EXHIBIT 10.12
MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK
Worcester, Massachusetts
FOUR BIOTECH PARK
SPACE LEASE
WORCESTER BUSINESS DEVELOPMENT CORPORATION
to
PHYTERA, INC.
1993
TABLE OF CONTENTS
PAGE
ARTICLE 1 REFERENCE DATA AND DEFINITIONS.................................. 1
Section 1.01 Terms and Titles Referred To............................ 1
Section 1.02 General Provisions...................................... 3
Section 1.03 Definitions............................................. 3
ARTICLE 2 PREMISES........................................................ 9
Section 2.01 Premises................................................ 9
Section 2.02 Appurtenances........................................... 9
Section 2.03 Landlord's Fixtures..................................... 9
ARTICLE 3 TERM............................................................ 10
Section 3.01 Term Commencement....................................... 10
Section 3.02 Termination............................................. 10
Section 3.03 Estoppel Certificate.................................... 10
ARTICLE 4 RENT............................................................ 10
Section 4.01 Basic Rent.............................................. 10
Section 4.02 Adjustment of Basic Rent................................ 10
ARTICLE 5 USE OF PREMISES................................................. 10
Section 5.01 Use Restricted.......................................... 10
ARTICLE 6 OPERATING EXPENSES; TAXES....................................... 10
Section 6.01 Operating Expenses and Taxes............................ 10
Section 6.02 Monthly Payments of Additional Rent..................... 11
Section 6.03 Annual Statements....................................... 11
Section 6.04 Assessments and Other Taxes............................. 11
Section 6.05 Accounting Periods...................................... 12
Section 6.06 Abatement of Taxes...................................... 12
Section 6.07 Exemption From Taxes.................................... 12
ARTICLE 7 IMPROVEMENTS.................................................... 12
Section 7.01 Tenant Fit-up........................................... 12
Section 7.02 Time for Completion..................................... 13
Section 7.03 Notice of Substantial Completion Date................... 13
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(CONTINUED)
PAGE
Section 7.04 Delays.................................................. 13
Section 7.05 Tenant's Access to the Premises......................... 13
Section 7.06 Improvements by Tenant.................................. 14
ARTICLE 8 BUILDING SERVICES............................................... 15
Section 8.01 Basic Services.......................................... 15
Section 8.02 Other Janitors.......................................... 15
Section 8.03 Additional Services..................................... 15
Section 8.04 Limitations on Landlord's Liability..................... 15
Section 8.05 Electric Service........................................ 15
ARTICLE 9 TENANT'S COVENANTS.............................................. 16
Section 9.01 Pay Rent................................................ 16
Section 9.02 Occupancy of the Premises............................... 16
Section 9.03 Rules and Regulations................................... 16
Section 9.04 Safety.................................................. 16
Section 9.05 Equipment............................................... 16
Section 9.06 Pay Taxes............................................... 17
Section 9.07 Maintenance............................................. 17
Section 9.08 Redelivery.............................................. 17
Section 9.09 Tenant Financial Information............................ 17
ARTICLE 10 COMPLIANCE WITH REQUIREMENTS.................................... 17
Section 10.01 Legal Requirements...................................... 17
Section 10.02 Contests................................................ 18
Section 10.03 Land Disposition Agreement.............................. 18
Section 10.04 Environmental Legal Requirements........................ 18
ARTICLE 11 COVENANT AGAINST LIENS.......................................... 18
Section 11.01 No Liens................................................ 18
Section 11.02 Discharge............................................... 18
ARTICLE 12 ACCESS TO PREMISES.............................................. 19
Section 12.01 Access.................................................. 19
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ARTICLE 13 ASSIGNMENT AND SUBLETTING: OCCUPANCY ARRANGEMENTS............ 19
Section 13.01 Assignment and Subletting............................... 19
Section 13.02 Procedure............................................... 19
ARTICLE 14 INDEMNITY..................................................... 20
Section 14.01 Tenant's Indemnity...................................... 20
Section 14.02 Claims by Landlord...................................... 21
Section 14.03 Landlord's Liability.................................... 21
ARTICLE 15 INSURANCE..................................................... 21
Section 15.01 Tenant's Insurance...................................... 21
Section 15.02 General Insurance Requirements.......................... 22
Section 15.03 Landlord's Insurance.................................... 23
ARTICLE 16 WAIVER OF SUBROGATION......................................... 23
Section 16.01 Waiver of Subrogation................................... 23
Section 16.02 Waiver of Rights........................................ 23
ARTICLE 17 DAMAGE AND RESTORATION........................................ 23
Section 17.01 Substantial Damage...................................... 23
Section 17.02 Restoration............................................. 24
ARTICLE 18 EMINENT DOMAIN................................................ 24
Section 18.01 Total Taking............................................ 24
Section 18.02 Partial Taking.......................................... 24
Section 18.03 Awards and Proceeds..................................... 24
ARTICLE 19 QUIET ENJOYMENT............................................... 25
Section 19.01 Landlord's Covenant..................................... 25
Section 19.02 Subordination and Non-Disturbance....................... 25
Section 19.03 Notice to Mortgagee and Ground Lessor................... 25
Section 19.04 Other Provisions Regarding Mortgagees................... 26
ARTICLE 20 DEFAULTS; EVENTS OF DEFAULT................................... 26
Section 20.01 Defaults................................................ 26
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Section 20.02 Tenant's Best Efforts................................... 27
Section 20.03 Elimination of Default.................................. 27
ARTICLE 21 LANDLORD'S REMEDIES; DAMAGES ON DEFAULT....................... 27
Section 21.01 Landlord's Remedies..................................... 27
Section 21.02 Possession.............................................. 27
Section 21.03 Right to Relet.......................................... 28
Section 21.04 Survival of Covenants, Etc.............................. 28
Section 21.05 Right to Equitable Relief............................... 28
Section 21.06 Right to Self Help; Interest On Overdue Rent............ 29
ARTICLE 22 NOTICES....................................................... 29
Section 22.01 Notices and Communications.............................. 29
ARTICLE 23 WAIVERS....................................................... 29
Section 23.01 No Waivers.............................................. 29
ARTICLE 24 SECURITY DEPOSIT.............................................. 30
Section 24.01 Security Deposit........................................ 30
ARTICLE 25 GENERAL PROVISIONS............................................ 30
Section 25.01 Unavoidable Delays...................................... 30
Section 25.02 Estoppel Certificates................................... 30
Section 25.03 Right to Relocate....................................... 30
Section 25.04 Holding Over............................................ 31
Section 25.05 Governing Law........................................... 31
Section 25.06 Partial Invalidity...................................... 31
Section 25.07 Notice of Lease......................................... 31
Section 25.08 Interpretation.......................................... 31
Section 25.09 Consents................................................ 31
Section 25.10 Entire Agreement; Changes............................... 31
Section 25.11 Binding Effect.......................................... 32
Section 25.12 Time of the Essence..................................... 32
Section 25.13 Table of Contents....................................... 32
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TABLE OF CONTENTS
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EXHIBIT A: LANDLORD'S SERVICES
EXHIBIT B: LEASE PLAN
EXHIBIT C: WORK LETTER
EXHIBIT D: ESTOPPEL CERTIFICATE
EXHIBIT E: RENT RIDER
EXHIBIT: RIDER AND ADDENDUM
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MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK
FOUR BIOTECH PARK
SPACE LEASE
THIS LEASE is made in Worcester, Massachusetts effective on the Date of
Lease stated in Article 1 between the Landlord and the Tenant named in Article
1.
In consideration of the Rent payable by Tenant and of the agreements to be
performed and observed by Tenant, Landlord hereby leases the Premises to Tenant,
and Tenant hereby takes the Premises from Landlord, subject to the provisions
and for the term stated below:
ARTICLE 1
Reference Data and Definitions
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Section 1.01 Terms and Titles Referred To. Each reference in this lease to
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any of the following terms and titles incorporates the data stated for that term
or title in this Section 1.01:
DATE OF LEASE: November 1, 1993
LANDLORD: WORCESTER BUSINESS DEVELOPMENT CORPORATION, a Massachusetts
corporation established pursuant to the provisions of Chapter 600 of the Acts of
1965, its successors and assigns.
LANDLORD'S ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TENANT: PHYTERA, INC., a corporation organized under the laws of Delaware.
TENANT'S ADDRESS: After the Term Commencement Date, Tenant's address will be
the Premises; before the Term Commencement Date, Tenant's address will be:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TERM COMMENCEMENT DATE: Premises A - March 1, 1994 or as defined in Section
1.03, if different. Premises B - June 1, 1994 or as defined in Section 1.03, if
different.
STATED EXPIRATION DATE: February 29, 2004 or as defined in Section 1.03, if
different.
LAND: Land owned by Waldo Corporation as Trustee of Four Biotech Realty Trust
under Declaration of Trust dated April 15, 1993, recorded with Worcester
District
Registry of Deeds (the "Registry") in Book 15199, Page 67, being Parcel
10A on the plan entitled "Plan of Property Owned by Worcester Business
Development Corporation of Parcels ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇", dated December 16, 1992 and recorded with the Registry in Plan
Book 670, Plan 70, containing a total area of 4.2929 acres, more or less,
described in a deed from Worcester Business Development Corporation to Waldo
Corporation as Trustee Four Biotech Realty Trust dated May 3, 1993 and recorded
with the Registry in Book 15199, Page 72.
PREMISES: Premises A - That portion of the second floor of the
Building shown as outlined or hatched on the Lease Plan attached as Exhibit B-1.
Premises B - That portion of the first floor of the Building shown as
outlined or hatched on the Lease Plan attached as Exhibit B-2.
RENTABLE AREA OF THE PREMISES: Premises A - 11,800 square feet
Premises B - 14,000 square feet
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TOTAL 25,800 square feet
RENTABLE AREA OF THE BUILDING: 93,000 square feet
TENANT'S SHARE:* Premises A - 12.7%
Premises B - 15.1%
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TOTAL 27.8%
DESIGN START DATE: June 1, 1993 (See Exhibit C - Work Letter)
LEASE TERM: Ten (10) Lease Years plus the partial month, if any, between the
Term Commencement Date and the first day of the next calendar month.
BASIC RENT:* For each Lease Year of the first Fixed Rental Period, an amount
equal to the product of (a) the Rentable Area of the Premises multiplied by (b)
the sum of (i) $9.00 plus (ii) an amount determined by multiplying that portion
of Tenant's Cost paid by Landlord by 17% and dividing the product by the number
of square feet of Rentable Area of the Premises.
FIXED RENTAL PERIOD: Each successive period of three (3) Lease Years beginning
on the Term Commencement Date.
ESTIMATED OPERATING EXPENSES: $4.50 per square foot of Rentable Area for the
calendar year in which the Lease Term begins.
ESTIMATED TAXES: $1.00 per square foot of Rentable Area for the calendar year
in which the Lease Term begins.
__________________________________
* See Rider and Addendum - #1
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INITIAL MONTHLY PAYMENT: $11,825.00
SECURITY DEPOSIT: Not Applicable
GUARANTOR: Alpha-Beta Technology, Inc. as to Premises B, only
PERMITTED USE: Research and development; general office and limited light
manufacturing to the extent authorized under the City of Worcester Zoning
Ordinance.
Section 1.02 General Provisions. For all purposes of this Lease, unless the
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context otherwise requires:
(a) A pronoun in one gender includes and applies to the other genders
as well.
(b) Each definition stated in Section 1.01 or 1.03 of this Lease
applies equally to the singular and the plural forms of the word or term
defined.
(c) Any reference to a document defined in Section 1.03 of this Lease
is to the document as originally executed, or, if amended or supplemented
as provided in this Lease, to the document as amended or supplemented and
in effect at the relevant time of reference.
(d) All accounting terms not otherwise defined in this Lease have the
meanings assigned to them under generally accepted accounting principles.
(e) All references in Section 1.01 are subject to the specific
definitions (if any) in Section 1.03.
Section 1.03 Definitions. Each underlined word or term in this Section 1.03
-----------
has the meaning stated immediately after it.
Additional Rent. All Taxes, Operating Expenses, costs, expenses and other
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charges (other than Basic Rent) due from Tenant to Landlord or incurred by
Landlord as the result of a Default.
Additional Services. Services provided to Tenant or in respect of the
-------------------
Premises which are not Basic Services described in Exhibit A.
Authorizations. All franchises, licenses, permits and other governmental
--------------
consents issued by Governmental Authorities under Legal Requirements which are
or may be required for the occupancy of the Premises and the conduct of a
Permitted Use on the Premises.
Basic Services. The Landlord's services described in Exhibit A.
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Building. The building on or to be constructed or under construction
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on the Land.
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Business Day. A day which is not a Saturday, Sunday or other day on
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which banks in Worcester, Massachusetts, are authorized or required by law or
executive order to remain closed.
Common Areas. All areas of the Building devoted to the common use of
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the occupants of the Building or all occupants of multi-tenant floors or the
provision of Basic or Additional Services to occupants of the Building,
including but not limited to air shafts pipes, wires, ducts, conduits, elevator
shafts and elevators, stairwells and stairs, restrooms, mechanical rooms,
janitor closets, vending areas, loading docks and loading facilities.
Default. Any event or condition specified in Article 20 so long as
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any applicable requirements for the giving of notice or lapse of time or both
have not been fulfilled.
Event of Default. Any event or condition specified in Article 20 if
----------------
all applicable requirements for the giving of notice or lapse of time or both
have been fulfilled.
Governmental Authority. United States of America, Commonwealth of
----------------------
Massachusetts, City of Worcester, County of Worcester, and any political
subdivision, agency, department, commission, board, bureau or instrumentality of
any of them.
Ground Lease. The lease of the Land (a) from WBDC to Landlord, or if
------------
that lease has not been executed as of the date of this Lease, (b) to be entered
into between WBDC and its assignee of Landlord's interest under this Lease.
Ground Lessor. WBDC or any successor under or assignee of the Ground Lease.
-------------
Hazardous Substances. "Oil", "hazardous materials", "hazardous
--------------------
wastes" and "hazardous substances" as those terms are defined under the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., as amended, the Resource Conservation and Recovery Act of
------
1976, 42 U.S.C. Section 6901, et seq., as amended, Massachusetts General Laws,
------
Chapters 21C and 21E, as amended, and the regulations from time to time adopted
under those laws.
Improvements. All (i) structures located in and forming a part of the
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Premises, including but not limited to, walls, ceilings, doors and floor
covering, (ii) pipes, wires, conduits, controls and fixtures relating to
utilities located in and serving the Premises, (iii) casework, including but not
limited to, benches, tables, cabinets and storage facilities, connected to a
utility or affixed to the Premises or the Building and (iv) fixtures, equipment
and personal property of any kind installed on the Premises in such a manner
that they become part of the Premises or the Building under law or that they
cannot be removed without material damage to the structure, fixtures, equipment
or personal property or to the Premises or the Building.
Insurance Requirements. All terms of any policy of insurance maintained by
----------------------
Landlord or Tenant and applicable to the Land, the Building or the Premises; all
requirements of the issuer of any such policy; and all orders, rules,
regulations and other requirements of the National Fire Protection Association
(or any other body exercising
4
similar functions) applicable to any condition, operation, use or occupancy of
all or any part of the Premises.
Land Disposition Agreement. The agreement dated June 13, 1984 between
--------------------------
the Commonwealth of Massachusetts, Division of Capital Planning and operations,
and WBDC relating to the acquisition by WBDC of the land in the Park.
Landlord's Fixtures. All fixtures and equipment paid for by Landlord
-------------------
and installed in the Building or the Premises for use by Tenant, whether before
or during the Lease Term and whether or not shown in the Working Drawings,
irrespective of whether or how the fixtures or equipment may be affixed to the
Premises, or the Building.
Landlord's Work. The work to be done by Landlord with respect to the
---------------
Premises described in the Work Letter.
Lease. This document, all exhibits and riders attached and referred to in
-----
this document and all amendments to this document, the exhibits and riders.
Lease Term. The period stated in Section 1.01 beginning on the Term
----------
Commencement Date. The Lease Term includes the period of any extension exercised
by Tenant as provided in this Lease.
Lease Termination Date. The earliest to occur of (a) the Stated
----------------------
Expiration Date, (b) the termination of this Lease by Landlord as the result of
an Event of Default or (c) the termination of this Lease under Article 17
(Damage or Destruction) or Article 18 (Eminent Domain).
Lease Year. Each twelve consecutive calendar month period ending on the day
----------
before an anniversary of the Term Commencement Date (or on the day before the
first day of the next succeeding calendar month if the Term Commencement Date
occurs other than on the first day of a month); provided that (a) the first
Lease Year includes the partial month, if any, between the Term Commencement
Date and the first day of the next calendar month and (b) the last Lease Year
will end on the Lease Termination Date.
Legal Requirements. (a) All statutes, codes, ordinances (and rules
------------------
and regulations thereunder) and all executive, judicial and administrative
orders, judgments, decrees and injunctions of or by any Governmental Authority
which are applicable to any condition or use of the Premises, Building or Land,
and (b) the provisions of all Authorizations.
Occupancy Arrangement. With respect to all or any part of the
---------------------
Premises or this Lease, and whether (a) written or unwritten or (b) for all or
any portion of the Lease Term, an assignment, a sublease, a tenancy at will, a
tenancy at sufferance or any other arrangement (including but not limited to a
license or concession) under which a Person occupies the Premises for any
purpose.
Operating Expenses. All expenses, costs, and disbursements of every
------------------
kind which Landlord pays or becomes obligated to pay in connection with the
operation, management, repair, cleaning and maintenance of the Land and the
Building (including
5
all facilities and equipment in operation on the Term Commencement Date and such
additional facilities and equipment in subsequent years as may be determined by
Landlord to be necessary or beneficial in reducing Operating Expenses) and the
provision of Basic Services, including, but not limited to (a) wages, salaries
and fees, including taxes, insurance, and benefits of all Persons engaged in
connection with Basic Services, (b) the cost of (i) all supplies and materials,
electricity and lighting, for Common Areas, (ii) water, heat, air conditioning,
and ventilating for the Building, (iii) all maintenance, janitorial, and service
agreements, (iv) snow removal and maintenance of parking and landscaped areas,
(v) all insurance, including the cost of casualty and liability insurance
applicable to the Building and Landlord's personal property used in connection
with the Building, (vi) repairs and general maintenance, (vii) capital items
which are primarily for the purpose of reducing Operating Expenses or which may
be required by a Governmental Authority, amortized over the reasonable life of
the capital items with the reasonable life and amortization schedule being
determined by Landlord in accordance with generally accepted accounting
principles, (viii) pursuing an application for an abatement of Taxes to the
extent not deducted from the abatement, if any, received, (ix) independent
auditors, (x) that portion of Landlord's central accounting functions allocable
to the Building and (xi) office space for the manager of the Building, (c)
management fees, not to exceed eight percent (8%) of Basic Rent in any Lease
Year, and (d) maintenance charges with respect to the Land imposed on the
Landlord under the Ground Lease. Operating expenses will be determined on the
accrual basis in accordance with generally accepted accounting principles
consistently applied.
Operating Expenses do not include (i) costs of services in excess of
Basic Services billed to and payable by specific Tenants; (ii) Taxes, any sales
tax, gross receipt tax or similar tax based on Rent, and any income, profits or
similar tax imposed on Landlord; (iii) expenditures for capital improvements,
and any depreciation or amortization, except amortization of certain capital
expenditures as provided in clause (vii) above; (iv) executive salaries above
the grade of building manager; (v) advertising and promotional expenses; (vi)
brokerage commissions; (vii) interest, principal and other amounts payable under
any mortgage, and rent payable under the Ground Lease; (viii) expenditures for
correcting construction defects in the Building; (ix) expenditures for any
alteration, renovation, redecoration, subdivision, layout or finish of any
tenant space in the Building; (x) cost of any curative action required to remedy
damage caused by or resulting from the negligence or willful act of Landlord,
its agents, servants or employees; (xi) legal and other professional fees
incurred by Landlord in connection with the leasing of space in the Building and
in connection with enforcing leases, or for any other matters not directly
connected to the administration or operation of the Building; (xii) costs of any
type relating to the development of the Building and (xiii) any fines or
penalties imposed upon Landlord under any Legal Requirement.
Park. Massachusetts Biotechnology Research Park created by WBDC
----
pursuant to the provisions of Chapter 317 of the Acts of 1983, as it may be
expanded by amendment of Chapter 317 or by virtue of any other legislation or
acquisition by WBDC.
Permitted Exceptions. Any liens or encumbrances on the Premises of
--------------------
the following character:
6
(a) Provisions of Chapter 317 of the Acts of 1983, as amended;
(b) Provisions of the Land Disposition Agreement;
(c) Rights, easements and restrictions in the deed dated June 13,
1984 from the Commonwealth of Massachusetts, Division of Capital Planning and
Operations, to WBDC recorded with Worcester District Registry of Deeds in Book
8233, Page 106;
(d) Present and future zoning laws, ordinances, resolutions and
regulations of the City of Worcester, including, without limitation,
Chapter 17 of the Revised Ordinances of 1986 - Regulations Relative to
Biomedical Research in the City of Worcester;
(e) The lien of any Taxes assessed but not yet due and payable;
(f) The Ground Lease;
(g) Mortgages of record;
(h) The rights of Landlord and other Persons to whom Landlord has
granted rights to use the Common Areas in common with Tenant;
(i) The easements created by instruments recorded with Worcester
District Registry of Deeds in Book 9538, Page142 (as modified by Release in
Book 12860, Page 119), Book 12717, Page 3 and Book 12860, Page 123, insofar
as they affect the Land;
(j) All declarations, covenants, conditions, restrictions,
reservations, rights, rights-of-way, easements and other matters of record
or apparent affecting the Land or the use of the Land now or in the future
in force and applicable; and
(k) Provisions of the Declaration of Protective Covenants, Conditions
and Restrictions recorded with the Worcester District Registry of Deeds in
Book 12860, Page 145, as they may from time to time in the future be
amended.
Person. An individual, a corporation, a company, a voluntary
------
association, a partnership, a trust, an unincorporated organization or a
Governmental Authority.
Premises. The space referred to in Section 1.01 located in the
--------
Building shown outlined or hatched on Exhibit B (the Lease Plan), excluding
exterior walls of the building except the inner surfaces thereof and excluding
any Common Areas located within such space.
Rent. Basic Rent and all Additional Rent.
----
Rentable Area of the Premises. The number of square feet stated in
-----------------------------
Section 1.01, irrespective of whether the number should be more or less as a
result of minor variations resulting from actual construction of the Building or
the Premises so long as such construction is done in accordance with the
provisions of this Lease.
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Stated Expiration Date. The later to occur of (i) date as stated in
----------------------
Section 1.01, or (ii) last day of the final Lease Year of the Lease Term.
Substantial Completion Date. The later to occur of (i) the date on
---------------------------
which a certificate of occupancy for the Premises is issued by the City of
Worcester, or (ii) the date on which Tenant Fit-up, together with the
appurtenant areas of the Building necessary for access and service to the
Premises, have been completed as provided in Article 7, except for items of work
and adjustment of equipment and fixtures which are not necessary to make the
Premises reasonably tenantable for the Permitted Use and because of season or
weather or nature of the, item cannot practicably be done at the time.
Taking. The taking or condemnation of title to all or any part of the
------
Land or Building or of possession or use of the Land, the Building or the
Premises by a Governmental Authority for any public use or purpose, or any
proceeding or negotiations which might result in such a taking, or any sale or
lease in lieu of such a taking.
Taxes. All (i) taxes (or payments in lieu of taxes), special or
-----
general assessments, water and sewer charges, and other charges of every nature
imposed by Governmental Authorities which are assessed, become due or become
liens upon or with respect to the Land, the Building, the Premises, Landlord's
Fixtures, equipment owned by Landlord on the Land or in the Building or the
Premises, or this Lease under all present or future Legal Requirements, and (ii)
taxes based on a percentage fraction or capitalized value of the Rent (whether
in lieu of or in addition to the taxes described above) computed as if the Land
and the Building were the only property of Landlord subject to such tax. Taxes
do not include (a) inheritance, estate, excise, succession, transfer, gift,
franchise, income, gross receipt, or profit taxes except to the extent they are
in substitution for Taxes now imposed on the Building, the Land, the Premises or
this Lease, or (b) assessments for streets, water or sewer installations or
other municipal improvements made in connection with the initial development of
the Building or the Park.
Tenant Fit-up. All Improvements and other work necessary to prepare
-------------
the Premises for Tenant's initial occupancy other than Landlord's Work.
Tenant's Cost. The cost of designing and constructing Tenant Fit-up.
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Term Commencement Date. The earliest to occur of (a) the Substantial
----------------------
Completion Date, (b) any other date for commencement of the Term determined as
provided in Article 7 or (c) the date on which Tenant first occupies the
Premises for the Permitted Use.
Total Taking . (i) a Taking of: (a) the fee interest in all or
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substantially all of the Land or the Building or (b) such title to or easement
in, over, under or such rights to occupy and use any part of the Land or the
Building to the exclusion of Landlord as, in the good faith judgment of
Landlord, unreasonably restricts access to the Building by vehicle or renders
the portion of the Building remaining after such Taking (even if restoration
were made) unsuitable or uneconomical for the continued use and occupancy of the
Building for the Permitted Use or (ii) a Taking of all or substantially all of
the Premises or such title to or easement in, on or over the Premises to the
exclusion of
8
Tenant which in the good faith judgment of Landlord prohibits access to the
Premises or the exercise, to any material extent, by Tenant of its rights under
this Lease.
Unavoidable Delays. Acts of God, strikes, lock-outs, labor troubles,
------------------
inability to procure materials, failure of power, riots and insurrection, acts
of the public enemy, wars, earthquakes, hurricanes and other natural disasters,
fires, explosions, any act, failure to act or default of the other party to this
Lease or any other reason (except lack of money) beyond the control of any party
to this Lease.
Work Letter. The agreement between Landlord and Tenant with respect to
-----------
Tenant Fit-up, substantially in the form of Exhibit C.
Working Drawings. The detailed plans and specifications developed by
----------------
Landlord and Tenant as provided in the Work Letter, prepared in compliance with
all applicable Legal Requirements, stamped by registered Massachusetts
professionals, and consisting of all architectural and engineering plans which
are required to construct Tenant Fit-up and to obtain any Authorization required
for the Premises.
WBDC. Worcester Business Development Corporation, a Massachusetts
----
corporation established pursuant to the provisions of Chapter 600 of the Acts of
1965.
ARTICLE 2
Premises
--------
Section 2.01 Premises.* Landlord hereby leases the Premises to Tenant, and
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Tenant hereby takes the Premises from Landlord, subject to the provisions of
this Lease and the Permitted Exceptions. Landlord reserves the right to relocate
within or without the Premises pipes, ducts, vents, flues, conduits, wires and
appurtenant fixtures which service other parts of the Building; provided that
such work is done in a manner that it does not unreasonably interfere with
Tenant's use of the Premises.
Section 2.02 Appurtenances. Tenant may use the Common Areas and the Land as
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appurtenant to the Premises for the purposes for which they were designed.
Tenant, its employees and business invitees have the non-exclusive right to use
the parking areas on the Land.
Section 2.03 Landlord's Fixtures. Tenant may use the Landlord's Fixtures
-------------------
during the Lease Term. Landlord's Fixtures remain the property of Landlord and
may not be removed by Tenant whether or not they are affixed to the Building.
___________________________________
* See Rider and Addendum - #2
9
ARTICLE 3
Term
----
Section 3.01 Term Commencement. The Lease Term will begin on the Term
-----------------
Commencement Date.
Section 3.02 Termination. The Lease Term will end on the Lease Termination
-----------
Date.
Section 3.03 Estoppel Certificate. If either the Term Commencement Date or
--------------------
the Stated Expiration Date occurs on a date other than as stated in Section
1.01, Landlord and Tenant agree to execute a certificate in the form of the
estoppel certificate referred to in Section 25.02 or such other form as either
may request, establishing the Term Commencement Date and the Stated Expiration
Date.
ARTICLE 4
Rent
----
Section 4.01 Basic Rent. Tenant agrees to pay Landlord the Basic Rent as
----------
annual rent for the Premises for each Lease Year, without offset or deduction
and without previous demand. Tenant agrees to pay Basic Rent in equal monthly
installments in advance on the first day of each calendar month during the Lease
Term, except that the first installment of Basic Rent, pro-rated for the partial
month, if any, at the beginning of the Lease Term, will be paid on the Term
Commencement Date.
Section 4.02 Adjustment of Basic Rent. The Basic Rent for each Lease Year
------------------------
during the first Fixed Rental Period will be as stated in Section 1.01. The
Basic Rent for each Lease Year of each successive Fixed Rental Period, if any,
will be as stated in Exhibit E, the Rent Rider.
ARTICLE 5
Use of Premises
---------------
Section 5.01 Use Restricted. The Premises may be used for the Permitted Use
--------------
and for no other purpose. Tenant agrees not to make any use of the Premises that
would cause the Premises to be considered a "place of public accommodation"
under the Americans with Disabilities Act of 1990. No Improvements, alterations
or additions may be made in or to the Premises except as provided in this Lease.
ARTICLE 6
Operating Expenses; Taxes
-------------------------
Section 6.01 Operating Expenses and Taxes. Tenant agrees to pay Landlord,
----------------------------
as Additional Rent, (i) Tenant's Share of Operating Expenses and Taxes as
provided in this
10
Article 6, prorated for any partial calendar year falling within the Lease Term,
and (ii) all Taxes assessed with respect to Improvements or structures anywhere
in the Park constructed by or on behalf of Tenant after the Substantial
Completion Date.
Section 6.02 Monthly Payments of Additional Rent. Tenant agrees to pay to
-----------------------------------
Landlord in advance for each calendar month of the Lease Term, as Additional
Rent, Operating Expenses and Taxes in an amount equal to (a) 1/12th of the
product of (i) Estimated Operating Expenses for the then current calendar year
times (ii) the Rentable Area of the Premises, plus (b) 1/12th of the product of
(i) Estimated Taxes for the then current calendar year times (ii) the Rentable
Area of the Premises. Tenant agrees to pay the amount payable under this Section
6.02 with Tenant's monthly payments of Basic Rent. The amounts paid will be
credited by Landlord to Tenant's obligations under Section 6.01. For the
balance of the first calendar year at the beginning of the Lease Term the amount
payable by Tenant each month with respect, to Tenant's Share of Estimated
Operating Expenses and Estimated Taxes will be the Initial Monthly Payment
stated in Section 1.01, which amount will be pro-rated for the partial month, if
any, at the beginning of the Lease Term and paid beginning on the Term
Commencement Date.
Section 6.03 Annual Statements. Within sixty (60) days after the end of
-----------------
each calendar year, Landlord agrees to render to Tenant a statement, prepared in
accordance with generally accepted accounting practices, showing in reasonable
detail (i) for the calendar year just ended (if any) (a) the amount of Taxes,
(b) the amount of Operating Expenses and (c) a calculation of Tenant's Share of
Taxes and Operating Expenses, and (ii) for the then current calendar year, the
amount of Estimated Operating Expenses and Estimated Taxes determined by
Landlord in the reasonable exercise of its judgment. Estimated operating
Expenses and Estimated Taxes for the calendar year in which the Lease Term
begins are the sums set forth in Section 1.01. If the total amount paid by
Tenant on account of Operating Expenses or Taxes or both in any calendar year
exceeds the actual amount of Tenant's Share of Operating Expenses or Taxes for
the year, then the excess will be credited by Landlord against the monthly
installments of Additional Rent next falling due or refunded to Tenant upon the
expiration or termination of this Lease, if earlier (unless such expiration or
termination is the result of an Event of Default). If the total amount of
Operating Expenses or Taxes or both paid by Tenant in any calendar year is less
than the actual amount of Tenant's Share of Operating Expenses or Taxes for the
year, then Tenant agrees to pay the difference to Landlord within thirty (30)
days after receipt by Tenant of Landlord's statement. Not more frequently than
once each Lease Year, Tenant may, at its expense and after ten (10) Business
Days prior notice, audit Landlord's records relating to Operating Expenses.
Section 6.04 Assessments and Other Taxes. Landlord agrees that all special
---------------------------
and general assessments will be paid in installments over the longest period
permitted by law and that the amount of Taxes shown on each annual statement
will include only the portion due in that year. Nothing in this Lease shall be
construed to require Tenant to pay any inheritance, estate, excise, succession,
transfer, gift, franchise, income, gross receipt, or profit taxes that are, or
may be, imposed upon Landlord, its successors or assigns, except to the extent
such taxes are in substitution for Taxes as now imposed on the Building, the
Land, the Premises or this Lease.
11
Section 6.05 Accounting Periods. Landlord may from time to time change the
------------------
periods of accounting under this Lease to any annual period other than a
calendar year. Upon any such change, all items referred to in this Article 6
will be appropriately apportioned. In all statements rendered under Section
6.03, amounts for periods partially within and partially outside of the
accounting periods will be appropriately apportioned. Any items which are not
determinable at the time of a statement will be included on the basis of
Landlord's estimate. Promptly after determination, Landlord will render a
supplemental statement in which appropriate adjustment will be made.
Section 6.06 Abatement of Taxes. Landlord may at any time and from time to
------------------
time make application to the appropriate Governmental Authority for an abatement
of Taxes. Landlord agrees to make such an application at any time tenants
occupying more than 60% of the Rentable Area of the Building under written
Occupancy Arrangements directly with the Landlord request that Landlord do so.
If (i) such an application is successful and (ii) Tenant has made any payment in
respect of Taxes under this Article 6 for the period with respect to which the
abatement was granted, Landlord agrees (a) to deduct from the amount of the
abatement all expenses incurred by it in connection with the application (b)
within thirty (30) days after receipt of the abatement amount, to pay to Tenant
Tenant's Share (adjusted for any period for which Tenant had made a partial
payment) of the abatement, with interest, if any, paid by the Governmental
Authority on such abatement, and (c) retain the balance, if any.
Section 6.07 Exemption From Taxes. As provided in Section 6 of Chapter 317
--------------------
of the Acts of 1983, Landlord may be or become exempt from the obligation to pay
Taxes if it leases any part of the Building to an organization exempt from taxes
under the United States Internal Revenue Code. If Tenant is able to establish to
Landlord's satisfaction the amount of the reduction in Taxes during any calendar
year which is a result of this Lease and Tenant's tax-exempt status, Tenant's
obligation to pay Taxes for such calendar year as provided in this Article 6
will ▇▇▇▇▇ in the same amount, or the amount, if previously paid, will be
refunded to Tenant. If Tenant is not tax-exempt but Landlord's obligation to pay
Taxes is abated because of the tax-exempt status of any other tenant or tenants
of the Building, Landlord reserves the right to increase Tenant's Share as it
relates to Taxes so that the Taxes payable "With respect to the Land and the
Building for any calendar year during the Lease Term are equitably apportioned
among the tenants of the Building who are not exempt from taxation.
ARTICLE 7
Improvements
------------
Section 7.01 Tenant Fit-up.* In connection with the preparation of the
-------------
Premises for Tenant's initial occupancy, Landlord agrees to do Landlord's Work
and Tenant Fit-up as described in the Working Drawings. Landlord agrees to
perform all work in a good
___________________________________
* See Rider and Addendum - #3
12
and workmanlike manner and in compliance with all Legal Requirements and
Insurance Requirements, subject to the provisions of the Work Letter. Unless
otherwise agreed, Tenant agrees to pay Tenant's Cost as Additional Rent in
installments as the work progresses as provided in the agreement with the
contractor performing the work and in any event on or before the Term
Commencement Date.
Section 7.02 Time for Completion. Landlord agrees to use due diligence to
-------------------
have the Premises ready for occupancy on or before the Term Commencement Date
referred to in Section 1.01. Reference is made to the Work Letter for details of
the completion process.
Section 7.03 Notice of Substantial Completion Date. Approximately fifteen
-------------------------------------
(15) days before it occurs, Landlord agrees to give Tenant a notice stating the
Substantial Completion Date.
Section 7.04 Delays. If Landlord is delayed in substantially completing
------
Tenant Fit-up as the result of
(a) delay by Tenant or any Person employed by Tenant in delivery to
Landlord of any plans, design work and detailed drawings, or
(b) Tenant's requests for special work not part of the work described
in the Working Drawings or for changes to the Working Drawings after
approval by Tenant (notwithstanding Landlord's approval of such changes),
or
(c) delays in performance by Tenant or any Person employed by Tenant
which cause delays in the completion of any work to be done by Landlord or
which otherwise delay the substantial completion of the Premises, or
(d) any fault, negligence, omission, or failure to act on the part of
Tenant or its agents, contractors, workmen, mechanics, suppliers or
invitees,
provided Tenant has been given notice of each such delay, the Premises will be
substantially completed on (and the Term Commencement Date will be) that date
determined by Landlord, in the reasonable exercise of its judgment, on which the
Substantial Completion Date would have occurred but for the delays referred to
in this Section 7.04.
Section 7.05 Tenant's Access to the Premises. Tenant and Tenant's agents,
-------------------------------
at Tenant's sole risk, may, with Landlord's prior consent, enter the Premises
before the Term Commencement Date in order to (a) install its furniture,
furnishings and equipment and (b) perform or inspect work necessary to make the
Premises ready for Tenant's use and occupancy. If Landlord permits entry before
the Term Commencement Date, the permission is conditioned upon (i) Tenant
delivering to Landlord evidence of the insurance required under Section 15.01
and (ii) Tenant and Tenant's agents, contractors, workmen, mechanics, suppliers
and invitees, working in harmony with Landlord and contractors working for
Landlord and with other tenants of the Building. If at any time Tenant's entry
causes or threatens to cause disharmony or interfere with the orderly
13
completion or operation of the Building, Landlord may withdraw the permission
upon notice to Tenant. Any entry by Tenant will be deemed to be under all of the
provisions of this Lease except the covenant to pay Rent. Except for negligence
of Landlord and its employees, if Tenant or its agents enter the Premises before
the Term Commencement Date, Landlord will not be liable for and Tenant agrees to
assume the entire risk for any loss or damage which may occur to any
Improvements or to any property placed in the Premises before the Term
Commencement Date.
Section 7.06 Improvements by Tenant.* Tenant agrees not to hang shades,
----------------------
curtains, signs, awnings or other materials in any window, attach any materials
to or make any change in the appearance of any glass visible from outside of the
Premises, add any window treatment of any kind or make Improvements or install
furniture visible from outside of the Premises, without Landlord's prior written
consent. Tenant agrees not to make any Improvements before or during the Lease
Term, except according to plans and specifications and using contractors first
approved by the Landlord. Tenant agrees not to make any Improvements which
would (a) delay completion of the Premises or the Building, or (b) require
unusual expense to readapt the Premises to normal research and development,
general office and limited light manufacturing use upon termination of this
Lease or (c) increase (i) the cost of Landlord's Work or insurance or (ii)
Taxes. All Improvements will become part of the Premises and property of
Landlord upon their completion or installation except to the extent Landlord
specifies that they must be removed at Tenant's expense on the Lease Termination
Date as an express condition to Landlord's approval of their initial
installation. The construction of Improvements by Tenant and the installation
of Tenant's furniture, furnishings and equipment will be coordinated with any
work being performed by Landlord and will be performed in such manner as to
maintain harmonious labor relations and not to damage the Building or the
Premises or interfere with Building operation. Except for work done by or
through Landlord before making any Improvements, Tenant will: secure all
necessary Authorizations; deliver to Landlord a statement of the names of all
its contractors and subcontractors and the estimated cost of all labor and
material to be furnished by them; cause each contractor to carry (1) worker's
compensation insurance in statutory amounts covering all the contractor's and
subcontractor's employees, (2) comprehensive public liability insurance with
such limits as Landlord may reasonably require, but in no event less than
$1,000,000, and (3) property damage insurance with limits of not less than
$300,000 (all such insurance to be written by companies approved by Landlord and
insuring Landlord and Tenant as well as the contractors), and to deliver to
Landlord certificates of all such insurance; and secure casualty insurance
against loss or damage to the Improvements pending completion and deliver
evidence of such insurance to Landlord. Tenant agrees to pay promptly when due
the entire cost of any work done in the Premises by Tenant, its agents,
employees, or independent contractors, and not to cause or permit any liens for
labor or materials performed or furnished in connection with its work to attach
to the Premises and immediately to discharge any such liens which may
__________________________________
* See Rider and Addendum - #4
14
attach. All construction work done by Tenant, its agents, employees or
independent contractors will be done in a good workmanlike manner and in
compliance with all Legal Requirements and Insurance Requirements. Landlord may
inspect the work at any time and will promptly give notice to Tenant of any
observed defects.
ARTICLE 8
Building Services
-----------------
Section 8.01 Basic Services. During the Lease Term, Landlord agrees to
--------------
furnish, or cause to be furnished, the Basic Services.
Section 8.02 Other Janitors. No Person will be employed by Tenant to do
--------------
janitorial work in the Premises and no Person other than the janitors of the
Building will clean the Premises unless first approved in writing by Landlord.
Any Person employed by Tenant with Landlord's approval to do janitorial work
will, while in the Building, either inside or outside the Premises, be subject
to and under the control and direction of the superintendent of the Building
(but not as agent or servant of the superintendent or of Landlord).
Section 8.03 Additional Services. Tenant agrees to pay Landlord a
-------------------
reasonable charge for any extra cleaning of the Premises required because of the
carelessness or indifference of Tenant and for any Additional Services rendered
at the request of Tenant. If the cost of cleaning the Premises is increased due
to the installation in the Premises, at Tenant's request, of any unique or
special materials, finish or equipment, Tenant agrees to pay the Landlord an
amount equal to the increase in cost. All charges for Additional Services will
be payable within ten (10) days after the date on which they are billed.
Section 8.04 Limitations on Landlord's Liability.* Landlord will not be
-----------------------------------
liable in damages nor in default under this Lease for any failure or delay in
furnishing Basic Services or Additional Services when the failure or delay is
caused by Unavoidable Delays. No failure or delay by Landlord in furnishing
Basic Services or Additional Services caused by Unavoidable Delays may be
claimed or pleaded as an eviction or disturbance of Tenant's possession or give
Tenant any right to terminate this Lease or give rise to any claim for set-off
or abatement of Rent or excuse Tenant from the performance of any of its
obligations under this Lease.
Section 8.05 Electric Service. Tenant agrees to make its own arrangements
----------------
for the provision of electricity to the Premises and to pay the full cost (as
shown on a separate electric meter to be installed at Landlord's expense)
directly to the utility company providing the electricity. Tenant's use of
electricity in the Premises will not at any time exceed the capacity of any of
the electrical conductors or equipment in or serving the Premises. In order to
insure that such capacity is not exceeded and to avert
___________________________
* See Rider and Addendum - (P)5
15
possible adverse effect upon the Building electric service, Tenant agrees it
will not, without prior written notice to Landlord in each instance, connect to
the Building electric distribution system any fixtures, appliances or equipment
which operate on a voltage in excess of 120 volts nominal or make any alteration
or addition to the electric system of the Premises. Unless Landlord objects to
the connection of any such fixtures, appliances or equipment, all additional
risers or other equipment required for, the connection will be provided by
Landlord, and the cost will be paid by Tenant on Landlord's demand.
ARTICLE 9
Tenant's Covenants
------------------
Section 9.01 Pay Rent. Tenant agrees to pay when due all Rent and all
--------
charges for utility services rendered to the Premises not included in Rent and,
as Additional Rent, all charges of Landlord for Additional Services.
Section 9.02 Occupancy of the Premises. Tenant agrees to occupy the
-------------------------
Premises continuously from the Term Commencement Date for the Permitted Use
only. Tenant will not (i) injure or deface the Premises or the Building, (ii)
install any sign in or on any window, demising wall, corridor, elevator foyer or
other Common Area, (iii) permit in the Premises any inflammable fluids or
chemicals not reasonably related to the Permitted Use, nor (iv) permit any
nuisance or use of the Premises which is improper, offensive, contrary to any
Legal Requirement or Insurance Requirement or liable to render necessary any
alteration or addition to the Building.
Section 9.03 Rules and Regulations. Tenant agrees not to obstruct in any
---------------------
manner any portion of the Building or the Land. Tenant agrees to comply with all
reasonable rules and regulations of which Tenant has notice promulgated by
Landlord and uniformly applicable to Persons occupying the Building regulating
the details of the operation and use of the Building.
Section 9.04 Safety. Tenant agrees to keep the Premises equipped with all
------
safety appliances required by Legal Requirements or Insurance Requirements
applicable to Tenant specifically because of any use made by Tenant and not
applicable generally to all other tenants of the Building. Tenant agrees to
procure all Authorizations required because of Tenant's use of the Premises and
to do any work required under any Authorization because of such use, it being
understood that the provisions of this Section may not be construed to broaden
in any way the Permitted Use.
Section 9.05 Equipment. Tenant agrees not to place a load upon the floor
---------
of the Premises exceeding the live load for which the floor has been designed.
Tenant agrees not to move any safe or other heavy equipment into, about or out
of the Premises except in the manner and at the time authorized by Landlord in
each instance. Tenant agrees to isolate and maintain all of Tenant's equipment
which causes or may cause airborne or structure-borne vibration or noise,
whether or not it may be transmitted to any other part of the Building, so as to
eliminate such vibration or noise.
16
Section 9.06 Pay Taxes. Tenant agrees to pay promptly when due all Taxes
---------
upon personal property (including, without limitation, fixtures and equipment)
in the Premises irrespective of the Person to whom the Taxes may be assessed.
Section 9.07 Maintenance. Tenant agrees, at all times during the Lease
Term, and at its own expense, (i) to maintain the Premises in good repair and
condition (except for (a) ordinary wear and tear, (b) damage by fire or casualty
and (c) any defect in material or workmanship performed by Landlord in
connection with initial preparation of the Premises for Tenant's use and
occupancy), (ii) to use all reasonable precautions to prevent waste, damage or
injury to the Premises or any other part of the Building and (iii) to repair all
damage to any part of the Building caused by Tenant or any of Tenant's agents,
employees or invitees, to the extent that such damage is not covered by
Landlord's insurance.
Section 9.08 Redelivery.* On the Lease Termination Date, Tenant agrees to
----------
leave the Premises and surrender possession to Landlord free of (i) all tenants
or occupants claiming through or under Tenant, and (ii) all liens encumbrances,
restrictions or reservations caused or consented to by Tenant. Tenant agrees,
subject to the provisions of Articles 17 and 18, to surrender the Premises,
including all Landlord's Fixtures and all Improvements except those which Tenant
is required to remove as provided in Section 7.06, to Landlord broom clean and
in good condition and repair (ordinary wear and tear and damage by fire or other
casualty only excepted) with all damage resulting from removal of (i) Tenant's
furniture, furnishings and equipment and (ii) any Improvements which Tenant is
required to remove as provided in Section 7.06 repaired at Tenant's expense to
Landlord's reasonable satisfaction.
Section 9.09 Tenant Financial Information. Whenever requested by Landlord
----------------------------
in connection with financing of the Building or its own operations, Tenant
agrees to provide to Landlord all information currently available relating to
Tenant's existing and future financial condition, including but not limited to
internally and externally prepared financial statements and reports,
prospectuses and offering circulars, underwriting agreements private placement
memoranda and similar documents involving public and private funding sources.
Landlord agrees to maintain all the information in strictest confidence except
to the extent necessary to share it with lenders in connection with financing of
the Building or its own operations.
ARTICLE 10
Compliance With Requirements
----------------------------
Section 10.01 Legal Requirements. Tenant agrees, at its expense, promptly
------------------
to observe and comply with all Legal Requirements relating to it specifically or
its use of the Premises and not applicable generally to all other tenants of the
Building. Tenant
____________________________
* See Rider and Addendum - (P)6*
17
agrees to day all costs, liabilities, losses, damages, fines, penalties, claims
and demands, that may arise out of or be imposed because of the failure of
Tenant to comply with the covenants of this Article 10.
Section 10.02 Contests. Tenant has the right to contest by appropriate
--------
legal proceedings diligently conducted in good faith, in the name of Tenant or
Landlord (if legally required) or both (if legally required), without expense or
liability to Landlord, the validity or application of any Legal Requirement. If
compliance with the terms of any Legal Requirement may legally be delayed
pending the prosecution of any such proceeding, Tenant may delay compliance
until the final determination of the proceeding.
Section 10.03 Land Disposition Agreement. As required under the Land
--------------------------
Disposition Agreement, Tenant, working with the public and private higher
educational institutions of Worcester and existing or future federal, state and
local job training programs, agrees to endeavor to establish education and
training programs to assist Worcester residents and women and minority group
members in developing skills necessary for future employment within or ancillary
to the Park and to establish fair and equitable procedures to provide employment
opportunities for qualified residents of the City of Worcester and women and
minority group members on a priority basis.
Section 10.04 Environmental Legal Requirements. Except to the extent
--------------------------------
permitted under applicable Legal Requirements, Tenant agrees not to cause or
permit any Hazardous Substances to be released on the Land or in the Building or
the Premises or into the air, or to be introduced into the sewage or other waste
disposal system serving the Premises. Tenant agrees to generate, store or
dispose of Hazardous Substances in the Premises or dispose of Hazardous
Substances from the Premises to any other location only in compliance with all
applicable Legal Requirements and to notify Landlord of any incident which would
require the filing of a notice under any Legal Requirement. Tenant agrees to
provide Landlord with such information required by Governmental Authorities as
Landlord may reasonably request from time to time with respect to compliance
with this Section.
ARTICLE 11
Covenant Against Liens
----------------------
Section 11.01 No Liens. Tenant agrees not to create any lien on the
--------
Premises, the Building or the Land and to discharge any lien on the Premises,
the Building or the Land arising out of any act or omission by Tenant, including
but not limited to any tax, mechanic's, laborer's or materialman's lien or lien
arising under Massachusetts General Laws, Chapter 21E.
Section 11.02 Discharge. If any lien is filed against the Premises, the
---------
Building or the Land as a result of any act or omission by Tenant, Tenant agrees
to cause the lien to be discharged of record by payment, deposit, bond, order of
a court of competent jurisdiction or otherwise, within sixty (60) days after (i)
Tenant has actual or constructive notice that it is filed, or (ii) final
judgment in favor of the holder of the lien. If Tenant
18
fails to cause the lien to be discharged, then, in addition to any remedies
available to Landlord in case of an Event of Default, Landlord may, but is not
obligated to, discharge the lien either by paying the amount claimed to be due
or by procuring the discharge of the lien by deposit or by bonding proceedings.
Any amount paid by Landlord and all costs incurred by Landlord in connection the
removal of any lien will constitute Additional Rent and will be paid by Tenant
to Landlord on demand with interest as provided in Section 21.06.
ARTICLE 12
Access to Premises
------------------
Section 12.01 Access.* Landlord or Landlord's agents and designees will
------
have the right, but not the obligation, to enter the Premises at all reasonable
times during ordinary business hours, after reasonable notice except in the case
of an emergency, to examine the Premises, to make necessary repairs and
replacements and to exhibit the Premises to prospective purchasers, mortgagees,
and, during the last six (6) months of the Lease Term, prospective tenants.
Except in the case of an emergency, any Person entering the Premises under this
Section 12.01 will be accompanied by a Person designated by Tenant, if Tenant
requires.
ARTICLE 13
Assignment and Subletting: Occupancy Arrangements
--------------------------------------------------
Section 13.01 Assignment and Subletting.* Tenant agrees not to enter
-------------------------
into any Occupancy Arrangement, either voluntarily or by operation of law,
(other than with a Person who is affiliated with Tenant and for a period ending
when and if such Person ceases to be affiliated with Tenant) without the prior
written consent of Landlord. For purposes of this Article 13, a Person will be
considered to be affiliated with Tenant if such Person, directly or indirectly,
controls, is controlled by or is under common control with Tenant.
Section 13.02 Procedure. If Tenant intends to enter into an Occupancy
---------
Arrangement which requires Landlord's consent, Tenant agrees to give Landlord
notice of the name of (and a financial statement with respect to) the proposed
occupant, the exact terms of the Arrangement and a precise description of the
portion of the Premises intended to be subject to the Occupancy Arrangement.
Within thirty (30) days after receipt of the notice, Landlord will (i) consent
to the Occupancy Arrangement, or (ii) refuse to consent to the occupancy
Arrangement, or (iii) notify Tenant of Landlord's election to terminate this
Lease with respect to so much of the Premises as is intended to
_______________________________
* See Rider and Addendum - (P)7
* See Rider and Addendum - (P)8
19
be subject to the Occupancy Arrangement. If Landlord consents to the Occupancy
Arrangement, Tenant agrees (i) to enter into the Arrangement on the exact terms
described to Landlord within thirty (30) days after Landlord's consent and to
deliver to Landlord and to the holder of any first mortgage on the Building an
executed original counterpart of the Occupancy Arrangement and (ii) to remain
liable for the payment and performance of the provisions of this Lease. If
Tenant enters into an Occupancy Arrangement, Tenant agrees to pay to Landlord
when received the excess, if any, of amounts received in respect of the
Occupancy Arrangement over the Rent. Any Occupancy Arrangement will expressly
incorporate and be subject to the terms of this Lease, which terms will be
binding on all parties to the Occupancy Arrangement. If Landlord consents to and
Tenant does not enter into the Arrangement within the thirty (30) day period,
such consent will be deemed revoked and Tenant will again comply with the terms
of this Section. If Landlord elects to terminate this Lease with respect to that
portion of the Premises to be subject to the Occupancy Arrangement, this Lease
will terminate as of the date specified in the election, which date will be not
less than thirty (30) days nor more than sixty (60) days after the date of the
election; provided that Tenant may, at any time before the date of termination,
withdraw its request for Landlord's consent to an Occupancy Arrangement. Such
withdrawal by Tenant will nullify Landlord's election to terminate, and this
Lease will remain in effect as if no election by Landlord had been made. If
Landlord terminates this Lease, all Rent due will be adjusted as of the day the
Premises (or the portion affected by the termination) are redelivered to
Landlord. Any portion of the Premises redelivered to Landlord will be in the
condition specified in Section 9.08.
ARTICLE 14
Indemnity
---------
Section 14.01 Tenant's Indemnity. Except to the extent waived by Landlord
------------------
under the provisions of Section 16.02, Tenant agrees to indemnify Landlord
against all claims, losses and expenses, including reasonable attorneys' fees,
which may be imposed upon or incurred by Landlord by reason of any of the
following occurrences:
(a) any act or omission on the Premises by Tenant or any Person other
than Landlord, its agents, contractors, licensees or invitees;
(b) any use, non-use, possession, occupation, condition, operation,
maintenance or management of the Premises;
(c) any act or omission on the part of Tenant, or any of its agents,
contractors, licensees or invitees, whether or not occurring on the
Premises;
(d) any accident, injury or damage to any Person or property
occurring in the Premises, not due to any act or omission of Landlord, its
agents, contractors or licensees;
20
(e) any failure on the part of Tenant to comply with any of its
obligations under this Lease, whether or not such failure constitutes a
Default or Event of Default;
(f) any untrue or misleading statement of a material fact or any
misrepresentation of a material fact made by or on behalf of Tenant in
connection with the negotiation of this Lease; or
(g) any release or threat of release of Hazardous Substances by
Tenant, or any of its agents, contractors, licensees or invitees, whether
or not occurring on the Premises.
Section 14.02 Claims by Landlord. If any proceeding is brought against
------------------
Landlord arising out of any occurrence described in Section 14.01, upon notice
from Landlord Tenant agrees, at its expense, to defend the proceeding using
legal counsel reasonably satisfactory to Landlord or, if applicable, Tenant's
insurer, provided that Tenant has not been prejudiced in any way by failure or
delay on the part of Landlord to give Tenant prompt notice of the proceeding.
If Tenant has supplied Landlord with insurance covering any of the risks
described in Section 14.01, no claim may be made against Tenant unless the
insurer fails or refuses to defend and/or pay all claims, losses and expenses
incurred by Landlord. Notwithstanding the foregoing, Landlord has the right to
make claims, institute legal proceedings, or otherwise seek redress against
Tenant before the expiration of any statute of limitations or other limitation
on the time or manner in which Landlord may seek redress regardless of whether
or not any insurer is responding.
Section 14.03 Landlord's Liability. Except for its intentional acts or
--------------------
negligence or the intentional acts or negligence of its agents, contractors or
licensees, Landlord will not be responsible or liable for any loss, damage or
injury to the Premises or to any Person or property at any time on the Land or
in the Building or the Premises.
ARTICLE 15
Insurance
---------
Section 15.01 Tenant's Insurance. Tenant agrees to provide, at its
------------------
expense, and to keep in force:
(a) Comprehensive general liability insurance against claims for
personal injury, death and property damage occurring with respect to Tenant's
occupancy of the Premises having primary combined single limit coverage of at
least $1,000,000 for bodily injury and property damage.
(b) Casualty insurance against loss or damage to (i) all inventory,
furniture, furnishings and equipment other than Landlord's Fixtures owned,
controlled or in use by Tenant and situated in the Building, (ii) all
Improvements made by Tenant pending completion and (iii) all Improvements made
by Tenant which Tenant is required to remove on the Lease Termination Date under
Section 7.06, under a so-called "All
21
Risk" policy in an amount sufficient to replace the same without allowance for
depreciation, if available, and if not, in the amount necessary to avoid the
effect of co-insurance provisions under the applicable policies.
(c) Worker's compensation insurance for all Tenant's employees
working in the Premises in an amount sufficient to comply with Legal
Requirements.
(d) Such greater limits and such other insurance and in such amounts
as may from time to time be reasonably required by Landlord against other
insurable hazards which at the time are customarily insured against in the case
of buildings similarly situated and used.
Section 15.02 General Insurance Requirements.
------------------------------
(a) All risk insurance provided for in Section 15.01 will be written
as primary policies (without "contribution" or "solely in excess of coverage
carried by Lessor" provisions) and will be effected under valid and enforceable
policies, issued by insurers of recognized responsibility authorized to write
such insurance in Massachusetts and having a Best's financial rating of B or
better. Not less than five (5) days before the Term Commencement Date, and
thereafter not less than ten (10) days before the expiration dates of the
expiring policies furnished under to Section 15.01, binders, certificates or
other evidence of such insurance satisfactory to Landlord bearing notations
evidencing the payment of premiums or accompanied by other evidence satisfactory
to landlord of such payment, will be delivered by Tenant to Landlord.
(b) Nothing in this Article 15 will prevent Tenant from taking out
insurance of the kind and in the amounts provided for under this Article under a
blanket insurance policy or policies covering other properties as well as the
Premises. Any policy or policies of blanket insurance (i) will specify, or
Tenant will furnish Landlord with a written statement from the insurers
specifying, the amounts of the total insurance allocated to the premises, which
amounts will not be less than the amounts required by Section 15.01 and will be
sufficient to prevent any of the insureds from becoming a coinsurer within the
terms of the applicable policy or policies, (ii) will contain an "Agreed Amount"
clause as to the Premises and (iii) will otherwise comply as to endorsement and
coverage with the provisions of this Article.
(c) All policies of insurance provided for in Section 15.01 will name
the Landlord and Tenant as the insured, as their respective interest may appear,
and also the Ground Lessor and any mortgagee, when requested, as their
respective interests may appear, except that Landlord, the Ground Lessor and any
such mortgagee will have no interest in the insurance on Tenant's personal
property. Each such policy or certificate issued by the insurer will, to the
extent obtainable, contain an agreement by the insurer that the insurance will
not be cancelled without at least twenty (20) days prior written notice to
Landlord and to any other named insureds. Landlord agrees not to carry any
insurance concurrent in coverage and contributing in the event of loss with any
insurance required to be furnished by Tenant if the effect of such separate
insurance would be to reduce the protection or the payment to be made under
Tenant's insurance.
22
Section 15.03 Landlord's Insurance. Landlord agrees to cause the Building
--------------------
(including Landlord's Fixtures but excluding any Improvements and leasehold
improvements (a) by any tenant prior to their completion, or (b) which any
tenant may be required to remove upon termination of its lease) to be insured
for the benefit of Landlord, the Ground Lessor and any mortgagee of the
Landlord, as their respective interests may appear, against loss or damage under
a so-called "All Risk" policy in an amount equal to (i) the replacement value or
(ii) the amount necessary to avoid the effect of co-insurance provisions of the
applicable policies. Landlord also agrees to maintain comprehensive form boiler
insurance, rental value insurance and such other insurance-;against such perils
and in such amounts as may be required by the Ground Lessor or any mortgagee of
Landlord or as Landlord may consider prudent. The cost of such insurance will
be part of the Operating Expenses.
ARTICLE 16
Waiver of Subrogation
---------------------
Section 16.01 Waiver of Subrogation. If available, all insurance policies
---------------------
carried by either party covering the Building and/or the Premises will contain a
clause or endorsement expressly waiving any right on the part of the insurer to
make any claim against the other party and against the Ground Lessor. The
parties agree to use reasonable efforts to insure that their policies will
include such waiver clause or endorsement.
Section 16.02 Waiver of Rights. Landlord and Tenant each waive all
----------------
claims, causes of action and rights of recovery against the other and against
the Ground Lessor and their respective partners, agents, officers and employees,
for any loss or damage to persons, property or business which occurs on or about
the Premises or the Buildings and results from any of the perils insured under
any policy of insurance maintained by Landlord and/or Tenant, regardless of
cause. This waiver includes the negligence and intentional wrongdoing of either
party and their respective agents, officers and employees but is effective only
to the extent of recovery, if any, under any such policy. This waiver will be
void to the extent that any such insurance is invalidated by reason of this
waiver.
ARTICLE 17
Damage and Restoration
----------------------
Section 17.01 Substantial Damage. If the Building is damaged by fire or
------------------
other casualty, Tenant agrees to give prompt written notice to Landlord. If as a
result of fire or other casualty, (i) the Building is so damaged that
substantial alteration or reconstruction of the Building is, in Landlord's sole
opinion, required (whether or not the Premises have been damaged), or (ii) the
Ground Lease is terminated, or (iii) any mortgagee of the Building requires that
all or a substantial portion of insurance proceeds payable be used to retire the
mortgage debt, Landlord may, at its option, terminate this Lease by giving
notice to Tenant within sixty (60) days after the date of the damage. If, within
sixty (60) days after the date of the damage, Landlord does not begin to restore
the Building as provided in Section 17.02 or notify Tenant of its election to
terminate this Lease, Tenant
23
may terminate this Lease by giving notice to Landlord within ten (10) days
after the expiration of the sixty (60) day period. If this Lease is terminated
by Landlord or Tenant as provided in this Section 17.01, Rent will be abated as
of the date of the damage.
Section 17.02 Restoration. If Landlord does not terminate this Lease as
-----------
provided in Section 17.01 within sixty (60) days after the date of the damage,
Landlord agrees to begin to restore the Building to substantially the same
condition in which it was immediately before the damage, and, subject to
Unavoidable Delays, to continue the restoration with reasonable diligence.
Landlord's restoration work will include Landlord's Fixtures, the scope of the
work done by Landlord in originally finishing the Premises according to the
working Drawings and subsequent Improvements made by Tenant under the provisions
of Section 7.06 which are to remain part of the Premises. Landlord will not be
required to rebuild, repair, or replace (i) any part of Tenant's furniture,
furnishings or equipment, or (ii) any Improvements made by Tenant which Tenant
is required to remove on the Lease Termination Date under Section 7.06. Landlord
will not be liable for any inconvenience or annoyance to Tenant or injury to the
business of Tenant resulting from the damage to or the repair of the Building,
except that Landlord will allow Tenant a fair reduction of Rent to the extent
the Premises are unfit for occupancy from the date of the occurrence of the
damage to a date thirty (30) days after completion of Landlord's repairs.
ARTICLE 18
Eminent Domain
--------------
Section 18.01 Total Taking. If there is a Total Taking, then this Lease
------------
will terminate as of the earlier to occur of (i) the date when physical
possession of the Building or the Premises is taken by the condemning authority
or (ii) the date when title vests in the condemning authority.
Section 18.02 Partial Taking. If there is a Taking of the Premises which
--------------
is not a Total Taking, Landlord may terminate this Lease by giving notice to
Tenant within sixty (60) days after receiving notice of the Taking, in which
event this Lease will terminate as of the earlier to occur of (i) the date where
physical possession of such portion of the Premises is taken by the condemning
authority or (ii) the date when title vests in the condemning authority. If this
Lease is not terminated, Rent will be abated from the date the Premises are
rendered unfit for occupancy by an amount representing that part of the Rent
properly allocable to the portion of the Premises taken, and Landlord will, at
Landlord's expense, restore the Building and the Premises to substantially their
former condition to the extent that restoration, in Landlord's judgment, may be
feasible. Landlord's restoration work will not exceed the scope of Tenant Fit-up
as shown in the Working Drawings and subsequent Improvements made by Tenant
under the provisions of Section 7.06 which are to remain part of the Premises.
Section 18.03 Awards and Proceeds. All proceeds payable in respect of a
-------------------
Taking will be the property of Landlord. Tenant hereby assigns to Landlord all
rights of Tenant in or to such awards and proceeds, provided that Tenant will be
entitled to separately
24
petition the condemning authority for a separate award for its moving expenses
and trade fixtures but only if such a separate award will not diminish the
amount of award or proceeds payable to Landlord.
ARTICLE 19
Quiet Enjoyment
---------------
Section 19.01 Landlord's Covenant. Landlord covenants that it has good
-------------------
title to the Premises and the Common Areas, subject to the Permitted Exceptions,
and that it has sufficient authority to enter into this Lease. Landlord also
covenants that if Tenant pays Rent and performs all of its obligations under
this Lease, subject to the Permitted Exceptions, it will quietly have and enjoy
the Premises during the Lease Term, without interference from any Person
lawfully claiming under Landlord or by paramount title. Landlord agrees that it
will pay and perform all of its obligations under the Ground Lease.
Section 19.02 Subordination and Non-Disturbance. This Lease is
---------------------------------
subordinate to (i) the Ground Lease and (ii) any mortgage now or hereafter on
the Building and to each advance made under any such mortgage, and to all
renewals, modifications, consolidations, replacements and extensions of such
mortgage. This Section 19.02 is self-operative and no further instrument of
subordination will be required, provided that before a future subordination is
effective Landlord will cause the mortgagee or Ground Lessor to deliver to
Tenant a non-disturbance agreement, binding upon itself and any successor in
interest, to the effect that no foreclosure of the mortgage or termination of
the Ground Lease will disturb the possession of Tenant under this Lease so long
as no Event of Default exists. In confirmation of such subordination, Tenant
agrees to execute and deliver promptly any certificate that Landlord or the
Ground Lessor or any mortgagee may request. If any mortgagee or Ground Lessor
succeeds to the interest of Landlord and agrees to recognize the interest of
Tenant under this Lease, Tenant agrees to attorn to such mortgagee or Ground
Lessor and to recognize such mortgagee or Ground Lessor as its landlord.
Section 19.03 Notice to Mortgagee and Ground Lessor. No act or failure to
-------------------------------------
act on the part of Landlord which would entitle Tenant under the terms of this
Lease, or by law, to be relieved of Tenant's obligations under or to terminate
this Lease, will result in a release or termination of such obligations or
termination of this Lease unless (i) Tenant first gives written notice of
Landlord's act or failure to act to Landlord's first mortgagee of record, if
any, and to the Ground Lessor specifying the act or failure to act on the part
of Landlord which could or would give basis to Tenant's rights; and (ii) the
mortgagee or Ground Lessor, after receipt of such notice, fails or refuses to
correct or cure the condition complained of within a reasonable time. Nothing
contained in this Section 19.03 will be deemed to impose any obligation on any
mortgagee or Ground Lessor to correct or cure any condition. "Reasonable time"
means a period of not less than thirty (30) Business Days and includes (but is
not limited to) a reasonable time to obtain possession of the Building if the
mortgagee or Ground Lessor elects to do so and a reasonable time to correct or
cure the condition if the condition is determined to exist.
25
Tenant has no obligation to give notice under this Section 19.03 until the
mortgagee or the Ground Lessor has given Tenant notice of its interest as such
and the address to which notices under this Section 19.03 are to be sent.
Section 19.04 Other Provisions Regarding Mortgagees. If this Lease or the
-------------------------------------
Rent is assigned to a mortgagee as collateral security for any obligation, the
mortgagee will not be deemed to have assumed any of Landlord's obligations under
this Lease solely as a result of the assignment. A mortgagee to whom this Lease
has been assigned will be deemed to have assumed such obligations only if (i) by
the terms of the assignment the mortgagee specifically elects to assume the
obligations, or (ii) the mortgagee has (a) foreclosed its mortgage, (b) accepted
a deed in substitution of foreclosure, or (c) taken possession of the Premises.
Even if the mortgagee assumes the obligations of Landlord, the mortgagee will be
liable for breaches of any of Landlord's obligations only to the extent the
breaches occur during the period of ownership by the mortgagee after foreclosure
(or any conveyance by a deed in substitution of foreclosure) or after entry, and
the mortgagee will have no liability for any act or omission or for any
obligations incurred by any prior Landlord, including liability with respect to
any Security Deposit except to the extent actually received by such mortgagee.
ARTICLE 20
Defaults; Events of Default
---------------------------
Section 20.01 Defaults. The following will (i) if any requirement for
--------
notice or lapse of time or both has not been met, constitute Defaults, and (ii)
if there are no such requirements or if such requirements have been met,
constitute Events of Default:
(a) The failure of Tenant to pay Rent when due, and the continuation
of such failure for a period of ten (10) days after notice from Landlord
specifying the failure;
(b) The failure of Tenant to perform any of its obligations under
this Lease, other than its obligation to pay Rent, and the continuation of
such failure for a period of twenty (20) days after notice from Landlord
specifying in reasonable detail the nature of such failure;
(c) The occurrence with respect to Tenant or any Guarantor of one or
more of the following events: the death, dissolution, termination of
existence (other than by merger or consolidation), insolvency, appointment
of a receiver for all or substantially all of its property, the making of a
fraudulent conveyance or the execution of an assignment or trust mortgage
for the benefit of creditors by it, or the filing of a petition of
bankruptcy or the commencement of any proceedings by or against it under a
bankruptcy, insolvency or other law relating to the relief or the
adjustment of indebtedness, rehabilitation or reorganization of debtors;
provided that if such petition or commencement is involuntarily made
against it and is dismissed within sixty (60) days of the date of such
filing or commencement, such events will not constitute an Event of
Default; and
26
(d) The issuance of any execution or attachment against Tenant or any
other occupant of the Premises as a result of which the Premises are taken
or occupied by a Person other than Tenant.
Section 20.02 Tenant's Best Efforts. If the Default of which Landlord
---------------------
gives notice is of such a nature that it cannot be cured within twenty (20)
days, then the Default will not be deemed to continue so long as Tenant, after
receiving notice of the Default, begins to cure the Default as soon as
reasonably possible and continues to take all steps necessary to complete the
curing of the Default within a period of time which, under all prevailing
circumstances, is reasonable. No Default will be deemed to continue so long as
Tenant is acting to cure the Default in good faith or is delayed in or prevented
from curing the Default by reason of Unavoidable Delays.
Section 20.03 Elimination of Default. If any Default is cured as provided
----------------------
in this Lease, the Default will be deemed never to have occurred and Tenant's
rights under this Lease will continue unaffected by the Default.
ARTICLE 21
Landlord's Remedies; Damages on Default
---------------------------------------
Section 21.01 Landlord's Remedies. Landlord may, at its option:
-------------------
(a) Whenever an Event of Default exists, give Tenant a notice
terminating this Lease on a date specified in the notice, which date will
be not less than three (3) Business Days after the date of receipt by
Tenant of the notice. On the date specified in the notice, this Lease and
all rights of Tenant under this Lease will end without further notice or
lapse of time, but Tenant will continue to be liable to Landlord as
provided in this Article 21.
(b) If an Event of Default results from Tenant's failure to pay
Tenant's Cost as required by Section 7.01 and the Work Letter, in addition
to or in substitution of the other remedies available to Landlord, refuse
Tenant access to the Premises. In such event the Term Commencement Date
will be the earlier of (i) the date determined under Section 7.04 or (ii)
the Substantial Completion Date.
(c) If an Event of Default results from Tenant's failure to pay a
charge for Additional Services, without further notice to Tenant, discontinue
any or all Additional Services.
Section 21.02 Possession. Upon any termination of this Lease as the
----------
result of an Event of Default, Tenant agrees to leave the Premises peacefully
and surrender possession to Landlord as provided in Section 9.08. Landlord may,
at any time after any termination of this Lease and without further notice,
enter the Premises and recover possession by summary proceedings or any other
manner permitted by law, and may remove Tenant and all other Persons and
property from the Premises and may hold the Premises and the right to receive
all rental income from the Premises.
27
Section 21.03 Right to Relet. At any time after termination of this Lease
--------------
as a result of an Event of Default, Landlord may relet all or any part of the
Premises in the name of Landlord or otherwise, for such term (which may be
greater or less than the period which would otherwise have constituted the
balance of the Lease Term) and on such conditions (which may include concessions
or free rent) as Landlord, in its reasonable discretion, may determine. Landlord
agrees to use reasonable efforts but will not be liable for failure to relet the
Premises or for failure to collect any rent due upon any such reletting, and
Landlord will not be obligated to show the Premises in preference to other space
available in the Building.
Section 21.04 Survival of Covenants, Etc. If this Lease is terminated as
--------------------------
provided in Section 21.01:
(a) The termination will not relieve Tenant of its obligations under
this Lease which obligations will survive the termination. Tenant agrees to
indemnify Landlord against all claims, losses and expenses arising out of
the termination.
(b) At the time of the termination, Tenant agrees to pay to Landlord
the Rent up to the date of termination. Tenant also agrees to pay to
Landlord, on demand, as liquidated damages for Tenant's Default, the
difference between
(1) the total Rent that would have been payable under this Lease by
Tenant from the date of the termination until the Stated Expiration Date,
less
----
(2) the fair and reasonable rental value of the Premises for the same
period reduced by Landlord's reasonable estimate of expenses to be incurred
in connection with reletting the Premises, including, without limitation,
all repossession costs, brokerage commissions, legal expenses, reasonable
attorneys' fees, alteration costs, and expenses of preparation for such
reletting.
(c) If all or any part of the Premises are relet by Landlord for any
portion of the unexpired Lease Term, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the amount of rent
reserved upon the reletting will be, prima facie, the fair and reasonable
rental value for the part or the whole of the Premises relet during the
term of the reletting.
(d) Nothing contained in this Section 21.04 will limit or prejudice
the right of Landlord to prove and obtain as liquidated damages by reason
of the termination, an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved, whether or not such amount is
greater, equal to, or less than the amount of the difference referred to in
clause (b) above.
Section 21.05 Right to Equitable Relief. If a Default occurs, Landlord
-------------------------
will be entitled to enjoin the Default and may invoke any remedy allowed at law
or in equity or by statute or otherwise as though re-entry, summary proceedings
and other remedies were not provided for in this Lease.
28
Section 21.06 Right to Self Help; Interest On Overdue Rent. If an Event of
--------------------------------------------
Default occurs, Landlord has the right, but not the obligation, to enter the
Premises and to perform any obligation of Tenant under this Lease
notwithstanding the fact that no specific provision for such substituted
performance by Landlord is made in this Lease. In performing such obligation,
Landlord may make any payment of money or perform any other act. The total of
(i) all sums paid by Landlord (ii) interest (at the rate of 1 1/2% per month or
the highest rate permitted by law, whichever is less) on such sums plus all Rent
not paid when due and (iii) all expenses in connection with the performance of
the obligation by Landlord, will be deemed to be Rent under this Lease and
payable to Landlord on demand. Landlord may exercise the foregoing rights
without waiving any other of its rights or releasing Tenant from any of its
obligations under this Lease.
ARTICLE 22
Notices
-------
Section 22.01 Notices and Communications. All notices, demands, requests
--------------------------
and other communications provided for or permitted under this Lease must be in
writing, either delivered by hand or sent by first-class mail, postage prepaid,
to the following addresses:
(a) if to Landlord, at the address stated in Section 1.01 (or at such
other address as Landlord designates in writing to Tenant), with a copy to such
Persons as Landlord designates in writing to Tenant, or
(b) if to Tenant, at the address stated in Section 1.01 (or at such
other address as Tenant designates in writing to Landlord), with a copy to such
Persons as Tenant designates in writing to Landlord.
Any communication provided for in this Lease will become effective only
upon receipt by the Person to whom it is given, unless mailed by first-class,
registered or certified mail, in which case it will be deemed to be received on
(i) the third Business Day after being mailed or (ii) the day of its receipt, if
a Business Day, or the next succeeding Business Day, whichever of (i) or (ii) is
the earlier.
ARTICLE 23
Waivers
-------
Section 23.01 No Waivers. Failure of Landlord or Tenant to complain of any
----------
act or omission on the part of the other no matter how long the act or omission
may continue, will not be deemed to be a waiver by either Landlord or Tenant of
any of its rights under this Lease. No waiver by Landlord or Tenant at any time,
expressed or implied, of the breach of any provision of this Lease will be
deemed a waiver of a breach of any other provision of this Lease or a consent to
any subsequent breach of the same or any other provision. No acceptance by
Landlord of any partial payment will constitute an accord or satisfaction but
will only be deemed a partial payment on account. None of Tenant's
29
obligations under this Lease and no Default or Event of Default may be waived or
modified except in writing by Landlord.
ARTICLE 24
Security Deposit
----------------
Section 24.01 Security Deposit. Tenant has deposited with Landlord the
----------------
Security Deposit in the amount, if any, stated in Section 1.01. Landlord will
hold the Security Deposit as security for the payment or performance by Tenant
of its obligations under this Lease and not as a prepayment of Rent. Landlord
may commingle the Security Deposit with other funds of Landlord. Landlord will
not be liable to Tenant for the payment of interest. Landlord may expend such
amounts from the Security Deposit as may be necessary to cure any Default or
Event of Default and, in such case, Tenant agrees to pay to Landlord the amount
expended, on demand. Landlord may assign the Security Deposit to any subsequent
owner of the Building and thereafter Landlord will have no liability to Tenant
with respect to the Security Deposit. As soon as reasonably practicable after
the Lease Termination Date, Landlord agrees (i) to inspect the Premises, (ii) to
make such payments from the Security Deposit as may be required to cure any
Default or Event of Default and (iii) if no Default or Event of Default exists,
pay the balance of the Security Deposit to Tenant.
ARTICLE 25
General Provisions
------------------
Section 25.01 Unavoidable Delays. If Landlord or Tenant is delayed,
------------------
hindered in or prevented from the performance of any act required under this
Lease by reason of Unavoidable Delays, then performance of the act will be
excused for the period of the delay and the period for the performance of the
act will be extended for a period equivalent to the period of the delay.
Section 25.02 Estoppel Certificates. Tenant agrees to deliver to Landlord
---------------------
within five (5) Business Days after the Term Commencement Date an estoppel
certificate substantially in the form of Exhibit D. Within five (5) Business
Days after receipt of a request from Landlord, Tenant agrees to deliver to any
prospective purchaser, mortgagee or other Person specified in the request an
estoppel certificate substantially in the form of Exhibit D or in such other
form as the purchaser, mortgagee or other Person may reasonably prescribe. Each
estoppel certificate will be (i) signed by a duly authorized representative of
Tenant, (ii) delivered without charge to the party requesting it and (iii)
binding as to its contents on Tenant.
Section 25.03 Right to Relocate. Landlord may, at its option, upon not
-----------------
less than six (6) months prior notice to Tenant, relocate Tenant (effective as
of the date specified in the notice) to other space in the Building or in
another building in the Park having a rentable area approximately the same as
the Rentable Area of the Premises. Landlord agrees to place the other space in
substantially the same condition as the Premises are
30
then in and to pay all costs associated with the move. If Tenant is relocated
under this provision (i) the other space will be substituted for the Premises
under this Lease (ii) the terms and provisions of this Lease will remain in full
force and effect and (iii) Tenant agrees (a) to relocate as requested by
Landlord and (b) to execute all documents (including but not limited to a
termination or amendment of this Lease with respect to the Premises) as Landlord
may reasonably request.
Section 25.04 Holding Over. If Tenant occupies the Premises after the
------------
Lease Termination Date without having entered into a new lease of the Premises
with Landlord, Tenant will be a tenant-at-sufferance only, subject to all of the
terms and provisions of this Lease at twice the then effective Basic Rent. Such
a holding over, even if with the consent of Landlord, will not constitute an
extension or renewal of this Lease.
Section 25.05 Governing Law. This Lease and the performance of its
-------------
provisions will be governed and construed under the laws of the Commonwealth of
Massachusetts.
Section 25.06 Partial Invalidity. If any provision of this Lease or its
------------------
application to any Person or circumstance is held to be invalid or
unenforceable, the remainder of this Lease, or the application of the provision
to Persons or circumstances other than those as to which it is held invalid or
unenforceable, will not be affected, and each provision of this Lease will be
enforced to the fullest extent permitted by law.
Section 25.07 Notice of Lease. The parties will at any time at the request
---------------
of either one, promptly execute duplicate originals of a statutory notice of
lease, in recordable form, setting forth a description of the Premises, the
Lease Term and any other terms of this Lease, excepting the rental provisions,
as may be required by law or as either party may request.
Section 25.08 Interpretation. The section headings used in this Lease are
--------------
for reference and convenience only, and do not enter into the interpretation of
this Lease. This Lease may be signed in several counterparts, each of which is
an original, but all of which constitute a single instrument. The term
"Landlord" means only the owner at the time of the Building. Upon any sale of
the Building or assignment (other than as collateral security for an obligation)
of the interest of Landlord in this Lease, Landlord will be relieved of all
liability under this Lease and its successor in interest and/or assign will be
deemed to be Landlord so long as it owns the Building. The liability of Landlord
under this Lease is limited to Landlord's interest in the Building.
Section 25.09 Consents. Except for the consents of Landlord required under
--------
Section 7.06 and Article 13, consents or approvals required or requested of
either Landlord or Tenant shall not be unreasonably withheld or delayed.
Section 25.10 Entire Agreement; Changes. All prior agreements between the
-------------------------
parties are merged within this Lease, which alone fully states the entire
understanding and agreement of the parties. This lease may not be changed or
terminated orally or in any manner other than by an agreement in writing and
signed by the party against whom enforcement of the change or termination is
sought.
31
Section 25.11 Binding Effect. The provisions of this Lease are binding on
--------------
and inure to the benefit of Landlord, its successors and assigns, and Tenant,
its successors and assigns and any Person claiming under Tenant.
Section 25.12 Time of the Essence. Any provision of law or equity to the
-------------------
contrary notwithstanding, it is agreed that time is of the essence of this
Lease.
Section 25.13 Table of Contents. The table of contents preceding this
-----------------
lease but under the same cover is for the purpose of convenience and reference
only and is not to be deemed or construed in any way as part of this lease.
32
EXECUTED as a sealed instrument as of the Date of Lease specified in
Section 1.01.
LANDLORD:
--------
WORCESTER BUSINESS DEVELOPMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
▇▇▇▇ ▇. ▇▇▇▇
Chairman
TENANT:
------
PHYTERA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer
33
EXHIBIT A
LANDLORD'S SERVICES
-------------------
I. CLEANING
A. General
1. All cleaning work will be performed during non-business hours,
Monday through Friday, unless otherwise necessary for stripping, waxing,
etc.
2. Abnormal waste removal (e.g., computer installation paper, bulk
packaging, wood or cardboard crates, refuse from cafeteria operation, etc.)
will be Tenant's responsibility.
B. Daily Operations (on Business days only)
1. Tenant Areas
a. Empty and clean all waste receptacles; wash receptacles as
necessary.
b. Vacuum all rugs and carpeted areas.
c. Empty, damp-wipe and dry all ashtrays.
2. Lavatories
a. Sweep and wash floors with disinfectant.
b. Wash both sides of toilet seats with disinfectant.
c. Wash all mirrors, basins, bowls, urinals.
d. Spot clean toilet partitions.
e. Empty and disinfect sanitary napkin disposal receptacles.
f. Refill toilet tissue, towel, soap, and sanitary napkin
dispensers.
3. Public Common Areas
a. Wipe down entrance doors and clean glass (interior and
exterior).
b. Vacuum elevator carpets and wipe down doors and walls.
c. Clean water coolers.
C. Operations as Needed (but not less than every other day)
1. Tenant and Public Common Areas
a. Buff all resilient tile floor areas.
D. Weekly Operations
1. Tenant Areas, Lavatories, Public Common Areas
a. Hand-dust and wipe clean all horizontal surfaces within
normal reach with treated cloths (including furniture, office
equipment, windowsills, venetian blinds, door ledges, chair
rails, baseboards, etc.).
b. Sweep all stairways.
E. Monthly Operations
1. Tenant and Public Common Areas
a. Thoroughly vacuum seat cushions on chairs, sofas, etc.
b. Vacuum and dust grillwork.
2. Lavatories
a. Wash down interior walls and toilet partitions.
F. As Required and Weather Permitting
1. Entire Building
a. Clean inside of all windows.
b. Clean outside of all windows.
G. Yearly
1. Tenant and Common Areas
a. Strip and wax all resilient tile floor areas.
II. HEATING, VENTILATING, AND AIR CONDITIONING
1. Heating, ventilating, and air conditioning ("IWACII) as required
to provide reasonably comfortable temperatures for normal occupancy at all
times.
2. Maintenance of any additional or special air conditioning
equipment and the associated operating cost will be at Tenant's expense.
III. WATER AND WASTE
Hot water for lavatory purposes and cold water for drinking, lavatory and
toilet purposes. Liquid laboratory and sanitary waste disposal and
maintenance of related plumbing systems.
IV. ELEVATORS
Elevators for the use of all tenants and the general public for access to
and from all floors of the Building. Programming of elevators (including,
but not limited to, service elevators) will be as Landlord, from time to
time, determines best for the Building as a whole.
V. RELAMPING OF LIGHT FIXTURES
Tenant will reimburse Landlord for the cost of replacement lamps, ballasts
and starters within the Premises.
VI. CAFETERIA AND VENDING INSTALLATIONS
1. Any space to be used primarily for lunchroom or cafeteria
operation within the Premises will be Tenant's responsibility to keep
clean and sanitary, it being understood that Landlord's approval of such
use must be first obtained in writing.
2. Vending machines or refreshment service installations by Tenant
must be approved by Landlord in writing and will be restricted to use by
employees and business invitees. All cleaning necessitated by such
installations shall be at Tenant's expense.
VII. STRUCTURAL AND EXTERIOR MAINTENANCE
Landlord will maintain the Building (excluding the Premises and other
tenant areas but including structural components, roof, exterior and
foundation, elevators, HVAC, pipes, wires and other building systems,
common areas, parking areas, sidewalks and access areas, etc.) in good
condition and working order. Landlord will remove snow and maintain
landscaped areas of the Land as necessary.
VIII. SECURITY
Landlord will control access to the Building during non-business hours
through use of a card access system or equivalent.
EXHIBIT B
LEASE PLAN
----------
1
EXHIBIT C
WORK LETTER
-----------
This Work Letter is attached to and incorporated by reference into a Lease
(the "Lease") of the Premises in the Building known as Four Biotech Park between
Worcester Business Development Corporation ("Landlord") and Phytera, Inc.
("Tenant"). Terms in this Work Letter not otherwise defined have the same
meanings as in the Lease.
1. The provisions of Sections 7.01, 7.02, 7.03, 7.04, 7.05 and 7.06 of
the Lease are made part of this Work Letter.
2. In preparing the Premises for occupancy by Tenant, Landlord will
provide the following work ("Landlord's Work"): the shell space
including interior face of exterior wall taped and sanded; sprinkler
mains including branches and related work; HVAC system, up to main
distribution points; control work as indicated on base building
drawings, electrical power up to and including distribution panels as
shown on base building drawings. in the Common Areas, Landlord's Work
includes entrances, main corridor, elevators and lavatory facilities.
3. At least ten (10) days before the Design Start Date, Landlord will
give Tenant a list of information required by Landlord's architect to
prepare a schematic space plan of the Premises ("Space Plan"). Tenant
agrees to meet with Landlord and its architect on or before the Design
Start Date and deliver all information necessary to prepare the Space
Plan.
4. Within fifteen (15) days after the Design Start Date, or the date on
which Tenant delivers the necessary information, if later, Landlord
will deliver to Tenant a copy of the Space Plan and an estimate of
Tenant's Cost for the work shown on the Space Plan. Within seven (7)
days after receipt of the Space Plan and estimate, Tenant will confirm
to Landlord that they are approved or give Landlord a detailed
explanation of why they are unacceptable. Landlord and Tenant agree to
repeat the procedure outlined in this paragraph 4 until Tenant
approves both the Space Plan and the estimate of Tenant's Cost.
5. Within thirty (30) days after approval by Tenant of the Space Plan and
estimate of Tenant's Cost, Landlord will deliver to Tenant the Working
Drawings prepared by Landlord's architect. The cost of preparing the
Working Drawings and any subsequent changes requested by Tenant will
be included in Tenant's Cost.
6. Within seven (7) days after receipt by Tenant of the Working Drawings,
Tenant will notify Landlord either (i) that the Working Drawings
correctly depict the proper layout and design of all Tenant Fit-up
desired by Tenant and Tenant approves the Working Drawings, or (ii)
that the Working Drawings vary in design from the approved Space Plat,
in which
1
case Landlord will correct the Working Drawings, or (iii) that Tenant
wishes to modify the Working Drawings, in which case Tenant will
include with the notification to Landlord a written list of
modifications to the Working Drawings.
7. Promptly upon receipt of Tenant's approval of the Working Drawings,
Landlord agrees to obtain from a qualified contractor a guaranteed
maximum price to construct Tenant Fit-up as shown in the Working
Drawings, and to submit to Tenant the final Tenant's Cost together
with a schedule for completion of the work. If Tenant's Cost, as
finally determined, does not exceed Landlord's estimate by more than
ten percent (10k), Tenant agrees to accept the final determination and
authorizes Landlord to proceed with construction of Tenant Fit-up. If
Tenant's Cost exceeds Landlord's estimate by more than ten percent
(10k), the process outlined in paragraph 6 above will be repeated
until Tenant approves Tenant's Cost.
8. If Tenant's Cost exceeds the amount of any allowance agreed to by
Landlord, within seven (7) days after the final determination of
Tenant's Cost, Tenant agrees (i) to deposit an amount equal to that
excess in an escrow account which provides for the payment of Tenant's
Cost on terms satisfactory to Landlord, or at Landlord's option, (ii)
to make other arrangements acceptable to Landlord for the payment of
the excess. Landlord will be under no obligation to begin construction
of Tenant Fit-up until Tenant has complied with the provisions of this
paragraph.
9. Tenant may request changes in Tenant Fit-up after approval of the
Working Drawings and Tenant's Cost Changes to the Working Drawings and
the work made by Tenant will be priced at the cost of (i) making such
changes to the Working Drawings and (ii) the cost of the work shown
thereon (including any contractor's overhead profit and general
conditions). Tenant agrees to pay the cost of all changes made by it.
10. Landlord may rely on Tenant's representative with respect to all
matters which pertain to this Work Letter, Tenant having authorized
Tenant's representative to make decisions binding upon Tenant with
respect to such matters.
11. If Landlord exercises its right to terminate this Lease because of
Tenant's failure to perform any of its obligations, including its
obligations under this Work Letter, and if the termination occurs
before the Term Commencement Date, Tenant agrees to pay Landlord, as
Additional Rent, (i) an amount equal to the sum of all expenses
incurred by Landlord for architectural, engineering, consulting, legal
and other professional services relating to the Premises and this
Lease, plus (ii) Basic Rent for the period from the date Tenant
accepted Landlord's letter of intent to lease the Premises through the
Lease Termination Date.
2
EXHIBIT D
ESTOPPEL CERTIFICATE
--------------------
, 19
Gentlemen:
Reference is made to the Lease dated , 19 , from Worcester Business
Development Corporation, as Landlord to Phytera, Inc., as Tenant with respect to
the Premises in the Building known as Four Biotech Park (the "Lease"). Terms
used in this Certificate which are defined in or by reference to the Lease have
the same meanings in this Certificate as in the Lease.
The undersigned hereby ratifies the Lease and certifies that:
1. The Term Commencement Date is .
2. The Stated Expiration Date is .
3. The Premises are presently occupied by .
4. Basic Rent is currently payable at the rate of $ per year.
5. Basic Rent has been paid through , 19 .
6. Additional Rent for Taxes and Operating Expenses has been paid through
, 19 .
7. The Lease is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (except by agreement(s) dated
___________) and represents the entire agreement between Landlord and
Tenant.
8. No Default or Event of Default has been asserted by either party to the
Lease and, to the knowledge of the undersigned, no Default or Event of
Default exists on the part of either party to the Lease (except ).
9. On this date, to the knowledge of the undersigned, there are no existing
defenses or offsets which Tenant has against the enforcement of the Lease by
the Landlord (except ).
10. No Rent has been paid in advance of its due date under the Lease.
Very truly yours,
_______________________
By:____________________(Title)
1
EXHIBIT E
RENT RIDER
----------
This Rent Rider is attached to and incorporated by reference into a Lease
(the "Lease") of the Premises in the Building known as Four Biotech Park between
Worcester Business Development Corporation ("Landlord") and Phytera, Inc.
("Tenant"). Terms not otherwise defined have the same meanings in this Rent
Rider as in the Lease.
1. Definitions. Each term set forth in this paragraph 1 has the meaning
-------------
stated immediately after it.
C.P.I. "Consumer Price Index - All Urban Consumers (CPI-U)-U.S. City
-------
Average--All Items (1982-84 = 100)" as published by the U.S. Department of
Labor.
Market Rental Value. The rent per square foot per year which a Person
-------------------
not affiliated with either Landlord or Tenant would pay as Basic Rent as of
the time of determination (i) for the same number of square feet of
Rentable Area as the Premises, located in the Building (or a comparable
building comparably located), (ii) assuming similar terms and concessions,
if any, to those prevailing at the time, (iii) for a term of years equal to
that for which the determination is being made and (iv) for space which is
finished in a manner similar to that of the Premises. For purposes of
determining market Rent, space in the Park leased to tax-exempt
organizations or tenants sponsored by Commonwealth BioVentures, Inc. will
not be considered comparable. All Additional Rent, such as Taxes and
Operating Expenses, will be in addition to the rent per square foot so
determined.
2. Adjustment of Basic Rent. Basic Rent for each Lease Year of each
------------------------
successive Fixed Rental Period, if any, after the first Fixed Rental Period will
be the greatest of
(i) an amount determined by (A) multiplying eighty percent (80%) of
Basic Rent for the final Lease Year of the most recent Fixed
Rental Period by a fraction, the numerator of which is the
C.P.I. for the last month or other reporting period of the most
recent Fixed Rental Period and the denominator of which is the
C.P.I. for the last month or other reporting period immediately
preceding the Term Commencement Date, and (B) adding the result
to the remaining twenty percent (20%;) of such Basic Rent; or
(ii) an amount determined by increasing Basic Rent as stated in
Article 1.01 by three percent (3%) per year, compounded annually
for the period beginning on the Term Commencement Date and
ending on the last day of the most recent Fixed Rental Period;
or
(iii) the Market Rental Value of the Premises determined as provided
in paragraph 4 below at the end of each Fixed Rental Period.
1
Basic Rent determined as provided in this paragraph 2 will in no event be
less than Basic Rent for each Lease Year of the preceding Fixed Rental Period
and will be exclusive of (and in addition to) amounts due for Taxes and
operating Expenses.
3. Change in C.P.I.; Substituted Index. If the United States Department
-----------------------------------
of Labor changes the base reference period for determining the C.P.I., the
adjustment of Basic Rent will continue to be calculated with 1982-84 as the base
reference period using such figures or conversion formulas as the United States
Department of Labor may publish at the time the base reference period is
changed. If publication of the C.P.I. is discontinued, Landlord and Tenant
agrees to accept comparable statistics on the cost of living as they are
computed and published by a Governmental Authority or if such statistics are not
published by a Governmental Authority, comparable statistics published by a
responsible financial periodical of recognized authority selected by Landlord.
If comparable statistics are used in place of the C.P.I., Landlord will make
such reasonable revisions in the method of computation of Basic Rent as the
circumstances may require to carry out the intent of this Rent Rider and will
give Tenant notice of the revisions before using them.
4. Market Rental Value; Arbitration.
--------------------------------
(a) At least ninety (90) (but not earlier than one hundred twenty (120)
days before the end of each Fixed Rental Period, Landlord will notify Tenant of
Landlord's estimate of the Market Rental Value of the Premises. Landlord and
Tenant will attempt to negotiate and determine by agreement the Market Rental
Value of the Premises. If a dispute arises between Landlord and Tenant with
respect to the determination of Market Rental Value or if Landlord and Tenant
have not agreed on such amount by the date which is sixty (60) days before the
end of the then current Fixed Rental Period, such dispute will be determined
exclusively by the arbitrators appointed under this paragraph 4.
(b) If Market Rental Value is to be determined by the arbitrators, either
Landlord or Tenant may give the other party a notice appointing an arbitrator
and demanding arbitration under this paragraph. Within fifteen (15) days after
receipt of such notice, the other party will, by notice to the original party,
appoint a second arbitrator on its behalf. If within thirty (30) days after the
appointment of the second arbitrator, the two arbitrators have not agreed upon
the Market Rental Value, the two arbitrators will appoint a third and give
notice of the appointment to each party. Each arbitrator must be a
disinterested person of recognized competence in the field of commercial real
estate leasing. The three arbitrators will, as promptly as possible, determine
the Market Rental value, provided, however, that
(i) if the second arbitrator is not appointed in the manner
prescribed, the first arbitrator may determine the matter
alone; and
(ii) if the two arbitrators appointed by the parties are
unable to agree, within thirty (30) days after the
2
appointment of the second arbitrator, upon the appointment
of a third arbitrator, they must give notice of such failure
to agree to the parties, and, if the parties fail to agree
upon the selection of such third arbitrator within fifteen
(15) days after notice from the arbitrators, then the third
arbitrator will be the person appointed by the President of
the Greater Worcester Board of Realtors, Inc., or if within
fifteen (15) days the President fails to appoint an
arbitrator, then within ten (10) days thereafter, either of
the parties upon notice to the other party may request such
appointment by a judge of the Superior Court, Worcester
County, Commonwealth of Massachusetts, or of any other court
having jurisdiction and exercising functions similar to
those now exercised by the Superior Court.
(c) Arbitration proceedings will be conducted in Worcester in accordance
with the rules of the American Arbitration Association then in effect, but only
so far as consistent with the provisions of this paragraph 4. The arbitrators
will be sworn to determine the questions at issue faithfully and fairly. They
will afford each party a hearing and the right to submit evidence with the
privilege of cross-examination on the questions at issue and will, with all
possible speed, make their determination in writing and give the parties written
notice of their determination. If the first two arbitrators fail to decide, the
third arbitrator shall make an independent determination of the Market Rental
Value. The determination of each of the three arbitrators shall be submitted in
writing to Landlord and Tenant. The Market Rental Value shall be the average of
the two closest determinations submitted by the Arbitrators and shall be final
and binding on the parties.
(d) Landlord and Tenant will each be solely responsible for the payment of
all fees and expenses of the arbitrator it appointed, and will share equally the
payment of all fees and expenses of the American Arbitration Association (if
any) and of the third arbitrator.
3
MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK
SPACE LEASE
to
PHYTERA, INC.
RIDER AND ADDENDUM
------------------
The Space Lease from Worcester Business Development Corporation to Phytera,
Inc. to which this Rider and Addendum is attached is modified and amended by
incorporation of the following additional provisions:
1. Rentable Area of the Premises Upon completion of Landlord's Work, the
-----------------------------
Rentable Area of the Premises will be determined by Landlord by actual
measurement and application of Landlord's standard method for determining
rentable area of buildings in the Park. Landlord agrees to give Tenant notice of
the determination of Rentable Area of the Premises together with a computation
of the resulting adjustments in Basic Rent, Tenant's Share and Initial Monthly
Payment.
2. Relocation of Building Service Fixtures. Landlord agrees that, except
---------------------------------------
in the case of an emergency, it will exercise its right reserved in Section 2.01
to relocate Building service fixtures only after reasonable notice to Tenant and
that it will repair any damage to the Premises resulting from the relocation
work.
3. Tenant's Allowance and Payment of Tenant's Cost. Landlord agrees to
-----------------------------------------------
pay up to $1,540,000 of Tenant's Cost in preparing the Premises for Tenant's
occupancy, which amount is referred to in this Lease as "Tenant's Allowance."
Therefore, notwithstanding the provisions of Section 7.01 and the Work Letter to
the contrary, Tenant will not be obligated to pay Tenant's Cost for preparing
the Premises for Tenant's occupancy, except to the extent that Tenant's Cost
exceeds Tenant's Allowance as a result of changes to the Working Drawings or
additional improvements requested by Tenant after the final determination of
Tenant's Cost as provided in the Work Letter.
4. Improvements by Tenant. Notwithstanding the provisions of Section 7.06
----------------------
to the contrary, Tenant may make Improvements during the Term without obtaining
Landlord's approval of the plans and specifications and the contractor, provided
that (i) the cost of the Improvements made during any one Lease Year may not
exceed $10,000 and (ii) Tenant will comply with all other provisions of Section
7.06.
5. Tenant's Self-Help. Notwithstanding any limitations contained in
------------------
Section 8.04, if Landlord fails to perform any of its obligations as provided in
this Lease, and the failure continues for a period of thirty (30) days after
notice from Tenant, Tenant may perform those obligations specified in the
notice, and Landlord agrees to reimburse Tenant for any costs incurred by Tenant
in performing those obligations.
6. Removal of Tenant's Equipment on Redelivery. Any equipment installed
-------------------------------------------
in the Building by Tenant at its expense which does not constitute an
Improvement, may be removed by Tenant on or before the Lease Termination Date.
1
7. Landlord's Access. For purposes of Section 12-01 reasonable, notice is
-----------------
considered to be at least twenty-four (24) hours before entry.
8. Assignment and Subletting. For purposes of Section 13.01, a Person is
-------------------------
affiliated with Tenant if that Person is (i) Tenant's parent corporation or (ii)
a wholly owned subsidiary of Tenant or Tenant's parent corporation, or (iii) an
Affiliate. The term "Affiliate" means any corporation which, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with Tenant. The term "control" means the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the controlled corporation. The term
"Affiliate" also includes any Person into which Tenant merges or with whom
Tenant consolidates or to whom Tenant sees all or substantially all of its
assets, provided that Tenant provides Landlord with evidence reasonably
satisfactory to Landlord that such Person is financially responsible and capable
of performing Tenant's obligations under this Lease.
9. Alpha-Beta Sublease and Guaranty. Notwithstanding the provisions of
--------------------------------
Section 13.01, Tenant may sublet Premises B to Alpha-Beta Technology, Inc.
("Alpha - Beta 11) upon terms mutually acceptable to Tenant and Alpha-Beta and
without complying with the provisions of Section 13.02, provided that before
entering into any sublease with Alpha-Beta, Tenant agrees to cause Alpha-Beta to
execute and deliver a guaranty of this Lease in the form of Exhibit R-A attached
to this Rider and Addendum which guaranty will relate to Tenant's obligations
with respect to Premises B and will remain in effect so long as the sublease
exists or, if later, so long as Alpha-Beta occupies Premises B.
2
EXHIBIT R-A
GUARANTY OF LEASE
-----------------
IN CONSIDERATION of One Dollar ($1.00) and other valuable consideration
paid to the undersigned ("Guarantor") by WORCESTER BUSINESS DEVELOPMENT
CORPORATION, a Massachusetts nonprofit corporation having a place of business at
One Innovation Drive, Worcester, Massachusetts ("Landlord"), the receipt and
sufficiency of which are acknowledged, the Guarantor unconditionally guaranties
to Landlord (a) payment when due of the Rent, as that term is defined in the
lease dated October 1, 1993 (the "Lease") of the premises in the building known
as "Four Biotech Park" having the address of ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ from Landlord to PHYTERA, INC. ("Tenant") and (b) the
performance of all obligations to be performed or observed by Tenant under the
Lease, provided that (1) this Guaranty is limited to the payment of Rent and the
performance of Tenant's obligation under the Lease only insofar as they relate
to Premises B described in the Lease and (2) this Guaranty will become effective
only when Guarantor enters into a sublease of Premises B or occupies any part of
Premises B, whichever is earlier, and will terminate when the sublease of
Premises B terminates or Guarantor vacates Premises B, whichever is later.
The Guarantor agrees to take or to refrain from taking any action which may
be required to assure that no Default or Event of Default (as defined in the
Lease) with respect to Premises B occurs or continues. The Guarantor waives
notice of all Defaults and Events of Default, except as specifically provided
below, and of all extensions and indulgences granted by Landlord to Tenant.
The Guarantor agrees that this is a guaranty of payment and not a guaranty
of collection, and that the liability of the Guarantor is immediate and is not
contingent on the exercise or enforcement by Landlord of whatever remedies it
has against Tenant or any other guarantor or with respect to the Premises. In
order to hold the Guarantor liable under this Guaranty, Landlord will have no
obligation to proceed against Tenant or any other guarantor, their respective
property or assets, or to resort to any collateral, the Premises or other rights
or remedies.
The liability of the Guarantor under this Guaranty is independent, absolute
and unconditional and will not be reduced or impaired by (i) the lack of
validity or enforceability of any provision of the Lease, (ii) any change of
ownership of Tenant, (iii) the bankruptcy, insolvency or reorganization of, or
similar proceedings involving, Tenant, (iv) the waiver by Landlord at any time
of any of its rights against Tenant arising out of a Default, (v) any extensions
or indulgences granted by Landlord to Tenant, (vi) the subletting, assignment or
other transfer of the Lease or any interest in the Lease by Landlord or Tenant,
(vii) the subordination of the Lease to any mortgage or ground lease, (viii) the
acceptance by Landlord of any security for or other guarantors of the
obligations under the Lease, (ix) the failure or neglect by Landlord to enforce
against Tenant, against any other, guarantor or against the Premises, any of the
obligations guarantied by the Guarantor, or (x) any other circumstance that
might constitute a defense available to, or a
1
discharge of, Tenant in respect of its obligations under the Lease or the
Guarantor in respect of this Guaranty.
Landlord has the exclusive right to determine how, when and what
application of payments and credits, if any, is to be made with respect to the
obligations guarantied by this Guaranty.
The Guarantor is fully aware of the financial condition of Tenant. The
Guarantor delivers this Guaranty based solely upon his own independent
investigation and not in reliance upon any representation or statement by
Landlord. The Guarantor is in a position to obtain, and assumes full
responsibility for obtaining, any additional information concerning the
financial condition of Tenant which the Guarantor considers material to his
obligations under this Guaranty, and the Guarantor is not relying upon Landlord
to furnish any information concerning the financial condition of Tenant.
This Guaranty is binding upon the Guarantor, his executors, administrators,
heirs and assigns, and is for the benefit of Landlord, its successors and
assigns. This Guaranty and the rights of the Guarantor and Landlord are to be
governed and construed under the laws of the Commonwealth of Massachusetts. The
Guarantor irrevocably submits to the nonexclusive jurisdiction of any
Massachusetts or Federal Court sitting in Worcester, Massachusetts, in any
proceeding for the enforcement of the obligations of the Guarantor under this
Guaranty. The Guarantor irrevocably agrees that all claims in respect of any
enforcement proceeding may be heard and determined by a Massachusetts or Federal
Court sitting in Worcester, Massachusetts. The Guarantor agrees that service of
process in any enforcement proceeding may be made by mailing a copy of the
process, certified mail, postage prepaid, addressed to the Guarantor at its
address specified below his signature, provided that service will be effective
only upon actual receipt.
If the Lease is terminated before the end of the term of the sublease to
Guarantor, Landlord agrees to give Guarantor notice of the termination together
with. a statement of all sums due under this Guaranty. Guarantor will have the
option for a period of thirty (30) days after receipt of Landlord's notice to
enter into a new lease of Premises B which lease will be (i) effective as of the
termination of the Lease, (ii) for the remainder of the term of the sublease to
Guarantor and (iii) for the same Rent and upon all of the other terms contained
in the Lease to the extent applicable to Premises B. Upon the execution of the
new lease, Guarantor agrees (a) to pay all Rent and other sums due Landlord
under the Lease with respect to Premises B, including reasonable counsel fees
and other costs incurred by Landlord in connection with the termination,
recovery of possession of Premises B and the preparation and execution of the
new lease and (b) to perform all other obligations of Tenant under the Lease as
they relate to Premises, B which are reasonably susceptible of being performed
by Guarantor. Any notice or other communication under this Guaranty will be
governed by the provisions of Section 22 of the Lease and if to Guarantor will
be delivered or sent to it at its address as indicated below or such other
address as Guarantor designates in writing to Landlord.
2
EXECUTED under seal this 1st day of October, 1993.
ALPHA-BETA TECHNOLOGY, INC.
By:________________________________
Spiros Jamas, President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMONWEALTH OF MASSACHUSETTS
Worcester, SS October 1, 1993
Then personally appeared the above-named Spiros Jamas, its president, and
acknowledged the foregoing instrument to be his free act and deed, before me.
________________________________
Notary Public
My Commission Expires:
3
PHYTERA, INC.
SECRETARY'S CERTIFICATE
I, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, hereby certify that I am the duly elected and
qualified
Secretary of Phytera, Inc., a Delaware corporation whose principal place of
business is in
Worcester, Massachusetts, and that the following vote was duly adopted by its
Board of
Directors:
VOTED: That the President and any Vice President, acting singly, is
hereby authorized to execute and deliver a lease of certain
premises at Four BioTech Park, Worcester, Massachusetts, as
described in the draft lease presented to the Board of Directors
with Worcester Business Development Corporation and having such
terms and otherwise in such form as shall be approved by the
executing officer, with his execution thereof to be conclusive
evidence of such approval.
I further certify that the foregoing vote is in full force and effect.
Dated: November 9, 1993
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
1
MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK
FOUR BIOTECH PARK
SECOND AMENDMENT TO LEASE
-------------------------
This SECOND AMENDMENT TO LEASE dated as of June 18, 1996 is between
-------
WORCESTER BUSINESS DEVELOPMENT CORPORATION ("Landlord") and PHYTERA, INC.
("Tenant") and amends the Lease dated November 1, 1993 between Landlord and
Tenant as amended by First Amendment dated March 23, 1994 (the "Lease"). The
purposes of this Second Amendment are to increase Tenant's Allowance by $34,000,
to make the appropriate adjustment to Basic Rent and to eliminate the
distinction between Premises B-1 and B-2.
1. AMENDMENT OF RIDER AND ADDENDUM. Paragraph 3 of the Rider and
-------------------------------
Addendum, as amended by the First Amendment, is amended by increasing Tenant's
Allowance from $1,540,000 to $1,574,000 and allocating the increase to the
entire Premises.
2. AMENDMENT OF SECTION 1.01. Section 1.01 of the Lease as amended by the
-------------------------
First Amendment is amended by substituting the following new definitions for the
corresponding definitions in the First Amendment:
TERM COMMENCEMENT DATE:
PREMISES A April 1, 1994
PREMISES B July 1, 1994
RENTABLE AREA OF THE PREMISES:
PREMISES A 11,993 square feet
PREMISES B 13,752 square feet
TOTAL 25,745 square feet
TENANT'S SHARE: 27.8%
BASIC RENT:
Before full expenditure of Tenant's Allowance, effective as
of the first day of each month during each Lease Year of the
first Fixed Rental Period, Basic Rent for the month will be
calculated by 1) multiplying the amount of Tenant's
Allowance previously expended by Landlord by 17%, 2)
dividing the product by the Rentable Area of the Premises
(25,745 square feet), 3) adding $9.00 to the result, 4)
multiplying the sum by the Rentable Area of the Premises and
5) dividing the product by 12.
After full expenditure of Tenant's Allowance for each Lease
Year of the first Fixed Rental Period, Basic Rent will be as
follows:
$499,285.00 per Lease Year
$ 41,607.08 Monthly Installment
3. RATIFICATION OF LEASE. This Amendment will prevail over any other
---------------------
provisions of the Lease which are inconsistent with this Amendment or the state
of facts contemplated by this Amendment. As amended by this Second Amendment,
the Lease is ratified and confirmed in all respects.
Executed as a sealed instrument as of the date first above written.
LANDLORD:
---------
WORCESTER BUSINESS DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------
▇▇▇▇ ▇. ▇▇▇▇, Chairman
TENANT:
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PHYTERA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive
Officer
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MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK
FOUR BIOTECH PARK
FIRST AMENDMENT TO LEASE
------------------------
This FIRST AMENDMENT TO LEASE dated as of March 23, 1994 is between
WORCESTER BUSINESS DEVELOPMENT CORPORATION ("Landlord") and PHYTERA, INC.
("Tenant") and amends the Lease dated November 1, 1993 between Landlord and
Tenant (the "Lease") The purpose of this First Amendment is to establish the
Term Commencement Date, to establish the actual Rentable Area of the Building
and the Premises by application of Landlord's standard method, to establish the
resulting adjustments in Tenant's Share and Initial Monthly Payment, to
subdivide the Premises into three (3) areas rather than two (2) and to clarify
the computation of Basic Rent and the allocation of Tenant's Allowance.
1. AMENDMENT OF SECTION 1.01. Section 1.01 of the Lease is amended by
-------------------------
substituting the following new definitions for the corresponding definitions in
the original Lease:
TERM COMMENCEMENT DATE:
PREMISES A April 1, 1994
PREMISES B-1 July 1, 1994) or as defined in
PREMISES B-2 July 1, 1995) Section 1.03, if different
RENTABLE AREA OF THE PREMISES:
PREMISES A 11,993 square feet
PREMISES B-1 10,415 square feet
PREMISES B-2 3,337 square feet
------
TOTAL 25,745 square feet
RENTABLE AREA OF THE BUILDING: 92,711 square feet
TENANT'S SHARE: PREMISES A 12.9%
PREMISES B-1 11.2%
PREMISES B-2 3.6%
-----
TOTAL 27.8%
LEASE TERM: Ten (10) Lease Years beginning April 1, 1994
and ending March 31, 2004
BASIC RENT: Annual Monthly Installment
------ -------------------
PREMISES A $ 230,337 $ 19,194.75
PREMISES B-1 $ 219,535 $ 18,294.58
PREMISES B-2 $43,633 * $3,636.08 *
* SEE AMENDED RIDER AND ADDENDUM - PARAGRAPH "FIXED"
FIXED RENTAL PERIOD: Each successive period of three Lease
years beginning on the Commencement Date
of Premises A. (3) Term
2. AMENDMENT OF RIDER AND ADDENDUM. Paragraph 3 of the Rider and Addendum
-------------------------------
is amended by substituting the following new paragraph 3:
3. THE PREMISES AND TENANT'S ALLOWANCE. Although the Rentable Area
-----------------------------------
of the Premises is 25,745 square feet, the Premises is subdivided
into three (3) areas called Premises A, Premises ▇-▇, and
Premises B-2. Landlord has agreed to pay up to $1,540,000 of
Tenant's Cost in preparing the Premises for Tenant's occupancy,
which amount is referred to in the Lease as "Tenant's Allowance".
Landlord and Tenant have agreed to allocate Tenant's Allowance
among the areas of the Premises as follows:
Premises A $720,000
Premises B-1 $740,000
Premises B-2 $ 80,000
Therefore, notwithstanding the provisions of Section 7.01 and the
Work Letter to the contrary, Tenant will not be obligated to pay
Tenant's Cost for preparing the Premises for Tenant's occupancy
except to the extent that Tenant's Cost for a particular Premises
exceeds Tenant's Allowance allocated to that Premises. Premises
A is currently occupied by Tenant. The preparation of Premises
B-1 for Tenant's occupancy is currently under way. Landlord will
have no obligation to begin preparation of Premises B-2 for
Tenant's occupancy until Tenant gives Landlord notice specifying
the Design Start Date with respect to that Premises. Subject to
extension as a result of delays of the type described in Section
7.04, Landlord agrees that the Substantial Completion Date with
respect to Premises B-2 will occur not more than one hundred
fifty (150) days after the Design Start Date specified by Tenant.
Irrespective of when the Premises are ready for occupancy, Tenant
agrees to begin paying Basic Rent, Operating Expenses and Taxes
according to the following schedule:
(a) On the Term Commencement Date of Premises A, Basic Rent
at the rate of $19.21 per square foot of Rentable Area of
Premises A and Operating Expenses and Taxes with respect to
Premises A;
(b) On the Term Commencement Date of Premises B-1, Basic
Rent at the rate of $21.08 per square foot of Rentable Area of
Premises B-1 and $9.00 per square foot of Rentable Area of
Premises B-2 and Operating Expenses and Taxes with respect to
both Premises B-1 and B-2; and
(c) On the Term Commencement Date of Premises B-2, Basic
Rent will increase from $9.00 to the rate of $13.08 per square
foot of Rentable Area of Premises B-2.
-2-
3. RATIFICATION OF LEASE. This Amendment will prevail over any other
---------------------
provisions of the Lease which are inconsistent with this Amendment or the state
of facts contemplated by this Amendment. As amended by this First Amendment, the
Lease is ratified and confirmed in all respects.
Executed as a sealed instrument as of the date first above written.
LANDLORD:
---------
WORCESTER BUSINESS DEVELOPMENT
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇ ▇. ▇▇▇▇, Chairman
TENANT:
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PHYTERA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
-3-