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Exhibit 10.2
LEASE
by and between
BTI 199-201 RIVERNECK, L.P.,
a Delaware limited partnership
as Landlord
and
MERCURY COMPUTER SYSTEMS INC.,
as Tenant
With respect to property
located at 199 and 201 Riverneck Road,
Chelmsford, Massachusetts
April 20, 2007
TABLE OF CONTENTS
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(i)
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(ii)
LEASE
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 following data.
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DATE:
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April 20, 2007
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LANDLORD:
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BTI 199-201 RIVERNECK, L.P., a Delaware limited
liability company
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TENANT:
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Mercury Computer Systems Inc., a Massachusetts
corporation
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LAND:
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Those certain parcels of land in Chelmsford,
Middlesex County, Massachusetts, as more particularly described in
Exhibit A attached hereto and made a part hereof,
commonly known as and numbered 199 and 201 Riverneck Road, together
with any rights appurtenant thereto.
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BUILDINGS:
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The existing buildings together with all fixtures
and building systems located on or in the buildings not owned by
Tenant located on the Land.
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PREMISES:
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The Land, the Buildings and the other
improvements now or hereafter located thereon.
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RENTABLE AREA OF BUILDINGS:
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Agreed to be 185,327 square feet
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COMMENCEMENT DATE:
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April 20, 2007
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TERM:
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Commencing on the Commencement Date and expiring
at the close of the day on April 30, 2017, as it may be extended as
provided herein
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BASE RENT:
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Annual Base Rent for the Premises shall be
$1,945,933.50 per annum, $162,161.13 per month ($10.50 per square
foot of Rentable Area) for Lease Years one through five and
$2,140,526.85 per annum, $178,377.24 per month ($11.55 per square
foot of Rentable Area) for Lease Years six through ten.
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DEPOSIT
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Three Million Dollars ($3,000,000.00) in the form
of a letter of credit as provided in Article 12
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LEASE YEAR:
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Means each period of one year during the Term
commencing on the Commencement Date or on any anniversary thereof,
or, if the Commencement Date does not fall on the first day of a
calendar month, the first Lease Year shall consist of the partial
calendar month following the Commencement Date and the succeeding
twelve full calendar months, and each succeeding Lease Year shall
consist of a one-year period commencing on the first day of the
calendar month following the calendar month in which the
Commencement Date fell (provided, however, that the last Lease Year
of the Lease Term hereof shall end on the date on which the Lease
Term ends)
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PERMITTED USES
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See Section 4.1.
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1.2 Exhibits . The exhibits listed below
are attached hereto and incorporated in this Lease by reference and
are to be construed as a part of this Lease:
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Exhibit A:
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Legal Description
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Exhibit B:
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Repair Items
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Exhibit C:
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Tenant’s Insurance
Certificates
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Exhibit D:
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Landlord’s Insurance
Certificates
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Exhibit E:
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Form of Subordination, Nondisturbance and
Attornment Agreement
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Exhibit F:
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Form of Notice of Lease
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Article II PREMISES AND
TERM
2.1 Premises and Term . Landlord hereby leases to Tenant
and Tenant hereby leases from Landlord, subject to and with the
benefit of the terms, covenants, conditions and provisions of this
Lease, the Premises hereunder for the Term, unless sooner
terminated as provided herein.
2.2 Acceptance of Premises . Tenant and Landlord
acknowledge: that Landlord has acquired the fee interest in the
Premises from two (2) wholly-owned subsidiaries of Tenant as
of the date hereof; that prior to the date hereof, Tenant was and
that Tenant currently remains in
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possession of the Premises; that Tenant and
Landlord have examined the Premises and are familiar with the
physical condition of the Premises; that Tenant is leasing the same
in "as is" condition; that the Premises were in satisfactory
condition on the Commencement Date with the exception of the items
(the "Repair Items") listed on Exhibit B attached
hereto and made a part hereof; that Tenant shall complete the
Repair Items in a commercially reasonable manner at its sole cost
and expense within the time period specified in Exhibit B; that no
promise has been made by Landlord or by Tenant to alter, remodel or
improve the Premises and no representation respecting the condition
of the Premises has been made by Landlord or by Tenant.
Notwithstanding the foregoing, nothing herein is intended to limit
Tenant’s obligation to comply with all Legal Requirements
applicable to Tenant’s use, operation, or occupancy of the
Premises as specified in Section 4.4.1 below. Without in any
way limiting the generality of the foregoing, in entering into this
Lease and leasing the Premises, Tenant and Landlord hereby
acknowledge that the parties have not made, do not hereby make and
will not hereafter make any representations or warranties or
guarantees, whether express or implied, with respect to the
Premises or the physical condition thereof as of the Commencement
Date, including, without limitation:
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(a) the quality, nature, adequacy and physical condition of the
Premises; or
(b) the quality, nature, adequacy and physical condition of
soils, geology and groundwater; or
(c) the existence, quality, nature, adequacy and physical
condition of utilities servicing the Premises; or
(d) the development potential of the Premises, and the
Premises’ use, habitability, merchantability, fitness,
suitability, value or adequacy for any particular purpose; or
(e) the zoning or other legal status of the Premises or any
other public or private restrictions on the use of the Premises;
or
(f) the compliance of the Premises or its operation with any
applicable codes and laws or with the restrictions of any
governmental or quasi governmental entity or of any other person or
entity; or
(g) the presence of Hazardous Materials (as hereinafter defined)
on, under, in or about the Premises or the adjoining or neighboring
property or the existence of any underground tanks, containers or
conduits in, on or about the Premises. For the purposes of this
Lease, " Hazardous Materials " shall mean and include those
substances defined in 42 U.S.C. Sec. 9601(14) or any related or
applicable federal, state or local statute, law, regulation, or
ordinance, pollutants of contaminants (as defined in 42 U.S.C. Sec.
9601(33), petroleum (including crude oil or any fraction thereof),
any form of natural or synthetic gas, sludge (as defined in 42
U.S.C. Sec. 6903(26A), radioactive substances, hazardous waste
(as
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defined in 42 U.S.C. Sec. 6903(27)) and any other
hazardous wastes, hazardous substances, contaminants or pollutants
as defined or described in any of the Environmental Laws. As used
in this Lease, " Environmental Laws " means all federal,
state and local environmental laws, and any rule or regulation
promulgated thereunder and any order, standard, interim regulation,
moratorium, policy or guideline of or pertaining to any federal,
state or local government, department or agency, including but not
limited to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (" CERCLA "), the
Superfund Amendments and Reauthorization Act of 1986 (" SARA
"), the Clean Water Act, the Clean Air Act, the Toxic Substances
Control Act, the Occupational Safety and Health Act, the Federal
Insecticide, Fungicide and Rodenticide Act, the Marine Protection,
Research, and Sanctuaries Act, the National Environmental Policy
Act, the Noise Control Act, the Safe Drinking Water Act, the
Resource Conservation and Recovery Act (" RCRA "), as
amended, the Hazardous Material Transportation Act, the Refuse Act,
the Uranium Mill Tailings Radiation Control Act and the Atomic
Energy Act and regulations of the Nuclear Regulatory Agency, and
all state and local counterparts or related statutes, laws,
regulations, and order and treaties of the United States;
or
(h) the condition of title of the Premises; or
(i) access rights to and from the Premises; or
(j) the economics of the operation of the Premises; or
(k) the quality of any labor and materials used in any
improvements on the Premises.
2.3 Options to Extend .
(a) Provided that, at the time of each such exercise,
(i) this Lease is in full force and effect, and (ii) no
Event of Default shall have occurred and be continuing (either at
the time of exercise or at the commencement of an Extended Term)
(any of which conditions described in clauses (i) and
(ii) may be waived by Landlord at any time), Tenant shall have
the right and option to extend the Term of this Lease for two
(2) extended terms (each, an " Extended Term ") of five
(5) years each by giving written notice (the "Extension
Notice") to Landlord not later than fifteen (15) months prior
to the expiration date of the initial Term or the first Extended
Term, as applicable. The effective giving of an Extension Notice
shall automatically extend the Term of this Lease for the
applicable Extended Term (provided no Event of Default shall have
occurred and be continuing either on the date of the Extension
Notice or at the commencement of an Extended Term), and no
instrument of renewal or extension need be executed. Upon
determination of Fair Market Rental Value (as hereinafter defined),
Landlord and Tenant shall enter into an agreement setting forth the
Extended Term, new Termination Date, new Base Rent rate and any
such other terms agreed to by Landlord and Tenant. In the event
that Tenant fails timely to give an Extension Notice to Landlord,
this Lease shall automatically terminate at the end of the Term,
and Tenant shall have no further option to extend the Term of this
Lease. Each
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Extended Term shall commence on the day
immediately succeeding the expiration date of the Term or first
Extended Term, as the case may be, and shall end on the day
immediately preceding the fifth (5th) anniversary of the first
day of such Extended Term. The Extended Terms shall be on all the
terms and conditions of this Lease, and all references in this
Lease to the Term shall be deemed to include each Extended Term,
except: (i) during the second Extended Term, Tenant shall have
no further option to extend the Term, and (ii) the Base Rent
for each Extended Term shall be equal to the Fair Market Rental
Value of the Premises as of the commencement of such Extended Term,
taking into account all relevant factors, determined pursuant to
paragraph (b) below.
(b) Within thirty (30) days after receiving an Extension
Notice extending the Term of this Lease pursuant to paragraph
(a) above, Landlord shall provide written notice to Tenant
(the "Rent Notice") setting forth Landlord’s good faith
estimate of the Fair Market Rental Value of the Premises for the
upcoming Extended Term based upon rents being paid by tenants
entering into leases for space similar in size, build-out and
condition, amenities, build-out allowance (or lack thereof), and
term in the Interstate 495-north suburban area (Acton, Andover,
Boxborough, Carlisle, Chelmsford, Dracut, Lawrence, Littleton,
Lowell, Methuen, North Andover, Tewksbury, Tyngsborough, and
Westford) (the "I-495 North Market Area"). If Tenant disputes
Landlord’s estimate of the Fair Market Rental Value as set
forth in the Rent Notice, and the parties are unable to reach
agreement thereon within thirty (30) days after the delivery
of the Rent Notice to Tenant (the "Negotiation Period"), then
Tenant may elect to rescind its election to extend the Term by
written notice (the "Rescission Notice") within ten
(10) Business Days after the expiration of the Negotiation
Period (the "Rescission Period"). In the event Tenant fails to
provide Landlord with a Rescission Notice, the Fair Market Rental
Value of the Premises shall be determined by arbitration as
specified below. Within fifteen (15) Business Days after the
expiration of the Rescission Period, both parties shall
(i) appoint its own arbitrator by notifying the other party of
its arbitrator, and (ii) Landlord and Tenant shall each
simultaneously submit to the other in a sealed envelope its good
faith estimate of the Fair Market Rental Value. If the higher of
such estimates is not more than one hundred five percent
(105%) of the lower of such estimates, then the Fair Market
Rental Value shall be the average of the two estimates. If either
party shall fail to identify an arbitrator or submit its sealed
estimate within such fifteen (15) Business Day period after
the expiration of the Rescission Period, and such failure shall
continue for an additional ten (10) Business Days after
written notice from the other party, the Fair Market Rental Value
of the Premises shall be determined by the arbitrator appointed by
the non-defaulting party. If both arbitrators shall have been so
appointed, the two arbitrators thus appointed shall, within fifteen
(15) Business Days after the date both arbitrators have been
selected, appoint a third arbitrator. If the two initial
arbitrators are unable timely to agree on the third arbitrator,
then either party or its arbitrator may, on behalf of both parties,
request such appointment by the Boston office of The American
Arbitration Association, or its successor, or, on its failure,
refusal or inability to act, by a court of competent jurisdiction.
Within fifteen (15) days after the appointment of the third
arbitrator, the three arbitrators shall determine the Fair Market
Rental Value of the Premises and give notice thereof to the parties
hereto, and the arbitrators’ determination shall be binding
upon the parties; provided , however , that in
determining the Fair Market Rental Value, the arbitrators shall be
required to select either Landlord’s determination of Fair
Market Rental Value or Tenant’s determination of Fair
Market
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Rental Value, and in no event shall the
arbitrators have the right (i) to average the final
determination of Fair Market Rental Value of Landlord and Tenant,
or (ii) to choose another number. All arbitrators shall be
appraisers or other qualified real estate professionals who are
independent from the parties who have had at least ten
(10) years commercial real estate experience in the I-495
North Market Area. Each party shall pay the fees of its own
arbitrator, and the fees of the third arbitrator shall be shared
equally by the parties.
(c) Landlord shall have no obligation to make any improvements,
decorations or alterations to the Premises, other than
Landlord’s existing obligations under this Lease, and Tenant
shall accept the Premises in their then current "as-is" condition
as of the commencement of each Extended Term.
(d) Any termination, cancellation or surrender of this Lease
shall terminate the extension options with respect to the portion
of the Premises for which this Lease is terminated, canceled or
surrendered.
(e) Time shall be of the essence with respect to the exercise by
Tenant of its rights under the extension options granted in this
Section 2.3 .
Article III RENT; CERTAIN OPERATING COSTS;
REPAIR AND MAINTENANCE
3.1 Base Rent; Additional Rent . Base Rent at the rates
set forth in Section 1.1 shall be payable in advance on
the first day of each calendar month during the Term to Landlord
without setoff or deduction (except as otherwise expressly provided
herein) at the address set forth herein for notices or such other
address as Landlord may thereafter specify by notice to Tenant.
Base Rent for any partial month at the beginning or end of the Term
shall be pro rated. Base Rent payable for any partial month at the
beginning of the Term shall be paid on the Commencement Date. All
amounts payable by Tenant to Landlord under this Lease other than
Base Rent shall constitute " Additional Rent " and shall be
paid without setoff or deduction (except as otherwise expressly
provided herein). " Rent " shall mean Base Rent and
Additional Rent. It is the intention of the parties that, to the
full extent permitted by law, Tenant’s covenant to pay Rent
shall be independent of all other covenants contained in this
Lease.
3.2 Late Payments .
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3.2.1 Interest . If Tenant fails to make any payment of
Rent within five (5) Business Days following the date due more
than once in any twelve (12) month period, then at
Landlord’s option, in addition to all other rights and
remedies of Landlord, Tenant shall pay upon demand to Landlord as
Additional Rent interest thereon at an annual rate equal to the
so-called "Prime Rate" in effect at Bank of America (or its
successor) from time to time plus two percent (2%) (the "
Default Rate ").
3.2.2 Late Charge . In addition to any interest due on
overdue Rent pursuant to Subsection 3.2.1 , if any payment
of Base Rent or regularly scheduled payment of Additional Rent is
not paid within five (5) Business Days after the date due more
than once in any twelve (12) month period, such late payment
shall be subject to a charge equal to two percent (2%) of such
late payment.
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3.3 Real Estate Taxes .
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3.3.1 Tax Year and Taxes . " Tax Year " shall mean
a twelve-month period commencing on July 1 and falling wholly
or partially within the Term, and " Taxes " shall mean all
ad valorem real estate taxes, assessments (special or otherwise),
levies, fees and all other government levies, exactions and charges
of every kind and nature, general and special, ordinary and
extraordinary, foreseen and unforeseen, which are, at any time
prior to or during the Term, imposed or levied upon or assessed
against the Premises as it may be constituted from time to time or
any portion thereof, including any penalties and interest charged
as a result of Tenant’s failure to pay Taxes on a timely
basis, but the amount of special taxes or special assessments
included in Taxes shall be limited to the amount of the installment
(plus any interest, other than penalty interest, payable thereon)
of such special tax or special assessment required to be paid
during the year in respect of which such Taxes are being determined
(Landlord hereby agreeing to elect to pay any such assessments over
the maximum period of time allowed by law). There shall be excluded
from Taxes all income, estate, succession, exercise, inheritance
and transfer taxes of Landlord; 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 a capital levy, franchise,
income, profits, sales, rental, use and occupancy, or other tax or
charge shall (a) in whole or in part be substituted for such
ad valorem tax or (b) be imposed solely on or with respect to
real property or the income generated thereby, and, in either case,
be levied against, or be payable by, Landlord with respect to the
Premises or any portion thereof, such tax or charge shall be
included in the term " Taxes " for the purposes of this
Article. Tenant shall pay directly to the authority charged with
collection thereof all Taxes prior to the date such Taxes would
become delinquent. Landlord agrees to endeavor to deliver copies of
all tax bills to Tenant as soon as possible upon receipt, and shall
deliver such copies to Tenant within ten (10) days of
Landlord’s receipt of such tax bills.
3.3.2 Failure to Pay . In the event Tenant fails to pay
Taxes on a timely basis more than once during the Term of this
Lease, and except to the extent that any such failure to timely pay
Taxes arises due to Landlord’s failure to timely forward any
tax bills to Tenant, or if Tenant fails to make any payment of
overdue Taxes within ten (10) days after having received
written notice from Landlord that such Taxes are overdue, Landlord
may thereafter elect, in its sole discretion, to collect from
Tenant on a monthly basis any amounts due for Taxes and pay such
amounts. Upon notice from Landlord thereof, and on the first day of
each month of the Term thereafter, Tenant covenants and agrees to
deposit with Landlord’s managing agent (or such other party
as Landlord may hereafter designate in writing from time to time)
(" Escrow Agent ") at the same place it pays Rent a sum
equal to one-twelfth of the total Taxes for the last ascertainable
year (which amount so deposited shall change as the amount of Taxes
for the last ascertainable year changes) on the Premises unless
said taxes are based upon assessments which exclude the
improvements or any part thereof, in which event the amount of such
deposits shall be based upon Landlord’s reasonable estimate
as to the amount of Taxes to be levied and assessed. Such deposits
are to be held by Escrow Agent without any allowance of interest
and are to be used for the payment of Taxes on the Premises which
accrue during the Term when
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they become due. If the funds so deposited are
insufficient to pay any such Taxes for any year (including all or a
portion of the last Lease Year of the Term) when the same shall
become due and payable, Tenant shall, within ten (10) days
after receipt of demand therefor from Landlord, deposit with Escrow
Agent such additional funds as may be necessary to pay such Taxes
in full. Without limitation of any other obligations of Tenant
which survive the end of the Term, the obligation of Tenant to pay
Taxes as stated aforesaid shall survive the expiration of the Term.
If the funds so deposited exceed the amount required to pay such
Taxes for any year, the excess shall be applied toward a subsequent
deposit or deposits due from Tenant or at the end of the Term
refunded to Tenant after payment of all Taxes which accrued during
the Term have been paid.
3.3.3 Evidence of Payment . In the event Tenant is not
required to make deposits with Managing Agent in accordance with
Subsection 3.3.2 hereinabove, Tenant shall provide Landlord
evidence that such Taxes have been paid on or before thirty
(30) days after the same are due and payable.
3.3.4 Abatement . If Tenant shall deem itself aggrieved
by any such tax or charge and shall elect to contest the payment
thereof, Tenant, at its sole cost and expense, shall be entitled to
seek an abatement from time to time of such Taxes and Landlord
shall, upon Tenant’s written request, reasonably cooperate
with Tenant in connection therewith, provided that Tenant shall
reimburse Landlord for its out of pocket costs therefor. If Tenant
files an abatement application, Tenant shall (i) promptly
provide a copy thereof to Landlord, (ii) diligently pursue
such application, (iii) keep Landlord informed of the status
thereof in writing, (iv) with respect to claims relating to a
Tax Year which falls entirely or partially within the last three
(3) Lease Years of the Term, not settle any such claim thereof
without the prior, written approval of Landlord (which may be
withheld in Landlord’s sole but reasonable discretion,
provided that Landlord shall not withhold consent if the settlement
does not establish the amount of Taxes for any period of time
subsequent to the expiration of the Term of the Lease), and
(v) not dismiss such claim (other than in connection with a
settlement which must first be approved by Landlord where required
under the preceding clause) without first giving Landlord at least
thirty (30) days’ prior written notice and opportunity
to assume the prosecution of such claim. Landlord shall have the
right at its own cost and expense to file an application for
abatement of Taxes only if either (a) at least thirty
(30) days prior to the last day for filing an application for
abatement of real estate or personal property taxes for any year,
Landlord shall give Tenant notice that it desires to file an
application for abatement and at least ten (10) days prior to
the last day for filing such application Tenant has not given
Landlord notice that it shall file such application, or
(b) the abatement relates to a Tax Year that falls entirely or
partially within or after the one (1) year period immediately
preceding the expiration of the Term of the Lease and Tenant has
not furnished a timely and effective Extension Notice. Both
Landlord and Tenant shall reasonably cooperate with the moving
party in prosecuting any abatement. Any Taxes that are refunded,
reimbursed or abated for any Tax Year shall belong to Tenant,
provided that in no event shall Tenant be entitled to receive more
than the payments made by Tenant on account of Taxes for such Tax
Year. If Landlord receives any refund, reimbursement or abatement
of Taxes or sum in lieu thereof with respect to any Tax Year, then
Landlord shall pay all such funds to Tenant after deducting from
the balance thereof Landlord’s reasonable out-of-pocket fees
for
8
3.4 Landlord’s Operating Costs . "
Landlord’s Operating Costs " shall mean the costs and
expenses incurred by Landlord in accordance with sound management
practice in connection with the management, maintenance, repair,
replacement and operation of the Premises, including, without
limitation, amounts paid or incurred for:
(1) Maintaining, repairing and or replacing the roof and
structural elements of the Buildings and otherwise performing
obligations under Subsections 3.8.1 or 3.8.2 ;
(2) Premiums for insurance required or permitted to be carried
by Landlord hereunder (including, without limitation, all-risk
commercial property, rental value, and liability insurance), and
permitted deductible amounts thereunder, but subject to the
limitations specified in Subsection 3.6.2 ;
(3) a management fee to a property manager (" Manager ")
not in excess of three percent (3%) of gross income from the
Premises, it being agreed that management may be provided by
Landlord, or an affiliate thereof; provided, however, that any fees
paid to Landlord or its affiliate who is engaged as the Manager do
not exceed commercially reasonable amounts charged for management
of comparable facilities; and
(4) payments under service contracts for any of the
foregoing.
If Landlord installs a new or replacement capital item
(i) in order to comply with a legal requirement or
interpretation thereof first arising after the date of this Lease,
or (ii) for the purposes of reducing Landlord’s
Operating Costs, or (iii) in compliance with Landlord’s
obligations under Section 3.8, the cost thereof as reasonably
amortized by Landlord over the useful life of the item (provided
that the cost of any replacement of the Trane unit on the roof of
building #199 within the first five (5) Lease Years shall be
amortized over the balance of the remaining portion of the Term)
together with interest at the rate of interest actually charged to
Landlord for borrowing funds to finance such item, (or the
prevailing market interest rate 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, except that the amortized amount of any capital
expense for the purpose of reducing Landlord’s Operating
Costs shall be limited by the amount of actual savings achieved
each year. If Landlord leases any items of capital equipment which
is intended to reduce expenses which would otherwise be included in
Landlord’s Operating Costs, or is for the purpose of
complying with a legal requirement or interpretation thereof first
arising after the date of this Lease, then the rentals and other
costs paid pursuant to such leasing shall be included in
Landlord’s Operating Costs for the year in which they were
incurred, except that the rentals and other costs incurred for the
purpose of reducing Landlord’s Operating Costs shall be
limited by the amount of actual savings achieved each year.
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Landlord’s Operating Costs shall exclude
the following:
(1) Taxes;
(2) the interest and amortization on mortgages for the Buildings
and the Landlord or leasehold interests therein;
(3) ground rent; depreciation on the Buildings or equipment or
systems therein;
(4) costs in connection with leasing, releasing, or subleasing
space at the Buildings (including but not limited to legal fees and
brokerage commissions);
(5) costs incurred in connection with the sale, financing or
refinancing of the Buildings and/or the Land;
(6) the cost of repairs or other work to the extent Landlord has
the right to be reimbursed by insurance or condemnation proceeds or
by any other third party or any tenant (including Tenant);
(7) costs incurred in enforcing leases against other
tenants;
(8) the cost of special services rendered to tenants (including
Tenant) for which a special charge is made.
(9) Salaries or benefits for Landlord’s executives and
employees above the level of building manager;
(10) Capital expenditures except as expressly provided
above;
(11) Advertising and promotional expenditures;
(12) Bad debt loss, rent loss, or reserves of any kind;
(13) Costs of fines or penalties incurred by Landlord due to
violations of or non-compliance with any applicable legal
requirements, unless such violation or non-compliance was caused by
Tenant;
(14) Costs incurred in the removal, abatement or other treatment
of underground storage tanks or Hazardous Materials present in the
Buildings or on the Premises;
(15) Costs associated with the operation of the business of the
entity which constitutes Landlord as the same are distinguished
from the costs of operation of the Buildings, including, without
limitation, accounting and legal expenses, costs of selling,
syndicating, financing, mortgaging or hypothecating
Landlord’s interest in the Buildings, costs of any disputes
between Landlord and its employees, or building managers;
(16) Landlord’s general overhead and administrative
expenses; and
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(17) Expenses for any item or service which
Tenant pays in full directly to a third party or separately pays in
full to Landlord.
3.5 Payment of Landlord’s Operating Costs . Tenant
shall pay to Landlord, as Additional Rent, all of Landlord’s
Operating Costs attributable to the Term of this Lease, as set
forth herein. With respect to each calendar year or fraction
thereof during the Term, 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 (hereafter, "
Estimated Monthly Expense Payments ") of Landlord’s
Operating Costs for which Tenant will be liable, equal to 1/12
th of
Landlord’s estimate of Landlord’s Operating Costs for
the respective calendar year. The Estimated Monthly Expense Payment
during the first calendar year of the Lease Term shall be equal to
$4,578.70, with the first Estimated Monthly Expense Payment due on
the Commencement Date. Within one hundred twenty (120) days
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 detail in
accordance with generally accepted accounting practices and in form
reasonably acceptable to Tenant, showing for the preceding calendar
year or fraction thereof, as the case may be, Landlord’s
Operating Costs. The calculation of Landlord’s Operating
Costs reflected in the Landlord’s Statement shall be binding
upon Landlord. Tenant shall pay an appropriate additional payment
(or credit by Landlord against Tenant’s future payments of
Landlord’s Operating Costs or, if at expiration of the Term,
promptly refunded to Tenant) reconciling the Estimated Monthly
Expense Payments collected during the preceding calendar year with
the actual outlay of Landlord’s Operating Costs within thirty
(30) days after Landlord’s Statement is delivered to
Tenant. Landlord may reasonably adjust the Estimated Monthly
Expense Payments from time to time and at any time during a
calendar year, and Tenant shall pay, as Additional Rent, on the
first day of each month following receipt of Landlord’s
written notice thereof (provided it receives at least thirty
(30) days’ advance notice), the adjusted Estimated
Monthly Expense Payment.
Landlord agrees to make its books and records relating to
Landlord’s Operating Costs available for examination during
normal business hours upon reasonable notice by Tenant and its
representatives; provided that any such examination 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 sixty (60) days following delivery of
Landlord’s Statement with respect to such fiscal year;
provided further, that if the examination discloses an overcharge
to Tenant, Landlord shall promptly rebate the same to Tenant, and,
if the overcharge exceeds five percent (5%), with interest at the
Default Rate. If Tenant fails to notify Landlord of its desire to
conduct such an examination within such sixty (60) day period
or after such notice, fails to commence an audit within an
additional period of sixty (60) days, then the calculation of
Landlord’s Operating Costs reflected in the Landlord’s
Statement shall be final and conclusive for all purposes and Tenant
shall be deemed to have waived any rights under this Lease, at law
or in equity, to contest the same. Tenant agrees to use
commercially reasonable efforts to complete any audit within ninety
(90) days after having commenced the audit, and in any event
will complete the same within one hundred twenty (120) days
after commencement provided that Tenant shall have been given
reasonable access to Landlord’s books and records during such
time period. Also, if the examination discloses a discrepancy which
the parties agree (or a court of competent jurisdiction determines)
involves an
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overcharge to Tenant of more than five
(5%) percent, Landlord shall pay the reasonable expenses
incurred by Tenant for such audit. Tenant’s audit shall be
conducted by a Certified Public Accountant whose compensation is
not contingent upon the results of Tenant’s audit or the
amount of any refund received by Tenant, and who is not affiliated
with Tenant, except to the extent that such accountant has been
engaged by Tenant to conduct Tenant’s audit or is an employee
of Tenant. A complete copy of any report delivered to Tenant by the
auditor concerning the results of Tenant’s audit shall be
delivered to Landlord within thirty (30) days after
Tenant’s receipt of such report.
3.6 Insurance .
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In addition, during the performance of any construction by
Tenant on the Premises, in addition to the above coverage required
to be maintained by Tenant, Tenant shall cause the general
contractor performing the work under any contract costing in excess
of One Hundred Thousand Dollars ($100,000.00) to carry:
(a) Workers’ compensation and occupational disease
insurance in statutory amounts; (b) employer’s liability
insurance with a limit of not less than One Million Dollars
($1,000,000.00); (c) commercial general liability insurance,
including personal injury and property damage, on an occurrence
basis in the amount of a combined single limit of not less than One
Million Dollars ($1,000,000.00) for each occurrence; and
(d) all risk installation floater insurance (on the complete
value/full coverage form) to protect Landlord’s interest and
that of Tenant, contractors and subcontractors during the course of
the construction, with limits of not less than the total
replacement cost of the completed improvements under construction.
Such contractor insurance policies shall be endorsed to include
Landlord and any Mortgagee (provided that Landlord has identified
such Mortgagee by notice to Tenant) as additional insureds.
Each policy of insurance required under this Subsection
3.6.1 shall be issued by companies acceptable to Landlord in
the Landlord’s reasonable discretion and licensed to do
business in the Commonwealth of Massachusetts, and shall be
noncancellable with respect to Landlord and any Mortgagee (provided
that Landlord has identified such Mortgagee by notice to Tenant),
without thirty (30) days’ prior notice to Landlord and
such Mortgagee. Tenant shall, following Landlord’s written
request therefor, deliver to Landlord and any Mortgagee (provided
that Landlord has identified such Mortgagee by notice to Tenant)
certificate(s) of insurance evidencing the coverage required
hereunder. Landlord acknowledges and agrees that the insurance
coverages reflected in the Tenant’s Certificates of Insurance
attached hereto as Exhibit C are in compliance with
the requirements of this Lease as of the Commencement Date.
Notwithstanding anything to the contrary hereinabove contained,
Tenant may, at its option, include any of the insurance coverage
hereinabove set forth in general or blanket policies of insurance,
and the coverage afforded may be effected by any combination of
basic, excess or umbrella coverage; provided that as to property
insurance, any blanket policy shall include an agreed amount clause
or its equivalent. Any insurance policy which Tenant is required to
maintain under this Lease may have a maximum deductible of no more
than $100,000.00. Tenant will be responsible to bear the deductible
portion of any claims or losses.
3.6.2 Landlord’s Insurance . Landlord shall
purchase, as part of Landlord’s Operating Costs, and keep in
force during the Term, the following insurance with insurance
companies licensed or authorized to do business in the State of
Massachusetts:
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is agreed to be $34,099,248 as of the
Commencement Date), not including any of Tenant’s property or
the contents of the Buildings for which Landlord has no
responsibility, with a deductible not in excess of $100,000 and
with no penalty for unintentional underinsuring (no co-insurance or
margin clause), which policy shall include an agreed upon value
endorsement and coverages for contingent liability from the
operation of building laws, demolition costs and increased costs of
construction;
(b) Commercial General Liability Insurance pertaining to the
Premises, and bodily injuries, death and property damage arising or
occurring therein on an occurrence form including premises,
operations, products/completed operations, hazards and contractual
coverage with limits of no less than $5,000,000 per occurrence,
$10,000,000 General Aggregate and $10,000,000 Completed Operations
Aggregate and with a deductible not in excess of $100,000;
(c) Boiler and machinery insurance and equipment breakdown
insurance covering the Building systems;
(d) Such other insurance in such amounts and with such policy
provisions as may be reasonably required by Landlord’s
institutional lender from time to time; and
(e) Such other insurance in such amount, and with such policy
provisions as may be reasonably required of a prudent owner of the
Premises.
Notwithstanding anything to the contrary in this Lease,
including without limitation Section 3.4 ,
Subsection 3.6.1 or this Subsection 3.6.2 , Landlord
acknowledges and agrees that (i) Tenant shall not be required
to carry environmental pollution liability insurance, nor shall
Tenant be required to pay the premiums of such insurance coverage
as part of Landlord’s Operating Costs if such coverage is
maintained by Landlord, (ii) Tenant shall not be required to
carry (or pay the premiums as part of Landlord’s Operating
Costs for) loss of "rental value" insurance for any amount in
excess of the aggregate sum of Base Rent and Additional Rent due
under the Lease for a period of twelve (12) months, and
(iii) Tenant shall not be required to maintain any other
property insurance coverage against any risk that is adequately
covered by insurance that is maintained by Landlord at
Tenant’s expense as part of Landlord’s Operating
Costs.
As of the Commencement Date, all insurance coverages being
carried by Landlord pursuant to the requirements of this
Subsection 3.6.2 are evidenced by the Certificates of
Insurance attached hereto as Exhibit D . With respect
to any insurance policy the premium of which is being paid for by
Tenant as part of Landlord’s Operating Costs, upon
Tenant’s written request Landlord shall deliver a Certificate
of Insurance to Tenant.
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For purposes of Tenant’s payment of
Additional Rent, to the extent Landlord pays insurance premiums
less frequently than monthly, the cost of the same shall be
calculated separately from the other Landlord’s Operating
Costs, and Tenant shall have the option to either (i) pay the
portion of Landlord’s Operating Costs attributable to such
insurance premiums as part of the Estimated Monthly Expense
Payments in accordance with Section 3.5 or
(ii) pay the portion of Landlord’s Operating Costs
attributable to such insurance premiums on the later of five
(5) Business Days after receipt of an invoice from Landlord or
fifteen (15) Business Days prior to the date Landlord is
obligated to pay the same to the insurance company as specified in
a notice from Landlord to Tenant.
3.6.3 Waiver of Subrogation . All insurance which is
carried by either party with respect to the Premises, whether or
not required, shall include provisions which deny to the insurer
acquisition by subrogation of rights of recovery against the other
party to the extent such rights have been waived by the insured
party prior to the occurrence of loss or injury, insofar as, and to
the extent that such provisions may be effective without making it
impossible to obtain insurance coverage from responsible companies
qualified to do business in the Commonwealth of Massachusetts (but
if extra premium results therefrom, the other party shall reimburse
the insuring party therefor, on demand). Each party shall be
entitled to have certificates of any policies containing such
provisions. Each party hereby waives all rights of recovery against
the other for loss or injury against which the waiving party is
protected by insurance containing said provisions, reserving,
however, any rights with respect to any excess of loss or injury
over the amount recovered by such insurance.
3.7 Utilities and Other Services . Tenant shall pay or
cause to be paid directly to the proper authorities charged with
the collection thereof all charges for any utilities or services
separately metered to Tenant used or consumed on the Premises.
Tenant shall install separate meters to measure Tenant’s use
and consumption of any utility (including electricity) furnished to
each Building but which is not separately metered to such Building
by the applicable utility as of the Commencement Date, at
Tenant’s sole cost and expense. At Landlord’s request,
Tenant shall provide evidence of payment of utility services.
Landlord shall have the right to pay such utility costs if Tenant
fails to pay such charges and Landlord shall have the right to
recover from Tenant as Additional Rent any amounts paid
therefor.
3.8 Repair and Maintenance .
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3.8.1 Tenant Repairs and Maintenance . Subject to
Landlord’s obligations in Subsection 3.8.2 below,
Tenant shall throughout the Term, in compliance with all laws, keep
and maintain the Premises, including, without limitation,
(i) the building systems, including HVAC, back-up generators
and roof-top units, elevators, boilers, the plumbing, sprinkler,
electrical and mechanical lines and equipment associated therewith,
each to the extent located within or attached to the Buildings;
(ii) utility and trunk lines, tanks and transformers, each to
the extent located within, attached to, or on the roof of the
Buildings; (iii) improvements to the Land outside of the
Buildings, including detention basins, ditches, shrubbery,
landscaping and fencing; (iv) the parking areas and the access
drive; (v) HVAC systems, trash compactors, and the two
emergency generators and the associated oil fuel tank, and all
connecting piping, electrical conduits, controls, and other related
equipment located outside of the Buildings; (vi) the
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underground conduits connecting the Buildings and
containing telephone, communications and control wiring, security
and other computer wiring; and (viii) the existing mechanical
screen support frame and metal screen panels on the Building at 199
Riverneck Road, in at least as good order, condition and repair as
they are in on the Commencement Date or as improved during the
Term, excepting only (x) reasonable wear and tear,
(y) damage by fire or other casualty or taking by condemnation
or eminent domain, and (z) damage caused by Landlord or its
agents, contractors or employees. Tenant shall contract for regular
maintenance of the HVAC with a professional service provider
reasonably acceptable to Landlord and shall keep records of the
performance of all scheduled maintenance of the HVAC systems and
shall provide copies thereof to Landlord from time to time upon
request by Landlord. Landlord agrees to make available to Tenant
the benefit of any warranties and guaranties in favor of Landlord
of any part of the Premises that Tenant is responsible to repair.
In the event that a capital replacement of any portion of any of
the Building Systems is reasonably necessary as determined by
Landlord and Tenant, notwithstanding anything to the contrary
anywhere in this Lease, including without limitation the foregoing
provisions of this Subsection 3.8.1 or Subsection
3.8.2 , Landlord and not Tenant shall cause such replacement to
be performed, and the amortized costs incurred by Landlord with
respect to such capital replacement shall constitute a
Landlord’s Operating Cost and shall be reimbursed by Tenant
in accordance with the provisions of Sections 3.4 and 3.5
above. Landlord shall have the right upon reasonable prior notice
to review any repair and maintenance reports maintained by Tenant
concerning any repair, replacement and maintenance activities
performed at the Premises by Tenant. Tenant agrees to furnish to
Landlord repair and maintenance reports, in reasonable detail,
indicating the material items of repair, replacement (other than
Landlord capital replacements) and maintenance performed at the
Premises on a semi-annual basis (on or before August 15 with
respect to activities performed during the preceding period from
January 1 through June 30 and on or before
February 15 with respect to activities performed during the
preceding period from July 1- December 31).
3.8.2 Landlord Repairs and Maintenance . Subject to
Tenant’s obligations set forth in Subsection 3.8.1
above, Landlord shall maintain, repair and replace, as necessary,
and keep in at least as good order, condition and repair as they
are in on the Commencement Date or as improved during the Term, the
bearing walls, roof, exterior walls, exterior glass, support beams
and columns, foundation, window frames and floor slabs of the
Buildings (collectively, the " Structure ") as well as any
portion of the following systems, to the extent located outside of
the Buildings but on the Premises: plumbing, sprinkler, electrical
and mechanical lines and equipment associated therewith and utility
and trunk lines, provided that Landlord shall not be obligated to
maintain or repair any tanks, transformers, HVAC units, back-up
generators or roof-top building systems units and any equipment
installed by Tenant for the purpose of supporting Tenant’s
light manufacturing operations, as opposed to the functioning of
the Buildings for other Permitted Uses. Landlord shall in no event
be responsible to Tenant for the repair of any condition on the
Premises caused by any act or neglect of Tenant.
3.8.3 Tenant’s Right to Self-Help . If Tenant shall
have given written notice to Landlord, and any ground lessor or
mortgagee of whose identity Tenant shall have been given notice, of
Landlord’s obligation to perform maintenance, repairs or
replacements for which Landlord is responsible under this Lease,
and Landlord shall have failed to commence
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performance of the same within thirty
(30) days following Tenant’s notice as aforesaid, or
such shorter period as may be necessary in case of emergency,
Tenant may (but shall not be obligated to) perform such
maintenance, repairs or replacements, and Landlord shall reimburse
the Tenant for the reasonable cost thereof no later than thirty
(30) days after receipt of Tenant’s invoice therefor (if
not paid by Landlord within said thirty days, together with
interest at the Default Rate, from the expiration of such thirty
(30) day period until paid). If Landlord has timely commenced
the performance of such maintenance, repairs, or replacements but
fails to continue diligently to complete the same, except to the
extent caused by External Causes (as defined herein), Tenant shall
have the aforesaid right to self-help if Landlord does not cure its
failure within such time. As used in this Lease, " External
Causes " means any of the following: Acts of God, war, civil
commotion, fire, flood or other casualty, strikes or other
extraordinary labor difficulties, shortages of labor or materials
or equipment in the ordinary course of trade, government order or
regulations or other cause not reasonably within the control of the
party in question, and not due to the fault or neglect of such
party, excluding, however, inability to pay obligations as they
become due.
Article IV TENANT’S ADDITIONAL
COVENANTS
4.1 Permitted Use . Tenant agrees to use the Premises
only for general office use, for light manufacturing and assembly,
product storage and distribution as an accessory use in connection
with general office use, and light manufacturing and assembly, and
all other lawful uses accessory to the foregoing primary uses,
including without limitation a cafeteria serving Tenant’s
employees, guests and invitees (the " Permitted Uses ").
Tenant shall have the right to use the Premises for storage
trailers and movable containers (provided that such trailers and
containers (i) do not impermissibly encroach, either entirely
or partially, on land that is adjacent to the Premises,
(ii) are not visible from the main entrance of either of the
Buildings and (iii) are not located in such a manner as to
cause the number of parking spaces at the Premises to fall below
the minimum number of parking spaces that are required to be
provided at the Premises in order to comply with any applicable
Legal Requirements) and to install other equipment and perform
improvements on and to the Premises from time to time in compliance
with all applicable laws and the terms and conditions of this
Lease. Tenant shall not use or occupy the Premises for any other
purpose without the prior written consent of the Landlord, which
shall not be unreasonably withheld or delayed.
4.2 Prohibited Uses . Tenant shall not use the Premises
or allow the Premises to be used (a) for any illegal or
immoral purpose; (b) so as to create waste, or constitute a
private or public nuisance; (c) in violation of any
restrictions of record as of the date hereof; (d) in violation
of any Legal Requirements; (e) for offices of any agency or
bureau of the United States or any State or political subdivision
thereof, provided that Tenant shall be permitted to allow
governmental officials to use desk space at the Premises from time
to time in Tenant’s usual course of business; (f) for
offices or agencies of any foreign government or political
subdivision thereof; (g) for offices of any health care
professionals; (h) for school facilities which are not
ancillary to corporate, executive or professional office use;
(i) for retail or restaurant uses other than a cafeteria
serving Tenant’s employees, guests and invitees; and
(j) for radio and/or television stations. Tenant shall not
place any loads upon the floors, walls, or ceiling which
17
endanger the structure, or place any harmful
fluids or other materials in the drainage system of the Buildings,
or overload existing electrical or other mechanical systems. No
waste materials or refuse shall be dumped upon or permitted to
remain outside of the Premises except in trash containers placed
inside exterior enclosures designated by Landlord for that
purpose.
4.3 Hazardous Materials .
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4.3.1 Hazardous Materials . Tenant agrees not to
generate, store or use any Hazardous Materials on or about the
Premises, except those used by Tenant in connection with the
Permitted Uses and janitorial services, in both cases limited to
such Hazardous Materials in such amounts as are customarily used in
connection with the Permitted Uses and for janitorial service
provided to the Permitted Uses, in all cases in compliance with any
and all applicable Environmental Laws (also as hereinafter
defined); provided, however, that no Hazardous Materials shall be
used in connection with light manufacturing that are not also
customarily used in connection with the Permitted Uses other than
light manufacturing. Tenant agrees not to dispose of Hazardous
Materials (a) on the Premises or (b) from the Premises to
any other location except a properly approved disposal facility and
then only in compliance with any and all Environmental Laws
regulating such activity, nor permit any occupant of the Premises
to do so. In accordance with Section 4.5 below, Tenant
shall indemnify, defend, and hold harmless Landlord, and the holder
of any mortgage on the Premises or any larger parcel of land of
which the Premises may be a part, from and against any claim, cost,
expense, liability, obligation or damage, including, without
limitation, attorney’s fees and the cost of litigation,
arising from or relating to the use of Hazardous Materials or
breach by Tenant or anyone claiming by, through or under Tenant of
the provisions of this Subsection 4.3.1 , and shall
immediately discharge or cause to be discharged any lien imposed
upon the Premises or any larger parcel of land of which the
Premises may be a part in connection with any such claim. The
provisions of this Subsection 4.3.1 shall survive the
expiration or earlier termination of this Lease.
4.3.2 Tenant’s Obligation to Remediate . In
compliance with applicable Environmental Laws, Tenant shall
investigate, assess, monitor and remediate, at Tenant’s sole
cost and expense, any release of Hazardous Materials requiring
Response Action (as defined in 310 CMR 40.0000) under any
Environmental Law, which arises out of Tenant’s use,
operation, or occupancy of the Premises during the Term (a "
Tenant’s Release "). Tenant shall make available to
Landlord copies of drafts of any submittals to governmental
authorities in connection with any remediation of a Tenant’s
Release for Landlord’s approval at least ten
(10) Business Days prior to such submittal. Tenant shall be
solely responsible for and sign any manifests or other documents as
the waste generator for any Hazardous Materials it disposes of or
sends off site or otherwise arising from a Tenant’s Release.
The remediation of any Tenant’s Release shall be carried out
in accordance with the applicable provisions of the Massachusetts
Contingency Plan (310 CMR 40.0000) and any other Environmental Laws
governing such remediation activity. This indemnity shall survive
the Term and shall be subject to the provisions of
Section 4.5 .
4.3.3 Landlord’s Indemnity . Landlord shall
indemnify, defend upon demand with counsel reasonably acceptable to
Tenant, and hold Tenant harmless from and against, any
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liabilities, losses, claims, damages, interest,
penalties, fines, attorneys’ fees, experts’ fees, court
costs, remediation costs, and other expenses which result from any
the use, storage, handling, treatment, transportation, release or
disposal of Hazardous Materials in, on or about the Premises by
Landlord Responsible Parties, as well as any violation of the
Environmental Laws by Landlord Responsible Parties.
4.4 Compliance with Legal and Insurance Requirements
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4.4.1 Compliance with Legal Requirements . Tenant, at
Tenant’s cost and expense, agrees to comply with all Legal
Requirements applicable to Tenant’s use, operation, or
occupancy of the Premises or any Alterations made by or on behalf
of Tenant, and to provide Landlord with a copy of any notice
alleging violation of any such Legal Requirement given to Tenant by
any governmental authority or third party; except that Tenant may
defer compliance so long as the validity of any such Legal
Requirement shall be contested by Tenant in good faith and by
appropriate legal proceedings, if such contest would not subject
Landlord to any possible civil or criminal penalties and such
contest would not place Landlord in default under any Mortgage
applicable to the Premises, and if Tenant first gives Landlord
appropriate assurance in Landlord’s reasonable judgment
against any damage, loss, cost or expense on account thereof. If
any present or future Legal Requirement requires any licenses or
permits for Tenant’s particular use, operation, and occupancy
of the Premises, including without limitation any required licenses
or permits for the storage of inflammables and/or the presence of
storage trailers and/or movable containers at the Premises, Tenant
will obtain and maintain such licenses and permits at
Tenant’s own expense, and, upon Landlord’s request,
will promptly provide copies to Landlord of all such licenses and
permits. If any Legal Requirement requires any Alterations to the
Premises for Tenant’s particular use or operation of the
Premises that would not generally be required for the Permitted
Uses, Tenant shal
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