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<PAGE>
Exhibit 10.2
LEASE
by and between
ARE-MA Region No. 20, LLC
Landlord
and
ARQULE, INC.
Tenant
Dated: May __, 2005
Premises at 19 Presidential Way, Woburn, Massachusetts
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TABLE OF CONTENTS
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Page
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TABLE OF
CONTENTS..............................................................
i
ARTICLE I Reference
Data................................................. 1
1.1. Incorporated
References........................................ 1
1.2.
Exhibits.......................................................
3
ARTICLE II Lease Grant; Extended
Terms.................................... 4
2.1.
Term...........................................................
4
2.2. Option to Extend
Term.......................................... 4
2.3. Annual Fixed Rent During the Original
Term..................... 4
2.4. Annual Fixed Rent During Extended
Terms........................ 4
ARTICLE III
Rent...........................................................
6
3.1. Annual Fixed
Rent.............................................. 6
3.2. Additional
Rent................................................ 6
3.3. Real Estate
Taxes.............................................. 6
3.4.
Insurance......................................................
8
3.5. Certain Provisions Applicable to Insurance
Policies............ 9
3.6. Waiver of
Subrogation.......................................... 10
3.7.
Utilities......................................................
10
3.8. Net Lease; Nonterminability by
Tenant.......................... 10
ARTICLE IV Additional
Covenants........................................... 11
4.1. Tenant's Affirmative
Covenants................................. 11
4.2. Landlord's Repair and Maintenance
Obligations.................. 13
4.3. Tenant's
Work.................................................. 13
4.4. Tenant's
Indemnity............................................. 14
4.5. Landlord's
Indemnity........................................... 14
4.6. Landlord's Right to
Enter...................................... 14
4.7. Personal Property at Tenant's
Risk............................. 15
4.8. Payment of Cost of
Enforcement................................. 15
4.9.
Yield-Up.......................................................
15
4.10. Estoppel
Certificates.......................................... 17
4.11. Park
Restrictions.............................................. 17
4.12. Holding
Over................................................... 17
4.13. Assignment and
Subletting...................................... 18
4.14. Waste;
Nuisance................................................ 19
4.15. Installations, Alterations or
Additions........................ 20
4.16.
Signage........................................................
21
4.17.
Parking........................................................
21
4.18. Landlord's Additional
Covenants................................ 21
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<TABLE>
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ARTICLE V Casualty or
Taking............................................. 22
5.1.
Casualty.......................................................
22
5.2.
Taking.........................................................
23
5.3.
Restoration....................................................
24
5.4.
Award..........................................................
24
ARTICLE VI
Defaults.......................................................
25
6.1. Events of
Default.............................................. 25
6.2.
Remedies.......................................................
25
6.3. Remedies
Cumulative............................................ 26
6.4. Landlord's Rights to Cure
Defaults............................. 26
6.5. Effect of Waivers of
Default................................... 26
6.6. No Accord and
Satisfaction..................................... 27
6.7. Interest on Overdue
Sums....................................... 27
ARTICLE VII
Mortgages......................................................
27
7.1. Rights of Mortgage
Holders..................................... 27
7.2. Superiority of Lease: Option to
Subordinate.................... 28
ARTICLE VIII Miscellaneous
Provisions....................................... 28
8.1. Notices from One Party to the
Other............................ 28
8.2. Quiet
Enjoyment................................................ 29
8.3. Recordation of
Lease........................................... 29
8.4. Bind and Inure: Limitation of Landlord's
Liability............ 29
8.5. Acts of
God.................................................... 29
8.6. Landlord's Default; Tenant's Right of
Self-Help................ 30
8.7.
Brokerage......................................................
30
8.8. Applicable Law and
Construction................................ 30
8.9. Submission Not an
Offer........................................ 31
8.10. Security
Deposit............................................... 31
8.11. Parties Responsible for Costs of Own
Obligations............... 32
8.12. Limitation on
Damages.......................................... 32
ARTICLE IX First Opportunity; Right of First
Refusal...................... 32
9.1. Tenant's Right of First Opportunity to
Purchase................ 32
9.2. Tenant's Right of First
Refusal................................ 33
ARTICLE X Development of Expansion
Lot................................... 33
10.1. Tenant's Approval Right During
Term............................ 33
10.2. Activities on Expansion
Lot.................................... 34
10.3. Construction Activities of Landlord on Expansion
Lot........... 34
10.4. Expansion
Right................................................ 34
ARTICLE XI Landlord's Representations And
Warranties...................... 36
11.1. Representations and Warranties of
Landlord..................... 36
</TABLE>
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EXHIBIT A DESCRIPTION OF PRIMARY LOT
EXHIBIT B DESCRIPTION OF EXPANSION LOT
EXHIBIT C FIXTURES, FURNISHINGS AND EQUIPMENT OF TENANT TO
BE
REMOVED FROM PREMISES
EXHIBIT D NOTICE OF LEASE
EXHIBIT E FORM OF PURCHASE AGREEMENT
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<PAGE>
LEASE AGREEMENT
ARE-MA Region No. 20, LLC, a Delaware limited liability company
(the
"Landlord"), hereby leases and demises to ARQULE, INC., a
Delaware corporation
(the "Tenant") and Tenant hereby leases from Landlord, the
Premises (as
described in Section 1.1 of this Lease) on the terms and
provisions of this
Lease.
ARTICLE I
REFERENCE DATA
1.1. Incorporated References. 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.
Primary Lot: The parcel of land described in Exhibit A
attached hereto.
Expansion Lot: The parcel of land described in Exhibit B
attached hereto.
Cross-Easements: Those rights and easements appurtenant to
the Primary Lot for drainage facilities,
water and sewer and other utility lines,
granted pursuant to recorded instruments,
including the Easement and Agreement made
as of December 7, 2000, and recorded in
the Middlesex South Registry District of
the Land Court as Document No. 1158395
(the "Easement and Agreement" and together
with the Declaration of Protective
Covenants (hereinafter defined) and other
appurtenant easements, the "Cross
Easements"). Landlord shall not amend or
modify any Cross Easements without the
prior consent of Tenant, which may be
withheld by Tenant in its reasonable
discretion.
Premises: The Primary Lot, the Building and the
Cross-Easements.
Building: The building located on the Primary Lot.
Rentable Area of Building: 128,325 square feet on three levels.
The
19,473 square feet of mechanical space in
the Building is excluded from the Rentable
Area of Building and the calculation of
Annual Fixed Rent.
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Original Address of Landlord: ARE-MA Region No. 20, LLC
c/o Alexandria Real Estate Equities,
Inc.
135 North Robles Avenue, Suite 250
Pasadena, CA 91101
Attention: Corporate Secretary
Original Address of Tenant: 19 Presidential Way
Woburn, MA 01801
Landlord's Representative: Thomas Andrews
Tenant's Representative: Steven M. Lacerte
Security Deposit: $1,604,063 (equal to six (6) months' of
Annual Fixed Rent during Original Term in
the form of a Letter of Credit)
Term Commencement Date: May __, 2005
Original Term: If the Term Commencement Date is the first
day of a calendar month, the period
beginning on the Term Commencement Date
and ending on the day before the tenth
(10th) anniversary of the Term
Commencement Date. If the Term
Commencement Date is a day other than the
first day of a calendar month, the period
beginning on the Term Commencement Date
and ending on the last day of the month in
which the tenth (10th) anniversary of the
Term Commencement Date occurs (whichever
of the foregoing expiration dates is
applicable, the "Original Term Expiration
Date").
Extended Terms: Two (2) five (5) year periods, subject to
the provisions of Section 2.2.
Intended Uses: General office, manufacturing, research
and development (including RDNA, genetic,
biomedical and combinational chemistry,
and animal testing), testing laboratory,
other accessory general office and
manufacturing uses, and other uses
ancillary and/or related thereto,
including but not limited to parking.
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<PAGE>
Other Charges: Amounts payable by the owner of the
Primary Lot under that certain Declaration
of Protective Covenants dated May 27,
1988, and recorded with the Middlesex
South Registry District of the Land Court
as Document No. 777192, as amended by
Amendment to Declaration of Covenants
dated October 12, 1989, and recorded with
the Middlesex South Registry District of
the Land Court as Document Number 809254
(collectively, the "Declaration of
Protective Covenants") and the Easement
and Agreement.
Lease Year: (a) If the Term Commencement Date is the
first day of a calendar month, each one
year period beginning on the Term
Commencement Date and each anniversary
thereof and ending on the day before the
next succeeding such anniversary and (b)
If the Term Commencement Date is a day
other than the first day of a calendar
month, each one year period beginning on
the first day of the calendar month
immediately after the month in which the
Term Commencement Date occurs, and each
anniversary of such day, and ending on the
day before the next succeeding such
anniversary. Appropriate pro-rations shall
be made for any partial months or other
periods prior to the commencement of the
first Lease Year.
Broker(s): CBRE Lynch Murphy Walsh Advisors
Public Liability Insurance Limits Comprehensive General
Liability Limit of
(per occurrence):: $5,000,000
Annual Fixed Rent: Determined under Sections 2.3 and 2.4 of
this Lease.
1.2. Exhibits. The Exhibits listed below in this Section are
incorporated
in this Lease by reference and are to be construed as a part of
this Lease:
EXHIBIT A: Description of Primary Lot.
EXHIBIT B: Description of Expansion Lot.
EXHIBIT C: Fixtures, Furnishings and Equipment of
Tenant to be removed from Premises
EXHIBIT D: Form of Notice of Lease
EXHIBIT E: Form of Purchase Agreement
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<PAGE>
ARTICLE II
LEASE GRANT; EXTENDED TERMS
2.1. Term. Landlord leases the Premises to Tenant and Tenant
leases the
Premises from Landlord, for the Term.
2.2. Option to Extend Term. Tenant shall have two (2) separate
options to
extend the then term of this Lease, in each case for an
additional five (5) year
period (i.e., for a total, if any of such options is exercised
as provided
herein, of ten (10) successive years beyond the Original Term)
(each five (5)
year period being referred to herein as an "Extended Term"),
provided (i) to
exercise any such option, Tenant shall give notice in writing to
Landlord of its
exercise not less than twelve (12) months prior to expiration of
the Original
Term or the first Extended Term, as applicable (the "Exercise
Date"), and (ii)
no default continuing beyond any applicable notice, grace or
cure period in the
obligations of Tenant under this Lease shall exist at the time
each such notice
is given. All of the terms and provisions of this Lease shall be
applicable
during each such Extended Term except that (i) Tenant shall have
no option to
extend the Term of this Lease beyond the second Extended Term
and (ii) the
Annual Fixed Rent for each Extended Term shall be adjusted in
accordance with
Section 2.4 hereof. The word "Term" or "term" as used herein
shall mean the
Original Term, plus any of the Extended Terms as to which Tenant
shall have
exercised its option under this Section 2.2.
2.3. Annual Fixed Rent During the Original Term. For the
Original Term of
this Lease the Annual Fixed Rent for the Building shall be as
set forth below:
<TABLE>
<CAPTION>
Annual Fixed Rent Annual Fixed Annual Fixed
Lease Year per square foot Rent Rent per month
--------------------------------- -----------------
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<S> <C> <C> <C>
Commencement Date through
May 31, 2006 $23.1200 $2,966,874.00 $247,239.50
June 1, 2006 through May 31, 2007 $23.8136 $3,055,880.22
$254,656.69
June 1, 2007 through May 31, 2008 $24.5280 $3,147,556.63
$262,296.39
June 1, 2008 through May 31, 2009 $25.2638 $3,241,983.33
$270,165.28
June 1, 2009 through May 31, 2010 $26.0218 $3,339,242.83
$278,270.24
June 1, 2010 through May 31, 2011 $26.8024 $3,439,420.11
$286,618.34
June 1, 2011 through May 31, 2012 $27.6065 $3,542,602.71
$295,216.89
June 1, 2012 through May 31, 2013 $28.4347 $3,648,880.79
$304,073.40
June 1, 2013 through May 31, 2014 $29.2877 $3,758,347.22
$313,195.60
June 1, 2014 through May 31, 2015 $30.1664 $3,871,097.64
$322,591.47
</TABLE>
2.4. Annual Fixed Rent During Extended Terms.
(a) If Tenant shall exercise its option(s) to extend the
Term
pursuant to Section 2.2, the Annual Fixed Rent shall be
adjusted, effective as
of the first day of each Extended Term (each an "Adjustment
Date"), to equal
ninety-five (95%) of the Market Rent (as hereinafter determined
and defined) as
of the applicable Adjustment Date. "Market Rent" shall be
computed as of each
Adjustment Date at the fair market rental rate (per square foot
of Rentable
Area) that would be agreed upon between a landlord and a tenant
entering into a
new
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lease for "as is" space in a comparable building, taking into
account and giving
effect to (i) the estimated savings to Landlord of costs and
expenses associated
with leasing the Premises to Tenant rather than to a third
party, including
without limitation leasing commissions and lost rent due to
vacancy periods and
(ii) in determining comparability, considerations such as size,
configuration,
location (i.e., suburbs of Boston, excluding Cambridge, MA and
Boston city
limits), quality, age and condition of premises and lease term,
assuming the
landlord and tenant are informed and well-advised and each is
acting in what it
considers its own best interests. Market Rent shall include the
provision by
Landlord to Tenant of a tenant improvement allowance, free rent
and/or other
special concessions ("Fair Market Concessions") in amounts that
would be agreed
upon between a landlord and a tenant entering into a new lease
for comparable
space as to location (i.e., suburbs of Boston, excluding
Cambridge, MA and
Boston city limits), configuration, size and use, in a
comparable building as to
location, quality, reputation and age, with a comparable
build-out, and a
comparable term, assuming the landlord and tenant are informed
and well-advised
and each is acting in what it considers its own best interests.
Notwithstanding
anything to the contrary in this Section 2.4(a), the
determination of Market
Rent pursuant to Section 2.4(b) shall exclude the value of
Tenant's Property and
any installations, alterations or additions to the Premises made
after the date
of this Lease. In determining the Market Rent, the net present
value approach
shall be utilized (with an appropriate discount rate) to reflect
the fact that
Landlord will realize the savings set forth in clause (i) above
immediately upon
the commencement of the applicable Extended Term.
(b) Landlord and Tenant shall negotiate in good faith to
determine
the Annual Fixed Rent (including Fair Market Concessions) for
the applicable
Extension Period, for a period of thirty (30) days after the
date on which
Landlord receives Tenant's written notice of Tenant's election
to exercise the
extension option provided for under this Section. In the event
Landlord and
Tenant are unable to agree upon the Annual Fixed Rent for any
Extension Period
within said thirty (30)-day period, the Market Rent for the
Premises shall be
determined by two (2) licensed real estate brokers, one of whom
shall be named
by the Landlord and one of whom shall be named by Tenant. Each
real estate
broker so selected shall be licensed in the jurisdiction in
which the Building
is located as a real estate broker specializing in the field
of
laboratory/biotech leasing in the suburban Boston, Massachusetts
area, having no
less than ten (10) years' experience in such field, and
recognized as ethical
and reputable within the field. Landlord and Tenant agree to
make their
appointments promptly within ten (10) days after the expiration
of the thirty
(30)-day period, or sooner if mutually agreed upon. Each broker,
within fifteen
(15) days after both brokers have been selected, shall submit
his or her
determination of the Market Rent and the Fair Market
Concessions. If the higher
determination of Market Rent is not more than ten percent (10%)
of the lower
determination (based on net present values using an annual
discount rate of five
percent (5%)), then the Market Rent shall be the average of the
two (2) rental
rate and concession determinations. If the higher determination
of Market Rent
is greater than 10% of the lower determination of Market Rent,
then the two (2)
brokers selected by Landlord and Tenant shall promptly select a
third broker
within ten (10) days after they have delivered their
determinations. The third
broker shall meet all the qualifications required above for the
first two (2)
brokers and shall make its determination of the Market Rent
within ten (10) days
after he or she has been appointed. In such event, the Market
Rent shall be the
determination of the three brokers (on a net present value basis
as described
above) that is not the highest or the lowest determination,
provided, that, if
any two brokers have an identical determination of Market Rent,
such
determination shall be the Market Rent hereunder for the
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applicable Extension Term. Subject to Section 2.4(c), Landlord
and Tenant shall
each pay the fee of the broker selected by it, and they shall
equally share the
payment of the fee of the third broker.
(c) If the Market Rent is determined by brokers pursuant to
Section
2.4(b), Tenant shall have the right, within ten (10) days after
such
determination, to revoke its notice to extend the term of this
Lease, in which
event Tenant shall be obligated to pay the fees of all of the
brokers engaged to
determine Market Rent, and the Term of this Lease shall expire
at the end of the
then current Term. If Tenant does not revoke its notice to
extend the Term of
this Lease pursuant to the immediately preceding sentence, then,
within thirty
(30) days after the Market Rent is determined, whether by
agreement of Landlord
and Tenant or by brokers, as aforesaid, the parties shall
promptly execute a
supplement to this Lease confirming the same.
ARTICLE III
RENT
3.1. Annual Fixed Rent. Tenant covenants and agrees to pay rent
("Annual
Fixed Rent") to Landlord at the original Address of Landlord or
at such other
place or to such other person or entity as Landlord may by
written notice to
Tenant from time to time direct, at the Annual Fixed Rent set
forth in, or
determined by the provisions of, Article II, in equal
installments equal to
1/12th of the Annual Fixed Rent in advance on the first day of
each calendar
month during the Term; and for any portion of a calendar month
at the beginning
of the Term, prorated for such portion.
3.2. Additional Rent. Tenant covenants and agrees to pay as
Additional
Rent to Landlord an administrative management fee in the amount
of Fifteen
Thousand Dollars ($15,000) per year, which amount shall be due
and payable on
the first anniversary of the Commencement Date and on each
anniversary of the
Commencement Date during the Original Term. In addition, Tenant
shall pay the
amounts provided for in Section 3.3 and Section 3.4 as
Additional Rent.
3.3. Real Estate Taxes.
(a) Each year during the Term, Landlord shall submit to Tenant
a
statement of all invoices for Real Estate Taxes (hereinafter
defined) payable by
Tenant pursuant to this Section 3.3, and Tenant shall pay the
same to Landlord
not later than ten (10) days prior to the date on which the same
may be paid
without interest or penalty. For purposes of this Lease, the
term "Real Estate
Taxes" shall mean: (i) all taxes, assessments (special or
otherwise), levies,
fees, water and sewer rents and charges and all other
governmental levies and
charges, general and special, ordinary and extraordinary
foreseen and
unforeseen, to the extent allocable to the Term hereof, imposed
with respect to
the ownership or operation of the Primary Lot or the Building;
and (ii) all
charges for utilities furnished to the Premises which may become
a lien on the
Building or the Primary Lot (collectively "taxes and
assessments" or if singular
"tax or assessment"). "Real Estate Taxes" shall not include any
income, sales,
gross receipts, value added, estate, transfer, capital gains,
inheritance,
succession, gift, franchise, capital stock tax, any income taxes
arising out of
or related to the ownership and operation of the Primary Lot or
the Building or
any taxes relating to the Expansion Lot. Tenant shall have the
right to apply to
the
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appropriate governmental authority or agency to have taxes and
assessments
assessed directly to Tenant, and Landlord shall cooperate with
Tenant completing
such application and documentation necessary to effect such
direct assessment.
In the case of any such taxes and assessments assessed directly
to Tenant,
Tenant shall cause the same to be paid on or prior to the date
on which the same
may be paid without interest or penalty.
(b) With respect to any taxes and assessments assessed directly
to
Landlord, Landlord shall pay all taxes and assessments to the
applicable
government authorities before or on the dates due, and shall
promptly provide to
Tenant evidence of such payment.
(c) With respect to taxes and assessments which may lawfully be
paid
in installments, for the purpose of this Section 3.3, taxes and
assessments in
any period shall include only such portion of the same which is
required to be
paid within such period and any interest payable thereon
computed (whether or
not such is the case) as if Landlord had elected to pay the same
over the
longest period permitted by law.
(d) 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 Primary Lot and Building, 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 gross rents, then any and all of such taxes,
assessments, levies or
charges, to the extent so measured or based ("Substitute
Taxes"), shall be
payable by Tenant without duplication; provided, however,
Tenant's obligation
with respect to the aforesaid Substitute Taxes shall be limited
to the amount
thereof as computed at the rates that would be payable if the
Premises were the
only property of Landlord. Landlord shall furnish to Tenant a
copy of any notice
of any public, special or betterment assessment received by
Landlord concerning
the Premises and charged to Tenant hereunder promptly upon
Landlord's receipt
thereof.
(e) If Landlord shall obtain any abatement or refund on account
of
any real estate taxes as to which Tenant shall have paid
payments hereunder,
then, within thirty (30) days after receiving the same, Landlord
shall refund to
Tenant Tenant's portion of any such abatement or refund, after
deducting
therefrom the reasonable costs and expenses incurred by Landlord
in obtaining
such abatement or refund.
(f) For so long as taxes are assessed directly against Landlord,
if
at least twenty (20) days prior to the last day for filing an
application for
abatement of taxes or assessments for any tax year, Tenant shall
give notice to
Landlord that it desires to file an application for abatement of
such taxes and
assessments or to otherwise contest the assessed valuation of
the Primary Lot
and Building for such tax year, and if within ten (10) days
after the receipt of
such notice, Landlord does not give notice back to Tenant that
Landlord shall
itself file such application or commence such contest, then
Tenant shall have
the right either in its own name or in the name of Landlord but
at its own cost
and expense to file such application or commence such contest.
If within ten
(10) days after receipt by Landlord of such notice from Tenant,
Landlord shall
give Tenant notice that Landlord shall itself file such
application or commence
such contest, then Landlord shall do so prior to the expiration
of the time for
the
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filing of the same at its own cost and expense. In any event, if
any abatement
by whomever prosecuted shall be obtained, the cost and expense
of obtaining the
same shall be the first charge upon such abatement and shall be
reimbursed to
the party expending the same from the proceeds thereof, prior to
any other
distribution. If Tenant shall file an application for abatement
or commence such
contest pursuant to the provisions of this paragraph, Tenant
shall prosecute the
same to final determination with reasonable diligence and shall
not, without
Landlord's consent (which shall not be unreasonably withheld,
conditioned or
delayed), settle, compromise or discontinue the same except that
Tenant may
discontinue the prosecution of the same at any time after giving
Landlord notice
thereof and a reasonable opportunity to assume prosecution of
the same. If
Landlord shall file an application for abatement or commence
such contest,
Landlord shall prosecute the same to final determination with
reasonable
diligence and shall not without Tenant's consent (which shall
not be
unreasonably withheld, conditioned or delayed), settle,
compromise, or
discontinue the same except that Landlord may discontinue the
prosecution of the
same at any time after giving Tenant notice thereof and a
reasonable opportunity
to assume prosecution of the same. If either party shall file an
application for
an abatement or commence such contest, the other will cooperate
and furnish any
pertinent information in its files reasonably required by the
prosecuting party.
In every case, any abatement, refund, rebate or credit received
shall be paid
first to the party which prosecuted such abatement in the amount
of the costs
and expenses expended by it in such connection, and the balance
to each party
(within thirty (30) days after receipt) in the proportion that
it paid the tax
or assessment being abated, refunded, rebated or credited.
Landlord shall pay
any sums due to Tenant from any abatement within thirty (30)
days after receipt
of the same even if this Lease shall have expired. Tenant shall
timely pay all
sums payable under this Lease in respect of taxes and
assessments
notwithstanding the pendency of an abatement proceeding or any
such contest.
(g) Real Estate Taxes assessed for a real estate tax fiscal
year
which extends after the Term or earlier termination of this
Lease shall be
apportioned between Landlord and Tenant at the expiration of the
Term.
3.4. Insurance. Throughout the Term, subject to Section 3.5(b),
Landlord
shall obtain and maintain the insurance listed in Sections
3.4(b) and 3.4(c), at
Tenant's sole cost and expense, which shall be payable by Tenant
as Additional
Rent, and Tenant shall obtain and maintain the insurance listed
in Section
3.4(a) at Tenant's sole cost and expense:
(a) Commercial general liability insurance indemnifying Landlord
and
Tenant, and if Landlord shall elect, Landlord's mortgagees,
against all claims
and demands for any injury to person or property which may be
claimed to have
occurred on the Premises or on the sidewalk or ways immediately
adjoining the
Premises (including, without limitation the main access
driveway), in amounts
which shall, at the beginning of the Term, be at least equal to
the limits set
forth in Section 1.1, and, from time to time during the Term,
shall be for such
higher limits, if any, as are reasonably required by Landlord;
provided,
however, that such increases shall not be required more than
biannually, shall
not be required if comparable landlords of comparable buildings
do not require
such increases, and shall not exceed those amounts then
customarily carried on
properties similar to the Premises in the greater Boston
area;
(b) Direct risk of physical loss (all risk) insurance which
shall in
no event be less than 100% replacement value of the Premises (in
the Yield-Up
Condition), together with
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rental loss coverage in an amount equal to one year's Annual
Fixed Rent and
estimated additional rent, insuring the Building and its rental
value with a
replacement cost coverage endorsement and agreed value
endorsement, together
with deductibles not to exceed $250,000; and
(c) Insurance against loss or damage from sprinklers and
from
leakage or explosions or cracking of boilers, pipes carrying
steam or water, or
both, pressure vessels or similar apparatus (to the extent that
any of the
foregoing are present in the Premises), in the so-called "broad
form", in such
amounts and with such deductibles as Landlord may reasonably
determine, and
insurance against such other hazards and in such amounts as may
from time to
time be required by a bank, insurance company or other lending
institution
holding a mortgage on the Building and/or the Primary Lot.
3.5. Certain Provisions Applicable to Insurance Policies.
(a) Policies for insurance provided for under the provisions
of
Sections 3.4(b) and 3.4(c) shall have a deductible not in excess
of $250,000,
and shall, in case of loss, be first payable to the holders of
any mortgages on
the fee simple interest in the Building and/or the Primary Lot
under a standard
mortgagee's clause, and shall be deposited with the holder of
any mortgage or
with Landlord, as Landlord may elect. Landlord, Alexandria Real
Estate Equities,
Inc. (so long as it is an indirect owner of the Landlord) and,
if required,
Landlord's mortgagee, shall be named as an additional insured
for general
liability in all such policies issued therefor. All policies for
insurance
required under the provisions of Section 3.4 shall be obtained
from responsible
companies qualified to do business in the Commonwealth of
Massachusetts and in
good standing therein, having a Best's Insurance Rating of at
least "A minus"
and a financial size category of at least "VIII". All policies
for insurance
required hereunder shall also state that any loss will be
payable in accordance
with such policy, notwithstanding any act or omission of either
Landlord or
Tenant. Each of Landlord and Tenant agrees to furnish the other
party with
copies of certificates on ACORD form 27 of all such insurance
which such party
is obligated to obtain pursuant to Section 3.4 prior to the
beginning of the
Term hereof and during each Extension Term. Each such policy
shall be
noncancelable with respect to the interest of Tenant without at
least thirty
(30) days, prior written notice thereto. In the event of a claim
under any
insurance policies, Landlord and Tenant shall cooperate with one
another and
provide the other party with copies of such insurance policies
upon request.
(b) Tenant shall pay the costs of insurance obtained by
Landlord
pursuant to Section 3.4 (including general coverages, such as
earthquake,
fidelity, etc typically maintained by Landlord or its affiliates
for similar
properties, provided, that, at such time as the Premises is no
longer owned by
an organization that, together with its affiliates, owns more
than ten
properties similar to the Premises, the foregoing shall include
only coverages
typically maintained by owners of properties similar to the
Premises in the
greater Boston metropolitan area) as Additional Rent within
thirty (30) days
after delivery of an invoice therefor by Landlord, together with
reasonable
supporting documentation of such costs. In the event that
Landlord obtains any
such insurance pursuant to a blanket insurance policy, Tenant
shall be obligated
to pay only those insurance costs allocable to the Premises on
an equitable
basis. Upon request from time to time by Tenant, Landlord shall
provide
reasonable supporting documentation of how it allocates
insurance costs under
its blanket insurance policy to the Premises.
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3.6. Waiver of Subrogation. Landlord and Tenant shall each
procure an
appropriate clause in or endorsement to any property insurance
covering the
Premises, the Building and personal property, fixtures and
equipment located
therein, wherein the insurance companies shall waive subrogation
or consent to a
waiver of right of recovery, and Landlord and Tenant agree not
to make any claim
against, or seek to recover from, the other for any loss or
damage to its
property or the property of others resulting from fire or other
hazards to the
extent covered by such property insurance; provided, however,
that the release,
discharge, exoneration and covenant not to sue contained herein
shall be limited
by and coextensive with the terms and provisions of the waiver
of subrogation or
waiver of right of recovery. If either party shall be unable to
obtain the
inclusion of such clause even with the payment of an additional
premium, then
such party shall attempt to name the other party as a loss payee
under the
policy. If it shall not be possible to have the other party
named as a loss
payee, even with the payment of an additional premium, then the
first party
shall not be required to obtain such waiver of subrogation or
consent to waiver
provision and such party shall so notify the first party and the
first party's
agreement to name the other party as an additional insured shall
be satisfied.
Tenant acknowledges that Landlord shall not carry insurance on,
and shall not be
responsible for, (i) Tenant's Property, and (ii) any loss
suffered by Tenant due
to interruption of Tenant's business.
3.7. Utilities. Tenant shall pay directly to the proper
authorities
charged with the collection thereof all charges for water,
sewer, gas,
electricity, telephone and other utilities or services used or
consumed on the
Premises, whether designated as a charge, tax, assessment fee or
otherwise,
including, without limitation, water and sewer use charges and
taxes, if any,
all such charges to be paid as the same from time to time become
due. If Tenant
is not charged directly by the respective utility for any of
such utilities or
services, Tenant shall from time to time, within ten (10) days
of receipt of
Landlord's reasonably documented invoice therefor, pay to
Landlord such charges.
Landlord shall not be liable for any interruption or failure in
the supply of
any such utilities to the Premises; provided, however, that such
failure or
interruption does not arise out of any willful act of Landlord
or any of
Landlord's employees, servants, licensees, invitees,
contractors, affiliates,
agents, or consultants (together, the "Landlord's Parties").
Notwithstanding the
foregoing, Tenant shall have the right to terminate this Lease
upon notice to
Landlord if any interruption or failure in the supply of any
utilities to the
Premises shall continue for more than one hundred eighty (180)
consecutive days.
If Landlord receives any proceeds from a loss of rents insurance
policy due to
the interruption or failure to provide utilities to the
Premises, Landlord shall
abate the Annual Fixed Rent to the extent of the insurance
proceeds received by
Landlord. In addition, Landlord shall use its best efforts to
restore any
interrupted utility service affecting Tenant's use of the
Premises.
3.8. Net Lease; Nonterminability by Tenant.
(a) The Annual Fixed Rent, the Additional Rent and all other
amounts
payable hereunder to Landlord shall be paid without notice or
demand and without
setoff, abatement, suspension, deferment, reduction or deduction
except as
otherwise provided in this Lease or by operation of law, and
Landlord shall have
no obligations in respect of the Premises or Tenant, except as
otherwise
expressly provided herein.
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(b) This Lease shall not terminate, nor shall Tenant have any
right
to terminate this Lease, nor shall the obligations and
liabilities of Tenant set
forth herein be otherwise affected, except as otherwise
expressly provided in
this Lease or by operation of law or by final decree or final
judgment of any
court having jurisdiction.
ARTICLE IV
ADDITIONAL COVENANTS
4.1. Tenant's Affirmative Covenants. Tenant covenants at its
expense at
all times during the Term and for such further time as Tenant
occupies the
Premises or any part thereof:
(a) Perform Obligations. To perform promptly all of the
obligations
of Tenant set forth in this Lease; and to pay when due the
Annual Fixed Rent and
Additional Rent and all charges, rates and other sums which by
the terms of this
Lease are to be paid by Tenant.
(b) Use. To use the Premises only for the Intended Uses, and
from
time to time to procure all licenses and permits necessary
therefor at Tenant's
sole expense and to provide copies thereof to Landlord.
(c) Repair and Maintenance. To keep and maintain the Premises
in
good condition and repair, including the plumbing, electrical,
lighting, roof
membrane, interior mechanical systems, and all doors, door
frames, and door
openers, and all windows, frames and plate glass located on and
serving the
Premises, except for (a) reasonable use and wear, (b) damage
resulting from
Casualty or Taking (which shall instead be governed by Article
V), (c) portions
of the Premises that Landlord is obligated to repair and
maintain in accordance
with Section 4.2, and (d) damage resulting from the negligent or
other acts or
omissions of Landlord or Landlord's Parties ("Landlord's
Negligence") (Landlord
hereby agreeing, subject to the waiver of subrogation provisions
of Section 3.7
and in the case of a Casualty or Taking subject to the
provisions of Article V,
to perform at Landlord's sole expense any repair or maintenance
to the Premises
made necessary by Landlord's Negligence); to keep in a safe,
secure and sanitary
condition all trash and rubbish temporarily stored at the
Premises; to arrange
for and be responsible for all of the costs of a trash and
rubbish removal
service in connection with Tenant's use of the Premises; and to
make all
interior repairs and replacements (which shall not include
replacements of the
Structural Components or foundation of the Building), which are
required to keep
the Premises in good order, condition and repair as required
hereunder, and to
do all other work necessary for the foregoing purposes whether
the same may be
ordinary or extraordinary, foreseen or unforeseen.
(d) Compliance with Law and Insurance Requirements. To make
all
repairs, alterations, additions or replacements to the Premises
required by any
law or ordinance or any order or regulation of any public
authority other than
to the Structural Components and foundation of the Building; to
keep the
Premises equipped with all safety appliances so required; to pay
all municipal,
county, or state taxes assessed against the leasehold interest
hereunder, or
against personal property of any kind on or about the Premises;
not to dump,
flush, or in any way introduce any hazardous substances or any
other toxic
substances into the septic, sewage or other waste disposal
system serving the
Premises except in compliance with a valid sewer use permit;
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not to generate, store or dispose of hazardous substances in or
on the Premises
or dispose of hazardous substances from the Premises (including
any discharge to
the sewer system serving the Premises) except for use, storage,
generation and
off-site disposal of hazardous substances normally attendant to
Building
operations and Tenant's manufacturing, research and development
processes in
compliance with the Resource Conservation and Recovery Act of
1976, as amended,
42 U.S.C. Section 6901 et seq., the Massachusetts Hazardous
Waste Management
Act, M.G.L. c. 21 C, as amended, the Massachusetts Oil and
Hazardous Material
Release Prevention and Response Act, M.G.L. c. 2lE, as amended,
and all other
applicable codes, regulations, ordinances and laws; to notify
Landlord of any
incident which would require the filing of a notice under
applicable law; to
provide Landlord, from time to time upon Landlord's reasonable
request, a list
of hazardous substances which Tenant uses or stores on the
Premises, subject to
such confidentiality, proprietary information and trade secret
assurances as
Tenant may reasonably impose on Landlord, and without further
disclosure of such
records and information to third parties; and to comply with the
orders and
regulations of all governmental authorities with respect to
zoning, building,
fire, health and other codes, regulations, ordinances or laws
applicable to
Tenant's specific use of the Premises, except that Tenant may
defer compliance
so long as the validity of any such law, ordinance, order or
regulation shall be
contested by Tenant in good faith and by appropriate legal
proceedings, if
Tenant first gives Landlord appropriate assurance against any
loss, cost or
expense on account thereof. The term "hazardous substances" as
used in this
paragraph shall mean "hazardous substances" as defined in the
Comprehensive
Environmental Response Compensation and Liability Act of 1980,
as amended, 42
U.S.C. Section 9601 and regulations adopted pursuant to said
Act.
Landlord acknowledges that the Primary Lot and the Expansion Lot
are
located adjacent to the Industri-plex Superfund site. Tenant
acknowledges that
Tenant's Intended Uses will include the generation and storage
of hazardous
substances on the Premises. Without limitation of any of
Tenant's obligations
under this Lease in respect of the Premises or Landlord, Tenant
agrees to
indemnify, defend with counsel acceptable to Landlord and hold
harmless
Landlord, all of Landlord's mortgagees and their respective
officers, directors,
principals, agents and employees from and against all loss, cost
or damage that
any of them may incur or be liable for in connection with any
condition on the
Premises or arising on the Premises relating to the release or
threat of release
of hazardous substances in respect of the Premises and directly
attributable to
the act, omission or neglect of Tenant or any of Tenant's
employees, agents,
independent contractors or invitees including, without
limitation, any condition
not in conformity with the requirements of applicable law.
Within fifteen (15) days thereafter, Tenant shall provide copies
to
Landlord of any notice that Tenant may receive, from or give to
any governmental
authority or any other party in respect of any release or threat
of release of
hazardous substances in respect of the Premises. Landlord and
Landlord's
environmental consultants shall have the right from time to
time, upon not less
than 24 hours' advance notice to Tenant and accompanied by a
representative of
Tenant, to enter the Premises, subject to Tenant's rights and
Landlord's
obligations under Section 4.6, to undertake at Landlord's sole
cost an
assessment thereof to determine whether any release or threat of
release of
hazardous substances has occurred, and Tenant shall cooperate
with Landlord
(which cooperation shall not include Tenant's expenditure of
money to third
parties) in undertaking such assessment, including, without
limitation,
providing copies of such reports and such other information as
Landlord or its
consultant may reasonably request, but subject to such
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confidentiality, proprietary information and trade secret
assurances as Tenant
may reasonably impose on Landlord, and without further
disclosure of such
records and information to third parties; provided, however,
Tenant may elect to
undertake such assessment using its own consultants if
satisfactory to Landlord
and the holders of mortgages on the Premises and said
consultants shall provide
to Landlord and such holders such assessment and a reliance
letter from such
consultants regarding the aforesaid without additional charges
beyond those
which Landlord would have incurred if Landlord's consultant had
undertaken said
assessment. Tenant shall promptly correct any such condition if
(a) such
condition does not comply with the requirements of applicable
law or permits or
approvals, (b) such condition was caused by the act, omission,
or neglect of
Tenant or any of Tenant's employees, agents, independent
contractors or
invitees, and (c) Landlord gives written notice of such
condition to Tenant
(with Tenant recognizing that Landlord shall have no duty to
Tenant to conduct
such assessment or to give such notice to Tenant) in accordance
with the
Massachusetts Contingency Plan and the requirements of any other
applicable law.
If such assessment discloses any such release that exceeds
reportable quantities
under applicable law and was caused by the act or omission of
Tenant or any of
its employees, agents, contractors, or invitees, Tenant shall
promptly reimburse
Landlord for all costs and expense Landlord may incur in
undertaking such
assessment as Additional Rent.
4.2. Landlord's Repair and Maintenance Obligations. Subject to
the
provisions of Article V of this Lease, Landlord covenants, at
its sole expense
at all times during the Term to keep in good order, condition
and repair the
structural components, structural components of the roof,
exterior walls,
foundation and the parking areas and driveways located on the
Premises and/or
serving the Building (collectively, "Structural Components").
Without limitation
of the foregoing, Landlord shall be responsible, at its sole
expense, for all
capital replacements of the Structural Components and for
causing such
Structural Components to be in compliance with all applicable
laws and
regulations during the entire Term. Landlord shall not be
responsible for damage
to the Premises resulting from the negligence or other acts or
omissions of
Tenant or Tenant's employees, servants, agents, contractors
licensees,
affiliates, consultants or invitees ("Tenant's Negligence"),
Tenant hereby
agreeing to perform at Tenant's expense any repair or
maintenance to the
Premises made necessary by Tenant's Negligence; provided,
however, that if such
damage to the Premises results from a Casualty (as defined in
Section 5.1)
caused by Tenant's Negligence, Landlord shall repair, maintain
or restore the
Premises or portion thereof in accordance with and to the extent
required by
Article V.
4.3. Tenant's Work. Tenant shall procure at Tenant's sole
expense all
necessary permits and licenses before undertaking any work on
the Premises; to
do all such work in a good and workmanlike manner employing
materials of good
quality and so as to conform with all applicable zoning,
building, fire, health
and other codes, regulations, ordinances and laws; to keep the
Premises at all
times free of liens for labor and materials, and to discharge or
bond over such
liens forthwith after notice thereof from Landlord; to employ
for such work only
contractors approved by Landlord which approval shall not be
unreasonably
withheld, delayed or conditioned; to require all contractors
employed by Tenant
to carry worker's compensation insurance in accordance with
statutory
requirements and commercial general liability insurance covering
such
contractors on or about the Premises in amounts that at least
equal the limits
set forth in Section 1.1; and to save Landlord harmless and
indemnified from all
injury, loss, claims or damage to any person or property due to
such work
(provided, however, that Tenant shall not
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be required to indemnify and save Landlord harmless from
Landlord's negligent or
intentional acts or omissions to act) and, upon Landlord's
request, to furnish
to Landlord statements from all contractors and subcontractors
certifying
payment in full of any obligation owed to them in respect of
work undertaken on
the Premises.
4.4. Tenant's Indemnity. Tenant hereby agrees to defend, with
counsel
reasonably acceptable to Landlord (which approval shall not be
unreasonably
withheld, delayed or conditioned), all actions against Landlord,
any partner,
trustee, stockholder, officer, director, employee, beneficiary
or member or
manager of Landlord, holders of mortgages secured by the
Building and/or the
Primary Lot and any other party having an interest in the
Premises ("Indemnified
Parties") with respect to, and to pay, protect, indemnify and
save harmless, to
the extent permitted by law, all Indemnified Parties from and
against, any and
all liabilities, losses, damages, costs, expenses (including
reasonable
attorneys' fees), causes of action, suits, claims, demands or
judgments of any
nature arising from (i) injury to or death of any person, or
damage to or loss
of property, on or about the Premises, or connected with the
use, condition or
occupancy thereof except to the extent caused by the negligent
or intentional
act or omission to act of Landlord, (ii) violation of this Lease
by Tenant, or
(iii) any wrongful act, fault, wrongful omission, or other
misconduct of Tenant
or its agents, contractors, licensees, sublessees or invitees.
Nothing in this
Section 4.4, however, shall derogate from the effectiveness of
insurance
required to be maintained by Tenant under this Lease naming
Landlord as an
insured. This Section 4.4 is further subject to the waiver of
subrogation
provisions in Section 3.7.
4.5. Landlord's Indemnity. Landlord hereby agrees to defend,
with counsel
reasonably acceptable to Tenant (which approval shall not be
unreasonably
withheld, delayed or conditioned), all actions against Tenant,
any partner,
trustee, stockholder, officer, director, employee, beneficiary
or member or
manager of Tenant ("Tenant Indemnified Parties") with respect
to, and to pay,
protect, indemnify and save harmless, to the extent permitted by
law, all Tenant
Indemnified Parties from and against, any and all liabilities,
losses, damages,
costs, expenses (including reasonable attorneys' fees), causes
of action, suits,
claims, demands or judgments of any nature arising from (i)
injury to or death
of any person, or damage to or loss of property, on or about the
Premises, or
connected with the use, condition or occupancy thereof to the
extent caused by
the negligent or intentional act or omission to act of Landlord,
(ii) violation
of this Lease by Landlord, or (iii) any wrongful act, fault,
wrongful omission,
or other misconduct of Landlord or its agents, contractors,
licensees,
sublessees or invitees. Nothing in this Section 4.5, however,
shall derogate
from the effectiveness of insurance required to be maintained by
Tenant under
this Lease naming Landlord as an insured. This Section 4.5 is
further subject to
the waiver of subrogation provisions in Section 3.7. Landlord
further agrees to
indemnify, defend with counsel acceptable to Tenant and hold
harmless Tenant and
its officers, directors, principals, agents and employees from
and against all
loss, cost or damage that any of them may incur or be liable for
in connection
with any condition on the Premises or arising on the Premises
relating to the
release or threat of release of hazardous substances in respect
of the Premises
and directly attributable to the act, omission or neglect of
Landlord or any of
Landlord's employees, agents, independent contractors or
invitees including,
without limitation, any condition not in conformity with the
requirements of
applicable law.
4.6. Landlord's Right to Enter. Landlord and its agents shall be
permitted
to enter into the Premises at reasonable times and upon
reasonable advance
notice to examine the Premises, make
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such repairs and replacements as Landlord may be entitled to
make under this
Lease, without, however, any obligation to do so except as
provided in this
Lease, to view the Premises for Tenant's compliance with
Tenant's obligations
under this Lease, and show the Premises to prospective
purchasers and lenders,
and, during the last twelve (12) months of the Term or earlier
if Tenant shall
be in default under this Lease beyond applicable notice, grace
and cure periods,
to show the Premises to prospective tenants and to keep affixed
in suitable
places notices of availability of the Premises. Landlord's
exercise of its right
of access to the Premises as provided in this Lease shall be
subject to the
following: (a) Landlord shall not unreasonably interfere with
Tenant's business
activities, (b) Landlord shall indemnify and hold harmless
Tenant from and
against all loss, cost and expense resulting from the negligent
or intentional
act or omission to act of Landlord in the course of exercise of
such right, (c)
Landlord shall, except in the case of an emergency, enter the
Premises only when
accompanied by a representative of Tenant during normal business
hours and upon
not less than 24 hours' notice, in order to ensure the continued
confidentiality
of Tenant's business materials, and (d) Landlord shall at all
times adhere to
such safety, security, confidentiality, proprietary information
and trade secret
rules and guidelines as Tenant may reasonably impose.
4.7. Personal Property at Tenant's Risk. All of the furnishings,
fixtures,
equipment, effects and property of every kind, nature and
description of Tenant
and of all persons claiming by, through or under Tenant which,
during the
continuance of this Lease or any occupancy of the Premises by
Tenant or anyone
claiming under Tenant, may be on the Premises, shall, as between
the parties, be
at the sole risk and hazard of Tenant and if the whole or any
part thereof shall
be destroyed or damaged by fire, water or otherwise, or by the
leakage or
bursting of water pipes, steam pipes, or other pipes, by theft
or from any other
cause, no part of said loss or damage is to be charged to or to
be borne by
Landlord, except that Landlord shall in no event be indemnified
or held harmless
or exonerated from any liability to Tenant or to any other
person, for any
injury, loss, damage or liability resulting from Landlord's
Negligence. Tenant
shall insure Tenant's personal property.
4.8. Payment of Cost of Enforcement. Tenant shall pay on demand
Landlord's
expenses, including reasonable attorney's fees, incurred in
successfully
enforcing any obligation of Tenant under this Lease continuing
beyond applicable
notice, grace and cure periods or in curing any default by
Tenant under this
Lease as provided in Section 6.4.
4.9. Yield-Up.
(a) At the expiration of the Term or earlier termination of
this
Lease, Tenant shall surrender all keys to the Premises and shall
remove the
furnishings, fixtures and equipment set forth in Exhibit C
attached hereto, as
defined below. Tenant shall have the right, but not the
obligation, to remove
any installments, alterations or improvements made by Tenant
during the Term.
Tenant shall repair all damage caused by such removal and to
yield-up the
Premises in broom-clean condition and in the same good order and
repair in which
Tenant is obliged to keep and maintain the Premises by the
provisions of this
Lease (except for reasonable wear and tear, damage by Casualty
and Taking and
damage resulting from Landlord's Negligence).
(b) Upon surrender of the Premises in accordance with this
Section
4.9, the Premises shall be free of Hazardous Materials brought
upon, kept, used,
stored, handled, treated,
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generated in, or released or disposed of from, the Premises by
any person other
than a Landlord Party (collectively, "TENANT HAZMAT OPERATIONS")
and released of
all Hazardous Materials Clearances. At least three (3) months
prior to the
surrender of the Premises at the end of the Term, Tenant shall
deliver to
Landlord a narrative description of the actions proposed to be
taken by Tenant
(the "SURRENDER PLAN") in order to surrender the Premises free
of Hazardous
Materials and in a manner that results in the release of all
Hazardous Materials
Clearances at the expiration or earlier termination of the Term.
Such Surrender
Plan shall be accompanied by a current listing of (i) all
Hazardous Materials
licenses and permits held by or on behalf of any Tenant Party
with respect to
the Premises, and (ii) all Hazardous Materials used, stored,
handled, treated,
generated, released or disposed of from the Premises, and shall
be subject to
the reasonable review and approval of an environmental
consultant selected by
Landlord and reasonably acceptable to Tenant to ensure that the
Surrender Plan
is likely to result in the surrender of the Premises free of all
Hazardous
Materials and in a manner that results in the release of all
Hazardous Materials
Clearances. In connection with the review and approval of the
Surrender Plan,
upon the request of Landlord, Tenant shall deliver to Landlord
or its consultant
such additional non-proprietary information concerning Tenant
HazMat Operations
as Landlord shall reasonably request. On or before such
surrender, Tenant shall
deliver to Landlord evidence that the approved Surrender Plan
shall have been
completed, and Landlord shall have the right, at Landlord's sole
cost and
expense, to cause Landlord's environmental consultant to inspect
the Premises
and perform such additional procedures as may be deemed
reasonably necessary to
confirm that the Premises will be surrendered free of all
Hazardous Materials
and that all Hazardous Materials Clearances have or will be
issued as of the
effective date of such surrender or early termination of the
Lease. Tenant shall
reimburse Landlord, as Additional Rent, for the actual out-of
pocket expense
incurred by Landlord for Landlord's environmental consultant to
review and
approve the Surrender Plan and to visit the Premises and verify
satisfactory
completion of the same, which cost shall not exceed $5,000.
Landlord shall have
the unrestricted right to deliver such Surrender Plan and any
report by
Landlord's environmental consultant with respect to the
surrender of the
Premises to third parties with a need to access to the
information contained in
the Surrender Plan. The term "HAZARDOUS MATERIALS" means any
substances,
materials or wastes currently or in the future deemed or defined
in any
applicable law as "hazardous substances", "toxic substances",
"contaminants",
"pollutants" or words of similar import, but shall expressly
exclude any such
substances or materials contained in the Premises and/or used in
connection with
the electrical, HVAC and other systems serving the Premises
(such as hydraulic
oil used for the elevators and water treatment in the boilers)
to the extent the
presence of such substances or materials is required for the
proper operation of
the Premises and such systems and is in compliance with all
applicable laws and
regulations.
(c) If Tenant shall fail to prepare or submit a Surrender
Plan
approved by Landlord, or if Tenant shall fail to complete the
approved Surrender
Plan, or if such Surrender Plan, whether or not approved by
Landlord, shall fail
to result in the surrender of the Premises free of Hazardous
Materials and in
the issuance of all Hazardous Materials Clearances, then
Landlord shall have the
right, from and after the expiration of the Term or the earlier
termination of
this Lease, and continuing through and including the date that
is 180 days
thereafter, to take such actions as Landlord may deem reasonably
appropriate to
assure that all Hazardous Materials are removed from the
Premises and all
Hazardous Materials Clearances are issued, the reasonable costs
of which actions
shall be reimbursed by Tenant as Additional Rent.
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<PAGE>
(d) The yield-up of the Premises in accordance with the
foregoing
provisions of this Section 4.9 shall be referred to as the
"Yield-Up Condition."
Landlord and Tenant shall conduct an inspection of the Premises
prior to the end
of the Term to facilitate Landlord's identification of the items
to be removed
under this Section 4.9. Any property not so removed that remains
on or at the
Premises shall be deemed abandoned and may be removed and
disposed of by
Landlord in such manner as Landlord shall determine, provided,
that, Tenant
shall have no obligation to pay Landlord any expense incurred by
it is effecting
such removal and disposition and in making any incidental
repairs and
replacements to the Premises and for use and occupancy during
the period after
the expiration of the Term and prior to Tenant's performance of
its obligations
under this Section 4.9.
4.10. Estoppel Certificates.
(a) Upon not less than ten (10) business days' prior notice
from
Landlord, Tenant shall execute and deliver to Landlord a
statement in writing
certifying that this Lease is unmodified and in full force and
effect and that
except as stated therein Tenant has no knowledge of any
defenses, offsets or
counterclaims against its obligations to pay the Annual Fixed
Rent and to
perform its other covenants under this Lease (or, if there have
been any
modifications that the same is in full force and effect as
modified and stating
the modifications and, if there are any defenses, offsets or
counterclaims,
setting them forth in reasonable detail), the dates to which the
Annual Fixed
Rent have been paid and a statement that Landlord is not in
default hereunder
beyond applicable notice, grace and cure periods (or if in
default beyond
applicable notice, grace and cure periods, the nature of such
default, in
reasonable detail). Any such statement delivered pursuant to
this Section 4.10
may be relied upon by any prospective purchaser or mortgage of
the Premises, or
any prospective assignee of any such mortgage.
(b) Upon not less than ten (10) business days' prior notice
from
Tenant, Landlord shall execute and deliver to Tenant a statement
in writing
certifying that this Lease is unmodified and in full force and
effect and that
except as stated therein Landlord has no knowledge of any
defenses, offsets or
counterclaims against its obligations to perform its covenants
under this Lease,
(or, if there have been any modifications that the same is in
full force and
effect as modified and stating the modifications and, if there
are any defenses,
offsets or counterclaims, setting them forth in reasonable
detail), the dates to
which the Annual Fixed Rent has been paid and a statement that
Tenant is not in
default hereunder beyond applicable notice, grace and cure
periods (or if in
default beyond applicable notice, grace and cure periods, the
nature of such
default, in reasonable detail). Any such statement delivered
pursuant to this
Section 4.10 may be relied upon by any prospective lender,
subtenant or assignee
of Tenant.
4.11. Park Restrictions. Each of Landlord and Tenant shall
comply with the
restrictions and covenants set forth in Declaration of
Protective Covenants.
4.12. Holding Over. Tenant covenants that it will vacate the
Premises
immediately upon the expiration or sooner termination of this
Lease. If Tenant
retains possession of the Premises or any part thereof after the
termination of
the Term without Landlord's express consent, Tenant shall be
treated as a tenant
at sufferance and shall pay to Landlord the following
percentages of Annual
Fixed Rent payable during the last Lease Year preceding
expiration or
termination of the term: 110% for the first month of such
holdover, 125% for the
second and
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<PAGE>
third months of such holdover and 150% thereafter. Landlord's
acceptance of such
rent shall not in any manner adversely affect Landlord's rights
to evict Tenant
from the Premises; provided, however, that such rent shall
constitute liquidated
damages and Tenant shall have no obligation to pay separate or
additional
damages incurred by Landlord. Landlord may elect to refuse
payment of holdover
rent pursuant to this Section 4.12 and in such event Landlord
shall have the
right to remove Tenant through summary proceedings for holding
over beyond the
expiration of the Term of this Lease.
4.13. Assignment and Subletting.
(a) Except as otherwise expressly provided herein, Tenant shall
not
assign this Lease or sublet all or any portion of the Premises
without
Landlord's prior written consent, which consent shall not be
unreasonably
withheld, delayed or conditioned. Within twenty (20) days after
delivery by
Tenant of any request for Landlord's consent to a sublease or
assignment,
Landlord shall deliver notice to Tenant indicating whether it
consents or does
not consent to such proposed sublease or assignment. If Landlord
withholds its
consent, such notice shall contain a detailed explanation of the
factors
considered and conclusions arrived at by Landlord in withholding
its consent. If
Landlord fails to deliver such notice to Tenant within such
twenty (20) day
period, Landlord shall be deemed to have consented to the
proposed assignment or
sublease. The sole factors that Landlord may consider in
determining whether to
consent or not to consent to a sublease or assignment are (a)
whether the
proposed subtenant or assignee has sufficient net worth and
working capital to
perform the obligations under the proposed this Lease or the
proposed sublease,
as the case may be and (b) whether the use and occupancy of the
Premises by the
proposed subtenant or assignee would result in additional
material financial
risks to Landlord. Landlord acknowledges that Tenant may, from
time to time,
desire to grant Tenant's lender(s) a security interest in the
equipment and
furnishings that Tenant may install or maintain in the Premises
and that Tenant
shall have the right to grant such security interests without
the consent of
Landlord, provided that no such security interest shall encumber
any fixture
that Tenant is not entitled under the terms of this Lease to
remove at the
expiration of the Term. Any attempted assignment of this Lease
without the prior
written approval of Landlord shall be void. No assignment
approved or permitted
to be made without Landlord's consent under the next following
paragraph of this
Section 4.13, and no indulgence granted by Landlord to any
assignee or
sublessee, shall in any way impair the continuing primary
liability (which after
an assignment shall be joint and several with the assignee) of
Tenant hereunder,
and no approval in a particular instance shall be deemed to be a
waiver of the
obligation to obtain Landlord's approval in any other case.
(b) Notwithstanding the terms of Section 4.13(a), Landlord
agrees
that Tenant shall have the right, without Landlord's consent, to
assign this
Lease or sublease all or a portion of the Premises, as
applicable as follows:
(i) Tenant shall have the right to assign this Lease to a
Credit Entity (hereinafter defined). As used herein, a "Credit
Entity" shall
mean any person that immediately following such assignment and
having given
effect thereto will have a publicly traded unsecured senior debt
rating of
"Baa2" or better from Moody's Investor's Services, Inc. or a
rating of "BBB" or
better from Standard & Poor's Corporation (or comparable
ratings from successor
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<PAGE>
rating agencies) (or, if such Person does not then have rated
debt, a
determination that by either of such rating agencies its
unsecured senior debt
would be so rated by such agency);
(ii) Tenant shall have the right to sublease all or a
portion
of the Premises to a Credit Entity; or
(iii) Tenant shall have the right to assign this Lease or
sublet all or any portion of the Premises to any corporation,
person or entity
directly or indirectly controlling or controlled by, or under
common control
with, Tenant (an "Affiliate of Tenant") or to any successor by
merger,
consolidation or acquisition of all or substantially all of the
assets of
Tenant, provided that, in the case of an assignment to an
Affiliate of Tenant or
to a successor by merger, consolidation or acquisition of all or
substantially
all of the assets of Tenant, such assignee shall have a net
worth and working
capital sufficient to enable such assignee to meet Tenant's
financial
obligations hereunder.
(c) In connection with any assignment of the Lease permitted
without
the consent of Landlord pursuant to Section 4.13(b), effective
on the date of
the assignment, Tenant shall be released from all obligations
under this Lease
arising prior to such effective date.
(d) If Landlord's consent is required with respect to any
assignment
of this Lease or any sublease of the Premises or any part
thereof, and Landlord
shall grant such consent, Tenant shall, in consideration
therefor, pay to
Landlord, as Additional Rent, an amount equal to one-half
of:
(i) in the case of an assignment, one-half (1/2) of all sums
and other consideration paid to Tenant by the assignee for, or
by reason of,
such assignment to the extent such sums are in excess of the
obligations assumed
by the assignee to pay Annual Fixed Rent, Additional Rent and
other sums under
this Lease; and
(ii) in the case of a sublease, one-half (1/2) of any rents,
additional charges, or other consideration payable under the
sublease by the
subtenant to Tenant that are in excess of the Annual Fixed Rent
and Additional
Rent accruing during the term of the sublease in respect of the
subleased space
(at the rate per square foot payable by Tenant hereunder)
pursuant to the terms
hereof;
after deducting in both such cases all of Tenant's reasonable
out-of-pocket
expenses actually and directly incurred in connection with such
sublease or
assignment including, without limitation, reasonable legal fees,
brokerage
commissions, marketing costs, alterations to the space, rent
concessions, tenant
improvements or allowance, or any rent-free period, such
expenses to be
amortized over the term of the sublease (in the case of a
sublease) or over the
remaining term of this Lease (in the case of an assignment where
the
consideration is not paid in a lump sum on the date of such
assignment).
The sums payable under this Section 4.13(d) shall be paid to
Landlord as
and when payable by the subtenant or assignee to Tenant.
4.14. Waste; Nuisance. Tenant shall not commit any nuisance or
allow or
suffer any waste to the Premises.
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<PAGE>
4.15. Installations, Alterations or Additions.
(a) Tenant shall not make any installations, alterations or
additions in, to or on the Premises which would have a material
adverse effect
on the structural or external architectural integrity of the
Premises, or the
cost of which would exceed $250,000 with respect to a single
project, without
obtaining the prior written consent of Landlord, which consent
shall not be
unreasonably withheld, delayed or conditioned. In all cases
where plans are
prepared for any work to be done by Tenant having a cost of more
than $250,000
or involving structural modifications, Tenant shall furnish
copies of the same
to Landlord no less than fifteen (15) days prior to the date on
which Tenant
shall commence work in the Premises and in all such cases,
Tenant shall provide
to Landlord as-built plans in respect of such work promptly
after Tenant
completes the same.
(b) Installations, alterations or improvements performed by
Tenant
in or at the Building shall not require Landlord's prior consent
if such
installations, alterations or improvements would not have a
material adverse
effect on the structural or architectural integrity of the
Premises. Landlord
shall not have the right to require Tenant to remove at the end
of the Term
Tenant's Property or any installations, alterations or additions
made during the
Term. Notwithstanding the foregoing, nothing in this Section
4.15 shall require
Tenant to obtain Landlord's consent to the installation, removal
or substitution
of Tenant's Property (hereinafter defined) in connection with
the operation of
Tenant's business so long as such installation, removal or
substitution does not
adversely affect in any material respect any structural
component of the
Building. "Tenant's Property" shall mean all of the following
located in or used
by Tenant in connection with the Premises (which shall be the
sole property of
Tenant): all personal property of any type whatsoever, all trade
fixtures,
machinery, office equipment, manufacturing equipment and used in
connection with
Tenant's business, production equipment, laboratory equipment,
office equipment,
furniture, together with all additions thereto, substitutions
therefor and
replacements thereof.
(c) The following procedures shall apply with respect to any
installations, alterations or additions in, to or on the
Premises that require
Landlord's prior consent pursuant to Section 4.15(a): Tenant
shall submit to
Landlord for review and comment construction plans,
specifications and drawings
for the Proposed Alterations ("Construction Drawings"). Landlord
shall deliver
its written comments on the Construction Drawings to Tenant not
later than ten
(10) business days after Landlord's receipt of the same. If
Landlord does not
respond within ten (10) business days to any request by Tenant
for consent to
the Construction Drawings, then Landlord's consent shall be
deemed given. Such
process shall continue until the Construction Drawings are
approved or deemed
approved by Landlord. Any disputes in connection with such
comments shall be
resolved in accordance with Section 4.15(d) hereof.
(d) In the event of any dispute regarding the design of the
Proposed
Alterations, which is not settled within ten (10) business days
after notice of
such dispute is delivered by one party to the other, Tenant
shall make the final
decision regarding the design of the Tenant Improvements,
provided (i) Tenant
acts reasonably and such final decision is either consistent
with or a
compromise between Landlord's and Tenant's positions with
respect to such
dispute, and (ii) such dispute does not involve a proposed
modification or
alteration of the exterior shell of the Building.
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<PAGE>
(e) Landlord and Tenant hereby agree that disputes over
Proposed
Alterations that are not resolved pursuant to Section 4.15(c),
(each, an
"ARBITRATION MATTER") which cannot be resolved between Landlord
and Tenant will
be submitted to binding arbitration. If either party delivers to
the other a
demand for arbitration of an Arbitration Matter, then Landlord
and Tenant shall
meet (which meeting may take place by telephone conference)
within three (3)
business days after delivery of the demand for arbitration and
make a good faith
attempt to mutually appoint a single Arbitrator (as defined
below) to determine
the Arbitration Matter. If Landlord and Tenant are unable to
agree upon a single
Arbitrator, then each shall, by written notice delivered to the
other within
five (5) business days after the meeting, select an Arbitrator.
If either party
fails to timely give notice of its selection for an Arbitrator,
the other
party's Arbitrator shall be the sole Arbitrator. If each party
selects an
Arbitrator, then the two Arbitrators so appointed shall, within
five (5)
business days after their appointment, appoint a third
Arbitrator, who shall be
the sole Arbitrator. If the two Arbitrators so selected cannot
agree on the
selection of the third Arbitrator within the time above
specified, then either
party, on behalf of both parties, may request such appointment
of such third
Arbitrator by application to any state court of general
jurisdiction in the
jurisdiction in which the Premises are located, upon 5 business
days prior
written notice to the other party of such intent. The Arbitrator
shall hold an
arbitration proceeding, to be attended by Landlord and Tenant,
within ten (10)
business days of the Arbitrator's appointment. The decision of
the Arbitrator
shall be made within two (2) days after the arbitration
proceeding. Each party
shall pay the fees and expenses of the Arbitrator appointed by
or on behalf of
such party. The fees and expenses of any single Arbitrator or
the third
Arbitrator shall be borne equally by both parties. The parties
hereby waive any
right to appeal the decision of the Arbitrator. An "ARBITRATOR"
for purposes of
this Section only shall be any person appointed by or on behalf
of either party
pursuant to the provisions hereof and shall be a retired judge
of the Superior
Court or Land Court of Middlesex County, Massachusetts or an
individual
otherwise mutually agreed to by Landlord and Tenant.
(f) Landlord shall not charge any fees for such approvals or
in
connection with the construction of any such alterations.
4.16. Signage. Tenant shall have the right, without the consent
of
Landlord, to display Tenant identification signage on the
exterior and interior
of the Building, in the parking areas serving the Building and
on the Primary
Lot. The size, design and placement of said signage shall be in
compliance with
applicable laws. Tenant shall have no obligation to remove any
signage upon the
expiration or earlier termination of this Lease.
4.17. Parking. Tenant shall have the exclusive right to use and
occupy the
parking areas located on the Land.
4.18. Landlord's Additional Covenants. Except for mortgages
granted with
respect to the Premises to secure a financing, Landlord shall
not encumber the
Premises or permit any other person to use or occupy the
Premises without the
prior consent of Tenant. Without the prior written consent of
Tenant, Landlord
shall not construct any installations, alterations or additions
on, to or under
the Premises, except to the extent necessary to perform its
obligations under
this Lease.
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<PAGE>
ARTICLE V
CASUALTY OR TAKING
5.1. Casualty.
(a) If, at any time during the Term, the Building or the
Premises
are damaged or destroyed by a fire or other insured casualty,
Landlord shall
notify Tenant within 30 days after discovery of such damage (a
"Restoration
Notice") as to the amount of time Landlord reasonably estimates
it will take to
restore the Premises, as applicable (the "Restoration Period").
If the
Restoration Period is estimated to exceed fifteen (15) months
(the "Maximum
Restoration Period"), Landlord may, in such notice, elect to
terminate this
Lease as of the date that is seventy-five (75) days after the
date of discovery
of such damage or destruction; provided, however, that
notwithstanding
Landlord's election to restore, Tenant may elect to terminate
this Lease by
written notice to Landlord delivered within forty-five (45) days
of receipt of a
notice from Landlord estimating a Restoration Period for the
Premises longer
than the Maximum Restoration Period. Unless either Landlord or
Tenant so elects
to terminate this Lease pursuant to this Section 5.1, Landlord
shall promptly
restore the Premises (including all tenant improvements that
were part of the
Premises as of the date of this Lease), as needed to obtain any
license,
clearance or other authorization of any kind required to enter
into and restore
the Premises issued by any Governmental Authority having
jurisdiction over the
use, storage, handling, treatment, generation, release,
disposal, removal or
remediation of Hazardous Materials (hereinafter defined) in, on
or about the
Premises (collectively referred to herein as "HAZARDOUS
MATERIALS CLEARANCES");
provided, however, that if repair or restoration of the Premises
is not
substantially complete as of the end of the Maximum Restoration
Period, Landlord
shall cease all work, and Tenant may by written notice to
Landlord delivered
within five (5) business days of the expiration of Maximum
Restoration Period,
elect to terminate this Lease. If Tenant elects to terminate
this Lease,
Landlord shall be relieved of its obligation to make repairs or
restoration, and
this Lease shall terminate as of the date of discovery of such
damage or
destruction. Landlord shall retain any Rent paid and the right
to any Rent
payable by Tenant and applicable to the date of termination. If
Tenant does not
timely elect to terminate, this Lease shall remain in full force
and effect, and
Landlord shall complete all repairs and restoration as soon as
reasonably
practicable.
(b) Notwithstanding anything to the contrary contained in
Section
5.1(a), (i) if there is Material Damage (as hereinafter defined)
and the date
set forth in the Restoration Notice is more than twelve (12)
months from the
date of such damage, then Tenant shall have the right to
terminate this Lease by
giving notice to Landlord (a "TENANT TERMINATION NOTICE"), not
later than thirty
(30) days following Tenant's receipt of the Restoration Notice.
If this Lease is
terminated by Landlord p
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