-----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, CNRZ//H0tVMXedd3hk1JZdc0YggKfzXAy+mDYjbWD9ArIBlaMUnH8+z3rV7CUT0Y 1B2ZsiLU3hondBe1do7rqA== 0000912057-95-008997.txt : 19951030 0000912057-95-008997.hdr.sgml : 19951030 ACCESSION NUMBER: 0000912057-95-008997 CONFORMED SUBMISSION TYPE: S-2 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19951027 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERLEAF INC /MA/ CENTRAL INDEX KEY: 0000793604 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042729042 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: S-2 SEC ACT: 1933 Act SEC FILE NUMBER: 033-63785 FILM NUMBER: 95585140 BUSINESS ADDRESS: STREET 1: PROSPECT PLACE STREET 2: 9 HILLSIDE AVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6172900710 S-2 1 FORM S-2 As filed with the Securities and Exchange Commission on October 26, 1995 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-2 Registration Statement under the Securities Act of 1933 INTERLEAF, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2729042 ------------------------------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 9 Hillside Avenue, Prospect Place Waltham, MA 02154 (617) 290-0710 - -------------------------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) John K. Hyvnar, General Counsel Interleaf, Inc. 9 Hillside Avenue, Prospect Place Waltham, MA 02154 (617) 290-0710 - ------------------------------------------------------------------------------- (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: As soon as practicable after the Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ] If the registrant elects to deliver its latest annual report to security holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1) of this Form, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment file pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
Proposed Proposed Maximum Maximum Title of Each Class Amount Offering Aggregate of Securities to be Price Per Offering Amount of to be Registered Registered Share (1) Price (1) Registration Fee ---------------- ---------- --------- --------- ---------------- Common Stock, 275,000 $.01 par value shares $8.90 $2,447,500 $844.00
- ---------- (1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933, as amended, based upon the average of the high and low prices of the Common Stock on the National Market System as reported by the NASDAQ on October 24, 1995. -------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. INTERLEAF, INC. Cross-Reference Sheet Pursuant to Item 501(b) of Regulation S-K Form S-2 Item Number and Caption Caption in Prospectus - -------------------------------- --------------------- 1. Forepart of the Registration Statement and Outside Front Cover of Prospectus Outside Front Cover Page 2. Inside Front and Outside Back Cover Pages of Prospectus Inside Front and Outside Back Cover Pages 3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges Inside Front Cover Page 4. Use of Proceeds Issuance of Shares 5. Determination of Offering Price Issuance of Shares 6. Dilution Not Applicable 7. Selling Security Holders Not Applicable 8. Plan of Distribution Issuance of Shares 9. Description of Securities to be Registered Description of Common Stock 10. Interests of Named Experts and Counsel Not Applicable 11. Information With Respect to the Registrant The Company; Additional Information; Recent Developments 12. Incorporation of Certain Information by Reference Incorporation of Certain Documents by Reference 13. Disclosure of Commission Position on Indemnification for Securities Act Liabilities Not Applicable Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. SUBJECT TO COMPLETION, DATED OCTOBER 27, 1995 INTERLEAF, INC. 275,000 Shares Common Stock, $.01 par value The shares of Common Stock, $.01 par value ("Common Stock") of Interleaf, Inc. (the "Company") covered by this Prospectus are offered as set forth under "Issuance of Shares". On October 25, 1995, the last reported sale price for the Common Stock on the National Market System, as reported by NASDAQ, was $10.00 per share. The Common Stock is traded in the over-the-counter market under the NASDAQ symbol "LEAF". _________________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. _________________________ Estimated offering expenses of $15,000 will be paid by the Company. The date of this Prospectus is __________, 1995 TABLE OF CONTENTS Page THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ISSUANCE OF THE SHARES . . . . . . . . . . . . . . . . . . . . . . . DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE. . . . . . . . . . . RECENT DEVELOPMENTS. . . . . . . . . . . . . . . . . . . . . . . . . ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . _________________________ The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information filed by the Company with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549 and at the following regional offices of the Commission: Suite 1300, 7 World Trade Center, New York, NY 10048; and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, IL 60611. Copies of such material may be obtained from the Public Reference Section of the Commission, Washington, D.C. 20549, at prescribed rates. _________________________ The Company will provide without charge to each person to whom a Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the documents incorporated by reference herein, other than exhibits to such documents. Such request should be directed to: Interleaf, Inc., Prospect Place, 9 Hillside Avenue, Waltham, MA 02154, attn: John K. Hyvnar, or (617) 290-0710 extension 1016. THE COMPANY Interleaf, Inc., a Massachusetts corporation (the "Company"), develops and markets software that is used in the creation, management and distribution of documents. The Company's software enables customers to compose, edit, view and print documents, while also facilitating their electronic management, preparation, conversion and distribution. The Company offers its customers an integrated document management solution to meet both the needs of the document author and information user. The Company's principal offices are located at Prospect Place, 9 Hillside Avenue, Waltham, Massachusetts 02154, and its telephone number is (617) 290-0710. This Prospectus is accompanied by: (i) the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1995; and (ii) the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1995. ISSUANCE OF THE SHARES In October 1988, the Company entered into a joint venture (the "Venture") with PruTech Research and Development Partnership III ("PruTech"), for the purpose of developing and marketing certain products. PruTech contributed approximately $2,950,000 in cash to the Venture; the Company licensed to the Venture certain base technology and was required to perform certain development, marketing and administrative services for the Venture. Under the terms of the agreement by which the Venture was established, the Company receives 65% of the revenues from -1- the sale of such products in consideration of the cost of goods sold, and as reimbursement for marketing, selling, general and administrative expenses incurred by the Company on behalf of the Venture. The net profits of the Venture were allocated initially to PruTech (up to a maximum of 5% of the revenues of the Venture from sales of such products for the period through October 1991 and up to a maximum of 30% of such revenues thereafter), with the balance of net profits of the Venture allocated to the Company. Until October 1991, the Company had an option to purchase PruTech's interest in the Venture at a price of approximately $7 million, which option was not exercised by the Company. From and after February 1992, PruTech has had the option to purchase the Company's interest in the Venture on a quarterly basis at a price equal to 10 times the Venture's net profits for the previous quarter. In March 1994, PruTech commenced an arbitration action against the Company alleging, among other things, (i) that the Company had mismanaged the Venture; (ii) that PruTech is entitled to cash distributions of 30% of Venture revenues; and (iii) that certain Venture-owned technology was used in the Company's other products. The Company has denied such allegations. The Company has agreed to pay PruTech $2.1 million (the "Purchase Price") solely in consideration of (i) the acquisition by the Company of PruTech's interest in the Venture, and (ii) the settlement of the pending arbitration action and the release by PruTech of all claims that it may have against the Company arising out of the formation and operation of the Venture. At the Company's option, the Purchase Price shall be payable in cash, by the issuance of Common Stock, or a combination thereof. It is the Company's intention to issue to PruTech Shares having a value of $2.1 million for payment of the Purchase Price. No cash consideration will be paid by PruTech for the Shares to be issued to it and, consequently, the Company will realize no cash proceeds from the issuance of the Shares. The number of Shares to be issued to PruTech and the terms of their issuance have been determined by arms' length negotiation between the Company and PruTech. DESCRIPTION OF CAPITAL STOCK The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, $.01 par value per share, and 5,000,000 shares of Preferred Stock, $.10 par value per share, 200,000 shares of which have been designated as Series A Junior Participating Preferred Stock and 2,142,857 shares of which have been designated as Senior Series B Convertible Preferred Stock. As of October 25, 1995, there were issued and outstanding 15,653,068 shares of Common Stock held of record by approximately 928 persons and 1,232,144 shares of Senior Series B Convertible Preferred Stock held of record by 6 persons. No shares of Series A Junior Participating Preferred Stock are outstanding. COMMON STOCK Holders of Common Stock are entitled to one vote per share on matters to be voted upon by the shareholders. There are no cumulative voting rights. Holders of Common Stock are entitled to receive ratably dividends when and if declared by the Board of Directors out of funds legally available therefor. Upon the liquidation, dissolution or winding up of the Company, holders of Common Stock share ratably in the assets of the Company available for distribution to its shareholders, subject to the preferential rights of any then outstanding Preferred Stock. Holders of Common Stock have no preemptive, subscription, redemption or conversion rights. All outstanding shares of Common Stock are fully paid and non-assessable. PREFERRED STOCK The Board of Directors may, without further action of the shareholders of the Company, issue Preferred Stock in one or more series and fix the rights and preferences thereof, including the dividend rights, dividend rates, conversion rights, voting rights, terms of redemption (including sinking fund provisions), redemption prices and liquidation preferences. The rights of holders of Common Stock will be subject to, and may be adversely affected by, the rights of holders of any Preferred Stock that may be issued in the future. Issuance of Preferred Stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of the outstanding voting stock of the Company. -2- The Board of Directors has designated two series of Preferred Stock: Series A Junior Participating Preferred Stock, consisting of 200,000 shares ("Series A Preferred Stock"), and Senior Series B Convertible Preferred Stock, consisting of 2,142,857 shares ("Series B Preferred Stock"). The Series A Preferred Stock was designated for the purpose of implementing the Shareholder Rights Plan discussed under "Shareholder Rights Plan" below. SENIOR SERIES B CONVERTIBLE PREFERRED STOCK The terms of the Series B Preferred Stock are summarized as follows: DIVIDENDS. Holders of Series B Preferred Stock are not entitled to any mandatory dividends, but are entitled to receive, before any cash dividends are declared, set aside or paid upon shares of Common Stock, when and as declared by the Board of Directors, dividends in an amount per share equal to that amount as would be declared, set aside or paid on the number of shares of Common Stock into which each share of Series B Preferred Stock could be converted. LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series B Preferred Stock are entitled to be paid out of the assets available for distribution to stockholders, before any payments are made to the holders of Common Stock or any other stock ranking on liquidation junior to the Series B Preferred Stock, an amount equal to $7.00 per share (subject to adjustment in the event of any stock split, stock dividend or similar event). Holders of shares of Series B Preferred Stock are entitled to share ratably with the holders of Common Stock in the distribution of any assets remaining for distribution to the stockholders (after the holders of Common Stock have received an aggregate amount equal to the aggregate amount distributed to the holders of Series B Preferred Stock pursuant to the preceding sentence. CONVERSION FEATURE. Shares of Series B Preferred Stock may, at the option of the holder thereof, be converted at any time or from time to time into shares of Common Stock at a rate of 1.34375 shares of Common Stock for each share of Series B Preferred Stock. The conversion rate is subject to adjustment for stock dividends, splits, combinations or similar events. REDEMPTION FEATURE. Subject to the rights of each holder of Series B Preferred Stock to exercise the conversion rights, the Company shall have the option at any time and from time to time to redeem not less than 20% of the outstanding shares of Series B Preferred Stock, out of funds legally available therefor, pro rata from each holder of Series B Preferred Stock, at a purchase price of $21.00 per share (subject to adjustment for stock dividends, stock splits and similar events). VOTING. Except as otherwise required by law, the holders of shares of Series B Preferred Stock shall be entitled to vote on all matters submitted to a vote of the stockholders, voting together with the holders of Common Stock as a single class. Each share of Series B Preferred Stock shall be entitled to that number of votes equal to the number of shares of Common Stock into which such share can be converted. Notwithstanding the foregoing, (i) so long as a majority of the authorized shares of Series B Preferred Stock remain outstanding, the holders of the Series B Preferred Stock shall be entitled to vote as a separate class to elect one member of the Company's Board of Directors, and (ii) so long as any shares of Series B Preferred Stock are outstanding, the consent of the holders of a majority of the outstanding shares of Series B Preferred Stock shall be necessary to (a) amend the Articles of Organization, if such amendment would adversely affect any of the rights, powers, privileges or preferences of the Series B Preferred Stock, (b) authorize any equity security ranking prior to or on a parity with the Series B Preferred Stock as to liquidation preference or dividend rights or prior to the Series B Preferred Stock as to voting rights, or (c) approve a merger, consolidation, liquidation or sale of all or substantially all of the assets of the Company that would result in a holder of Series B Preferred Stock receiving an amount less than $18.00 per share of Series B Preferred Stock (subject to adjustment for stock splits, stock dividends and similar events). SHAREHOLDER RIGHTS PLAN The Board of Directors adopted a Shareholder Rights Plan (the "Rights Plan") on July 15, 1988. The Rights Plan is designed to protect stockholders in the event of (i) an unsolicited offer to acquire the Company, including an offer that does not treat all stockholders equally, (ii) the acquisition in the open market of shares constituting control of the Company without offering fair value to all stockholders, and (iii) other coercive takeover tactics that could impair the Board's ability to represent stockholder interests fully. Under the Rights Plan, each stockholder of record at the close of business on July 25, 1988 received a dividend distribution of one right (a "Right") for each share of Common Stock held. Each Right entitles the registered -3- holder to purchase from the Company one unit (a "Unit") consisting of one one- hundredth of a share of Series A Junior Participating Preferred Stock for a price of $65.00 per Unit, subject to adjustment. The Rights will attach to all outstanding shares of Common Stock. The Rights will trade with the Common Stock, and will not become exercisable until the Distribution Date, which will occur ten business days after the earlier of (i) a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of 20% or more of the outstanding shares of Common Stock (the "Stock Acquisition Date") or (ii) the commencement of a tender offer or exchange offer that would result in a person or group beneficially owning 30% or more of the outstanding shares of Common Stock. If (i) the Company is the surviving corporation in a merger with an Acquiring Person, (ii) a person or group becomes the beneficial owner of more than 25% of the then outstanding shares of Common Stock (except pursuant to an offer for all outstanding shares of Common Stock which the independent directors determine to be fair), or (iii) an Acquiring Person enters into certain "self- dealing" transactions with the Company, each Right will entitle the holder thereof to receive, for the $65.00 exercise price, the number of shares of Common Stock equal to 65, divided by one-half of the current per share market price of the Common Stock. Following the occurrence of any of the events described above, all Rights that are, or (as specified in the Rights Plan) were, beneficially owned by an Acquiring Person will be null and void. If, after the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction, or (ii) 50% or more of the assets of the Company or earning power is sold, each Right will entitle the holder thereof to receive, for the $65.00 exercise price, a number of shares of common stock of the acquiring company equal to 65, divided by one-half of the current market price of such common stock. The Rights may be redeemed in whole, but not in part, at a price of $.01 per Right by the Board of Directors, subject to certain conditions set forth in the Rights Plan. The Rights will expire on July 25, 1998. The following is a summary of the terms of the Series A Preferred Stock: Subject to the rights of the holders of any other series of Preferred Stock, holders of Series A Preferred Stock are entitled to receive, in preference to the holders of Common Stock, when, as and if declared by the Board of Directors, quarterly dividends in an amount equal to the greater of (i) $1.00 or (ii) 100 times the per share amount of dividends declared on the Common Stock (subject to adjustment for stock splits, stock dividends and similar events in the future). In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of Series A Preferred Stock are entitled to be paid out of the assets available for distribution to stockholders, subject to the rights of holders of other series of Preferred Stock, an amount equal to the greater of (i) $100 per share or (ii) 100 times the per share amount to be distributed to the holders of Common Stock (subject to adjustment in the event of any stock dividend, split, combination or similar event). Holders of Series A Preferred Stock would be entitled to 100 votes for each share of Series A Preferred Stock held of record on all matters submitted to a vote of stockholders. Holders of Series A Preferred Stock and Common Stock shall vote together as a single class, except as otherwise required by law and except that holders of Series A Preferred Stock shall be entitled to elect two directors in the event of certain arrearages in the payment of dividends. In the event of a merger, consolidation or other transaction in which shares of Common Stock are exchanged for or changed into other stocks or securities, cash and/or property, each share of Series A Preferred Stock would be entitled to receive 100 times the amount received per share of Common Stock (subject to adjustment). The shares of Series A Preferred Stock are not redeemable. CLASSIFIED BOARD OF DIRECTORS The Company's Board of Directors is divided into three classes, each of whose members serve for staggered three-year terms. The Board is comprised of two Class I directors, two Class II directors and three Class III directors. The terms of the Class I directors, Class II directors and Class III directors will expire upon the election and qualification of directors at the annual meeting of shareholders held following the fiscal years ending March 31, 1997, 1998 and 1996, respectively. TRANSFER AGENT The transfer agent and registrar for the Common Stock is The First National Bank of Boston. -4- LEGAL MATTERS Certain legal matters with respect to the legality of the Common Stock offered hereby are being passed upon for the Company by John K. Hyvnar, Esq. EXPERTS The consolidated financial statements of Interleaf, Inc. appearing in Interleaf's Annual Report (Form 10K) for the year ended March 31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents, filed with the Securities and Exchange Commission, are incorporated herein by reference: 1. The Company's latest annual report on Form 10-K filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 which contains financial statements for the Company's latest fiscal year for which a Form 10-K was required to have been filed. 2. All other reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year covered by the annual report referred to in (1) above. RECENT DEVELOPMENTS Effective August 14, 1995, the Company, as tenant, entered into a certain Net Lease with Principal Mutual Life Insurance, as landlord, for approximately 30,000 square feet, at 62 Fourth Avenue Waltham, MA 02154, with a term ending December 31, 2000. The Company has relocated certain administrative personnel to this facility. Effective September 15, 1995, the Company subleased approximately 76,310 square feet of its existing facility at Prospect Place, Waltham, MA, to Parametric Technology Corporation. Effective September 1, 1995, Andre Harari resigned as a Class II Director. Accordingly, the Company currently has six directors: two Class I Directors, Patrick J. Sansonetti and Clinton P. Harris; one Class II Director, George D. Potter, Jr. and three Class III Directors, David A. Boucher, Frederick Bamber and Ed Koepfler. ADDITIONAL INFORMATION The Company has filed with the Securities and Exchange Commission, Washington, D.C. 20549, a Registration Statement on Form S-2 under the Securities Act of 1933, as amended, with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information pertaining to the Company and the Common Stock offered hereby, reference is made to the Registration Statement, including the exhibits and schedules filed therewith or incorporated by reference as a part thereof. Statements in this Prospectus concerning the contents of any contract or other document referred to are not necessarily complete. Where such contract or other document is filed as an exhibit to the Registration Statement, each such statement is qualified in all respects by the provisions of such exhibit, to which reference is hereby made for a full statement of the provisions thereof. A copy of the Registration Statement may be inspected at the Commission's offices or may be obtained from the Commission upon payment of certain prescribed fees. _________________________ No person has been authorized to give any information or to make any representations not contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been autho- -5- rized by the Company. This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the shares of Common Stock offered by this Prospectus, nor does it constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby by any person in any jurisdiction in which it is unlawful for such person to make such offer or solicitation. Neither delivery of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that the information contained herein is correct as of any date subsequent to the date hereof. -6- Part II - Information Not Required in Prospectus Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses in connection with this offering, all of which are to be paid by the Company, are as follows: SEC registration fee: $1,500 Legal fees and expenses: $2,000 Accounting fees and expenses: $10,000 Miscellaneous: $1,500 ------ TOTAL: $15,000
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) Section 67 of the Massachusetts Business Corporation Law permits indemnification of present and former directors and officers to the extent specified in or authorized by (i) the articles of organization, (ii) a by-law adopted by the stockholders, (iii) a vote adopted by the holders of a majority of the shares of stock entitled to vote, or (iv) in the case of officers who are not directors, by the Board of Directors, except that no indemnification shall be provided for any person with respect to any matter as to which he shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation. Section 67 also provides that the absence of any express provision for indemnification shall not limit any right of indemnification existing independently of such Section. (b) Article V of the Company's by-laws provides that the Company shall, to the extent legally permissible, indemnify each former or present director or officer against all liabilities and expenses imposed upon or incurred by any such person in connection with, or arising out of, the defense or disposition of any action, suit or other proceeding, civil or criminal, in which he may be threatened or involved, by reason of his having been a director or officer; provided that the Company shall provide no indemnification with respect to any matter as to which any such person shall be finally adjudicated in such action, suit or proceeding not to have acted in good faith in the reasonable belief that his action was in the best interests of the Company. If any such action is disposed of, on the merits or otherwise, without the disposition being adverse to the director or officer and without an adjudication that such person did not act in good faith in the reasonable belief that his action was in the best interests of the Company, the director or officer is entitled to indemnification as a matter of right. In all other cases, indemnification shall be made as of right unless after investigation (a) by the Board of Directors by a majority vote of a quorum of disinterested directors, or (b) by written opinion of independent legal counsel (who may be regular counsel of the Company), or (c) the holders of a majority of outstanding stock entitled to vote (exclusive of stock owned by any interested directors or officers), it shall be determined by clear and convincing evidence that such person did not act in good faith and in a manner reasonably believed to be in or not opposed to the best interest of the Company. Indemnification may include advancement of expenses of defending an action upon receipt of an undertaking by the person indemnified to repay such advances if it is ultimately determined that such person is not entitled to indemnification under Article V. Article V also provides that the right of indemnification provided therein is not exclusive of and does not affect any other rights to which any director or officer may be entitled under any agreement, statute, vote of stockholders or otherwise. The Company's obligation to indemnify under Article V shall be offset to the extent of any other source of indemnification or any otherwise applicable insurance coverage. (c) The Company has entered into an Agreement to Defend and Indemnify with each of its officers and directors. Pursuant to these agreements, the Company has agreed, to the extent legally permissible, to indemnify such person against all losses (including, without limitation, judgments, fines and penalties) and expenses (including, without limitation, amounts paid in settlement and counsel fees and disbursements) incurred by such person in connection with or as a result of any claim, action, suit or other proceeding, civil or criminal, or appeal related thereto, in which he may be involved by reason of his having been a director or officer or by reason of any action taken or not taken in his capacity as director or officer; provided that no indemnification shall be provided with respect to any matter as to which such person shall not have acted in good faith in the reasonable belief that his action was in the best interests of the Company. If any such claim, action, suit or proceeding is disposed of, on the merits or otherwise, -7- without the disposition being adverse to such person, without a plea of guilty or NOLO CONTENDRE and without an adjudication that such person did not act in good faith in the reasonable belief that his action was in the best interests of the Company, the director or officer is entitled to indemnification as a matter of right. In all other cases, indemnification shall be made upon a determination that such person's conduct was in good faith and in the reasonable belief that his action was in the best interests of the Company by (a) a quorum of disinterested directors, or (b) independent legal counsel (who may be regular counsel of the Company), or (c) the holders of a majority of outstanding stock entitled to vote (exclusive of stock owned by any interested directors or officer). Expenses may be advanced by the Company prior to any final disposition of any such action upon receipt of an undertaking by the person indemnified to repay such advances if it is ultimately determined that such person is not entitled to indemnification under the Agreement. Such Agreements provide that the right of indemnification provided therein is in addition to any rights to which any person concerned may be entitled by other agreements or as a matter of law, and shall inure to the benefit of the heirs, executors and administrators of the indemnified person. The rights of indemnification provided in such Agreements are in addition to any rights under any insurance policy in effect, provided that to the extent any claim is covered by any such insurance policy, the Company will provide coverage after the full coverage of the insurance policy is exhausted or otherwise unavailable. (d) Article 6D of the Company's Articles of Organization provides that, to the fullest extent permitted by Chapter 156B of the Massachusetts General Laws, a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. Section 13(b)(1 1/2) of Chapter 156B of the Massachusetts General Laws permits a corporation to include in its articles of organization a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary as a director, except for (i) any breach of the director's duty of loyalty to the corporation and its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, (ii) improper issuances of stock or unauthorized distributions to stockholders, or (iv) any transaction in which the director derived an improper personal benefit. Item 16. EXHIBITS. The Exhibit Index immediately preceding the exhibits is incorporated herein by reference. Item 17. UNDERTAKINGS. 1. Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the Articles of Organization, By-laws or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefor, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. -8- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-2 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of Massachusetts, on October 25, 1995. INTERLEAF, INC. By: /s/ Ed Koepfler ------------------------------- Ed Koepfler, President and Chief Executive Officer POWER OF ATTORNEY We, the undersigned officers and directors of Interleaf, Inc., hereby severally constitute and appoint Ed Koepfler, G. Gordon M. Large and John K. Hyvnar, and each of them acting singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the Registration Statement on Form S-2 filed herewith and any and all pre-effective and post-effective amendments to said Registration Statement, and generally to do all such things in our names and behalf in our capacities as officers and directors to enable Interleaf, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Registration Statement and any and all amendments thereto. WITNESS our hands and common seal on the date set forth below. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated. -9- Signature Title Date - --------- ----- ---- /s/ Ed Koepfler President and Chief October 25, 1995 - ------------------------- Executive Officer and Director Ed Koepfler (principal executive officer) /s/ G. Gordon M. Large Executive Vice President October 25, 1995 - ------------------------- and Chief Financial Officer G. Gordon M. Large (principal financial officer) /s/ Peter A. McGovern Controller October 25, 1995 - ------------------------- (principal accounting officer) Peter A. McGovern /s/ Frederick B. Bamber Director October 25, 1995 - ------------------------- Frederick B. Bamber /s/ David A. Boucher Chairman of the Board October 25, 1995 - ------------------------- of Directors David A. Boucher /s/ Clinton P. Harris Director October 25, 1995 - ------------------------- Clinton P. Harris /s/ George D. Potter, Jr. Director October 25, 1995 - ------------------------- George D. Potter, Jr. /s/ Patrick J. Sansonetti Director October 25, 1995 - ------------------------- Patrick J. Sansonetti EXHIBIT INDEX Exhibit Number Description Method of Filing 4(a) Specimen Certificate for shares of the Company's [i] Common Stock 4(b) Rights Agreement, dated July 15, 1988, between the [ii] Company and The First National Bank of Boston 5 Opinion of John K. Hyvnar, Esq. Included 10(a) Company's 1983 Stock Option Plan, as amended [viii] 10(a1) 1994 Employee Stock Option Plan [ix] 10(a2) 1993 Incentive Stock Option Plan, as amended [xi] 10(b) Company's 1989 Director Stock Option Plan [iii] 10(b2) Company's 1987 Employee Stock Purchase Plan, as amended [viii] 10(c) Company's 1989 Officer and Employee Severance [iii] Benefit Plans 10(cc) Company's 1993 Director Stock Option Plan [viii] 10(d) Agreements between PruTech Research and Development Partnership III and the Company, dated October 21, 1988. [iv] 10(e) Exclusive Marketing and Licensing Agreement, between Interleaf South America, Ltd. and the Company, and [iii] related Option Agreement, dated March 31, 1989. 10(f) Distribution and License Agreement between Interleaf Italia, S.r.l. and the Company, and related Joint [iii] Venture Agreement, dated October 31, 1988. 10(g) Preferred Stock Purchase Agreements, for the issuance of 2,142,857 shares of the Company's Senior Series B Convertible Preferred Stock, dated September 29, 1989. [iv] 10(h) Notification to Preferred Shareholder of increase in conversion ratio, dated May 18, 1992 [v] 10(i) Lease of Prospect Place, Waltham, MA, between Prospect Place Limited Partnership and Interleaf, Inc., and [vi] related Agreements, dated March 30, 1990. 10(j) Management Consulting Agreement between the Company and David A. Boucher, the Company's Chairman of the Board, dated July 15, 1992. [vii] 10(k) Letter Agreement between the Company and Richard P. Delio, the Company's former Sr. Vice President of Finance and Administration and Chief Financial Officer, dated March 30, 1994, concerning his employment and severance with the Company. [viii] 10(l) Letter of Separation and Management Consulting Agreement between the Company and Mark K. Ruport, the Company's former President, Chief Executive Officer and Director, dated July 25, 1994, concerning his separation and consulting obligations to the Company. [ix] 10(m) Letter Agreement between the Company and Richard P. Delio, the Company's former Sr. Vice President of Finance and Administration and Chief Financial Officer and Acting President, dated August 3, 1994, concerning his employment and severance with the Company. [ix] 10(n) Letter of Separation and Management Consulting Agreement between the Company and Peter Cittadini, the Company's former Sr. Vice President Worldwide Operations, dated July 27, 1994, concerning his separation and consulting obligations to the Company. [ix] 10(o) Executive Compensation Arrangement for David A. Boucher, the Company's Chairman of the Board, dated July 20, 1994. [ix] 10(p) Letter of Separation and Management Consulting Agreement between the Company and Lawrence S. Bohn, the Company's former Sr. Vice President, Marketing and Business Development, dated September 20, 1994, concerning his separation and consulting obligations to the Company. [ix] 10(q) Employment and severance agreement between the Company and Edward Koepfler, the Company's President, dated October 3, 1994. [x] 10(r) Loan and Security Agreement between the Company and Foothill Capital Corporation, dated May 2, 1995. [xii] 10(s) Employment and severance agreement between the Company and G. Gordon M. Large, the Company's Executive Vice President and Chief Financial Officer, dated June 5, 1995. [xii] 10(t) Net Lease, dated August 14, 1995, between Principal Mutual Life Insurance Company and the Company. Included 10(u) Sublease, dated September 15, 1995, between Parametric Technology Corporation and the Company. Included 11 Computation of Earnings Per Share [xi],[xii] 13(a) Company Report on Form 10-Q for the quarter ended June 30, 1995 [xiii] 23(a) Consent of John K. Hyvnar, Esq. Included 23(b) Consent of Independent Auditors Included 24 Power of Attorney Included 99(a) Company Annual Report on Form 10-K for the year ended March 31, 1995 [xiv] ________________________ [i] Incorporated herein by reference is the applicable Exhibit to Company's Registration Statement on Form S-1, File Number 33-5743. [ii] Incorporated herein by reference is Exhibit 1 to Company's Registration Statement on Form 8-A, filed July 27, 1988. [iii] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1989, File Number 0-14713. [iv] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1990, File Number 0-14713. [v] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1992, File Number 0-14713. [vi] Incorporated herein by reference is the applicable Exhibit to Company's Report on Form 8-K filed April 13, 1990, File Number 0-14713. [vii] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1993, File Number 0-14713. [viii] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1994, File Number 0-14713. [ix] Incorporated herein by reference is the applicable Exhibit to Company's Report on Form 10-Q for the quarter ended September 30, 1994, File Number 0-14713. [x] Incorporated herein by reference is the applicable Exhibit to Company's Report on Form 10-Q for the quarter ended December 31, 1994, File Number 0-14713. [xi] Incorporated herein by reference is the applicable Exhibit to Company's Annual Report on Form 10-K for the year ended March 31, 1995, File Number 0-14713. [xii] Incorporated herein by reference is the applicable Exhibit to Company's Report on Form 10-Q for the quarter ended June 30, 1995, File Number 0-14713. [xiii] Incorporated herein by reference is the Company's Report on Form 10-Q for the quarter ended June 30, 1995, File Number 0-14713. [xiv] Incorporated herein by reference is the Company's Annual Report on Form 10-K for the year ended March 31, 1995, File Number 0-14713. EX-5 2 EXHIBIT 5 EXHIBITS 5 AND 23(A) October 25, 1995 Interleaf, Inc. Prospect Place 9 Hillside Avenue Waltham, MA 02154 Gentlemen: I have assisted in the preparation of a Registration Statement on Form S-2 to be filed with the Securities and Exchange Commission (the "Registration Statement"), relating to 275,000 shares of Common Stock, $.01 par value per share (the "Shares"), of Interleaf, Inc., a Massachusetts corporation (the "Company"), issuable to PruTech Research and Development Partnership III pursuant to a certain agreement with the Company ("Agreement"). I have examined (i) the Restated Articles of Organization and By-laws of the Company and all amendments thereto, (ii) the Agreement, and (iii) such records of meetings of the directors and stockholders of the Company, documents and other instruments as in my judgement are necessary or appropriate to enable me to render the opinion expressed below. In my examination of the foregoing documents, I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as originals, the conformity to original documents of all documents submitted to me as certified or photostatic copies, and the authenticity of the originals of such latter documents. Based upon the foregoing, I am of the opinion that the Shares have been duly authorized for issuance and, when issued in accordance with the terms of the Agreement against payment therefor, will be legally issued, fully paid and nonassessable. I hereby consent to the use of my name in the Registration Statement and consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. Very truly yours, /s/ John K. Hyvnar --------------------- John K. Hyvnar, Esq. GENERAL COUNSEL EX-10.T 3 EXHIBIT 10(T) NET LEASE Landlord and Tenant (as hereinafter defined), hereby agree to the following Lease dated as of the 14th day of August 1995. SECTION 1. DEFINITIONS AND EXHIBITS. (A) DEFINITIONS. Each reference in this Lease to any of the following terms shall be construed to incorporate the data stated for that term in this Section 1. (1) LANDLORD: Principal Mutual Life Insurance Company, an Iowa corporation (2) LANDLORD'S ADDRESS: 711 High Street, Des Moines, Iowa 50392-0001 Attention: Commercial Real Estate (3) TENANT: Interleaf, Inc. . ----------------------------------------------------- (4) TENANT'S ADDRESS (for notice and billing): 62 Fourth Avenue, ------------------- Waltham, Massachusetts, Attn: Devra Simon . ------------------------------------------------------------- (5) TENANT'S BUSINESS ORGANIZATION: A Massachusetts Corporation . ------------------------------------------------------------- (6) BUILDING (Address): 62 Fourth Avenue, Waltham, Ma 02154 . ------------------------------------------ (7) LEASED PREMISES: Entire Building . --------------------------------------------- (8) TERM OF LEASE: Five (5) Years and Four (4) Months . ----------------------------------------------- (9) COMMENCEMENT DATE: September 1, 1995 . -------------------------------------------- (10) TERMINATION DATE: December 31, 2000 . -------------------------------------------- (11) MINIMUM ANNUAL RENT: $337,160.00 . ----------------------------------------- 2 (12) MINIMUM MONTHLY RENT INSTALLMENTS: $28,096.67 . --------------------------- (13) PREPAID RENT: See Section 4(B) . ------------------------------------------------ (14) TOTAL RENTABLE AREA OF THE LEASED PREMISES: 30,000 sq. ft. ------------------ (15) TOTAL RENTABLE AREA IN THE BUILDING: 30,000 sq. ft. . ------------------------- (16) BROKER: Meredith & Grew And The Nelson Companies, LTD. . ------------------------------------------------------ (B) EXHIBITS. The Exhibits listed below and preceded by an "X" are incorporated in this Lease by reference and are to be construed as part of this Lease. (X) Exhibit A: Plan Showing Leased Premises (X) Exhibit B: Plan Showing Parking Area (X) Exhibit C: Rules and Regulations (X) Exhibit D: Tenant Improvement Escrow Agreement (X) Exhibit E: Tenant's Plans and Specifications ( ) Exhibit F: Intentionally Omitted (X) Exhibit G: Landlord's Construction Work SECTION 2. THE LEASED PREMISES; PARKING. (A) LEASED PREMISES. The Landlord hereby lets to the Tenant, and the Tenant hires from the Landlord, upon and subject to the terms and provisions of this Lease, the Leased Premises (which are more particularly shown as the area outlined on the plan attached hereto and incorporated herein as Exhibit "A"). (B) PARKING; THE LAND. The Leased Premises are leased together with the right of Tenant to use the land on which the Building is situated (the "Land") adjacent to the Building and in such locations thereon as are designated by Landlord, for parking by its customers, employees, suppliers and visitors on an unassigned and unreserved basis, and for ingress and egress to and from the Building (said parking area shown as the area outlined on the plan attached hereto as Exhibit "B"). Landlord reserves the right from time to time, and at Landlord's sole discretion, to temporarily close portions of the parking area, or to relocate the ingress and egress to and from the parking area. Tenant and its employees shall also have the right to use, in common with others entitled thereto, such other common areas and facilities in or appurtenant to the Building and the Land as Landlord may from time to time designate and provide. Notwithstanding any supervision 3 or control over any parking area on the Land which Landlord may undertake pursuant to this Lease or otherwise, Tenant acknowledges and agrees that Landlord shall not be responsible or obligated hereunder to furnish any security or security services to any parking area, the Land or the Building. (C) OFFICE PARK; PROPERTY. The Building is situated in Prospect Hill Executive Office Park (as from time to time constituted, the "Office Park"). The term "Property", as hereinafter used, shall mean the Building and the Land. SECTION 3. TERM OF LEASE; LANDLORD'S CONSTRUCTION. (A) DEFINITIONS. For the purpose of this Lease, the following definitions shall apply: (1) "COMMENCEMENT DATE." The Commencement Date shall be September 1, 1995. (B) READINESS FOR OCCUPANCY. The Leased Premises shall be deemed to be ready for Tenant's occupancy as of the Commencement Date. (C) TERM OF LEASE. The Term of this Lease shall begin on the Commencement Date and shall end on the Termination Date. After the beginning of the Term, Landlord and Tenant shall, upon the request of either, execute an agreement specifying the date on which the Term begins; provided, however, the failure of Landlord and Tenant to execute such an agreement shall have no effect upon such date. (D) ALTERATION OF LEASED PREMISES. (1) Tenant agrees to accept the Leased Premises "AS-IS," and Tenant acknowledges that Landlord has no present or future intention to make any alterations, renovations or improvements to the Leased Premises or to the Building, except as otherwise provided in Exhibit "G" attached hereto and incorporated herein. (2) Notwithstanding anything herein to the contrary, Tenant shall construct tenant improvements in the Leased Premises in accordance with plans and specifications previously approved by Landlord and attached hereto as Exhibit "E" (or referenced therein) (the "Tenant Improvements"). In partial consideration of Tenant's execution and delivery of the Lease, Landlord shall fund an aggregate of $100,000 of the cost of the Tenant Improvements; provided, however, on or before March 1, 1996, Tenant shall pay Landlord $100,000 in cash in reimbursement of same. (3) Upon the execution of this Lease by Landlord, Landlord shall deposit said $100,000 with the Escrow Agent (as defined in Exhibit "D" hereto). Upon the execution of this Lease by Tenant, Tenant shall deposit $350,000 with the Escrow Agent (as defined in Exhibit "D" hereto), who shall release the Escrowed Funds to Tenant for payment of construction of the Tenant Improvements in accordance with the provisions of the Tenant Improvement Escrow Agreement attached hereto as Exhibit "D". 4 SECTION 4. MINIMUM ANNUAL RENT; PREPAID RENT (A) MINIMUM ANNUAL RENT. Tenant covenants and agrees to pay to Landlord, without set-off or deduction, the Minimum Annual Rent during each year of the Term of the Lease. Such Minimum Annual Rent shall be payable in equal Minimum Monthly Rent Installments, in advance, on the first day of each and every calendar month during the Term of this Lease, commencing January 1, 1997, initially from the Prepaid Rent (as hereinafter defined and described) as hereinafter provided, so long as the balance of Prepaid Rent held by Landlord shall be sufficient to pay same in full, and if not, or after Tenant shall no longer be required by the terms of this Lease to deposit any Prepaid Rent with Landlord, at the Landlord's Address, or at such other place as Landlord shall from time to time designate by notice, by check drawn on a bank which is a New York Clearing House Association. Minimum Annual Rent for any partial month during the Term shall be prorated on a daily basis. (B) PREPAID RENT. (1) On or before March 1, 1996, Tenant shall deposit with Landlord $75,000 as Prepaid Rent. On the first day of each month commencing January 1, 1997, and thereafter so long as the amount of Prepaid Rent held by Landlord from time to time shall be sufficient to pay same, Landlord shall credit Tenant from the Prepaid Rent for the Minimum Monthly Rent Installment due and payable hereunder for such month. (2) On or before June 30, 1996, and on each June 30, thereafter, until this provision shall be null and void as hereinafter provided, Tenant shall deliver to Landlord its audited financial statements, for its most recent fiscal year then ended, prepared by independent certified public accountants in accordance with generally accepted accounting principles consistently applied (the "Tenant Financial Statements"). If the Tenant Financial Statements shall reflect as of March 31, 1996 (a) an annual operating profit, and (b) cash and cash equivalents in excess of $10,441,000 (collectively, the "Profit and Cash"), then Tenant shall thereafter have no obligation to deposit additional sums with Landlord constituting Prepaid Rent. (3) If, however, the Tenant Financial Statements shall not reflect as of March 31, 1996 the Profit and Cash, then on or before each of September 1, 1996 and March 1, 1997, Tenant shall deposit with Landlord as Prepaid Rent, $175,000 in cash, as of each such date. (4) If, as of March 31, 1997, the Tenant Financial Statements do not reflect the Profit and Cash, then or before each September 1, 1997, and March 1, 1998 and on each succeeding September 1 and March 1 during the term of this Lease until the Tenant Financial Statements for Tenant's fiscal year then ended indicate the Profit and Cash, Tenant shall deposit with the Landlord as Prepaid Rent, $175,000 in cash, as of each such date; provided, however, if Tenant shall be required to make a deposit of Prepaid Rent as herein provided on September 1, 2000, such amount shall be equal to the lesser of $175,000 or such amount as shall be sufficient to pay the Minimum Annual Rent due and payable by Tenant hereunder through the Termination Date. (5) The Prepaid Rent to be paid by Tenant hereunder shall constitute cash collateral to secure Tenant's obligations to pay Minimum Annual Rent and any additional rent due to Landlord under this Lease. 5 (C) LATE CHARGE. Commencing on the Commencement Date, if the Minimum Monthly Rent Installment or Prepaid Rent, or any additional rent or other payments or charges to be made hereunder are not paid by the tenth (10th) day of the month for which such payments are due, Tenant agrees to pay a penalty charge of three (3%) percent of the Minimum Monthly Rent Installment, Prepaid Rent, additional rent or other payments or charges due. This shall also apply for any dishonored check which results in the failure of Landlord to receive any such payment within ten (10) days after such payment is due. Nothing in this Section 4(C) shall be deemed to be a waiver of any right of Landlord's, including but not limited to, Landlord's right to bring an action for default under this Lease for non-payment of Minimum Annual Rent, Prepaid Rent, additional rent or other payments or charges due and payable hereunder. If, because of Tenant's default under any covenant of the Lease, including without limitation the non-payment of Minimum Annual Rent, Prepaid Rent, additional rent or other payments or charges Landlord institutes an action for summary proceedings against Tenant, Tenant agrees to reimburse Landlord for the expense of reasonable attorney's fees plus costs and disbursements and the same shall be included in such action as additional rent, and the same shall be due and payable in said actions. SECTION 5. REIMBURSEMENT FOR REAL ESTATE TAXES. (A) DEFINITIONS. For the purpose of this Lease, the following definitions shall apply: (1) The term "Tax Year" shall mean the twelve (12) month period commencing on July 1 next preceding the Commencement Date and each succeeding twelve (l2) month period commencing on July l during the Term hereof. (2) The term "Taxes" shall mean all taxes, betterments, assessments (special or otherwise), levies, license, permit and other fees, water and sewer rents and charges, and all other charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind and nature whatsoever levied, assessed or imposed at any time by any governmental authority upon or against the Property, or taxes or payments in lieu thereof. The amount of any betterments, special taxes or special assessments included in Landlord's Taxes for any tax fiscal year shall be limited to the amount of the installment (plus any interest, other than penalty interest, payable thereon, provided, however, that Tenant shall be responsible for penalty interest payments if due to Tenant's failure to make its installment in a timely fashion) of such special tax or special assessment required to be paid during or with respect to the year in question. 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, the same shall be included in Taxes; provided, however, Taxes shall not include franchise, estate, inheritance, succession, capital levy, transfer, income or excess profits taxes assessed on Landlord. (B) PAYMENT OF TAXES. (1) During the Term hereof, Tenant shall pay to Landlord as additional rent an amount equal to the total Taxes imposed on or against the Property (such total amount being hereinafter referred to as the "Tenant's Tax"). Payment of Tenant's Tax shall be made to Landlord within twenty (20) days from the date Landlord shall give written notice to Tenant that based upon a bill (or estimated bill) received for Taxes (or for partial Taxes), 6 or other form of notice received from any governmental authority responsible for collection of Taxes, there is due from Tenant any Tenant's Tax (which notice shall set forth the manner of computation of any Tenant's Tax due from Tenant). At Landlord's election, simultaneously with such payment of Tenant's Tax in respect of any Tax Year, and on the first day of each of the next succeeding eleven calendar months, Tenant shall remit to Landlord one-twelfth of the Tenant's Tax. If the total of such monthly remittances is greater than the Tenant's Tax for the next succeeding Tax Year, Tenant may credit the difference against the next installment of Tenant's Tax due to Landlord hereunder; and if the total of such remittances is less than the Tenant's Tax for such next succeeding Tax Year, Tenant shall pay the difference to Landlord at the time any Tenant's Tax becomes due and payable as hereinabove provided. If, for any reason whatsoever, Tenant does not pay its share of any Tenant's Tax prior to any date on which such share is due and payable, Tenant shall be responsible for any interest or penalties imposed on Landlord as a result or arising out of such late payment. (2) If, after Tenant shall have made any payment to Landlord pursuant to this Section 5, Landlord shall receive a refund of any portion of Taxes paid by Tenant with respect to any Tax Year during the term hereof as a result of an abatement of such Taxes by legal proceedings, settlement or otherwise, Landlord shall, within thirty (30) days after receiving the refund, pay or credit to Tenant such percentage of the refund (less the proportional, prorata expenses, including attorneys' fees and appraisers' fees, incurred in connection with obtaining any such refund), as relates to Taxes paid by Tenant to Landlord with respect to any Tax Year for which such a refund is obtained. (3) In the event this Lease shall commence or shall end (by reason of expiration of the Term or earlier termination pursuant to the provisions hereof) on any date other than the first or last day of the Tax Year, or should the Tax Year or period of assessment of real estate taxes be changed or be more or less than one (1) year, as the case may be, then the amount of Tenant's Tax which may be payable by Tenant as provided in this Section 5 shall be appropriately adjusted. Any overpayments by Tenant for the year in which the Term ends shall be refunded to Tenant upon such adjustment provided there are no outstanding amounts due Landlord under this Lease, in which event Landlord shall have the right to retain such overpayments and apply the same to such amount due. SECTION 6. Intentionally omitted. SECTION 7. USE OF LEASED PREMISES. The Leased Premises are leased, and other rights set forth herein are granted, subject to easements, ground leases, mortgages and other matters of record and are to be used solely for general office purposes, uses ancillary thereto appurtenant to a software company, and any other uses which are authorized in writing by Landlord and which are appropriate in a first class office building, and not for any other purposes, and without annoyance to or disruption of other tenants or occupants of the Building or Office Park. SECTION 8. LANDLORD'S COVENANTS. Except as otherwise expressly provided herein, Landlord covenants to make such repairs to the roof, exterior walls (except for doors, windows and glass), floor slabs, foundations and other structural elements of the Building as may be necessary to keep them in good working order (except for repair or replacement occasioned by any act or negligence of Tenant, its agents, customers or employees). 7 Landlord shall be under no responsibility or liability for failure or interruption of any of the above-described services, repairs or replacements caused by breakage, accident, strikes, repairs, inability to obtain supplies, labor or materials, or for any other causes beyond Landlord's control, nor in any event for any indirect or consequential damages; and the failure or omission on the part of Landlord to furnish any of same shall not be construed as an eviction of Tenant, actual or constructive, not entitle Tenant to any abatement or reduction of rent by reason thereof nor shall the same render Landlord liable in damages, nor release Tenant from prompt fulfillment of any of its covenants under this Lease. SECTION 9. TENANT'S COVENANTS. Tenant covenants with Landlord, during the Term and for such further time as Tenant or anyone claiming by, through or under Tenant shall hold the Leased Premises or any part thereof, it being understood by Tenant that this is a net lease intended to provide Landlord with the rent and other charges reserved on a net basis and (except for Landlord's specific obligations set forth in Section 8 hereof) Landlord shall have no obligations and shall not be required to make any expenditures in connection with this Lease or the Leased Premises during the Term hereof: (A) PAYMENT OF RENTS AND CHARGES. To promptly pay to Landlord, without set-off or deduction, the Minimum Annual Rent, Prepaid Rent, Tenant's Tax, and any other additional rents and charges payable by Tenant to Landlord (which additional charges shall include Landlord's costs for liability and property damage insurance for the Property), at the address from time to time designated for the sending of notices to Landlord, at the times and in the manner herein set forth. Except as expressly provided herein, Landlord shall not be obligated to pay any charge or bear any expense whatsoever against or with respect to the Leased Premises, the Minimum Annual Rent and Prepaid Rent payable hereunder shall not be subject to any reduction or offset whatsoever on account of any such charge or otherwise, and all costs, expenses and obligation of every kind and nature whatsoever relating to the Leased Premises (except as otherwise expressly set forth herein) shall be paid by Tenant. (B) PAYMENT FOR UTILITIES. To pay when due directly to the proper authorities or utilities charged with the collection thereof, or, to promptly reimburse Landlord therefor if not separately metered, all charges and expenses for water, sewer, gas, electricity, telephone and other utilities and utilities services, and service inspections made therefor during the Term (other than those expressly required to be provided by Landlord hereunder), whether designated as a charge, tax, assessment, fee or otherwise. (C) ALTERATIONS AND ADDITIONS. Unless Landlord's prior written approval is obtained in each instance (not to be unreasonably withheld), not to perform any renovation or construction to the Property, Leased Premises or Building (which shall include any rearrangement of the interior space), or the erection of any signs or other additions or structures on or to the Property or Building or Leased Premises, or any other alterations or additions to the Property or Building or Leased Premises (including, without limitation, any alterations or additions to the plumbing, heating, cooling or electrical systems of the Building or the installation of any signs or draperies in any windows of the Building or Leased Premises), except as herein expressly provided (subject to the Rules and Regulations attached hereto as Exhibit "C"); provided, however, Tenant may make minor alterations or leasehold improvements to the interior of the Leased Premises which in no 8 way affect or modify any portion of the structure of the Building, and may install fixtures and equipment which do not damage the Building. All such construction, alterations or additions shall be performed at Tenant's sole risk and expense and in accordance with plans and specifications submitted to and approved, in advance, by Landlord. (D) PAYMENT FOR WORK. To (1) pay promptly when due the entire cost of any work to the Leased Premises undertaken by or for Tenant and all amounts that may become due for, or purport to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished or to be furnished to or for the Tenant in, upon or about the Leased Premises, and not to create, incur, assume or permit to exist any mortgage, security interest, encumbrance, mechanic's or materialmen's lien, or other charge of any kind on the Leased Premises or Landlord's interest therein, and to cause any such lien to be fully discharged and released within five (5) days of any imposition of the same so that the Leased Premises shall at all times be free of liens for labor and materials; (2) procure at Tenant's expense all necessary permits and approvals before undertaking any such work; (3) do all such work in a good and workmanlike manner and in accordance with plans and specifications previously approved by Landlord, employing reputable contractors and materials of good quality; (4) to furnish to Landlord prior to the commencement of any such work a bond or other security acceptable to Landlord, insuring that any work commenced by Tenant will be completed in accordance with such plans and specifications or as otherwise provided in writing by Landlord, whichever may be applicable; (5) to employ for such work responsible contractors who shall be subject to the approval of Landlord, and whose labor will not interfere with other labor working in the Leased Premises or Property; (6) to require such contractors employed by Tenant to carry workers' compensation insurance in accordance with statutory requirements and comprehensive public liability insurance covering such contractors on or about the Leased Premises and the Property in amounts at least equal to the limits set forth in subsection (H) hereof and to submit certificates evidencing such coverage to Landlord prior to the commencement of such work; and (7) to save Landlord harmless and indemnified from all injury, loss, claims or damage to any person or property occasioned by or growing out of any such work. (E) IMPROPER USE OF LEASED PREMISES. Not to overload or deface the Leased Premises or Building, nor permit any use, alteration or repair contrary to law or lawful ordinance, by-law, regulation or order of public authority. Not to injure, overload, deface or otherwise harm the Leased Premises; nor to commit any nuisance; nor to permit the emission of any objectionable noise or odor and not to make or permit any use of the Leased Premises which is improper, offensive or contrary to any law, ordinance, by-law or governmental regulation or which will invalidate any of Landlord's insurance or any other insurance on the Leased Premises. (F) HAZARDOUS MATERIALS. (1) Not to introduce on or transfer to the Leased Premises or Property, any hazardous materials (as hereinafter defined); nor to dump, flush or otherwise dispose of any hazardous materials into the drainage, sewage or waste disposal systems serving the Leased Premises or Property; nor to generate, store, use, release, spill or dispose of any hazardous materials in or on the Leased Premises or the Property, or to transfer any hazardous materials from the Leased Premises to any other location; and not to commit or suffer to be committed in or on the Leased Premises or Property any act which would require any reporting or filing of any notice with any governmental agency pursuant to any statutes, laws, codes, ordinances, rules or regulations, present or future, applicable to the Property or to hazardous materials (hereinafter collectively called "Environmental Laws"). 9 (2) Tenant agrees that if it or anyone claiming under it shall generate, store, release, spill, dispose of or transfer to the Leased Premises or Property any hazardous materials, it shall forthwith remove the same, at its sole cost and expense in the manner provided by all applicable Environmental Laws, regardless of when such hazardous materials shall be discovered. Furthermore, Tenant shall pay any fines, penalties or other assessments imposed by any governmental agency with respect to any such hazardous materials, and shall forthwith repair and restore any portion of the Leased Premises or Property which it shall disturb in so removing any such hazardous materials to the condition which existed prior to Tenant's disturbance thereof. (3) Tenant agrees to deliver promptly to Landlord any notices, orders or similar documents received by Tenant from any governmental agency or official concerning any violation of any Environmental Laws or with respect to any hazardous materials affecting the Leased Premises or Property. (4) For purposes of this Lease, the term "hazardous materials" shall mean and include any oils, petroleum products, asbestos and any other toxic or hazardous wastes, materials and such substances which are defined, determined or identified as such in any Environmental Laws, or in any judicial or administrative interpretations of Environmental Laws. (5) The obligations of Tenant contained in this Section 9(F) shall survive the expiration or termination of this Lease; provided, however, Tenant shall have no obligations for violation of any Environmental Laws or with respect to hazardous materials affecting the Leased Premises or Property except as specifically provided in this Lease. (G) INJURY OR DAMAGE; INDEMNIFICATION. To assume exclusive control of the Leased Premises, and all tort liabilities incident to the control, use or leasing thereof; to pay, protect, indemnify and save harmless, to the extent permitted by law, Landlord, and any partner, employee or beneficiary of Landlord, holders of mortgages on the Property and any other party having an interest in the Property from and against any and all liabilities, costs, expenses, causes of action, injuries, accidents, injunctions, losses, claims, damages, suits, actions, demands, judgments, fines or penalties of any nature (including court costs and reasonable attorney's fees), asserted by or on behalf of any person, party or governmental authority whatsoever on account of injury, death, damage or loss to person or property in or upon the Leased Premises, the Property or any area adjacent to or in proximity to the Leased Premises or the Property, arising out of any act, negligence or omission of Tenant, or arising as a result of any use or occupancy of, or travel over or upon the Leased Premises, the Property or any area adjacent to or in proximity to the Leased Premises or Property, by Tenant or by any person claiming by, through or under Tenant (including, without limitation, all patrons, guests, employees, agents, contractors, invitees, and customers of Tenant), or arising out of any delivery to or service supplied to or for the benefit of Tenant or the Leased Premises, or on account of or based upon anything whatsoever done on the Leased Premises, the Property, or any area adjacent to or in proximity to the Leased Premises or the Property, by Tenant or by any person claiming by, through or under Tenant, except if the same was caused by the negligence or willful misconduct of Landlord, its agents or employees; and, if required by law, to keep all of Tenant's employees working in or about the Leased Premises or the Property covered by workers' compensation insurance and to deliver certificates evidencing said coverage to Landlord. In respect to all of the foregoing, Tenant shall indemnify Landlord from and against all costs, expenses (including reasonable attorneys' fees) and liabilities incurred in or in connection with any such claim, action or proceeding brought thereon, including, without limitation, any such claims or liabilities as may arise in connection with violation or 10 enforcement of any of the provisions of Section 9(F) hereof; and in case of any action or proceeding brought against Landlord by reason of any such claims, Tenant, upon notice from Landlord and at Tenant's expense, shall resist or defend such action or proceeding and employ counsel therefor reasonably satisfactory to Landlord. The covenants of this Section 9(G) shall survive the termination of the Term. In addition to the foregoing, Landlord may make all repairs and replacements to the Building resulting from acts or omissions of Tenant's employees, agents, independent contractors or invitees (including damage and breakage occurring when Tenant's property is being moved into or out of the Building) and Landlord may recover all costs and expenses thereof from Tenant on demand as additional rent. (H) INSURANCE REQUIREMENTS. To carry and maintain, throughout the Term hereof, at its own cost and expense, public liability insurance covering the Leased Premises (and the Property and any area adjacent to or in proximity to the Leased Premises or the Property, insofar as used by any customers, employees or invitees of Tenant), naming Tenant as the insured party and Landlord (and such others, including mortgagees of the Property, as are in privity of estate with Landlord, as set out in a notice from time to time) as an additional insured party, in such companies as are reasonably satisfactory to the Landlord, in amounts not less than $1,000,000 for bodily injury per occurrence and $5,000,000 aggregate, and an amount of not less than $l00,000 for damage to property. All such policies shall be obtained from responsible companies qualified to do business in Massachusetts and in good standing therein and shall be in a form and from a company approved by Landlord. Each such policy shall be non-cancelable and shall not be materially changed with respect to the interests of Landlord, mortgagees of the Property and others that are in privity of estate with Landlord (as to which Landlord provides notice to Tenant from time to time) by either the insured or the carrier without at least twenty (20) days' prior written notice to Landlord. In the event provision for any such insurance is to be by a blanket insurance policy, the policy shall allocate a specific and sufficient amount of coverage to the Leased Premises. Certificates evidencing such insurance coverages shall be delivered to Landlord prior to commencement of the Term, and at least thirty (30) days prior to the expiration of any such certificates. (I) PROPERTY OF TENANT. That any and all of the furnishings, fixtures, equipment, effects and property of every kind, nature and description of Tenant and all persons claiming by, through or under Tenant which, during the continuance of this Lease or any occupancy of the Leased Premises by Tenant or anyone claiming under Tenant, that may be in or on the Leased Premises, Building or Property, shall be at the sole risk of Tenant or those claiming by, through or under Tenant, and in no case whatsoever shall Landlord (or those having estate in the Leased Premises) be liable to Tenant, or any other person, for any injury, death, loss or damage to any person or property on the Property or in the Building or the Leased Premises, except if same was caused by the negligence or willful misconduct of Landlord, its agents or employees. The parties acknowledge that loss or damage to property may result from acts of cleaning personnel and employees of other contractors or subcontractors working in and around the Building and that Tenant shall bear the risk and cost thereof unless Landlord has been negligent in the selection of such persons. (J) ASSIGNMENT AND SUBLETTING. (1) Not to assign, mortgage, pledge or encumber this Lease, nor to sublet (which term shall be deemed to include the granting of concessions and licenses and the like) any part of the Leased Premises, or advertise the Premises for assignment or sublet, or suffer 11 or permit this Lease or the leasehold estate hereby created or any other rights arising under this Lease to be assigned, transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in part, whether voluntarily, involuntarily or by operation of law, or permit the use or occupancy of all or any portion of the Leased Premises by anyone other then Tenant without, on each occasion, obtaining the prior written consent of Landlord. (As used herein, the term "assign" or "assignment" shall be deemed to include any change in control of Tenant or transfer of Tenant's interest in the Lease by operation of law, the merger or consolidation of Tenant with or into any other firm, entity or corporation, or the transfer or sale of a controlling interest in Tenant, whether by sale of its capital stock, beneficial or partnership interest or otherwise. For purposes hereof, control shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the applicable person or entity, whether through the ownership of voting securities, partnership or beneficial interests, by contract or otherwise.) The consent by Landlord to any such assignment or subletting shall not constitute a waiver for the necessity to obtain such consent with respect to any subsequent assignment or subletting. In the event of any assignment or subletting by Tenant, Landlord may, at any time and from time to time, collect rent and other charges from the assignee or subtenant, and apply the net amount collected against all rents and other charges due hereunder; but no such assignment, subletting or collection shall be deemed an acceptance of the assignee or subtenant as a lessee, or a release of Tenant from the further performance by Tenant of all lessee covenants herein contained, and Tenant shall remain liable for the payment of any and all rents and other payments and charges which may become due hereunder and for the performance of all other covenants, agreements and conditions on the part of Tenant to be performed hereunder. No such assignment or subletting shall be valid or effective unless or until, at Landlord's election, the assignee or subtenant, respectively, shall covenant in writing with Landlord, to the satisfaction of Landlord, to be bound directly to Landlord for the performance of all Tenant covenants herein contained. Any subletting, assignment or other transfer of Tenant's interest in this Lease in contravention of any of the provisions of this Section 9(J) shall be voidable at Landlord's option. (2) Notwithstanding anything to the contrary set forth in Section 9(J)(1) hereof, provided that Tenant shall first have offered, in writing, either to terminate (this Lease or to suspend this Lease for the period and with respect to the space involved in the proposed assignment or subletting, as the case may be, and Landlord shall not, within thirty (30) days from receipt of such offer, have accepted such offer in writing, Landlord agrees not to unreasonably withhold its consent to a subletting of a portion of the Leased Premises by Tenant to a person, firm or corporation which, in Landlord's reasonable opinion, is (a) financially responsible and of good reputation, and (b) is engaged in a business, the functional aspects of which, with respect to the Leased Premises, are substantially similar to the use of premises made by Tenant in the Building. (3) In the event of any subletting or assignment hereunder, Tenant shall pay to Landlord, at the same time and in the same manner that it makes monthly payments of Minimum Annual Rent due under this Lease, fifty percent (50%) of the Excess Rent, as hereinafter defined, that Tenant receives from any assignee of this Lease or from any subtenant of the Leased Premises, as the case may be "Excess Rent" shall be the excess (if any) of the rent and all other amounts (including, without limitation, any consideration received by Tenant from any such assignee or subtenant as a commitment fee, inducement fee, bonus payment or the like) received by Tenant from any such assignee or subtenant over the sum of: (a) the amount of monthly payments of Minimum Annual Rent Tenant is required to pay to Landlord under this Lease, or in respect of the portion of the Leased Premises leased under any such sublease, as the case may be, plus (b) any Tenant's Tax which Tenant is required to pay under this Lease or on any such portion of the Leased Premises so subleased, as the case may be, and plus (c) any necessary reasonable 12 brokerage costs and direct out-of-pocket costs for leasehold improvements incurred by Tenant in connection with such assignment or subletting, amortized in equal monthly installments over the number of years, or fraction thereof, remaining in the Lease Term. (4) Any sublease of all or any portion of the Leased Premises shall provide that it is subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and that in the event of termination of this Lease or reentry of dispossession of Tenant by Landlord under this Lease, Landlord may, at its option, take over all of the right, title and interest of Tenant, as sublessor under such sublease, and such subtenant shall, at Landlord's option, attorn to Landlord pursuant to the then executory provisions of such sublease, except that neither Landlord nor any mortgagee of the Property, as holder of a mortgage or as Landlord under this Lease (if such mortgagee succeeds to that position), shall (a) be liable for any act or omission of Tenant under such sublease, (b) be subject to any credit, counterclaim, offset or defense which theretofore accrued to such subtenant against Tenant, or (c) be bound by any previous modification of such sublease or by any previous prepayment of more than one (1) month's rent, (d) be bound by any covenant of Tenant to undertake or complete any construction of the Leased Premises or any portion thereof, (e) be required to account for any security deposit of the subtenant other than any security deposit actually delivered to Landlord by Tenant, (f) be bound by any obligation to make any payment to such subtenant or to grant any credits, (g) be responsible for any monies owing by Landlord to the credit of Tenant, or (h) be required to remove any person occupying the Leased Premises or any part thereof; and such sublease shall provide that the subtenant thereunder shall, at the request of Landlord, execute a suitable instrument in confirmation of such agreement to attorn. The provisions of this paragraph shall not be deemed a waiver of the provisions set forth in Section 9(J)(1). Tenant shall pay all of Landlord's reasonable costs, including without limitation for attorney's fees, incurred by Landlord in connection with any subletting or assignment or proposed subletting or assignment by Tenant. (K) COMPLIANCE WITH LAWS. Not to permit anything to be done in or upon the Leased Premises or Property, or to bring or keep anything therein or thereon (including, without limitation, all furnishings, carpeting and wall coverings), except as now or hereafter permitted by applicable building, fire, health, sanitary or safety codes, ordinances or by-laws, or by any public authority (including, without limitation, the Waltham Fire Department or any fire insurance rating organization or other authority having jurisdiction of the Property); Tenant shall not use the Leased Premises in a manner which shall increase the premium for fire, casualty or extended coverage insurance on the Building or on property located therein over the premium in effect as of the Commencement Date; and Tenant shall, at Tenant's expense, carry contents and improvements and betterments property insurance at replacement cost and without deductible, containing standard extended coverage endorsements, so-called, insuring Tenant's property, fixtures and improvements within the Leased Premises. Tenant shall keep the Leased Premises equipped with all safety appliances and permits required by law or ordinance or any order or regulation of any public authority, shall keep the Leased Premises equipped at all times with adequate fire extinguishers and other such equipment reasonably required by Landlord and, upon notice by Landlord, shall make all repairs, alterations, replacements, or additions so required. If, by use of the Leased Premises or by reason of failure of Tenant to comply with the provisions of this Section 9(K), the fire, casualty or extended coverage insurance rates effective on the Building shall be higher than such rates otherwise would have been, then Tenant shall, upon demand, reimburse Landlord, as additional rent hereunder, for that part of all such insurance premiums thereafter paid by Landlord which shall be charged because of such failure or use by Tenant (a schedule or "make up" of rates for the Building 13 or Property issued by the Insurance Service Organization, or any other body making such insurance rates for the Property, being conclusive evidence of the facts therein stated and of the several items and charges in such insurance rates then applicable to the Property), and shall make such reimbursement upon the first day of the month following such outlay by Landlord; but if the use or occupancy of the Leased Premises by Tenant shall make void or voidable any such insurance coverage, at the option of the Landlord, this Lease may be terminated. That the Leased Premises are being used for the purposes authorized in this Lease shall not relieve Tenant from the foregoing duties, obligations and expenses. (L) ACCESS BY LANDLORD. To permit the Landlord and its agents or representatives to enter the Leased Premises or any part thereof at reasonable times and, except in the event of an emergency, upon reasonable prior notice, to (a) inspect the Leased Premises, (b) exhibit the Leased Premises to prospective purchasers, lenders or tenants, (c) determine whether Tenant is complying with its obligations in this Lease, (d) post notices of nonresponsibility or similar notices, (e) to make improvements, and (f) make repairs which this lease requires Landlord to make, and to make repairs and replacements to preserve the Leased Premises and Building, and (g) at any time within six (6) months prior to the expiration of this Lease to affix to any part of the Leased Premises a notice for letting the Leased Premises and to keep the same so affixed. Tenant waives any claim on account of any injury or inconvenience to Tenant's business, interference with Tenant's business, loss of occupancy or quiet enjoyment of the Leased Premises, or any other loss occasioned by such entry. Landlord will have the right, by means which Landlord may deem proper, to open doors to the Leased Premises in an emergency in order to enter the Leased Premises. No entry to the Leased Premises by Landlord by any means will be deemed to be a forcible or unlawful entry into the Leased Premises or a detained of the Leased Premises or an eviction (actual or constructive) of Tenant from the Leased Premises, or any part of the Leased Premises, nor will any such entry entitle Tenant to damage or an abatement of rent or other charges which this Lease requires Tenant to pay. (M) RULES AND REGULATIONS. To comply with all reasonable rules and regulations (not in conflict with the provisions of this Lease) as Landlord may, from time to time, promulgate to regulate the conduct of all tenants using the Building and the Property, as if all such rules and regulations were set forth in this Lease at length. A set of such rules and regulations, as currently in effect, are attached hereto as Exhibit "C". Landlord shall, however, have the right to change such rules and regulations and to waive any one or more of them in the case of any one or more tenants. Such waiver as to one tenant shall not constitute a waiver as to any other tenant. Landlord shall not be responsible to Tenant or to Tenant's agents, employees, servants, licensees, invitees, or visitors for failure to enforce any such rules and regulations or for the nonobservance or violation of any such rules and regulations by any other tenant or by any other person. (N) CONDITION OF LEASED PREMISES. To maintain the Leased Premises neat and clean and in such repair, order and condition as the same are in on the Commencement Date or may be put in during the Term hereof, reasonable use and wear thereof and damage by fire or by unavoidable casualty only excepted; and to make as and when needed as a result of misuse by, or neglect or improper conduct of Tenant or Tenant's servants, employees, agents, invitees or licensees or otherwise, all repairs in and about the Leased Premises necessary to preserve them in such repair, order and condition, which repairs shall be in quality and class equal to the original work. (Landlord, upon prior notice to Tenant, may elect, at the expense of Tenant, to make any such repairs or to repair any damage or injury to the Building or the Leased Premises caused by moving property of Tenant in or out of the Building, or by installation or removal or furniture or other property, or by misuse by, 14 or neglect or improper conduct of, Tenant or Tenant's servants, employees, agents, or licensees.) Tenant shall, on or before the expiration of the Term, remove Tenant's signs, goods, personal property, trade fixtures and equipment used in the conduct of Tenant's business not servicing or affixed to the Leased Premises, and will repair, prior to the expiration of the Term, any damages caused by such removal. Any property not so removed shall be deemed abandoned and may be removed and disposed of by Landlord, without risk to Landlord, in such manner as Landlord shall determine and Tenant shall pay Landlord the entire cost and expense incurred by it in effecting such removal and disposition and in making any incidental repairs and replacements to the Leased Premises and for use and occupancy during the period after the expiration of the Term and prior to its performance of its obligations under this Section 9(N). (O) MAINTENANCE OF LEASED PREMISES. To have performed by a reputable vendor previously approved by Landlord, preventive maintenance and all routine and ordinary repairs and replacements to any plumbing, heating, electrical, ventilating, air-conditioning, mechanical and life-safety systems installed by Tenant or Landlord in the Leased Premises such as are necessary to keep them in good operation and working order; to have performed all necessary maintenance and upkeep of (1) all sidewalks, driveways, roads and parking areas on the Property, including without limitation snow shoveling, snow plowing, sanding, cleaning, patching, crack sealing, resurfacing and restriping, and (2) all utilities, lighting and landscaping on the Property, so as to maintain same neat and clean, in good condition and repair, in accordance with applicable municipal, state and federal laws, rules, regulations, by-laws or ordinances and to the standards prescribed by Landlord and the Office Park from time to time; and to make as and when needed as a result of misuse by, or neglect or improper conduct of, Tenant or Tenant's servants, employees, agents, invitees or licensees or otherwise, all repairs in and about the Leased Premises necessary to preserve them in such repair, order and condition, which repairs shall be in quality and class equal to the original work. If Tenant shall be in default of its obligations set forth in this Section 9(O), Landlord may give written notice of such default and if Tenant fails to adequately remedy the default within fifteen (15) days of the date of such notice Landlord may, for and at the expense of Tenant, make any and all such repairs, or perform such maintenance and upkeep to the Leased Premises, Building and Property as herein provided, and to such equipment serving the Leased Premises. In the event of an emergency in which a delay would cause or threaten to cause further damage to the Leased Premises, the Building or Property, no such notice from Landlord shall be necessary prior to Landlord making such repairs or performing such maintenance or upkeep. (P) FINANCIAL INFORMATION. Tenant shall deliver to Landlord a copy of all of its Form 10Q and 10K Reports promptly after filing thereof with the Securities and Exchange Commission. Landlord shall have the right to enter the Leased Premises at all reasonable times, subject to Tenant's reasonable security regulations, to ascertain whether or not Tenant is in compliance with the lessee covenants and agreements contained in this Section 9 of the Lease. SECTION 10. WAIVER OF SUBROGATION. Landlord and Tenant mutually agree (insofar as and to the extent that such agreement may be effective without invalidating or making it impossible to secure insurance coverage obtainable from responsible insurance companies doing business in the Commonwealth of Massachusetts) that with respect to any loss or damage to property that is covered by insurance then being carried by Landlord or 15 Tenant, respectively, the party carrying such insurance and suffering such loss or damage releases the other of and from any and all claims with respect to such loss or damage; and they further mutually agree that their respective insurance companies shall have no right of subrogation against the other on account thereof, even though an extra premium may result therefrom. In the event that any extra premium is payable by Tenant as a result of this provision, Landlord shall not be liable for reimbursement to Tenant for such extra premium. SECTION 11. ALTERATIONS, INSTALLATIONS AND WORK DONE TO LEASED PREMISES. (A) OWNERSHIP OF PROPERTY. All repairs, alterations, additions and restorations required or permitted hereunder by Tenant or Landlord shall be done in a good and workmanlike manner and in compliance with all applicable laws and lawful ordinances, permits, by-laws, regulations and orders of governmental authority and insurers of the Property. All improvements, alterations and additions to the Leased Premises, and to fixtures and equipment serving it, made or installed at any time by either Landlord or Tenant, shall be part of the Building and the property of Landlord; but not signs, equipment, trade fixtures or the like installed by Tenant and used in Tenant's business (where such equipment, trade fixtures or the like neither service nor are affixed or secured to the Building), or any additions or equipment installed at Tenant's expense which Landlord has agreed in writing prior to installation may be removed by Tenant. At Tenant's option, Tenant may remove cabinetry installed in the Leased Premises upon the termination of this Lease provided Tenant shall repair at the time of such removal any damage to the Leased Premises or Building caused by same. (B) LIENS AND ENCUMBRANCES. Each party doing any construction or other work covenants to promptly pay for it, unless otherwise provided in this Lease, and to bond or discharge promptly any mechanics or other liens, claims or encumbrances arising from the same. SECTION 12. CASUALTY AND TAKING. (A) TAKING OR DAMAGE AFFECTING ENTIRE BUILDING. If the entire Building or Property shall be taken by any exercise of the right of eminent domain, or if the entire Building shall be destroyed by reason of damage from fire or other casualty, or by account of any public or quasi-public authority, then this Lease shall terminate as of the effective date of such taking or as of the effective date of such damage. If the Building shall be substantially damaged by reason of fire or other casualty, or by action of any public or quasi-public authority, then this Lease may be terminated by Landlord as of the date of such damage or action by written notice to Tenant within sixty (60) days of the date of such damage or action. (B) DESTRUCTION OF OR DAMAGE TO LEASED PREMISES. If the entire Leased Premises shall be damaged and rendered untenantable by reason of damage from fire or casualty, or if a portion thereof is so rendered untenantable that the entire undamaged portion is unsuitable for the continued conduct of Tenant's business, then this Lease may be terminated by either Landlord or Tenant, as of the date of such damage, by written notice to the other within sixty (60) days of the date of such damage; provided, however, Tenant may not so terminate this Lease, or any such termination shall not be effective, if Landlord, within sixty (60) days of the date of damage, gives Tenant written notice of its intention to promptly and fully restore the Leased Premises for use and occupancy by Tenant. If the Lease is not so terminated, a just proportion of the rent due hereunder shall be abated 16 according to the nature and extent of the damage from the date of such damage until the Leased Premises shall have been restored to proper condition for use and occupancy. If a portion of the Leased Premises is so damaged, but the remaining portion is suitable for the continued conduct of Tenant's business, then Tenant shall have no right to terminate this Lease, but a just proportion of the rents due hereunder shall be abated according to the nature and extent of the damage from the date of such damage until the damaged portion of the Leased Premises shall have been restored to proper condition for use and occupancy. (C) PARTIAL OR TEMPORARY TAKING OF LEASED PREMISES. If a portion, but not all of the Building or Property shall be taken by any exercise of the right of eminent domain, such partial taking shall be considered to be damage to a portion of the Leased Premises and treated in accordance with Subsection (B) hereof. If all of the Building or Property shall be so taken for temporary purposes, such temporary taking shall be treated in accordance with Subsection (B) hereof if the taking lasts for three (3) months or less, and in accordance with Subsection (A) hereof if the taking lasts in excess of three (3) months. (D) CONDEMNATION AWARDS. In the event of any taking, Landlord shall be entitled to receive the entire award with respect to such taking, and Tenant hereby waives all rights relating to damages to the Building and the leasehold hereby created; provided, however, Tenant shall be entitled to and does not waive its rights with respect to any portion of any such award expressly allocated to Tenant by the taking authority with respect to Tenant's loss of fixtures, leasehold improvements, and relocation expenses. (E) RESTORATION OF LEASED PREMISES. In the event of damage to or a partial taking of the Property, Building or Leased Premises which does not result in a termination of this Lease as aforesaid, Landlord shall repair and restore the Leased Premises to the condition thereof prior to such damage or partial taking, subject to reduction in size caused by any partial taking. Such repair and restoration shall be commenced and completed by Landlord, as rapidly as is reasonably practicable, subject to reasonable delays which may arise by reason of adjustment of insurance, labor troubles, shortages of materials, or any other cause beyond Landlord's control. Landlord shall not be liable for any inconvenience or annoyance to Tenant, or for any injury to the business of Tenant, resulting from delays in repairing such damage. Upon commencement of such repair and restoration by Landlord, Tenant shall, at its expense, promptly commence repair and replacement of all trade fixtures, equipment, signs and other property installed in the Leased Premises by Tenant, or belonging to the Tenant, which may have been so damaged, taken or destroyed and shall, subject to causes beyond the control of Tenant, complete the same as rapidly as is reasonably practicable. SECTION 13. TENANT DEFAULT. (a) In the event any default by Tenant or any sublessee or assignee of Tenant's interest hereunder (collectively "Assignee") continues, in case of non-payment of Minimum Annual Rent, Prepaid Rent, additional rent or any other rents or charges herein required to be paid by Tenant, for more than ten (10) days after written notice thereof to Tenant from Landlord, or (b) in the event any other default of Tenant or any Assignee continues for more than twenty (20) days after written notice thereof to Tenant from Landlord (unless Tenant has, within said twenty (20) day period, commenced to cure such default and thereafter prosecutes the curing of such default to completion without interruption and with due diligence), or (c) if Tenant or any Assignee shall abandon all or any portion of the Leased Premises, which shall exclude the vacating of the Leased Premises by Tenant or any Assignee provided Tenant or such Assignee shall not be in default of its obligations hereunder, or (d) if Tenant or any Assignee or any Guarantor of Tenant's obligations hereunder ("Guarantor") executes an assignment for the benefit of creditors, trust mortgage or similar document, or (e) if Tenant or any Guarantor or Assignee files a petition for relief under any bankruptcy or insolvency law or code, or (f) if any petition for relief under any bankruptcy or insolvency law or code is filed 17 against Tenant or any Assignee or any Guarantor and is not dismissed or discharged within sixty (60) days, or (g) if a custodian or similar agent is authorized or appointed to take charge of all or substantially all of the assets of Tenant or any Guarantor or Assignee, or (h) if Tenant's or any Assignee's interest in this Lease is taken on execution or other process of law in any action, or (i) if Tenant or any Assignee or any Guarantor dissolves or is dissolved or liquidates or adopts any plan or commences any proceeding, the result of which is intended to include dissolution or liquidation, or (j) if any order is entered in any proceeding by or against Tenant or any Assignee or any Guarantor decreeing or permitting the dissolution of Tenant or any Assignee or any Guarantor or the winding up of its affairs, or (k) if any action shall be commenced to collect upon or enforce any lien or attachment on the Leased Premises, any portion thereof or Landlord's interest therein, or (l) if any representation or warranty made herein or in any report, certificate, statement or other instrument furnished in connection with this Lease by Tenant shall prove to be materially false, then, in any such instance, Landlord may immediately or at any time thereafter (notwithstanding any license, consent or waiver of any former breach), and without demand or notice, in person or by agent or attorney, immediately or at any time thereafter enter into or upon the Leased Premises or any part thereof in the name of the whole and repossess the same as of its former estate, or terminate this Lease by written notice to Tenant and, in either event, expel Tenant and those claiming through or under Tenant (including any Assignee), and remove their effects (forcibly, if necessary), without being deemed guilty of any manner of trespass, without liability for any damages, and without prejudice to any remedy which otherwise might be available for arrears of rent or breach of covenant; and, upon entry or notice as aforesaid this Lease shall terminate and Landlord, in addition to all other remedies which it may have at law or in equity, shall have the remedies provided in Section 14 hereof; provided, however, in the event that under applicable bankruptcy law any trustee in bankruptcy has the right to affirm this Lease and to continue to perform the obligations of Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the affirmance of this Lease and provide to Landlord such adequate assurances as may be necessary to ensure Landlord of the continued performance of Tenant's obligations under this Lease. Tenant hereby waives and surrenders all rights and privileges which it might have under or by reason of any present or future law to redeem the Premises, or to have continuance of this Lease for the Term hereby leased, after being dispossessed or ejected therefrom by process of law or under the terms of this Lease, or after the termination of this Lease, as herein provided. Tenant further agrees that it shall not interpose any counterclaim or set-off in any summary proceeding or in any action based in whole or in part on non-payment of rent. SECTION 14. LANDLORD'S REMEDIES. (A) RENTS AND OTHER CHARGES. If this Lease shall be terminated as provided in Section 13 hereof, Tenant shall pay the Minimum Annual Rent, Tenant's Tax, and all additional rent and other charges payable hereunder up to the time of such termination; and thereafter, Tenant, until the end of what would have been the Term of this Lease in the absence of such termination, and whether or not the Leased Premises shall have been re-let, shall be liable for and shall pay to Landlord, as current damages, the Minimum Annual Rent, Tenant's Tax, and all additional rent and other charges which would have been payable hereunder for the remainder of the Term of this Lease if such termination had not occurred, less the net proceeds if any, of re-letting of the Leased Premises, after deducting all expenses incurred by Landlord in connection with such re-letting (including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorneys' fees, 18 advertising, alteration costs and expenses of preparation for such re-letting). Tenant shall pay such current damages to Landlord monthly on the days on which the Minimum Monthly Rent Installments would have been payable hereunder if this Lease had not been terminated. (B) LIQUIDATED DAMAGES. At any time after such termination, whether or not Landlord shall have collected any such current damages payable under any of the foregoing provisions of this Section 14, Landlord may elect to recover, and Tenant shall forthwith pay, as liquidated final damages in lieu of all such current damages beyond the date of such election, either (1) an amount equal to the excess, if any, of the Minimum Annual Rent, Tenant's Tax, additional rent and other charges as hereinbefore provided which would be payable hereunder from the date of such election (assuming that, for the purposes of this subsection (B), annual payments by Tenant on account of Tenant's Tax would be the same as payments required for the immediately preceding twelve calendar months, or if less than twelve calendar months have expired since the Commencement Date, the payments required for such lesser period projected to an annual amount) for what would be the then unexpired Term of this Lease if the same remained in effect, over the then fair net rental value of the Leased Premises of the same period or (2) an amount equal to the lesser of (a) the Minimum Annual Rent, Tenant's Tax, additional rent and other charges that would have been payable for the balance of the Term of this Lease had it not been terminated or (b) the aggregate of the Minimum Annual Rent, Tenant's Tax, additional rent and other charges accrued in the twelve (12) months ended next prior to such termination without reduction for any free rent or other concession or abatement (plus, in either case under (a) or (b), the amount of Minimum Annual Rent, and amounts for Tenant's Tax and additional rents of any kind accrued and unpaid at the time of termination of this Lease). In the event this Lease is so terminated prior to the expiration of the first full year of the Term of this Lease, the liquidated damages which Landlord may elect to recover pursuant to clause (2) (b) of this subsection (B) shall be calculated as if such termination had occurred on the first anniversary of the Commencement Date. Landlord agrees that any lump sum payment which it may elect pursuant to this Section 14(B) shall be reduced to present value, as reasonably determined by Landlord. Nothing contained in this Lease shall, however, limit or prejudice the right of Landlord to prove for and obtain in proceedings for bankruptcy or insolvency by reason of the termination of this Lease, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount be greater than, equal to, or less than the amount of the loss or damages referred to above. (C) LANDLORD'S ADDITIONAL COSTS. In addition to the foregoing, Tenant also agrees (1) to indemnify and save Landlord harmless from and against all reasonable expenses and attorneys' fees which Landlord may incur in connection with such termination and the cost of putting the Leased Premises in good order or preparing the same for re-rental, and (2) that Landlord may re-let the Leased Premises, or any portion thereof, for a period which may, at Landlord's option, be less than or exceed the period which would otherwise have constituted the balance of the Term, and may grant concessions or free rent. Any suit brought to collect the amount of deficiency for any month shall not prejudice in any way the right of Landlord to collect the deficiency for any subsequent month by a similar proceeding. Landlord may make such alterations, repairs, replacements and decorations to the Leased Premises as Landlord, in Landlord's reasonable judgment, considers advisable and necessary for the purpose of re-letting the Leased Premises. Landlord shall use reasonable efforts to so re-let the Leased Premises but shall not, in any event, be liable for failure to re-let the Leased Premises, or, if the Leased Premises are re-let, for failure to collect the rent due under such re-letting; for purposes hereof, it is agreed that the listing of the Leased Premises, for rental, with a reputable broker involved in leasing of property within the Waltham-Route 128 area shall be a discharge of Landlord's obligation hereunder to use reasonable efforts to re-let the Leased Premises. 19 (D) LANDLORD'S EXPENSES IN CURING TENANT'S DEFAULTS. In the event of any default by Tenant hereunder, Tenant will reimburse Landlord for all expenses and reasonable attorneys' fees incurred by Landlord in collecting any amount due from Tenant, curing any default of Tenant or in obtaining possession of, or in re-letting, the Leased Premises; and Tenant shall pay all reasonable attorneys' fees and expenses arising out of any litigation in which Landlord shall become involved by reason of any default, act or failure to act, or negligence of Tenant or anyone acting under Tenant. Tenant shall immediately reimburse Landlord for any expense that such cure might be effected by Landlord following the expiration or earlier termination of this Lease). Tenant further agrees that if, on termination of this Lease by expiration or otherwise, Tenant shall fail to remove any of its property from the Leased Premises, Landlord shall be authorized, at its sole option, and in Tenant's name and on its behalf, upon 10 days' prior notice, either (1) to cause such property to be removed and placed in storage for the account of and at the risk and expense of Tenant, (without liability for loss or damage to such property), or (2) to sell such property at public or private sale, and to apply the proceeds thereof, after the payment of all expenses of removal, storage and sale, to the indebtedness, if any, of Tenant to Landlord, the surplus, if any, to be paid to Tenant. (E) NO SURRENDER OF LEASED PREMISES. No act or thing done by Landlord during the Term hereof shall be deemed an acceptance or a surrender of the Leased Premises and no agreement to accept such surrender shall be valid, unless in writing signed by Landlord. The delivery of keys to any employee of Landlord or of Landlord's agents shall not operate as a termination of the Lease or a surrender of the Leased Premises. SECTION 15. CUMULATIVE REMEDIES. Any and all rights and remedies which Landlord may have under this Lease, and at law and in equity (including, without limitation, actions at law for direct, indirect, special and consequential damages), for Tenant's failure to comply with its obligations under this Lease shall be cumulative and shall not be deemed inconsistent with each other, and any two or more of all such rights and remedies may be exercised at the same time insofar as permitted by law. SECTION 16. INTEREST DUE ON TENANT DEFAULTS. If Tenant fails to pay the full amount of the Minimum Annual Rent, Prepaid Rent, or any additional rent, or to make any other payment required after any applicable grace period, or to perform any act required of Tenant hereunder after any applicable grace period, Landlord shall have the right to collect the amount of such overdue payment or to pay such sums or do any act which requires the expenditure of monies which may be necessary or appropriate by reason of the failure or neglect of Tenant to comply with any of its obligations under this Lease and to collect from Tenant interest at the rate of one and one-half percent (1 1/2%) per month, computed on the amount of such payment or the cost of such performance on behalf of Tenant, from the due date of such payment or the date of such performance to the date payment is made by Tenant. SECTION 17. HOLDOVER. If the Tenant remains in the Leased Premises beyond the expiration of this Lease, such holding over shall be without right and shall not be deemed to create any tenancy, but the Tenant shall be a tenant at sufferance only and shall pay during such period of holdover, when and as billed therefor by Landlord, as an occupancy charge (but not as rent), an amount pro rated on a daily basis equal to two (2) times the Minimum Annual Rent due from Tenant as of the expiration of the Term, plus any charges for additional rent hereunder, and Tenant's Tax due for such period of holdover. 20 SECTION 18. SUBORDINATION OF LEASE; RIGHTS OF MORTGAGE HOLDERS. Tenant will, upon request of Landlord, subordinate this Lease and the lien hereof to the lien of any present or future mortgage, ground lease, operating agreement or the like (collectively hereinafter called the "Mortgages"), affecting the Property, or any part thereof, irrespective of the time of execution or time of recording of any such Mortgages. Tenant agrees that it will, upon request of Landlord, execute, acknowledge and deliver any and all instruments deemed necessary or desirable by Landlord to give effect to, or notice of, such subordination, provided only that the holders of any such Mortgages shall enter into an agreement with Tenant (in the standard form of such agreement utilized by any such holder) which provides that such holders will not disturb the possession and other rights of Tenant and that such holders will accept Tenant as a lessee of the Leased Premises under the terms and conditions of this Lease in the event of acquisition of title to the Property through foreclosure proceedings, or otherwise, so long as Tenant performs its obligations hereunder, agrees to recognize the holders of such Mortgages as the Landlord in such event, and agrees to attorn to such holders; such agreement shall be expressly binding upon the successors and assigns of Tenant and on the holders of any such Mortgages and upon anyone purchasing the Property at a foreclosure sale. Tenant and Landlord agree to execute, acknowledge and deliver any appropriate instruments necessary to carry out the agreements contained in this Section 18. Tenant agrees that if it shall fail at any time to execute, acknowledge and deliver any such instrument within fifteen (15) days after request by Landlord, then Landlord may, in addition to any other remedy available to Landlord, execute, acknowledge and deliver such instrument as Tenant's attorney-in-fact and in Tenant's name; and Tenant hereby makes, constitutes and irrevocably appoints Landlord as its attorney-in-fact, coupled with an interest, for that purpose. In the event of any assignment by Landlord of Landlord's interest in this Lease, or the rents payable hereunder, which is conditional in nature or otherwise, which assignment is made to the holder of a Mortgage, Tenant agrees that the execution thereof by Landlord and the acceptance thereof by the holder of such Mortgage shall not be treated as an assumption by such holder of any of the obligations of Landlord hereunder unless such holder shall, by notice sent to Tenant, specifically otherwise elect. Until the holder of a Mortgage shall enter and take possession of the Leased Premises for the purpose of foreclosure, such holder shall have only such rights of Landlord as are necessary to preserve the integrity of this Lease as security. Upon entry and taking possession of the Leased Premises for the purpose of foreclosure, such holder shall have all the rights of Landlord. No such holder of a Mortgage shall be liable either as mortgagee or as assignee, to perform, or be liable in damages for failure to perform, any of the obligations of Landlord unless and until such holder shall enter and take possession of the Leased Premises for the purpose of foreclosure. If the holder of any Mortgage shall require any modification(s) to this Lease, Tenant shall, at Landlord's request, promptly execute and deliver to Landlord such instruments effecting such modification(s), provided that such modification(s) do not adversely affect in any material respect any of Tenant's rights under this Lease. SECTION 19. COVENANT OF QUIET ENJOYMENT; LANDLORD'S RIGHT TO MAKE ALTERATIONS OR IMPROVEMENTS TO THE PROPERTY. Tenant, on payment of the rents and other charges payable hereunder, and upon performance of the covenants of this Lease on its part to be performed, shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the Term of this Lease without any manner of hindrance or molestation from Landlord or anyone claiming under Landlord, subject, however, to the terms of this Lease; provided, however, Landlord may at any time and from time to time, without the same constituting a breach of Landlord's covenant of quiet enjoyment or an actual or constructive eviction, and without incurring any liability to Tenant or otherwise affecting any of Tenant's obligations under this Lease, install, use, maintain, repair, replace 21 and relocate for service to the Leased Premises and other parts of the Building, pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Leased Premises or Building, or to make such changes, alterations, additions, improvements, repairs or replacements in or to the interior and exterior of the Building (including the Leased Premises) and the fixtures and equipment thereof, and in or to the Property (including, without limitation, landscaping, the construction of additional structures, signs and buildings, the relocation of access roads situated within the Property and the redesign, relocation or temporary closing of common facilities serving the Building and Property), as Landlord may deem necessary or desirable in order to perform Landlord's obligations hereunder; provided further, however, that there be no unreasonable interference (except in emergencies) with the conduct of Tenant's business or obstruction of access to the Leased Premises by Tenant. Landlord shall endeavor to give Tenant reasonable prior notice, except in the event of an emergency, prior to taking any actions herein permitted. In connection with any of the foregoing work by Landlord on the Property, Landlord shall repair any damage caused to Tenant's property or the Leased Premises by reason of Landlord's negligence in performing same. Nothing contained in this Section 19 shall be deemed to relieve Tenant of any duty, obligation or liability with respect to making any repair, replacement or improvement or complying with any law, order or requirement of any governmental or other authority. Landlord reserves the right, at any time, and from time to time, to change the name and address of the Building. SECTION 20. ESTOPPEL CERTIFICATES. Landlord and Tenant agree that at any time and from time to time, upon not less than ten (10) days prior written request by the other, each will execute, acknowledge and deliver to the requesting party a statement in writing certifying that this Lease is unmodified and in full force and effect (or, if there have been modifications, that the same are in full force and effect as modified and stating the modifications), that to the knowledge of such party no uncured defaults exist hereunder (or if any defaults exist, specifying the same), and the dates to which the rent and other charges due hereunder have been paid in advance, if any, it being intended that any such statement delivered pursuant to this Section 20 may be relied upon by any mortgagee or prospective mortgagee or purchaser of the Property. Tenant acknowledges that the execution and delivery of such certificates in connection with a financing or sale in a prompt manner may constitute requirements of Landlord's financings and/or property dispositions, and Tenant shall indemnify Landlord against all damages (including consequential damages in the nature of increased costs or loss of any such transactions, and including attorneys' fees) directly or indirectly resulting from Tenant's failure to comply herewith (notwithstanding that any applicable grace or notice period under Section 13 may not have expired). SECTION 21. NOTICE OF LEASE. Tenant agrees that it will not record this Lease. Both parties shall, upon request of either, execute and deliver a notice of this Lease in such recordable form as may be permitted by applicable statute. SECTION 22. NOTICES AND APPROVALS. All notices, requests, demands, consents, elections, approvals, and other communications which may be or are required to be served or given hereunder (hereinafter collectively called "Notices") shall be in writing and may be delivered in hand or sent by first class registered or certified mail (return receipt requested), or by nationally recognized overnight courier, if to Landlord at Landlord's Address, with a copy by like manner to The Nelson Companies, Ltd., 100 Fifth Avenue, Waltham, MA 02154, Attention: Douglas G. Waybright, and if to Tenant, at Tenant's Address. Each party agrees upon request of the other to immediately acknowledge any such hand delivery. Either party may, by Notice given as aforesaid, change its address for 22 all subsequent Notices, except that neither party may require Notices to it to be sent to more than two (2) addresses (exclusive of copies of Notices which may be required to be sent to Landlord's mortgagees). Notices shall be deemed given when mailed in the manner aforesaid provided they are received in due course. SECTION 23. BROKERAGE. Tenant warrants that it has had no dealings with any broker or agent in connection with this Lease except for any broker designated in Section 1(A) and covenants to pay, hold harmless and indemnify Landlord from and against any and all costs, expense or liability for any compensation, commissions and charges claimed by any broker or agent, other than such designated broker, with respect to this Lease or the negotiation thereof, arising from a breach of the foregoing warranty. Upon the execution of this Lease by Landlord, Landlord shall pay a brokerage commission in the aggregate amount of $60,688.00, to be paid fifty percent (50%) to Meredith and Grew and fifty percent (50%) to The Nelson Companies, Ltd. SECTION 24. NON-WAIVER PROVISION. No assent, express or implied, by either party to any breach of any agreement or condition herein contained on the part of the other to be performed or observed, and no waiver, express or implied , of any such agreement or condition, shall be deemed to be a waiver of or assent to any succeeding breach of the same or any other agreement or condition. The acceptance by Landlord of rent or other payment hereunder, or silence by Landlord as to any breach, shall not be construed as a waiver of any of the Landlord's rights hereunder unless such waiver shall be in writing. No payment by Tenant or acceptance by Landlord of a lesser amount with an endorsement or statement thereon, or in a writing accompanying such check, that said lesser amount is payment in full shall be deemed an accord and satisfaction, and the Landlord may accept such check without prejudice to recover the balance due or to pursue any other remedy. SECTION 25. INABILITY TO PERFORM-EXCULPATORY CLAUSE. Except as otherwise expressly provided herein, this Lease and the obligations of Tenant to pay rent hereunder and to perform all of the other covenants, agreements, terms, provisions and conditions hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused because Landlord is temporarily delayed in making any repairs or replacements by reason of strikes or labor troubles, conditions of supply and demand, or any other similar or dissimilar cause whatsoever beyond Landlord's control (including, but not limited to, governmental preemption in connection with a national emergency or by reason of any rule, order or regulation of any governmental agency), provided that in each such instance of inability of Landlord to perform, Landlord shall exercise reasonable diligence to eliminate the cause of such inability to perform or to secure alternate sources of supply. SECTION 26. 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 Building, and in the event of any transfer or transfers of title to the Building, the Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and 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 23 ownership of the Building. Tenant and Tenant's successors and assigns agree they 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 Building and in the rents, issues and profits therefrom, and agree 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 general partner, limited partner, officer, director, shareholder, employee, trustee, beneficiary, attorney or agent of Landlord) ever be personally liable for any such liability. SECTION 27. ENTIRE AGREEMENT. This Lease sets forth the entire agreement between the parties hereto and cannot be modified or amended except in writing duly executed by both parties hereto. SECTION 28. PARTIAL INVALIDITY. 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 been included in this Lease. SECTION 29. WAIVER OF JURY TRIAL. Landlord and Tenant waive trial by jury in any action, proceeding or counterclaim brought by either of them against the other on all matters arising out of this Lease or the use and occupancy of the Leased Premises (except claims for personal injury or property damage). If Landlord commences any summary proceeding for nonpayment of rent, or possession of the Leased Premises, Tenant will not interpose (and waives the right to interpose) any counterclaim in any such proceeding. SECTION 30. TENANT AS BUSINESS ENTITY. If Tenant is a business entity, then the person or persons executing this Lease on behalf of Tenant warrant and represent in their corporate capacities that (a) Tenant is duly organized, validly existing and in good standing under the laws of the jurisdiction in which such entity was organized and, if a foreign corporation, has qualified to do business in the Commonwealth of Massachusetts; (b) Tenant has the authority to own its property and to carry on its business as contemplated under this Lease; (c) Tenant is in compliance with all laws and orders of public authorities applicable to Tenant; (d) Tenant has duly executed and delivered this Lease; (e) the execution, delivery and performance by Tenant of this Lease (i) are within the powers of Tenant, (ii) have been duly authorized by all requisite action, (iii) will not violate any provisions of law or any order of any court or agency of government, or any agreement or other instrument to which Tenant is a party or by which it or any of its property is bound, or (iv) will not result in the imposition of any lien or charge on any of Tenant's property, except by the provisions of this Lease; and (f) the Lease is a valid and binding obligation of Tenant in accordance with its terms. Tenant, if a business entity, agrees that any breach of the foregoing warranty and representation shall, at Landlord's election, be a default under this Lease for which there shall be no cure. This warranty and representation shall survive the termination of the Term. SECTION 31. APPLICABLE LAW AND CONSTRUCTION; EXECUTION. This Lease shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts and, if any provision of this Lease shall to any extent be invalid, the remainder of this Lease shall not be affected thereby. There are no oral or written agreements between 24 Landlord and Tenant affecting this Lease. This Lease may be executed in one or more counterparts, all of which are identical, any one of which is to be deemed to be complete in itself and may be introduced in evidence or used for any purpose. The headnotes throughout this Lease are for convenience or reference only, and shall in no way be held or deemed to define, limit, explain, describe, modify or add to the interpretation, construction or meaning of any provision of this Lease. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Leased Premises, and this document shall become effective and binding only upon the execution and delivery hereof by both Landlord and Tenant. Except as herein otherwise provided, the terms hereof shall be binding upon and shall inure to the benefit of the successors and assigns, respectively, of Landlord and Tenant and, if Tenant shall be an individual, upon and to his heirs, executors, administrators, successors and assigns. If two or more persons are named as Tenant herein, each of such persons shall be jointly and severally liable for the obligations of the Tenant hereunder, and Landlord may proceed against any one without first having commenced proceedings against any other of them. Each term and each provision of this Lease to be performed by Tenant shall be construed to be both an independent covenant and a condition. Any reference herein to successors and assigns of Tenant is not intended to constitute a consent to any assignment of this Lease by Tenant. Except as otherwise set forth in this Lease, any obligations of Tenant (including, without limitation, rental and other monetary obligations, repair obligations and obligations to indemnify Landlord), shall survive the expiration or earlier termination of this Lease. WITNESS the execution hereof as a sealed instrument as of the date first above written. LANDLORD: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: /s/ John N. Urban -------------------------------------------------- Its Assistant Director Commercial Real Estate/Equities -------------------------------------------------- By: /s/ Ronald B. Franklin -------------------------------------------------- Its Director Commercial Real Estate Loan Administrator -------------------------------------------------- TENANT: INTERLEAF, INC. By: /s/ G. Gordon M. Lange -------------------------------------------------- Its Executive Vice President & Chief Financial Officer -------------------------------------------------- IF TENANT IS A CORPORATION, TRUST, OR LIMITED PARTNERSHIP, A SECRETARY'S, CLERK'S, TRUSTEE'S OR GENERAL PARTNER'S CERTIFICATE OF THE AUTHORITY AND THE INCUMBENCY OF THE PERSON SIGNING ON BEHALF OF TENANT SHALL BE ATTACHED. INTERLEAF.624thlease 7/19/95 Page 1 of 1 EXHIBIT "A" LEASED PREMISES INTERLEAF, INC. Floor plan drawing of leased premises at 62 Fourth Avenue, Waltham, MA Page 1 of 1 EXHIBIT "B" Plan Showing Parking Area LEASE WITH INTERLEAF, INC. Plan showing building and parking area of leased premises at 62 Fourth Avenue, Waltham, MA. Page 1 of 3 EXHIBIT "C" RULES AND REGULATIONS LEASE WITH INTERLEAF, INC. The following rules and regulations have been established for the safety, comfort and general well-being of the tenants of Landlord at the Office Park as well as for the neat, orderly and attractive appearance and maintenance of all the buildings owned by Landlord at the Office Park. They are not intended to modify or vary the terms of your lease. 1. GENERAL USE OF BUILDING AND PREMISES a) Tenant shall not place, store or keep any property adjacent to the Building or upon the adjacent sidewalks or walkways, or in the elevators, vestibules, stairways, corridors, or halls (except as may be necessary for brief periods during deliveries); nor shall Tenant use any such areas for any purpose other than ingress or egress to and from the Leased Premises. b) No vehicles or animals (other than seeing eye dogs) of any kind shall be brought into the Leased Premises. c) The Leased Premises shall not be used for lodging or sleeping or for any offensive use or purpose. 2. CONSTRUCTION AND REPAIRS a) Tenants shall direct all requests for any work in or about the Leased Premises to Landlord's representative. Landlord's employees shall not perform any work or do anything outside their regular duties except upon special instruction from the Landlord's representative. b) The following rules and regulations have been adopted to govern the performance of all construction or repair work in the Leased Premises, including decoration and installation of fixtures and equipment. These rules and regulations cover not only the actual work, but also cover visits to the Leased Premises by Tenant's decorators, manufacturers and installers of equipment and fixtures. The purpose of these rules is to minimize the risk of injury to persons or damage to the Building and to avoid conflicts with Landlord's construction schedules and other scheduled work: (1) All persons will be required to comply with all posted safety regulations, including those established by the Landlord or any contractor of Landlord such as, but not limited to, wearing protective clothing. INITIALS: Landlord Tenant /s/ ------- ------ EXHIBIT "C" Page 2 of 3 (2) Except when accompanied by a representative of Landlord or a contractor of Landlord, all persons desiring to visit the Leased Premises must first secure permission through Landlord or Landlord's contractor or other representative. (This rule does not apply to visits in respect of which prior arrangements have been made for access by Tenant or prospective tenants.) (3) At least 72 hours before the commencement of any work on the Leased Premises, including the installation of any equipment or fixtures, Tenant shall inform Landlord's representative of the place where the work is to be performed and the date of commencement and the nature of the work to be done, the name of the contractor or other party to perform such work and the name of the individual who will supervise the performance of the work and, if requested by Landlord's representative, shall cause the contractor or other party doing such work to furnish certificates of such insurance coverage in connection with the performance of such work as Landlord may reasonably require. In any case in which Landlord shall require proof of insurance coverage, the work shall not be commenced until such certificates shall have been furnished. 3. SIGNS AND DRAPES a) Any signs, lettering or the like installed or erected on the Leased Premises or Building without Landlord's prior written consent (which consent, as to interior signs, shall not be unreasonably withheld) may, without notice to Tenant, be removed by Landlord at Tenant's expense and without any liability to Landlord. b) In order to preserve the unified and pleasant appearance of the Building, Tenant shall not hang or attach any shades, blinds, screens, draperies or other window accessories of any kind which may be visible from the exterior of the Building without Landlord's prior written approval. 4. BUILDING UTILITY SYSTEMS a) The water and wash closets and other plumbing fixtures shall be used only for the purposes for which they were designed and constructed and for no other use or purposes, except as otherwise specifically permitted by Landlord; and no sweepings, rubbish, rags, acid, harmful or damaging substances shall be deposited therein. 5. DELIVERIES, PARKING, MISCELLANEOUS a) Tenant shall require all hand trucks used for deliveries within the Building made to the Leased Premises to be equipped with rubber tires and bumpers. b) The receiving areas for the Building, as designated from time to time by Landlord, are to be used only for deliveries and unloading of merchandise. INITIALS: Landlord Tenant /s/ -------- ------ EXHIBIT "C" Page 3 of 3 c) Any "No Parking" signs on the Property shall be strictly observed; offenders may be towed without notice and at their expense. d) Upon termination of the Lease or occupancy of the Leased Premises, Tenant shall turn over to the Landlord all keys to the Leased Premises and to all rooms therein. e) Tenant will be responsible for the cost of removal and disposal of unusually large or heavy loads of rubbish such as obsolete files, wooden packing cases and the like. INITIALS: Landlord Tenant /s/ ------- ------ Page 1 of 3 EXHIBIT "D" TENANT IMPROVEMENT ESCROW AGREEMENT LEASE WITH INTERLEAF, INC. Escrow Agreement made this ___ day of July 1995, by and between Principal Mutual Life Insurance Company, an Iowa corporation, (the "Landlord"), Interleaf, Inc., a Massachusetts corporation (the "Tenant"), and Lawyers Title Insurance Corporation, a Virginia corporation (the "Escrow Agent"). WITNESSETH: WHEREAS, Landlord and Tenant have entered into a Lease of even date herewith (the "Lease") for the entire building at 62 Fourth Avenue, Waltham, Massachusetts 02154 (the "Leased Premises"); and WHEREAS, Tenant has agreed to construct tenant improvements in the Leased Premises in accordance with plans and specifications previously approved by Landlord and attached hereto as Exhibit "E" (or referenced therein) (the "Tenant Improvements"); and WHEREAS, in partial consideration of Tenant's execution and delivery of the Lease, Landlord has agreed to initially fund an aggregate of $100,000 in cash (the "Landlord's Fund") of Tenant's costs for construction of the Tenant Improvements; and WHEREAS, Tenant has agreed to deposit $350,000 in cash (the "Tenant's Fund") in escrow upon Tenant's execution of the Lease to be used for payment of construction of the Tenant Improvements. NOW, THEREFORE, in consideration of these presents, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows: 1. At the time of execution of the Lease by Tenant, Tenant shall deliver the Tenant's Funds to the Escrow Agent to be deposited into a segregated interest bearing account at State Street Bank & Trust Company (the "Escrow Account"). 2. At the time of execution of the Lease by Landlord, Landlord shall deliver the Landlord's Funds to the Escrow Agent to be deposited into the Escrow Account. 3. Not more than once each month, Tenant may request reimbursement from the Escrow Account for Tenant Improvements which have been completed to Landlord's reasonable satisfaction in accordance with Exhibit "E" to the Lease. Tenant shall furnish such documentation, including lien waivers, as Landlord shall reasonably request to substantiate such expenditures and completion of Tenant Improvements. INITIALS: Landlord Tenant /s/ ------- ------ EXHIBIT "D" Page 2 of 3 4. Landlord shall send a written letter of authorization to the Escrow Agent within ten (10) days of approval of such Tenant Improvements, but not more often than once every two weeks, and the Escrow Agent shall, within ten (10) days of receipt of same, reimburse Tenant for such amount as Landlord shall have authorized. Any funds remaining in the Escrow Account after Tenant shall have submitted to Landlord its request for final reimbursement for the Tenant Improvements shall be paid by the Escrow Agent to Landlord within ten (10) days after Landlord shall have delivered a copy of Tenant's request for final reimbursement to the Escrow Agent. 5. The Escrow Agent shall have no liability for any action lawfully taken or omitted to be taken in accordance with the terms of this Agreement except for the Escrow Agent's negligence or willful misconduct. The Escrow Agent may rely and shall be protected in acting or refraining from acting upon any written notice, instruction or request received by it and believed by it to be genuine and to have been signed or sent by the proper person. Escrow Agent may consult with legal counsel and be fully protected in acting in accordance with the advice of such counsel. The Escrow Agent shall keep accurate records of all funds disbursed by it from the Escrow Account and shall report monthly to Landlord and Tenant as to the outstanding balance. 6. All notices, approvals or other communications which may be or are required to be given hereunder (collectively, the "Notices") shall be in writing and may be delivered in hand, by registered or certified mail, return receipt requested, or by nationally recognized overnight courier service, and shall be deemed given when received if by hand, three business days after sending as aforesaid by U.S. mails or next day if by overnight courier. Notices shall be addressed as follows: If to Landlord, to: Principal Mutual Life Insurance Company c/o The Nelson Companies, Ltd. 100 Fifth Avenue Waltham, MA 02154 Attention: Douglas G. Waybright If to Tenant, to: Interleaf, Inc. 62 Fourth Avenue Waltham, MA 02154 Attention: Devra Simon If to Escrow Agent, to Lawyers Title Insurance Corporation 225 Franklin Street, Suite 3010 Boston, MA 02110 Attention: Kevin Creedon, Esq. INITIALS: Landlord Tenant /s/ ------- ------ EXHIBIT "D" Page 3 of 3 7. This Agreement shall be binding on and inure to the benefit of the respective successors and assigns of Landlord, Tenant and Escrow Agent and shall be governed by the laws of the Commonwealth of Massachusetts. 8. Tenant shall be entitled to all interest accrued to the Escrow Account at the time of its termination, and shall pay the fees of the Escrow Agent for maintaining the Escrow Account. If the Escrow Account shall remain open for a period not to exceed three (3) months, the fee of the Escrow Agent shall be $150.00, and if the Escrow Account shall remain open for a period in excess of three (3) months, the fee of the Escrow Agent shall be $250.00. IN WITNESS WHEREOF, each of Landlord, Tenant and Escrow Agent has caused this Agreement to be executed by their respective duly authorized partners, officers or representatives as of the date first above written. LANDLORD PRINCIPAL MUTUAL LIFE INSURANCE COMPANY By: ----------------------------------- Its TENANT INTERLEAF, INC. By: --------------------------------- Its ESCROW AGENT LAWYERS TITLE INSURANCE CORPORATION By: -------------------------------- Its INITIALS: Landlord Tenant /s/ ------- ------ Page 1 of 1 EXHIBIT "E" TENANT'S PLANS AND SPECIFICATIONS LEASE WITH INTERLEAF, INC. LIST OF PLANS AND SPECIFICATIONS Interleaf, Inc. Headquarters Renovations 62 Fourth Avenue Waltham, MA 02154 Prepared by Archetype Architecture, Inc. Title No. Date Revision No. Revised Date - ----- --- ---- ------------ ------------ Partition Plan A 1.0 8/4/95 5 8/31/95 Reflected Ceiling Plan A 2.0 8/4/95 5 8/31/95 Schedules: Door & Partition Details A 3.0 8/4/95 5 8/31/95 Furniture Layout/Power/Voice Data Plan A 4.0 8/11/95 5 8/31/95 Enlarged Plan at Reception Area A 5.0 8/11/95 4 8/26/95 Interior Elevations A 6.1 8/26/95 5 8/31/95 Interior Elevations A 6.2 8/26/95 5 8/31/95 Interior Elevations A 6.3 8/26/95 5 8/31/95 Entry Vestibule Details A 7.0 8/24/95 5 8/31/95 INITIALS: Landlord Tenant /s/ -------- ------ Page 1 of 1 EXHIBIT "G" LANDLORD'S CONSTRUCTION WORK LEASE WITH INTERLEAF, INC. Landlord shall perform the following work in the Leased Premises at Landlord's sole cost and expense in conjunction with Tenant's construction of tenant improvements per Exhibit "E" attached hereto: 1. Install sealant in cracks of foundation walls of Building. 2. Patch spalled concrete areas on vertical surfaces and curbing of handicapped ramp. 3. Install sealant in masonry cracks of exterior walls of Building. 4. Fill holes in exterior masonry wall of Building located above roof of wood framed addition. 5. Caulk joints at all precast window sills. 6. Replace rotted wood sleepers located under one rooftop HVAC unit with pressure treated sleepers. 7. Re-attach aluminum fascia where it has lifted from face of roof. 8. Repair horizontal closure pieces on two window frames where sections are missing. 9. Install sealant and enclose exposed subframing at two exterior hollow metal door frames. 10. Relocate two handicapped toilets so as to be 18" off of the side wall to the centerline of the fixture and remove related toilet stall partitions. 11. Extend the flue from the gas-fired water heater 36" above the roof line and clear of adjacent window. 12. Repair rooftop HVAC units as needed so as to be in good working order. The following additional work shall be performed by Landlord as hereinabove provided only if required by the Building Inspector, City of Waltham: 1. Add a double check valve at the sprinkler main. Notwithstanding anything in this Lease to the contrary, provided Tenant shall be in possession of the Leased Premises and not in default under the terms of this Lease beyond any applicable grace periods, and provided Tenant shall not use or have used the Leased Premises for a use different than Tenant's permitted use of the Leased Premises as of the Commencement Date, in the event that, subsequent to Tenant's receipt of a Certificate of Occupancy for the Leased Premises upon completion of the Tenant Improvements per Exhibit "E" hereto, the City of Waltham shall revoke said Certificate of Occupancy for a violation by the base building (exclusive of the Leased Premises) of an applicable law, rule or regulation, then Landlord shall perform such construction work to the base building as shall be reasonably required to cure said violation. INITIALS: Landlord Tenant /s/ -------- ------- EX-10.U 4 EXHIBIT 10(U) 9/15/95 SUBLEASE This instrument is a Sublease between Interleaf, Inc., a Massachusetts corporation (the "Sublessor"), and Parametric Technology Corporation., a Massachusetts corporation (the "Sublessee"). The parties to this Sublease hereby agree as follows: ARTICLE I SUMMARY OF BASIC SUBLEASE PROVISIONS 1.1 BASIC DATA ALL CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE PRIME LEASE (hereinafter defined) UNLESS OTHERWISE DEFINED HEREIN. Date of this Sublease: September 15, 1995 Sublessor: Interleaf, Inc. Present Mailing Address Nine Hillside Avenue of Sublessor: Waltham, Massachusetts 02154 Sublessee: Parametric Technology Corporation. Present Mailing Address 128 Technology Drive of Sublessee: Waltham, Massachusetts 02154 Premises: Approximately 76,310 rentable square feet of space located in the building known as and numbered Prospect Place, 9 Hillside Avenue, Waltham, Massachusetts (the "Building"). The Premises demised under this Sublease comprise the sixth, fifth and second floors leased to Sublessor by Prime Lessor under the Prime Lease (as defined below) as set forth in Exhibit A. Permitted Uses: Office, sales, marketing, training, software development and creation, general office use and ancillary uses related thereto, all to the extent permitted by applicable law, and no other use that is inconsistent with Section 7 of the Prime Lease. 9/15/95 Commencement Date: Rentable Access Rent Square Commencement Commencement Feet Location Date Dates ---- -------- ---- ----- 28,430 RSF 6th Floor 10/23/95 12/01/95 19,450 RSF 2nd Floor 11/15/95 01/01/96 28,430 RSF 5th Floor 04/01/96 05/15/96 Sublease Term or Term(s): Beginning on the respective Access Commencement Date(s) and all expiring on December 31, 2000. Annual Fixed Rent: $24.00 per sq. Foot.
Rentable Square Annual Feet Location Rent ---- -------- ---- 28,430 RSF 6th Floor $682,320 19,450 RSF 2nd Floor $466,800 28,430 RSF 5th Floor $682,320
Additional Charges: Sublessee's share of electricity as set forth in Section 6.3, estimated to be approximately $1.25 per square foot. Security Deposit: None Parking Spaces: Sublessee shall be entitled to use its prorata share of Sublessor's 420 parking spaces, of which 396 are covered under the Building. Upon occupation of the Premises by the Sublessee, Sublessee shall be entitled to use 225 spaces, of which 212 shall be covered. Prime Lease: That certain lease, dated as of March 30, 1990, as subsequently amended, between Prime Lessor, as Landlord, and Sublessor, as Tenant. Prime Lessor: Prospect Hill Executive Office Park, a Massachusetts limited partnership. 9/15/95 1.2 ENUMERATION OF EXHIBITS The following exhibits are attached to this Sublease and incorporated herein: EXHIBIT A: PLAN OF PREMISES EXHIBIT B: PRIME LEASE EXHIBIT C: SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT EXHIBIT D: SUBLESSOR SYSTEMS ARTICLE II PREMISES 2.1 SUBLEASE OF PREMISES Sublessor hereby subleases to Sublessee, and Sublessee hereby accepts and subleases from Sublessor, upon and subject to the terms and provisions of the Prime Lease and this Sublease, the Premises. 2.2 PRIME LEASE 2.2.1 Sublessor hereby represents and warrants that: (a) Sublessor is Tenant under the Prime Lease; (b) the Prime Lease is in full force and effect, Sublessor has submitted to Sublessee a true and complete copy of the Prime Lease, inclusive of all amendments, riders, exhibits and related agreements; the Prime Lease is the entire agreement between Sublessor and Prime Lessor (or any other party) relating to the use and occupancy of the Premises and there are no side letters of understanding, oral or written, of any sort that modify, amend, alter, supplement or change the terms of the Prime Lease; (c) Sublessor has not received any notice of default that has not been cured under the Prime Lease from Prime Lessor; and (d) Sublessor is not insolvent and is able to pay its debts and other obligations as they come due; it has not declared bankruptcy or filed a petition to take advantage of any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts and it has no present intention of doing so; no such proceeding has been commenced against Sublessor seeking such relief and Sublessor has no knowledge that any such proceeding is threatened. Sublessee warrants and acknowledges that it has reviewed the Prime Lease and is satisfied with the arrangements therein reflected. 2.2.2 The Prime Lease is by this reference incorporated into and made a part hereof, except that all references in the Prime Lease to "Landlord", "Tenant", "Lease" and "Premises", respectively, shall be deemed to refer to Sublessor, Sublessee, this Sublease and the Premises subleased hereunder, respectively, EXCEPT THAT all references in the following sections and/or provisions of the Prime Lease are expressly EXCLUDED from this Sublease (i.e., they shall NOT be deemed to be incorporated in this Sublease) to the extent described below, either because they are inapplicable or because they are superseded by specific provisions hereof: 9/15/95 (a) Section 1 (Definitions and Exhibits) (b) Section 3 (Term of Lease, Landlord's Construction) (c) Section 4 (Minimum Annual Rent; Security Deposit) (d) Section 5 [EXCEPT THAT the provisions of Section 5 shall be deemed applicable to this Sublease solely for the purposes of calculating the amount of Taxes payable by Sublessee under Section 6.1 of this Sublease using Fiscal Year 1995 as the base year] (e) Section 6 [EXCEPT THAT the provisions of Section 6 shall be deemed applicable to this Sublease solely for the purposes of calculating the amount of Additional Charges payable by Sublessee under Section 6.2 of this Sublease using Calendar Year 1994 as the base year] (f) Section 21 (Notice of Lease) (g) Section 23 (Brokerage) (h) Section 30 (Sign for Building) (i) Section 32 (Extension Options) (j) Section 33 (Allowances) (k) Section 34 (Additional Improvements) 2.2.3 This Sublease shall be subject and subordinate to the Prime Lease and to the matters to which the Prime Lease is or shall be subject or subordinate, and that in the event of termination of the Prime Lease or reentry or dispossession of Sublessor by Prime Lessor under the Prime Lease, Prime Lessor may, at its option, take over all of the right, title and interest of Sublessor, as sublessor under this Sublease, and Sublessee shall, at Prime Lessor's option, attorn to Prime Lessor pursuant to the then executory provisions of this Sublease, except that neither Prime Lessor nor any mortgagee of the Premises, as holder of a mortgage or as Prime Lessor under the Prime Lease (if such mortgagee succeeds to that position), shall (a) be liable for any act or omission of Sublessor under such Sublease, (b) be subject to any credit, counterclaim, offset or defense which theretofore accrued to Sublessee against Sublessor, or (c) be bound by any previous modification of such Sublease or by any previous prepayment of more than one (1) month's rent, (d) be bound by any covenant of Sublessor to undertake or complete any construction of the Premises or any portion thereof, (e) be required to account for any security deposit of Sublessee other than any security deposit actually delivered to Prime Lessor by Sublessor, (f) be bound by any obligation to make any payment to such Sublessee or to grant any credits, (g) be responsible for any monies owing by Sublessor to the credit of Sublessee, or (h) be required to remove any person occupying the Premises or any part thereof; and Sublessee shall, at the request of Prime Lessor, execute a suitable instrument in confirmation of such agreement to attorn. 2.2.4 Sublessee shall neither do, nor permit to be done, anything that would increase Sublessor's obligations to Prime Lessor under the Prime Lease (unless Sublessee shall indemnify Sublessor from such increased obligation) or that would cause the Prime Lease to be terminated or forfeited. 2.2.5 Sublessor shall copy Sublessee, its designees, successors and assigns on any notice of default, termination or any occurrence otherwise affecting the existence or validity of the Sublease, given by Sublessor or Prime Lessor to the other. Sublessor covenants that upon Sublessee's payment of the rent and additional rent and observance and performance of all the terms, covenants 9/15/95 and conditions of this Sublease on its part to be observed and performed, Sublessee may, at all times during the term hereof, peaceably and quietly enjoy the Subleased Premises, subject, nevertheless, to the terms and conditions of the Prime Lease and this Sublease. Sublessor further covenants that it will perform and observe all of the terms, covenants and conditions of the Prime Lease on its part to be observed and performed and which are not to be observed and performed by Sublessee under this Sublease. Sublessor agrees to pay all rents and not terminate or modify the Prime Lease or take any action which would diminish Sublessee's rights or increase Sublessee's obligations under this Sublease during the Sublease Term(s). 2.3 APPURTENANT RIGHTS/SIGNAGE 2.3.1 Sublessee shall have, as appurtenant to the Premises, the rights to use in common with others entitled thereto, the Common Property as defined in Section 2 of the Prime Lease which definition includes: (a) the common facilities in or serving the Building including common area rest rooms, common walkways, driveways, ramps, loading dock(s) and stairways; (b) Parking Spaces; and (c) any other common areas which may be added or deleted from time to time. 2.3.2 Sublessor agrees to waive any requirements set forth in Section 30 of the Prime Lease and to obtain waivers and consents from all necessary parties in order to allow Sublessee to place Sublessee's identification sign on the northwest side of the exterior building on or after October 23, 1995. Sublessor shall be responsible for the cost of removing the existing "Interleaf" sign. 2.3.3 Sublessee's identification sign shall be subject to Prime Lessor's approval as to design, shall identify "Parametric Technology" as a tenant in the Building, shall have lettering of no greater height, width or spacing than, and the same type and intensity of lighting as, the existing sign of the Sublessor, and shall be subject to all applicable federal, state and municipal laws and regulations. Sublessee shall be responsible for all costs and expenses associated with the erection and maintenance of Sublessee's sign. 2.3.4 In the event that Sublessor sublets additional space to Sublessee during the term of this Sublease which when taken in the aggregate would be greater than 75% of the space currently rented by Prime Lessor to Sublessor, Sublessor shall grant to Sublessee its right to signage on the North side of the Building all as set forth in Section 2.3.2 and in accordance with Section 2.3.3 above. 2.4 CONDITION OF PREMISES 2.4.1 Sublessor hereby represents and warrants that the Premises is in full compliance to the best of its knowledge with all local, municipal, state, federal or other governmental agencies and National Board of Fire Underwriters rules, ordinances, regulations and laws. Sublessor makes no other representation or warranty with respect to the Premises. Sublessor agrees to assign to Sublessee any applicable warranty given to Sublessor by any third party in connection with all Tenant's Work. 9/15/95 2.4.2 Sublessee is satisfied with the present condition of the Premises and accepts the Premises "as is" as of the date hereof and without obligation of any kind on Sublessor to make any repairs or improvements thereto EXCEPT FOR Sublessor's limited representation in Section 2.4.1 above. 2.5 HAZARDOUS MATERIALS Sublessor shall indemnify, defend and hold harmless Sublessee, its officers, directors, partners, trustees, employees and shareholders from and against any damage, loss, expense (including, without limitation, reasonable attorneys' fees and other costs and expenses incident to any suit, action, complaint, audit, investigation or proceeding) arising out of or resulting from any breach of Section 9(F) by Sublessor of the Prime Lease. ARTICLE III TERM OF SUBLEASE 3.1 TERM The Term of this Sublease shall be for the periods specified in Section 1.1 as the Sublease Term(s), unless earlier terminated as provided below. The Sublease Term(s) shall commence on the Access Commencement Dates set forth in Section 1.1 hereof. ARTICLE IV USE; COMPLIANCE WITH LAW; DAMAGE; NUISANCE; ASSIGNMENT AND SUBLETTING 4.1 PERMITTED USE Sublessee agrees that the Premises shall be used and occupied for the permitted uses specified in Section 1.1 only. Sublessee shall, at its expense, obtain any and all licenses and permits necessary for its use of the Premises. 4.2 COMPLIANCE WITH LAW Sublessee shall comply with all present and future laws, regulations, permits, orders and conditions of any special permits or other governmental approvals (collectively, "laws") applicable to Sublessee or Sublessee's particular use or manner of use of the Premises from time to time. Sublessee shall procure all appropriate approvals, licenses and permits applicable to Sublessee or Sublessee's particular use or manner of use of the Premises, in each case promptly giving Sublessor and Prime Lessor true and complete copies of the same and all applications therefor. Sublessee shall also keep the Premises equipped with appropriate safety appliances and comply with all requirements of insurance inspection or rating bureaus. Compliance with a law may be deferred so long as Sublessee is diligently contesting the validity or applicability of such law in good faith and 9/15/95 based on counsel's written advice that such contest is more likely than not to succeed and so long as non-compliance will not result in a lien, charge or liability against Sublessor or Prime Lessor or their respective interests or cause a default by Sublessor under the Prime Lease. 4.3 ASSIGNMENT AND SUBLETTING Neither Sublessee nor any other person having an interest in the possession, use, occupancy or utilization of space in the Premises will enter into any lease, sublease, license, concession or other agreement for use, occupancy or utilization of space in the Premises which provides for rental or other payment for such use, occupancy or utilization based in whole or in part on the net income or profits derived by any person from the portion of the Premises subleased, used, occupied or utilized (other than an amount based on a fixed percentage or percentages of receipts or sales). ARTICLE V RENT AND OTHER CHARGES 5.1 RENT Sublessee shall pay rent ("Rent") to Sublessor on the Rent Commencement Dates and thereafter monthly, in advance, on the first day of each calendar month during the term hereof, in a sum equal to one-twelfth (1/12th) of the Annual Fixed Rent specified in Section 1.1. Sublessee shall pay Rent on a pro- rata basis for any partial calendar month during the Sublease Term(s). All payments of Rent are to be made to Sublessor at Sublessor's mailing address specified in Section 1.1 or at such other places as Sublessor may from time to time designate in writing in accordance with the notice provisions hereof. All Rent due under this Sublease shall be made without demand, offset or deduction. ARTICLE VI REAL ESTATE TAXES AND OPERATING COSTS 6.1 SUBLESSEE'S SHARE OF TAXES Pursuant to Section 5 of the Prime Lease, Sublessor is obligated to pay to Prime Lessor "Tax Excess" (as defined therein) based on Tenant's Tax Base Year Amount, which is the amount of aggregate Taxes (as therein defined) for Fiscal Year 1992 and based on Tenant's Tax Percentage (as defined therein) ("Sublessor's Taxes"). "Sublessee's Taxes" shall be calculated in the same manner as Sublessor's Taxes in accordance with Section 5 of the Prime Lease, substituting aggregate Taxes for Fiscal Year 1995 as Sublessee's Tax Base Year Amount and calculating Sublessee's Tax Percentage on the Rentable Square Feet of the Premises then leased by Sublessee from Sublessor as of the first day of the applicable tax year. 9/15/95 Sublessee shall pay to Sublessor in monthly installments, within 15 days of a written invoice therefor, one-twelfth (1/12) of Sublessee's Taxes. Such written invoice shall be accompanied by the copy of the tax bill(s) and statement(s) which are provided by Prime Lessor under Section 5(B)(1) of the Prime Lease to the Sublessor. If the total of such monthly remittances is greater than the Sublessee's Taxes for the next succeeding Fiscal Tax Year, Sublessee may credit the excess against the next installment of Sublessee's Taxes due to Sublessor under this Sublease, and if the total of such remittances is less than the Sublessee's Taxes for the next succeeding Fiscal Tax Year, Sublessee shall pay the difference to Sublessor at the Time of payment by Sublessee of its next monthly installment of Sublessee's Taxes. Sublessor and Sublessee further agree that any such amount of the Taxes which relate to any period, part of which does not fall within the term of this Sublease, shall be prorated between Sublessor and Sublessee so that Sublessee shall be responsible for only that portion of the Taxes that is ratably allocable to the part of such period that falls within the term of this Sublease. Upon or after default by Sublessor under the Prime Lease not cured within applicable cure periods, if any payments made by Sublessee on account of Sublessee's Taxes directly to Prime Lessor shall be deemed to have been paid to or for the benefit of Sublessor hereunder. Simultaneously with its direct payment on account of Taxes to Prime Lessor, Sublessee shall provide Sublessor with a copy of such payments. 6.2 SUBLESSEE'S SHARE OF OPERATING EXPENSES Pursuant to Section 6 of the Prime Lease, Sublessor is obligated to pay to Prime Lessor, Operating Cost Excess (as defined therein) based on the aggregate Operating Costs for Calendar Year 1991 as the Operating Cost Base Year Amount and based on Tenant's Operating Cost Percentage (as defined therein) ("Sublessor's Operating Costs"). "Sublessee's Operating Costs" shall be calculated in the same manner as Sublessor's Operating Costs, in accordance with Section 6 of the Prime Lease, substituting aggregate Operating Costs for Calendar Year 1994 as the Sublessee's Operating Cost Base Year Amount and calculating Sublessee's Operating Cost Percentage based on the Rentable Square Feet of the Premises then leased by Sublessee from Sublessor as of the first day of each applicable Operating Cost Year. Sublessee shall pay to Sublessor, in monthly installments, on or before the first day of each calendar month, in the same manner the payments of Annual Fixed Rent are to be made, one-twelfth (1/12) of the Sublessee's Operating Costs. At the end of each calendar year, if the total of monthly remittances by Sublessee is greater than the actual Sublessee's Operating Costs for such calendar year, Sublessee may credit any excess against the next installment due to the Sublessor, and if the total of monthly remittances by Sublessee is less than the actual Operating Costs for such year, then Sublessee shall pay the difference to Sublessor at the time the next monthly installment of Sublessee's Operating Costs is due hereunder. Sublessor and Sublessee further agree that any such amount or account of Sublessee's Operating Costs which relates to a period, part of which does not fall within the term of this Sublease, shall be prorated between Sublessor and Sublessee so that Sublessee shall be responsible 9/15/95 for only that portion of Operating Costs that is ratably allocable to the part of such period that falls within the term of this Sublease. Upon or after default by the Sublessor under the Prime Lease, not cured within applicable cure periods, if any, any payments made by Sublessee on account of Sublessee's Operating Costs so paid directly to Prime Lessor shall be deemed to have been paid to or for the benefit of Sublessor hereunder. Simultaneously with its direct payment on account of Sublessee's Operating Costs, Sublessee shall provide Sublessor with a copy of such payment. 6.3 UTILITY COSTS Sublessee shall be responsible for paying for all electricity and all other utilities that are separately metered or submetered for the Premises; such utility payments shall be made directly by Sublessee to the Sublessor. Sublessor shall have the same rights and remedies for the nonpayment by Sublessee of such utility costs that Sublessor has under this Sublease for failure of Sublessee to pay Rent. 6.4 RIGHT TO NOTICE; RIGHT TO AUDIT 6.4.1 Sublessor agrees to provide to Sublessee copies of all notices, statements of account or invoices with respect to Taxes and/or Operating Costs. 6.4.2 In the event that Sublessor does not exercise its right to review and/or audit Operating Costs as set forth in the Prime Lease, Sublessee shall have the right to request that Sublessor, at Sublessee's reasonable cost and expense, review and/or audit such Operating Costs in the name of the Sublessor. ARTICLE VII SUBLESSOR'S SYSTEMS 7.1 SUBLESSOR'S SYSTEMS Sublessee acknowledges and affirms that certain systems exist within the Premises that are necessary for the continued operation of the Sublessor's business. Such systems include, without limitation, voice and data communication wiring connecting the third floor and the first floor and water filtration equipment located on the sixth floor in the building management janitorial closet as indicated on the attached Exhibit E (hereinafter "Systems"). Sublessee agrees to use its best efforts not to modify or disturb the Systems and to notify Sublessor in writing 24 hours in advance of any work to be performed in the area of the Systems. Sublessee further agrees to allow Sublessor reasonable access from time to time as set forth above to monitor and maintain the Systems. In the event that Sublessee were to be responsible 9/15/95 for any damage to the Systems due to its, its agents', its employees', or its contractor's negligence, Sublessee shall repair the same at its reasonable cost and expense. ARTICLE VIII INDEMNITY AND INSURANCE 8.1 INDEMNITY 8.1.1 Sublessee shall be solely responsible for and has the risk of loss of or damage to any property owned by Sublessee, its employees and any subcontractor it uses in the Leased Premises. 8.1.2 Except as otherwise provided herein, each party shall defend, indemnify and hold harmless the other party, its employees, agents, subcontractors and co- ventures, against any direct loss, damage, claim, suit, liability, judgment and expense (including reasonable attorney's fees and other costs of litigation) resulting from negligence of such party arising out of or in connection with the implementation of the Sublease, including but not limited to injury, or death of any persons or damage to or loss of any property. Each party shall give the other party prompt notice of each claim or suit which is or may be within this indemnity. Each party shall have the right to defend any such claim or suit. Each party shall extend reasonable co-operation to the other party at the other party's cost in the defense of any such claim or suit. Neither party shall settle such claim or suit without the prior consent of the other party, which consent shall not be unreasonably withheld. 8.1.3 Neither party shall be liable to the other party for any loss or damage incurred by the other party's employees and/or agents in connection with the implementation of the Sublease, unless and to the extent that such loss or damage was caused by the willful misconduct or gross negligence of the other party. For the purpose of this Article ``willful misconduct or gross negligence'' means an act or omission not justifiable by any special circumstances and done with the intent to cause the loss or damage, or recklessly and with the knowledge that the loss or damage would probably result. 8.1.4 Notwithstanding anything to the contrary contained in this Sublease, neither party shall be liable to the other party for any loss of production or profit or any other indirect, consequential, special, or incidental damages. A certificate of such insurance will be provided to Sublessor upon Sublessor's request. 8.2 SUBLESSEE'S LIABILITY INSURANCE Sublessee agrees to maintain in full force and effect from the date upon which Sublessee first enters the Premises for any reason, until the date Sublessee surrenders occupancy of the entire Premises, a policy of comprehensive general public liability and property damage insurance under which Prime Lessor, Sublessor (and such other persons as are in privity of estate with Prime Lessor and Sublessor as may be set out in a notice to Sublessee from time to time), 9/15/95 and Sublessee are named as insureds, and under which the insurer agrees to indemnify and hold Prime Lessor, Sublessor, and those in privity of estate with Prime Lessor and Sublessor, harmless from and against all direct cost, expense and/or liability arising out of or based upon any and all claims, accidents, injuries and damages occurring in or about the Premises in the broadest form of such coverage from time to time available in Massachusetts. Each such policy shall be non-cancelable and shall not be amended or changed with respect to Prime Lessor, Sublessor, and their designees without ten (10) days' prior written notice to said parties. The minimum amounts of liability of such liability insurance shall be not less than a combined single limit of five million dollars ($5,000,000) per occurrence and which, from time to time hereafter, shall be no less than such higher amounts, if procurable, as may be reasonably required by Prime Lessor under Section 9(H) of the Prime Lease. 8.3 INSURANCE POLICIES All required insurance policies shall be obtained from responsible companies qualified to do business in Massachusetts and in good standing therein and shall be in a form and from a company reasonably satisfactory to Sublessor and Prime Lessor. Sublessee shall furnish to Sublessor, and Prime Lessor, prior to the commencement of the Sublease Term(s) and at least ten (10) days prior to the expiration of each policy, all policies of insurance or renewal policies or certificates of insurance, as may be required hereunder. ARTICLE IX DEFAULT 9.1 "EVENT OF DEFAULT" DEFINED Any one or more of the following events shall constitute an "Event of Default" by Sublessee: (a) Failure to pay Rent or other charges when due within 10 days after receipt of written notice thereof. (b) Failure by Sublessee to cure, upon the delivery by Sublessor of a default notice, any non-monetary default hereunder or under the Prime Lease, within 30 days of the date of the default notice. 9.2 REMEDIES Upon the occurrence and continuance of an Event of Default, Sublessor, upon notice to Sublessee, may do any one or more of the following: (a) Sublessor may exercise any of the Prime Lessor's rights under Section 13 of the Prime Lease. 9/15/95 (b) Sublessor may exercise any other legal or equitable right or remedy which it may have, including, without limitation, the rights and remedies set forth in Sections 14(A).of the Prime Lease. ARTICLE X MISCELLANEOUS PROVISIONS 10.1 WAIVER Failure on the part of either party to complain of any action or non-action on the part of the other, no matter how long the same may continue, shall never be deemed to be a waiver by such party of any of its rights hereunder. Further, it is agreed that no waiver of any of the provisions hereof by either party shall be construed as a waiver of any of the other provisions hereof and that a waiver at any time of any of the provisions hereof shall not be construed as a waiver at any subsequent time of the same provisions. The consent to or approval of any action by either party requiring such consent or approval shall not be deemed to waive or render unnecessary such consent to or approval of any subsequent similar act by such party. 10.2 YIELD UP In the event the Sublessee elects not to exercise its rights under an Agreement with the Prime Lessor of even date at the termination of the Sublease Terms, Sublessee and all persons claiming through Sublessee shall without the necessity of notice, surrender the Premises and all keys (or lock combinations) to the Premises; and shall remove all trade fixtures and personal property whether or not bolted or otherwise attached, and all of Sublessee's signs wherever located. Any property not so removed shall be deemed abandoned, shall at once become the property of Sublessor (or Prime Lessor, as the case may be) and may be disposed of in such manner as Sublessor (or Prime Lessor, as the case may be) shall see fit upon five days notice to Sublessee (which notice may be given in accordance with the terms of this Sublease and Sublessee agrees that notice so given, notwithstanding that the Term of this Sublease has terminated and/or that Sublessee has abandoned or vacated the Premises, shall satisfy such notice requirements); and Sublessee shall pay the cost of such removal and disposal to Sublessor (or Prime Lessor, as the case may be) upon demand. 10.3 INVALIDITY OF PARTICULAR PROVISIONS If any term or provision of this Sublease, or the application thereof to any person or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of this Sublease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Sublease shall be valid and be enforced to the fullest extent permitted by law. 9/15/95 10.4 REAL ESTATE ADVISOR Sublessee represents and warrants that it has not directly or indirectly dealt, with respect to the Premises with any real estate advisor other than McCall & Almy and Meredith & Grew (the "Advisors"), whose fees shall be paid by Sublessor. Sublessee shall save harmless and indemnify Sublessor against any claims by anyone other than the Advisors with whom it has so dealt or by whom its attention was called to the Premises for a commission or fee arising out of the execution and delivery of this Sublease or out of negotiations between Sublessor and Sublessee with respect to the Premises. 10.5 WHEN SUBLEASE BECOMES BINDING Employees or agents of Sublessor have no authority to make or agree to make a lease or any other agreement or undertaking in connection herewith. The submission of this document for examination and negotiation does not constitute an offer to lease, or a reservation of, or option for, the Premises, and this document shall become effective and binding only upon the execution and delivery hereof by both Sublessor and Sublessee. 10.6 PROVISIONS BINDING, ETC. Except as herein otherwise expressly provided, the terms hereof shall be binding upon and shall inure to the benefit of the heirs, legal representatives, successors and assigns, respectively, of Sublessor and Sublessee. Each term and each provision of this Sublease to be performed by Sublessee shall be construed to be both a covenant and a condition. The reference contained to the successors and assigns of Sublessee is not intended to constitute a consent to assignment by Sublessee, but has reference only to those instances in which Sublessor shall have given its consent to a particular assignment if such consent is required by the provisions of this Sublease. The persons executing this Sublease on behalf of each party warrant that each party is duly organized under the laws of The Commonwealth of Massachusetts and such persons are authorized to execute and deliver this Sublease on behalf of the Sublessor and the Sublessee respectfully. 10.7 NO RECORDING Sublessee agrees not to record this Sublease, but the parties agree to execute and deliver a non-recordable instrument in form and substance reasonably satisfactory to both parties and any lenders or financial institutions extending credit to either party. 10.8 NOTICES Whenever by the terms of this Sublease notice, demand or other communication shall or may be given, either to Sublessor or to Sublessee, the same shall be adequately given if in writing and delivered by hand or sent by registered or certified mail, postage prepaid or by a nationally recognized overnight courier. All such notices shall be deemed delivered upon the earlier to occur of (a) the date when actually received or refused by the other party; (b) the third business 9/15/95 day after deposit in the United States mail; (c) the next business day after delivery to a recognized overnight delivery service; If intended for Sublessor, addressed to it at the mailing address set forth on the first page of this Sublease (or to such other address or addresses as may from time to time hereafter be designated by Sublessor by like notice). If intended for Sublessee, addressed to: Parametric Technology Corporation 128 Technology Drive Waltham, Massachusetts 02154 Att: Rosemary Spurway with a copy to: Parametric Technology Corporation 128 Technology Drive Waltham, Massachusetts 02154 Att: Martha L. Durcan, Corporate Counsel If intended for the Prime Lessor, addressed to: Prospect Hill Executive Office Park c/o The Nelson Companies 100 Fifth Avenue Waltham, MA 02154 Att: Douglas G. Waybright with a copy to: Emily A. Maitin, Esq. c/o The Nelson Companies, Ltd. 100 Fifth Avenue Waltham, MA 02154 (or to such other address or addresses as may from time to time hereafter be designated by Sublessee or Prime Lessor by like notice). 10.9 PARAGRAPH HEADINGS The paragraph headings throughout this instrument are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this Sublease. 9/15/95 10.10 INTEGRATION; AMENDMENT This Sublease together with all the Exhibits attached hereto supercedes all other agreements or memoranda written or oral between the parties and cannot be modified or altered except by written agreement signed by both Sublessor and Sublessee. 10.11 RIGHT OF FIRST OFFER 10.11.1 Sublessor assigns to Sublessee all of its right, title, and interest, to Sublessor's rights under Section 31 of the Prime Lease. 10.11.2 Sublessor additionally agrees to offer first to Sublessee any and all space in the Building currently occupied by Sublessor on the following terms: (a) the first (1st) floor Sublessor space at a rental rate equal to 85% of the market rate (such market rate to be equal to the market rate of the other space offered pursuant to the option set forth in this Subsection on the terms and conditions set forth in this Sublease) prior to offering any such space to anyone and (b) at 95% of the market rate on an "as-is" basis for all other space. For the purposes of this Sublease, "market rate" shall mean the prevailing rents for comparable rental property in the Route 128 area in effect as of the commencement of the proposed term, including, without limitation, consideration of the then current allowances for tenant improvements and other concessions granted by landlords, as determined by Sublessor. The termination date for any space taken pursuant to this Subsection shall be co-terminus with Sublessee's Sublease term. If Sublessor and Sublessee cannot agree upon the market rate, then the determination as to market rate shall, upon election of either the Sublessor or the Sublessee, be submitted to arbitration, as follows: market rate shall be determined by impartial arbitrators, one to be chosen by the Sublessor, one to be chosen by Sublessee and one to be selected if necessary, as below provided. The unanimous written decision of the two first chosen (without the selection and participation of the third arbitrator) or otherwise the average of the amount determined by each of the three arbitrators chosen and selected as aforesaid, shall be conclusive and binding upon Sublessor and Sublessee. Sublessor and Sublessee shall each notify the other of its chosen arbitrator within ten (10) days following the call for arbitration and, unless such two arbitrators shall have reached a unanimous decision within thirty days after their designation, they shall so notify the Boston Office of the American Arbitration Association and request an impartial third arbitrator (who shall be an impartial real estate appraiser dealing with commercial properties) to determine the market rate applicable to the option space. Such third arbitrator and the first two chosen arbitrators shall render their decision within thirty days of the appointment of the third arbitrator. The decision of the panel shall be final and binding as to market rate. Sublessor and Sublessee shall divide equally all expenses of the arbitrators and arbitration. If the market rate has not been established before the commencement of Sublessee's obligation to pay rent based upon such market rate, Sublessee shall pay rent under the lease based upon the market rate designated by Sublessor, less ten percent (10%), until either (1) agreement of the parties as to the market rate or (2) decision of the arbitrators, as the case may be, at which time 9/15/95 Sublessee shall pay any underpayment of rent to Sublessor, or Sublessor shall refund any overpayment of rent to Sublessee. Sublessee shall have a period of ten (10) business days from the receipt of such written notice of offer to exercise said right by providing written notice to Sublessor of its exercise. In the event Sublessee does not exercise such right, Sublessee's right of first offer as to other space shall not be affected. Should Sublessee elect to exercise any right to additional space the parties will enter into an amendment to this Sublease within 60 days after such election. REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK 9/15/95 EXECUTED in any number of counterpart copies, each of which counterpart copies shall be an original for all purposes, as of the day and year first above written. Sublessor: Interleaf, Inc. By /s/ G. Gordon Mc Lange ------------------------------ Name: G. Gordon Mc Lange Title: Ex. V.P., C.F.O. Sublessee: Parametric Technology Corporation By /s/ C. Richard Harrison ------------------------------ Name: C. Richard Harrison Title: President and Chief Operating Officer EX-23.B 5 EXHIBIT 23(B) EXHIBIT 23(b) CONSENT OF INDEPENDENT AUDITORS We consent to the reference of our firm under the caption "Experts" in the Registration Statement (Form S-2) and related Prospectus of Interleaf, Inc. for the registration of 275,000 shares of its common stock and to the incorporation by reference therein of our report dated May 11, 1995, with respect to the consolidated financial statements and schedule of Interleaf, Inc., included in its Annual Report (Form 10-K) for the year ended March 31, 1995, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP Boston, Massachusetts October 27, 1995 -----END PRIVACY-ENHANCED MESSAGE-----