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DATE OF LEASE EXECUTION: November 21, 2007

Lease Agreement

DATE OF LEASE EXECUTION: November 21, 2007 | Document Parties: CAMBRIDGE HEART INC | 100-200 Ames Pond Drive LLC | CAMBRIDGE HEART, INC | Farley White Management Company, LLC You are currently viewing:
This Lease Agreement involves

CAMBRIDGE HEART INC | 100-200 Ames Pond Drive LLC | CAMBRIDGE HEART, INC | Farley White Management Company, LLC

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Title: DATE OF LEASE EXECUTION: November 21, 2007
Governing Law: Massachusetts     Date: 3/31/2008
Industry: Medical Equipment and Supplies     Law Firm: Wilmer Cutler     Sector: Healthcare

DATE OF LEASE EXECUTION: November 21, 2007, Parties: cambridge heart inc , 100-200 ames pond drive llc , cambridge heart  inc , farley white management company  llc
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Exhibit 10.45

[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

DATE OF LEASE EXECUTION: November 21, 2007

ARTICLE I

REFERENCE DATA

 

1.1 SUBJECTS REFERRED TO:

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

 

LANDLORD:    100-200 Ames Pond Drive LLC, a Massachusetts limited liability company
MANAGER:    Farley White Management Company, LLC, a Massachusetts limited liability company, or such other manager appointed by Landlord from time to time
LANDLORD’S & MANAGER’S ADDRESS:
  

Farley White Management Company, LLC

10 High Street, Suite 900

Boston, Massachusetts 02110

Facsimile Number: (617) 338-2387

Attention: Mr. Roger Altreuter

   with a copy to:
  

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, MA 02109

Facsimile Number: 617-526-5000

Attention: William R. O’Reilly, Jr., Esq.

 

LANDLORD’S CONSTRUCTION REPRESENTATIVE:    Mr. Jonathan Dayton

 

TENANT:    Cambridge Heart, Inc., a Delaware corporation

 

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TENANT’S ADDRESS:   

Until the Term Commencement Date:

One Oak Park Drive

Bedford, MA 01730

Attention: Vincenzo LiCausi

 

After Term Commencement Date:

At the Premises

Attention: Vincenzo LiCausi

 

TENANT’S CONSTRUCTION REPRESENTATIVE:    Vincenzo LiCausi

 

LOT:    The land known and numbered as 100 and 200 Ames Pond Drive, Tewksbury, MA, more particularly described on Exhibit A.
BUILDING:    The building known and numbered as 100 Ames Pond Drive, Tewksbury, MA located on the Lot.
PREMISES:    20,432 square feet of space located on the first floor of the Building, as shown on Exhibit A-1 attached hereto and made a part hereof.

 

RENTABLE FLOOR

AREA OF THE PREMISES:

   20,432 square feet, which the parties agree shall be conclusive for all purposes hereunder

TOTAL RENTABLE

FLOOR AREA OF THE

BUILDING:

   76,522 square feet, which the parties agree shall be conclusive for all purposes hereunder.
TENANT ACCESS
DATE:
   The date that Landlord’s Work is substantially completed, as described in Section 3.2.

SCHEDULED ACCESS

DATE:

   February 15, 2008.
TENANT’S EARLY ACCESS DATE    The date when, subject to Tenant’s compliance with all of the terms, provisions and conditions of this Lease, Landlord shall permit Tenant access to the Premises, and at an appropriate time in the construction sequence of the Landlord’s Work, Landlord shall permit Tenant access to the Premises for Tenant to install wiring and cabling and furniture, fixtures and equipment in connection with its preparation to occupy the Premises. In no event shall the Tenant’s Early Access Date be later than thirty (30) days prior to the Landlord’s good faith estimate of the Tenant Access Date for purposes of Tenant’s installation of wiring and cabling, or later than fourteen (14) days prior to Landlord’s good faith estimate of the Tenant’s Access Date for purposes of Tenant’s installation of its furniture, fixtures and equipment.

 

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[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

TERM COMMENCEMENT

DATE

   The earlier of (x) fourteen days after Tenant Access Date and (y) the day Tenant occupies the Premises for the conduct of business.

LEASE YEAR:

   The first Lease Year shall consist of any partial calendar month at the beginning of the Term and the successive fourteen (14) calendar months. Each successive Lease Year shall consist of each successive twelve (12) full calendar month period thereafter.
TERM:    Commencing on the Term Commencement Date, a period of sixty two (62) months, and if the Term Commencement Date occurs on a day other than the first day of a calendar month, the partial month in which the Commencement Date occurs, so that the last day of the term shall be the last day of the calendar month occurring sixty two (62) months after the Term Commencement Date.
ANNUAL BASE RENT:    Lease Year.
   1   $262,500.00 per annum (i.e. $[****] per square foot of Rentable Floor Area of the Premises per year); provided, however, Tenant shall not be required to pay Annual Base Rent for the first sixty (60) days of the Term (“Free Rent”).
   2   $367,776.00 per annum (i.e. $[****] per square foot of Rentable Floor Area of the Premises per year).
   3   $377,992.00 per annum (i.e. $[****] per square foot of Rentable Floor Area of the Premises per year).
   4   $388,208.00 per annum (i.e. $[****] per square foot of Rentable Floor Area of the Premises per year).
  

5

(through the end of the initial Term)

  $398,424.00 per annum (i.e. $[****] per square foot of Rentable Floor Area of the Premises per year).
OPERATING COST BASE:      All Landlord’s Operating Costs for calendar year 2008, calculated in the manner provided for in Section 4.2.1, including without limitation the penultimate sentence thereof.

 

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[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

REAL ESTATE TAX BASE:    All Real Estate Taxes attributable to fiscal year 2008, calculated in the manner provided for in Section 4.2.2, including without limitation the final sentence thereof.
TENANT’S PRO RATA SHARE:    26.70%, representing the Rentable Floor Area of the Premises expressed as a fraction of the Total Rentable Floor Area of the Building.

TENANT IMPROVEMENT COST SAVINGS

AMOUNT:

   The lesser of (A) $[****] less the Improvement Cost (defined below), and (B) $[****].
PERMITTED USES:    Office and electronic laboratory, including assembly and light manufacturing and uses accessory thereto to the extent permitted by applicable law.
COMMERCIAL GENERAL LIABILITY INSURANCE:

$2,000,000 combined single limit per occurrence; $2,000,000 annual aggregate.

 

BROKERS:    Jones Lang LaSalle and FHO Partners
SECURITY DEPOSIT AMOUNT:    $500,000, subject to the provisions of Section 10.19. The Security Deposit Amount will decline to $400,000 after the end of the second Lease Year, to $300,000 after the end of the third Lease Year and to $200,000 after the end of the fourth Lease Year, in each instance provided that at such time no Event of Default exists.
GUARANTOR:    None.

 

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1.2 EXHIBITS.

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

 

EXHIBIT A    Description of Lot.
EXHIBIT A-1    Plan showing Premises.
EXHIBIT B    Landlord’s Work.
EXHIBIT C    Rules and Regulations.
EXHIBIT D    Form of Notice of Commencement Date
EXHIBIT E    Form of Tenant Estoppel Certificate
EXHIBIT F    Cleaning Specifications
EXHIBIT G    Notice of Lease

 

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1.3 TABLE OF CONTENTS

 

       PAGE
Article I   
REFERENCE DATA    1
   1.1    SUBJECTS REFERRED TO:    1
   1.2    EXHIBITS    5
   1.3    TABLE OF CONTENTS PAGE    6
Article II   
PREMISES AND TERM    7
   2.1    DESCRIPTION OF PREMISES    7
   2.2    TERM    8
   2.3    EXTENSION OPTION    9
Article III   
CONSTRUCTION    11
   3.1    DELIVERY OF PREMISES    11
   3.2    PREPARATION OF PREMISES BY TENANT    13
   3.3    GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION    15
   3.4    CONSTRUCTION REPRESENTATIVES    15
   3.5    ALTERATIONS AND ADDITIONS    15
Article IV   
RENT    17
   4.1    RENT    17
   4.2    OPERATING COSTS AND REAL ESTATE TAXES    17
   4.3    ESTIMATED PREMISES EXPENSE PAYMENTS    22
   4.4    ELECTRICITY    22
   4.5    CHANGE OF FISCAL YEAR    23
   4.6    PAYMENTS    23
Article V   
LANDLORD’S COVENANTS    24
   5.1    LANDLORD’S COVENANTS DURING THE TERM    24
   5.2    INTERRUPTIONS    25
Article VI   
TENANT’S COVENANTS    26
   6.1    TENANT’S COVENANTS DURING THE TERM    26
Article VII   
CASUALTY AND TAKING    33
   7.1    CASUALTY AND TAKING    33
   7.2    RESERVATION OF AWARD    34

 

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Article VIII   
RIGHTS OF MORTGAGEE AND GROUND LESSOR    35
   8.1    PRIORITY OF LEASE    35
   8.2    Rights of Mortgagee to Cure    36

Article IX

  

DEFAULT

   37
   9.1    EVENTS OF DEFAULT    37
   9.2    TENANT’S OBLIGATIONS AFTER TERMINATION    38

Article X

  

MISCELLANEOUS

   39
   10.1    NO RECORDING    39
   10.2    NOTICES FROM ONE PARTY TO THE OTHER    39
   10.3    BIND AND INURE    39
   10.4    LIMITATION ON LIABILITY    40
   10.5    NO SURRENDER    40
   10.6    NO WAIVER, ETC    40
   10.7    NO ACCORD AND SATISFACTION    41
   10.8    CUMULATIVE REMEDIES    41
   10.9    LANDLORD’S RIGHT TO CURE    41
   10.10    ESTOPPEL CERTIFICATE    41
   10.11    ACTS OF GOD    42
   10.12    BROKERAGE    42
   10.13    SUBMISSION NOT AN OFFER    42
   10.14    APPLICABLE LAW AND CONSTRUCTION    42
   10.15    AUTHORITY OF TENANT    43
   10.16    AUTHORITY OF LANDLORD    43
   10.17    CONFIDENTIALITY    43
   10.18    LANDLORD’S FEES; ENFORCEMENT COSTS    44
   10.19    SECURITY DEPOSIT    44
   10.20    WAIVER OF SUBROGATION    45

ARTICLE II

PREMISES AND TERM

 

2.1 DESCRIPTION OF PREMISES.

Subject to and with the benefit of the provisions of this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord, the Premises, excluding common facilities and building service fixtures and equipment located therein and serving the Premises exclusively or in common with other parts of the Building.

Tenant shall have, as appurtenant to the Premises, the right to use in common with others entitled thereto and owners and tenants of the adjacent buildings known as 200 Ames Pond and 300

 

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Ames Pond (collectively, the “Park”): (a) the common facilities included in the Building (including without limitation the common lobbies, stairways, elevators and bathrooms) or on or appurtenant to the Park (including without limitation the common driveways, walkways, sidewalks and landscaped areas and the right to continuously use 3.5 parking spaces within the parking facilities provided by Landlord for the Building for every 1,000 rentable square feet of space included in the Premises on a nonexclusive basis (“Parking Spaces”)), and (b) the building service fixtures and equipment (including without limitation HVAC plumbing and electrical systems) serving the Premises. Landlord shall not reduce the number of parking spaces in the parking facilities provided by Landlord for the Building below a number equal to 3.5 parking spaces per 1,000 rentable square feet in the Building. The parking rights set forth in the preceding sentence are not transferable, except in connection with a valid assignment of this Lease or sublease as described in Section 6.1.6 hereunder. Tenant shall not assign its rights to the Parking Spaces or any interest therein, or sublease or otherwise allow the use of all or any part of the Parking Spaces to or by any other person (other than together with a Transfer in compliance with the provisions of Section 6.1.6), except with Landlord’s prior written consent, which may be withheld or conditioned in Landlord’s sole discretion. All loading doors and bays are common facilities.

Landlord reserves the right from time to time, upon reasonable advance written notice to Tenant (except in case of emergency) without unreasonable interference with Tenant’s use, (i) to install, repair, replace, use, maintain and relocate for service to the Premises and to other parts of the Building, or either, building service fixtures and equipment wherever located in the Building or on the Lot and (ii) to alter or relocate any common facilities. Without limiting the foregoing, Parking Spaces may be temporarily relocated from time to time by Landlord to a location within reasonable walking distance of the Building in the event of emergencies or (after reasonable advance written notice) in the event of required repairs or maintenance work. Landlord also reserves the right at all reasonable times upon reasonable advance notice and in the presence of Tenant (except that neither notice nor Tenant’s presence is required in the event of an emergency) to enter upon the Premises, inspect the same and in the last nine months of the Term of the Lease show the same to others, and in Landlord’s discretion to make repairs, alterations or substitutions for the protection and maintenance of the Building or any part thereof, and to remove, at Tenant’s expense, any changes, additions, signs, curtains, blinds, shades, awnings or the like not consented to in writing by Landlord.

 

2.2 TERM.

To have and to hold for a period (the “Term”) commencing on the Term Commencement Date (as defined in Section 1.1 hereof) and continuing for the Term, unless sooner terminated as provided herein. Notwithstanding the fact that the Term shall not commence until the Term Commencement Date, from and after the Tenant’s Early Access Date, Tenant shall have access to the Premises for the purposes of installing wiring, furniture, fixtures and equipment and other reasonable purposes in connection with Tenant’s preparation to occupy the Premises, and (from said date or such earlier date on which Tenant is provided access to the Premises for the purpose of installing wiring and cabling in connection with its preparation to occupy the Premises) Tenant shall comply with all of the terms, provisions and conditions of this Lease, other than the obligation to pay Annual Base Rent and Rent on account of Landlord’s Operating Costs and Real Estate Taxes (as defined in Article IV), provided, however, that from and after the Tenant Access Date Tenant shall be responsible for all electricity consumed by Tenant and other expenses directly attributable to Tenant’s installations or other early access activities.

 

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2.3 EXTENSION OPTION.

2.3.1 Tenant shall have the option to extend the Term for one (1) additional period of five (5) years (the “Extension Term”) commencing upon the expiration of the original Term referred to in Section 2.2 (the “Original Term”), provided that Tenant shall give Landlord written notice of Tenant’s irrevocable exercise of such option at least nine (9) months prior to the expiration of the Original Term, as the same may have been extended to date, and provided further that at both the time of the giving such notice and at the time of the commencement of the Extension Term: (a) the Lease is in full force and effect, (b) Tenant is not in default, beyond applicable notice and cure periods, in the performance or observance of any of the terms and provisions of this Lease on the part of the Tenant to be performed or observed, (c) Tenant has neither assigned the Lease nor sublet all or a portion of the Premises (other than as part of a Permitted Transfer (as such term is hereinafter defined)), and (d) Tenant is occupying the entire Premises (other than any portion of the Premises occupied by a subtenant or assignee pursuant to a Permitted Transfer). Prior to the exercise by Tenant of such option, the expression “Term” shall mean the Original Term, and after the exercise by Tenant of such option, the expression “Term” shall mean the Original Term as it has been extended by the Extension Term. All the terms, covenants, conditions, provisions and agreements in the Lease contained shall be applicable to the Extension Term, except that (i) Landlord shall not be obligated to undertake any Landlord Work or leasehold improvements or otherwise prepare the Premises for Tenant or provide any tenant allowance to Tenant, (ii) the Annual Base Rent shall be as set forth below, and (iii) in no event shall Tenant have the right to extend the Term for more than one (1) Extension Term. If Tenant shall give notice of its exercise of said option to extend in the manner and within the time period provided aforesaid, the Term shall be extended upon the giving of such notice without the requirement of any further action on the part of either Landlord or Tenant. If Tenant shall fail to give timely notice of the exercise of any such option as aforesaid, Tenant shall have no right to extend the Term of this Lease, time being of the essence of the foregoing provisions.

2.3.2 The Annual Base Rent payable during the Extension Term shall be the amount which is the greater of (i) the Annual Base Rent in effect for the Lease Year immediately preceding the commencement of the Extension Term or (ii) the Fair Market Rent for the Premises, as determined below, as of the commencement of the Extension Term. If for any reason the Annual Base Rent payable during the Extension Term has not been determined as of the commencement of the Extension Term, until the Annual Base Rent for the Extension Term is determined Tenant shall pay Annual Base Rent at a rate equal to the average of the Annual Base Rent specified by Landlord pursuant to the procedures hereinafter set forth and the Annual Base Rent specified by Tenant pursuant to such procedures, or at the rate specified by either of Landlord or Tenant if the other has not so specified an Annual Base Rent, but in no event less than Annual Base Rent payable during the immediately preceding Lease Year. Within ten (10) days after determination of the Annual Base Rent in accordance with the provisions hereof, an appropriate adjustment, if any, shall be made between Landlord and Tenant.

 

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For purposes hereof, the “Fair Market Rent” shall mean the fair rent for similar Class A office space in buildings in the 495 North Office Market comparable to the Building, free and clear of this Lease, as of the commencement of the Extension Term under market conditions then existing, taking into account all relevant factors and considerations for a market lease transaction, and the then current market rental rates for direct leases of comparable space in comparable buildings in the Tewksbury area to new tenants. Fair Market Rent shall be determined pursuant to the following provisions:

2.3.3 Landlord shall give Tenant notice of its determination of the Fair Market Rent for the Premises for the applicable period (the “Landlord’s Rent Notice”) by the later of (i) two hundred forty (240) days prior to the commencement of the Extension Term, or (ii) sixty (60) days after Tenant notifies Landlord of its election to exercise an extension option. If Tenant disagrees with Landlord’s determination of the Fair Market Rent, Tenant may, by notice given to Landlord within twenty (20) days after Landlord’s Rent Notice is given (“Tenant’s Rent Notice”), provide its own determination of the Fair Market Rent, and elect to have the Fair Market Rent determined by the appraisal process (the “Appraisal Process”) set forth in subparagraph 2.3.4 below in the event Landlord fails to accept such determination. Tenant’s Rent Notice shall include the name of Tenant’s Appraiser (defined in subparagraph 2.3.4 below). The Fair Market Rent determination pursuant to Section 2.3 shall be binding on both Landlord and Tenant. If Tenant does not give a Tenant’s Rent Notice within such twenty (20) day period, Tenant shall be deemed to have agreed with Landlord’s determination of the Fair Market Rent for the applicable Extension Term, which determination shall be binding on both Landlord and Tenant.

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

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

 

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[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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

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

ARTICLE III

CONSTRUCTION

 

3.1 DELIVERY OF PREMISES.

Tenant acknowledges that Tenant has had an opportunity to inspect the Premises. Except for Landlord’s Work as expressly set forth hereinafter, the Premises shall be delivered to Tenant “As Is,” “Where Is” with all faults and without representation, warranty or guaranty of any kind by Landlord to Tenant. Notwithstanding the foregoing, subject to the following provisions, Landlord shall complete the work, a preliminary description of which is identified in Exhibit B, pursuant to the Final Plans, as defined below (“Landlord’s Work”). Landlord agrees to use reasonable efforts to have Landlord’s Work substantially completed no later than the Scheduled

 

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[*****] A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Access Date, subject to delays beyond Landlord’s reasonable control and delays caused by Tenant. Except as expressly provided otherwise, in this paragraph, below, Landlord shall in no way be liable to Tenant or any other party, and Tenant’s obligations shall not be reduced hereunder in the event such construction work is not substantially completed by the Scheduled Access Date. If Landlord’s Work is not substantially completed on or before the date that is thirty (30) days after the Scheduled Access Date for any reason except delays caused by matters set forth in Section 10.11 of this Lease or delays caused by Tenant, Tenant shall be entitled to [****] for each and every day from such date to the date of actual substantial completion of Landlord’s Work, and the actual Term Commencement Date shall be delayed by one day for each day of delay until the construction of the Landlord’s Work is substantially complete. If Landlord’s Work is not substantially complete on or before the date which [****] days after the Scheduled Access Date for any reason except delays caused by matters set forth in Section 10.11 of this Lease or delays caused by Tenant, Tenant shall be entitled to [****] for each and every day from the seventy sixth (76 th ) day after the Scheduled Access Date to the date of actual substantial completion of the Landlord’s Work and the actual Term Commencement Date shall be delayed by [****] days for each day of such delay after such date until the construction of the Landlord’s Work is substantially completed. If Landlord’s Work is not substantially completed on or before the date which is [****] days after the Scheduled Access Date for any reason except delays caused by matters set forth in Section 10.11 of this Lease or delays caused by Tenant, then Tenant shall have the right to terminate this Lease by giving fifteen (15) days’ prior written notice of its exercise of said termination right at any time thereafter, whereupon the Security Deposit and any other sums theretofore paid to Landlord by Tenant shall be promptly returned to Tenant and Tenant shall have no further liability under this Lease (provided that if the Landlord’s Work is substantially complete within [****] days following such notice, then Tenant’s termination right shall be deemed rescinded and Tenant’s obligations hereunder shall continue as if no such election had occurred; however, such rescission shall not in any manner affect the delay of the actual Term Commencement Date as set forth in the preceding sentence).

Subject to the provisions hereof, Landlord shall undertake Landlord’s Work to prepare the Premises for Tenant’s use and occupancy in accordance with the Final Plans approved as set forth below using contractors and subcontractors selected by Landlord. For the purposes hereof, Landlord and Tenant have approved the preliminary plans (“Preliminary Plans”) identified in Exhibit B for the Landlord Work. Landlord shall prepare final architectural plans (“Final Plans”) in substantial conformance with the Preliminary Plans. The Final Plans need not include working or shop drawings, but must be sufficient to secure any necessary building permits. Landlord shall deliver copies of the Final Plans to Tenant as soon as reasonably possible, but in all events within thirty five (35) days after the Date of Lease Execution.

Once the Final Plans have been prepared, Landlord shall thereupon cause the Landlord’s Work to be completed in accordance with the Final Plans by a licensed contractor in a good and workmanlike manner and in accordance with all applicable laws. In the event of any conflict between the plans and specifications that are part of the Preliminary Plans or the Final Plans, the specifications shall control, provided that Landlord shall be entitled to substitute materials of similar quality to any materials specified in the plans or specification (if the specified materials are not readily available). Once installed, such improvements (except for items considered to be trade fixtures, if any) shall be part of the Premises and the sole property of Landlord.

 

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Landlord shall pay the Improvement Cost (as hereafter defined) necessary to complete the work set forth on the Final Plans. Improvement Cost shall mean all costs to design and construct Landlord’s Work, including without limitation the cost of all labor and materials and Landlord’s architectural, space planning and permit costs and all payments to the contractor that performs the Landlord’s Work.

Tenant is not entitled to require any changes in the Final Plans after their approval; provided, however, that if Tenant nevertheless requests any change and Landlord assents thereto, such assent not to be unreasonably withheld, conditioned or delayed, Tenant shall pay any additional costs required to implement any such changes, including, without limitation, architectural fees and construction cost increases (including costs of delay) plus a fee equal to five percent (5%) of such costs. Tenant shall pay Landlord for such costs as additional rent within five (5) days after written notice from Landlord of the amount due. Any requests by Tenant for changes in the Final Plans shall constitute an agreement by Tenant to any delay in completion of the Landlord’s Work caused by reviewing, processing and implementing such changes, provided Landlord provides Tenant with an estimate of such delay in writing prior to the implementation of the change and Tenant agrees to the same in writing. If Landlord’s Work is delayed due to any delay resulting from Landlord’s reviewing, processing and implementing such changes, or from any act or omission of Tenant or Tenant’s representatives, including, but not limited to, any delay by Tenant in the submission of plans, drawings, specifications or other information, or in approving any working drawings or estimates or in giving any authorization or approval, for the purposes of calculating when Annual Base Rent commences to be paid (including the date from which Free Rent is measured) the Premises shall be deemed substantially completed on the date when they would have been ready but for such delay.

Landlord warrants that all of Landlord’s Work will be free of material defects in workmanship and materials for a period of one (1) year from the Tenant Access Date. Further, upon written request from Tenant, Landlord agrees to use reasonable efforts to enforce its rights under any third-party warranties related to any defective components of Landlord’s Work; provided, however, Landlord shall not be required to incur any costs or expenses in said efforts. Tenant agrees to promptly notify Landlord of any observed material defects.

In addition to the Landlord’s Work, Landlord agrees that on or before the Term Commencement Date, Landlord shall do the following: (1) provide an operating on-site food service establishment in the Park; and (2) replace the HVAC unit currently servicing the Premises with a new and appropriately sized unit.

 

3.2 PREPARATION OF PREMISES BY TENANT.

Upon Landlord’s written request, Tenant will execute a certificate acknowledging the Term Commencement Date and the obligation of Tenant to pay Rent hereunder in the form of Exhibit D hereto, promptly upon the occurrence of the Term Commencement Date, and in no event later than ten (10) days following the Term Commencement Date. Landlord’s Work shall be deemed substantially completed on the date Tenant receives notice from Landlord that Landlord has received a permanent or temporary certificate of occupancy for the Premises (the “Certificate of Occupancy”); provided, however, that if Landlord is unable to complete construction due to delay in Tenant’s compliance with any of the provisions hereof (including delays in approving

 

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plans) or due to other delays caused by Tenant (including, without limitation, changes to Landlord’s Work requested by Tenant and agreed to by Landlord as aforesaid), then the Landlord’s Work will be deemed substantially complete and the Premises shall be deemed ready for occupancy on the date which Landlord’s Work would have been substantially complete but for such delays, as determined by Landlord’s architect. Landlord shall deliver a copy of the Certificate of Occupancy to Tenant within a reasonable time following its receipt.

If Landlord’s contractor is delayed in completion of the Landlord’s Work as a result of Tenant-caused delays, then Tenant shall be responsible for and shall pay Landlord upon completion of the Landlord’s Work as additional rent the additional supervisory and general conditions costs incurred by Landlord.

Landlord shall not be required to furnish professional interior design services to Tenant and shall not be required to pay for professional interior design services engaged by Tenant. Further, Tenant’s interior furnishings (i.e., specification, supply and installation of furniture, furnishings, telephones, data cabling and moveable equipment) shall be the sole responsibility of Tenant. Tenant, however, shall be reimbursed by Landlord out of the Tenant Improvement Cost Savings Amount, if any, for related, actual, third party costs incurred in connection with such interior furnishings (the “Costs”). Tenant shall have the right to install its internal wiring and cabling and its furniture, fixtures and equipment from and after the Tenant’s Early Access Date. Such installations shall be coordinated with any work being performed by Landlord in the Premises or elsewhere in the Building in such manner as to maintain harmonious labor relations and not to damage the Building or the Premises or interfere with Building operations; provided, however, that without Landlord’s prior consent, Tenant may not install any interior furnishings or equipment in advance of the Tenant’s Early Access Date. Landlord will not unreasonably withhold its consent to any request by Tenant to access the Premises for the installation of furniture, fixtures and equipment within a reasonable period prior to Landlord’s then estimate of the Tenant’s Early Access Date. In the course of such installations: (a) Tenant shall comply with all of the terms, provisions and conditions of this Lease other than the obligation to pay Annual Base Rent and Rent on account of Operating Costs and Real Estate Taxes (as defined in Article IV); (b) Tenant shall be responsible for any delay in the completion of Landlord’s Work resulting therefrom; and (c) Landlord may suspend such access if, in its good faith judgment, it is delaying or interfering with the completion of Landlord’s Work or the normal operations of the Building. Upon completion of Landlord’s Work, Landlord shall give Landlord written notice of its calculation of the Tenant Improvement Cost Savings Amount, if any, together with reasonable documentation of Improvement Costs (“Landlord’s Improvement Cost Notice”). Tenant shall have the right to perform an audit of the Improvement Costs within ninety (90) days of Landlord’s Improvement Cost Notice. Provided the Improvement Cost is less than $[****], so that funds remain for a Tenant Improvement Cost Savings Amount, if Tenant desires to be reimbursed from said Tenant Improvement Cost Savings Amount for its Costs, it shall, from time to time, but not more than monthly, deliver to Landlord an application for reimbursement setting forth the actual, third party Costs for which reimbursement is sought (a “Requisition”). Such Requisition for payment shall contain such invoices or other evidence of the Costs incurred as Landlord may reasonably request, together with evidence reasonably satisfactory to Landlord that the same have been paid or are due and payable by Tenant and current lien waivers from all contractors and subcontractors in the statutory form, if reimbursement is for work affecting the real property of which the Premises is a part. Provided such information is provided by the third

 

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to last business day in a month, by the twenty-fifth (25 th ) calendar day of the next month, Landlord shall reimburse Tenant, from the Tenant Improvement Cost Savings Amount in an amount equal to any actual, third party Costs paid by Tenant properly set forth in the Requisition or, if such amount remains due and payable by Tenant, Landlord may pay such amount to the party to which it is owed as indicated on the applicable invoices, or to Tenant for payment to such party. It is agreed that no sums will be disbursed from the Tenant Improvement Cost Savings Amount unless Requisitions therefore are submitted to Landlord within the first five (5) months following delivery of Landlord’s Improvement Cost Notice and in no event will Landlord be required to disburse any amounts for any Costs which in the aggregate with other Costs paid or reimbursed by Landlord would exceed the Tenant Improvement Cost Savings Amount set forth in Section 1.1.

 

3.3 GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION.

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

 

3.4 CONSTRUCTION REPRESENTATIVES.

In connection with the parties’ respective rights and obligations under this Article III, each party authorizes the other to rely upon approvals and other actions given or made on such party’s behalf by any person designated as its Construction Representative in Section 1.1 hereof. Each party may change its Construction Representative by notice to the other. Notwithstanding anything to the contrary contained herein, no change order shall be binding on Landlord or Tenant unless in a writing signed by both parties or their respective Construction Representatives.

 

3.5 ALTERATIONS AND ADDITIONS.

This Section 3.5 shall apply before and during the Term. Tenant shall not make any non-decorative or non-cosmetic alterations and/or additions to the Premises except in compliance with plans and specifications first approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, subject in all events to the “Review Conditions” (described below) and provided that all plans and specifications and all alterations and additions performed by Tenant shall comply with such minimum standards as in effect when such alterations are made as Landlord may from time to time reasonably dictate (the “Minimum Standards”). If Landlord does not respond to Tenant’s written request for said approval within thirty (30) days of its receipt, such alterations shall be deemed approved by Landlord, provided Tenant requests Landlord’s approval pursuant to a notice delivered in accordance with the provisions of Section 10.2 hereof that includes a statement at the top of the request, in bold, capital letters that are in at least fourteen (14) point font, that states that, “IF LANDLORD FAILS TO DISAPPROVE THE ALTERATIONS LISTED BELOW WITHIN THE NEXT THIRTY (30) DAYS, SUCH ALTERATIONS SHALL BE DEEMED APPROVED IN

 

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ACCORDANCE WITH THE TERMS OF SECTION 3.5 OF THE LEASE.” Landlord hereby approves Tenant’s initial alterations described in                      . Landlord’s approval of any plans or specifications shall not be deemed its opinion that the plans and specifications or the work depicted thereon comply with any or all applicable laws, ordinances, regulations or orders of governmental authorities or requirements of insurers of the Building and the Lot, or with the Minimum Standards, and no waiver from the requirement of the Minimum Standards shall be deemed to have been granted by such approval unless such waiver is expressly stated in writing. At Landlord’s request, Tenant will cause its architect to certify that its plans and specifications and the work depicted thereon comply with such laws, ordinances, regulations and orders of governmental authorities and with the Minimum Standards. Tenant shall pay Landlord’s out of pocket costs of reviewing or inspecting any proposed non-decorative or non-cosmetic alterations and/or additions and the plans therefore, such as costs and fees of third party consultants hired by Landlord. In no event shall any non-decorative or non-cosmetic alterations and/or additions be considered or approved by Landlord except in Landlord’s sole discretion which (a) involve or might affect any structural or exterior element of the Building, Building systems, including mechanical, electrical, utility, fire protection or life safety systems, or the common facilities of the Building, or (b) will require unusual expense to readapt the Premises to normal office use on Lease termination or increase the cost of construction or of insurance or taxes on the Building or the Lot (collectively, the “Review Conditions”). All non-decorative and/or non-cosmetic alterations and additions shall become a part of the Premises except for trade fixtures and except that, by written notice given at the time Landlord approves any alterations or additions, Landlord may require that upon yielding up of the Premises pursuant to Section 6.1.2, Tenant shall remove any such items. Tenant shall be responsible for any damage to the Building caused by the malfunction of its equipment or the removal of its property as aforesaid.

All of Tenant’s alterations and additions and installation and delivery of telephone systems, furnishings, and equipment shall be coordinated with any work being performed by Landlord and other tenants in the Building, and shall be performed in such manner, and by such persons as shall maintain harmonious labor relations and not cause any damage to the Building or interference with Building construction or operation, or with other tenants in the Building, and, except for installation of furnishings, equipment and telephone systems, shall be performed by contractors approved in writing by Landlord, such approval not to be unreasonably withheld or delayed.

Landlord may post any notices it considers necessary to protect it from responsibility or liability for any alteration, addition or other work by Tenant, its agents, employees, or independent contractors, and Tenant shall give sufficient notice to Landlord to permit such posting. Before sending non-decorative and/or non-cosmetic work out for bid, Tenant shall provide Landlord with a list of proposed bidders for Landlord’s review; Landlord shall have seven (7) business days to approve or disapprove such bidders; if Landlord does not so timely approve, such bidders shall be presumptively deemed disapproved by Landlord. Before commencing any work Tenant shall: secure all licenses and permits necessary therefor; deliver to Landlord a statement of the names of all its contractors and subcontractors (the identity of which must have been previously approved by Landlord as hereinabove contemplated) and the estimated cost of all labor and material to be furnished by them; and cause each contractor and subcontractor to carry (i) workers’ compensation insurance in statutory amounts covering all the contractor’s and subcontractor’s employees, (ii) commercial general liability insurance with such

 

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limits as Landlord may reasonably require, but in no event less than a combined single limit of $3,000,000 per occurrence and (iii) such other insurance as Landlord may reasonably require, (all such insurance to be written in companies reasonably approved by Landlord and insuring Landlord, Manager and Tenant as well as the contractors), and to deliver to Landlord, certificates of all such insurance naming Landlord, Manager and Tenant as additional insureds as their interests may appear with respect to commercial general liability coverage. Tenant agrees to pay promptly when due (or bond off if payment is disputed), and to defend and indemnify Landlord from and against, any cost, claim or liability arising from any work done on the Premises by Tenant, its agents, employees or independent contractors, and not to cause or permit any liens for labor or materials performed or furnished in connection therewith to attach to the Building or the Lot and immediately to discharge any such liens which may so attach (or bond off if payment is disputed). Without derogating from the foregoing, before commencement of any work, the cost of which is reasonably estimated to exceed $100,000, Tenant shall cause its contractor to provide any payment, performance, completion and lien indemnity bonds requested by Landlord. Tenant shall be solely responsible for the effect of any alterations, additions or other work on the Building’s structure and systems, whether or not Landlord has consented thereto. Upon completion of any non-cosmetic or non-decorative alteration or addition, Tenant shall provide Landlord with a complete set of “as built” plans therefor, which may consist of a mark-up of any plans previously prepared for such work showing actual construction. Alterations and/or additions shall be considered “cosmetic” and/or “decorative” if they involve painting, carpeting and the like, do not cost in excess of $25,000 in the aggregate in any twelve (12) month period and provided they do not involve and will not or could not affect any structural or exterior element of the Building, Building systems, including mechanical, electrical, utility, fire protection or life safety systems, or the common facilities of the Building.

ARTICLE IV

RENT

 

4.1 RENT.

Tenant agrees to pay rent to Landlord at the address set forth in Section 1.1 without any offset or reduction whatsoever, except as may be provided in Article VII, equal to 1/12th of the Annual Base Rent in equal monthly installments in advance on the first day of each calendar month included in the Term after the Term Commencement Date; and for any portion of a calendar month which includes the Term Commencement Date or at the end of the Term, at the proportionate rate payable for such portion, in advance.

 

4.2 OPERATING COSTS AND REAL ESTATE TAXES.

4.2.1 Landlord’s Operating Costs . Tenant shall pay to Landlord, as additional rent, Tenant’s Pro Rata Share of Landlord’s Excess Operating Costs (as set forth in Section 4.2.3 below), if any, on or before the fifteenth (15 th ) day following receipt by Tenant of Landlord’s Statement (as defined below). As soon as practicable after the end of each calendar year ending during the Term and after Lease termination, Landlord shall render a statement (“Landlord’s Statement”) in reasonable line-item detail and according to Landlord’s usual accounting practices, which shall be consistently applied and in accordance with generally accepted

 

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accounting practices, showing for the preceding calendar year or fraction thereof, as the case may be, “Landlord’s Operating Costs” together with Real Estate Taxes (as defined in Section 4.2.2 hereof). If any costs or expenses which would otherwise be included in Landlord’s Operating Costs include the costs or expenses (collectively, “Shared Costs”) related to the Lot or the Park or otherwise also benefit the owner or occupants of other buildings or improvements located thereon (collectively, the “Other Buildings”), only a fractional share of such costs shall be included as part of the Landlord’s Operating Costs for purposes of determining Tenant’s Pro Rata Share of Landlord’s Excess Operating Costs. Such fractional share shall equal the product of each such Shared Cost multiplied by a fraction, the numerator of which is the Rentable Floor Area of the Building and the denominator of which is the aggregate Rentable Floor Area of the Building and the Rentable Floor Area of those portions of the Other Buildings owned or occupied by parties similarly benefiting from the expenditure of such cost or expense.

Landlord’s Operating Costs shall exclude : Real Estate Taxes; the interest and amortization on mortgages for the Building and the Lot or leasehold interests therein; ground rent; depreciation on the Building or equipment or systems therein; costs in connection with leasing, releasing, or subleasing space at the Building (including but not limited to brokerage commissions); costs incurred in connection with the sale, financing or refinancing of the Building and/or the Lot; the cost of repairs or other work to the extent Landlord is reimbursed by insurance or condemnation proceeds or by any other third party; costs incurred in enforcing leases against other tenants; the cost of special services rendered to tenants (including Tenant) for which a special charge is made; costs of renovating or decorating space for any tenant or other occupant of the Building or the Lot, including Tenant, or relocating any tenant; wages, bonuses and other compensation of employees above the grade of Building Manager and fringe benefits other than insurance plans and tax qualified benefit plans; increased insurance or Real Estate Taxes attributable specifically to any tenant of the Building or the Lot; charges for electricity, water, or other utilities, services or goods and applicable taxes for which Tenant or any other tenant, occupant, person or other party is obligated to reimburse Landlord or to pay to third parties; cost of any HVAC, janitorial or other services provided to tenants on an extra cost basis after regular business hours; cost of any work or service performed on an extra cost basis for any tenant in the Building or the Lot to a materially greater extent or in a materially more favorable manner than furnished generally to the tenants and other occupants; cost of any work or services performed for any facility other than the Building or Lot; any cost representing an amount paid to a person firm, corporation or other entity related to Landlord that is in excess of the amount which would have been paid in the absence of such relationship; cost of initial cleaning and rubbish removal from the Building or the Lot to be performed before final completion of the Building or tenant space; late fees or charges incurred by Landlord due to late payment of expenses, except to the extent attributable to Tenant’s actions or inactions; cost of acquiring, securing cleaning or maintaining sculptures, paintings and other works of art; charitable or political contributions; all other items for which another party compensates or pays so that Landlord shall not recover any item of cost more than once; Landlord’s general overhead and any other expenses not directly attributable to the operation and management of the Building and the Lot (e.g. the activities of Landlord’s officers and executives or professional development expenditures), except to the extent included in the management fee permitted hereby; costs of mitigation or impact fees or subsidies (however characterized), imposed or incurred prior to the date of the Lease or imposed or incurred solely as a result of another tenant’s or tenants’ use of the Lot or their respective premises; and except as expressly provided elsewhere herein, the cost of any item that, under generally accepted accounting principles, is properly classified as a capital expense.

 

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Landlord’s Operating Costs may include , without limitation: installments and interest on assessments for public betterments or public improvements; premiums for insurance (including, without limitation, all-risks commercial property, rental value, casualty and liability insurance, and insurance required to be carried by any mortgage lender), and deductible amounts thereunder; fees payable to third parties for financial audits of Landlord’s Operating Costs; compensation and all fringe benefits, worker’s compensation insurance premiums and payroll taxes paid by Landlord to, for or with respect to all persons engaged in the operating, maintaining, or cleaning of the Building, the Lot and the Park, including, without limitation, a building manager located at the Building, and a pro rata portion of one off-site property manager to the extent available to the Building; the cost of cleaning and maintaining and the cost of utilities servicing any space occupied by the manager for a building office; all electricity charges related to the common areas of the Building and the Park and heat pumps servicing the Building and the Park, and all utility charges incurred in the operation and maintenance of the Premises, the Building, the Lot and the Park not billed directly to tenants by Landlord or by the utility company; all costs of cleaning the common areas of the Building and all windows on the exterior of the Building; all costs of maintenance, repairing, managing and operating the Building (including without limitation, all structural components and common facilities of the Building); payments under service contracts for cleaning the common areas, tenant spaces and windows of the Building as aforesaid and for operating, managing, maintaining and repairing the Building, the Lot and the Park; management fees, which shall not exceed the prevailing market fees for management services in similar buildings in the 495 North Office Market; all costs, expenses, payments or fees paid by Landlord for any regional transportation shuttle funded or paid for either partially or wholly by Landlord and owners of other properties in the area of the Building, whether such expenditures and shuttle are voluntary or involuntary, public or private; to the extent of any net loss, the cost of operating any cafeteria available for the use of Tenant in common with others, including without limitation the cost of personnel and rent subsidies (including free rent); all charges to Landlord allocable to the Building, the Lot and the Park for services performed in connection with the Building, the Lot, the Park and any common facilities appurtenant thereto and other buildings and properties with which they are jointly operated, including, without limitation, any shared parking facilities or other amenities, and, to the extent Landlord incurs additional charges applicable to the Building and/or the Lot together with one or more other buildings or properties, the pro rata share (as reasonably determined by Landlord) of such charges allocable to the Building and the Lot; and all other reasonable and necessary expenses paid in connection with the operating, administering, managing, cleaning, maintaining and repairing of the Building, the Lot and the Park or either, and properly chargeable against income, it being also agreed that if Landlord installs a new or replacement capital item in order to comply with a legal requirement or interpretation thereof first arising after the date of this Lease, or for the purposes of reducing Operating Costs, the cost thereof as reasonably amortized by Landlord, with interest at the rate of interest charged to Landlord for borrowing funds to finance such item (or the rate that Landlord reasonably determines would have been charged if Landlord does not finance such item), on the unamortized amount, shall be included in Landlord’s Operating Costs. In any calendar year in which the average annual occupancy of the Building is less than 100%, Landlord’s Operating Costs as defined herein shall also include such additional costs as would reasonably have been incurred by Landlord with respect to the

 

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operation, administration, management, cleaning, maintenance and repair of the Property with 100% average annual occupancy; calculation of the Operating Cost Base shall be similarly adjusted to include such additional costs as would reasonably have been incurred by Landlord with 100% average annual occupancy. Payments for any services may be to Landlord or affiliates thereof provided the same are at reasonable market rates charged by unrelated parties and consistent with the type of occupancy.

4.2.2 Real Estate Taxes . Tenant shall pay to Landlord, as additional rent, Tenant’s Pro Rata Share of Excess Real Estate Taxes (as set forth in Section 4.2.3 below), if any, on or before the fifteenth (15 th ) day following receipt by Tenant of Landlord’s Statement. The term “Real Estate Taxes” as used herein shall mean all taxes, impositions and charges of every kind and nature assessed by any governmental authority on the Lot, Building, Park and improvements, and the expenses incurred by Landlord in connection with any proceedings for abatement of taxes and assessments with respect to any fiscal year or fraction of a fiscal year; together with the Building’s allocable share of such taxes, impositions and charges with respect to other parcels on which any common facilities serving the Building are located, which Landlord shall become obligated to pay because of or in connection with the ownership, leasing and operation of the Lot, Building, Park and improvements, subject to the following: There shall be excluded from Real Estate Taxes all income taxes, excise taxes, franchise taxes, and estate, succession, inheritance and transfer taxes, provided, however, that if at any time during the Term the present system of ad valorem taxation of real property shall be changed so that in lieu of the whole or any part of the ad valorem tax on real property, there shall be assessed on Landlord a capital levy or other tax on the gross rents received with respect to the Lot, Building and improvements, or both, or a federal, state, county, municipal, or other local income, franchise, excise or similar tax, assessment, levy or charge (distinct from any now in effect) measured by or based, in whole or in part, upon any such gross rents, then any and all of such taxes, assessments, levies or charges, to the extent so measured or based, shall be deemed to be included within the term “Real Estate Taxes.” If the amount of Real Estate Taxes, for the base year referred to in Section 1.1 hereof are abated or otherwise reduced on a permanent basis (as opposed to a reduction based upon a variable factor such as vacancies), the Real Estate Tax Base shall be reduced by the amount of such abatement or reduction. Notwithstanding that the Real Estate Tax bill may include the Lot and the Other Buildings, Real Estate Taxes shall never include any assessment or tax related only to the Other Buildings. If said Real Estate Tax bill includes any Other Buildings, only a fractional share of the taxes assessed with respect to the Lot shall be included as Real Estate Taxes. Such fractional share shall equal the product of the taxes assessed with respect to the Lot (as specified on the Real Estate Tax bill or, if not so specified, as otherwise reasonably estimated by Landlord) multiplied by a fraction, the numerator of which is the Rentable Floor Area of the Building and the denominator of which is the aggregate Rentable Floor Area of the Building and the Other Buildings included on such Real Estate Tax bill.

4.2.3 Tenant’s Pro Rata Share of Landlord’s Excess Operating Costs and Real Estate Taxes . If with respect to any calendar year falling within the Term or for any fraction of any calendar year falling at the beginning or end of the Term, Landlord’s Operating Costs for a full calendar year exceed the Operating Cost Base or for any such fraction of a calendar year, exceed the corresponding fraction of the Operating Cost Base, then Tenant shall pay to Landlord, as additional rent, an amount (such amount being referred to as “Tenant’s Pro Rata Share of Landlord’s Excess Operating Costs”) equal to the product of (i) the amount of such excess

 

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multiplied by (ii) Tenant’s Pro Rata Share (which represents a fraction, the numerator of which is the Rentable Floor Area of the Premises and the denominator of which is the Total Rentable Floor Area of the Building and which fraction as of the date hereof is set forth in Section 1.1 hereof). Notwithstanding the foregoing, if any Operating Costs are incurred for a service which is not provided to one or more tenants who are not obligated to pay for a proportionate share of the cost of such service, then Tenant’s Pro Rata Share thereof shall be based upon a fraction, the numerator of which is the Rentable Floor Area of the Premises and the denominator of which is the Total Rentable Floor Area of the Building less the rentable floor area of the premises of the tenant or tenants not receiving and not paying for such service. In addition, if with respect to any fiscal year falling within the Term or for any fraction of any fiscal year falling at the beginning or end of the Term, Real Estate Taxes for a full fiscal year exceed the Real Estate Tax Base, or for any fraction of a fiscal year exceed the corresponding fraction of the Real Estate Tax Base, then Tenant shall pay to Landlord, as additional rent, an amount (such amount being referred to as “Tenant’s Pro Rata Share of Excess Real Estate Taxes”) equal to the product of (x) the amount of such excess multiplied by (y) Tenant’s Pro Rata Share. (The sum of Tenant’s Pro Rata Share of Landlord’s Excess Operating Costs and Tenant’s Pro Rata Share of Excess Real Estate Taxes is referred to herein as “Tenant’s Pro Rata Share of Expenses”). Landlord and Tenant acknowledge that Landlord owns two buildings on the Lot. It is the intent of Landlord and Tenant that, for the purposes of this Section 4.2, Landlord shall apportion costs shared by both buildings on a reasonably consistent and equitable basis when calculating Operating Costs and Real Estate Taxes.

4.2.4 Landlord’s Estimates at End of Term . Notwithstanding any other provision of this Section 4.2, if the Term expires or is terminated as of a date other than the last day of a calendar year, then for such fraction of a calendar year at the end of the Term, Tenant’s last payment to Landlord under this Section 4.2 shall be made on the basis of Landlord’s best estimate of the items otherwise includable in Landlord’s Statement and shall be made on or before the later of (a) ten (10) days after Landlord delivers such estimate to Tenant or (b) the last day of the Term, with an appropriate payment or refund to be made upon submission of Landlord’s Statement.

4.2.5 Audit Rights . Landlord agrees to make its books and records relating to Landlord’s Operating Costs and Real Estate Taxes available for examination during normal business hours upon reasonable notice by Tenant and its representatives; provided that any such examination shall be by an independent real estate professional with experience conducting audits as set forth in this Section 4.2.5, the fees of which are not determined on a contingent fee basis, shall be at Tenant’s sole cost and expense, and shall be conducted with respect to any particular fiscal year pursuant to a notice sent by Tenant not later than ninety (90) days following delivery of Landlord’s statement with respect to such fiscal year; provided further, that if the examination discloses a discrepancy which the parties agree (or an arbitrator determines) involves an overcharge to Tenant, Landlord shall promptly rebate the same to Tenant. If Tenant fails to notify Landlord of its desire to conduct such an examination within such ninety (90) day period, then the calculation of Landlord’s Operating Costs and Real Estate Taxes reflected in the Landlord’s Statement shall be final and conclusive for all purposes. If the Tenant’s audit reveals an overstatement of the Landlord’s Operating Costs of greater than eight percent (8%), Landlord shall reimburse Tenant for all of its costs in connection with its audit within ten (10) days after Tenant’s written demand.

 

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Any dispute, claim or controversy arising out of this Section 4.2.5 shall be determined by arbitration in Boston, Massachusetts, before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude the parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. The arbitrators shall be empowered to enforce the aforementioned sections of this Lease upon its terms, including making orders for specific performance of any covenants and promises made by the parties and other equitable relief, and may award reasonable money damages, if appropriate to compensate any party for breach or default by the other party, but excluding the assessment of any awards pursuant to M.G.L. c. 93A. The arbitrators shall also have the power to make any orders for further and additional relief respecting the scope, rights, benefits, and purpose of the aforementioned sections of this Lease, which the arbitrators shall deem just and equitable, as the circumstances dictate. The arbitration herein provided for and the remedies expressly allowed hereby are intended to be the exclusive remedy for the breach of or disputes concerning this Section 4.2.5.

 

4.3 ESTIMATED PREMISES EXPENSE PAYMENTS.

If, after June 30, 2008, with respect to any calendar year or fraction thereof during the Term, Landlord estimates that Tenant will be obligated to pay Tenant’s Pro Rata share of Expenses, then Tenant shall pay, as additional rent, on the first day of each month of such calendar year and each ensuing calendar year thereafter, estimated monthly payments of Tenant’s Pro Rata share of Expenses (hereinafter “Estimated Monthly Expense Payments”) equal to 1/12 th of Landlord’s estimate of Tenant’s Pro Rata Share of Expenses for the respective calendar year, with an appropriate additional payment (or credit by Landlord against Tenant’s future payments of Tenant’s Pro Rata Share of Expenses) to be made within thirty (30) days after Landlord’s Statement is delivered to Tenant. Landlord may adjust such Estimated Monthly Expense Payments from time to time and at any time during a calendar year, but not more often than two (2) times in any calendar year, and Tenant shall pay, as additional rent, on the first day of each month following receipt of Landlord’s notice thereof, the adjusted Estimated Monthly Expense Payment.

 

4.4 ELECTRICITY.

Tenant shall pay for all charges for electric consumption in the Premises as reasonably determined by Landlord, but without mark-up above actual cost, within ten (10) days of Landlord’s invoice therefor, from time to time, but not more often than monthly; provided that upon written notice from Landlord, Tenant shall pay an estimate of such charges, as reasonably determined by Landlord from time to time, monthly at the same time and in the same manner as payments of Annual Base Rent, with appropriate payment (or credit against future electric charges) to be made annually based upon Landlord’s revised estimates for the prior year. Landlord estimates that the charge for electric consumption is currently $1.50 per square foot of Rentable Floor Area. If at any time electric charges for the Premises are payable to the utility therefor, because of the installation of submeters or check meters or otherwise, Tenant shall pay such charges before they become due. The foregoing shall not constitute Landlord’s consent to the installation of any such meters. Landlord shall have the exclusive right to designate the electric service provider and primary telecommunications provider to serve the Building. Tenant shall make arrangements for its own telecommunications service, using the existing cabling to the Building.

 

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Tenant covenants and agrees that its use of electric current (exclusive of HVAC) shall not exceed 8.0 watts per square foot of rentable floo


 
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