|
|
|
Legal Resources
Business Contracts
MCLE Courses
Projects
Friends
|
LEASE
88 Sidney Street
Cambridge, Massachusetts
LANDLORD
================================================================================
FC 88 SIDNEY, INC.
TENANT
================================================================================
ALKERMES, INC.
Dated: October 26, 2000
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE 1
RECITALS AND DEFINITIONS......................................................1
Section 1.1 Recitals.....................................................1
Section 1.2 Definitions..................................................1
ARTICLE 2
PREMISES AND TERM.............................................................3
Section 2.1 Premises.....................................................3
Section 2.2 Appurtenant Rights...........................................3
Section 2.3 Landlord's Reservations......................................4
Section 2.4 Parking Passes...............................................5
Section 2.5 Commencement Date; Scheduled Rent Commencement Date; Rent
Commencement Date............................................5
Section 2.6 Extension Options............................................6
Section 2.7 Termination Rights for Failure of Conditions.................8
ARTICLE 3
RENT AND OTHER PAYMENTS......................................................10
Section 3.1 Annual Fixed Rent...........................................10
Section 3.2 Real Estate Taxes...........................................10
Section 3.3 Operating Expenses..........................................12
Section 3.4 Utility Charges.............................................15
Section 3.5 Above-standard Services.....................................15
Section 3.6 No Offsets..................................................16
ARTICLE 4
ALTERATIONS..................................................................16
Section 4.1 Consent Required for Tenant's Alterations...................16
Section 4.2 Ownership of Alterations....................................17
Section 4.3 Construction Requirements for Alterations...................18
Section 4.4 Payment for Tenant Alterations..............................19
ARTICLE 5
RESPONSIBILITY FOR CONDITION OF BUILDING AND PREMISES........................19
Section 5.1 Maintenance of Building and Common Areas by Landlord........19
Section 5.2 Maintenance of Premises by Tenant...........................20
Section 5.3 Tenant-Provided Services....................................20
Section 5.4 Delays in Landlord's Services...............................20
Section 5.5 Tenant's Responsibilities Regarding Hazardous Materials.....21
Section 5.6 Landlord's Responsibilities Regarding Hazardous Materials...22
(i)
<PAGE> 3
Page
----
Section 5.7 Cross Indemnification.......................................22
ARTICLE 6
TENANT COVENANTS.............................................................23
Section 6.1 Permitted Uses..............................................23
Section 6.2 Laws and Regulations........................................23
Section 6.3 Rules and Regulations; Signs................................23
Section 6.4 Safety Compliance...........................................24
Section 6.5 Landlord's Entry............................................24
Section 6.6 Floor Load..................................................24
Section 6.7 Personal Property Tax.......................................24
Section 6.8 Assignment and Subleases....................................25
ARTICLE 7
INDEMNITY AND INSURANCE......................................................28
Section 7.1 Indemnity...................................................28
Section 7.2 Liability Insurance.........................................28
Section 7.3 Personal Property at Risk...................................29
Section 7.4 Landlord's Insurance........................................29
Section 7.5 Waiver of Subrogation.......................................29
Section 7.6 Policy Requirements.........................................30
ARTICLE 8
CASUALTY AND EMINENT DOMAIN..................................................30
Section 8.1 Restoration Following Casualties............................30
Section 8.2 Landlord's Termination Election.............................31
Section 8.3 Tenant's Termination Elections..............................31
Section 8.4 Casualty at Expiration of Lease.............................32
Section 8.5 Eminent Domain..............................................32
Section 8.6 Rent After Casualty or Taking...............................32
Section 8.7 Temporary Taking............................................32
Section 8.8 Taking Award................................................33
Section 8.9 Casualty or Eminent Domain Affecting Parking Privileges.....33
ARTICLE 9
DEFAULT......................................................................34
Section 9.1 Tenant's Default............................................34
Section 9.2 Damages.....................................................35
Section 9.3 Cumulative Rights...........................................36
Section 9.4 Landlord's Self-help........................................36
Section 9.5 Enforcement Expenses; Litigation............................36
Section 9.6 Late Charges; Interest on Overdue Payments..................37
Section 9.7 Landlord's Right to Notice and Cure; Tenant's Self-Help
Rights......................................................37
(ii)
<PAGE> 4
ARTICLE 10
MORTGAGEES' AND GROUND LESSORS' RIGHTS.......................................38
Section 10.1 Subordination...............................................38
Section 10.2 Prepayment of Rent not to Bind Mortgagee or Ground Lessor...38
Section 10.3 Tenant's Duty to Notify Mortgagee and Ground Lessor;
Mortgagee's and Ground Lessor's Ability to Cure.............38
Section 10.4 Estoppel Certificates.......................................38
Section 10.5 Subordination, Nondisturbance and Attornment Agreements.....40
ARTICLE 11
SECURITY DEPOSIT.............................................................40
ARTICLE 12
MISCELLANEOUS................................................................42
Section 12.1 Notice of Lease.............................................42
Section 12.2 Notices.....................................................42
Section 12.3 Successors and Limitation on Liability......................43
Section 12.4 Waivers.....................................................43
Section 12.5 Acceptance of Partial Payments of Rent......................43
Section 12.6 Interpretation and Partial Invalidity.......................43
Section 12.7 Quiet Enjoyment.............................................44
Section 12.8 Brokerage...................................................44
Section 12.9 Surrender of Premises and Holding Over......................44
Section 12.10 Ground Lease................................................45
Section 12.11 Financial Reporting.........................................45
Section 12.12 Cambridge Employment Plan...................................45
Section 12.13 Truck Delivery Routes; Traffic Mitigation Measures..........46
Section 12.14 Parking and Transportation Demand Management................46
Section 12.15 Laboratory Animals..........................................46
Section 12.16 No Consequential Damages....................................46
Section 12.17 Governing Law...............................................46
EXHIBIT A - Basic Lease Terms
EXHIBIT B - Legal Description
EXHIBIT B-1 - Depiction of Premises
EXHIBIT B-2 - Map of University Park
EXHIBIT C - Work Letter
EXHIBIT D - Standard Services
EXHIBIT E - Rules and Regulations
EXHIBIT F - Measurement Method
EXHIBIT G - Form of MIT Non-Disturbance Agreement
EXHIBIT H - Intentionally Omitted
(iii)
<PAGE> 5
EXHIBIT I - Expedited Dispute Resolution Procedure
EXHIBIT J - Tenant Removable Equipment
(iv)
<PAGE> 6
LEASE
ARTICLE 1
RECITALS AND DEFINITIONS
Section 1.1 RECITALS. This Lease (this "Lease") is entered into this 26th
day of October, 2000 by and between FC 88 Sidney, Inc. (the "Landlord"), a
Massachusetts corporation, and Alkermes, Inc. (the "Tenant"), a Pennsylvania
corporation.
In consideration of the mutual covenants herein set forth, the Landlord and
the Tenant do hereby agree to the terms and conditions set forth in this Lease.
Section 1.2 DEFINITIONS. The following terms shall have the meanings
indicated or referred to below:
"Additional Rent" means all charges payable by the Tenant pursuant to this
Lease other than Annual Fixed Rent, including without implied limitation the
Tenant's parking charges as provided in Section 2.4; the Tenant's Tax Expense
Allocable to the Premises as provided in Section 3.2; the Tenant's Operating
Expenses Allocable to the Premises in accordance with Section 3.3; amounts
payable to Landlord for separately submetered utilities and services pursuant to
Section 3.4; amounts payable for special services pursuant to Section 3.5; costs
for alterations or additions to the Premises exceeding the Tenant's Allowance
(as described in the Work Letter); and the Landlord's share of any sublease or
assignment proceeds pursuant to Section 6.8.
"Annual Fixed Rent" - See EXHIBIT A, and Section 3.1.
"Base Building Improvements" - See the Work Letter.
"Building" means the building to be constructed in accordance with the Work
Letter and located at 88 Sidney Street, Cambridge, Massachusetts.
"Commencement Date" - See Section 2.5.
"Common Areas" - see Section 2.2.
"Declaration of Covenants" means that certain Declaration of Covenants
dated as of December 15, 1997 made by Massachusetts Institute of Technology, as
declarant, recorded on March 12, 1998 in the Middlesex South Registry of Deeds
as Instrument No. 1065 and filed on March 12, 1998 in the Middlesex South
Registry District of the Land Court as Document No. 1058425.
<PAGE> 7
"Default Interest Rate" - see Section 9.6.
"Estimated Rent Commencement Date" - See EXHIBIT A.
"Expedited Dispute Resolution Procedure" means the dispute resolution
procedure described in EXHIBIT I.
"Extension Term" - See Section 2.6.
"Excusable Delay" - See the Work Letter.
"External Causes" means, when referring to a party's responsibilities under
this Lease, collectively Acts of God, war, civil commotion, fire, flood or other
casualty, strikes or other extraordinary labor difficulties or shortages of
labor or materials or equipment in the ordinary course of trade, extraordinary
weather conditions, government order or regulations or other cause not
reasonably within the control of such party, and not due to the fault or neglect
of such party. In no event shall financial inability be deemed to be an External
Cause.
"Garage" - See EXHIBIT A.
"Initial Leasehold Improvements" means the initial alterations and
additions which Tenant is undertaking pursuant to the Work Letter.
"Initial Term" - See EXHIBIT A.
"Land" means the parcel of land situated in Cambridge, Massachusetts,
described in EXHIBIT B.
"Landlord's Original Address" - See EXHIBIT A.
"Landlord's Work" means the Landlord's construction of the Base Building
Improvements in accordance with the Work Letter.
"Lease Year" means each period of one year during the Term commencing on
the Rent Commencement Date or on any anniversary thereof.
"Market Rate Parking Charge" means the monthly parking rate for structured
parking facilities charged from time to time by owners of parking facilities of
similar age and quality, providing similar convenience and proximity to the work
environment, and similar services and amenities, in the geographical area in
which the Garage is located. As of the date hereof, parking facilities most
similar to the Garage are the parking facilities of Cambridge Center, Technology
Square and One Kendall Square.
"Parking Passes" - See EXHIBIT A.
2
<PAGE> 8
"Permitted Uses" - See EXHIBIT A.
"Premises" means the entire rentable area of the Building. See EXHIBIT A
and Sections 2.1 and 2.3.
"Property" means the Land and the Building.
"Removable Alterations" - See Section 4.2.
"Rent Commencement Date" - See Section 2.5.
"Rules and Regulations" - See Section 6.3.
"Substantial Completion" - See the Work Letter.
"Tenant's Original Address" - See EXHIBIT A.
"Term" means the Initial Term together with any Extension Term for which an
extension option is timely exercised by the Tenant under Section 2.6.
"Termination Date" - See EXHIBIT A.
"University Park" means the area in Cambridge, Massachusetts, bounded on
the North side by Massachusetts Avenue, Green and Blanche Streets, on the East
side by Landsdowne, Cross and Purrington Streets, on the South side by Pacific
Street and on the West side by Brookline Street, as shown on EXHIBIT B-2.
"Work Letter" means the letter agreement of even date herewith between the
Landlord and Tenant relating to the construction of the Building and the
leasehold improvements in the Premises attached hereto and made a part hereof as
EXHIBIT C. The Work Letter is incorporated by reference and shall be deemed to
be a part of this Lease.
ARTICLE 2
PREMISES AND TERM
Section 2.1 PREMISES. The Landlord hereby leases to the Tenant, and the
Tenant hereby leases from the Landlord, for the Term, the Premises, which shall
be comprised of the space illustrated on EXHIBIT B-1, the rentable square foot
calculation of which shall be determined in accordance with EXHIBIT A and the
methodology set forth in EXHIBIT F, subject to the Landlord's reservations set
forth in Section 2.3, such easements, covenants and restrictions as may affect
the Property and the terms and conditions of this Lease. The Tenant acknowledges
that, except as expressly set forth in this Lease, there have been no
representations or warranties
3
<PAGE> 9
made by or on behalf of the Landlord with respect to the Premises, the Building
or the Property or with respect to the suitability of any of them for the
conduct of the Tenant's business.
Section 2.2 APPURTENANT RIGHTS.
(a) The Tenant shall have, as appurtenant to the Premises, the
nonexclusive right to use in common with others, subject to the Rules and
Regulations, the common walkways and driveways situated upon the Land that are
necessary or reasonably convenient for access to the Building, and all other
areas in and amenities of University Park as are made available generally to the
occupants of University Park or the general public (collectively, the "Common
Areas").
(b) The Tenant shall have, as appurtenant to the Premises (and
exclusively for use in connection with the occupancy of the Premises), the
exclusive right of access to and use of the roof (in common with Landlord but
subject to Section 2.3(b)) for the purpose of installing and maintaining
mechanical equipment, antennae and dishes which, in each case, have been
pre-approved by the Landlord as part of the Initial Leasehold Improvements or as
otherwise approved by the Landlord under Article 4, subject however, to
reasonable rules and regulations from time to time made by the Landlord of which
the Tenant is given notice.
(c) The Tenant shall have, as appurtenant to the Premises, the
right to enjoy such easements of ingress and egress over other land within
University Park as may benefit the Property as more particularly contemplated
under the Declaration of Covenants.
(d) The Tenant shall have, as appurtenant to the Premises, the
parking rights set forth in Section 2.4.
Section 2.3 LANDLORD'S RESERVATIONS.
(a) RESERVED COMMON AREA RIGHTS. The Landlord reserves the
right from time to time, without unreasonable interference with the
Tenant's use to alter or modify the Common Areas, provided that (i) the
Landlord gives the Tenant reasonable advance notice of the Landlord's
contemplated alterations or modifications, with respect to which the
Tenant shall have reasonable approvals rights, (ii) any such actions
are effected in a good and workmanlike manner at no additional cost to
Tenant (other than improvements thereto the costs of which are shared
by tenants in University Park pursuant to the Declaration of
Covenants), and (iii) such alterations or modifications do not impair
Tenant's access to the Premises or its practical use and enjoyment
thereof or of the Common Areas.
(b) RESERVED ROOF RIGHTS. The Landlord reserves the right from
time to time, without unreasonable interference with the Tenant's use,
to access, install, use, maintain, repair, replace and relocate
mechanical and communications equipment on the roof of the Building and
any mechanical penthouse areas thereon, and any related conduits, wires
4
<PAGE> 10
and appurtenant fixtures and equipment ("Landlord Reserved Roof
Rights"), provided that the Landlord agrees that the exercise of
Landlord's Reserved Roof Rights shall not be permitted to impair the
Tenant's conduct of business operations in the Premises including,
without limitation, the communication with off-premises locations of
the Tenant or its affiliates. The Tenant acknowledges that the Tenant's
right to make installations, improvements and alterations upon the roof
of the Building, in addition to being limited by Article 4 of this
Lease, shall be restricted to mechanical equipment serving the
Premises, and antennae, satellite dishes or other communications
equipment that serves exclusively the business activities conducted in
the Premises (exclusive of a communications business being conducted in
the Premises) including, without limitation, the communication with
off-premises locations of the Tenant or its affiliates.
(c) GROUND FLOOR LOBBY. Tenant hereby acknowledges that the
Landlord has an interest in the appearance and use of the ground floor
lobby of the Building notwithstanding that the Building shall be
occupied by a single tenant. The Tenant hereby agrees that visitors may
enter the front door to the lobby during normal business hours. For
purposes hereof, normal business hours shall mean Monday through Friday
from 8:00 a.m. to 5:00 p.m. Accordingly, Tenant shall not alter the
appearance of said lobby in a way contrary to the standards mutually
agreed upon by Landlord and Tenant, without Landlord's prior written
consent which shall not be unreasonably withheld, conditioned or
delayed; provided that such consent shall be deemed given if not denied
by Landlord within ten (10) business days of a request therefor and if
still not denied within five (5) business days of a written reminder
notice, which reminder notice shall state the "deemed approval"
consequences of failure to respond.
Section 2.4 PARKING PASSES. The Landlord shall provide and the Tenant shall
pay for Parking Passes (as defined in EXHIBIT A) for use by the Tenant's
employees in accordance with EXHIBIT A. Charges for the Tenant's parking
privileges hereunder shall be determined in accordance with EXHIBIT A, shall
constitute Additional Rent and shall be payable monthly to the Landlord, during
the Term, from and after the Rent Commencement Date. The Tenant agrees that it
and all persons claiming by, through and under it, shall at all times abide by
the Rules and Regulations set forth on EXHIBIT E and any other rules and
regulations promulgated by the Landlord in accordance with Section 6.3, of which
the Tenant is given written notice, with respect to the use of the parking
facilities provided by the Landlord pursuant to this Lease. The Landlord
acknowledges that it is the Landlord's responsibility to assure that holders of
Parking Passes who fulfill the requirements of the Rules and Regulations are
able to park their motor vehicles in the designated parking facilities.
At the option of the Landlord, the Tenant shall enter into a separate
agreement, with the Landlord or a separate entity, or the Landlord may assign
the Landlord's rights and obligations with respect to such parking privileges to
a separate entity, upon the same terms and conditions contained in this Lease
(and cross-defaulted, both as to the Landlord's and Tenant's obligations, with
this Lease) for a period which shall have the same expiration date as the Term
and which, if
5
<PAGE> 11
this Lease provides for options on the part of the Tenant to extend, shall be
automatically extended upon the exercise of any of such options.
Section 2.5 COMMENCEMENT DATE; SCHEDULED RENT COMMENCEMENT DATE; RENT
COMMENCEMENT DATE. "Commencement Date" means the date on which the Tenant is
first provided access to any portion of the Premises for the construction of the
Initial Leasehold Improvements. "Scheduled Rent Commencement Date" shall mean
the date specified therefor in EXHIBIT A hereto. "Rent Commencement Date" shall
mean the latest of (w) the Scheduled Rent Commencement Date specified in EXHIBIT
A hereto, (x) the date thirty nine (39) weeks after the occurrence of the Steel
Frame Completion Date (as defined in the Work Letter), (y) the date twenty five
(25) weeks after the occurrence of the Building Weathertight Date (as defined in
the Work Letter) or (z) the date upon which Substantial Completion of the Base
Building Improvements occurs. Notwithstanding the foregoing (w) through (z), the
Rent Commencement Date shall be accelerated to the date upon which Tenant
commences occupancy of any portion of the Premises which, in the aggregate,
comprises twenty five percent (25%) or more of the rentable square footage
thereof for the conduct of business, provided that during any period that Tenant
so occupies any portion of the Premises prior to the Rent Commencement Date, the
Tenant shall be liable for any rental and other monetary obligations under this
Lease allocable to such portion of the Premises so occupied including, without
limitation, Annual Fixed Rent proportionate to the portion of the Premises so
occupied.
Notwithstanding the foregoing procedure for establishing the Rent
Commencement Date, the occurrence of Tenant Delay (as defined in the Work
Letter) or Landlord Delay (as defined in the Work Letter) shall have the
following effect:
(i) If the performance of the Landlord's Work is delayed as
the result of Tenant Delay, then, for the purpose of determining each
of (i) the Steel Frame Completion Date, (ii) the Building Weathertight
Date and (iii) the date upon which Substantial Completion of the Base
Building Improvements occurs, each of such conditions shall be deemed
to have been fulfilled on the date that the conditions would have
otherwise been fulfilled, but for such Tenant Delay.
(ii) If the performance of the Tenant Work is delayed as the
result of Landlord Delay with the consequence that Tenant Work that
would otherwise have been substantially completed on or before the Rent
Commencement Date cannot reasonably be substantially completed on or
before the Rent Commencement Date, then the Rent Commencement Date
shall be postponed for a period equal to the period by which the
substantial completion of such Tenant Work is so delayed, but in any
event the Rent Commencement Date shall be accelerated to any earlier
date (but not prior to the Scheduled Rent Commencement Date) upon which
Tenant commences occupancy of any Portion of the Premises for the
conduct of business.
6
<PAGE> 12
The Landlord and the Tenant shall, promptly following the Rent Commencement
Date, confirm in writing the Rent Commencement Date, the rentable floor area of
the Premises and the initial Annual Fixed Rent.
Section 2.6 EXTENSION OPTIONS. Provided that there has been no Event of
Default which is uncured and continuing on the part of the Tenant, and the
Tenant is, as of the date of exercise and as of the commencement date of each
Extension Term, actually occupying at least fifty percent (50%) of the Premises
for its own business purposes, the Tenant shall have the right to extend the
Term hereof for two (2) successive periods of ten (10) years each (each such
period an "Extension Term") on the following terms and conditions:
(a) Such right to extend the Term shall be exercised by the
giving of notice by Tenant to Landlord at least twelve (12) months
prior to the expiration of the Initial Term or the then current
Extension Term, as applicable (the "Extension Notice Deadline Date").
Upon the giving of such notice on or before the Extension Notice
Deadline Date, this Lease and the Term hereof shall be extended for an
additional term, as specified above, without the necessity for the
execution of any additional documents except a document memorializing
the Annual Fixed Rent for the Extension Term to be determined as set
forth below. Time shall be of the essence with respect to the Tenant's
giving notice to extend the Term on or before the Extension Notice
Deadline Date. In no event may the Tenant extend the Term under this
Section 2.6 for more than twenty (20) years after the expiration of the
Initial Term.
(b) Each Extension Term shall be upon all the terms,
conditions and provisions of this Lease, except the Annual Fixed Rent
payable during each Extension Term shall be the then Extension Fair
Rental Value of the Premises for such Extension Term, to be determined
under Section 2.6(d) or Section 2.6(e) below, but in no case less than
the Annual Fixed Rent that was applicable thereto immediately preceding
the Extension Term with respect to which the Extension Fair Rental
Value is to be established (the "Then Applicable Annual Fixed Rental
Rate"). For purposes of this Section 2.6, the "Extension Fair Rental
Value" of the Premises shall mean the then current fair market annual
rent, for leases of other space in Cambridge, Massachusetts similarly
improved, taking into account the condition to which such premises have
been improved (including any replacements of existing improvements or
performance of maintenance obligations ("Replacements"), but excluding
any capital improvements to the Premises (i.e., other than
Replacements) that enhance the value thereof, provided the same are
made by the Tenant during the sixty (60) month period immediately
preceding the applicable Extension Notice Deadline Date), and the
economic terms and conditions specified in this Lease that will be
applicable thereto.
(c) If the Tenant makes a written request to the Landlord for
a proposal for the Extension Fair Rental Value for the upcoming
Extension Term ("Tenant's Extension Rental Request") on or before the
day two (2) months prior to the Extension Notice Deadline Date, then
the Landlord shall make such a written proposal ("Landlord's
7
<PAGE> 13
Proposal") to the Tenant within fifteen (15) days after receipt of
Tenant's Extension Rental Request, but in no event shall the Landlord
be required to deliver such a proposal sooner than fifteen (15) months
prior to the scheduled commencement of such Extension Term. Following
delivery by the Landlord of Landlord's Proposal to the Tenant, the
parties will endeavor in good faith to reach agreement with respect to
the establishment of the Extension Fair Rental Value for the Extension
Term.
(d) Unless the parties have already mutually agreed upon such
Extension Fair Rental Value, on or before the day that is ten (10) days
prior to the applicable Extension Notice Deadline Date, the Landlord
and the Tenant shall deliver to each other their final Landlord's
Proposal (or any final change that the Landlord wishes to make to any
previously furnished Landlord's Proposal) and a written proposal from
the Tenant for the Extension Fair Rental Value of the Premises (the
"Tenant's Proposal"), as the case may be, and each of such Landlord's
Proposal and such Tenant's Proposal shall be binding on the Landlord
and the Tenant, respectively, for the purpose of conducting the
resolution procedure described in clause (e) below. Failure by the
Landlord or the Tenant to timely deliver a final Landlord's Proposal or
final Tenant's Proposal (time being of the essence), as the case may
be, shall result in the other party's proposal being deemed the
Extension Fair Rental Value, and failure by the Landlord or the Tenant
to timely make any final change to the then most recently delivered
Landlord's Proposal or Tenant's Proposal, as the case may be, shall
render no longer subject to change the last previously delivered
Landlord's Proposal or Tenant's Proposal, as the case may be, which
shall thereupon become final.
(e) If the Tenant exercises its election to extend the Term
under clause (a) above, without the Extension Fair Rental Value of the
Premises having been established by mutual agreement of the parties as
contemplated under clause (c) above, then unless a final Landlord's
Proposal and a final Tenant's Proposal has been established under
clause (d) above, the Landlord shall furnish a final Landlord's
Proposal to the Tenant, and the Tenant shall furnish a final Tenant's
Proposal to the Landlord, within thirty (30) days of the Tenant's
having exercised its election to extend the Term. Within thirty (30)
days after the later to occur of (x) the Tenant's exercise of its
election to extend the Term or (y) the establishment of a final
Landlord's Proposal and a final Tenant's Proposal in accordance with
this clause (e), unless the parties have mutually agreed upon the
identity of a real estate professional ("Arbiter") with at least ten
(10) years continuous experience in the business of appraising or
marketing similar commercial real estate in the Cambridge,
Massachusetts area who has agreed to serve as hereinafter provided (the
"Deciding Arbiter"), the Landlord and the Tenant shall each appoint an
Arbiter who shall, within thirty (30) days of selection, select a third
Arbiter to serve as the Deciding Arbiter. The Deciding Arbiter shall
select either Landlord's Proposal or Tenant's Proposal as the proposal
most accurately stating the Extension Fair Rental Value of the
Premises. If the two Arbiters respectively selected by the parties (the
"Party Selected Arbiters") cannot agree upon the selection of a
Deciding Arbiter, then such two Party Selected Arbiters shall seek the
selection of the Deciding Arbiter by the Greater Boston Real Estate
Board.
8
<PAGE> 14
The Deciding Arbiter shall give notice of his or her selection to the
Landlord and the Tenant and its selection of either Landlord's Proposal
or Tenant's Proposal shall be final and binding upon the Landlord and
the Tenant. Each party shall pay the fees and expenses of its real
estate professional counsel and any Party Selected Arbiter that such
party selects, if any, in connection with any proceeding under this
paragraph, and one-half of the fees and expenses of the Deciding
Arbiter. In the event that the commencement of the Extension Term
occurs prior to a final determination of the Extension Fair Rental
Value therefor (the "Extension Rent Determination Date"), then the
Tenant shall pay the Annual Fixed Rent in effect immediately preceding
the commencement of such Extension Term. If the Annual Fixed Rent for
the Extension Term is determined to be greater than the Annual Fixed
Rent paid with respect to the Premises prior to the Extension Rent
Determination Date, then the Tenant shall pay to the Landlord the
amount of such underpayment within thirty (30) days of the Expansion
Rent Determination Date.
Section 2.7 TERMINATION RIGHTS FOR FAILURE OF CONDITIONS. The effectiveness
of the Lease shall be subject to the timely satisfaction of each of the
conditions specified below, unless the satisfaction of a condition is waived or
deemed waived, on or before the deadline date specified below for the
satisfaction thereof:
(a) TENANT'S TITLE DUE DILIGENCE: that the Tenant is
reasonably satisfied, on or before the date which is ten (10) business
days following the date upon which Landlord furnishes Tenant an ALTA
leasehold title insurance commitment with respect to this Lease and a
boundary survey of the Land specifying the location of any easements or
restrictions, that there are no title or survey matters that will
materially and adversely interfere with Tenant's use of the Premises,
and the timely occupancy thereof as contemplated under this Lease, for
the Permitted Uses. The Tenant's failure to terminate this Lease under
this clause (a) on the basis of the condition herein described, on or
before such tenth (10th) business day, shall constitute a waiver by the
Tenant of such condition.
(b) CLOSING OF CONSTRUCTION LOAN: that a loan financing
construction of the Building shall have closed on or before May 1,
2001, which condition shall be for the benefit of both the Landlord and
the Tenant, and cannot be waived as a condition unless waived by both
the Landlord and the Tenant. If the construction loan is not closed on
or before May 1, 2001, this Lease may be terminated by either the
Landlord or the Tenant upon notice to such effect to the other. Failure
by either party to terminate this Lease under this clause (b) on or
before May 5, 2001 shall constitute a waiver of such condition by such
party.
(c) LENDER SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT: that the Tenant has been furnished with a subordination,
non-disturbance and attornment agreement ("SNDA"), in form and
substance reasonably satisfactory to Tenant, on or before the closing
of the construction loan to which reference is made in clause (b)
above.
9
<PAGE> 15
Tenant agrees that the form of SNDA attached to the Lease as EXHIBIT H,
with commercially reasonable modifications required by either of the
Tenant or the Lender, shall be deemed satisfactory to the Tenant.
(d) GROUND LESSOR NON-DISTURBANCE AGREEMENT: that Tenant has
been furnished with a non-disturbance agreement in the form attached
to the Lease as EXHIBIT G, on or before the closing of the
construction loan to which reference is made in clause (b) above.
The Landlord and the Tenant each agree to exercise commercially reasonable
efforts to facilitate the satisfaction of the aforesaid conditions to their
respective obligations under this Lease. Upon any termination of this Lease
under this Section 2.7, neither party shall have any further rights or
obligations under this Lease, which shall have no further force or effect.
ARTICLE 3
RENT AND OTHER PAYMENTS
Section 3.1 ANNUAL FIXED RENT. From and after the Rent Commencement Date,
the Tenant shall pay, without notice or demand, monthly installments of
one-twelfth (1/12) of the Annual Fixed Rent in effect and applicable to the
Premises in advance for each full calendar month of the Term following the Rent
Commencement Date and of the corresponding fraction of said one-twelfth (1/12)
for any fraction of a calendar month at the Rent Commencement Date. The Annual
Fixed Rent applicable to the Premises during the Initial Term shall be as set
forth in EXHIBIT A.
Section 3.2 REAL ESTATE TAXES. From and after the Rent Commencement Date,
during the Term, the Tenant shall pay to the Landlord, as Additional Rent, the
entirety of the Landlord's Tax Expenses (as such term is hereinafter defined) in
accordance with this Section 3.2. The terms used in this Section 3.2 are defined
as follows:
(a) "Tax Fiscal Year" means the 12-month period beginning July
1 each year, or such other fiscal period in respect of which real
estate taxes are due and payable to the appropriate governmental taxing
authority.
(b) "The Landlord's Tax Expenses" with respect to any Tax
Fiscal Year means the aggregate Real Estate Taxes on the Property with
respect to that Tax Fiscal Year, reduced by any abatement receipts with
respect to that Tax Fiscal Year.
(c) "Real Estate Taxes" means (i) all taxes and special
assessments of every kind and nature assessed by any governmental
authority on the Property; (ii) reasonable expenses incurred in
connection with negotiating with the city assessor's office, in advance
of the establishment of the assessed valuation of the Property, to
establish a
10
<PAGE> 16
mutually agreeable assessment therefor; and (iii) reasonable expenses
incurred in connection with any proceedings for abatement of such taxes
or special assessments. Any special assessments to be included within
the definition of "Real Estate Taxes" shall be limited to the amount of
the installment (plus any interest thereon) of such special tax or
special assessment (which shall be payable over the longest period
permitted by law) required to be paid during the Tax Fiscal Year in
respect of which such taxes are being determined. There shall be
excluded from such taxes all income, estate, succession, inheritance,
excess profit, franchise and transfer taxes, all so-called linkage
payments and delinquency interest or penalties; provided, however, that
if at any time during the Term the present system of AD VALOREM
taxation of real property shall be changed so that in lieu of the whole
or any part of the ad valorem tax on real property, there shall be
assessed on the Landlord a capital levy or other tax on the gross rents
received with respect to the Property, or a federal, state, county,
municipal or other local income, franchise, excise or similar tax,
assessment, levy or charge (distinct from any now in effect) based, in
whole or in part, upon any such gross rents, then any and all of such
taxes, assessments, levies or charges, to the extent so based, shall be
deemed to be included within the term "Real Estate Taxes," based on the
Building being the Landlord's only property. Landlord hereby agrees
that it will cause the Land to constitute a separate parcel with
respect to the assessment of Real Estate Taxes.
Payments by the Tenant on account of the Landlord's Tax Expenses shall
be made monthly at the time and in the fashion herein provided for the payment
of Annual Fixed Rent and shall be in an amount of the greater of (i) one-twelfth
(1/12) of the Landlord's Tax Expenses for the current Tax Fiscal Year as
reasonably estimated by the Landlord, or (ii) an amount reasonably estimated by
any ground lessor of the Land or holder of a first mortgage on the Property, to
be sufficient, if paid monthly, to pay the Landlord's Tax Expenses on the dates
due to the taxing authority.
Not later than one hundred twenty (120) days after the Landlord's Tax
Expenses are determinable for the first Tax Fiscal Year of the Term or fraction
thereof and for each succeeding Tax Fiscal Year or fraction thereof during the
Term, the Landlord shall render the Tenant a statement in reasonable detail
showing for the preceding year or fraction thereof, as the case may be, real
estate taxes on the Property, and any abatements or refunds of such taxes,
together with a copy of the tax bill for the Tax Fiscal Year in question.
Reasonable expenses incurred in obtaining any tax abatement or refund not
previously charged may be charged against such tax abatement or refund before
the adjustments are made for the Tax Fiscal Year. If at the time such statement
is rendered it is determined with respect to any Tax Fiscal Year, that the
Tenant has paid (i) less than the Landlord's Tax Expenses or (ii) more than the
Landlord's Tax Expenses, then, in the case of (i) the Tenant shall pay to the
Landlord, as Additional Rent, within thirty (30) days of such statement the
amount of such underpayment and, in the case of (ii) the Landlord shall credit
the amount of such overpayment against the monthly installments of the
Landlord's Tax Expenses next thereafter coming due (or refund such overpayment
within thirty (30) days if the Term has expired to the extent that such
overpayment exceeds any amount then due from the Tenant to the Landlord). To the
extent that real estate taxes shall be payable to the taxing
11
<PAGE> 17
authority in installments with respect to periods less than a Tax Fiscal Year,
the statement to be furnished by the Landlord shall be rendered and payments
made on account of such installments. If the Rent Commencement Date occurs on
other than the first day of a Tax Fiscal Year, or if the Termination Date occurs
on other than the last day of a Tax Fiscal Year, then the amount of Landlord's
Tax Expenses payable by the Tenant with respect to such Tax Fiscal Year(s) shall
be pro-rated based upon the ratio of the length of the time period during such
Tax Fiscal Year(s) in respect of which the Tenant has an obligation to pay
Landlord's Tax Expenses to the length of such Tax Fiscal Year(s).
At the reasonable request of the Tenant, the Landlord shall use
reasonable efforts to contest or seek abatement of any Real Estate Taxes
affecting the Premises. Should the Landlord contest or seek abatement of such
taxes, then it shall do so with diligence and shall keep the Tenant
appropriately informed, in the Landlord's reasonable discretion, as to such
action. If there shall be any dispute between the Landlord and the Tenant
regarding whether or not the Landlord is being reasonable in electing not to
contest or seek abatement of any Real Estate Taxes that the Tenant desires be
contested or with respect to which the Tenant desires to seek abatement, such
dispute shall, at the election of either the Landlord or the Tenant, be resolved
by the Expedited Dispute Resolution Procedure.
Section 3.3 OPERATING EXPENSES. From and after the Rent Commencement
Date, during the Term, the Tenant shall pay to the Landlord, as Additional Rent,
the entirety of the Operating Expenses for the Property, in accordance with this
Section 3.3 including, without limitation, the conditions and limitations set
forth in clauses (a) through (k) below, with respect to each 12-month period
beginning February 1 each year or such other fiscal period of twelve (12)
consecutive months hereinafter adopted by the Landlord for lease administration
purposes ("Operating Fiscal Year"). The term "Operating Expenses for the
Property" means the Landlord's actual cost of operating, cleaning, maintaining
and repairing the Property, the roads, driveways and walkways for providing
access to the Building, and shall include without limitation, the cost of
fulfilling the maintenance and repair obligations required to be performed by
Landlord under Section 5.1 and, subject to the exclusions set forth below, the
cost of services specified on EXHIBIT D; premiums for insurance carried pursuant
to Section 7.4; the amount of any deductible associated with an insurance claim
of the Landlord; compensation including, without limitation, fringe benefits,
worker's compensation insurance premiums and payroll taxes paid to, for or with
respect to all persons (University Park/Building general manager and below)
engaged in the operating, maintaining or cleaning of the Property; interior
landscaping and maintenance; steam, water, sewer, gas, oil electricity,
telephone and other utility charges (excluding any such utility charges either
separately metered or separately chargeable to the Tenant for either measured or
additional or special services); cost of providing HVAC services other than such
services described in Section 3.4; cost of building and cleaning supplies; the
costs of routine environmental management programs operated by Landlord; market
rental costs (or alternatively the Amortization Charge-off [as hereinafter
defined] so long as the expenses which are the subject of such Amortization
Charge-off would have been permitted Operating Expenses had the item in question
been purchased) with respect to equipment used in the operating, cleaning,
maintaining or repairing of the Property; cost of cleaning; cost of
12
<PAGE> 18
maintenance, and non-capital repairs and replacements; cost of snow removal;
cost of landscape maintenance; security services; payments under service
contracts with independent contractors; management fees at reasonable rates
consistent with comparable single-tenant or multi-tenant buildings, as
applicable, in the Cambridge market with the type of occupancy and services
rendered (the parties agree that for the first Lease Year, this shall equal
$0.85 per rentable square foot, and shall be subject to reasonable adjustments
during subsequent Lease Years); the cost of any capital repairs, replacements or
improvements: (i) required by any law or regulation enacted or promulgated after
the issuance of a building permit for the construction of the Building, (ii)
which is required in order to maintain the Property in the condition it is
required to be kept and maintained under Section 5.1, (iii) which reduces the
Operating Expenses for the Property, or (iv) which improves the management and
operation of the Property in a manner reasonably acceptable to Tenant (all such
capital costs to be amortized on a straight-line basis in accordance with
generally accepted accounting principles, together with interest on the
unamortized balance at such rate as may have been paid by the Landlord on funds
borrowed for the purpose of making such capital repairs, replacements or
improvements (or if the Landlord did not borrow such funds, then at the base
lending rate announced by a major commercial bank designated by the Landlord),
with only the annual amortization amount ("Amortization Charge-off") being
included in Operating Expenses with respect to any Operating Fiscal Year);
charges equitably and reasonably allocated to the Building for the operating,
cleaning, maintaining, securing and repairing of the Common Areas excluding the
initial capital improvement costs associated with initially establishing the
Common Areas; and all other reasonable and necessary (in the Landlord's
reasonable judgment) expenses paid in connection with the operation, cleaning,
maintenance and repair of the Property.
Operating Expenses for the Property shall not include the following:
(a) any cost or expense to the extent to which Landlord is paid or reimbursed,
or which is reimbursable to the Landlord, from the Tenant or a third party
(other than as a payment for Operating Expenses), including but not
necessarily limited to: (1) work or service performed for Tenant at its
cost and (2) the cost of any item for which the Landlord is paid or
reimbursed, or which is reimbursable, by insurance, warranties, service
contracts, condemnation proceeds, insurance reimbursements or otherwise;
(b) salaries and bonuses of officers or executives of Landlord or
administrative employees above the grade of University Park/Building
general manager, and if personnel below such grades are shared with other
buildings or have other duties not related to the Building, only the
allocable portion of such person or persons salary shall be included in
Operating Expenses;
(c) interest on debt or principal amortization payments (except as expressly
otherwise provided) or any other payments on any mortgage or any payments
under any ground lease;
13
<PAGE> 19
(d) any fees, costs, and commissions incurred in procuring or attempting to
procure other tenants including, but not necessarily limited to brokerage
commissions, finders fees, attorneys' fees and expenses, entertainment
costs and travel expenses;
(e) any cost included in Operating Expenses representing an amount paid to a
person, firm, corporation or other entity related to Landlord which is in
excess of the amount which would have been paid on an arms'-length basis in
the absence of such relationship (provided that nothing herein shall be
construed as requiring that the cost in question equal the lowest possible
cost; only that the cost not be inflated solely due to the absence of an
arms'-length relationship);
(f) any cost or expense which is applicable to or incurred for any parking
garage or parking lots, or any costs of personnel used to park cars,
collect money or provide special security, and garage management fees;
(g) depreciation of the Building or any part thereof;
(h) replacement or contingency reserves;
(i) legal, auditing, consulting and professional fees and other costs (other
than those legal, auditing, consulting and professional fees and other
costs incurred in connection with the normal and routine maintenance and
operation of the Building), including, without limitation, those: (i) paid
or incurred in connection with financings, refinancings or sales of any
Landlord's interest in the Building or University Park, (ii) relating to
specific disputes with tenants, and (iii) relating to any special reporting
required by securities laws;
(j) penalty interest, late charges, penalties and similar charges associated
with any failure by the Landlord and fulfill its obligations under this
Lease;
(k) bad debt loss or rent loss; and
(l) any cost incurred primarily as a consequence of the Landlord's negligence
or willful misconduct.
Any costs related to the Common Areas shall, for the purposes of
determining Operating Expenses for the Property, be allocated to the Building
based upon the methodology set forth in the Declaration of Covenants.
Payments by the Tenant for its share of the Operating Expenses for the
Property shall be made monthly at the time and in the fashion herein provided
for the payment of Annual Fixed Rent. The amount so to be paid to the Landlord
shall be an amount from time to time reasonably estimated by the Landlord to be
sufficient to aggregate a sum equal to the Tenant's share of the Operating
Expenses for the Property for each Operating Fiscal Year.
14
<PAGE> 20
Not later than one hundred twenty (120) days after the end of each
Operating Fiscal Year or fraction thereof during the Term or fraction thereof at
the end of the Term, the Landlord shall render the Tenant a statement in
reasonable detail and according to usual accounting practices certified by an
officer of the Landlord, showing for the preceding Operating Fiscal Year or
fraction thereof, as the case may be, the Operating Expenses for the Property.
Said statement to be rendered to the Tenant also shall show for the preceding
Operating Fiscal Year or fraction thereof, as the case may be, the amounts of
Operating Expenses already paid by the Tenant. If at the time such statement is
rendered it is determined with respect to any Operating Fiscal Year, that the
Tenant has paid (i) less than the entirety of the Operating Expenses for the
Property or (ii) more than the Operating Expenses for the Property, then, in the
case of (i) the Tenant shall pay to the Landlord, as Additional Rent, within
thirty (30) days of such statement the amounts of such underpayment and, in the
case of (ii) the Landlord shall credit the amount of such overpayment against
the monthly installments of the Operating Expenses for the Building next
thereafter coming due (or refund such overpayment within thirty (30) days if the
Term has expired to the extent that such overpayment exceeds any amount then due
from the Tenant to the Landlord). If the Rent Commencement Date occurs on other
than the first day of an Operating Fiscal Year, or if the Termination Date
occurs on other than the last day of an Operating Fiscal Year, then the amount
of Operating Expenses for the Property payable by the Tenant with respect to
such Operating Fiscal Year(s) shall be pro-rated based upon the ratio of the
length of the time period during such Operating Fiscal Year(s) in respect of
which the Tenant has an obligation to pay Operating Expenses for the Property to
the length of such Operating Fiscal Year.
The Tenant may examine or audit the accounts and original bills for
Operating Expenses for the Property upon ten (10) days' prior written notice to
the Landlord, but no more often than one (1) time in any Operating Fiscal Year;
provided however, that if, during the course of any such examination or audit,
the Tenant reasonably believes that it has discovered an error in the amount of
Operating Expenses for the Property, the Tenant may review the accounts and
bills for the immediately two (2) preceding Operating Fiscal Years relating to
the subject matter of such error. The Landlord agrees that it will make
available to the Tenant in the Landlord's office in University Park, during
regular business hours, such information as the Landlord has available at such
office. In similar manner, the Tenant may examine such further records as the
Landlord (or its affiliates) may have, but such matters will be conducted where
the Landlord customarily keeps such records, which may be at the headquarters of
the Landlord's parent company. The Tenant shall bear the cost of any such audit,
unless the same discloses a discrepancy in excess of three percent (3%) of the
Operating Expenses for the Property, in which event the Landlord shall reimburse
the Tenant for such costs reasonably incurred. For any given Operating Fiscal
Year of the Landlord, the Tenant must, except in connection with errors
discovered during the course of an examination, as provided above, make any such
audit within twenty four (24) months after the Tenant's receipt of itemized
statements (and any supporting documentation requested by the Tenant) referred
to in the preceding paragraph. The Tenant must, except in connection with errors
discovered during the course of an examination, as provided above, further make
any claim for revision of Operating Expenses for the Property for such Operating
Fiscal Year by written notice to the Landlord within said twenty four (24) month
period. If the Tenant and the Landlord determine that Operating Expenses for the
Property are more or less than reported,
15
<PAGE> 21
either the Landlord shall provide the Tenant with a refund or a credit against
the next installment of Annual Fixed Rent and other charges or the Tenant shall
pay the Landlord the amount of any underpayment within thirty (30) days of
billing, provided that if the refund or credit to which the Tenant is entitled
relates to an error in Landlord's statement of Operating Expenses for the
Property which overstates the Operating Expenses for the Property by more than
three percent (3%), then interest at the Default Interest Rate accrue on any
such discrepancy from the date of overpayment by the Tenant to the date the
Tenant is credited or reimbursed in full therefor. The Landlord shall have no
right to give the Tenant any adjustment billing on account of Operating Expenses
for the Property incurred in any Operating Fiscal Year later than the date two
(2) years after the expiration of such Operating Fiscal Year.
Section 3.4 UTILITY CHARGES. During the Term, the Tenant shall pay directly
to the provider of the service, which in each case will be separately metered by
the Landlord to the extent specified in the Work Letter, but otherwise by the
Tenant, with respect to the Building, all charges for steam, gas, electricity,
fuel, water, sewer and other services and utilities furnished to the Premises.
Section 3.5 ABOVE-STANDARD SERVICES. If the Tenant requests and the
Landlord elects to provide any services to the Tenant in addition to those
described in EXHIBIT D, the Tenant shall pay to the Landlord, as Additional
Rent, the amount billed by Landlord for such services at Landlord's standard
rates as from time to time in effect, so long as such rates are consistent with
comparable services in comparable buildings within the Cambridge market. If the
Tenant has requested that such services be provided on a regular basis, the
Tenant shall, if requested by the Landlord, pay for such services at their
actual cost to Landlord, including, without limitation, a reasonable overhead
component, at the time and in the fashion in which Annual Fixed Rent under this
Lease is payable. Otherwise, the Tenant shall pay for such additional services
within thirty (30) days after receipt of an invoice from the Landlord.
Section 3.6 NO OFFSETS. Annual Fixed Rent and Additional Rent shall be paid
by the Tenant without offset, abatement or deduction except as provided herein.
ARTICLE 4
ALTERATIONS
Section 4.1 CONSENT REQUIRED FOR TENANT'S ALTERATIONS. The Tenant shall not
make alterations or additions to the Premises except in accordance with the
Tenant Design and Construction Manual, and with plans and specifications
therefor first approved by the Landlord, which approval shall not be withheld
unreasonably, conditioned or delayed. Notwithstanding the foregoing, the Tenant
may, from time to time without the Landlord's prior consent and at the Tenant's
own expense, make interior non-structural alterations and changes in and to the
Premises, provided that such alterations or changes (i) do not diminish the
value of the Building, (ii) are not incompatible with existing mechanical or
electrical, plumbing, HVAC or other
16
<PAGE> 22
systems in the Building, and (iii) do not affect the exterior appearance of the
Building. Whether or not the Tenant's changes and/or alterations require the
Landlord's consent pursuant to this paragraph, the Tenant shall, in each
instance, give reasonable prior notice to the Landlord of any alterations and
changes in and to the Premises costing $50,000.00 or more which the Tenant
intends to undertake, together with a reasonable description of the proposed
work and such plans and specifications, if any, as the Tenant has therefor and
promptly following the performance of any alterations or additions to the
Premises, the Tenant shall furnish Landlord an "as-built" set of plans and
specifications for the Premises, modified mechanical, electrical or plumbing
work, specifying the alterations or additions in question, in each case in a
fashion reasonably required by the Landlord, in addition to any other plans and
specifications furnished by Tenant to Landlord from time to time. The Landlord
shall not be deemed unreasonable for withholding approval of any alterations or
additions which (i) would, in the Landlord's reasonable judgment, adversely
affect any structural or exterior element of the Building, (ii) would in the
Landlord's reasonable judgment, adversely affect the general utility of the
Building for use by prospective future tenants thereof, (iii) would affect the
exterior appearance of the Building in a manner which is not acceptable to the
Landlord, in its sole discretion, (iv) will require unusual expense to readapt
the Premises to normal use as a biotechnology office and research and
development facility unless the Tenant first gives assurance acceptable to the
Landlord that such readaptation will be made prior to such termination without
expense to the Landlord; or (v) would not be compatible with existing mechanical
or electrical, plumbing, HVAC or other systems in the Building, in each case, as
reasonably determined by the Landlord; provided, however, that the Landlord
shall specify in any notice withholding approval specifying, in reasonable
detail, the nature of the Landlord's objection, and if the Tenant shall, at its
sole cost and expense, cure the Landlord's objections (in the Landlord's
reasonable judgment except in the case of the subject matter of clause (iii)
above), then the Landlord shall not withhold its approval. If the Tenant shall
request the Landlord's approval of proposed alterations under this Section 4.1,
and the Landlord fails to respond to the Tenant's request within ten (10)
business days thereof, then the Landlord shall be deemed to have given its
approval thereto if Landlord fails to respond to the Tenant's request within
five (5) business days following the delivery to the Landlord of a written
reminder notice, given by the Tenant on or following the expiration of the
aforementioned 10-day period, which reminder notice states the "deemed approval"
consequences of failure to respond. Neither the Landlord's failure to object to
any proposed alterations or additions, nor the Landlord's approval of any plans
and specifications furnished by Tenant to Landlord, shall be construed as
superseding in any respect, or as a waiver of Landlord's right to enforce, the
Tenant's obligation to fulfill all of the terms and conditions of this Lease
applicable to any work contemplated thereby.
Notwithstanding anything to the contrary contained in this Section 4.1, if
any of the Tenant's proposed alterations and/or additions affect the roof or the
envelope of the Building, the following additional conditions shall apply:
(a) Such alterations and changes will not in any way interfere with
the proper functioning of and Landlord's access to equipment located on the
roof of the Building; and
17
<PAGE> 23
(b) Adequate measures are taken to screen and otherwise reduce the
visibility and noise of such mechanical equipment, antennae and dishes
consistent with the appearance and design scheme required by the City of
Cambridge and other structures in University Park.
Section 4.2 OWNERSHIP OF ALTERATIONS. All alterations and additions shall
be part of the Building and owned by the Landlord; provided, however, that the
Landlord may require removal by the Tenant of all or any portion of any
alterations and additions made to the Premises, so long as the Landlord advised
the Tenant of such requirement prior to the installation of the alteration or
addition by the Tenant. If the Tenant fails to inform the Landlord, in writing,
at least ten (10) days prior to the installation of the alteration or addition,
thereby preventing the Landlord from making a determination as to whether it
will want such addition or alteration removed from the Premises prior to its
installation, then the Landlord shall advise the Tenant in writing of such
determination within ten (10) days after the Tenant gives the Landlord written
notice requesting that the Landlord make such determination. All movable
equipment, trade fixtures and furnishings not attached to the Premises shall
remain the personal property of the Tenant and shall be removed by the Tenant
upon termination or expiration of this Lease. Notwithstanding anything to the
contrary contained in this Section 4.2, any alterations and additions funded by
the Landlord, and installed as part of the Initial Leasehold Improvements (as
defined in the Work Letter) or otherwise (the "Landlord Funded Improvements"),
and all alterations and additions which are necessary for the use of the
Premises as an operational biotechnology laboratory (the "Base Laboratory
Improvements"), regardless of who funded their acquisition and installation,
shall be part of the Building and owned by the Landlord, and shall in no event
constitute the Tenant's personal property. For purposes of this Lease, "Base
Laboratory Improvements" shall include equipment that is integrated into the
Building which is consistent with and necessary for the operation of a standard,
high quality biotechnology research laboratory. Such equipment would include,
but would not be limited to, supply and exhaust ventilation systems; fume hoods
in reasonable quantity; environmental rooms in reasonable quantity; laboratory
benches in reasonable quantity, casework with associated shelving (whether fixed
or adjustable or otherwise capable of being relocated) in reasonable quantity,
fixtures, plumbing supply/waste lines and equipment associated therewith, gas
supply lines, a back-up electrical generator sufficient to meet critical power
requirements, and similar improvements. Base Laboratory Improvements does not
include stand-alone equipment such as autoclaves, cagewashers, glasswashers,
refrigerators, biosafety cabinets, NMR equipment, benchtop equipment, and
similar equipment, including without limitation the equipment specified in
EXHIBIT J attached hereto.
Within thirty (30) days of the occurrence of the Rent Commencement Date,
the Landlord and the Tenant shall review the final scope of the Initial
Leasehold Improvements and develop a mutually acceptable list of those installed
equipment items that will be deemed to be Base Laboratory Improvements, and
those that, by virtue of quantity, specialization or portability, will not be
deemed to be Base Laboratory Improvements and will therefore remain the property
of the Tenant, subject to the terms of this Lease.
18
<PAGE> 24
Any alterations and additions which are neither Landlord Funded
Improvements nor Base Laboratory Improvements shall remain the property of the
Tenant, and, if required to be removed upon the termination or expiration of
this Lease as hereinabove provided, shall be removed by the Tenant with
reasonable care and diligence, including the capping off of all utility
connections behind the adjacent interior finish, and the restoration of such
interior finish to the extent necessary so that the Premises are left with
complete wall, ceiling and floor finishes.
Section 4.3 CONSTRUCTION REQUIREMENTS FOR ALTERATIONS. All construction
work performed by or on behalf of the Tenant ("Tenant's Work"), including
without limitation any Initial Leasehold Improvements, shall be done in a good
and workmanlike manner employing only first-class materials and in compliance
with Landlord's construction rules and regulations and with all applicable laws
and all lawful ordinances, regulations and orders of Governmental authority and
insurers of the Building. The Landlord or Landlord's authorized agent may (but
without any implied obligation to do so) inspect the work of the Tenant at
reasonable times and shall give notice of observed defects. Tenant's Work and
the installation of furnishings shall always be coordinated in such manner as to
maintain harmonious labor relations within University Park and not to damage the
Building or interfere with Building construction or operation. Tenant's Work
shall be performed by contractors or workmen first approved by the Landlord,
which approval the Landlord agrees not to unreasonably withhold or delay. The
Landlord agrees to cooperate with the Tenant to develop a list of contractors
and workmen (which may change, from time to time) who are mutually acceptable
and are permitted to perform work in the Building. The Tenant, before starting
any work, shall receive and comply with the Landlord's construction rules and
regulations and shall cause the Tenant's contractors to comply therewith, except
in the case of the Initial Leasehold Improvements obtain "builder's risk"
coverage (in an amount that is reasonable given the quality and quantity of the
work to be undertaken) to enhance the insurance coverage otherwise required to
be carried by the Tenant, secure all licenses and permits necessary for such
work, and deliver to the Landlord a statement of the names of its general
contractor (or construction manager) and subcontractors who are to perform
mechanical, electrical or plumbing work or are otherwise to perform work that
will affect the structure or base building systems of the Building, and the
estimated cost of all labor and material to be furnished by them and security
satisfactory to the Landlord in its reasonable discretion and consistent with
the security requirements for comparable work in comparable buildings in the
Cambridge market protecting the Landlord against liens arising out of the
furnishing of such labor and material; and cause each contractor to carry
worker's compensation insurance in statutory amounts covering all the
contractors' and subcontractors' employees and comprehensive general public
liability insurance with limits (except as otherwise provided in the Work Letter
with respect to Initial Leasehold Improvements) of $1,000,000 (individual) and
$5,000,000 (occurrence), or in such lesser amounts as Landlord may accept,
covering personal injury and death and property damage (all such insurance to be
written in companies approved reasonably by the Landlord and insuring the
Landlord, such individuals and entities affiliated with the Landlord as the
Landlord may designate, any ground lessor or mortgagee that the Landlord may
designate, and the Tenant as well as the contractors and to contain a
requirement for at least thirty (30) days' notice to the Landlord prior to
cancellation, nonrenewal or material change), and to deliver to the Landlord
certificates of all such insurance.
19
<PAGE> 25
Section 4.4 PAYMENT FOR TENANT ALTERATIONS. The Tenant agrees to pay
promptly when due the entire cost of any work done on the Premises by the
Tenant, its agents, employees or independent contractors, and not to cause or
permit any liens for labor or materials performed or furnished in connection
therewith to attach to the Premises or the Property and promptly to discharge or
bond over any such liens which may so attach. If any such lien shall be filed
against the Premises or the Property and the Tenant shall fail to cause such
lien to be discharged, or bonded over, within fifteen (15) days after receipt by
the Tenant of notice of the filing thereof, the Landlord after a further five
(5) days' written notice may cause such lien to be discharged by payment, bond
or otherwise without investigation as to the validity thereof or as to any
offsets or defenses which the Tenant may have with respect to the amount
claimed. The Tenant shall reimburse the Landlord, as additional rent, for any
cost so incurred and shall indemnify and hold harmless the Landlord from and
against any and all claims, costs, damages, liabilities and expenses (including
reasonable attorneys' fees) which may be incurred or suffered by the Landlord by
reason of any such lien or its discharge. The Tenant's obligations under this
Section 4.4 with respect to the Initial Leasehold Improvements that are,
pursuant to the Work Letter, to be paid for with the proceeds of Landlord's
Contribution, are conditioned upon the Landlord's payment to the Tenant of
Landlord's Contribution in accordance with the Work Letter.
ARTICLE 5
RESPONSIBILITY FOR CONDITION OF BUILDING AND PREMISES
Section 5.1 MAINTENANCE OF BUILDING AND COMMON AREAS BY LANDLORD. Except as
otherwise provided in Article 8, the Landlord shall make such repairs to the
foundation system, roof, exterior walls (including exterior glass), floor slabs,
and any other structural elements of the Building as may be necessary to keep
them in good order, condition and repair, and make such repairs to the
mechanical systems and equipment serving the Building, exclusive of mechanical
systems and equipment that constitute either a component of the Initial
Leasehold Improvements, or other alterations or additions made by the Tenant
under Article 4 ("Tenant's Dedicated Mechanical Systems and Equipment"), as are
necessary to keep them in good order, condition and repair. The Landlord shall
further perform the services designated as Landlord's Services on EXHIBIT D.
Costs and expenses incurred by the Landlord under this Section 5.1 shall be
included in Operating Expenses of the Property only as permitted under Section
3.3. Subject to Section 7.5, the Tenant shall be responsible for 100% of the
cost of any repair to the Premises, the Building, or the Land caused by the
negligence or misconduct of the Tenant, or any agent, employee or contractor of
the Tenant, notwithstanding anything to the contrary provided in Section 3.3.
Section 5.2 MAINTENANCE OF PREMISES BY TENANT. The Tenant shall keep and
maintain in good order, condition and repair the Premises and every part thereof
and all of Tenant's Dedicated Mechanical Systems and Equipment, reasonable wear
and tear and damage by fire or other casualty excepted (provided that subject to
Section 7.5, the Landlord shall be responsible for damage caused by the fault or
neglect of the Landlord, or the Landlord's agents, employees
20
<PAGE> 26
or contractors), excluding those repairs for which the Landlord is responsible
pursuant to Sections 5.1, 8.1 and 8.5, and shall surrender the Premises and all
alterations and additions thereto, at the end of the Term, in such condition,
first removing all personal property of the Tenant and, to the extent required
pursuant to this Lease, all alterations and additions made by the Tenant,
repairing any damage caused by such removal and restoring the Premises and
leaving them in broom clean condition. If the Tenant elects to provide the
Tenant-Provided Services, identified as such in Section 5.3, the Tenant shall
perform the Tenant-Provided Services promptly, as necessary and appropriate,
with due diligence and in accordance with the standards therefor established
under Section 5.3. The Tenant shall not permit or commit any damage (waste), and
the Tenant shall, subject to Section 7.5, be responsible for the cost of repairs
which may be made necessary by reason of damage to the Property caused by the
negligence or misconduct of the Tenant, or any of the contractors, employees, or
agents of the Tenant. Tenant's Dedicated Mechanical Systems and Equipment, and
all other laboratory systems and equipment, shall be maintained in good order,
condition and repair consistent with prevailing standards at comparable
first-class leased biotechnology facilities, reasonable wear and tear, damage by
fire or other casualty, and subject to Section 7.5, damage caused by the fault
or neglect of the Landlord, or the Landlord's agents, employees, or contractors
excepted.
Section 5.3 TENANT-PROVIDED SERVICES. Notwithstanding anything to the
contrary contained in this Article 5, the Tenant may choose to provide, at its
own cost and expense, in lieu of the Landlord providing the same under this
Lease, services within the interior of the Building, associated directly with
the Tenant's use of the Building, including without limitation, the building
services specified in clauses F, G, H, I and J of EXHIBIT D, and such other
services as the Landlord may approve in its reasonable discretion. Such services
which are paid for and provided by the Tenant are hereinafter referred to as the
"Tenant-Provided Services." The provision by Tenant of Tenant-Provided Services
shall be subject to reasonable standards imposed by Landlord for the purpose of
assuring the fulfillment of the requirements of any ground lessee, mortgagee,
tenant, governmental authority or other third party pertaining to the
maintenance and operation of the Building in good order, condition and repair
and in compliance with all legal requirements.
Section 5.4 DELAYS IN LANDLORD'S SERVICES. The Landlord shall not be liable
to the Tenant for any compensation or reduction of rent by reason or
inconvenience or annoyance or for loss of business arising from the necessity of
the Landlord or its agents entering the Premises for any purposes authorized in
this Lease, or for repairing the Premises or any portion of the Building. In
case the Landlord is prevented or delayed from making any repairs, alterations
or improvements, or furnishing any services or performing any other covenant or
duty to be performed on the Landlord's part, by reason of any External Cause,
the Landlord shall not be liable to the Tenant therefor, nor, except as
expressly otherwise provided in this Lease, shall the Tenant be entitled to any
abatement or reduction of rent by reason thereof, nor shall the same give rise
to a claim in the Tenant's favor that such failure constitutes actual or
constructive, total or partial, eviction from the Premises.
21
<PAGE> 27
The Landlord reserves the right to stop any service or utility system the
Landlord provides or causes to be provided under this Lease (i.e. exclusive of
any Tenant-Provided Services or other obligations of the Tenant under this
Lease) when necessary by reason of accident or emergency, or until necessary
repairs have been completed; provided, however, that in each instance of
stoppage, the Landlord shall exercise reasonable diligence to eliminate the
cause thereof. Except in case of emergency repairs, the Landlord will give the
Tenant reasonable advance notice of the contemplated stoppage and will schedule
contemplated stoppages at times reasonably approved by the Tenant and will use
reasonable efforts to avoid unnecessary inconvenience to the Tenant by reason
thereof. To the extent that the Landlord is providing or causing to be provided
heat, light or any utility or service, in no event shall the Landlord have any
liability to the Tenant for the unavailability of the same to the extent that
such unavailability is caused by External Causes, provided, however, that the
Landlord is obligated to exercise reasonable efforts to restore such services or
utility systems' operation. The Landlord agrees to carry rent interruption
insurance in commercially reasonable amounts which permits recovery within, to
the extent reasonably available, five (5) days after the insured peril.
If the unavailability of heat, light or any utility or service provided or
caused to be provided by the Landlord other than the unavailability of the same
due to the Tenant's acts or omissions renders all or any portion of the Premises
untenantable for the Tenant's use as permitted under this Lease, and the Tenant
ceases to occupy the same for the conduct of its business, the Tenant shall
receive an equitable abatement of rent, taking into account the extent of the
Tenant's loss of use of the Premises, following the condition of untenantability
on and after the day following the expiration of the deductible period provided
in the Landlord's rent interruption insurance policy. For all purposes of this
Lease, if Tenant has responsibility for maintenance and repair of any aspect of
the Building or any equipment or system therein, the functioning and performance
of the same shall be the responsibility of the Tenant under this Lease, and
shall in no event constitute a service or utility system that the Landlord
provides or causes to be provided under this Lease.
Section 5.5 TENANT'S RESPONSIBILITIES REGARDING HAZARDOUS MATERIALS. The
Tenant covenants and agrees that the Tenant shall not use, generate, store or
dispose, nor shall the Tenant suffer or permit the use, generation, storing or
disposal in the Premises or otherwise by any of Tenant's contractors, licensees,
invitees, agents or employees, of any oil, toxic substances, hazardous wastes or
hazardous materials (collectively, "Hazardous Materials") in, on or about the
Premises, the Building or the Land, except for Hazardous Materials that are
necessary for Tenant's operation of Tenant's Permitted Use, as set forth on
EXHIBIT A, and in all cases such Hazardous Materials must be used, generated,
stored and disposed of in compliance with all applicable law and regulations.
The Tenant covenants and agrees that the Tenant shall comply with all applicable
laws and regulations and in handling and disposing of materials used in its
research and other uses of the Premises, whether or not considered Hazardous
Materials, and no dumping, flushing or other introduction of Hazardous Materials
or such other inappropriate materials into the septic, sewage or other waste
disposal systems serving the Premises shall occur, except as specifically
permitted by law and subject to the conditions and qualifications imposed by any
governmental license or permit. The Tenant shall provide to the Landlord copies
22
<PAGE> 28
of all licenses and permits that the Tenant has been required to obtain prior to
the handling of any such Hazardous Materials, and the Tenant must obtain all of
such licenses and permits prior to the commencement of operations in the
Premises requiring the same. From time to time during the Term of this Lease,
and thereafter during which the Tenant occupies any portion of the Premises, the
Tenant shall provide the Landlord with such reasonable substantiation of the
Tenant's compliance with the requirements of this Section 5.5 and any additional
requirements set forth in Section 6.2 as the Landlord may reasonably request.
The Tenant covenants and agrees that the Tenant shall, at its sole cost,
promptly remove or remediate all Hazardous Materials that are found upon the
Premises, the Building or the Land by virtue of the failure of the foregoing
covenants and agreements to have been fulfilled, or otherwise as the result of
the act or omission of Tenant or its contractors, licensees, agents or
employees, in a manner complying with all applicable laws and regulations and
the provisions of this Lease. If the Tenant should have any responsibility under
this Section 5.5 to remove or remediate Hazardous Materials, the Tenant shall
keep the Landlord reasonably informed as to the status of the environmental
condition at issue, promptly furnish to the Landlord copies of all regulatory
filings with any governmental regulatory agencies in connection therewith, and
substantiate the performance of its obligations under this Section 5.5.
Section 5.6 LANDLORD'S RESPONSIBILITIES REGARDING HAZARDOUS MATERIALS.
During the Term of this Lease, if the removal or remediation of Hazardous
Materials from the Premises, Building or Land is required to be undertaken, then
except to the extent such obligation is the responsibility of the Tenant under
Section 5.5 hereof, the Landlord covenants and agrees to undertake the same
without charge to the Tenant. Without limitation of the foregoing, if necessary
to comply with any applicable legal requirements, should the existing
environmental condition of the Land require the removal or remediation of
Hazardous Materials, the Landlord shall perform such removal or remediation,
without charge to the Tenant, when and if required by applicable legal
requirements. The Landlord shall keep the Tenant reasonably informed as to the
status of the environmental condition at issue, promptly furnish to the Tenant
copies of all regulatory filings with any governmental regulatory agencies in
connection therewith, and substantiate the performance of its obligations under
this Section 5.6.
If the Premises shall be rendered no longer reasonably occupiable as a
consequence of the presence of Hazardous Materials for which the Landlord is
responsible for undertaking remediation under this Section 5.6, and the presence
of such Hazardous Materials is introduced to the Premises by the Landlord, then
until the Premises is again reasonably occupiable, the Annual Fixed Rent and
Additional Rent shall be justly and equitably abated and reduced according to
the nature and extent of the loss of use thereof suffered by the Tenant.
Section 5.7 CROSS INDEMNIFICATION. Each of the Landlord and the Tenant
shall defend and indemnify the other and hold the other harmless from and
against any damages, liability or expense associated with claims by governmental
or other third parties arising out of the presence, removal or remediation of
Hazardous Materials for which the indemnifying party is responsible for removal
or remediation under this Lease.
23
<PAGE> 29
ARTICLE 6
TENANT COVENANTS
The Tenant covenants during the Term and for such further time as the
Tenant occupies any part of the Premises:
Section 6.1 PERMITTED USES. The Tenant shall occupy the Premises only for
the Permitted Uses, and shall not injure or deface the Premises or the Property,
nor permit in the Premises any auction sale. The Tenant shall give written
notice to the Landlord, within twenty (20) days prior to the Rent Commencement
Date and thereafter once annually within twenty (20) days of each anniversary of
the Rent Commencement Date, of any materials on OSHA's right to know list or
which are subject to regulation by any other federal, state, municipal or other
governmental authority and which the Tenant intends to have present at the
Premises. The Tenant shall comply with all requirements of public authorities
and of the Board of Fire Underwriters in connection with methods of storage, use
and disposal thereof although nothing herein shall prevent the Tenant from
challenging the validity of such requirements. The Tenant shall not permit in
the Premises any nuisance, or the emission from the Premises of any reasonably
objectionable noise, odor or vibration, nor use or devote the Premises or any
part thereof for any purpose which is contrary to law or ordinance, or liable to
invalidate or increase premiums (above those normally incurred for Permitted
Uses) for any insurance on the Building or its contents (unless the Tenant pays
for any such increase in premiums and provided such actions do not interfere
with the use and enjoyment of the Land by the Landlord, other tenants, visitors
or invitees of University Park) or liable to render necessary any alteration or
addition to the Building, nor commit or permit any waste in or with respect to
the Premises.
Section 6.2 LAWS AND REGULATIONS. The Tenant shall comply with all federal,
state and local laws, regulations, ordinances. executive orders, federal
guidelines, and similar requirements in effect from time to time, including,
without limitation, City of Cambridge ordinances numbered 1005 and 1086 and any
subsequently adopted ordinance for employment and animal experimentation with
respect to animal experiments and hazardous waste and any such requirements
pertaining to employment opportunity, anti-discrimination and affirmative
action. Tenant shall have the right to contest any notice of violation for any
of the foregoing by appropriate proceedings diligently conducted in good faith.
Section 6.3 RULES AND REGULATIONS; SIGNS. The Tenant agrees to comply with
such reasonable and non-discriminatorily enforced rules and regulations of
general applicability ("Rules and Regulations") as (i) may from time to time be
made by the Landlord of which the Tenant is given written notice, so far as the
same relate to the use of the Building, the Land and the Tenant's appurtenant
parking privileges and (ii) may from time to time be promulgated under the
Declaration of Covenants with respect to all or any portion of University Park.
The Tenant shall not obstruct in any manner any portion of the Property; and,
except as set forth in this Lease, shall not permit the placing of any signs,
curtains, blinds, shades, awnings or flagpoles, or the like, visible from
outside the Building.
24
<PAGE> 30
The Tenant shall have the right to install a maximum of two (2) signs with
its corporate logo on the facade of the Building and a single identity plaque at
the main Building entrance. Any such exterior sign, however, shall be subject to
prior approval by the City of Cambridge, and subject to the Landlord's
reasonable approval regarding the content, size, design and location on the
Building facade, and all applicable legal requirements. Landlord and Tenant will
work together to implement the aforesaid signage program. Landlord shall provide
street numbering signage and code required signage for the Common Areas.
Section 6.4 SAFETY COMPLIANCE. The Tenant shall keep the Premises equipped
with all safety appliances required by law or ordinance or any other regulations
of any public authority because of the manner of use made by the Tenant and to
procure all licenses and permits so required because of such manner of use and,
if requested by the Landlord, do any work so required because of such use, it
being understood that the foregoing provisions shall not be construed to broaden
in any way the Tenant's Permitted Uses. Tenant shall conduct such periodic
tests, evaluations or certifications of safety appliances and laboratory
equipment as are required or recommended in accordance with generally accepted
standards for good laboratory practice to ensure that such safety appliances and
equipment remain in good working order, and shall, upon Landlord's reasonable
request but not more often than two (2) times in any calendar year, provide to
Landlord copies of such reports, evaluations and certifications.
Section 6.5 LANDLORD'S ENTRY. The Tenant shall permit the Landlord and it
agents, after at least twenty four (24) hours' notice except in the case of
emergencies, to enter the Premises at all reasonable hours for the purpose of
inspecting or making repairs to the same, monitoring Tenant's compliance with
the requirements and restrictions set forth in this Lease, and for the purpose
of showing the Premises to prospective purchasers and mortgagees at all
reasonable times and to prospective tenants within twelve (12) months of the end
of the Term provided that in connection with such entry, Tenant may provide
procedures reasonably designed so as not to jeopardize Tenant's trade secrets,
proprietary technology or critical business operations, including accompaniment
of all such persons by an employee of the Tenant. In case of an emergency, the
Landlord shall make good faith efforts to notify the Tenant in person or by
telephone prior to such entry, and in any event, the Landlord shall notify
Tenant promptly thereafter such entry.
Section 6.6 FLOOR LOAD. The Tenant shall not place a load upon any floor in
the Premises exceeding the floor load per square foot of area which such floor
was designed to carry, and which is allowed by law. The Tenant's machines and
mechanical equipment shall be placed and maintained by the Tenant at the
Tenant's expense in settings sufficient to absorb or prevent vibration or noise
that may be transmitted to the Building structure.
Section 6.7 PERSONAL PROPERTY TAX. The Tenant shall pay promptly when due
all taxes which may be imposed upon personal property (including, without
limitation, fixtures and equipment) in the Premises to whomever assessed. Tenant
shall have the right to contest the validity or amount of any such taxes by
appropriate proceedings diligently conducted in good faith.
25
<PAGE> 31
Section 6.8 ASSIGNMENT AND SUBLEASES. The Tenant shall not assign this
Lease or sublet (which term, without limitation, shall include granting of
concessions, licenses and the like) the whole or any part of the Premises, nor
permit the further underletting or assignment of any sublease or other occupancy
agreement (each a "Transfer") without, in each instance, having first received
the consent of the Landlord which consent shall not be unreasonably withheld or
delayed, except in the case of Permitted Transfers, with respect to which the
Landlord's consent shall not be required so long as a condition constituting an
Event of Default is not then subsisting. In no event shall any of the Tenant's
rights with respect to the roof of the Building be assigned or sublet other than
in connection with a Transfer of the whole or any part of the Premises for
purposes of enabling the transferee to occupy the same for the conduct of its
business therein (provided that the occupancy of part of the Premises in service
of a business the substantial orientation of which is roof communications shall
not qualify as such an occupancy), or to a service provider using such roof
rights exclusively for the purpose of providing services to the Tenant in
connection with the conduct of the Tenant's business (other than a
communications business). Any purported Transfer made without such consent or
otherwise not fulfilling the conditions and requirements of this Section 6.8
shall be void, and except as specifically permitted in this Section 6.8, in no
event shall the Tenant or anyone claiming by, through or under the Tenant have
the right to mortgage, pledge, hypothecate or otherwise transfer this Lease. The
Landlord shall not be deemed to be unreasonable in withholding its consent to
any proposed Transfer that is subject to the Landlord's consent based on any of
the following factors:
(a) If the manner in which the proposed occupant conducts its business
operations is not consistent, in Landlord's reasonable opinion, with the
image and character of the University Park development as a first-class
office/research and development park, then the withholding of consent by
the Landlord shall be considered reasonable and
(b) If the proposed Transfer is (i) an assignment of this Lease, or
(ii) a sublease where as a result of the consummation of such sublease, the
then Tenant shall no longer be in occupancy of at least sixty five percent
(65%) of the rentable floor area of the Premises (e.g. any sublease that
would result in more than thirty five percent (35%) of the rentable floor
area of the Premises being subject to a sublease, subleases or other
occupancy agreements), then in either of such cases, if the proposed
occupant is not sufficiently creditworthy in the reasonable opinion of the
Landlord with reference to the obligations which are to be fulfilled by the
tenant under this Lease, and the reasonable needs of the Landlord to
protect the value of the Building, then the withholding of consent by the
Landlord shall be considered reasonable.
If the proposed occupant is already involved in discussions with either the
Landlord or any affiliate of the Landlord regarding space within University Park
that is or is to become available for lease, then the withholding of consent by
the Landlord shall be considered reasonable.
26
<PAGE> 32
Notwithstanding anything to the contrary contained in this Section, Tenant
shall have the right to assign or otherwise transfer this Lease or the Premises,
or part of the Premises, without obtaining the prior consent of Landlord, (a) to
an entity owning a majority of Tenant or to a majority owned subsidiary or to an
entity which is majority owned by the same entity which owns a majority of
Tenant (any of the foregoing being referred to herein as a "Tenant Affiliate"),
provided that (i) the transferee shall, subject to applicable law, regulation or
prior binding agreement, prior to the effective date of the transfer, deliver to
Landlord instruments evidencing such transfer and its agreement to assume and be
bound by all the terms, conditions and covenants of this Lease to be performed
by Tenant, all in form reasonably acceptable to Landlord, and (ii) at the time
of such transfer there shall not be an uncured Event of Default under this
Lease; or (b) to the purchaser of at least fifty percent (50%) of its assets or
stock, or to any entity into which the Tenant may be merged or consolidated
(along with all or substantially all of its assets) (the "Acquiring Company"),
provided that (i) the net worth of the Acquiring Company upon the consummation
of the transfer or merger shall not be less than the net worth of the Tenant at
the time immediately prior to such transfer or merger, (ii) the Acquiring
Company continues to operate the business conducted in the Premises consistent
with the Permitted Uses described in Exhibit A hereto, (iii) the Acquiring
Company shall assume in writing, in form reasonably acceptable to Landlord, all
of Tenant's obligations under this Lease, (iv) Tenant shall provide to Landlord
such additional information regarding the Acquiring Company as Landlord shall
reasonably request, and (v) Tenant shall pay Landlord's reasonable out-of-pocket
expenses incurred in connection therewith. Unless Landlord shall have objected
to such assignment or transfer by Tenant within ten (10) business days following
Landlord's receipt of the information or items described in (b)(i) and (iii)
above, then Landlord shall be deemed to have waived its right to object thereto.
Each of the transfers described in this paragraph is referred to hereinafter as
"Permitted Transfers." In no event shall any transaction consummated for the
purpose of evading Tenant's obligation to obtain Landlord's consent under this
Section 6.8 be construed as a Permitted Transfer, notwithstanding that such
transaction otherwise qualifies as a Permitted Transfer.
Whether or not the Landlord consents, or is required to consent, to any
Transfer, the Tenant named herein shall remain fully and primarily liable for
the obligations of the Tenant hereunder, including, without limitation, the
obligation to pay Annual Fixed Rent and Additional Rent provided under this
Lease.
The Tenant shall give the Landlord notice of any proposed Transfer (other
than a Permitted Transfer), specifying the provisions thereof, including (i) the
name and address of the proposed occupant, subtenant, assignee, mortgagee or
other transferee, (ii) a copy of the proposed occupant's, subtenant's,
assignee's, mortgagee's or other transferee's most recent annual financial
statement, and (iii) all of the terms and provisions upon which the proposed
Transfer is to be made including, without limitation, all of the documentation
effectuating such Transfer (which shall be subject to the Landlord's approval
not to be unreasonably withheld) and such other reasonable information
concerning the proposed Transfer or concerning the proposed occupant, subtenant,
assignee, mortgagee or other transferee as the Tenant has obtained in connection
with the proposed Transfer. The Tenant shall reimburse the Landlord promptly for
27
<PAGE> 33
reasonable legal and other reasonable expenses incurred by the Landlord in
connection with any request by the Tenant for consent to any Transfer. If this
Lease is assigned, or if the Premises or any part thereof is sublet or occupied
by anyone other than the Tenant, or there is otherwise a Transfer, then during
any time when an Event of Default is subsisting, the Landlord may, at any time
and from time to time, collect rent and other charges from the assignee,
sublessee, occupant, mortgagee or transferee, and apply the net amount collected
to the rent and other charges herein reserved, but no such assignment,
subletting, occupancy or collection shall be deemed a waiver of the prohibitions
contained in this Section 6.8 or the acceptance of the assignee, sublessee or
occupant as a tenant or a release of the Tenant from the further performance by
the Tenant of covenants on the part of the Tenant herein contained.
The Tenant shall pay to the Landlord fifty percent (50%) of any amounts the
Tenant receives from any occupant, subtenant, assignee or other transferee other
than a Permitted Transferee, as rent, additional rent or other forms of
compensation or reimbursement (if any) in excess of the aggregate amount of (i)
the proportionate monthly share of Annual Fixed Rent, Additional Rent and all
other monies due to Landlord pursuant to this Lease (allocable in the case of a
sublease to that portion of the Premises being subleased), (ii) brokerage
commissions and fees for legal services associated with the transaction, (iii)
any expenses incurred by the Tenant in connection with preparing the Premises or
applicable portion thereof for occupancy by such subtenant, assignee or other
transferee and (iv) any monetary concessions paid to the subtenant, assignee or
other transferee such as, but not limited to, reimbursement of moving expenses
(collectively "Sublease Transaction Expenses"). In the circumstances where the
transferee pays the consideration due to the Tenant on account of such transfer
over time (e.g. monthly rental payments under a sublease), Sublease Transaction
Expenses shall be amortized on a straight-line basis over the term of the
transfer in question, together with interest at a rate which is reasonably
satisfactory to the Landlord. Neither the fact that the Landlord's consent may
not be required in order for the Tenant to effectuate a Permitted Transfer, nor
the consent by the Landlord to a Transfer for which the Landlord's consent is
required shall be construed to relieve the Tenant from the obligation to obtain
the express consent in writing of the Landlord to any further Transfer whether
by the Tenant or by anyone claiming by, through or under the Tenant including,
without limitation, any occupant, assignee, subtenant, mortgagee or other
transferee, excluding any Permitted Transfer.
The Landlord may elect, within thirty (30) days of receipt of written
notice from the Tenant of any proposed assignment of this Lease prior to
approving or disapproving any such proposed assignment, to repossess the
Premises. The Landlord may thereafter lease the Premises in such a manner as the
Landlord may in its sole discretion determine. In the event the Landlord elects
to repossess the Premises as provided above, then all of the Tenant's rights and
obligations hereunder with respect to the Premises shall cease and shall be of
no further force and effect. The provisions of this paragraph shall not apply to
Permitted Transfers.
If the Landlord withholds consent to a proposed Transfer, in any case where
the Landlord is bound by this Lease not to unreasonably withhold such consent,
and the Tenant disputes the reasonability of the Landlord's withholding of such
consent, then either party may, at its election,
28
<PAGE> 34
have the dispute resolved by the Expedited Dispute Resolution Procedure. The
Landlord shall have no liability for having unreasonably withheld consent to
such a Transfer provided that the Landlord may be required to give such consent
pursuant to the Expedited Dispute Resolution Procedure.
ARTICLE 7
INDEMNITY AND INSURANCE
Section 7.1 INDEMNITY. The Tenant shall indemnify and save harmless the
Landlord and the Landlord's ground lessees, mortgagees and managing agent for
the Building from and against all claims, loss, or damage of whatever nature
arising from (i) any breach by Tenant of any obligation of Tenant under this
Lease, or (ii) any negligence or misconduct of the Tenant, or the Tenant's
contractors, licensees, agents, servants or employees, or (iii) any accident,
injury or damage whatsoever caused to any person or property in the Building or
on or about the Land, occurring after the Rent Commencement Date (or such
earlier date upon which the Tenant first commences occupancy [as distinguished
from construction of Initial Leasehold Improvements by the Contractor (as
defined in the Work Letter)] of all or any part of the Premises) and until the
end of the Term and thereafter, so long as the Tenant is in occupancy of any
part of the Premises, provided that the foregoing indemnity shall not include
any claims, loss or damage to the extent arising from any negligence or
misconduct of the Landlord, or the Landlord's contractors, licensees, agents,
servants or employees or the Landlord's ground lessees, mortgagees or managing
agent for the Building.
The Landlord shall indemnify and save harmless the Tenant from and against
all claims, loss, or damage of whatever nature arising from (i) any breach by
Landlord of any obligation of Landlord under this Lease or (ii) from any
negligence or misconduct of the Landlord, or the Landlord's contractors,
licensees, agents, servants or employees, provided that the foregoing indemnity
shall not include any claims, loss or damage to the extent arising from any act,
omission or negligence of the Tenant, or the Tenant's contractors, licensees,
agents, servants or employees, occurring following the Rent Commencement Date
and until the expiration of earlier termination of the Term of this Lease.
The foregoing indemnity and hold harmless agreements shall include
indemnity against reasonable attorneys' fees and all other costs, expenses and
liabilities incurred in connection with any such claim or proceeding brought
thereon, and the defense thereof, but shall be subject to the limitations
specified in Sections 7.5 and 12.16.
Section 7.2 LIABILITY INSURANCE. The Tenant agrees to maintain in full
force from the Rent Commencement Date (or such earlier date upon which the
Tenant first commences occupancy [as distinguished from construction of Initial
Leasehold Improvements by the Contractor (as defined in the Work Letter)] of all
or any part of the Premises), throughout the Term, and thereafter, so long as
the Tenant is in occupancy of any part of the Premises, a policy
29
<PAGE> 35
of commercial general liability insurance under which the Landlord (and any
individuals or entities affiliated with the Landlord, any ground lessor and any
holder of a mortgage on the Property of whom the Tenant is notified by the
Landlord) are named as additional insureds, and under which the insurer provides
a contractual liability endorsement insuring against all cost, expense and
liability arising out of or based upon any and all claims, accidents, injuries
and damages described in Section 7.1, in the broadest form of such coverage from
time to time available. Each such policy shall be noncancelable and nonamendable
(to the extent that any proposed amendment reduces the limits or the scope of
the insurance required in this Lease) with respect to the Landlord and such
ground lessors and mortgagees without thirty (30) days' prior notice to the
Landlord and such ground lessors and mortgagees and at the election of the
Landlord, either a certificate of insurance or a duplicate original policy shall
be delivered to the Landlord. The minimum limits of liability of such insurance
as of the Commencement Date shall be Ten Million Dollars ($10,000,000.00) for
combined bodily injury (or death) and damage to property (per occurrence) with
an aggregate annual limit of liability of Ten Million Dollars ($10,000,000.00),
and from time to time during the Term such limits of liability shall be
increased to reflect such higher limits as are customarily required pursuant to
new leases of space in the Boston-Cambridge area with respect to similar
properties. Such insurance may be effected with a combination of a base
commercial general liability policy and umbrella insurance.
Section 7.3 PERSONAL PROPERTY AT RISK. The Tenant agrees that all of the
furnishings, fixtures, equipment, effects and property of every kind, nature and
description of the Tenant and of all persons claiming by, through or under the
Tenant which, during the continuance of this Lease or any occupancy of the
Premises by the Tenant or anyone claiming under the Tenant which, during the
continuance of this Lease or any occupancy of the Premises by the Tenant or
anyone claiming under the Tenant, may be on the Premises or elsewhere in the
Building or on the Land or parking facilities provided hereby, shall be at the
sole risk and hazard of the Tenant, and if the whole or any part thereof shall
be destroyed or damaged by fire, water or otherwise, or by the leakage or
bursting of water pipes, steam pipes, or other pipes, by theft or from any other
cause, no part of said loss or damage is to be charged to or be borne by the
Landlord, except that the Landlord shall in no event be exonerated from any
liability to the Tenant or to any person, for any injury, loss, damage or
liability to the extent caused by Landlord's or its employees', agents' or
contractors' negligence or willful misconduct.
Section 7.4 LANDLORD'S INSURANCE. The Landlord shall, from and after the
Rent Commencement Date and until the expiration or earlier termination of the
Term of this Lease, carry such "all risk" casualty in an amount equal to at
least the replacement cost for the Building with a deductible in amounts carried
at comparable buildings with similar uses within the Cambridge market or
required by any mortgagee holding a mortgage thereon or any ground lessor of the
Land, in an amount equal to the replacement cost of the Building, including all
leasehold improvements, exclusive of foundations, site preparation and other
nonrecurring construction costs. The Landlord shall also, during the aforesaid
period, carry commercial general liability insurance with the same limits which
the Tenant is required to carry from time to time upon and with respect to
operations at the Building, which shall similarly be noncancellable and
nonamendable (to the extent that any proposed amendment reduces the limits or
the scope of
30
<PAGE> 36
insurance required in this Lease) with respect to the Tenant without thirty (30)
days' prior notice to the Tenant.
Section 7.5 WAIVER OF SUBROGATION. Any casualty insurance carried by either
party with respect to the Building, Land, Premises, parking facilities or any
property therein or occurrences thereon shall, without further request by either
party, include a clause or endorsement denying to the insurer rights of
subrogation against the other party (and the Landlord's policy shall also deny
the insurer rights of subrogation against any permitted subtenant and any such
subtenant shall be required to carry a policy that denies the insurer rights of
subrogation against the Landlord) to the extent rights have been waived by the
insured prior to occurrence of injury or loss. Each party, notwithstanding any
provisions of this Lease to the contrary, hereby waives any rights of recovery
against the other (and the Landlord hereby waives any right of recovery which
the Landlord has against any permitted subtenant, and any sublease will require
that the subtenant waive any right of recovery which any such subtenant may have
against the Landlord) for loss or damage to property, including, without
limitation, loss or damage caused by negligence of such other party, due to
hazards covered by casualty insurance which such party is required to carry
hereunder, except with respect to any damage within the deductible under such
insurance policy.
Section 7.6 POLICY REQUIREMENTS. Any required insurance may be in the form
of blanket coverage, so long as the coverage required herein is maintained. Each
party shall cause a certificate, providing such information as reasonably
requested by the other party, evidencing the existence and limits of its
insurance coverage with respect to the Premises and the Building, as the case
may be, to be delivered to such other party upon the commencement of the Term.
Thereafter, each party shall cause similar certificates evidencing renewal
policies to be delivered to such other party at least thirty (30) days prior to
the expiration of the term of each policy and at such other times as reasonably
requested by the other party. The insurance policies and certificates required
by this Article 7 shall contain a provision requiring the insurance company to
furnish Landlord and Tenant, as the case may be, thirty (30) days' prior written
notice of any cancellation or lapse, or the effective date of any reduction in
the amounts or scope of coverage. The Landlord shall have reasonable approval
over the identity of the Tenant's insurance underwriter.
ARTICLE 8
CASUALTY AND EMINENT DOMAIN
Section 8.1 RESTORATION FOLLOWING CASUALTIES. If, during the Term, the
Building or the Premises shall be damaged by fire or casualty, subject to
termination rights of the Landlord and the Tenant provided below in this Article
8, the Landlord shall proceed promptly to exercise diligent efforts to restore,
or cause to be restored, the Building to substantially the condition thereof
just prior to time of such damage, but the Landlord shall not be responsible for
delay in such restoration which may result from External Causes. Provided that
the Landlord complies with its obligations to carry casualty insurance in
accordance with Section 7.4, the Landlord shall
31
<PAGE> 37
have no obligation to expend in the reconstruction of the Building more than the
sum of the amount of any deductible and the actual amount of insurance proceeds
made available to the Landlord by its insurer, and any additional costs
associated with changes to the Premises desired by the Tenant and permitted by
Article 4 shall be paid by the Tenant in the manner reasonably required by the
Landlord. Any restoration of the Building or the Premises shall be altered to
the extent necessary to comply with then current and applicable laws and codes.
The Landlord shall, as soon as possible after any casualty, but in any event no
later than sixty (60) days after such casualty, provide to the Tenant a
reasonable written estimate ("Architect's Estimate") from a reputable architect
or other design professional as to the time frame within which the Landlord will
be able to repair the casualty damage and the cost of repairing such damage, and
the Landlord's reasonable determination ("Insurance Proceeds Estimate") as to
the amount of insurance proceeds which will be available to repair such damage.
Section 8.2 LANDLORD'S TERMINATION ELECTION. If the Landlord reasonably
determines, based upon the Architect's Estimate and the Insurance Proceeds
Estimate, that (a) the amount of insurance proceeds available to the Landlord is
insufficient (by more than the amount of any deductible) to cover the cost of
restoring the Building by more than the amount of any deductible (provided
however, that the Landlord shall not have the right to terminate the Lease
pursuant to this clause (a) if the casualty would have been covered by casualty
insurance which the Landlord is required to obtain pursuant to Section 7.4), or
(b) the Landlord will be unable to restore the Building within twelve (12)
months from the date of such casualty, then the Landlord may terminate this
Lease by giving notice to the Tenant at the time that the Landlord provides to
the Tenant the Architect's Estimate and the Insurance Proceeds Estimate. Any
such termination shall be effective on the date designated in such notice from
the Landlord, but in any event not later than sixty (60) days after such notice,
and if no date is specified, effective upon the delivery of such notice. Failure
by the Landlord to give the Tenant notice of termination within ninety (90) days
following the occurrence of the casualty shall constitute the Landlord's
agreement to restore the Building as contemplated in Section 8.1.
Section 8.3 TENANT'S TERMINATION ELECTIONS. If, based upon the Architect's
Estimate and the Insurance Proceeds Estimate, the time period for repairing any
casualty damage will exceed twelve (12) months after the date of any casualty,
then the Tenant shall have the right, exercisable by written notice given on or
before the date thirty (30) days after the Landlord gives to the Tenant the
Architect's Estimate and the Insurance Proceeds Estimate, to terminate this
Lease.
If neither the Landlord nor the Tenant exercise their termination rights
based upon the Architect's Estimate and the Insurance Proceeds Estimate, but the
Landlord has failed to restore the Building, within twelve (12) months from the
date of the casualty or taking, such period to be subject, however, to extension
(which extension shall not exceed an additional one hundred eighty (180) days)
where the delay in completion of such work is due to External Causes, the Tenant
shall have the right to terminate this Lease at any time after the expiration of
such 12-month period (as extended by delay due to External Causes as aforesaid),
as the case may be, until the restoration is substantially completed, such
termination to take effect as of the date of
32
<PAGE> 38
the Tenant's notice. However, if the Landlord has been diligently prosecuting
the repair of all casualty and damage, and if the Landlord reasonably determines
at any time, and from time to time, during the restoration, based upon
certification by its architect or other design professional, that such
restoration will not be able to be completed before the deadline date after
which the Tenant may terminate this Lease under this Section 8.3, and the
Landlord specifies in a notice to Tenant to such effect a later date that the
Landlord estimates will be the date upon which such restoration will be
completed, then the Tenant may terminate this Lease within thirty (30) days of
the Landlord's notice as aforesaid, failing which the deadline date shall be
extended to the date set forth in Landlord's notice (as extended by delay due to
External Causes as aforesaid). The Landlord shall exercise reasonable efforts to
keep the Tenant advised of the status of restoration work from time to time, and
promptly following any request for information during the course of the
performance of the restoration work.
Section 8.4 CASUALTY AT EXPIRATION OF LEASE. If the Premises shall be
damaged by fire or casualty in such a manner that the Premises cannot, in the
ordinary course, reasonably be expected to be repaired within one hundred twenty
(120) days from the commencement of repair work and such damage occurs within
the last twenty four (24) months of the Term (as the same may have been extended
prior to such fire or casualty), either party shall have the right, by giving
notice to the other not later than sixty (60) days after such damage, to
terminate this Lease, whereupon this Lease shall terminate as of the date of
such notice. Notwithstanding the foregoing, the Landlord shall not have the
right to terminate this Lease as aforesaid provided that the Tenant shall have
exercised its right to extend the Term of this Lease pursuant to Section 2.6
hereof not later than forty-five (45) days after the date of damage to the
Premises.
Section 8.5 EMINENT DOMAIN. Except as hereinafter provided, if the
Premises, or such portion thereof as to render the balance (if reconstructed to
the maximum extent practicable in the circumstances) unsuitable for continued
occupancy for the purposes contemplated under this Lease, shall be taken by
condemnation or |
