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EXHIBIT 10.3
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Second Amendment") is made as of
April , 1997, by and between ONE MEMORIAL DRIVE LIMITED PARTNERSHIP
("Landlord"), a Massachusetts limited partnership, and SAPIENT CORPORATION
("Tenant"), a Delaware corporation.
WITNESSETH:
WHEREAS, Landlord and Tenant have heretofore entered into a Lease, dated
as of March 30, 1994 (the "Original Lease"), for certain premises comprising
24,909 rentable square feet on the second floor and 20,670 rentable square feet
on the third floor (collectively, the "Original Premises") in ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "Building"); and
WHEREAS, Landlord and Tenant have heretofore amended the Original Lease by
that certain First Amendment to Lease, dated as of December 5, 1995 (the "First
Amendment to Lease") whereby Landlord and Tenant agreed to add the entire
rentable area of the fifth floor of the Building (the "Fifth Floor Space")
comprising 20,670 rentable square feet to the Original Premises, and to make
certain other modifications to the Original Lease; and
WHEREAS, Landlord and Tenant have now agreed that Tenant shall surrender
the Fifth Floor Space and, in lieu thereof, the entire rentable area of the
seventh (7th) and eighth (8th) floors of the Building, comprising 20,960
rentable square feet and 21,422 square feet respectively (collectively, the
"Expansion Premises"), shall be added to the Original Premises and that certain
other modifications to the Original Lease, as heretofore amended, shall be made
as more particularly herein set forth.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and legal sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Capitalized Terms: All capitalized terms not otherwise modified or
defined herein shall have the same meanings as are ascribed to them in the
Original Lease. For purposes of this Second Amendment, the Original Lease, as
amended by the First Amendment to Lease and this Second Amendment, shall be
hereinafter referred to as the "Amended Lease".
2. Delivery of Expansion Premises. On the date that is the later of: (i)
November 1, 1997 or (ii) the date that Landlord delivers possession of the
Expansion Premises to Tenant (the "Expansion Premises Effective Date"), the
Expansion Premises shall be included in the Premises for all purposes of the
Amended Lease, Landlord shall have no liability to Tenant should Landlord fail
to cause the Expansion Premises Effective Date to occur by November 1, 1997,
except that Tenant shall be entitled to liquidated damages equal to one (1) day
of free rent with respect to the Expansion Premises for each day later than
November 1. 1997 the Expansion Premises Effective Date occurs, unless such delay
is due to Tenant's negligence or wrongful conduct.
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3. Surrender of the Fifth Floor Space. On the last day of the Build-out
Period defined in Section 7(d) below (the "Fifth Floor Surrender Date"), Tenant
shall surrender the Fifth Floor Space in the condition required by Section 6.1.2
of the Original Lease, upon such terms and conditions as if such date were the
last day of the Term, whereupon the Fifth Floor Space shall be deleted from the
Premises for all purposes of the Amended Lease. Notwithstanding anything to the
contrary set forth in paragraphs 7, 8, 9 and 10 of this Second Amendment, all
rental and additional rental amounts payable under the First Amendment to Lease,
allocable to the Fifth Floor Space, shall accrue and be due and payable as
contemplated therein during the period from the Expansion Premises Effective
Date until the Fifth Floor Surrender Date. Any holding over in the Fifth Floor
Space after the Fifth Floor Surrender Date shall constitute an Event of Default
under the Amended Lease, and the terms of Section 10.4 of the Original Lease
shall apply to any such holding over in the Fifth Floor Space.
4. Definition of the Premises. For all purposes of the Amended Lease, the
Premises shall (i) on and after the Expansion Premises Effective Date, include
the 42,382 rentable square feet comprising the entire rentable area of the
seventh (7th) and eighth (8th) floors of the Building and (ii) on and after the
Fifth Floor Surrender Date, exclude the 20,670 rentable square feet comprising
the entire rentable area of the fifth (5th) floor of the Building. The Original
Premises and the Expansion Premises shall hereinafter be referred to in the
aggregate as the "Combined Premises."
5. Term. The term of the Amended Lease is hereby extended to June 30,
2004. For all purposes of the Amended Lease, the term "Original Term" shall
refer to the period from the Term Commencement Date until March 31, 1999.
6. Preparation of the Expansion Premises for Occupancy. Tenant has
inspected the Expansion Premises, and the leasehold improvements which have
heretofore been made thereto, and acknowledges that the Expansion Premises shall
be delivered to Tenant in their existing "as is" condition, reasonable wear and
tear excepted but otherwise broom clean, except that any of the existing
leasehold improvements which the existing tenant of the Expansion Premises
desires to remove may be removed prior to the Expansion Premises Effective Date.
Tenant agrees that such property is acceptable in "as is" condition, subject to
such additional wear and tear as may take place. Landlord shall have no
obligation to perform any work in the Expansion Premises to prepare the same for
Tenant's occupancy, provided however, that Landlord shall make an allowance (the
"Combined Premises Tenant Improvements Allowance") available for purposes of
reimbursing Tenant for any costs and expenses incurred in making leasehold
improvements in accordance with Section 3.2 to prepare the Expansion Premises
for Tenant's initial occupancy, as well as to renovate the premises demised
under the Original Lease (collectively, the 'Combined Premises Tenant
Improvements"). The amount of the aforesaid Combined Premises Tenant Improvement
Allowance shall equal the aggregate of (i) $12 per r.s.f of the premises demised
under the Original Lease, (ii) $20 per r.s.f. of the portion of the Expansion
Premises located on the seventh (7th) floor of the Building, (iii) $23 per
r.s.f. of the portion of the Expansion Premises located on the eighth (8th)
floor of the Building and (iv) $3 per r.s.f. of the portion of the Expansion
Premises located on the seventh (7th) floor of the Building for application
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exclusively to Tenant's moving expenses from the Fifth Floor Space to the
Expansion Premises. Landlord shall reimburse Tenant for costs incurred in
constructing the Combined Premises Tenant Improvements, including, without
limitation, architectural and engineering fees, from time to time (but not more
frequently than monthly) upon Tenant's furnishing Landlord with invoices
reasonably satisfactory to Landlord. Tenant shall prepare complete working
drawings and specifications, including, but not limited to, structural,
architectural and mechanical systems, as applicable (the "Plans") which shall
govern the performance of the Combined Premises Tenant Improvements to be
performed by the Tenant and its architects, engineers and contractors. The Plans
shall conform to applicable government requirements and to sound and generally
accepted engineering practices and shall be submitted to Landlord for its
approval. Within five (5) business days after receipt of the Plans, Landlord
shall give Tenant written notice of such approval or disapproval based upon any
reasonable objections. If Landlord disapproves, Tenant shall revise the Plans
and shall resubmit them to Landlord, Landlord agreeing to approve or disapprove
in the case of such resubmission within five (5) business days of receipt of
such revised Plans. Notwithstanding anything contained in Section 3.3 of the
Original Lease, Tenant shall cause its general contractor for the Combined
Premises Tenant Improvements to carry an umbrella policy of commercial public
liability insurance, written by companies rated not less than A+ by Best's
Insurance Report, in an amount not less than $5,000,000.00 and cause all of the
subcontractors performing the Combined Premises Tenant Improvements to carry
commercial public liability insurance, written not less than A+ by Best's
Insurance Reports, in an amount not less than $2,000,000. Notwithstanding and in
limitation of the foregoing, Tenant shall not be entitled to be reimbursed more
than twenty percent (20%) of the Combined Premises Tenant Improvement Allowance
for expenses associated with the following: (i) Tenant's relocation from the
Fifth Floor Space to the Expansion Premises, (ii) engineering and architectural
fees, (iii) cabling and (iv) other soft costs related to the Combined Premises
Tenant Improvements. If Tenant does not draw down the entire Combined Premises
Tenant Allowance, Tenant shall notify Landlord in writing of same and Landlord
shall calculate and notify Tenant of the amount that Tenant may deduct from the
Annual Fixed Rent each month for the next succeeding twelve months on account of
such remaining Combined Premises Tenant Allowance, which amount shall equal the
remaining balance of the Combined Premises Tenant Allowance divided by twelve
(12).
7. Annual Fixed Rent.
(a) Commencing on the Expansion Premises Effective Date (subject to clause
(d) below) and continuing through March 31, 1999, the Annual Fixed Rent payable
with respect to the Combined Premises shall be as follows: (i) Nine Hundred
Fifty-Three Thousand Seven Hundred Ninety-One Dollars ($953.791) per annum
(Seventy-Nine Thousand Four Hundred Eighty-Two Dollars and 59/100 ($79,489.59)
per month) with respect to the Original Premises based on $20.93/r.s.f times the
rentable square footage thereof; (ii) Five Hundred Sixty-Five Thousand Nine
Hundred Twenty Dollars and 00/100 ($565,920.00) per annum (Forty-Seven Thousand
One Hundred Sixty Dollars and 00/100 ($47,160.00) per month) with respect to the
portion of the Expansion Premises located on the seventh floor, based on
$27/r.s.f. times the rentable square footage thereof; and (iii) Six Hundred
Eighty Five Thousand Five Hundred Four Dollars and 00/100 ($685,504.00) per
annum (Fifty-Seven Thousand One hundred Twenty-Five
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Dollars and 33/100 ($57,125.33) per month) with respect to the portion of the
Expansion Premises located on the eighth floor, based on $32.00/r.s.f. times the
rentable square footage thereof.
(b) Commencing on April 1, 1999 and continuing through September 30, 2002,
the Annual Fixed Rent payable with respect to the Combined Premises shall be Two
Million Eight Hundred Fourteen Thousand Seven Hundred Fifty-Two Dollars and
00/100 ($2,814,752.00) per annum (Two Hundred Thirty-Four Thousand Five Hundred
Sixty-Two Dollars and 67/100 ($234,562.67) per month) based on $32.00/r.s.f.
times the rentable square footage in the Combined Premises.
(c) Commencing on October 1, 2002 and continuing through June 30, 2004 the
Annual Fixed Rent payable with respect to the Combined Premises shall be Two
Million Nine Hundred Ninety Thousand Six Hundred Seventy-Four Dollars and 00/100
($2,990,674.00) per annum (Two Hundred Forty-Nine Thousand Two Hundred
Twenty-two Dollars and 83/100 ($249,222.83) per month) based on $34.00/r.s.f.
times the rentable square footage in the Combined Premises.
(d) Provided that Tenant is not then in default beyond any applicable cure
period, for the ninety (90) day period commencing upon the Expansion Premises
Effective Date (the "Build-out Period"), no Annual Fixed Rent payable under
clauses (ii) and (iii) of subparagraph (a) of this paragraph 6 shall accrue with
respect to the Expansion Premises.
8. Included Share of Real Estate Taxes. The definition of "Tenant's
Included Share of Real Estate Taxes" set forth in Section 1.1 of the Lease
shall be amended as follows:
(a) Commencing on the Expansion Premises Effective Date and continuing
until March 31, 1999, the definition of Tenant's Included Share of Real Estate
Taxes set forth in Section 1.1 of the Original Lease shall be supplemented by
adding the following words after the words "Additional Second Floor Space": "and
100% of the actual real estate taxes per r.s.f with respect to the Expansion
Premises during the tax fiscal year 1998 (i.e. July 1, 1997-June 30, 1998).
(b) Commencing on April 1, 1999 and continuing until the expiration of the
Term, the definition of Tenant's Included Share of Real Estate Taxes set forth
in Section 1.1 of the Original Lease, as supplemented in accordance with
subparagraph 7(a) above, shall be deleted in its entirety and the following
definition of Tenant's Included Share of Real Estate Taxes shall be inserted in
lieu thereof: "100% of the actual real estate taxes per r.s.f. of the Combined
Premises during the tax fiscal year 1998 (i.e. July 1, 1997-June 30, 1998).
9. Included Share of Operating Expenses.
(a) Commencing on the Expansion Premises Effective Date and continuing
until March 31, 1999, the definition of Tenant's Included Share of Operating
Expenses set forth in Section 1.1 of the Original Lease shall be supplemented by
adding the following words after the words "Additional Second Floor Space": "and
100% of the actual operating expenses per r.s.f with
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respect to the Expansion Premises during the calendar year 1997 (i.e. January 1,
1997-December 31, 1997).
(b) Commencing on April 1, 1999 and continuing until the expiration of the
Term, the definition of Tenant's Included Share of Operating Expenses set forth
in Section 1.1 of the Original Lease, as supplemented in accordance with
subparagraph 8(a) above, shall be deleted in its entirety and the following
definition of Tenant's Included Share of Operating Expenses shall be inserted in
lieu thereof: "100% of the actual operating expenses per r.s.f. of the Combined
Premises during the calendar year 1997 (i.e. January 1, 1997 - December 31,
1997).
10. Tenant's Proportionate Share of Real Estate Taxes and Operating
Expenses. Effective as of the Expansion Premises Effective Date, Section 4.2.4
of the Original Lease shall be deleted in its entirety and the following
inserted in lieu thereof with respect to the periods referred to herein below:
(a) Commencing on the Expansion Premises Effective Date and continuing
until March 31, 1999: Tenant's proportionate share of real estate taxes pursuant
to Section 4.2.1 shall be the excess of real estate taxes allocable to the
Premises over Tenant's Included Share of Real Estate Taxes, where real estate
taxes allocable to the Premises means the real estate taxes for the Property
multiplied by a fraction, the numerator of which is the number of r.s.f. of the
Premises and the denominator of which is the number of r.s.f. determined by
multiplying the Total Rentable Floor Area of the Building by ninety-five percent
(95%). Tenant's proportionate share of operating expenses pursuant to Section
4.2.3 shall be the excess of operating expenses allocable to the Premises over
Tenant's Included Share of Operating Expenses, where operating expenses
allocable to the Premises means the operating expenses for the Property
multiplied by a fraction, the numerator of which is the number of r.s.f. of the
Premises and the denominator of which is the number of r.s.f. determined by
multiplying the Total Rentable Floor Area of the Building by ninety-five percent
(95 %). Tenant's proportionate share of real estate taxes pursuant to Section
4.2.1 shall be calculated by making three separate calculations in accordance
with this Section 4.2.4: (i) the first calculation using Tenant's Included Share
of Real Estate Taxes for the Third Floor Space and the Initial Second Floor
Space, (ii) the second calculation using Tenant's Included Share of Real Estate
Taxes for the Additional Second Floor Space and (iii) the third calculation
using Tenant's Included Share of Real Estate Taxes for the Expansion Premises;
the positive results such calculations shall be added together to produce
Tenant's proportionate share of real estate taxes payable pursuant to Section
4.2.1. Tenant's proportionate share of operating expenses pursuant to Section
4.2.1 shall be calculated by making three separate calculations in accordance
with this Section 4.2.4: (X) the first calculation using Tenant's Included Share
of Operating Expenses for the Third Floor Space and the Initial Second Floor
Space, (y) the second calculation using Tenant's Included Share of Operating
Expenses for the Additional Second Floor Space and (z) the third calculation
using Tenant's Included Share of Operating Expenses for the Expansion Premises;
the positive results of such calculations shall be added together to produce
Tenant's proportionate share of operating expenses payable pursuant to Section
4.2.1. The annual adjustment of Tenant's proportionate share of real estate
taxes and operating expenses, as provided for hereunder, shall be made on each
anniversary of the Third Floor Rent Commencement Date.
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(b) Commencing on April 1, 1999 and continuing until the expiration of the
Term: Tenant's proportionate share of real estate taxes pursuant to Section
4.2.1 shall be the -excess of real estate taxes allocable to the Premises over
Tenant's Included Share of Real Estate Taxes, where real estate taxes allocable
to the Premises means the real estate taxes for the Property multiplied by a
fraction, the numerator of which is the number of r.s.f. of the Premises and the
denominator of which is the number of r.s.f. determined by multiplying the Total
Rentable Floor Area of the Building by ninety-five percent (95%). Tenant's
proportionate share of operating expenses pursuant to Section 4.2.3 shall be the
excess of operating expenses allocable to the Premises over Tenant's Included
Share of Operating Expenses, where operating expenses allocable to the Premises
means the operating expenses for the Property multiplied by a fraction, the
numerator of which is the number of r.s.f. of the Premises and the denominator
of which is the number of r.s.f. determined by multiplying the Total Rentable
Floor Area of the Building by ninety-five percent (95 %). The annual adjustment
of Tenant's proportionate share of real estate taxes and operating expenses, as
provided for hereunder shall be made on each anniversary of the Third Floor Rent
Commencement Date.
11. Parking. Commencing on the Expansion Premises Effective Date, the
maximum number of parking spaces to which Tenant shall be entitled under the
Amended Lease shall be increased by 21 parking spaces, so that Tenant shall be
entitled to up to 87 parking spaces in the aggregate. The Tenant shall pay the
prevailing market rate which may be adjusted from time to time, for each parking
space used by Tenant in the Building. The prevailing market rate is currently
$175.00 per month. Notwithstanding anything to the contrary contained in the
Amended Lease, Tenant may sublet one (1) parking space per one thousand square
feet of subleased rentable area; provided such sublease is first approved by
Landlord; and further provided that Tenant shall not charge any such sublessee
of parking spaces more than the rent charged therefor by Landlord.
12. Expansion Option. Section 2.6 of the Original Lease shall be amended
by deleting the words; first floor currently occupied by National Computer
Systems, Inc., or any of the space in the Building currently occupied by ▇▇▇▇▇
▇. ▇▇▇▇▇▇ or the EF Company" and inserting therefor the words "first, ninth,
fifteenth, sixteenth or seventeenth floor".
13. Extension Option. For all purposes of the extension option to which
reference is made in Section 1.1 and Section 2.5 of the Original Lease, the five
(5) year period with respect to which Tenant may extend the Term shall mean the
five (5) year period commencing on July 1, 2004, and the term "Extension Term"
set forth in the Original Lease is hereby so amended. Consequently, Section 2.5
of the Original Lease shall also be amended by deleting the date "May 31, 1998"
in the eighth line thereof and inserting in lieu thereof the date "June 30,
2003," deleting the date "May 1, 1998" in the nineteenth line thereof and
inserting in lieu thereof the date "July 1, 2003," and deleting the word
"Original" in the sixth line thereof. Additionally, the words "the day following
the expiration of the Original Term" on the fortieth line thereof shall be
deleted and inserted in lieu thereof shall be the date "July 1, 2004. "
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14. Security Deposit. The Letter of Credit shall be maintained by
Tenant at its current level of $275,000 for the remainder of the term of the
Amended Lease, as extended pursuant to this Second Amendment.
15. Plan Showing Tenant's Space. Effective as of the Fifth Floor
Surrender Date, Exhibit B to the Original Lease shall be replaced with the
plan showing the Combined Premises attached hereto as Schedule 1.
16. Signs. Landlord has agreed to allow Tenant to have additional
signage in or about the Building on terms and conditions satisfactory to
Landlord. Tenant acknowledges that all signage must be approved by Landlord,
the City of Cambridge, any other applicable governing authority and Congress
Group Ventures.
17. Relocation. Section 10.22 of the Original Lease is hereby deleted
in its entirety.
18. Brokerage. Each party hereto represents and warrants to the other
party that it has not dealt with any real estate broker or agent in connection
with this Second Amendment or the Lease or either of their negotiation, except
for Fallon, ▇▇▇▇▇ & ▇'▇▇▇▇▇▇. Each party hereto shall indemnify the other party
and hold the other party harmless from any cost, expense or liability (including
costs of suit and reasonable attorneys' fees) for any compensation, commission
or fees claimed by any other real estate broker or agent in connection with this
Second Amendment or the Amended Lease or either of their negotiation by reason
of any of its acts. Landlord shall be responsible for any brokerage commission
payable to Fallon, ▇▇▇▇▇ & ▇'▇▇▇▇▇▇ in connection with this Second Amendment,
pursuant to a separate agreement.
19. Authority. Landlord and Tenant each warrant tO the other that the
person or persons executing this Second Amendment on its behalf has or have
authority to do so and that such execution has fully obligated and bound such
party to all terms and provisions of this Second Amendment.
20. Ratification. As modified by this Second Amendment, the Lease is in
full force and effect and Landlord and Tenant ratify and confirm the same.
21. Interpretation and Partial Invalidity. If any term of this Second
Amendment, or the application thereof to any person or circumstances, shall to
any extent be invalid or unenforceable, the remainder of this Second Amendment,
or the application of such term to persons or circumstances other than those as
to which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Second Amendment shall be valid and enforceable to the fullest
extent permitted by law. The titles for the paragraphs are for convenience only
and not to be considered in construing this Second Amendment. This Second
Amendment contains all of the agreements of the parties with respect to the
subject matter hereof, and supersedes all prior dealings between them with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Second Amendment as a
sealed instrument, in two or more counterparts, as of the day and year first
above written.
Landlord:
ONE MEMORIAL DRIVE LIMITED
PARTNERSHIP
By: One Memorial Drive Property
Management, Inc., its agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
President
Hereunto duly authorized
Tenant:
SAPIENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ .
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Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director of Operations
Hereunto duly authorized
By:
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Name:
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Title:
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Hereunto duly authorized
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