|
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 |
- 1 -
|
|
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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. |
- 2 -
[*****] 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. |
- 3 -
[*****] 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. |
- 4 -
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 |
- 5 -
|
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| |
|
PAGE |
| Article I |
|
|
|
|
| REFERENCE DATA |
|
1 |
|
|
1.1 |
|
SUBJECTS
REFERRED TO: |
|
1 |
|
|
1.2 |
|
EXHIBITS |
|
5 |
|
|
1.3 |
|
TABLE OF
CONTENTS PAGE |
|
6 |
|
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| Article II |
|
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|
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| PREMISES AND TERM |
|
7 |
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|
2.1 |
|
DESCRIPTION OF PREMISES |
|
7 |
|
|
2.2 |
|
TERM |
|
8 |
|
|
2.3 |
|
EXTENSION
OPTION |
|
9 |
|
|
| Article III |
|
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|
|
| 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 |
|
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| Article IV |
|
|
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| RENT |
|
17 |
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|
4.1 |
|
RENT |
|
17 |
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|
4.2 |
|
OPERATING
COSTS AND REAL ESTATE TAXES |
|
17 |
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|
4.3 |
|
ESTIMATED
PREMISES EXPENSE PAYMENTS |
|
22 |
|
|
4.4 |
|
ELECTRICITY |
|
22 |
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|
4.5 |
|
CHANGE OF
FISCAL YEAR |
|
23 |
|
|
4.6 |
|
PAYMENTS |
|
23 |
|
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| Article V |
|
|
|
|
| LANDLORD’S COVENANTS |
|
24 |
|
|
5.1 |
|
LANDLORD’S COVENANTS DURING THE TERM |
|
24 |
|
|
5.2 |
|
INTERRUPTIONS |
|
25 |
|
|
| Article VI |
|
|
|
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| TENANT’S COVENANTS |
|
26 |
|
|
6.1 |
|
TENANT’S COVENANTS DURING THE TERM |
|
26 |
|
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| Article VII |
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|
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| CASUALTY AND TAKING |
|
33 |
|
|
7.1 |
|
CASUALTY
AND TAKING |
|
33 |
|
|
7.2 |
|
RESERVATION OF AWARD |
|
34 |
- 6 -
|
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| Article VIII |
|
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|
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| RIGHTS OF MORTGAGEE AND GROUND LESSOR |
|
35 |
|
|
8.1 |
|
PRIORITY
OF LEASE |
|
35 |
|
|
8.2 |
|
Rights of
Mortgagee to Cure |
|
36 |
|
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|
Article IX
|
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|
|
DEFAULT
|
|
37 |
|
|
9.1 |
|
EVENTS OF
DEFAULT |
|
37 |
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|
9.2 |
|
TENANT’S OBLIGATIONS AFTER TERMINATION |
|
38 |
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Article X
|
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|
MISCELLANEOUS
|
|
39 |
|
|
10.1 |
|
NO
RECORDING |
|
39 |
|
|
10.2 |
|
NOTICES
FROM ONE PARTY TO THE OTHER |
|
39 |
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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
- 7 -
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.
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.
- 8 -
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.
- 9 -
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.
- 10 -
[*****] 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
- 11 -
[*****] 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.
- 12 -
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
- 13 -
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
- 14 -
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
- 15 -
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
- 16 -
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
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
- 17 -
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.
- 18 -
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.
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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