney's fees incurred by LESSOR in enforcing any and all obligations of LESSEE under this Lease at any time. (d) No consent or waiver, express or implied, by LESSOR, to or of any breach of any covenant, condition or duty of LESSEE shall be construed as a consent or waiver to or of any other breach of the same or any other covenant, condition or duty, 18. SURRENDER. LESSEE shall at the expiration or other termination of this Lease remove all of LESSEE's goods and effects from the Leased Premises. LESSEE shall deliver to LESSOR the Leased Premises and all keys and locks thereto, and other fixtures and equipment connected therewith, and all alterations, additions and improvements made to or upon the Leased Premises (except for Lessee's Alterations, as defined in Section 11(a) hereof), including but not limited to any permanent partitions, floor coverages (including computer floors), plumbing and plumbing fixtures, air conditioning equipment and duct work of any type, exhaust fans or heaters, burglar alarms, telephone wiring, wooden or metal shelving which has been bolted, welded or otherwise attached to the Building, air or gas distribution piping, counters attached to walls or floors, electrical fixtures, and electrical switchboards, power panels or similar electrical equipment. LESSEE shall deliver the Leased Premises broom clean and in the same condition as they were at the commencement of the term, or as they were put in during the term hereof, reasonable wear and tear and damage by fire or other casualty only excepted, In the event of LESSEE's failure to remove any of LESSEE's property from the Leased Premises within one (1) day after the expiration or other termination of this Lease, LESSOR is hereby authorized, without liability to LESSEE for loss or damage thereto, and at the sole risk of LESSEE, to remove and store any such property at LESSEE's expense, or to retain same under LESSOR's control, or to sell at public or private sale (without notice), any or all of the property not so removed and to apply the net proceeds of such sale to the payment of any sum due hereunder, or to destroy such property, all of which shall be conclusively deemed to have been abandoned. In no case shall the Leased Premises be deemed surrendered to LESSOR until the expiration date provided herein or such other date as may be specified in a written agreement between the parties. 19. NOTICES; OTHER COMMUNICATION. Any notice or other communication given or made pursuant to this Lease (a "Communication") shall be in writing and shall be hand delivered or sent either (i) through the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage, (ii) by means of an express delivery service if it obtains a written receipt to confirm delivery, or (iii) by means of a facsimile transmission if a written acknowledgment of receipt is confirmed by facsimile transmission or otherwise, Each Communication shall be effective upon the receipt thereof by the addressee or its agent. Rejection or refusal to accept or inability to deliver because of change of address of which no notice was given as provided herein shall be deemed to be receipt of the Communication sent. By giving to the other party hereto at least twenty (20) days notice thereof, any party hereto shall have the right from time to time to change its address for purposes of this Lease to any other address within the continental United States of America. Until notice of change of address as aforesaid, each such Communication shall be addressed, if to LESSOR, at Eight Faneuil Hall Marketplace, Boston, Massachusetts 02109 (Attention: Richard Sandberg), and if to LESSEE, (i) prior to the Term Commencement Date, at 420 Washington Street, Dedham, Massachusetts 02026 (Attention: Helen Cochran) and (ii) after the Term Commencement Date, at the Leased Premises (Attention: Helen Cochran). 20. BROKERAGE. LESSEE represents and warrants that it has dealt with no broker in connection with this transaction other than Coldwell Banker. LESSEE agrees to defend, indemnify and save LESSOR harmless from and against any and all claims for a commission arising out of this Lease, other than from such broker, and LESSOR agrees to pay the commission of such broker arising out of this Lease. 21. GENERAL PROVISIONS. (a) The invalidity or unenforceability of provision of this Lease shall not affect or render invalid or unenforceable any other provision hereof. (b) 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. (c) No action or proceeding, regardless of form, arising out of the subject matter of this Lease shall be brought by LESSOR or LESSEE more than one year after the cause of action has occurred, of if later, one year after the claiming party knew or should have known of the events giving rise to such cause of action. (d) If LESSOR or LESSEE is acting under any partnership or corporation, the obligations of LESSOR or LESSEE, as the case may be, shall be binding upon the partnership or corporation but not individually upon any partner, officer, corporate officer or shareholder of the partnership or corporation. (e) This Lease is made and delivered in the Commonwealth of Massachusetts, and shall be interpreted, construed, and enforced in accordance with the laws thereof. (f) This Lease, when executed by both parties shall constitute the entire agreement between said parties, No other verbal or written representation shall have any effect hereon, and this Lease may not be altered, extended or amended except by written agreement attached hereto or as otherwise provided herein. (g) Notwithstanding any other statements herein, LESSOR makes no warranty, express or implied, concerning the suitability of the Leased Premises for LESSEE's intended use. (h) LESSEE hereby grants to LESSOR a continuing security interest for all sums of money becoming due hereunder upon all existing or hereafter acquired property of LESSEE in the Leased Premises. Upon default under this Lease, LESSOR, in addition to all other remedies provided herein or by law, will have all rights and remedies under the Uniform Commercial Code, including without limitation the right to sell the property herein described. LESSEE also agrees to execute a UCC-1 Financing Statement, or other financing agreement as may in LESSOR's opinion be necessary to perfect or continue the security interest herein created. (i) LESSOR and LESSEE will execute and deliver a recordable notice of lease with respect to this Lease, and all recording charges shall be paid by LESSEE. (j) Within ten (10) days after written request by LESSOR, LESSEE shall deliver to LESSOR an estoppel certificate, in such form as may be required by any mortgagee or prospective mortgagee of the Property, setting forth factual information concerning this Lease and LESSEE's tenancy hereunder. 22. RIGHT OF FIRST REFUSAL. During the Base Term or the First Extension Term, provided that LESSEE is not then in default under this Lease, LESSOR shall not lease any space abutting or contiguous to the Leased Premises and containing five thousand (5,000) square feet or less (the "Additional Space") at any time except in compliance with the following provisions of this Section 22, LESSOR shall give notice to LESSEE that such Additional Space has or will become available (the "Availability Notice"), and the Availability Notice shall include LESSOR's determination of the fair market rental value for the Additional Space, calculated as set forth in paragraph (a) of Exhibit F hereto, Within two (2) weeks after receipt of the Availability Notice, LESSEE shall give notice to LESSOR (the "First Refusal Notice") whether LESSEE is interested in leasing the Additional Space. If LESSEE declines interest in leasing the Additional Space, or if LESSEE expresses such interest but LESSOR and LESSEE shall not have executed an appropriate amendment to this Lease for the Additional Space within three (3) weeks after the giving of the First Refusal Notice, LESSOR shall be entitled to lease the Additional Space to any other party on terms acceptable to LESSOR and such other party, However, if a lease or lease amendment for the Additional Space with such other party is not executed within six (6) months after the First Refusal Notice was given, the provisions of this Section 22 shall once again apply to any leasing of the Additional Space. IN WITNESS WHEREOF, LESSOR AND LESSEE, intending to be legally bound hereby, have caused this Lease to be executed by their respective duly authorized officers or partners, as the case may be, as of the day and year first above written, LESSOR: 580 WINTER STREET LIMITED PARTNERSHIP By its General Partner, Kullenberg Development Inc. By: /s/ Its President LESSEE: HARTE-HANKS COMMUNICATIONS, INC. (d/b/a HARTE-HANKS COMMUNITY NEWSPAPERS, MASSACHUSETTS) By: /s/ Its Publisher and By: /s/ Its Senior Vice President; Secretary FIRST AMENDMENT OF LEASE TIES AGREEMENT, made this / day of September, 1992, by and between 580 Winter Street Limited Partnership, a Massachusetts limited partnership having a usual place of business at 30 Federal St., Boston, Massachusetts ("Landlord"), and Harte Hanks Communications, Inc., a Delaware Corporation d/b/a Harte-Hanks Community Newspapers, Massachusetts ("Tenant") having a usual place of business at 580 Winter Street, Waltham, Massachusetts. WITNESSETH THAT: WHEREAS, Landlord has leased to Tenant and Tenant has hired from Landlord a portion of the first floor of the building located at 580 Winter Street, Waltham, Massachusetts, all as more particularly described and set forth in a certain Lease Agreement dated March 20, 1990 (the "Lease").' WHEREAS, the parties wish to add additional rental area to the Premises, subject to the terms and conditions hereof; NOW, THEREFORE, for the good and valuable consideration by each party paid to the other, and in further consideration of the foregoing premises and the mutual obligations set forth herein, the parties hereby agrees as follows: 1. All capitalized words or terms used in this Agreement shall have the same meaning as in the Lease unless otherwise specifically provided herein. 2. The area of approximately 1,259 usable square feet on the first floor of the Building shown on the plan attached hereto as Exhibit A and made a part hereof (hereinafter referred to as the "Expansion Area") shall be added to and included in the Leased Premises and shall become subject to all terms and conditions of the Lease as fully as if it had originally been part of the Leased Premises, except as otherwise herein provided. As a result of the addition of the Expansion Area, the Leased Premises leased by Tenant shall consist of approximately 25,734 square feet of Rentable Floor Area on the first floor. 3. The Base Rent is hereby amended to include also the additional rentable square footage of the Expansion Area with an increase of the Base Rent for the Base Term of Eight Thousand Eight Hundred and Thirteen Dollars ($8,813.00) per year payable in advance in equal monthly installments of Seven Hundred and Thirty Four Dollars ($734.42) The Rent Commencement Date for the Expansion Area shall be September 1, 1992. 4. Tenant accepts the Expansion Area in present conditions as is, without any Improvement required by Landlord. Except as modified by this Agreement, the Lease is hereby ratified and confirmed. Unless the context requires otherwise, all terms used herein shall be construed in conformity with the applicable provisions of the Lease. In witness whereof, Landlord and Tenant have executed this instrument under seal as of the day and year first above written. WITNESS: LANDLORD: 580 Winter Street Limited Partnership TENANT: By: Kullenberg Development Inc. Harte Hanks Communications, Inc. general partner (d/b/a Harte Hanks Community Newspapers, Massachusetts) By: /s/ By: /s/ Lars Borgwing President SECOND AMENDMENT OF LEASE THIS AGREEMENT, made this 3rd day of October, 1994, by and between 580 Winter Street Corp., a Massachusetts Corporation having a usual place of business at 30 Federal St., Boston, Massachusetts (successor-in-interest to 580 Winter Street Limited Partnership) (the "Landlord"), and Harte Hanks Communications, Inc., a Delaware Corporation d/b/a Harte-Hanks Community Newspapers, Massachusetts (the "Tenant") having a usual place of business at 580 Winter Street, Waltham, Massachusetts. WITNESSETH THAT: WHEREAS, Landlord has leased to Tenant and Tenant has hired from Landlord a portion of the first floor of the building located at 580 Winter Street, Waltham, Massachusetts, consisting of approximately 25,734 square feet of rentable floor area, all as more particularly described and set forth in a certain Lease Agreement dated March 20, 1990, as amended by First Amendment of Lease dated September 1, 1992. (the "Lease"); and WHEREAS, the Tenant wishes to extend the term of the Lease for the First Extension Term subject to the terms and conditions hereof, NOW, THEREFORE, for the good and valuable consideration by each party paid to the other, and in further consideration of the foregoing premises and the mutual obligations set forth herein, the parties hereby agrees as follows: 1. All capitalized words or terms used in this Agreement shall have the same meaning as in the Lease unless otherwise specifically provided herein. 2. Landlord hereby acknowledges that Tenant has exercised its right to extend the term of the Lease with respect to Tenant's existing space and the First Extension Term. The Lease shall be automatically so extended at the expiration of the Base Term unless the Lease shall have been sooner terminated pursuant to its terms. The first Extention Term should commence on July 11, 1995 and end on July 10, 1998. 3. The annual Base Rent for the Leased Premises for the First Extension Term shall be at the annual rate of $13.00 per rentable square foot. ($334,542.00 per annum or $27,878.50 per month.) 4. Tenant shall also pay during the First Extention Term additional rent as set forth in Section 6 of the Lease; provided however, the charge for management service in Section 6 (c) (4) shall be at an annual rate of $0.45 per rentable square foot ($11,580.30). Except as modified by this Agreement, the Lease is hereby ratified and confirmed. Unless the context requires otherwise, all terms used herein shall be construed in confirmity with the applicable provisions of the Lease. In witness whereof, Landlord and Tenant have executed this instrument under seal as of the day and year first above written. TENANT LANDLORD: 580 Winter Street Corp. Harte Hanks Communications, Inc. (d/b/a Harte Hanks Community Newspapers, Massachusetts By: /s/ By: /s/ EX-10.3 4 MFS INTELENET LEASE LEASE AGREEMENT By and Between 580 Winter Street Corp., LANDLORD and MFS Intelenet of Massachusetts, Inc., TENANT October 20th, 1994 LEASE AGREEMENT This LEASE made and entered into this 20th day of October, 1994, by and between 580 Winter Street Corp., a Massachusetts corporation having a usual place of business c/o WASA Management, 30 Federal Street, Boston, MA 02110 (hereinafter the "Landlord"), and MFS Intelenet of Massachusetts, Inc., a Delaware corporation having a usual place of business at One Tower Lane, Suite 1600, Oakbrook Terrace, IL 60181 (hereinafter the "Tenant"). 1. Premises and Exclusions: In consideration of the rents and covenants herein stipulated to be paid and performed by Tenant and upon the terms and conditions herein specified, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the following-described premises: A portion of the first floor of the building located at 580 Winter Street in Waltham, Massachusetts (hereinafter the "Building") consisting of approximately 15,252 square feet of rentable area and a portion of the roof consisting of approximately 2,500 usable square feet (hereinafter the "Premises") as shown on Exhibit "A" attached hereto, subject to and with the benefit of all easements, agreements, restrictions and encumbrances now of record, to the extent in force and applicable. The Building, together with the parcel of land on which the Building is located, may be referred to hereinafter as the "Property". The Premises exclude exterior faces of exterior walls, the common stairways and stairwells, fan rooms, electric and telephone closets, janitor closets, freight elevator vestibules, and pipes, ducts, conduits, wires and appurtenant fixtures serving other parts of the Building (exclusively or in common). Tenant shall have, as appurtenant to the Premises, rights to use in common with others entitled thereto (subject to reasonable rules of general applicability to tenants of the Building from time to time made by Landlord of which Tenant is given notice): (a) the common lobbies and corridors of the Building, and the pipes, ducts, conduits, wires and appurtenant meters and equipment serving the Premises in common with others; (b) common walkways necessary to access the Building; (c) if the Premises include less than the entire rentable floor area of any floor, the common toilets and corridors on such floor and serving the Premises; and (d) eight (8) undesignated parking spaces in the rear parking lot (with the right to add up to seven additional undesignated. parking spaces upon written notice to Landlord) and one (1) loading dock, such parking spaces and loading dock to be in the location shown on Exhibit A, subject to rights of others, if any, to exclusive use of parking and loading areas, but which exclusive use of others will not interfere with the rights and use of such parking spaces and loading dock herein granted to Tenant. Landlord reserves for the benefit of Landlord and other occupants of the Building, the right, from time to time, without unreasonable interference with Tenant's office use: (a) to install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building, or either, pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises or Building provided the same are not located above, below or through Tenant's switch facility; and (b) to alter or relocate any other common facility provided same does not materially and adversely affect the operation of Tenant's switch facility. Installations, replacements and relocations referred to in clause (a) above shall be located to the extent practicable in the central core area of the Building, above ceiling surfaces, below floor surfaces or within perimeter walls of the Premises. 2. Use: Throughout the Term (hereinafter defined) of this Lease, Tenant shall continuously use and occupy the Premises for general and executive offices, warehousing and the installation, operation and maintenance of telecommunications equipment and transmission facilities, including but not limited to, a switch facility and customer collocation provising equipment, and other uses normally related thereto (the "Permitted Use") and for no other purpose. Tenant at its sole expense shall comply with all laws, rules, orders and regulations of federal, state, county and municipal authorities and with any direction of any public officer or officers, pursuant to law, which will impose any duty upon Landlord or Tenant with respect to or arising out of Tenant's use or occupancy of the Premises. If Tenant receives notice of any violation of law, ordiance, order or regulation applicable to the Premises, it shall give prompt notice thereof to the Landlord. Tenant shall not injure, overload, deface or commit waste in the Premises, or any part of the Building, nor permit the occurrence of any nuisance therein or, unless otherwise permitted herein, the emission therefrom of any objectionable noise or odor, nor use or permit any use of the Premises which is improper, offensive, contrary to law or ordinance or which is liable to render necessary any alterations or additions in the Building, nor obstruct in any manner any portion of the Building or appurtenant land. Tenant may not, without Landlord's prior written consent, install in the Premises any water fountains, refrigerators, sinks or cooking equipment, provided that Landlord's consent will not be unreasonably withheld with respect to items designed for the convenience of Tenant's employees and further provided that special venting or other matters are not required in connection therewith. 3. Term. Subject to the terms, covenants, agreements and conditions contained herein, Tenant shall have and hold the Premises for an initial term (the "Term") of fifteen (15) years and six (6) months, commencing upon the date of delivery of the Premises to Tenant after completion of Landlord's Pre- Commencement Work pursuant to Section 7 hereof (the "Commencement Date"). Tenant shall be responsible for the payment of additional rent and all other charges hereunder beginning on the Commencement Date. Tenant shall be responsible for the payment of Basic Annual Rent (hereinafter defined) on the Rent Commencement Date (hereinafter defined). As used herein, the term "lease year" shall mean each twelve (12) month period during the Term, commencing on the Commencement Date. 3.1 Extension: So long as Tenant is not in default hereunder, and no event has occurred which, with the passage of time, could ripen into default, Tenant shall have the option to extend the Term for two (2) extended terms of five (5) years each (the "Extended Terms"). The Extended Term(s) shall commence immediately following the end of any then existing Term. Tenant may exercise its option to extend for any Extended Term by giving written notice to Landlord at any time during the then existing Term of the Lease, but no later than twelve (12) months prior to the end of the then existing Term. All terms and conditions applicable during the Term shall apply during any Extended Term(s), except for Basic Annual Rent which shall be as provided below. If Tenant fails to give such notice exercising its option for the Extended Term(s) within the time provided above, time being of the essence, this Lease shall automatically expire at the end of the then existing Term (unless sooner terminated as provided herein). 4. Basic Annual Rent: Security Deposit: (a) Tenant shall not be obliged to pay Basic Annual Rent for the first six (6) months of the first lease year of the Term, (ii) the first one (1) month of the eleventh (11th) lease year of the Term, and (iii) the final two (2) months of the final year of the Term, as extended if applicable (collectively, the "Free Rent Period"). The day on which Basic Annual Rent shall be due shall be known as the "Rent Commencement Date". (b) Tenant covenants to pay to Landlord, Basic Annual Rent as follows: Lease Years 1-10 - ($7.50 per square feet of rentable area) - - $114,390.00 per annum, or $9,532.50 monthly; and Lease Years 11-15.5 - ($9.50 per square feet of rentable area) - $144,894.00 per annum, or $12,074.50 monthly. Basic Annual Rent for the seventh month of the First Lease Year shall be payable on the execution of this Lease. In the event of the commencement or termination of this Lease, other than on the first or last day of a calendar month, Basic Annual Rent, additional rent and other charges shall be appropriately prorated for the portion of the month elapsed to the Commencement Date, or to and including the date of termination, as the case may be. (c) Tenant will pay the Basic Annual Rent, additional rent and all other charges due hereunder on the first day of each month in advance, without set- off, counterclaim, deduction or demand, to Landlord at the address set forth below, or at such other place as is designated in writing from time to time by Landlord. (d) All payments of Basic Annual Rent, additional rent and all other charges due hereunder shall be made to the Landlord at c/o WASA Management, 30 Federal Street, Boston, MA 02110, or such other address as Landlord may from time to time designate by notice to Tenant. Landlord, may at the completion of Tenant's Work (as such term is defined in Section 7 hereof), measure the Premises. Tenant's rentable area shall then be finally computed and notice thereof shall be provided to Tenant. For the purpose of this Lease, Tenant's rentable area shall be the product of (i) the total usable area of the Premises excluding the portion of the Premises located on the roof and (ii) 1.039. 4.1 Free Rent Restriction: This Lease provides for a Free Rent Period during which Tenant's liability for the payment of Basic Annual Rent at the then normal monthly rate shall be suspended. Tenant shall be credited with having paid all sums which would otherwise be due only if, at the end of the Term of the Lease, as it may have been extended hereunder, Tenant has fully, faithfully, and punctually performed all of Tenant's obligations hereunder, including the payment of all additional rent and other charges (other than Basic Annual Rent during the Free Rent Period) and all other monetary obligations and Tenant shall have, at the appointed time, surrendered the Premises in the physical condition required by this Lease. Tenant acknowledges that its right to receive credit for payment which would have otherwise been due for the Free Rent Period is absolutely conditioned upon Tenant's full, faithful and punctual performance of its obligations under this Lease. If Tenant defaults and does not cure within the applicable grace period, payments of Basic Annual Rent which would otherwise have been due during the Free Rent Period shall immediately become due and payable in full and this Lease shall be enforced as if there were not such Free Rent Period or other rent concessions. In such case, Basic Annual Rent due for the Free Rent Period shall be calculated based upon the full Basic Annual Rent payable under this Lease for such lease year. 4.2 Extended Term: If Tenant exercises its option to extend the Term of this Lease for any Extended Term, Tenant covenants to pay to Landlord, during such Extended Term of this Lease, Basic Annual Rent equal to fair market rent (for a five (5) year term determined as of the date which is twelve (12) months prior to the end of the previously existing Term) for comparable space in buildings similar to the Building in the area of the City of Waltham in the vicinity of the Building, but in no event shall Basic Annual Rent for such Extended Term be less than the Basic Annual Rent for the immediately preceding lease year of the term (the "Basic Annual Rent Floor"). It is understood and agreed that fair market Basic Annual Rent for any Extended Term, as determined in the manner hereinafter provided, need not be a single rate for the entire Extended Term, but rather may be stepped over the course of the Extended Term. Landlord shall notify Tenant as to the proposed Basic Annual Rent for the Extended Term of this Lease at least ten (10) months prior to the end of the Term. Landlord shall notify Tenant of Landlord's chosen appraiser together with Landlord's notice as to Basic Annual Rent for the Extended Term proposed by Landlord. If Tenant disputes the amount of Basic Annual Rent so established by Landlord, Tenant shall either rescind its option to extend the Term or notify Landlord of Tenant's objection to said amount within thirty (30) days after the receipt of Landlord's notice to Tenant, which notice shall be accompanied by the name of one (1) appraiser if Tenant does not rescind its option. Tenant's failure to notify Landlord of Tenant's rescission or objection shall constitute Tenant's agreement to the Basic Annual Rent specified by Landlord. If Tenant so notifies Landlord of Tenant's objection, then the amount of Basic Annual Rent for each year of the Extended Term shall be decided by three (3) appraisers, one (1) selected by Landlord, one (1) selected by Tenant, and one (1) selected by the first two (2) appraisers selected. Each party shall pay for the appraiser selected by it and the cost of the third appraiser shall be divided equally between the parties. In no event may any appraiser determine fair market rent to be less than the Basic Annual Rent Floor. Each appraiser shall have at least ten (10) years experience in the management, ownership and/or appraisal of property similar to the Building in the City of Waltham. If two (2) appraisers are able to agree upon the Basic Annual Rent for each year of the Extended Term, then the Basic Annual Rent shall be as determined by said two (2) appraisers, but only if the determination of said two (2) appraisers is within ten percent (10%) of the determination of the third appraiser for each year of the Extended Term. If the foregoing condition is not satisfied, or if no two (2) appraisers are able to agree upon Basic Annual Rent for each year of the Extended Term, the Basic Annual Rent for each year of the Extended Term shall be the average of the determination of all three (3) appraisers, but only if the lowest determination is at least ninety percent (90%) of the highest determination. If this procedure cannot be followed because the lowest determination is not ninety percent (90%) of the highest determination, then the appraisers shall send a notice to Landlord and Tenant, setting forth their individual determinations, and the highest such determination for each year and the lowest such determination for each year shall be disregarded and the remaining determination for each year shall be deemed the Basic Annual Rent for each year of the Extended Term. If any appraiser is not appointed as provided herein, either party may request that such appraiser be appointed by the President of the Boston Bar Association and the costs of any appraiser so appointed shall be equally divided by Landlord and Tenant. Basic Annual Rent for each Extended Term(s) -payable in equal monthly installments, in advance, on the first day of every month during each Extended Term(s). 5. Operating Costs: (a) As used in this Section, these words and terms shall have the following meanings: (i) "Operating Costs" shall mean all costs incurred and expenditures paid by the Landlord in the operation and management, maintenance and repair of the Property, including, without limitation, the Building, common areas, and the land on which the Building is situated, exclusive of financing expenses, as determined by Landlord's accountant in accordance with generally accepted accounting principles consistently applied. Subject to subsection (ii) below, Operating Costs include, without limitation, costs of security and janitorial service (including costs of materials and equipment); maintenance and repairs to the Premises and the Property (including, without limitation, snow removal and landscaping); payments under all service contracts relating to the operation and maintenance of the Property; management fees; wages, salaries, benefits, payroll taxes and unemployment compensation insurance for employees of Landlord below the level of Building Supervisor or any contractor of Landlord engaged in the cleaning, operation, maintenance or security of the Property; insurance relating to the Property; any capital expenditure (amortized, with interest, on such reasonable basis as Landlord shall determine) made by Landlord for the purpose of reducing other operating expenses or complying with any governmental requirement arising after the date hereof (collectively the "Permitted Capital Expenditures'); legal fees related to the management and operation of the Property; auditing expenses, payments other than Real Estate Taxes (as hereinafter defined) to the City of Waltham (including, but not limited to, water and sewer use charges, fire service fees and other user fees), supplies and all other expenses customarily incurred in connection with the operation of first class retail/office buildings. (ii) "Operating Costs" shall not include the following: 1. costs incurred in connection with the original construction of the Building or in connection with any major change in the Building, such as adding or deleting floors; 2. interest, principal, late charges, default fees, prepayment penalties or premiums on any debt owed by Landlord, including any mortgage debt, and depreciation; 3. costs of correcting defects in or inadequacy of the initial design or construction of the Building; 4. expenses directly resulting from the negligence of the Landlord, its agents, servants or employees; 5. legal fees, space planners fees, real estate brokers' leasing commissions and advertising expenses incurred in connection with the original development or original leasing of the Building or future leasing of the Building; 6. costs for which Landlord is reimbursed by insurance by its carrier or Tenant's carrier or by anyone else; 7. any bad debt loss, rent loss, or reserves for bad debts or rent loss; 8. costs associated with the operation of the business of the partnership or corporation which constitutes Landlord, as the same are distinguished from the costs of operation of the Building, including partnership or corporation accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be the issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord's interest in the Building, costs (including attorney fees and costs of settlement judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations respecting Landlord and/or the Building; 9. the wages and benefits of any employee who does not devote substantially all of his or her time to the Building unless such wages and benefits are prorated to reflect time spent on operating and managing the Building vis-a-vis time spent on matters unrelated to operating and managing the Building; 10. fines, penalties and interest; 11. amounts paid as ground rental by Landlord; 12. costs of compliance with any handicap or other subsequent governmental code regulations, including ADA that are attributable to a particular tenant in the building other than Tenant; 13. costs of compliance with applicable laws arising from the presence of hazardous materials or substances in or about the Building, or the site upon which the Building is situated, including without limitation, hazardous substances in the ground water or soil and the removal of asbestos-containing materials; provided, however, that Tenant shall be liable and responsible for such costs if attributable to Tenant pursuant to Section 35 of the Lease; 14. costs paid to Landlord or to affiliates of Landlord for services in the Building including management fees to the extent the same exceed or would exceed the costs for such services if rendered by unaffiliated third parties on a competitive basis; 15. any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord or in any parking areas; 16. rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment ordinarily considered to be of a capital nature if purchased, except equipment not affixed to the Building which is used in providing janitorial or similar services; 17. all items and services for which Tenant or anyone else reimburses Landlord; 18. costs arising from Landlord's political or charitable contributions; 19. costs arising from latent defects in the Building or improvements installed by Landlord; 20. costs for which Landlord has been compensated by a management fee; 21. Landlord's general corporate overhead and general and administrative expenses; and 22. costs incurred by Landlord due to the violation by Landlord of the terms and conditions of any lease of space in the Building. 23. capital expenditures, except the Permitted Capital Expenditures. (iii) "Operating Cost Statement" shall mean a statement in writing signed by Landlord, setting forth the actual Operating Costs incurred by Landlord for a specified computation year pursuant to this Section. Landlord shall use reasonable efforts to deliver the Operating Cost Statement to Tenant within ninety (90) days after the end of the computation year. (b) Tenant shall pay to Landlord, as additional rent for each calendar year, Tenant's proportionate share of Operating Costs. Tenant's proportionate share of Operating Costs shall be 19.4%, determined by dividing 15,252, being the number of rentable square feet leased by Tenant, by 78,680, being the number of rentable square feet in the Building. Tenant's proportionate share of Operating Costs shall be subject to adjustment in the event the rentable square footage leased by Tenant or the rentable square footage in the Building either increases or decreases. Such amount shall be due and payable within thirty (30) days following receipt by Tenant of the Operating Cost Statement for such year. Commencing on the first day of the first calendar month of the first lease year of the Term, and on the first day of each calendar month thereafter during the Term of this Lease, Tenant shall pay to Landlord, as estimated payments of Tenant's proportionate share of Operating Costs for such calendar year, one- twelfth (1/12) of the amount reasonably estimated in good faith by Landlord to be Tenant's proportionate share of Operating Costs for such year. Tenant shall have the right to review Landlord's estimate of Operating Costs. Such payments shall be credited to the sum finally determined to be payable for the calendar year pursuant to the Operating Cost Statement, with the excess estimated payments, if any, paid to Tenant within thirty (30) days after delivery of the Operating Cost Statement. If this Lease shall commence or terminate other than on the first or last day of a calendar year, Tenant shall be liable for only that portion of its proportionate share of Operating Costs for such calendar year represented by a fraction, the numerator of which is the number of days of the Term, as it may be extended hereunder, which falls within the calendar year and the denominator of which is three hundred sixty-five (365). Any obligations under this Section of Tenant which shall not have been paid at the termination or earlier expiration of the Term of this Lease shall survive such termination or earlier expiration and shall be paid when and as the amount of the same shall be determined together with interest thereon at the rate set forth in Section 20(d). Tenant shall have the right, at Tenant's expense, exercisable by written notice to Landlord within nine (9) months following receipt of the Operating Cost Statement for a specified computation year, to review Landlord's books and records with respect to such Operating Cost Statement. 6. Real Estate Taxes: (a) As used in this Section, these words and terms shall have the following meanings: (i) "Real Estate Taxes" shall mean all payments for all taxes, assessments and betterments levied, assessed or imposed by any governmental authority upon or against the Property or Building or payments in lieu thereof, including reasonable expenses, which shall include without limitation, fees of attorneys, appraisers and other consultants incurred in connection with any efforts to obtain abatements or reductions or to assure maintenance of Landlord's taxes for any tax fiscal year wholly or partially included in the Term. If, at any time during the Term of this Lease, any tax or excise on rents or other taxes, however described, are levied or assessed against Landlord with respect to the rent reserved hereunder, either wholly or partially in substitution for, or in addition to, real estate taxes assessed or levied on the Property or Building, or payments in lieu thereof, such tax or excise on rents shall be included in Real Estate Taxes; however, Real Estate Taxes shall not include franchise, estate, inheritance, succession, capital levy, transfer, income or excess profits taxes assessed to Landlord. Real Estate Taxes shall further not include interest, penalties, or late charges associated with any late payment of Real Estate Taxes by Landlord, unless caused by Tenant. (ii) "Real Estate Tax Statement" shall mean a statement in writing signed by Landlord, setting forth the Real Estate Taxes paid by or to be paid for a specified computation period pursuant to this Section accompanied by a copy of the applicable tax bill. (iii) "Tax Year" shall mean the fiscal tax year of the City of Waltham, Massachusetts. (b) For each Tax Year during the Term of this Lease, Tenant shall pay to Landlord, as additional rent, Tenant's proportionate share of Real Estate Taxes. Tenant's proportionate share shall be 19.4%, determined by dividing 15,252, being the number of rentable square feet leased by Tenant, by 78,680, being the number of rentable square feet in the Building. Tenant's proportionate share of Real Estate Taxes shall be subject to adjustment in the event the rentable square footage leased by Tenant or the rentable square footage in the Building either increases or decreases. Such amount shall be due and payable fifteen (15) days following receipt by the Tenant of the Real Estate Tax Statement for a tax period. If this Lease shall commence or terminate other than on the first or last day of a Tax Year, Tenant shall be liable for only that portion of Real Estate Taxes in respect of such year represented by a fraction the numerator of which is the number of days of the Term which fall within the Tax Year and the denominator of which is three hundred sixty-five (365). Any obligation under this Section of Tenant which shall not have been paid at the expiration of the Term of this Lease, as it may have been extended, shall survive such expiration and shall be paid when and as the amount of the same shall be determined together with interest thereon at the rate set forth in Section 20(d) from the date the payment was first due to Landlord. Tenant's proportionate share of Operating Costs and Real Estate Taxes shall be determined on the first day of the applicable calendar year for Operating Costs and the first day of the Tax Year for applicable Real Estate Taxes based on an application of the above-referenced fractions on such dates. 7. Preparation for Occupancy: (a) Landlord's Work. Prior to the Commencement Date, Landlord shall deliver the Premises in a "as is', "where is" condition except for Landlord's Pre-Commencement Work as described in Exhibit B attached hereto ("Landlord's Pre-Commencement Work"). Subject to delays due to governmental regulation, unusual scarcity of or inability to obtain labor or materials, labor difficulties, casualty, weather, or other causes reasonably beyond Landlord's control or attributable to Tenant's action or inaction, Landlord shall use reasonable speed and diligence in the construction of the work to be undertaken by Landlord in the Premises, and shall use diligent efforts to deliver the Premises to Tenant within four (4) weeks after Landlord has obtained approval from the City of Waltham to undertake Landlord's Pre-Commencement Work. Subject to the delays specified in the preceding sentence, Landlord shall, at its own cost and expense, use reasonable speed and diligence to complete the work described in Exhibit B within six (6) months following the Commencement Date. ("Landlord's Post Commencement Date Work"). Landlord's failure to complete Landlord's Pre-Commencement Work and/or Landlord's Post Commencement Date Work within the time periods specified herein, for any reason, shall not give rise to any liability of Landlord hereunder, except for gross negligence or wilful misconduct, shall not constitute a Landlord's default, shall not affect the validity of this Lease, and shall have no effect on the beginning or end of the Term as otherwise determined hereunder or on Tenant's obligations associated therewith. (Landlord's Pre-Commencement Work and Landlord's Post Commencement Date Work shall hereinafter sometimes collectively be referred to as "Landlord's Work.") Landlord's Post Commencement Date Work shall be treated as having been substantially completed on the date on which the work described in Exhibit "B" has been substantially completed except for minor items of construction work and minor mechanical adjustments of equipment and fixtures which can be completed after occupancy has been taken without causing material interference with Tenant's use and occupancy of the Premises ("Punch List Items"). Landlord shall complete as soon as conditions practically permit all Punch List Items, and Tenant shall cooperate with Landlord in providing access as may be required to complete such work in a normal manner. Landlord shall permit Tenant access for installing Tenant's fixtures, communications systems, computer equipment and appurtenances, and other equipment in portions of the Premises prior to substantial completion when it can be done without material interference with remaining work and with the maintenance of harmonious labor relations. (b) Tenant's Work. Tenant will engage, at its expense (except as provided below), its own architect or engineer to produce plans and specifications ("Plans and Specifications") for the "build-out" of the Premises required to prepare the Premises for the conduct of Tenant's business therein ("Tenant's Work"). Without limiting the generality of the foregoing, Tenant's Work shall also include the construction of all (i) demising walls within or around the Premises; (ii) common bathrooms and the corridors leading thereto and (iii) accessways leading to the Premises, excluding demising walls leading to the loading dock referred to in Section 1 above. The Plans and Specifications shall set forth, among other things, (i) specifications for the use, operation and testing of Tenant's emergency generator and associated fuel tank and (ii) the items of Tenant's Work which Tenant shall be required to remove from the Premises at the expiration or earlier termination of this Lease ("Tenant's Removal Items"). Landlord shall provide, at Tenant's expense, temporary power to the Premises from existing sources during construction of Tenant's Work. Prior to the commencement of Tenant's Work, Tenant shall deliver the Plans and Specifications to Landlord for its written approval, which approval shall not be unreasonably withheld or delayed. Landlord shall respond to Tenant's request for approval of its Plans and Specifications within ten (10) business days after receipt thereof; the failure of Landlord to respond within said period shall constitute approval of the Plans and Specifications. In the event that Landlord shall not approve the Plans and Specifications, Landlord shall notify Tenant of its objections thereto. Landlord and Tenant shall thereafter work cooperatively and in good faith to reach agreement upon mutually acceptable Plans and Specifications. Landlord shall not be deemed to be unreasonably withholding its consent to the Plans and Specifications if, among other things: (I) the Plans and Specifications do not contain sufficient detail to enable Landlord to evaluate the effect including, without limitation, noise, vibration, odor and emissions, on the Building and Landlord's other tenants of Tenant's installation and testing of Tenant's emergency generator and associated fuel tank (the "Generator Effect"); (ii) the Generator Effect will, in Landlord's reasonable judgment, place the safety of the Building or Landlord's other tenants at risk; or (iii) Tenant's Work will, in Landlord's reasonable judgment, negatively effect the exterior appearance of the Building. If, despite diligent and good faith efforts, Landlord and Tenant are unable to agree upon the Plans and Specifications within thirty (30) days after Tenant has first submitted the Plans and Specifications to Landlord, then either party shall have the right to terminate this Lease upon written notice to the other within five (5) days after the end of such thirty (30) day period, without further recourse to either party. If Tenant shall so exercise its right to terminate this Lease, then Tenant shall immediately reimburse Landlord for (i) the cost of Landlord's Work through the date of termination and (ii) all compensation paid to The Niles Company and CB Commercial Real Estate Group in connection with this Lease. Submission of the Plans and Specifications to Landlord for approval shall be deemed a warranty by Tenant and Tenant's architect, jointly and severally, that all work described in the Plans and Specifications (i) complies with all applicable laws, regulations, building codes, and reasonable and prudent design standards for a first-class building, (ii) does not in any manner affect the structural or exterior elements of the Building except as specifically provided therein, and (iii) is in all respects compatible with the mechanical, electrical and structural components and systems of the Building (including applicable loading limits). Landlord's approval of the Plans and Specifications shall signify Landlord's consent to the work thereon only and shall not result in any responsibility of Landlord concerning such work. Tenant shall engage its own contractor, subject to Landlord's approval which approval shall not be unreasonably withheld or delayed, to perform Tenant's Work, at Tenant's sole cost and expense, and Tenant agrees to complete Tenant's Work using reasonable speed and diligence. Tenant shall not be responsible for Landlord's own costs related to review, construction management or supervision fees, costs or expenses related to Tenant's Work. All of Tenant's Work to the Premises shall conform to the approved Plans and Specifications and any changes thereto must be approved in writing by Landlord which approval shall not be unreasonably withheld or delayed. Tenant's Work, together with all repairs required to be made by Tenant Pursuant to this Lease, shall be made in a good and workmanlike manner Using first class materials and shall comply with all applicable federal, state and local codes and ordinances. Tenant shall obtain all necessary permits from the appropriate governmental authorities, including, without limitation, any required Certificate of Occupancy. The contractor, subcontractors and materialmen utilized by the Tenant to perform Tenant's Work shall be subject to Landlord's prior written approval which approval shall not be unreasonably withheld or delayed. Tenant agrees not to create, incur or permit any lien or other obligation to exist against the Property or Landlord by reason of Tenant's Work and Tenant agrees to hold Landlord harmless from and against any and all claims and demands by contractors or other third parties against the Property or Landlord relating to or arising out of Tenant's Work. Tenant will maintain insurance reasonably acceptable to Landlord during the performance of Tenant's Work, and copies of any such insurance policies will be provided to Landlord and any mortgagee of Landlord, naming Landlord and any such mortgagee of Landlord as additional insureds under such coverage. Tenant's Work (except for Tenant's generator and associated fuel tank) shall at once become part of the Property and belong to Landlord and Tenant shall have no right or duty to remove same unless designated as Tenant's Removal Items. Any damages so caused by the removal of any improvements made by Tenant, shall be immediately repaired by Tenant at its sole cost and expense. (c) Landlord makes no representation, express or implied, with respect to this Lease (including, without limiting the generality of the foregoing, the suitability of the Premises for the Permitted Use or zoning thereof), except as expressly contained herein. Tenant has made its own investigation as to the use of the Premises and will obtain any and all licenses or permits which would be required for the operation of Tenant's business. (d) All construction work required or permitted by this Lease, including Landlord's Work and Tenant's Work under this Section 7, shall be done in a good and workmanlike manner and in compliance with all applicable laws, ordinances, regulations and orders and requirements of all public authorities and insurers of the Building. Landlord, at its sole expense, shall procure all permits and licenses required by any governing authority having jurisdiction over the Building and the Premises to undertake and complete Landlord's Work under this Section 7, including building permits and any Certificate of Occupancy. All of Tenant's work shall be coordinated with any of Landlord's Work being performed by or for Landlord and in such manner as to maintain harmonious labor relations. Each party may inspect the work of the other at reasonable times and shall promptly give notice of observed defects. Each party authorizes the other to rely in connection with design and construction upon approval and other actions on the party's behalf by any construction representative of the applicable party. (e) Except to the extent to which Tenant shall have given Landlord notice of any matter in which Landlord has not performed Landlord's Work obligations under this Section 7 not later than the end of the ninth full calendar month after the Commencement Date (except for latent defects as to which the cut-off date shall be the end of the twelfth full calendar month after the Commencement Date), Tenant shall be deemed conclusively to have approved Landlord's Work and shall have no claim that Landlord has failed to per-form any of Landlord's obligations under this Section 7. Landlord agrees to correct or repair, at its expense. items which are then incomplete or do not conform to Landlord's Work contemplated in Exhibit B and as to which. in either case, Tenant shall have given notice to Landlord, as aforesaid. 8. Improvements and Alterations: (a) During the Term of this Lease and following completion of Tenant's Work, Tenant, at its own expense, may make non-structural alterations, additions and improvements (including, without limitation, interior painting and decorating) to the interior of the Premises which are necessary or appropriate for the conduct of Tenant's business with Landlord's prior written consent and in accordance with detailed working drawings and specifications describing such work which have been submitted in advance to, and approved in writing by, Landlord and with a contractor approved by Landlord. Landlord's consent to such alterations and approval of Tenant's contractor shall not be unreasonably withheld or delayed. During the Term of this Lease, Tenant, at Tenant's own expense, may alter the existing curtain wall on any of the facades of the Premises to install louvers for additional outside air and/or exhaust air, at Tenant's option, but subject to Landlord's prior written consent (such consent not to be unreasonably withheld) and in accordance with detailed working drawings and specifications which have been submitted in advance to and approved in writing by Landlord. Tenant shall pay all costs of preparing plans, drawings and specifications. Such alterations, additions and improvements (specifically excluding movable personal property installed by Tenant) are hereinafter collectively called the "Improvements". All the Improvements, whether placed in or attached to or made part of the Premises prior to or during the Term of this Lease, shall become and be Landlord's property and, unless Landlord otherwise elects, shall be and remain part of the Premises as of the expiration or earlier termination of the Lease. Landlord shall notify Tenant in writing at the time Landlord approves Tenant's plans for Improvements of its election to require Tenant to remove any or all of its Improvements upon the expiration or earlier termination of this Lease. Construction of the Improvements shall be performed diligently and in a good and workmanlike manner and shall be expeditiously completed in compliance with all laws, ordinances, orders, rules, regulations and requirements. All work done in connection with the Improvements shall comply with all requirements of insurance policies maintained by Landlord and Tenant. Tenant, at its expense, shall procure all permits and licenses required by any governing authority having jurisdiction over the Premises and the business to be conducted in the Premises. Tenant shall promptly pay all costs and expenses of the Improvements and shall furnish indemnification bonds against performance, liens, costs, damages and expenses in forms and amounts reasonably satisfactory to Landlord, in connection with all alterations and Improvements. At the expiration or earlier termination of this Lease, Tenant shall remove all of this personal property other than the Improvements, and, at the option of Landlord, Tenant shall remove any or all of the Improvements. If Landlord elects to have Tenant remove the Improvements, Landlord shall not require removal of pipes, wires and the like from walls, ceilings or floors provided that Tenant properly cuts, caps and disconnects such pipes and wires and seals them off in a safe and lawful manner flush with the applicable wall, floor or ceiling and redecorates the area consistent with the remainder of the Premises. Tenant shall maintain the Improvements in a first class manner during the Term -of the Lease, as extended, and shall be responsible for any and all damages to the Premises, the fixtures, appurtenances and equipment of Landlord or the Building caused by the installation, malfunction or removal of the Improvements or Tenant's Property as defined in Section 9 below. (b) In order to protect the historical and architectural integrity and appearance of the Building, Tenant shall not install any signs on the exterior of the Building or Premises or in the interior of the Premises if visible from the exterior of the Premises except as permitted by this paragraph or as approved in the Plans and Specifications. All signs or lettering, if any, visible from the exterior of the Building or from the lobby, public corridors or in any other common area or public place must be submitted by Tenant to Landlord for prior written approval of the size, color, design, and location of such signs or lettering before installation. Tenant may hang its own window blinds or curtains in the Premises subject to Landlord's prior written approval. 9. Property of Tenant: Subject to the provisions of this Section 9, Tenant may place fixtures, equipment, supplies and the like ("Tenant's Property") in the Premises. Upon the expiration or sooner termination of this Lease, Tenant shall remove Tenant's Property and restore the Premises to its condition prior to installation of Tenant's Property ordinary wear and tear and loss by insured casualty or condemnation excepted. Tenant shall not place a load upon any floor of the Premises exceeding the floor load per square foot area which such floor was designed to carry and which is allowed by law. Machines and mechanical equipment and Tenant's other personal property shall be placed and maintained by Tenant, at its expense, in settings sufficient to absorb and prevent vibration, noise and annoyance and without overloading the electrical service available to the Premises or to the Building. Tenant covenants and agrees that all Tenant's Property of every kind, nature and description which may be in or upon the Premises or Building, in the public corridors, or on the sidewalks, area ways and approaches adjacent thereto, during the Term and any movement of Tenant's Property, shall be at the sole risk and hazard of Tenant, and Tenant hereby indemnifies and agrees to save Landlord harmless from and against any liability, loss, injury, claim or suit resulting directly or indirectly therefrom. 10. Maintenance and Repair: (a) Tenant shall, at its sole cost and expense, maintain (i) the Premises, (ii) the common bathrooms and the corridors leading thereto, and (iii) the accessways leading to the Premises, (items (ii) and (iii) are referred to herein as "Maintenance Areas'), in good order, condition and repair and shall make all foreseen and unforeseen and ordinary and extraordinary changes and repairs required to keep the Premises and the Maintenance Areas in good repair and condition including, without limitation, repairs to vents, ducts, wires, fans, outlets, doors, locks, hardware, utility lines and facilities exclusively servicing the Premises and the Maintenance Areas, installations and equipment on the roof installed by Tenant, electrical, plumbing and HVAC equipment exclusively serving the Premises and the Maintenance Areas, flooring, carpets, walls, ceilings, fixtures and exterior and interior glass in the Premises and the Maintenance Areas and structural portions of the Building (including the roof) constructed or modified by or at the request of Tenant. Tenant shall wash any dishes and perform any cleaning necessary to maintain the Premises and the Maintenance Areas in a clean and sanitary condition, free of all vermin, waste and fire hazards. Tenant, at its own expense, shall supply and maintain all light bulbs, tubes, light fixtures, globes and switches or similar devices for lighting the Premises and the Maintenance Areas. (b) Except as provided in (a) above, Landlord shall (D keep the roof, exterior walls and all structural portions of the Building so long as the same are not affected by Tenant's Work, and the plumbing lines and sewers, electrical systems and utility service lines furnished by Landlord in good and serviceable condition and repair (except for any repair or replacement occasioned by any willful or negligent act or omission of Tenant, its servants, agents, customers, contractors, employees or licensees) and provided further that Landlord shall not be obliged to repair any equipment or facilities serving the Premises only; (ii) keep sidewalks, parking and landscape areas, common corridors, stairways, mechanical and electrical systems serving occupants of the Building other than Tenant (it being understood that Landlord shall not be obliged to repair any equipment or facilities exposed in the Premises or the Maintenance Areas or serving the Premises and the Maintenance Areas only), and all other public portions of the Building in serviceable repair and in a reasonably clean and safe condition and make repairs to all pipes, ducts, conduits, wires and appurtenant fixtures which run through Tenant's Premises but service other tenants, but not Tenant; and (iii) comply with applicable governmental rules, regulations, laws and ordinances affecting the Building, unless the violation is caused by Tenant or Tenant's use of the Premises or Tenant's willful or negligent act or omission, in which case, compliance shall be at the expense of the Tenant. Landlord reserves the right to interrupt, curtail, stop and suspend the furnishing of any services and the operation of the plumbing, electrical, heating, ventilating and air-conditioning system when necessary by reason of accident or emergency or for repairs, alterations, replacements or improvements which may become necessary or when it cannot secure supplies or labor, or by reason of any other cause beyond its control, without liability or any abatement of Basic Annual Rent, additional rent or other charges being due thereby. If, due to causes within Landlord's reasonable control, services to the Premises are interrupted or the operation of the plumbing, electrical or HVAC system is suspended for a period exceeding five (5) consecutive business days and such interruption or suspension renders all or a portion of the Premises unusable for the Permitted Use, Tenant shall receive an equitable abatement of Rent for the period commencing on the sixth (6th) consecutive business ,day and ending on the date such service is restored. (c) In the event Landlord fails to commence to repair a roof or ceiling leak or other similar problem within twenty-four (24) hours following receipt of written notice from Tenant (which notice may be delivered by hand and then given as set forth in Section 24), and diligently prosecute such repair to completion, Tenant may, subject to the following conditions, cause the necessary repairs to be performed at Landlord's expense. With respect to Tenant's exercise of self help, the following shall apply: (i) Tenant may exercise such self help rights only in the event of an emergency wherein there exists an imminent-threat of damage or harm to persons or property or cessation of operation of Tenant's switch facility; (ii) if Tenant elects to exercise its self help rights as set forth above, Tenant shall cure such defects as may be necessary to abate the emergency, even if such cure is temporary in nature, such that Landlord shall thereafter have the opportunity to exercise a permanent cure; and (iii) Tenant agrees that the performance of any self help rights shall be limited to reasonable and competitive amounts. 11. Services: (a) The Landlord shall provide: (i) Access to the Premises twenty-four (24) hours per day, 365 days per year; provided, however, that outside normal business hours access shall be under conditions which will insure the security of the Building. (ii) Removal of snow and ice from the entry to and sidewalks of the Building. (b) Landlord shall provide and maintain adequate connections with the local water supply and sewerage systems. Tenant shall install separate meters for Tenant's electrical and gas service and shall pay the cost of such meters and connections and shall pay the utility company directly for all fuel, electrical, gas and other utilities (other than water) used by Tenant on the Premises and the Maintenance Areas. With respect to water charges, Tenant shall pay Landlord directly for Tenant's Share of the total amounts for the same within 30 days after billing by Landlord. Upon request by Tenant, Landlord shall provide reasonable evidence indicating that all such charges for water are based upon compatible uses for all tenants in the Building. Landlord agrees that, if any tenant of the Building (including Tenant) uses a disproportionate amount of water because of the specific nature of such tenant's business, Tenant's Share shall be equitably adjusted accordingly. 12. Inspection: Landlord and its authorized representatives shall have the right, at all reasonable times and upon reasonable advance notice, to enter the Premises to inspect the same (and at all times during an emergency), to make repairs or replacements therein as required by this Lease, to exhibit the Premises to prospective tenants, lenders or others; provided, however, that Landlord shall use all reasonable effort not to unduly disturb the Tenant's use and occupancy. Landlord shall not be liable to Tenant in any manner for any expense, loss or damage occurring by reason of the aforesaid entries, nor shall the exercise of any such right be deemed an eviction or disturbance of Tenant's use or possession. 13. Casualty: (a) If the Premises, or any part thereof, shall be damaged by fire or other casualty, Tenant shall give prompt notice to Landlord. Upon receipt of such notice, Landlord (except as provided in subparagraph (b), (b)(i), (b)(ii), and (b)(iii) below), shall proceed with reasonable diligence, and at its expense (but only to the extent of insurance proceeds recovered or recoverable and made available to Landlord by any mortgagee of the Building), to cause such damage to be repaired and restored as nearly as possible to the condition in which they were immediately prior to the casualty. All repairs to and replacements of Tenant's Work, Tenant's Property and Improvements as defined in Section 8 shall be made by and at the expense of Tenant. (b) If the Premises, or any part thereof, shall have been rendered unfit for use and occupation hereunder by reason of such damage, the Basic Annual Rent, or a just and proportionate part thereof, according to the nature and extent to which the Premises shall have been so rendered untenantable, shall be suspended or abated until the Premises (except Tenant's Work, the Improvements and Tenant's Property which are to be repaired by or at the expense of Tenant), shall have been restored as nearly as practicable to the condition in which they were immediately prior to such fire or other casualty, provided that restoration can be completed in accordance with applicable laws and regulations; provided, however that notwithstanding the foregoing, Tenant shall not be entitled to an abatement if the damage is by Tenant's Property and Improvements including, without limitation, any fuel tank or generator. Landlord shall not be liable for delays in the making of any such repairs which are due to governmental regulations, casualties and strikes, unavailability of labor and materials, and other causes beyond the control of Landlord, nor shall Landlord be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting from reasonable delays in repairing such damage. If the Premises are damaged by fire or other casualty and said Premises shall not have been restored to substantially the same condition which they were in prior to such fire or other casualty within one hundred eighty (180) days after such fire or other casualty or are not capable of being so restored, as reasonably determined- by an independent engineer selected by Landlord, then Tenant may terminate this Lease by notice to Landlord within fifteen (15) days after the end of said one hundred eighty (180) day period, without further recourse to either party. (b)(i) If more than twenty-five percent (25%) of the Building is damaged by such fire or other casualty, whether or not the Premises shall have been damaged by such fire or other casualty, or (ii) if more than fifty percent (50%) of the Premises is damaged by fire or other casualty, or (iii) if restoration cannot be achieved on account of inadequate insurance proceeds, governmental restrictions or otherwise, then this Lease and the Term hereof may be terminated at the election of Landlord by giving written notice of termination to the Tenant within sixty (60) days following such fire or other casualty, the termination date being specified in such notice as a date not less than thirty (30) days after the day on which such termination notice is given. In the event of any such termination, this Lease and the Term hereof shall expire as of such effective termination date and the Basic Annual Rent shall be apportioned as of such date. 14. Condemnation - Eminent Domain: (a) If the Property, or any material part thereof, shall be taken or appropriated by eminent domain or shall be condemned for any public or quasi- public use, or by reason of any transfer of all or any material part of the Building, or any interest therein made in avoidance of such a taking or 'appropriation, or (by virtue of any taking, appropriation or condemnation) shall suffer any damage (direct, indirect or consequential) for which Landlord or Tenant shall be entitled to compensation, then (and in any such event) this Lease and the Term hereof may be terminated at the election of Landlord by giving a written notice of termination to the Tenant within sixty (60) days following the date on which Landlord shall have received notice of a taking, appropriation or condemnation, or shall have effected such transfer. If the entire Premises, or a portion thereof shall be so taken, appropriated, condemned or transferred, such that Tenant shall be precluded from effectively utilizing the Premises for its intended purpose, then (and in such event) this Lease and the Term hereof may be terminated at the election of Tenant by giving a written notice of termination to Landlord within sixty (60) days following the date on which Tenant shall have received notice of a taking, appropriation, condemnation, or on which Landlord shall have transferred such property. Upon the giving of any such notice of termination by either Landlord or Tenant, this Lease and the Term hereof shall terminate as of the date on which Landlord or Tenant, as the case may be, shall be required to vacate any portion of the area so taken, appropriated or condemned or shall be deprived of the means of access thereto, provided, however, that Landlord in its notice of termination may elect to terminate this Lease and the Term hereof retroactively as of the date on which such taking, appropriation or condemnation became legally effective. In the event of such termination, this Lease and the Term hereof shall expire as of such effective termination date and the Basic Annual Rent shall be apportioned as of such date. (b) If neither party elects to terminate this Lease and the Term hereof, Landlord shall, with reasonable diligence and at its expense (but only to the extent of the taking award recovered or recoverable and made available to Landlord by any mortgagees of the Building), restore the remainder of the Premises (but not the Improvements or any of Tenant's Property), as nearly as practicable to the condition thereof prior to such taking, appropriation or condemnation, in which event the Basic Annual Rent shall be adjusted in a manner such that (i) a just proportion of the Basic Annual Rent, according to the nature and extent of the taking, appropriation or condemnation and the resulting permanent injury to the Premises shall be permanently abated, and (ii) a just proportion of the remainder of the Basic Annual Rent, according to the nature and extent of the taking, appropriation or condemnation and the resultant injury sustained by the Premises, shall be abated until what remains of the Premises (other than Tenant's Work, Improvements or any of Tenant's Property) shall have been restored as fully as practicable for permanent use and occupation by Tenant hereunder. Landlord shall not be liable for any delays in such restoration which are due to governmental regulations, casualties, strikes, unavailability of labor or materials, or other causes beyond Landlord's control nor shall Landlord be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant resulting from reasonable delays in such restoration. Landlord expressly reserves to Landlord and Tenant hereby assigns to Landlord all rights to compensation and damages created, accrued or accruing by reason of any taking, appropriation or condemnation, except for compensation relating to Tenant's Property and for moving expenses, provided the same are separately awarded to Tenant without reduction of Landlord's award. 15. Injury and Damage: Landlord shall not be liable for any injury or damages to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, electrical disturbance, water, rain or snow or leaks from any part of the Building or from the pipes, appliances or plumbing works or from the roof, street or subsurface or from any other place or by dampness or by any other cause of whatever nature, unless caused by or due to the act, omission, fault, negligence or misconduct of Landlord, or its agents, servants or employees; nor shall Landlord, its agents, servants or employees be liable for any such damage caused by other tenants or persons on the Property or caused by construction operations of any private, public or quasi-public person; nor shall Landlord be liable for any latent defect in the Premises or in the Building. 16. Indemnification: Tenant hereby indemnifies and covenants to save Landlord harmless from and against any and all claims, liabilities or penalties asserted by or on behalf of any person, firm, corporation or public authority: (i) on account of or based upon any injury to person, or loss of or damage to property, sustained or occurring on the Premises on account of or based upon the act, omission, fault, negligence or misconduct of any person other than Landlord or its servants, agents or employees; (ii) on account of or based upon any injury to persons, or loss of or damage to property, sustained or occurring in or about the Property and other than on the Premises (and, in particular, without limiting the generality of the foregoing, on or about the elevators, stairways, public corridors, sidewalks, parking areas, concourses, arcades, approaches, area ways, roof or other appurtenances and facilities used in connection with the Building or the Premises) arising out of the use and occupancy of the Building or the Premises by the Tenant or by any other person claiming by, through or under Tenant, and caused by the act, omission, fault, negligence or misconduct of Tenant or its servants, agents or employees, and in addition to and not in limitation of the foregoing subdivision (i); and (iii) on account of or based upon (including monies due on account of) any work or thing whatsoever done (other than by Landlord or its contractors, or agents or employees of either) on the Premises during the Term and during the period of time, if any, prior to the Commencement Date when Tenant may have been given access to the Premises; and, in respect of any of the foregoing, from and against all costs, expenses (including, without limitation, reasonable attorney's fees) and liabilities incurred in or in connection with any such claim, or any action or proceeding brought thereon. If any action or proceeding be brought against Landlord by reason of any such claim, Tenant upon notice from Landlord shall at Tenant's expense resist and defend -such action or proceeding and employ counsel therefore reasonably satisfactory to Landlord, it being agreed that such counsel as may act for insurance underwriters of Tenant engaged in such defense shall be deemed satisfactory. 17. Insurance: (a) Tenant covenants and agrees that from and after the date of delivery of the Premises from Landlord to Tenant, and during the Term of this Lease, Tenant will carry and maintain, at its sole cost and expense, the form of insurance hereinafter provided for: (i) Tenant shall keep in full force and effect Comprehensive General Liability Insurance including Blanket Contractual, Personal Injury, Broad Form Property Damage, Products Liability, Completed Operations, Fire Legal Liability and Owned, Non-owned and Hired automobile coverages, naming Landlord and Tenant and any designee of Landlord, as insured, with minimum limits of $1,000,000 for property damage, $1,000,000 for injury or death of one person and $3,000,000 for injury or death of more than one person in a single accident and from time to time thereafter shall not be less than such higher amounts as may reasonably be required by Landlord for any and all claims for injury or damage to persons or property or for the loss of life or of property occurring upon, in or about the Premises and the public portions of the Building used by Tenant, its employees, agents, contractors, customers and invitees. Tenant shall deposit a policy or policies of such insurance, or an approved certificate thereof issued by duly authorized agents or the carriers in question, with Landlord, at least ten (10) days before the Commencement Date and renewals of same and at least thirty (30) days prior to the expiration of any existing policies. All such policies must provide that Landlord and any additional insured be provided with thirty (30) days prior written notice of cancellation, reduction, or material change by the insurer. (ii) Tenant shall keep in full force and effect All Risk insurance including sprinkler leakage and floor and earthquake (if floor and earthquake exposure exists) and vandalism and malicious mischief on a 100% replacement cost basis covering all contents, pictures and improvements. Tenant shall deposit a policy or policies of such insurance, or an approved certificate thereof with Landlord, providing Landlord within thirty (30) days notice of cancellation, reduction, or material change by the insurer. (iii) Tenant shall keep in full force and effect Workers' Compensation insurance as required by law and Employers' Liability coverage for a minimum of $100,000 per occurrence. (iv) Tenant covenants to comply with any and all rules and regulations applicable to the Premises issued by the Board of Fire Underwriters or by any other body hereinafter constituted exercising similar functions and insurance companies writing policies covering the Premises. Tenant shall pay all costs, expenses, claims, fines, penalties and damages imposed because of failure of Tenant to comply with this subsection (iv) and agrees to indemnify Landlord from all liability with reference thereto. Tenant shall, at its own cost and expense, procure and maintain each and every permit, license, certificate or other authorization and any renewals, extension or continuances of the same required in connection with lawful and proper use of the Premises for Tenant's business. (b) Tenant will not do, or omit to do, or keep anything in, upon or about the Premises, the Building or any adjacent areas which may prevent the obtaining of any fire, liability or other insurance upon or Written in connection with the Premises, the Building or such adjacent areas or which may make any such insurance void or voidable or otherwise invalidate the obligations of the insurer contained therein, or which may create any extra premiums or increase the rate of any such insurance over that normally applicable to office buildings in the City of Waltham. Tenant agrees to pay to Landlord, upon demand, the amount of any extra premiums or any increase in the rate of such insurance which results from Tenant's use of the Premises, whether or not Landlord has consented to such use. In the event that the installation of Tenant's emergency generator and associated fuel tank shall result in an increase in the rate of Landlord's insurance, than Tenant shall pay the amount of any such increase in insurance premium and such installation shall not give rise to an event of default hereunder. If Tenant installs any electrical equipment in the Premises, Tenant shall, at its expense, make whatever changes are necessary to comply with the requirements of the insurance underwriter or governmental authorities having jurisdiction, but such changes shall only be made in accordance with the provisions of this Lease. (c) Landlord agrees to maintain in force during the Term an all risk property policy with 100% full replacement cost coverage. 18. Waiver of Subrogation: (a) Tenant and Landlord covenant that with respect to all fire or extended coverage insurance carried by Tenant and Landlord in connection with the Premises or the Building, whether or not such insurance is required by the terms of this Lease, such insurance shall provide for the waiver by the insurance carrier of any subrogation rights against the other party, its agents, servants and employees under such party's insurance policies. (b) Notwithstanding any other provision of this Lease, (i) Landlord shall not be liable to Tenant for any loss or damage, whether or not such loss or damage is caused by the negligence of Landlord, its agents, servants or employees, to the extent that such loss or damage is covered by valid and enforceable insurance carried by Tenant and containing subrogation waiver provisions pursuant to paragraph (a); and (ii) Tenant shall not be liable to Landlord for any loss or damage, whether or not such loss or damage is caused by the negligence of Tenant or its agents, servants or employees, to the extent that such loss or damage is covered by valid and enforceable insurance carried by Landlord and containing subrogation waiver provisions pursuant to paragraph (a). 19. Assignment, Mortgaging, Subletting: (a) Tenant covenants and agrees that neither this Lease, nor the Term, nor the estate hereby granted, nor any interest herein or therein, will be assigned, mortgaged, pledged, encumbered or otherwise transferred, and that neither the Premises, nor any part thereof, will be encumbered in any manner by reason of any act or omission of Tenant, or used or occupied, or permitted to be used or occupied, by anyone other than Tenant and its employees, or for any use or purpose other than as above stated, or be sublet, or offered or advertised for subletting, without in each case, Landlord's prior written consent. Assignment shall include, without limitation, any transfer of the Tenant's interest in the Lease by operation of law, merger or consolidation of the Tenant into any other firm or corporation, and the transfer or sale of a controlling interest in Tenant, whether by sale of its capital stock or otherwise. It is expressly understood and agreed that such consent may be withheld in Landlord's sole and absolute discretion; provided, however, Landlord's consent to a proposed assignment or subleasing shall not be unreasonably withheld or delayed. Landlord shall not be deemed to be unreasonably withholding its consent to such a proposed assignment or subleasing if: (a) the proposed assignee or subtenant is not of a character consistent with Tenant's use or the operation of a first-class office/retail building; or (b) the proposed assignee or subtenant is not of good character and reputation; or (c) the proposed assignee or subtenant does not possess adequate financial capability to perform the Tenant obligations as and when due or required; or (d) the proposed assignee or subtenant proposes to use the Premises (or any part thereof) for a purpose other than the purpose for which the Premises may be used as set forth in Section 2 hereof-, or (e) the character of the business to be conducted or the proposed use of the Premises by the proposed assignee or subtenant shall (i) be likely to increase operating expenses for the Property beyond that which Landlord now incurs for use by Tenant, or (ii) violate or be likely to violate any provisions or restrictions contained herein relating to the use or occupancy of the Premises; or (f) there shall be existing a default under this Lease as set forth in Section 20. Tenant's request for consent shall include a copy of the proposed instrument of assignment or sublease, if available, or else a statement of the proposed assignment or sublease in detail satisfactory to Landlord. Landlord shall have the option (but not the obligation), in lieu of granting its consent to a proposed assignment or sublease, to terminate the Lease, or that portion proposed to be assigned or subleased, effective upon the date of the proposed assignment or sublease by giving Tenant written notice of such termination. Notwithstanding Landlord's consent to any assignment or sublease, the liability of Tenant and of any guarantor of Tenant's obligations under this Lease shall remain primary and Landlord's acceptance of Basic Annual Rent, additional rent and other charges from persons other than Tenant shall not operate to discharge or in any way diminish such liability. In the event of any such assignment or subletting, Tenant shall deliver to the Landlord at the time of such assignment or subletting a written agreement from the assignee, or subtenant agreeing with Landlord to perform Tenant's obligations under the Lease. If the Basic Annual Rent, additional rent and other charges payable to Tenant under such assignment or sublease exceed the Basic Annual Rent, the additional rent and other charges payable under this Lease, Tenant shall pay to Landlord, as additional rent, one half of the amount of the excess. Landlord's acceptance of a check in payment of any obligations of Tenant under this Lease from a person other than Tenant shall not be construed as an implied consent by Landlord to an assignment of this Lease or subletting under it. Any assignment of this Lease made hereunder shall be upon the express condition that the assignee and Tenant shall promptly execute, acknowledge and deliver to Landlord an agreement in form and substance satisfactory to Landlord whereby the assignee shall agree to be personally bound by the terms, covenants, and conditions of this Lease on Tenant's part to be performed and whereby the assignee shall expressly agree that the provisions of this Section shall, notwithstanding such assignment or transfer, continue to be binding upon it with respect to all future assignments and transfers. Any sublease of the Premises, or any part thereof, shall be expressly subject to the terms of this Lease and shall contain the agreement of the subtenant thereunder that, upon Landlord's written request, it will pay all rents under the sublease directly to Landlord. The provisions of this Section shall also be applicable to any sublease or assignment by any sublessee or assignee or other person(s) or entity deriving its interest through Tenant. (b) If this Lease shall be assigned, or if the Premises or any part thereof be sublet or occupied by anybody other than Tenant and its employees, Landlord, after default by Tenant hereunder, may collect the rents from such assignee, subtenant or occupant, as the case may be, and apply the net amount collected to the Basic Annual Rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of the requirements set forth in subparagraph (a) of this Section, the acceptance by Landlord of such assignee, subtenant or occupant, as the case may be, as a tenant, or a release of Tenant from the future performance by Tenant of its covenants, agreements and obligations contained in this Lease. The consent by Landlord to an assignment or subletting shall not in any way be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment or subletting. No assignment, subletting or use of the Premises shall affect the purpose for which the Premises may be used as stated in Section 2. (c) The listing of any name other than that of Tenant, whether on the doors of the Premises or on the Building directory, or otherwise, shall not operate to vest any right or interest in this Lease or in the Premises or be deemed to be the written consent of Landlord mentioned in this Section, it being expressly understood that any such listing is a privilege extended by Landlord revocable at will by written notice to Tenant. (d) Tenant further covenants and agrees that it will not sublease space from or take an assignment of a lease covering space in the Building from any other Building tenant or sublease to or assign this Lease to any other Building tenant. (e) Any reasonable legal expenses incurred by Landlord by reason of any proposed assignment or subletting shall be paid by Tenant whether or not the transaction shall be consummated. Notwithstanding anything contained herein to the contrary, so long as MFS Intelenet of Massachusetts, Inc. or any Related Entity (as hereafter defined) is the Tenant in possession of the Premises, Tenant shall have right, without the consent or approval of Landlord, and without any recapture rights or right to excess rents of, or payments of any fees to, Landlord: (i) assign its interest in this Lease (a) to any corporation which is a successor to Tenant either by merger or consolidation, or (b) to a purchaser of all or substantially all of Tenant's stock or assets, or (c) to a corporation or other entity which shall directly or indirectly control, be under the control of, or be under common control with, MFS Intelenet of Massachusetts, Inc. or MFS Communications Company, Inc. (any such entity being a "Related Entity"), provided that any such assignee has a net worth greater than the higher of the net worth of Tenant on (1) the date hereof or (2) the date of such assignment, or (ii) sublease all or any portion of Premises to a Related Entity. For purposes hereof, "control" shall be deemed to mean the direct or indirect ownership of more than fifty percent of the outstanding voting stock of a corporation or other majority equity and control interest if not a corporation. Without limiting the foregoing, the collocation of telecommunications equipment in the Premises not owned by Tenant shall not constitute a prohibited assignment of sublease or require the consent of Landlord. 20. Default: (a) If Tenant shall default in the payment of the Basic Annual Rent, additional rent, or any other charges or sums due hereunder and such default shall continue for ten (10) days (after notice from Landlord to Tenant; provided, however, that Landlord shall not be required to give such notice more than one time in any Lease Year), or if Tenant shall default in the performance of any other of its obligations and such default shall continue for thirty (30) days after written notice thereof by Landlord to Tenant (except that if Tenant cannot reasonably cure any such default within said thirty (30) day period, this period may be extended for a reasonable period of time not exceeding thirty (30) additional days, provided that Tenant commences to cure such default within the thirty (30) day period and proceeds diligently thereafter to effect such cure), or if Tenant or the Guarantor (as such term is defined in Section 36 hereof) shall file a petition under any bankruptcy, insolvency law or code, or if such a petition filed against Tenant or Guarantor is not dismissed within sixty (60) days, or if Tenant or Guarantor shall be adjudicated bankrupt or insolvent according to law, or if Tenant or Guarantor shall make any assignment for the benefit of creditors, or if Tenant or Guarantor shall file any petition seeking a reorganization, arrangement or similar relief, or if a receiver, custodian, trustee or similar agent is appointed for all or a substantial portion of Tenant's or Guarantor's assets, or if Tenant's interest in this Lease is taken upon execution or other process of law in any action against Tenant or if the Guarantor shall attempt to rescind or terminate the Guaranty (as such term is defined in Section 36 hereof), then Landlord may lawfully enter the Premises and repossess the same as the former estate of Landlord, or terminate this Lease by written notice to Tenant and. in either event, expel Tenant and those claiming through or under Tenant, and remove their effects, without being deemed guilty of any manner of trespass and without prejudice to any other remedy which Landlord may have for arrears of Basic Annual Rent and additional rent and other charges and sums due hereunder or proceeding on account of breach of covenant, and upon entry or notice as aforesaid, this Lease shall terminate. In addition, Tenant covenants, in case of any default by Tenant hereunder, to pay Landlord all costs of enforcing Landlord's rights under this Lease (including, without limitation, reasonable attorneys' fees and actual out-of- pocket expenses), reletting expenses (including without limitation, the costs to prepare the Premises for a new tenant) and brokerage fees, and in addition, liquidated damages of any one of the following elected by Landlord: (i) the amount by which, at the termination of the Lease, the then present value (using as a discount factor the current interest rate on U.S. Treasury bills having a maturity equivalent to the unexpired Term of the Lease) of the aggregate of the Basic Annual Rent (including, without limitation, the Real Estate Tax and Operating Cost payments -projected on the basis of experience under this Lease) and other sums payable hereunder projected over a period from such termination until the normal expiration date of the Term, exceeds the then present value (using as a discount factor the current interest rate on U.S. Treasury bills having a maturity equivalent to the unexpired Term of the Lease) of the aggregate projected fair market rental value of the Premises for such period, or (ii) an amount equal to the Basic Annual Rent, plus Operating Costs and Real Estate Tax payments projected on the basis of experience under this Lease not so terminated (subject to off-set for net rents actually received from reletting after subtraction of the expenses of reletting), payable upon the due dates as specified herein. (b) Landlord may bring legal proceedings for the recovery of such damages, or any installments thereof, from time to time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the Term of this Lease would have expired if it had not been terminated hereunder. (c) Nothing herein contained shall be construed as limiting or precluding the recovery by Landlord from Tenant of any sums or damages (including, without limitation, reasonable attorney's fees and expenses) to which, in addition to the damages particularly provided above, Landlord may lawfully be entitled by reason of any default hereunder on the part of Tenant. Landlord and Tenant agree that, for the purpose of computing liquidated damages, the Real Estate Tax and Operating Cost payments for the period between the termination of this Lease pursuant to this Section and the normal expiration date shall be computed by multiplying the Real Estate Tax and Operating Cost payment for the year immediately preceding the year in which termination occurs times the number of years and any fraction thereof remaining of the full Term (as it may have been extended hereunder) hereby granted on the assumption that the amount of such Real Estate Tax and Operating Cost payments for the immediately preceding year would have remained constant for each subsequent year during the entire Term of this Lease (as it may have been extended hereunder). This same principle shall apply to the twelve (12) month period following termination if Landlord shall elect to recover under (iii) above. If this Lease and the Term shall terminate pursuant to this Section prior to the determination of the initial Real Estate Tax and Operating Cost payments, such payments shall be reasonably estimated by Landlord, at its sole discretion. Landlord shall not be obligated to mitigate its damages, but shall market the Premises for lease with the broker then marketing space in the Building. (d) Payments of Basic Annual Rent, additional rent, Real Estate Taxes, Operating Cost payments and any other obligations of Tenant which are not paid on the date due shall, at the option of Landlord, bear interest at the rate equal to the "Base Rate" from time to time established by The First National Bank of Boston, plus two (2) percent per annum from the due date. 21. Landlord's Right to Cure: If Tenant shall default in the observance or performance of any term, covenant or condition on its part to be observed or performed under this Lease, Landlord, without being under any obligation to do so and without thereby waiving such default, may remedy such default for the account and at the expense of Tenant, immediately and without notice in case of emergency, or in any other case, if Tenant shall fail to remedy such default with all reasonable diligence within the time set forth under Section 20 and after Landlord shall have notified Tenant of such default. If Landlord makes any expenditures or incurs any obligations for the payment of money in connection therewith, including, but not limited to, reasonable attorney's fees, such sums paid or obligations incurred, with interest at the rate of interest set forth in Section 20(d), shall be paid to Landlord by Tenant as additional rent hereunder. 22. Subordination: This Lease is subject and subordinate in all respects to all existing mortgages and ground leases and other matters of record and, provided Tenant is provided with a so-called non-disturbance agreement to all mortgages and ground leases which may hereafter be placed on or affect this Lease, the Property, or Landlord's interest or estate therein, and to each advance made or hereafter to be made under any such mortgages, and to all renewals, modifications, consolidations, replacements and extensions thereof and all substitutions therefor. This Section shall be self-operative and no further instrument of subordination shall be required. In confirmation of such subordination, Tenant shall execute and deliver promptly any certificate acknowledging or confirming such subordination that Landlord or any mortgagees or their respective successors in interest may request. Notwithstanding the foregoing, any mortgagee may elect at any time to subordinate its mortgage to this Lease in whole or in part. In the event of an assignment to any mortgagee of this Lease or any payments due hereunder, such mortgagee shall have no liability for Landlord's obligations unless the same shall have been expressly assumed in writing by such mortgagee or unless such mortgagee shall have obtained indefeasible title to the Property. No act or failure to act on the part of Landlord which would entitle Tenant under the terms of this Lease, or by law, to be relieved of Tenant's obligations hereunder or to terminate this Lease shall result in such release or termination unless Tenant shall have given written notice thereof to any mortgagee whose address has been furnished to Tenant, and such mortgagee, after receipt of such notice, has failed to correct the condition complained of within a reasonable time thereafter, including such time as may be necessary in order to obtain possession of the Property. Simultaneously with the execution of this Lease, Landlord shall provide Tenant with a so-called Non-Disturbance Agreement from the current holders of all existing mortgages or ground leases on or respecting the Property, which Non- Disturbance Agreement shall be in the form currently used by the holders of the first mortgage. 23. Surrender of Possession: Holdover: (a) At the expiration or earlier termination of the Term of this Lease, as it may have been extended hereunder, Tenant will remove Tenant's property, equipment and trade fixtures and shall peaceably yield up to Landlord the Premises in the same condition as they were on the Commencement Date, together with the Improvements made pursuant to Section 7 hereof (unless otherwise requested by Landlord pursuant to the provisions of this Lease), except for reasonable wear and tear and damage by fire or other casualty covered by Landlord's insurance or condemnation. (b) If Tenant remains in the Premises beyond the expiration or earlier termination of the Term of this Lease, as it may have been validly extended hereunder, such holding over shall not be deemed to create any tenancy, but the Tenant shall be a Tenant-at-Sufferance only and shall pay rent to Landlord at the times and manner determined by Landlord at a daily rate in an amount equal to one and one half (1-1/2) times the daily rate of the Basic Annual Rent, additional rent and other sums payable under this Lease as of the last day of the Term of this Lease, as it may have been validly extended hereunder. 24. Notices: All notices or other communications which are required or permitted herein shall be in writing and be given by sending by overnight prepaid air courier utilizing receipt or by registered or certified mail, postage prepaid, return receipt requested, addressed to the parties as follows: IF TO LANDLORD: c/o WASA Management 30 Federal Street Boston, Massachusetts 02110 with a copy to: Andrew M., Pearlstein, Esq. Goldstein & Manello, P.C. 265 Franklin Street Boston, Massachusetts 02110 IF TO TENANT: MFS Intelenet of Massachusetts, Inc. 580 Winter Street Waltham, Massachusetts with a copy to: c/o MFS Telecom, Inc. One Tower Lane, Suite 1600 Oakbrook Terrace, Illinois 60181 Attn: Real Estate & General Counsel or at such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. Any such communication shall be deemed to have been given on the business day after dispatch if sent by overnight air courier (unless the receipt shows otherwise) or on the fifth business day after posting if sent by mail. 25. Rules and Regulations: Tenant will faithfully observe and comply with such rules and regulations as Landlord may now have or hereafter at any time or from time to time may make and may communicate in writing to Tenant, which in the judgment of Landlord shall be necessary for the reputation, safety, care or appearance of the Building, or the preservation of good order therein, or the operation or maintenance of the Building, or any equipment relating thereto, or the comfort of tenants or others in the Building (the "Rules and Regulations"). Set forth on Exhibit C attached hereto are the Rules and Regulations in effect as of the date of execution of this Lease. If this Lease shall conflict with any such Rules and Regulations, the provisions of this Lease shall control. Landlord shall not have any duty or obligation to enforce the Rules and Regulations or the terms, covenants or conditions in any other lease as against any other tenant (but Landlord shall not enforce the Rules and Regulations in a discriminatory manner) and Landlord shall not be liable to Tenant for violation of the same by other tenants, their servants, employees, agents, visitors, invitees or licensees. 26. Quiet Enjoyment: The Tenant, on paying Basic Annual Rent, additional rent and other sums payable hereunder and performing the covenants of this Lease on its part to be performed, shall and may peaceably and quietly have, hold and enjoy the Premises for the Term of this Lease (as it may have been extended hereunder) free from hindrance or molestation by any person claiming by, through or under Landlord. 27. Limitation of Landlord's Liability: The term "Landlord", as used in this Lease, so far as covenants or obligations to be performed by Landlord are concerned, shall be limited to mean and include only the owner or owners at the time in question of the Property, and in the event of any transfer or transfers of title to said Property, the Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically relieved from and after the date of such transfer or conveyance of all liability as respects the performance of any covenants or obligations on the part of the Landlord contained in this Lease thereafter to be performed, it being intended hereby that the covenants and obligations contained in this Lease on the part of Landlord shall, subject as aforesaid, be binding on the Landlord, its successors and- assigns, only during and in respect of their respective successive periods of ownership of the Property. Tenant, its successors and assigns, agrees it shall not assert nor seek to enforce any claim for breach of this Lease against any of Landlord's assets other than Landlord's interest in the Property and in the rents, issues and profits thereof, and Tenant agrees to look solely to such interest for the satisfaction of any liability of or claim against Landlord under this Lease, it being specifically agreed that in no event whatsoever shall Landlord (which term shall include, without limitation, any beneficiary of any trust of which Landlord is a trustee or any general or limited partners of Landlord if Landlord is a general or limited partnership), ever be personally liable for any such liability. In no event shall Landlord be liable for any indirect or consequential damages, including without limitation, loss of profits, loss of business, damage to reputation or loss of rental under any sublease or assignment arrangement. Nothing contained herein shall prohibit any action by Tenant against Landlord for, specific performance. 28. Binding Agreement: This Lease shall bind and inure to the benefit of the parties hereto and such respective heirs, representatives, successors or assigns as are permitted by this Lease. This Lease contains the entire agreement of the parties and may not be modified except by an instrument in writing. 29. Notice of Lease: Tenant agrees that it will not record this Lease. Landlord and Tenant shall, upon request of either, execute and deliver a notice of this Lease in such recordable form as may be permitted by applicable statute. 30. Brokerage: Landlord and Tenant each represents and warrants to the other that it has dealt with no broker except The Niles Company and CB Commercial Real Estate Group, Inc. in connection with this transaction. Landlord hereby agrees to pay all compensation which may be due by it to The Niles Company and CB Commercial Real Estate Group, Inc. as set forth in a separate agreement. Tenant agrees to hold harmless and indemnify Landlord from and against any and all costs, (including without limitation reasonable attorneys' fees), expenses, or liability for any compensation, commissions and/or charges claimed by any other broker or agent claiming to have dealt with Tenant in connection with this Lease or the negotiation thereof. 31. Claims in Bankruptcy: Nothing herein shall limit or prejudice the right of Landlord to prove and obtain in a proceeding for bankruptcy, insolvency, arrangement or reorganization, by reason of the termination, an amount equal to the maximum allowed by a statute 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 is greater to, equal to, or less than the amount of the loss or damage which Landlord has suffered. 32. Estoppel Certificates: At Landlord's request, from time to time, Tenant agrees to execute and deliver to Landlord within ten (10) days after requested to do so by Landlord, a certificate which acknowledges tenancy and possession of the Premises and recites such other facts concerning any provision of the Lease or payments made under the Lease including, without limitation, the date to which rents have been paid, the amount of any security deposit, and whether Landlord is then in default in the performance of any obligation of Landlord under the Lease which a mortgagee or lender or a purchaser or prospective purchaser of the Building or any interest therein or any other party may reasonably request. 33. General Provisions: (a) The various rights and remedies contained in this Lease and reserved to each of the parties shall not be exclusive of any other right or remedy of such party, but shall be construed as cumulative and shall be in addition to every other remedy now or hereafter existing at law, in equity, or by statute. No delay or omission of the right to exercise any power by either party shall impair any such right or power, or shall be construed as a waiver of any default or as acquiescence in any default. No covenant, term or condition shall be deemed waived by Landlord except by a writing. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed by the other party as a waiver of a subsequent breach of the same covenants, terms or conditions or any other covenant, term or condition. The consent or approval of either party to or any act by the other party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. No payment by Tenant, or acceptance by Landlord, of a lesser amount than shall be due from Tenant to Landlord shall be treated otherwise than as a payment on account. The acceptance by Landlord of a check for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such check, that such lesser amount is payment in full, shall be given no effect, and Landlord may accept such check without prejudice to any other rights or remedies which Landlord may have against Tenant. (b) Payments to Landlord under this Lease are rental for the use of the Premises, and nothing herein contained shall be deemed or construed to make Landlord a partner or associate of Tenant in the conduct of any business, nor as rendering Landlord liable for any debts, liabilities or obligations incurred by Tenant in the conduct of any business, it being expressly agreed that the relationship between the parties is, and shall at all times remain, that of landlord and tenant. (c) All amounts payable by Tenant to Landlord under any provision of this Lease other than Basic Annual Rent shall be deemed to be additional rental for the use of the Premises, and Landlord shall have the same remedies for the nonpayment of such amounts as for the nonpayment of Basic Annual Rent. (d) Where the words "Landlord" and "Tenant" are used in this Lease, they shall include Landlord and Tenant and shall apply to persons, both men and women, associations. partnerships and corporations, and in reading this Lease, the necessary grammatical changes required to make the provisions hereof mean and apply to them shall be made in the same manner as if written into the Lease. (e) Tenant hereby declares that in entering into this Lease, Tenant relied solely upon the statements contained in this Lease and fully understanding that no agents or representatives of Landlord have authority to in any manner change, add to or detract from the terms of this Lease. Landlord shall not be deemed to have made any other representations or agreements, express or implied. (f) The invalidity of one or more of the provisions of this Lease shall not affect the remaining portions of this Lease; and, if any one or more of the provisions of this Lease should be declared invalid by final order, decree or judgment of a court of competent jurisdiction, this Lease shall be construed as if such invalid provisions had not bee included in this Lease. (g) If Tenant shall be two or more persons or entities, each such person shall be jointly and severally liable for the payment of all sums due to Landlord from Tenant under this Lease and the performance of all of Tenant's covenants, agreements, or obligations under this Lease. (h) If either Landlord or Tenant shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, strikes, lockouts, labor troubles, inability to procure materials, restrictive governmental laws or regulations or other cause without fault beyond their control (financial inability and Tenant's obligation to pay Rent excepted), performance of such acts shall be excused for the period of such delay and the period for the performance of any act shall be extended for a period equivalent to the period of such delay. (i) Where the word "Term" is used in this Lease, it shall also include the word "Extended Term" as the context shall so require. (j) Whenever the approval or consent of Landlord is required hereunder, such approval or consent may be withheld or conditioned in Landlord's sole discretion unless expressly otherwise set forth. 34. Landlord's Reservation of Rights to Change the Property: Landlord hereby expressly reserves the right, at any time and from time to time, but not any obligation, to alter, or otherwise modify (or eliminate) the locations, features, configuration and/or dimensions of all buildings, improvements, parking areas, approaches, roadways, service drives, entries, exits, curb cuts, fire lanes, sidewalks, alleys, isles, islands, planted and landscaped areas, public restrooms, if any, and other facilities, areas or improvements contained from time to time as a part of the Property, to raise buildings, or construct additional buildings and improvements on the Property, including, without limitation, one or more additional floors on the Building, to change the size, location or arrangement of the common areas, to place and remove in the corridors and other common areas, landscaping, decorative items and structures for retail sales, promotional activities, or for any other reasonable purpose; provided that the exercise of Landlord's rights hereunder shall not materially and adversely affect the Premises or Tenant's use thereof for the Permitted Use. 35. Environmental Matters: Tenant shall, at all times, comply with all applicable federal, state, and local environmental and other laws, ordinances, orders or regulations now or hereafter affecting or applicable to the Premises or the operation of Tenant's business at the Premises or the Property including, without limitation, with respect to the operation and testing of Tenant's emergency generator and associated fuel tank (the foregoing laws, ordinances, orders, and regulations are hereinafter collectively referred to as "Environmental Laws"). Notwithstanding anything in this Lease to the contrary, and without limiting the generality of the foregoing, Tenant shall not, without Landlord's prior written consent, and subject to such conditions as may be imposed by Landlord and in strict compliance with all Environmental Laws, use, store, manufacture or otherwise generate, process, dispose of, or deposit in, on or under the Property or into any septic, sewer, drainage or other system servicing the Property or suffer or permit the use, storage, manufacture or other generating, processing, disposal of or depositing in, on or under the Property or any septic, sewer, drainage or other system servicing the Property (collectively, "Dealing With or Dealt With"), any oil, grease, chemical, hazardous or dangerous substance regulated by any public authority (hereinafter referred to as "Hazardous Substances") at, in, upon or under the interior or exterior of the Premises, or the Property, whether or not above or below ground, or in any pipes, mains, conduits or ducts thereof or thereat. In connection with any Tenant request for Landlord consent hereunder, Tenant shall provide Landlord with such data, specifications and professional opinions as Landlord may reasonably request. Tenant does hereby agree to indemnify, defend, and save and hold harmless Landlord from all claims, actions, hens, demands, costs, expenses, fines and judgments resulting from or arising by reason of the following: (i) any spills or contamination of air, soil or water or otherwise by Hazardous Substances at or around the Premises or the Property or upon removal therefrom caused by Tenant, its agents, servants, employees, contractors or invitees; (ii) the violation of any Environmental Laws by Tenant or its agents, servants, employees, contractors or invitees; and (iii) the violation of any of the provisions of this Section of this Lease by Tenant or its agents, servants, employees, contractors or invitees, in any case, including, without implied limitation, reasonable engineering, attorney's and other professional fees and expenses for evaluating, and/or curing the same and for consulting, engineering, defending against any such claims or removing such .Hazardous Substances, and for enforcing this indemnification. Upon ten (10) days prior written request from Landlord, Tenant shall execute, acknowledge and deliver to Landlord or to landlord's mortgagee(s), or to such other persons or parties as Landlord shall from time to time designate, a written statement in form and specifics satisfactory to Landlord certifying that Tenant has not been (or to what extent Tenant has been) Dealing With or Dealt With any Hazardous Substances on or about the Premises or the Property and that any Hazardous Substances used, processed or generated at the Premises or by it at the Property have been used or removed and disposed of properly, and of Tenant's strict compliance with this Section. 36. Guaranty: all be guaranteed The obligations of the Tenant hereunder shall be guaranteed by MFS Communications Company, Inc. (the "Guarantor") pursuant to a Guaranty to be executed by Guarantor simultaneously with the execution of this Lease substantially in the form of Exhibit "D" attached hereto (the "Guaranty"). 37. Right of First Offer: So long as this Lease is in full force and effect and Tenant is not in default under Article 20 beyond the applicable grace periods set forth in Section 20(a), Tenant shall have a right of first offer, pursuant and subject to the following terms and conditions, to lease any rentable area contiguous to the Premises on the first floor of the Building except for the space shown on Exhibit A and marked "Exempt Space". In the event that, at any time during the Term, any such area becomes or is to become vacant, and Landlord desires to lease said area other than to its then current occupant (if any), Landlord shall first made a written offer to lease said area to Tenant, stating the rent that Landlord will accept and all other material terms and conditions of the proposed lease (which rent and other terms and conditions shall be consistent with other offerings then being made by Landlord for comparable space in the Building), and Tenant shall have a right of first offer (subject to any similar right or option which may heretofore have been given to another tenant) to lease said area by giving notice to Landlord to such effect within ten (10) days after notice of such offer from Landlord. If such notice is not so given by Tenant, then Landlord shall be free to lease said area to anyone and Tenant shall have no further recourse with respect thereto except in the event that, subsequent to the leasing of said area to a third party, said area again becomes available for rental as hereinabove set forth. In any case in which Tenant shall have waived said right of first offer or said right shall have expired, Tenant shall, upon request of Landlord, execute and deliver in recordable form an instrument indicating such waiver or expiration, which instrument shall be conclusive in favor of all persons relying thereon in good faith. IN WITNESS WHEREOF, the parties hereto have executed this Lease in multiple counterparts, the original as a sealed instrument on the day and year first above written. LANDLORD: 580 Winter Street Corp. By: /s/ TENANT: MFS Intelenet of Massachusetts, Inc. BY: /s/ its hereunto duly authorized EXHIBIT "C" Rules and Regulations 1. The sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors or halls of the Building shall not be obstructed or encumbered or used for any purpose other than ingress and egress to and from the premises demised to any tenant or occupant. 2. No awnings or other projections shall be attached to the outside walls or windows of the Building without the prior consent of Landlord. No curtains, blinds, shades, or screens shall be attached or hung in, or used in connection with, any window or door of the premises demised to any tenant or occupant, projections, curtains, blinds, shades, screens, or other fixtures permitted by Landlord must be of a quality type, design and color, and attached in a manner, approved by Landlord. 3. No sign, advertisement, object notice or other lettering shall be exhibited, inscribed, painted or affixed on any part of the outside or inside of the premises demised to any tenant or occupant of the Building without the prior consent of Landlord. Interior signs on doors and directory tables, if any, shall be of a size, color and style approved by Landlord. 4. The sashes, sash doors, skylights, windows and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed, nor shall any bottles, parcels, or other articles be placed on any window sills. 5. No show cases or other articles shall be put in front of or affixed to any part of the exterior of the Building, nor placed in the halls, corridors, vestibules or other parts of the Building without Landlord's prior consent. 6. 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. 7. No tenant or occupant shall mark, paint, drill into, or in any way deface any part of the Building or the premises demised to such tenant or occupant. No boring, cutting or stringing of wires shall be permitted, except with the prior consent of the Landlord, and as Landlord may direct. No tenant or occupant shall install any resilient tile or similar floor covering in the premises demised to such tenant or occupant except in a manner approved by Landlord. 8. No bicycles, vehicles or animals of any kind shall be brought into or kept in or about the premises demised to any tenant. No cooking shall be done or permitted in the Building by any tenant without the approval of Landlord. No tenant shall cause or permit any unusual or objectionable odors to emanate from the premises demised to such tenant. 9. No tenant shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with other tenants or occupants of the Building whether by the use of any musical instrument, radio, television set or other audio device, unmusical noise, whistling, singing, or in any other way. Nothing shall be thrown out of any doors or windows. 10. Each tenant must, upon the termination of its tenancy, restore to Landlord all keys of stores, offices and toilet rooms, either furnished to, or otherwise procured by, such tenant. Locks to premises shall not be changed or added without permission of the Landlord. 11. Each tenant shall, at its expense, provide artificial light in the premises demised to such tenant for Landlord's agents, contractors, and employees while making repairs or alterations in said premises. 12. No premises shall be used, or permitted to be used, for lodging or sleeping, or for any immoral or illegal purpose. 13. There shall not be used in the Building, either by any tenant or occupant or by their agents or contractors, in the delivery or receipt of merchandise, freight or other matter, any hand trucks or other means of conveyance except those equipped with rubber tires rubber side guards and such other safeguards as Landlord may require. 14. Canvassing, soliciting and peddling in the Building are prohibited and each tenant and occupant shall cooperate in seeking their prevention. 15. If the premises demised to any tenant becomes infested with vermin, rodents, insects, or pests, such tenant, at its sole cost and expense, shall cause its premises to be exterminated from time to time, to the satisfaction of Landlord, and shall employ such exterminators therefore as shall be approved by Landlord. 16. All damages done to the Building by the installation or removal of any property of a tenant, or done by a tenant's property while in the Building, shall be repaired at the expense of such tenant. 17. Each tenant shall keep its premises neat and clean. Landlord shall be in no way responsible to the tenants, their agents, employees or invitees for any loss of property from their premises or public areas or for any damages to any property thereon from any cause whatsoever unless caused by Landlord's gross negligence or willful act or omission. 18. Nothing shall be swept or thrown into the corridors, halls, elevator shafts or stairways. No birds or animals shall be brought into or kept in, on or about the Building. 19. No machinery of any kind other than standard office equipment shall be operated by a tenant on its leased premises without the prior written consent of Landlord which consent shall not be unreasonably withheld or delayed. 20. Tenants shall not do anything, or permit anything to be done, in or on about the Building, or bring or keep anything therein, including without limitation any inflammable or explosive fluid or substance, that will in any way increase the possibility of fire or other casualty, or do anything in conflict with valid laws, rules or regulations of any governmental authority unless permitted by Landlord. 21. Landlord reserves the right to rescind any of these rules and regulations and to make such other and further rules and regulations as in its judgment shall from time to time be needful for the safety, protection, care and cleanliness of the Building, the operation thereof, the preservation of good order therein and the protection and comfort of the tenants and their agents, employees and invitees, which rules and regulations, when made and written notice thereof is given to a tenant, shall be binding upon it in like manner as if originally herein prescribed so long as the same are reasonable and uniformly enforced. Exhibit "D" GUARANTY For valuable consideration, the undersigned, MFS Communications Company, Inc., a Delaware corporation, of 200 Kiewit Place, 3555 Farnam Street, Omaha, Nebraska 68131, (hereinafter referred to as the "Guarantor"), for its legal representatives, successors and assigns, in order to induce 580 Winter Street Corp., with offices at c/o WASA Management, 30 Federal Street, Boston, Massachusetts ("Landlord") to enter into a lease of even date (the "Lease") between Landlord and MFS Intelenet of Massachusetts, Inc. (the "Tenant"), for certain premises at 580 Winter Street, Waltham, Massachusetts described in said Lease (the "Premises"), hereby unconditionally guarantees to the Landlord and its successors or assigns, the full and prompt payment and performance of all liabilities and obligations of the Tenant to the Landlord under the Lease of every kind, nature and description including, without limitation, the payment of rent and other charges due under the Lease, whether recovery upon such obligations may be or hereafter become barred by any statute of limitations, or whether such lease obligations may be or hereafter become otherwise unenforceable (the "Lease Obligations"). This Guaranty will apply to the Lease, any extension or renewal of the Lease, and any holdover period following the term of the Lease, or any such extension or renewal. Any act of Landlord, or the successors or assigns of Landlord, consisting of a waiver of any of the terms or conditions of the Lease, or the giving of any consent to any matter related to or thing relating to the Lease, or the granting of any indulgences or extensions of time to Tenant, may be done without notice to Guarantor and without affecting the obligations of Guarantor under this Guaranty. The obligations of Guarantor under this Guaranty will not be affected by Landlord's receipt, application, or release of security given for the performance of Tenant's obligations under the Lease, nor by any modification of the Lease, including, without limitation, the alteration, enlargement, or change of the Premises, except that in case of any such modification, the liability of the Guarantor will be deemed modified in accordance with the terms of any such modification. The obligation of the Guarantor is primary and not secondary. The Guarantor hereby waives any right to require the Landlord to (a) proceed against or exhaust any security held from the Tenant or remedy against Tenant prior to proceeding under this Guaranty; (b) proceed against any other guarantor of the Lease Obligations guaranteed hereby or (c) pursue any other remedy in Landlord's power whatsoever. The liability of Guarantor under this Guaranty will not be affected by (a) the release or discharge of Tenant from its obligations under the Lease in any creditors', receivership, bankruptcy, or other proceedings, or the commencement or pendency of any such proceedings; (b) the impairment, limitation, or modification of the liability of Tenant or the estate of Tenant in bankruptcy-, or of any remedy for the enforcement of Tenant's liability under the Lease, resulting from the operation of any present or future bankruptcy code or other statute, or from the decision in any court; (c) the rejection or disaffirmation of the Lease in any such proceedings; (d) the assignment or transfer of the Lease or sublease of all or part of the Premises by Tenant; (e) any disability or other defense of Tenant under the Lease. Guarantor: (a) waives any right of subrogation against Tenant by reason of any payments or acts of performance by Guarantor in compliance with the obligations of Guarantor under this Guaranty; (b) waives any other right that Guarantor may have against Tenant by reason of any one or more payments or acts in compliance with the obligations of Guarantor under this Guaranty; (c) subordinates any liability or indebtedness of Tenant held by Guarantor to the obligations of Tenant to Landlord under the Lease; and (d) waives all suretyship defenses and defenses of like nature. The Guarantor hereby waives all presentments, demands for performance notices of non-performance, protests, notices of dishonor, and notices of acceptances of this Guaranty. The Guarantor hereby waives any right or claim of right to cause a marshaling of the Tenant's assets. No delay on the pat of the Landlord in the exercise of any right, power or privilege under the Lease with the Tenant or under this Guaranty shall operate as a waiver of any such privilege, power or right. The Guarantor agrees to pay on demand reasonable attorneys, fees and expenses incurred by the Landlord in the enforcement of this Guaranty, whether or not suit is commenced. This Guaranty shall continue in full force and effect until the complete payment and performance of the Lease Obligations; provided, however, that notwithstanding the forgoing, this Guaranty shall be released on the date which is the fifth (5th) anniversary of the Rent Commencement Date provided that (i) Tenant has not previously defaulted beyond the applicable grace period during the Term of the Lease; (ii) there is no default existing under Section 20 of the Lease as of such date and no event has occurred which, with the passage of time, could ripen into default; and (iii) Tenant has a net worth as of such date of not less than One Million ($1,000,000) Dollars determined in accordance with generally accepted accounting principles. This Guaranty may not be changed, modified, discharged, or terminated orally or in any manner other than agreement in writing signed by Guarantor and Landlord. The Guarantor acknowledges that the Landlord has been induced by this Guaranty (among other things) to enter into the Lease with the Tenant heretofore described, and this Guaranty shall, without further reference of assignment, pass to, and may be relied upon and enforced by, any successor or assignee of the Landlord. The Guarantor hereby consents to the jurisdiction of the courts of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, for the purpose of any suit, action or other proceeding arising out of or in connection with this Guaranty. The Guarantor hereby expressly waives any and all objections it may have as to the venue in any such courts. This Guaranty shall, for all purposes, be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts to the maximum extent that the parties hereto may so lawfully agree, irrespective of the place of execution. EXECUTED as a sealed instrument this day of October, 1994. Witness This is the third and final page of a Guaranty, dated October, 1994, from MFS Communications Company, Inc. to 580 Winter Street Corp. EX-10.4 5 NOTICE NONC/AUDIT EXHIBIT 10.4 NOTICE OF NONCOMPLIANCE NOTICE OF AUDIT FINDINGS Dear Mr. Borgwing: During May, 1995, the Massachusetts Department of Environmental Protection (the Department) conducted an audit of certain activities related to the above referenced disposal site pursuant to the Massachusetts Contingency Plan (MCP), 310 CMR 40.1100. That audit is now complete. The purpose of this Notice is to inform you that, as a result of the audit, Department personnel have determined that you are in noncompliance with one or more laws, regulations, orders, licenses, permits, or approvals enforced by the Department, The specific aspects of the noncompliance and the measures the Department wants you to take to come into compliance are described in this Notice of Noncompliance. The audit included a windshield survey conducted on May 8, 1995, a review of the documents listed below, and a review of other information in the Department's files: 1) LSP Evaluation opinion report, prepared for WASA Management by Environmental Science Services (ESS), and dated June 17, 1994; and 2) "Phase I - Limited Subsurface Investigation of 580 Winter Street, Waltham, Massachusetts", prepared for Prudential Realty Group by Certified Engineering & Testing Company and dated May 9, 1989. SITE SUMMARY On August 14, 1987, a 10,000 gallon petroleum underground storage tank (UST) was removed from the subsurface at 580 Winter Street, Waltham, Massachusetts. Soil contaminated with number 4 fuel oil was discovered in this tank excavation. The Department was notified of this release on August l7, 1987. An Environmental Site Investigation for the property was completed by Goldberg-Zoino & Associates, Inc. (GZA), in January 1989. Six soil borings were drilled and four groundwater monitoring wells were installed. Fuel oil and chlorinated volatile organic chemicals (VOCs) were detected in soil and groundwater samples from the site. VOCs were not detected in soil at the site at levels exceeding the MCP RCS-l Reportable Concentrations. Trichloroethene was measured in a groundwater sample from well GZA-2 at a concentration of 21 ug/l, which exceeds the RCGW-1 concentration of 5 ug/l. A Phase I-Limited Site Investigation was conducted by Certified Engineering & Testing Company during the spring of 1989, On March 16 and 20, 1989, borings were drilled at the property, Split spoon screening was conducted at five foot intervals in these borings, Two groundwater monitoring wells were installed. Three shallow soil samples were also collected at this tine. These shallow soil samples were collected with a shovel from a depth of two feet. fuel oil and chlorinated VOCs were again detected in soil and groundwater samples from the site. VOCs were not detected in soil at levels exceeding the MCP RCS-l Reportable Concentrations, Trichloroethene was measured in a groundwater sample from well GZA-2 at a concentration of 9.6 ug/l, which exceeds the RCGW-1 concentration of 5 ug/l. Total Petroleum Hydrocarbon (TPH) was measured in a groundwater sample from well MW-103 at a concentration of 6 MG/1, which exceeds the RCGW-1 concentration of l mg/l. A Preliminary Environmental Assessment was conducted by Environmental science services (ESS). ESS collected groundwater samples from existing monitoring wells in November 1992 and December 1993. Trichloroethene wag measured in a groundwater sample from well GZA-3A at a concentration of 7 ug/1 in November 1992 (RCGW-1 = 5 ug/1). Trichloroethene was not detected in a water sample collected from this well in December 1993 (detection limit 5 ug/1). LSP EVALUATION OPINION The LSP Evaluation Opinion states that, "the subject site presents no significant risk to its occupants, the surrounding properties, or the City of Cambridge water supply. Since no contaminants listed in the MCP were currently detected, and previously collected groundwater samples were below the applicable RCGW-2 standards, it is the opinion of the undersigned that the location is not a disposal site where a release of oil and/or hazardous materials has occurred which is subject to the notification requirements of 310 CMR 40.0300, and that no further response actions are required." SITE VISIT On May 8, 1995, a representative of the Department completed a windshield survey of the subject site. The location of the property with respect to the Cambridge Reservoir was noted. Winter Street, and a narrow wooded area bordering the street, lie between the site and the Reservoir. The site is located on a hill overlooking Winter Street. Surface topography slopes strongly toward winter Street in this area, Surface water runoff is collected by storm drains which empty into a retention pond in the Winter Street median strip. A small stream, which flows in a southerly direction, away from the Cambridge Reservoir, is located east of the site, opposite a Guest Quarters suite Hotel. No sheens were observed on either the retention pond or the stream. NOTICE OF NONCOMPLIANCE The following is a description of (1) each activity identified during the audit which is in noncompliance, (2) the requirements violated, (3) the action the Department now wants you to take, and (4) the deadline for taking such action, An administrative penalty may be assessed for every day from now on that you are in noncompliance. Notwithstanding this Notice of Noncompliance, the Department reserves the right to exercise the full extent of its legal authority in order to obtain full compliance with all applicable requirements, including, but not limited to, criminal prosecution, civil action including court-imposed civil penalties, or administrative penalties assessed by the Department. ENTITY IN NONCOMPLIANCE WASA Management 30 Federal Street Boston, MA 02110 DEP RTN #3-2117 LOCATION WHERE NONCOMPLIANCE OCCURRED OR WAS OBSERVED Waltham, 580 Winter Street DATE(S) WHEN NONCOMPLIANCE OCCURRED OR WAS OBSERVED June 22, 1994, the date the Department received a Licensed Site Professional Evaluation Opinion/Report dated June 17, 1994 . DESCRIPTION OF ACTIVITY OF NONCOMPLIANCE The LSP Evaluation opinion did not identify the applicable groundwater category for the site, DESCRIPTION OF REQUIREMENT(S) NOT COMPLIED WITH The LSP Evaluation Opinion compared contaminant concentrations in groundwater at the site to the MCP RCGW-2 Reportable Concentrations. However, based on a measurement made from the Maynard, Massachusetts, USGS Quadrangle (scale = 1:25,000), the site is located approximately 325 feet from the shore of the Cambridge Reservoir, a Class A surface water body used as a public drinking water supply. Pursuant to section 40.0362(l)(a)(4) of the MCP, the reporting category for groundwater at the site is RCGW-1 because the site is located within the Zone A of the Cambridge Reservoir, Groundwater monitoring well MW-103 contained TPH at a concentration of 6 mg/l when last sampled in March 1989. This level exceeds the MCP RCGW-1 TPH Reportable Concentration of 1.0 mg/l. Groundwater monitoring well MW-101 contained trichloroethene at a concentration of 55 ug/1 when last sampled in March 1989. This level exceeds the MCP RCGW-1 trichloroethene Reportable Concentration of 5.0 ug/l. Based on the RCGW-1 groundwater category and levels of trichloroethene and fuel oil in groundwater, the site is subject to the notification requirements pursuant to 310 CMR 40.0300. DESCRIPTION OF DEADLINE(S) OF ACTION TO BE TAKEN Submit to the Department, within 60 days of the date of this Notice, in accordance with 310 CMR 40.0610(5), a revised LSP Evaluation opinion which indicates in Section B. that a release subject to the notification requirements of 310 CMR 40,0300 occurred or may have occurred at the subject site and that further response actions are necessary. This LSP Evaluation Opinion must be accompanied by either a Tier Classification Submittal Transmittal Form (BWSC-107) completed in accordance with 310 CMR 40,0500 with a Tier I Permit Application if necessary, or a Response Action Outcome Statement (BWSC-104) completed in accordance with 310 CMR 40,1000. The revised LSP Evaluation opinion must also be accompanied by a letter requesting that the Department rescind the original LSP Evaluation Opinion dated June 17, 1994 (received by the Department on June 22, 1994) and replace it it with the revised LSP Evaluation opinion. If the requested documents are not received by the Department within 60 days of the date of this Notice, pursuant to 310 CMR 40.0610(6), the site will default to a Tier 1B Classification and Tier 1B Annual Compliance Fees will be assessed. A copy of this Notice has been sent to your LSP. You may consult with your LSP when preparing a response to this Notice, Note, however, that you, not your LSP, are obligated to respond to this Notice and remedy the violation. Note that any submittal to the Department made in response to this Notice must include the certification statement specified in 310 CMR 40,0009, signed by an authorized individual. CONCLUSION You are advised to respond to the Notice of Noncompliance within the timeframes outlined above to avoid additional enforcement action by the Department. This audit focused primarily on compliance 'with certain requirements of M.G.L. c. 21E and the MCP and, to a limited extent, other applicable requirements. This audit does not preclude future audits of past, current, or future response actions or activities at the site or inspections to confirm compliance with applicable requirements of other laws or regulations enforced by the Department. If you have any questions regarding this notice or any of the requirements contained in it, please contact Jack Miano at the letterhead address or telephone (617) 932-7600, Very truly yours, /s/ Jack Miano Environmental Engineer /s/ Richard J. Chalpin Regional Engineer Bureau of Waste Site Cleanup cc: DEP/Woburn, Data Entry/Files DEP/Woburn/BWSC, John Fitzgerald DEP/Woburn/BWSC, Patricia Donahue DEP/BWSC/Boston/5th fl, c/o Steve Winslow City of Waltham, 610 Main Street, Waltham, MA 02154, Attn: Health Agent City of Waltham, 610 Main Street, Waltham, MA 02154, Attn: Board of Selectmen Environmental Science Services, 450 Lexington Street, Newton, MA 02166, Attn: Duncan Wood EX-10.5 6 MA DEP RAO EXHIBIT 10.5 Massachusetts Department of Environmental Protection BWSC-104 Bureau of Waste Site Cleanup RESPONSE ACTION OUTCOME (RAO) STATEMENT & DOWNGRADIENT PROPERTY STATUS TRANSMITTAL FORM Release Tracking Number 3-2117 Pursuant to 310 CMR 40.0180 (Subpart B), 40.0580 (Subpart E) & 40.1056 (Subpart J) A. SITE OR DOWNGRADIENT PROPERTY LOCATION: Site Name: (optional) 580 Winter Street Street: 580 Winter Street City/Town: Waltham Zip Code: 02154 / / Check here if this Site location is Tier Classified. if a Tier 1 Permit has been issued, state the Permit Number: Related Release Tracking Numbers that this Form Addresses: If submitting an RAO Statement, you must document the location of the Site or the location and boundaries of the Disposal Site subject to this Statement. If submitting an RAO Statement for a PORTION of a Disposal Site, you must document the location and boundaries for both the portion subject to this submittal and, to the extent defined, the entire Disposal Site. If submitting a Downgradient Property Status Submittal, you must provide a site plan of the property subject to the submittal and, to the extent defined, the Disposal Site. B. THIS FORM IS BEING USED TO: (check all that apply) / X / Submit a Response Action Outcome (RAO) Statement (complete Sections A,B,C,D,E,F,H,I,J, and L). / / Check here if this is a revised RAO Statement. Date of Prior Submittal: / / Check here if any Response Actions remain to be taken to address conditions associates with any of the Releases whose Release Tracking Numbers are listed above. This RAO Statement will record only an RAO-Partial Statement for those Release Tracking Numbers. Specify Affected Release Tracking Numbers: / / Submit an optional Phase I Completion Statement supporting an RAO Statement or Downgradient Property Status Submittal (complete Sections A,B,H,I,J, and L). / / Submit a Downgradient Property Status Submittal (complete Sections A,B,G,H,I,J and K). / / Check here if this is a revised Downgradient Property Status Submittal. Date of prior Submittal: / / Submit a Termination of a Downgradient Property Status Submittal (complete Sections A,B,I, J and L). / / Submit a Periodic Review Opinion evaluating the status of a Temporary Solution (complete Sections A, B, H, I, J and L). Specify one: / / For a Class C RAO / / For a Waive Completion Statement indicating a Temporary Solution Provide Submittal Date of RAO Statement or Waiver Completion Statement: You must attach all supporting documentation required for each use of form indicated, including copies of any legal Notices and Notices to Public Officials required by 310 CMR 40.1400. C. DESCRIPTION OF RESPONSE ACTIONS: (check all that apply) / / Assessment and/or Monitoring Only / / Removal of Contaminated Soils / / Re-use, Recycling or Treatment / / On site / / Off Site Est. Vol.: cubic yards / / Landfill / / Cover / / Disposal Est. Vol: cubic yards / / Removal of Drums, Tanks or Containers Describe: / / Removal of Other Contaminated Media Specify Type and Volume: / / Other Response Actions Describe: / / Deployment of Absorbant or Contaminant Materials / / Temporary Covers or Caps / / Bioremediation / / Soil Vapor Extraction / / Structure Venting System / / Product or NAPL Recovery / / Groundwater Treatment Systems / / Air Sparging / / Temporary Water Supplies / / Temporary Evacuation or Relocation of Residents / / Fencing and Sign Posting / / Check here if any Response Action(s) that serve as the basis for this RAO Statement involve the use of Innovative Technologies (DEP is interested in using this information to create an Innovative Technologies Clearinghouse). Describe Technologies: D. TRANSPORT OF REMEDIATION WASTE: (if remediation waste was sent to an off-site facility, answer the following questions) Name of Facility: NOT APPLICABLE Town and State: Quantity of Remediation Waste Transported to Date: E. RESPONSE ACTION OUTCOME CLASS: Specify the Class of Response Action Outcome that applies to the Site or Disposal Site. Select ONLY one Class: / / Class A-1 RAO: Specify one of the following / / Contamination has been reduced to background levels / / A Threat of Release has been eliminated / / Class A-2 RAO: You MUST provide justification that reducing contamination to background levels is infeasible. / / Class A-3 RAO: You MUST provide both an implemented Activity and Use Limitation (AUL) and justification that reducing contamination to background levels is infeasible. If applicable, provide the earlier of the AUL expiration date or date the design life of the remedy will end: / X / Class B-1 RAO: Specify one of the following: / / Contamination is consistent with background levels / X/ Contamination is NOT consistent with background levels / / Class B-2 RAO: You MUST provide an implemented AUL. If applicable, provide the AUL expiration date: / / Class C RAO / / Check here if you will conduct post-RAO Operation, Maintenance and Monitoring at the Site. Specify One: / / Passive Operation and Maintenance / / Monitoring Only / / Action Operation and Maintenance (defined at 310 CMR 40.0006) F. RESPONSE ACTION OUTCOME INFORMATION: / X / If an RAO Compliance Fee is required, check here to certify that the fee has been submitted. You MUST attach a photocopy of the payment. / / Check here if submitting one or more AULs. You must attach an AUL Transmittal Form (BWSC-113) and a copy of each implemented AUL related to this RAO Statement. Specify the type of AUL(s) below: (required for all Class A-3 RAOs and Class B-2 RAOs) / / Notice of Activity and Use Limitation / / Grant of Environmental Restriction Number of AULs attached: Specify the Risk Characterization Method(s) used to achieve the RAO described above and all Soil and Groundwater Categories applicable to the Site. More than one Soil Category and more than one Groundwater Category may apply at a Site. Be sure to check off all APPLICABLE categories, even if more stringent soil and groundwater standards were met. Risk Characterization Method(s) Used: / X / Method 1 / / Method 2 / / Method 3 Soil Category(ies) Applicable: / / S-1 / / S-2 / / S-3 Groundwater Category(ies) Applicable: / / GW-1 / X / GW-2 / X / GW-3 > When submitting any Class A-1 RAO or Class B-1 RAO where contamination is consistent with background levels, do NOT specify a Risk Characterization Method. > When submitting any Class A-2 RAO or a Class B-1 RAO where contamination is NOT consistent with background levels, you cannot use an AUL to maintain a level of no significant risk. Therefore, you must meet S-1 Soil Standards, if using Risk Characterization Method 1. G. DOWNGRADIENT PROPERTY STATUS SUBMITTAL: / / If a Downgradient Property Status Submittal Compliance Fee is required, check here to certify that the fee has been submitted. You MUST attach a photocopy of the payment. / / Check here if a Release(s) of Oil or Hazardous Material(s), other than that which is the subject of this submittal, has occurred at this property. Release Tracking Number(s) : / / Check here if the Releases identified above require further Response Actions pursuant to 310 CMR.40.0000. Required documentation for a Downgradient Property Status Submittal included, but is not limited to, copies of notices provided to owners and operators of both upgradient and downgradient abutting properties and of any known or suspected source properties. H. LSP OPINION: I attest under the pains and penalties of perjury that I have personally examined and am familiar with this transmittal form, including any and all documents accompanying this submittal. In my professional opinion and judgment based upon application of (i) the standard of care in 309 CMR 4.02(1), (ii) the applicable provision of 309 CMR 4.02(2) and (3), and (iii) the provision of 309 CMR 4.03(5), to the best of my knowledge, information and belief. > If Section B indicates that a Downgradient Property Status Submittal is being provided, the response action(s) that is (are) the subject of this submittal (i) has (have) been developed and implemented in accordance with the applicable provisions of M.G.L. c. 21E and 310 CMR 40.0000, (ii) is (are) appropriate and reasonable to accomplish the purposes of such response action9s) as set forth in 310 CMR (40.0183(2)(b), and (iii) complies(y) with the identified provisions of all orders, permits, and approvals identified in this submittal; > If Section B indicates that either an RAO Statement, Phase I Completion Statement and/or Periodic Review Opinion is being provided, the response action9s) that is (are) the subject of this transmittal (i) has (have) been developed and implemented in accordance with the applicable provisions of M.G. L. c. 21E and 310 CMR 40.0000, (ii) is (are) appropriate and reasonable to accomplish the purposes of such response action(s) as set forth in the applicable provisions of M.G.L. c. 21E and 310 CMR 40.0000, and (iii) complies(y) completely with the identified provisions of all orders, permits, and approvals identified in this submittal. I am aware that significant penalties may result, including, but not limited to, possible fines and imprisonment, if I submit information which I know to be false, inaccurate or materially incomplete. / / Check here if the Response Action(s) on which this opinion is based, if any, are (were) subject to any order(s), permit(s) and/or approval(s) issued by DEP or EPA. If the box is checked, you MUST attach a statement identifying the applicable provisions thereof. LSP Name: DUNCAN W. WOOD LSP# 8765 Stamp: Telephone: 617-431-0500 Ext.: FAX (optional): 617-431-7434 Signature: /S/ DUCAN W. WOOD Date: October 2, 1995 I. PERSON MAKING SUBMITTAL: Name of Organiation: WASA MANAGEMENT as agent for 580 Winter Street Corp. Name of Contact: LARS BORGWING Title: President Street: 30 Federal Street, 6th floor City/Town: Boston State: MA Zip Code: 02109 Telephone: 617-423-0054 Ext.: FAX: (optional) 617-423-0940 J. RELATIONSHIP TO SITE OF PERSON MAKING SUBMITTAL: (check one) / X / RP or PRP Specify: / X / Owner / / Operation / / Generator / / Transporter Other RP or PRP: / / Fiduciary, Secured Lender or Municipality with Exempt Status (as defined by M.G.L. c. 21E, s.2 / / Agency or Public Utility on a right of Way (as defined by M.G.L. c. 21E, s, 5(j)) / / Any Other Person Submitting This Form Specify Relationship: K. CERTIFICATION OF PERSON SUBMITTING DOWNGRADIENT PROPERTY STATUS SUBMITTAL: NOT APPLICABLE. L. CERTIFICATION OF PERSON MAKING SUBMITTAL: If you are completing only a Downgradient Property Status Submittal, you do not need to complete this section of the form. I, Lars Borgwing, attest under the pains and penalties of perjury (i) that I have personally examined am familiar with the information contained in this submittal, including any and all documents accompanying this transmittal form, (ii) that, based on my inquiry of those individuals immediately responsible for obtaining the information, the material information contained in this submittal is, to the best of my knowledge and belief, true, accurate and complete, and (iii) that I am fully authorized to make this attestation on behalf of the entity legally responsible for this submittal. I/the person or entity on whose behalf this submittal is made am/is aware that there are significant penalties, including, but not limited to, possible fines and imprisonment, for willfully submitting false, inaccurate or incomplete information. By: / S / LARS BORGWING Title: President For: WASA MANAGEMENT as agent for 580 Winter Street Corp. (print name of person or entity recorded in Section I) Enter address of the person providing certification, if different from address recorded in Section I: YOU MUST COMPLETE ALL RELEVANT SECTIONS OF THIS FORM OR DEP MAY RETURN THE DOCUMENT AS INCOMPLETE. IF YOU SUBMIT AN INCOMPLETE FORM, YOU MAY BE PENALIZED FOR MISSING A REQUIRED DEADLINE, AND YOU MAY INCUR ADDITIONAL COMPLIANCE FEES. EX-10.6 7 ESS DOC SUP RAO EXHIBIT 10.6 DOCUMENTATION SUPPORTING RESPONSE ACTION OUTCOME Fuel Oil and Trichloroethene in Groundwater 580 Winter Street, Waltham, Massachusetts DEP Site No. 3-2117 Prepared For: WASA Management 30 Federal Street, 6th Floor Boston, Massachusetts Submitted To: Massachusetts Department of Environmental Protection Northeast Region 10 Commerce Way Woburn, Massachusetts Prepared By: Environmental Science Services 49 Walnut Park, Building 3 Wellesley Hills, Massachusetts ESS Project No. W028 October 2, 1995 Environmental Science Services An Equal Opportunity Employer 49 Walnut Park, Building No. 3, Wellesley Hills, Massachusetts 02181 (617) 43 1-0500 Fax (617) 431-7434 DOCUMENTATION SUPPORTING RESPONSE ACTION OUTCOME Fuel Oil and Trichloroethene in Groundwater 580 Winter Street, Waltham, Massachusetts DEP Site No. 3-2117 1.0 INTRODUCTION This document presents information, an evaluation, and conclusions in support of a Response Action Outcome (RAO) Statement for the property located at 580 Winter Street, Waltham, Massachusetts (the Site). This document and the included RAO forms address the presence of fuel oil and trichloroethene detected in groundwater on a portion of the Site. A LSP Evaluation Opinion by Environmental Science Services (ESS) dated June 17, 1994 concluded that the site presents no significant risk to its occupants, the surrounding properties, or the City of Cambridge water supply based on the existing levels of groundwater contamination at the Site and a reporting category for groundwater at the site of RCGW-2. Subsequent review of this document by DEP in a memorandum dated May 16, 1995 stated that the reporting category for groundwater at the Site should be RCGW-1 based on its proximity to the Cambridge Reservoir. This review noted that the residual concentrations of fuel oil and trichloroethene exceed the RCGW-1 Standards. Therefore, the LSP Evaluation Opinion was not an appropriate end point for the evaluation of this Site, and a risk characterization is required. This document presents an opinion that, despite the RCGW-1 designation affirmed in DEP's communication, the groundwater should not be classified as GW-1 for the purposes of risk characterization. This opinion is supported by our interpretation of the particular hydrogeologic conditions at the Site. This document describes: - - the location and nature of the releases; - - the assessment of residual-conditions; and - - a risk characterization based upon the results of the assessment work. A Class B-2 RAO has been designated for the Site based on the following conclusions: 1) A level of "no significant risk" exists. 2) No remediation was undertaken at the Site. 3) Residual concentrations of fuel oil and several solvents exceed background levels. Also included with this documentation is a completed copy of the Response Action Outcome Statement and Downgradient Property Status Transmittal Form (BWSC-104). 2.0 DESCRIPTION OF THE SITE The Site is located in the industrial park near the 'intersection of Winter Street and Route 128 in Waltham, Massachusetts. The building is on the southwest comer of the intersection of Winter Street and First Avenue. The larger parking lot abuts West Street and is southwest of the building lot. The building is surrounded on the east, west, and south by other commercial and industrial proper-ties. Across Winter Street to the north is the Cambridge Reservoir, a primary storage reservoir serving the public water supply of the City of Cambridge. A locus map and site plan map are attached as Figures I and 2, respectively. 3.0 HISTORY OF RELEASE The initial site investigation was conducted by Goldberg-Zoino & Associates, Inc. (GZA) with their report dated January 1989. A follow up effort was conducted by Certified Engineering and Testing (CET) with their report dated May 1989. The sampling by these firms in December 1988 and March 1989 detected low levels of chlorinated solvents, such as trichloroethene, as well as total petroleum hydrocarbons (TPH). The Site was subsequently reported to the Massachusetts Department of Environmental Protection (DEP). No specific source was identified for the solvents, whereas the TPH contamination was attributed to small overfills of a former underground fuel oil tank, found to be intact on removal. A Preliminary Environmental Assessment and Limited Subsurface Investigation was completed by ESS in April 1993. This included analysis of groundwater samples collected in December 1992 from the four existing accessible monitoring wells on the property. ESS concluded that there was no visual evidence of a release or a significant threat of a release of oil or hazardous material to the property. However, analysis of the groundwater samples detected low levels of volatile organic compounds (VOCs). A summary of all available analytical results for groundwater is attached as Table 1. 4.0 GROUNDWATER CLASSIFICATION The subject Site was located on the 7.5- by 7.5-minute Concord quadrangle of the Massachusetts Geographical Information System (MASSGIS) maps at the DEP Northeast Region office in Woburn, Massachusetts. According to that map, there are no wells or pumping stations for public water supply within a radius of at least 1 mile from the subject Site. The building on the property is approximately 325 feet from the southern edge of the Cambridge Reservoir, and 1,500 feet from the ghettoize which regulates the reservoir's outlet into Hobs Brook, but there is no protected zone designation associated with the Cambridge Reservoir noted on the MASSGIS maps in this area. According to the maps entitled "Hydrology and Water Resources of the Charles River Basin, Massachusetts," published by the USGS, the subject property is not underlain by any aquifer that is favorable for development of water supply wells. In accordance with 3 1 0 CMR 40.0932, and based on the proximity of the Site to the Cambridge Reservoir, the Site is in the Zone A of a Class A Surface Water Body. As stated in DEP's memorandum of May 16, 1995, this condition requires classification of Site groundwater as RCGW-1 for reporting purposes. However, for the purposes of Risk Characterization, ESS believes that the appropriate classification of the groundwater at the Site is GW-2 and GW-3, based on its particular hydrogeologic setting. The following discussion on this topic is based on three sources of information: the USGS Topographic Map for the Maynard Quadrangle, the GZA environmental site assessment of the Site dated January 5, 1989, and the CET environmental site assessment for the Site dated May 9, 1989. Although this Site is within 400 feet of a Class A Surface Water Body, the water body in question is a dammed reservoir, and, based on the topography as depicted in the USGS Maynard Quadrangle, the Site is located on the regionally downgradient side of the dam. Surface water bodies typically gain part of their recharge from inflowing groundwater. However, along a certain portion (along the regionally downgradient side) of the perimeter of water bodies, groundwater is often recharged from surface water, flowing away from the water body. This is more consistently and predictably the case for dammed water bodies, where surface water is artificially maintained above its natural elevation. In this case, two observations support the conclusion that the Site is located in such a zone, and that groundwater beneath the Site flows to the more distant Hobbs Brook 'rather than the Cambridge Reservoir. The first observation is that relative groundwater elevations at the Site, as measured on two occasions (December 1989 and May 1989), show groundwater flow in a southerly direction, away from the reservoir. The second observation is that estimated absolute groundwater elevations at the Site are below the elevation of the water surface of the reservoir, as depicted on the USGS Topographic map. ESS estimated the absolute groundwater elevations (above MSL) at the Site based on the topographic contours provided on the USGS Quadrangle map. The average elevation of the four monitoring wells GZA-1, GZA-2, GZA-3 and MW-103 was assumed to be 177.1 feet. The elevation of each individual well was then estimated based on the difference from average as determined from the relative elevation survey provided by CET. Groundwater elevations were then computed for the four wells based on measured depth to water on two separate occasions. These elevations can be directly compared with the elevation of the water surface of the reservoir. These data are summarized in Table 2. Whereas the elevation of the reservoir surface is 172.2 feet above MSL, the groundwater elevations at the Site are between 161.78 and 163.51 ft, with the exception of one measurement in well MW-103 of 169.6. Groundwater elevations at the Site are therefore generally about 10 feet below the elevation of the reservoir surface as reported on the USGS Quadrangle map. In the case of MW-103, in which groundwater is 2.6 feet below the elevation of the reservoir, two points need to be considered. First, this well is the closest to the reservoir of all the wells at the Site, and second, this well is installed directly above the shallow refusal depth of 10 feet. It is possible that the groundwater elevation in this well reflects a local condition. In any case, the data indicates a hydraulic gradient away from the reservoir. For groundwater elevations across the Site to rise above the level of the reservoir, the reservoir level would have to drop as much as 10 feet. The drought conditions that would cause this condition would of course also cause groundwater levels at the Site to drop as well, making it unlikely that the flow in this region would reverse for any significant length of time. Even so, based on reasonable and conservative estimates of hydraulic conductivity and porosity, the hypothetical travel times for transport of pollutants from the Site to the reservoir can be computed. Assuming a hydraulic conductivity of 100 feet per day and a porosity of 0.3, the reservoir would have to drop 15 feet without the groundwater dropping at all and stay this way for 60 days for groundwater at the Site to reach the reservoir. This scenario is not within the realm of possibility. It is more likely that groundwater levels at the Site would drop along with the reservoir level, increasing the travel time to the reservoir to the order of years, long enough that seasonal increases in reservoir level would return the gradient to its average direction long before any contaminant migrating in groundwater could reach the reservoir. Table 2. Estimated Groundwater Elevations
Well Estimated GZA (12/88) Groundwater CET (5/89) Groundwater Elevation depth-to-water elevation depth-to-water elevation GZA-1 177.11 14.02 163.09 13.208 163.9 GZA-2 176.64 14.2 162.44 13.125 163.51 GZA-3 178.68 16.9 161.78 15.438 163.24 MW-103 175.52 well not installed 5.917 169.6
These observations indicate that either: 1) a groundwater divide exists between the reservoir and the Site, or 2) that the southern shore of the reservoir is located in the zone where surface water recharges groundwater, and groundwater flow between the reservoir and the Site is generally towards the Site. In either case, groundwater quality at the Site should have no significant impact on water quality in the reservoir, and therefore should not be classified as GW-1. This opinion is based on logic parallel to that appearing in 310 CMR 40.0932(5), which allows for exceptions to the GW-1 classification to be made based on local hydrogeologic conditions in the case of groundwater resources. Specifically, the exceptions are made relative to groundwater resources when a lack of hydrogeologic connection between the site and the resource area is shown or the regulated boundaries of a resource area are shown to be inaccurate based on site-specific data. Although these provisions are not explicitly granted in the case of surface water resources, ESS believes that both of these conditions apply to this Site, and concludes that the applicable groundwater standard for this Site should be GW-2 and GW-3. 5.0 RISK CHARACTERIZATION A Method 1 risk characterization has been performed in accordance with 310 CMR 40.0970 and 40.0980 of the Massachusetts Contingency Plan (MCP). This characterization is made based on the residual concentration of several solvents and TPH existing in areas classified as GW-2 and GW-3, as described above. 5.1 Exposure Point Concentrations Exposure point concentrations (EPCs) have been calculated for the various solvents detected at the Site as the maximum concentration detected in any well over the period of investigation. These concentrations, along with the relevant GW-2 and GW-3 standards, are provided in Table 3. Table 3. Maximum Concentrations of TPH and Solvents Detected in Groundwater at the Site and Relevant GW-2/GW-3 Standards
Compound Maximum Consultant Well Method 1, Method 1, Concentration Date GW-2 Limit GW-3 Limit (ppb) Total Petroleum 6000 Certified 3/89 MW-103 NA 50,000 Hydrocarbons (TPH) Chlorobenzene 48 ESS 11/92 GZA-1 1,000 500 1,1,1-Trichloroethane14 ESS 11192 GZA-3A 4,000 50,000 Trichlorethene 55 Certified 3/89 MW-101 300 20,000 Ethyl Benzene 16 Certified 3/89 GZA-1 30,000 4,000 Total Xylenes 6.9 Certified 3/89 GZA-1 6,000 50,000 1,3-Dichlorobenzene 9.9 Certified 3/89 GZA-1 10,000 8,000 Trichlorofluoro 58 Certified 3/89 GZA-3A NSA NSA Methane 1,1-Dichloroethane Trace (5) Certified3/89 GZA-2,3 9,000 50,000 cis- 1,2- Trace (5) Certified 3/89 GZA-3A NA 50,000 Dichloroethylene Tetrachloroethylene Trace (5) Certified 3/89 MW-101 3,000 5,000 Total 1,2- 8.9 GZA 12/88 GZA-2 NA 50,000 Dichloroethenes
Notes: > GZA's screening analysis was not per-formed by an EPA test method. > NT = Not tested for or well not sampleable (e.g., well not yet installed [MW-103] or covered over with budding [MW-1011). > NSA No standard available > Trace probable presence below detection limit (detection limit) Potential Receptors and Migratory Pathways As part of this risk characterization, ESS has considered what potential receptors and migratory pathways exist at the Site. The dissolved solvent and TPH concentrations are not large enough to pose a threat to air quality. The Site is not functionally located in a GW-l area, and the nearest known water supply wells are located over I mile from the Site. The Cambridge Reservoir, located 325 feet north of the Site, is upgradient. A wetland south of the Site, the likely discharge point for groundwater flowing under the Site, is located approximately 2,000 feet downgradient. Hobbs Brook, which probably receives recharge from water flowing through the wetland, is the eventual receptor of groundwater flowing through the Site. However, during the considerable travel time between the site and the brook, the low levels of organic compounds present will be most likely be greatly diminished due to sorption, biodegradation, and volatilization. 5.3 Risk Characterization Based on a comparison of the maximum concentrations of all compounds detected at the Site to below the applicable Method 1 GW-2/3 standards, ESS concludes that no significant risk is posed by the presence of residual contamination at this Site. 6.0 RAO OPINION After reviewing laboratory data from assessments conducted at the Site, ESS has reached the following conclusions: dissolved concentrations of various solvents and TPH are below GW- 2/3 standards; the contaminants detected in groundwater at the Site will not pose a significant risk of harm to health, public welfare or the environment; and the Site meets the requirements for a Class B-1 RAO. MAP SHOWING LOCATION OF PREMISES IN CLOSE PROXIMITY TO RESERVOIR. SITE SKETCH OF PREMISES DEPICTING THE LOCATION OF THE VARIOUS MONITORING WELL SITES. TABLE 1 RESULTS OF GROUNDWATER ANALYSIS Table of results of Groundwater Analysis Samples of Various Well Test Sites taken by various enviornmental engineers from 1988 through 1993. Tests were done in 1988, 1989, 1992 and 1993. Not all wells were tested each year. The test well showing the level of total petroleum hydrocarbon level and the test well showing the trichloroethene level which levels the Massachusetts Department of Environmental Protection indicated exceeded the public drinking water standard (GW-1) have not been tested since 1989. The summary of all of these test results at their highest levels of detection appears in Section 5.1 (of this Exhibit 10.6) as "Table 3 Maximum Concentrations of TPH and Solvents Detected in Groundwater at the Site and Relevant GW-2/GW-3 Standards."
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