FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 0-12042
BIOGEN, INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 04-3002117
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
14 Cambridge Center, Cambridge, Massachusetts 02142
(Address of principal executive offices)(zip code)
Registrant's telephone number, including area code: (617) 252-9200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value Warrants
(Title of class)(Title of class)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [
]
Aggregate market value of Common Stock held by nonaffiliates of
the Registrant at March 25, 1994: $1,133,288,049 (excludes shares held
by directors). Exclusion of shares held by any person should not be
construed to indicate that such person possesses the power, direct or
indirect, to direct or cause the direction of management or policies
of the Registrant, or that such person is controlled by or under
common control with the Registrant. Common Stock outstanding at March
25, 1994: 32,412,707 shares.
Documents Incorporated by Reference
Portions of the Registrant's definitive Proxy Statement for its
1994 Annual Meeting of Stockholders are incorporated by reference into
Part III of this Report, and portions of the Registrant's 1993 Annual
Report to Shareholders are incorporated by reference into Parts II and
IV of this Report.<PAGE>
PART I
Item 1.
Business
Biogen, Inc. ("Biogen" or the "Company") is a biopharmaceutical
company principally engaged in the business of developing and
manufacturing drugs for human health care through genetic engineering.
Biogen currently derives revenues from five products sold by licensees
around the world. During 1993, Biogen's licensees generated total sales
of approximately $1.5 billion from these products. In the future,
Biogen expects to derive additional revenues from sales of proprietary
products which Biogen will market. One of Biogen's two leading product
candidates, its Hirulog(TM) thrombin inhibitor, is in Phase III clinical
trials for two indications and in Phase II trials for certain other
indications. Hirulog(TM) is a rationally designed antithrombotic being
tested for use in the treatment of a number of arterial cardiovascular
conditions. Biogen's other leading product candidate, recombinant beta
interferon, is in Phase III clinical trials for one indication and in
Phase II clinical trials for certain other indications. Recombinant
beta interferon is a protein being tested for use as a therapy for
multiple sclerosis and certain viruses and cancers.
Biogen focuses its research and development efforts on areas where
it has particular scientific and competitive strengths: cardiovascular
disease, inflammatory diseases, AIDS and certain cancers and viruses.
Biogen is conducting preclinical tests on three anti-inflammatory
product candidates from its T-cell activation, T-cell/B-cell interaction
and cell adhesion programs. These product candidates are being tested
for therapeutic uses in a broad range of acute and chronic inflammatory
and autoimmune diseases. Biogen is also conducting preclinical tests on
an antimucolytic agent for treatment in cystic fibrosis and several
other pulmonary diseases. In addition, Biogen has earlier-stage
research programs directed toward new immune system modulators,
antithrombotic agents, virus inhibitors and drug delivery agents.
Biogen Proprietary Products and Major Research Programs
Biogen's research is focused on biological systems and processes
where its scientific expertise in molecular biology, cell biology,
immunology and protein chemistry can lead to a greater understanding of
disease processes and, as a result, to the creation of new
pharmaceuticals. Biogen selects product candidates from its research
programs to test in clinical trials, focusing its efforts on those
agents with the greatest potential competitive advantages and large
commercial markets. Described below are Biogen's proprietary products
in clinical trials and its major research programs.
Products in Clinical Trials
Hirulog(TM) Thrombin Inhibitor
Hirulog(TM) is a rationally designed antithrombotic which directly
inhibits thrombin, a central component in the cascade that leads to clot
formation in arteries and veins. Biogen believes that Hirulog(TM) may
have broad therapeutic applications and is focusing its initial clinical
efforts on the use of Hirulog(TM) during coronary balloon angioplasty,
for the treatment of unstable angina and as an adjunctive with
thrombolytic agents for treating myocardial infarction (heart attack).
Each of these indications often requires expensive and invasive surgical
procedures, and Biogen believes there is a significant need for better
treatments which is not met by currently available medications. To
date, Hirulog(TM) has been administered to more than 2,500 patients in
Phase I, Phase II and Phase III clinical trials conducted in North
America and Europe. The results of Phase I and Phase II clinical trials
to date have shown that Hirulog(TM) is well tolerated and has a
dose-related antithrombotic effect in humans. A clinical trial of
Hirulog(TM) in the treatment of unstable angina conducted by the
Thrombolysis in Myocardial Infarction (TIMI) group at the Brigham and
Women's Hospital has been completed. A second, larger Phase III
clinical trial of Hirulog(TM) in unstable angina recently began. A Phase
III clinical trial of Hirulog(TM) in angioplasty and additional Phase II
trials are ongoing. Biogen presently expects the Phase III trials of
Hirulog(TM)in angioplasty to be completed in 1994. Because of the
mechanism of action and results of in vitro, in vivo and clinical
testing of Hirulog(TM), Biogen believes Hirulog(TM) has the potential
for use in many situations where an anticoagulant is needed.
Hirulog(TM) is the product of Biogen research which began on
hirudin, the anticoagulant protein found in the saliva of the medicinal
leech. Based on their knowledge of the structure and function of
hirudin and thrombin, Biogen's scientists designed a smaller molecule
which may have different therapeutic effects from those of hirudin.
Hirulog(TM) is a chemically synthesized, twenty amino acid peptide.
Biogen has contracted with a major chemical company to provide Biogen
with the quantities of Hirulog(TM) necessary to meet its anticipated
needs for clinical trials and commercial sale.
Biogen is developing Hirulog(TM) as a proprietary therapeutic
product which it intends to market itself, assuming the successful
completion of clinical studies and receipt of applicable regulatory
approvals. In 1991, Biogen licensed to Commonwealth Serum Laboratories
Limited, Australia's largest domestic pharmaceutical company, the rights
to market Hirulog(TM) as a therapeutic in Australia and New Zealand.
Recombinant Beta Interferon
Natural beta interferon is a protein produced by fibroblast cells
in response to viral infection. Biogen is investigating recombinant
beta interferon for use as an antiviral and anticancer agent and for the
treatment of multiple sclerosis. Dosing in a Phase III clinical trial
in the United States of recombinant beta interferon for the treatment of
multiple sclerosis, sponsored by the National Institutes of Health,
ended in February 1994. The Company is currently collecting and
analyzing data and information from the trial. Biogen is also
conducting and sponsoring clinical investigations for the use of
recombinant beta interferon in treating hepatitis B, hepatitis C, and
other diseases. Phase II clinical trials of beta interferon are ongoing
in Europe and the United States for several indications.
Compared to natural beta interferon, beta interferon produced
through recombinant technology is believed to be a purer and more
consistent product, and can be produced in recombinant form in large
quantities. Biogen's recombinant beta interferon is produced in
mammalian cells. Biogen believes that recombinant beta interferon has
greater activity in vivo than natural beta interferon. In addition,
Biogen believes that recombinant beta interferon can be administered by
routes, such as subcutaneous and intramuscular, which are limited for
natural beta interferon.
Biogen is developing recombinant beta interferon as a proprietary
product and, assuming the successful completion of clinical studies and
receipt of applicable regulatory approvals, intends to market the drug
in North America and Europe. In 1993, Bioferon Biochemische Substanzen
GmbH & Co. ("Bioferon"), a pharmaceutical company owned jointly by
Biogen and Dr. Rentschler Arzneimittal GmbH & Co. ("Rentschler"), was
liquidated and its assets sold to Rentschler. As a result, Biogen's
agreements with Bioferon and Asta Pharma AG relating to beta interferon
and the participation of Bioferon and Asta in the development of
Biogen's recombinant beta interferon have terminated.
Major Research Programs
Inflammation Program
Biogen scientists have been working to understand the activities of
white blood cells involved in the inflammation process. Biogen has
focused on two events central to inflammation: (1) the activation of
T-cells, specialized white blood cells which initiate and control the
immune response; and (2) the adhesion of white blood cells to the
endothelium (blood vessel walls) and their migration through the
endothelium into surrounding tissues where they cause inflammation.
Activation and adhesion of white blood cells depend upon the binding of
pairs of receptor molecules which appear on the surface of white blood
cells and endothelial cells. When these pairs of receptors bind
together their interactions create cellular "pathways" for activation
and adhesion events. Biogen has investigated several of these cellular
pathways and identified new receptors in certain of these pathways.
Based on its research, Biogen has selected three cellular pathways
as the best points of therapeutic intervention to prevent inflammation:
(1) the LFA-3/CD2 pathway, which activates T-cells, (2) the
VCAM-1/VLA-4 pathway, which is necessary for the adhesion of several
types of white blood cells to endothelial cells, and (3) the TBAM/CD40
pathway which activates B-cells which produce antibodies. Biogen
believes that products which interrupt these pathways will block the
inflammation process at an early stage, thus preventing tissue damage
more effectively than currently available therapies. Moreover, such
products should result in selective inhibition of the immune system,
rather than the broad suppression associated with most therapies
currently available or under development. In in vitro and in vivo
experiments the product candidates from the inflammation program have
shown promising inhibitory effects. The Company has delayed commencing
Phase I clinical trials of product candidates from the inflammation
program while resources are devoted to development of Hirulog* and beta
interferon.
Gelsolin
Thick viscid secretions in the airways of cystic fibrosis ("CF")
patients are believed to cause progressive pulmonary destruction. A
major contributor to the viscosity of CF mucus is the release of a large
amount of filamentous actin by degenerating inflammatory cells which
migrate in large numbers to the airways of CF patients. Biogen and its
collaborators believe that severing actin filaments contaminating the CF
airway mucus may lead to clinical improvement in CF patients. Biogen is
developing a recombinant form of an actin severing agent, human r-P
gelsolin, for reducing airway obstruction in CF and several other
pulmonary diseases. The Company is presently conducting preclinical
studies of gelsolin product candidates.
Other Research Programs
As part of its further research efforts, Biogen is investigating a
number of different approaches for intervening in thrombotic processes,
targeting new approaches to the treatment of certain persistent viral
diseases, such as human papillomavirus infections, and developing
methods for delivering drug products directly to the inside of cells.
Additional efforts are being directed towards new strategies for
intervening in diseases where the normal pattern of growth regulation
has been disturbed. Abnormal growth is implicated in diseases as
diverse as cancer, which is characterized by the uncontrolled growth of
abnormal cells, and restenosis, in which the reclosure of blood vessels
may be associated with the growth of scar tissue. Biogen is also
exploring various avenues of therapeutic intervention in AIDS. One of
these avenues is a therapy that blocks entry of HIV into cells via CD4.
Biogen has identified a monoclonal antibody, known as 5A8, directed
against CD4, which has the potential to block HIV infection and HIV-
induced cell fusion or HIV/CD4 cell fusion.
Research Costs
During 1993, 1992 and 1991, Biogen's research and development costs
were approximately
$79.3 million, $60.4 million and $44.3 million, respectively.
There can be no assurance that any of the products described above
or resulting from Biogen's research programs will be successfully
developed, prove to be safe and efficacious at each stage of clinical
trials, meet applicable regulatory standards, be capable of being
produced in commercial quantities at reasonable costs or be successfully
marketed.
Products Being Marketed or Developed by Biogen Licensees
Intron(R) A Alpha Interferon
Alpha interferon is a naturally occurring protein produced by
normal white blood cells. Biogen has been granted patents in the United
States and in Europe covering the production of alpha interferons
through recombinant DNA techniques and has applications pending in
numerous other countries. See "Patents and Other Proprietary Rights."
Biogen's worldwide licensee for recombinant alpha interferon,
Schering-Plough Corporation ("Schering-Plough"), first began commercial
sales of its Intron(R) A brand of alpha interferon in the United States
in 1986 for hairy-cell leukemia. Schering-Plough now sells Intron(R) A
in more than 60 countries for more than 16 indications, including
hepatitis B, hepatitis C, genital warts and Kaposi's sarcoma.
Sales of Intron(R) A by Schering-Plough were $572 million in 1993,
the majority of which were generated outside the United States.
Currently the largest market for Intron(R) A is in Japan for the
treatment of hepatitis C. The United States Food and Drug
Administration ("FDA") has approved Intron(R) A for the treatment of
hepatitis B and hepatitis C in the United States. Schering-Plough has
undertaken studies using Intron(R) A for a number of additional
indications. These studies include Phase III trials of Intron(R) A for
the treatment of chronic myelogenous leukemia, bladder cancer, non-
Hodgkin's lymphoma, malignant melanoma, renal cell carcinoma, multiple
myeloma and head and neck cancer, and earlier phase trials for Crohn's
disease and, in combination with AZT or ddI, as a treatment for AIDS.
Royalties from Schering-Plough accounted for approximately 57% of
Biogen's revenues (excluding interest) in 1993.
Hepatitis B Vaccines and Diagnostics
Hepatitis B is a blood-borne disease which causes a serious
infection of the liver and substantially increases the risk of liver
cancer. More than 250 million people worldwide have chronic hepatitis
B virus infections. Biogen holds several important patents related to
hepatitis B antigens produced by genetic engineering techniques. See
"Patents and Other Proprietary Rights." These antigens are used in
recombinant hepatitis B vaccines and in diagnostic test kits used to
detect hepatitis B infection. In total, sales of hepatitis B vaccines
and diagnostic products by Biogen licensees exceeded $900 million in
1993.
Hepatitis B Vaccines
The American Academy of Pediatrics and the United States Centers
for Disease Control and Prevention ("CDCP") have recommended that all
infants born in the United States receive inoculation against hepatitis
B as part of a universal vaccination program. At least 20 countries
around the world already recommend vaccination for all infants. CDCP
and the American Academy of Pediatrics have also recommended universal
immunization of ten-year-old children and at-risk adolescents. In
addition, the United States Occupational Safety and Health
Administration ("OSHA") has recommended that all persons with an
occupational exposure to blood and other infectious material receive the
hepatitis B vaccine. In 1992, OSHA instituted a program requiring
certain employers to offer the vaccine at no cost to all employees at
risk.
SmithKline Beecham Biologicals s.a. ("SmithKline") and Merck & Co.,
Inc. ("Merck") are the two major worldwide marketers of hepatitis B
vaccines. Biogen has licensed to SmithKline exclusive rights under
Biogen's hepatitis B patents to market hepatitis B vaccines in the major
countries of the world, excluding Japan. SmithKline's vaccine is
approved in the United States and in over 60 other countries. In 1990,
SmithKline and Biogen entered into a sublicense arrangement with Merck
under which Biogen currently receives royalties. Royalties from
SmithKline and Merck together accounted for approximately 34% of
Biogen's revenues (excluding interest) in 1993. Biogen has also
licensed rights under its hepatitis B patents to Merck and The Green
Cross Corporation non-exclusively in Japan.
In 1993, SmithKline initiated arbitration in the United States
regarding the rate of royalties payable on sales of hepatitis B vaccines
by SmithKline in the United States. In the fourth quarter of 1992,
SmithKline received a favorable decision against Biogen in a foreign
arbitration regarding similar royalty provisions in a separate agreement
governing international sales of hepatitis B vaccines by SmithKline.
Biogen has received leave to appeal the foreign arbitration decision
from the English Chancery Court. The Company believes that a decision
in the United States similar to the foreign arbitration decision is not
probable.
Hepatitis B Diagnostics
Biogen has licensed its proprietary hepatitis B rights
non-exclusively, on an antigen-by-antigen basis, to diagnostic kit
manufacturers. Biogen currently has hepatitis B license or supply
agreements for diagnostic use with more than a dozen companies,
including Abbott Laboratories, the major worldwide marketer of hepatitis
B diagnostic kits, Ortho Diagnostic Systems, Inc., Roche Diagnostic
Systems, Inc. and Organon Teknika B.V.
Other Products
Gamma Interferon
Gamma interferon is a protein produced by cells of the immune
system. Biogen has developed a recombinant gamma interferon for Biogen
Medical Products Limited Partnership ("BMPLP"). In 1993, BMPLP
terminated its agreements with Bioferon under which Bioferon developed
gamma interferon and, under a distribution agreement with Rentschler,
marketed gamma interferon in Germany for the treatment of rheumatoid
arthritis as a second line therapy for patients who no longer benefit
from nonsteroidal anti-inflammatory drugs. See "Patents and Other
Proprietary Rights." In Japan, Biogen's licensee, Shionogi & Co., Ltd.
("Shionogi"), markets recombinant gamma interferon under the trademark
Imunomax(R)-Gamma for renal cell carcinoma. Biogen supplies Shionogi
with its clinical and commercial needs for recombinant gamma interferon.
In general, gamma interferon has experienced disappointing results in
clinical trials for tested indications.
Porcine Somatotropin
Porcine somatotropin ("PST") is a protein normally produced in
young pigs which promotes their growth and development into adult
animals. Biogen believes that PST significantly increases feed
conversion efficiency and daily weight gain and improves the quality of
the meat product in pigs by reducing fat content. Biogen has been
granted a patent in the European Patent Office and has applications
pending in certain other countries, including the United States,
covering the production of PST through recombinant DNA techniques.
Until 1993, recombinant PST was being developed by Pitman-Moore, Inc.,
a subsidiary of the IMCERA Group, under an agreement with Biogen. In
1993, Pitman-Moore terminated its development agreement with Biogen and
the license to recombinant PST patent rights, citing changing market
conditions.
Patents and Other Proprietary Rights
Biogen has filed numerous patent applications in the United States
and various other countries seeking protection of a number of its
processes and products, and patents have issued on a number of these
applications. Issues remain as to the ultimate degree of protection
that will be afforded to Biogen by such patents. There is no certainty
that these patents or others, if obtained, will be of substantial
protection or commercial benefit to Biogen. Furthermore, it is not
known to what extent Biogen's other pending patent applications will
ultimately be granted as patents or whether those patents that have been
issued will prevail if they are challenged in litigation.
Trade secrets and confidential know-how are important to Biogen's
scientific and commercial success. Although Biogen seeks to protect its
proprietary information, there can be no assurance that others will not
either develop independently the same or similar information or obtain
access to Biogen's proprietary information.
Recombinant Alpha Interferon
Biogen has more than 30 patents in countries around the world,
including the United States and countries of the European Patent Office,
covering the production of recombinant alpha interferons. Biogen
continues to seek related patents in the United States and other
countries.
Three infringement suits have been filed in Biogen's name to
enforce its European alpha interferon patent. The first suit was filed
in Vienna, Austria against Boehringer Ingelheim Zentrale GmbH ("BI") and
two of its subsidiaries. The Austrian Court has stayed Biogen's
infringement case pending a decision by the Austrian Patent Office on
BI's petition to revoke Biogen's European (Austrian) patent on grounds
peculiar to Austrian law. The second suit was filed in Dusseldorf,
Germany against Dr. Karl Thomae GmbH and two other BI companies. The
German trial and appeal courts ruled in favor of Biogen and have
enjoined Thomae from the further manufacture, use or sale of recombinant
alpha-2(c) interferon. The third suit was filed in Warsaw, Poland
against Boehringer Ingelheim Pharma GmbH ("BI Pharma"). The Polish
court preliminarily enjoined BI Pharma from further infringement of
Biogen's patent. The court then stayed the injunction pending a decision
on BI Pharma's appeal.
Recombinant Hepatitis B Antigens
Biogen has more than 50 granted patents in countries around the
world, including three in the United States and two in countries of the
European Patent Office, and several patent applications, covering the
recombinant production of hepatitis B surface, core and "e" antigens.
Biogen continues to seek related patents in the United States and other
countries.
Biogen's first European hepatitis B patent was opposed by five
companies. The Opposition Division of the European Patent Office
maintained the patent over those oppositions. Two of the opponents
appealed the Opposition Division's decision to the Technical Board of
Appeal which is the final arbiter. Biogen expects an oral hearing on
this appeal in June 1994.
Biogen's second European hepatitis B patent was opposed by four
companies. In 1992, the Opposition Division decided to revoke Biogen's
second European hepatitis B patent alleging that it lacked inventive
step. Biogen has appealed this decision to the European Patent Office
Technical Board of Appeal. The patent will remain in force during the
appeal process. Although such matters can never be free from doubt,
Biogen believes that the decision of the Opposition Division will be
reversed on appeal.
Biogen has filed three infringement suits to enforce its hepatitis
B patents, in England against Medeva plc ("Medeva"), in Israel against
Bio-Technology General (Israel) Ltd. ("BTG"), and in Singapore against
Scitech Medical Products Pte Ltd. and Scitech Genetics Pte Ltd. The
action against Medeva seeks to enjoin Medeva's planned production and
distribution of hepatitis B vaccine. In November 1993, the United
Kingdom High Court of Justice ruled in favor of Biogen and enjoined
Medeva from further infringement of one of Biogen's European (UK)
patents. The Court then stayed the injunction pending decision on
Medeva's appeal. The appeal is expected to be heard in mid-1994. In
1992, BTG brought an action against Biogen seeking a compulsory license
under Biogen's Israeli hepatitis B patent and Biogen filed an
infringement suit against BTG, seeking to enjoin BTG's production, sale
and distribution of hepatitis B vaccine. Both cases are continuing in
Israel. In 1993, Biogen sued Scitech Products and Scitech Genetics in
Singapore. The case is continuing in Singapore.
Recombinant Beta Interferon
The European Patent Office and certain countries have granted
patents to Biogen covering the recombinant production of beta
interferon. In other countries, including the United States, Biogen has
filed patent applications and continues to seek patents covering the
recombinant production of beta interferon and related technology.
Biogen's European patent was opposed by one company. In December
1993, the European Patent Office's Opposition Division dismissed the
opposition and maintained Biogen's patent. Biogen expects the opponent
to appeal this decision. In the United States, Biogen's claims to key
intermediates in the recombinant production of beta interferon were
involved in an interference to determine who was the first to invent
those intermediates in the United States. Priority of invention was
awarded to another party in the interference. Biogen's pending United
States claims to the production of recombinant beta interferon were not
part of that interference.
Other parties have also filed patent applications in various
countries covering the recombinant production of beta interferon, and,
in particular, key intermediates in that production, as well as beta
interferon itself. One such party has been granted several patents in
the European Patent Office and in certain countries on the key
intermediates. The same party was awarded priority to those
intermediates in the United States interference. Biogen has obtained
non-exclusive rights to manufacture, use and sell recombinant beta
interferon under these patents in various countries of the world,
including the United States, Japan and most European countries. Another
party has been granted various patents in the United States and in other
countries on beta interferon itself. Biogen has obtained worldwide,
non-exclusive rights under these patents to make, use and sell
recombinant beta interferon.
Hirulog(TM) Thrombin Inhibitor
In 1993, the United States Patent Office issued to Biogen a patent
covering Biogen's Hirulog(TM) thrombin inhibitor. Biogen has several
patent applications pending on Hirulog(TM) and continues to seek patents
covering Hirulog(TM) in the United States and other countries.
Recombinant Gamma Interferon
In 1988 and 1990, Genentech, Inc. ("Genentech") was granted several
patents in the United States and Europe claiming recombinant gamma
interferon and intermediates and methods for the production of
recombinant gamma interferon. In January 1990, Genentech and Biogen
and BMPLP entered into a cross-license agreement under which Genentech
and Biogen/BMPLP each licensed to the other its United States patent
rights relating to certain gamma interferons and their intermediates and
processes of production for certain fields of use. At the same time,
Biogen granted Genentech a non-exclusive worldwide sublicense for
certain proteins under certain of its licensed process patents relating
to the secretion of proteins.
Biogen opposed the Genentech European gamma interferon patent in
the European Patent Office. The European Patent Office has maintained
the Genentech patent in a decision that cannot be appealed. If
Genentech's European gamma interferon patents continue in force in
Europe with their present scope and Biogen does not obtain a license
under such patents, Biogen will likely be prevented from selling
recombinant gamma interferon in Europe.
Other Patents
In January 1994, Biogen filed suit in the District Court in Osaka,
Japan, against Sumitomo Pharmaceutical Co., Ltd. ("Sumitomo"). The suit
seeks to enjoin Sumitomo from importing and selling its recombinant
human growth hormone products in Japan. Biogen believes that these
products are made by a process that infringes certain of its licensed
patents relating to the secretion of proteins.
In January 1994, Biogen granted Eli Lilly and Company ("Lilly") a
non-exclusive license under certain of Biogen's patents for gene
expression. Lilly uses the patented vectors and methods in several
products that are on the market or in development.
Third Party Patents
Biogen is aware that others, including various universities and
companies working in biotechnology, have also filed patent applications
and have been granted patents in the United States and in other
countries claiming subject matter potentially useful or necessary to
Biogen's business. Some of those patents and applications claim only
specific products or methods of making such products, while others claim
more general processes or techniques useful or now used in the
biotechnology industry. Genentech has been granted patents and is
prosecuting other patent applications in the United States and certain
other countries which it may allege are currently used by Biogen and the
rest of the biotechnology industry to produce recombinant proteins in
microbial hosts. Genentech has offered to Biogen and others in the
industry non-exclusive licenses under those patents and patent
applications for various proteins and in various fields of use, but not
for others. Schering-Plough, Biogen's exclusive licensee for
recombinant alpha interferon, is licensed under certain of these patents
for the manufacture, use and sale of recombinant alpha interferon. The
ultimate scope and validity of Genentech's patents, of other existing
patents, or of patents which may be granted to third parties in the
future, the extent to which Biogen may wish or be required to acquire
rights under such patents, and the availability and cost of acquiring
such rights currently cannot be determined by Biogen.
There has been, and Biogen expects that there may continue to be,
significant litigation in the industry regarding patents and other
intellectual property rights. Such litigation could create uncertainty
and consume substantial resources.
Competition and Marketing
Competition in the biotechnology and pharmaceutical industries is
intense and comes from many and varied sources. Biogen does not believe
that it or any of the other industry leaders can be considered dominant
in view of the rapid technological change in the industry. Biogen
experiences significant competition from specialized biotechnology firms
in the United States, Europe and elsewhere and from many large
pharmaceutical, chemical and other companies. Certain of these
companies have substantially greater financial, marketing and human
resources than Biogen. The pharmaceutical companies have considerable
experience in undertaking clinical trials and in obtaining regulatory
approval to market pharmaceutical products. In addition, certain of
Biogen's products may be subject to competition from products developed
using alternatives to biotechnology techniques.
Much competition is directed towards establishing proprietary
positions through research and development. A key aspect of such
competition is recruiting and retaining qualified scientists and
technicians. Biogen believes that it has been successful in attracting
skilled and experienced scientific personnel. Biogen believes that
leadership in the industry will be based on managerial and technological
superiority and may be influenced significantly by patents and other
forms of protection of proprietary information. The achievement of such
a position depends upon Biogen's ability to attract and retain skilled
and experienced personnel, its ability to identify and exploit
commercially the products resulting from biotechnology and the
availability of adequate financial resources to fund facilities,
equipment, personnel, clinical testing, manufacturing and marketing.
Many of Biogen's competitors are working to develop products
similar to those under development and testing by Biogen. The timing of
the entry of a new pharmaceutical product into the market can be an
important factor in determining the product's eventual success and
profitability. Early entry may have important advantages in gaining
product acceptance and market share. Moreover, for certain diseases
with limited patient populations, the FDA is prevented under the Orphan
Drug Act, for a period of seven years, from approving more than one
application for the "same" product for a single orphan drug designation,
unless a later product is considered clinically superior. Accordingly,
the relative speed with which Biogen can develop products, complete the
testing and approval process and supply commercial quantities of the
product to the market is expected to have an important impact on
Biogen's competitive position. In addition, competition among products
approved for sale may be based, among other things, on patent position,
product efficacy, safety, reliability, availability and price.
Regulation
Biogen's current and contemplated activities and the products and
processes that will result from such activities are and will be subject
to substantial government regulation.
Before pharmaceutical products may be sold in the United States and
other countries, clinical trials of the products must be conducted and
the results submitted to appropriate regulatory agencies for approval.
These clinical trial programs generally involve a three-phase process.
Typically, in Phase I, trials are conducted in volunteers or patients to
determine the early side effect profile and, perhaps, the pattern of
drug distribution and metabolism. In Phase II, trials are conducted in
groups of patients with a specific disease in order to determine
appropriate dosages, expand evidence of the safety profile and, perhaps,
determine preliminary efficacy. In Phase III, large scale, comparative
trials are conducted on patients with a target disease in order to
generate enough data to provide the statistical proof of efficacy and
safety required by national regulatory agencies. The receipt of
regulatory approvals often takes a number of years, involving the
expenditure of substantial resources and depends on a number of factors,
including the severity of the disease in question, the availability of
alternative treatments and the risks and benefits demonstrated in
clinical trials. On occasion, regulatory authorities may require larger
or additional studies, leading to unanticipated delay or expense.
In connection with the commercialization of products resulting from
Biogen's projects, it is necessary, in a number of countries, to comply
with certain regulations relating to the manufacturing and marketing of
such products and to the products themselves. For example, the
commercial manufacturing, marketing and exporting of pharmaceutical
products require the approval of the FDA in the United States and of
comparable agencies in other countries. The FDA has established
mandatory procedures and safety standards which apply to the
manufacture, clinical testing and marketing of pharmaceutical products
in the United States. The process of seeking and obtaining FDA approval
for a new product and the facilities in which it can be produced is
likely to take a number of years and involve the expenditure of
substantial resources. The commercial manufacture and marketing of
pharmaceutical products for animal use require approval of either the
FDA or the USDA and of comparable agencies in other countries. In
addition, the regulatory approval processes for products in the United
States, Canada and Europe are undergoing or may undergo changes. Biogen
cannot determine what effect any changes in regulatory approval
processes may have on its business.
In the United States, the federal government is currently
undertaking a complete review and reformation of health care coverage
and costs. Resulting legislation or regulatory actions may have a
significant effect on the Company's business. Biogen's ability to
commercialize successfully human pharmaceutical products also may depend
in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health insurers and other
organizations. Currently, substantial uncertainty exists as to the
reimbursement status of newly approved health care products by
third-party payors.
Biogen's policy is to conduct relevant research in compliance with
the current United States National Institutes of Health Guidelines for
Research Involving Recombinant DNA Molecules (the "NIH Guidelines") and
all other federal and state regulations. By local ordinance, Biogen is
required, among other things, to comply with the NIH Guidelines in
relation to its facilities in Cambridge, Massachusetts, and is required
to operate pursuant to certain permits.
Various laws, regulations and recommendations relating to safe
working conditions, laboratory practices, the experimental use of
animals and the purchase, storage, movement, import and export and use
and disposal of hazardous or potentially hazardous substances, including
radioactive compounds and infectious disease agents, used in connection
with Biogen's research work are or may be applicable to its activities.
These include, among others, the United States Atomic Energy Act, the
Clean Air Act, the Clean Water Act, the Occupational Safety and Health
Act, the National Environmental Policy Act, the Toxic Substances Control
Act and the Resource Conservation and Recovery Act, national
restrictions on technology transfer and import, export and customs
regulations. The extent of government regulation which might result
from future legislation or administrative action cannot accurately be
predicted. Certain agreements entered into by Biogen involving
exclusive license rights may be subject to national or supranational
antitrust regulatory control, the effect of which also cannot be
predicted.
Employees
At January 1, 1994, Biogen employed 380 full-time employees, of
whom 55 held Ph.D. and/or M.D. degrees. Of the 380 employees, 167 were
engaged in, or directly supported, research and process development and 111
were involved in, or directly supported, manufacturing, quality
assurance/quality control, regulatory, medical operations and preclinical
and clinical development. Biogen maintains consulting arrangements
with a number of scientists at various universities and other research
institutions in Europe and the United States, including the six outside
members of its Scientific Board.
Item 2.
Properties
Substantially all of Biogen's facilities are located in Cambridge,
Massachusetts, where the Company leases all or part of five buildings
containing a total of approximately 220,000 square feet of office and
research and development space. Most of the Company's operations are
contained in a 67,000 square foot building housing a pilot production
plant, laboratories and office space, in a building with a combined
64,000 square feet of space containing laboratories, purification and
aseptic bottling facilities and office space, in a multitenant building
where the Company occupies approximately 54,000 square feet of office
space and in a 17,000 square foot building designed for specialized
research laboratories. The leases for these sites terminate in 1998
(with the right to renew), 2004, 1998 (with the right to renew) and
2004, respectively.
In 1993, the Company began construction of a 150,000 square foot
building in Cambridge, Massachusetts which will house laboratories and
office space. The anticipated cost of construction, including the land,
is approximately $40 million. Upon completion of the building, the
Company has the option, subject to certain conditions, to obtain a
secured term loan with a bank for up to $25 million for a period of up
to ten years. The building is scheduled for completion in 1995.
The Company believes that its pilot production plant in Cambridge,
Massachusetts and existing outside sources will allow it to meet its
production needs for clinical trials and its initial commercial
production needs for its Hirulog(TM) thrombin inhibitor and beta
interferon product. Biogen believes that the facilities are in
compliance with appropriate regulatory standards. The Company expects
that additional facilities and outside sources will be required to meet
the Company's future research and production needs.
Item 3.
Legal Proceedings
For a description of legal proceedings relating to patent rights,
see Item 1, "Business-Patents and Other Proprietary Rights."
Item 4.
Submission of Matters to a Vote of Security Holders
None
Executive Officers
The following is a list of the executive officers of the Company
and their principal positions with the Company. Each individual officer
serves at the pleasure of the Board of Directors.
Name Age Positions
James L. Vincent . 54 Chairman of the Board of Directors, Chief
Executive Officer
James R. Tobin . . 49 President and Chief Operating Officer
Michael J. Astrue. 37 Vice President - General Counsel,
Secretary and Clerk
Kenneth M. Bate. . 43 Vice President - Marketing and Sales
Frank A. Burke, Jr. 50 Vice President - Human Resources
Lawrence S. Daniels 51 Vice President - Strategic Planning
Joseph M. Davie. . 54 Vice President - Research
Irving H. Fox. . . 50 Vice President - Medical Affairs
Timothy M. Kish . 42 Vice President - Finance, Chief Financial
Officer and Treasurer
James C. Mullen. . 35 Vice President - Operations
Michael R. Slater. 47 Vice President - Regulatory Affairs
Irvin D. Smith.... 61 Vice President - QA/QC and Drug
Development
The background of these officers is as follows:
James L. Vincent joined the Company as its Chief Executive
Officer in October 1985. He also served as Chief Operating Officer and
President from April 1988 until February 1994. He is also Chairman of
the Board of Directors of the Company. Before joining Biogen,
Mr. Vincent served as Group Vice President, Allied Corporation and as
President, Allied Health & Scientific Products Company, a subsidiary of
Allied Corporation. Before joining Allied Corporation, Mr. Vincent was
with Abbott Laboratories, Inc. where he served in various capacities,
including Executive Vice President, Chief Operating Officer and Director
of the parent corporation. Mr. Vincent is, in addition, Chairman of the
Executive Board of Wharton Graduate School of the University of
Pennsylvania and is a member of the Board of Directors of Continental
Bank, Continental Corporation and Millipore Corporation.
James R. Tobin joined the Company as its President and Chief
Operating Officer in February 1994. Prior to joining the Company, Mr.
Tobin served in various capacities at Baxter International, including
Executive Vice President from 1988 until 1992 and President and Chief
Operating Officer from 1992 until 1993.
Michael J. Astrue was appointed Vice President - General
Counsel, Secretary and Clerk of the Company in June 1993. Prior to
joining the Company, Mr. Astrue was a partner in the Boston law firm of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and a managing
director of its wholly-owned consulting firm, ML Strategies, from
November 1992 to June 1993. From June 1989 through November 1992, Mr.
Astrue served as General Counsel of the United States Department of
Health and Human Services. From April 1988 through June 1989, Mr.
Astrue served as Associate Counsel to the President of the United
States.
Kenneth M. Bate was appointed Vice President - Marketing and
Sales in August 1993 after serving as Vice President - Finance and Chief
Financial Officer since August 1990 and as Treasurer of the Company
since December 1991. From 1978 until 1990, Mr. Bate was employed by
Peter Kiewit & Sons, Inc. and its subsidiaries in various financial
capacities, most recently as Vice President - Treasurer.
Frank A. Burke, Jr., was appointed Vice President - Human
Resources in May 1986 after serving for 12 years in various human
resource management positions at Allied-Signal, Inc., most recently as
Director of Compensation and Employee Benefits of the Engineered
Materials Sector.
Lawrence S. Daniels was appointed Vice President - Strategic
Planning of the Company in August 1993 after serving as Vice President -
Marketing and Business Development since November 1991. Prior to
joining the Company, Mr. Daniels served for nine years in planning and
administrative functions for Allied-Signal, Inc., most recently as Vice
President, Corporate Strategy Development.
Joseph M. Davie, Ph.D. was appointed Vice President - Research
of the Company in April 1993. Prior to joining the Company, Dr. Davie
was employed by Searle Corporation where he served as Senior Vice
President - Science and Technology from January 1993 to April 1993,
President - Research and Development from July 1987 to January 1993 and
Senior Vice President - Discovery Research from January 1987 to July
1987.
Irving H. Fox, M.D. was appointed Vice President - Medical
Affairs in February 1990. Dr. Fox joined Biogen following a 14-year
career at the University of Michigan, where he held professorships in
internal medicine and biological chemistry, and from 1978 to 1990, was
program director of the Clinical Research Center at the University of
Michigan Hospital.
Timothy M. Kish was appointed Vice President - Finance,
Treasurer and Chief Financial Officer of the Company in August 1993
after serving as Corporate Controller of the Company since 1986. Prior
to joining Biogen, Mr. Kish was Director of Finance for Allied Health &
Scientific Products Company, a subsidiary of Allied Corporation. Before
joining Allied, Mr. Kish served in various capacities at Bendix Corp.,
most recently as Executive Assistant to the President.
James C. Mullen became Biogen's Vice President - Operations in
December 1991 after serving as Senior Director - Operations since
February 1991. Mr. Mullen joined the Company in 1989 as Director -
Facilities and Engineering and then served as Acting Director -
Manufacturing and Engineering. Before coming to Biogen, Mr. Mullen held
various positions of responsibility from 1984 through 1988 at
SmithKline-Beckman Corporation, most recently as Director, Engineering
- - SmithKline and French Laboratories, Worldwide.
Michael R. Slater was appointed Vice President - Regulatory
Affairs in 1991. Mr. Slater has been with Biogen since 1983, serving
first as Head of Regulatory Affairs and then as Director of Regulatory
Affairs of Biogen, S.A., the Company's former Swiss subsidiary. From
1985 to 1988, Mr. Slater served as Director of Corporate Regulatory
Affairs of Biogen Research Corp. From 1988 to 1991, Mr. Slater served
as Vice President - Quality Assurance and Regulatory Affairs of the
Company.
Irvin D. Smith, Ph.D. was appointed Vice President - Quality
Assurance/Quality Control and Drug Development in August 1993 after
serving as General Manager of Bioferon, Biogen's former joint venture in
Germany, since July 1991. Dr. Smith was a private consultant from
March 1990 to July 1991 and President and Chief Executive Officer of
Applied BioSystems from October 1987 to March 1990.
<PAGE>
PART II
Item 5.
Market for Registrant's Common Equity and Related Stockholder Matters
The section entitled "Market for Securities" in the Company's
1993 Annual Report to Shareholders is hereby incorporated by reference.
Item 6.
Selected Financial Data
The section entitled "Selected Financial Data" in the
Company's 1993 Annual Report to Shareholders is hereby incorporated by
reference.
Item 7.
Management's Discussion and Analysis of Financial Condition and Results
of Operations
The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's 1993
Annual Report to Shareholders is hereby incorporated by reference.
Item 8.
Financial Statements and Supplementary Data
The sections entitled "Consolidated Balance Sheets,"
"Consolidated Statements of Income," "Consolidated Statements of Cash
Flows," "Consolidated Statements of Shareholders' Equity," "Notes to
Consolidated Financial Statements" and "Report of Independent
Accountants" in the Company's 1993 Annual Report to Shareholders are
hereby incorporated by reference.
Item 9.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable
PART III
Item 10.
Directors and Executive Officers of the Registrant, Promoters and
Control Persons
Directors
The sections entitled "Election of Directors" and "Other
Matters" in the Company's definitive proxy statement for its 1994 Annual
Meeting of Stockholders, which the Company intends to file with the
Commission no later than April 30, 1994, are hereby incorporated by
reference.
Executive Officers
Information concerning the Company's Executive Officers is set
forth in Part I of this Annual Report on Form 10-K.
Item 11.
Executive Compensation
The sections entitled "Executive Compensation", "Board of
Directors and Committees", "Employment Arrangements", "Statement of
Compensation Philosophy" and "Performance Graph" in the Company's
definitive proxy statement for its 1994 Annual Meeting of Stockholders,
which the Company intends to file with the Commission no later than
April 30, 1994, are hereby incorporated by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management
The section entitled "Share Ownership" in the Company's
definitive proxy statement for its 1994 Annual Meeting of Stockholders,
which the Company intends to file with the Commission no later than
April 30, 1994, is hereby incorporated by reference.
Item 13.
Certain Relationships and Related Transactions
The section entitled "Certain Transactions" in the Company's
definitive proxy statement for its 1994 Annual Meeting of Stockholders,
which the Company intends to file with the Commission no later than
April 30, 1994, is hereby incorporated by reference.
PART IV
Item 14.
Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) Financial Statements and Financial Statement Schedules.
The following documents are filed as a part of this report:
1. Financial Statements, as required by Item 8 of this Form,
incorporated by reference herein from the 1993 Annual Report to
Shareholders attached hereto as Exhibit 13:
Item Location
Consolidated Balance Sheets Annual Report under the caption
"Biogen, Inc. and Subsidiaries
Consolidated Balance Sheets."
Consolidated Statements of Income Annual Report under the caption
"Biogen, Inc. and Subsidiaries
Consolidated Statements of
Income."
Consolidated Statements of Cash Flows Annual Report under the caption
"Biogen, Inc. and Subsidiaries
Consolidated Statements of Cash
Flows."
Consolidated Statements of
Shareholders' Equity Annual Report under the caption
"Biogen, Inc. and Subsidiaries
Consolidated Statements of
Shareholders' Equity."
Notes to Consolidated Financial
Statements Annual Report under the caption
"Biogen, Inc. and Subsidiaries
Notes to Consolidated Financial
Statements."
Reports of Independent Accountants Page 25 of this Report;
Annual Report under the caption
"Report of Independent
Accountants."
With the exception of the portions of the 1993 Annual Report
to Shareholders specifically incorporated herein by reference, such
report shall not be deemed filed as part of this Annual Report on Form
10-K.
(2) Financial Statement Schedules:
Item Location
Report of Independent Accountants Page 25 of this Report
Consent of Independent Accountants Page 26 of this Report
Schedule I, Marketable Securities Page 27 of this Report
Schedule X, Supplementary Income Page 28 of this Report
Statement Information
Schedules not included herein are omitted because they are not
applicable or the required information appears in the Consolidated
Financial Statements or Notes thereto.
(3) Exhibits
Exhibit No. Description
(3.1) Articles of Organization, as amended (k)
(3.2) By-Laws, as amended (o)
(4.1) Form of Common Stock Share Certificate (q)
(4.2) Form of Warrant Certificate (f)
(4.3) Certificate of Designation of Series A Junior
Participating Preferred Stock (j)
(4.4) Rights Agreement dated as of May 8, 1989 between
Registrant and The First National Bank of Boston, as
Rights Agent (j)
(10.1) Independent Consulting and Project Agreement dated as of
June 29, 1979 between Registrant and Kenneth Murray
(a)**
(10.2) Letter Agreement dated March 12, 1993 with Dr. Kenneth
Murray relating to renewal of Independent Consulting
Agreement (o)**
(10.3) Minute of Agreement dated February 5, 1981 among
Registrant, The University Court of the University of
Edinburgh and Kenneth Murray (a)**
(10.4) Independent Consulting Agreement dated as of June 29,
1979 between Registrant and Phillip A. Sharp (a)**
(10.5) Letter Agreement dated December 10, 1992 with Phillip
Sharp relating to chairmanship of Scientific Board and
renewal of Independent Consulting Agreement (o)**
(10.6) Project Agreement dated as of December 14, 1979 between
Registrant and Phillip A. Sharp (a)**
(10.7) Share Restriction and Repurchase Agreement dated as of
December 15, 1979 between Registrant and Phillip A. Sharp
(a)**
(10.8) Consulting Agreement dated as of April 1, 1991, as
amended, between Registrant and Alexander G. Bearn (m)**
(10.9) Form of Amendment dated July 1, 1988 to Independent
Consulting Agreement between Registrant and Scientific
Board Members (h)**
(10.10) Form of Extension of Independent Consulting Agreement
between Registrant and Scientific Board Members (k)**
(10.11) Form of Share Purchase Agreement between Registrant and
Scientific Board Members (a)**
(10.12) Form of Stock Option Agreement between Registrant and
each of Alan Belzer, Harold W. Buirkle, James W. Stevens
and Roger H. Morley (d)**
(10.13) Letter regarding employment of James L. Vincent dated
September 23, 1985 (c)**
(10.14) Form of Stock Option Agreement with James L. Vincent
under 1985 Non-Qualified Stock Option Plan (o)**
(10.15) Letter dated December 13, 1989 regarding employment of
Dr. Irving H. Fox (l)**
(10.16) Letter dated August 13, 1990 regarding employment of Mr.
Kenneth M. Bate (m)**
(10.17) Letter dated October 23, 1991 regarding employment of Mr.
Lawrence S. Daniels (o)**
(10.18) Letter dated April 7, 1993 regarding employment of Dr.
Joseph M. Davie (p)**
(10.19) Letter dated January 12, 1994 regarding employment of
James R. Tobin *,**
(10.20) Letter dated August 30, 1993 regarding employment of
Irvin D. Smith, Ph.D.*,**
(10.21) Form of Indemnification Agreement between Registrant and
each Director and Executive Officer (h)**
(10.22) Second Amended and Restated Agreement and Certificate of
Limited Partnership dated as of May 15, 1984 among Biogen
Medical Products, Inc. as General Partner and certain
limited partners (k)
(10.23) First Amendment dated December 22, 1986 to Agreement and
Certificate of Limited Partnership (d)
(10.24) Technology License Agreement dated May 15, 1984 between
Biogen B.V. and Biogen Medical Products Limited
Partnership (k)
(10.25) Development Contract dated May 15, 1984 between Biogen
B.V. and Biogen Medical Products Limited Partnership (k)
(10.26) Amendment dated December 22, 1986 to Development Contract
(d)
(10.27) Amendment dated January 1, 1987 to Development Contract
(g)
(10.28) Extension Agreement dated October 10, 1989 relating to
Development Contract (k)
(10.29) Extension Agreement dated December 31, 1993 relating to
Development Contract *
(10.30) Joint Venture Option Agreement dated May 15, 1984 between
Biogen Inc. and Biogen Medical Products Limited
Partnership (k)
(10.31) Purchase Option Agreement dated May 15, 1984 between
Biogen B.V. and the limited partners of Biogen Medical
Products Limited Partnership (k)
(10.32) Guaranty dated May 15, 1984 to Biogen Medical Products
Limited Partnership by Registrant guaranteeing certain
obligations of Biogen Medical Products, Inc., Biogen B.V.
and Biogen Inc. to the Partnership (k)
(10.33) Demand Loan Agreement dated October 1, 1989 between
Biogen Medical Products Limited Partnership and Biogen
Medical Products, Inc. (k)
(10.34) Standard Form Commercial Lease dated January 29, 1981
between Ira C. Foss and Ira C. Foss, Jr., as Trustees of
Eastern Realty Trust, and B. Leasing, Inc. (k)
(10.35) Letter of May 24, 1989 exercising option under Standard
Form Commercial Lease dated January 29, 1981 (k)
(10.36) Lease Extension Agreement dated February 20, 1990 between
Eastern Realty Trust and Registrant (k)
(10.37) Standard Form Commercial Lease dated June 1, 1989 between
Eastern Realty Trust and Registrant (k)
(10.38) Cambridge Center Lease dated October 4, 1982 between
Mortimer Zuckerman, Edward H. Linde and David Barrett, as
Trustees of Fourteen Cambridge Center Trust, and B.
Leasing, Inc. (a)
(10.39) First Amendment to Lease dated January 19, 1989 amending
Cambridge Center Lease dated October 4, 1982 (o)
(10.40) Second Amendment to Lease dated March 8, 1990 amending
Cambridge Center Lease dated October 4, 1982 (o)
(10.41) Third Amendment to Lease dated September 25, 1991
amending Cambridge Center Lease dated October 4, 1982 (o)
(10.42) Lease dated October 6, 1993 between North Parcel Limited
Partnership and Biogen Realty Limited Partnership*.
(10.43) 1983 Employee Stock Purchase Plan as amended through
April 3, 1992 and restated (n)**
(10.44) 1982 Incentive Stock Option Plan as amended through March
25, 1993 and restated with form of Option Agreement (p)**
(10.45) 1985 Non-Qualified Stock Option Plan as amended through
March 25, 1993 and restated with form of Option Agreement
(p)**
(10.46) 1987 Scientific Board Stock Option Plan as amended
through April 3, 1992 and restated with form of Option
Agreement (n)**
(10.47) Exclusive License and Development Agreement dated
December 8, 1979 between Registrant and Schering
Corporation (a)
(10.48) Amendatory Agreement dated May 14, 1985 to Exclusive
License and Development Agreement dated December 8, 1979
(c)
(10.49) Amendment and Settlement Agreement dated September 29,
1988 to Exclusive License and Development Agreement dated
December 8, 1979 (o)
(10.50) Amendment dated March 20, 1989 to Exclusive License and
Development Agreement dated December 8, 1979 (o )
(10.51) License Agreement (United States) dated March 28, 1988
between Registrant and SmithKline Beecham Biologicals,
s.a. (as successor to Smith Kline-R.I.T, s.a.) (o)
(10.52) License Agreement (International) dated March 28, 1988
between Registrant and SmithKline Beecham Biologicals,
s.a. (as successor to Smith Kline-R.I.T., s.a.) (o)
(10.53) Sublicense Agreement dated as of February 15, 1990 among
Registrant, SmithKline Beecham Biologicals, s.a (as
successor to SmithKline Biologicals, s.a.) and Merck and
Co., Inc. (o)
(11) Computation of Earnings per Share *
(12) None
(13) Incorporated portions from Biogen, Inc. 1993 Annual
Report to Shareholders *
(22) Subsidiaries of the Registrant *
(24.1) Consent of Price Waterhouse (Included in Part IV hereof)
(29) None
(a) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-1, File No. 2-81689 and
incorporated herein by reference.
(b) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-8, File No. 2-87550 and
incorporated herein by reference.
(c) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1985, as amended, File No. 0-12042 and
incorporated herein by reference.
(d) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1986, as amended, File No. 0-12042 and
incorporated herein by reference.
(e) Previously filed with the Commission as an exhibit to
Report on Form 8-K, File No. 0-12042, dated September 30,
1988 and incorporated herein by reference.
(f) Previously filed with the Commission as an exhibit to
Registration Statement on Form 8-B, File No. 0-12042,
dated December 12, 1988 and incorporated herein by
reference.
(g) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 0-12042 and
incorporated herein by reference.
(h) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1988, File No. 0-12042 and
incorporated herein by reference.
(i) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-3, File No. 33-28612 and
incorporated herein by reference.
(j) Previously filed with the Commission as an exhibit to
Registration Statement on Form 8-A, File No. 0-12042,
filed May 26, 1989 and incorporated herein by reference.
(k) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1989, File No. 0-12042, and
incorporated herein by reference.
(l) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1990, File No. 0-12042, and
incorporated herein by reference.
(m) Previously filed with the Commission as an exhibit to
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1991, File No. 0-12042, and
incorporated herein by reference.
(n) Previously filed with the Commission as an exhibit to
Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1992, File No. 0-12042, and
incorporated herein by reference.
(o) Previously filed with the Commission as an exhibit to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, File No. 0-12042, and
incorporated herein by reference.
(p) Previously filed with the Commission as an exhibit to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993, File No. 0-12042, and
incorporated herein by reference.
(q) Previously filed with the Commission as an exhibit to
Registration Statement on Form S-3, File No. 33-51639,
and incorporated herein by reference.
* Filed herewith
** Management contract or compensatory plan or arrangement
(b) Reports on Form 8-K
None.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
<PAGE>
BIOGEN, INC.
By:/s/ James L. Vincent
James L. Vincent, Chairman of the Board
and Chief Executive Officer
Dated March 18, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Signatures Title Date
/s/ James L. Vincent Chairman, Board of DirectorsMarch 18, 1994
James L. Vincent (principal executive officer)
/s/ Timothy M. Kish Vice President - Finance March 18, 1994
(principal
Timothy M. Kish financial and accounting officer)
/s/ Alexander Bearn Director March 18, 1994
Alexander Bearn
/s/ Harold W. Buirkle Director March 18, 1994
Harold W. Buirkle
/s/ Alan Belzer Director March 18, 1994
Alan Belzer
/s/ Roger H. Morley Director March 18, 1994
Roger H. Morley
/s/ Kenneth Murray Director March 18, 1994
Kenneth Murray
/s/ Phillip A. Sharp Director March 18, 1994
Phillip A. Sharp
/s/ James W. Stevens Director March 18, 1994
James W. Stevens
<PAGE>
Report of Independent Accountants on
Financial Statement Schedules
To the Board of Directors
of Biogen, Inc.
Our audits of the consolidated financial statements referred to in our
report dated January 20, 1994 appearing on page 32 of the 1993 Annual
Report to Shareholders of Biogen, Inc. and its subsidiaries (which
report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an audit of
the Financial Statement Schedules listed in Item 14(a) of this Form 10-
K. In our opinion, these Financial Statement Schedules present fairly,
in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
Price Waterhouse
Boston, Massachusetts
January 20, 1994<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of its Registration Statements on Form S-8, as amended
(Nos. 2-87550, 2-96157, 33-9827, 33-14742, 33-37312, 33-22378, 33-41077
and as filed on September 21, 1993) and on Form S-3, as amended (Nos.
33-14741, 33-14743, 33-20183, and 33-51639) of Biogen, Inc. and its
subsidiaries of our report dated January 20, 1994 appearing on page 32
of the 1993 Annual Report to Shareholders which is incorporated in this
Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules, which
appears in this Form 10-K.
Price Waterhouse
Boston, Massachusetts
March 28, 1994<PAGE>
SCHEDULE I
BIOGEN, INC. AND SUBSIDIARIES
MARKETABLE SECURITIES AT DECEMBER 31, 1993
(in thousands)
PRINCIPAL MARKET VALUE BALANCE
NAME OF ISSUER AND AMOUNTS OF AT BALANCE SHEET
TITLE OF EACH ISSUE BONDS & NOTES COST SHEET DATE AMOUNT
Corporate Bonds and Notes:
Aluminum Co America $ 300 $ 300 $ 296 $ 300
American Brands Inc. 2,000 2,029 2,017 2,023
Associates Corp of NA 2,840 2,855 2,927 2,852
Bank America Corp 1,300 1,373 1,369 1,359
Bankers TR NY Corp 2,675 2,668 2,670 2,669
Beneficial Corp 1,500 1,696 1,686 1,668
BNY Master CR Card TR 2,500 2,555 2,560 2,543
Boeing Co 300 301 301 301
Chase Manhattan CR Corp 1,250 1,277 1,275 1,272
Commercial CR Group Inc 300 296 297 296
Discover Card TR 6,583 6,876 6,862 6,865
Discover Card TR 625 635 631 632
First Chicago Master TR 2,833 2,890 2,906 2,879
Fleet MTG Secs Inc. 2,000 2,040 2,046 2,036
Ford Motor CR CO 6,500 6,915 6,875 6,772
Ford Motor CR CO 554 579 575 577
General Motors Accep Corp 3,964 3,989 4,013 3,980
Gillette Co 300 300 298 300
Golden West Finl Corp DEl 900 1,029 998 1,021
Household Fin Corp 2,752 2,935 2,921 2,914
Korea Dev BK 2,000 2,184 2,134 2,168
MMCA Auto Grantor TR 1,862 1,859 1,849 1,859
Nissan Auto Receivables 799 798 804 798
Norwest Corp 1,925 1,908 1,916 1,915
Premier Auto TR 4,190 4,179 4,187 4,179
Reebok INTL LTD 1,082 1,196 1,161 1,183
Republic NATL BK New York 2,000 2,000 2,050 2,000
Ryland MTG Secs Corp 5,516 5,517 5,566 5,517
Saxon MTG Secs Corp 1,890 1,952 1,952 1,951
Security Pac Corp 1,000 1,051 1,092 1,040
Shawmut Natl Remic TR 241 248 246 248
Smith Barney Shearson HLDGS IN 1,000 1,000 1,009 1,000
Standard CR Card Master TR 1 1,250 1,266 1,275 1,260
Structured Asset Secs Corp 926 924 945 924
Syntex USA Inc. 1,000 995 996 996
Tennessee Valley Auth 300 296 299 296
TMS Home Equity LN TR 1,529 1,572 1,548 1,572
WMX Technologies 2,000 2,010 2,002 2,009
Computer Industry Bonds 530 528 552 528
Retail Industry Bonds 2,600 2,602 2,600 2,602
Utility Industry Bonds 5,605 5,920 5,912 5,843
U.S. Government Securities 115,548 112,633 113,886 112,658
TOTAL MARKETABLE SECURITIES $ 195,805
<PAGE>
SCHEDULE X
BIOGEN, INC. AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in thousands)
The amounts shown below are included in costs and expenses in the
consolidated statements of income.
1993 1992 1991
Maintenance and repairs. . . . . . . . . . 1,883 1,4531,410
Patent amortization. . . . . . . . . . . . 2,258 3,6601,689
Royalties. . . . . . . . . . . . . . . . . 11,588 9,3843,768
There were no material charges for advertising and taxes, other than
payroll and income taxes, for the periods noted above.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
(10.19) Letter dated January 12, 1994 regarding employment of
James R. Tobin
(10.20) Letter dated August 30, 1993 regarding employment of
Irvin D. Smith, Ph.D.
(10.29) Extension Agreement dated December 31, 1993 relating to
Development Contract.
(10.42) Lease dated October 6, 1993 between North Parcel Limited
Partnership and Biogen Realty Limited Partnership.
(11) Computation of Earnings per Share
(13) Incorporated portions from Biogen, Inc. 1993 Annual
Report to Shareholders.
(22) Subsidiaries of the Registrant.
(24.1) Consent of Price Waterhouse (included in Part IV hereof).
EXHIBIT 10.19
January 12, 1994
Mr. James R. Tobin
12 Briarwood Lane
Lincolnshire, IL 60069
Dear Jim:
This letter sets forth the terms of your employment by Biogen, Inc.
(the "Company"), subject to your agreement with the terms as
indicated by your execution of this letter on the final page. As
executed this letter will constitute the agreement (the
"Agreement") between you and the Company with respect to your
employment by the Company.
Position and Base Salary: You will serve as President and
Chief Operating Officer of the Company, reporting to me, with
an annual salary of $400,000. You will be eligible for a merit
salary review at year-end 1994 and annually thereafter,
consistent with the Company's compensation policy for executive
officers. Your name will be placed in nomination for election
to the Company's Board of Directors at the March 1994 regular
meeting of the Board of Directors.
Employment Bonus: Upon employment you will receive $250,000 as
a special cash bonus with a three year forgiveness plan. Under
this plan, 1/36th of the total amount is forgiven monthly over
the 36 month time period. In the event you terminate your
employment prior to three years from your employment date, the
unforgiven portion would be repayable to the Company.
Performance Bonus: Based upon performance and achievement of
mutually agreed goals, you will be eligible to receive a target
bonus of 70 percent of base salary, first payable at year-end
1994. It is agreed your 1994 performance bonus will be
prorated and guaranteed. For future years, and consistent with
the Company's performance bonus policy for executive officers,
you will continue to be eligible for a performance bonus based
on a target bonus of 70 percent of your then base salary.
Stock Options: Upon employment you will be granted an option
to purchase up to 400,000 shares of the Company's Common Stock.
The stock option grant has been approved by the Stock and
Option Plan Committee of the Board of Directors. The stock
option has a ten-year term and a seven-year, straight-line
vesting provision on each of your first seven employment
anniversary dates. Furthermore, the exercise price per share
is equal to the average of the high and low as reported by the
NASDAQ exchange on the date you agree to the terms and
conditions of the Agreement.
In the future, you will be next eligible for additional stock
option grants by no later than year-end 1996 based on your
performance and based on the Company's merit stock option
policy for executive officers.
Succession: It is agreed that if within three years of your
employment date your employment with the Company is terminated
for any reason by the Company, or you die, or if you do not
become Chief Executive Officer by that time and choose to leave
the Company, the Company will pay you the difference between
$2,500,000 and the gross profit from the exercise of your
vested stock options. If your employment is terminated, it is
agreed you will also resign from the Board of Directors.
Employee Benefits: You will be entitled to the full range of
the Company's employee benefits. At present these include
fully paid medical, life, dental, and disability insurances
starting from your date of employment. In the next calendar
quarter following your employment, you will be enrolled in the
Biogen Retirement Plan, including the Supplemental Executive
Retirement Plan, and you will be eligible to participate in
Biogen's 401(k) Savings Plan. You will be entitled to four
weeks' pro-rated vacation. In addition, in the event of long-
term disability you will receive 60 percent of your salary and
will not be subject to any cap on those payments.
Life Insurance: You will be provided the Company's Executive
Term Life Insurance coverage for a total of $1,000,000, such
coverage to be based on your successfully meeting the medical
standards provided for in the Executive Term insurance policy.
Relocation: You will be provided a relocation package which
includes reimbursement for all reasonable expenses associated
with your move from Lincolnshire to Boston, including moving
your household and personal effects; real estate agent, legal
and other fees associated with the sale of your residence in
Lincolnshire, and legal and other closing costs (including two
mortgage points) with the purchase of your new residence in the
Boston area; a house hunting trip of up to seven days for you
and Janet; and a period of sixty days' temporary living pending
your move to the Boston area.
If you have the need, the Company will provide you with an
interest-free bridge loan, representing up to 90 percent of the
equity in your Lincolnshire residence, for the purposes of the
timely purchase of your new residence in the Boston area. It
is understood that you will repay this bridge loan immediately
upon receiving the proceeds from the sale of your home in
Lincolnshire.
After the closing on the purchase of your home in the Boston
area, and for a period of up to six months pending the sale of
your residence in Lincolnshire, the Company will reimburse the
carrying expenses of your residence in Lincolnshire, including
mortgage principle and interest, real estate taxes, home owners
insurance, and reasonable maintenance and utility expenses.
Mortgage Loan: In addition to the relocation package described
above, and on the condition that in order for you to be able to
purchase a residence in the Boston area which is essentially
similar to your current residence in Lincolnshire and the
purchase price of the new residence in the Boston area is
greater than the selling price of your current residence in
Lincolnshire ("the price differential"), the Company will
provide you a mortgage loan ("the loan") equivalent to the
price differential but not to exceed $200,000. The following
additional terms and conditions will apply:
a. The total amount of the loan will be secured by the Company
as a second mortgage on your residence in the Boston area;
b. One half of the loan will be forgiven over a five-year,
straight-line schedule (10 percent of the entire loan per
year). In the event of your termination of employment from
the Company prior to five years from the date of the loan,
the unforgiven portion of the loan would be subject to six
percent per annum simple interest and would be payable to
the Company within six months of your termination date;
c. The remaining one half of the loan will be subject to six
percent per annum simple interest, with the principal due
at the earlier of the following events:
i) Five years following the date of the loan; or
ii) Six months following your termination of employment.
Personal Tax Return Preparation: During your employment with
the Company you will be entitled to the preparation or review,
including a review of estimated taxes, of your annual Federal
and State tax returns, to be made by the company's outside
public accountants. The cost of this preparation or review
will be borne by the Company. Any additional cost incurred by
you for tax consultation, etc. will be your responsibility.
Identification: The Federal Government requires that on your
first day of employment you provide proper identification to
verify your eligibility to work in the United States. Please
refer to the enclosure for more details.
Health and Safety: It is the Company's policy to comply with
federal, state and local guidelines applicable to its
facilities and to take all reasonable steps to ensure the
health and safety of the Company's employees. Consistent with
this policy and within the scope of your normal duties, from
time to time you may be required to work in any of the
Company's facilities.
Physical Exam: We require all new employees to undergo an
employment physical examination, which we will schedule at your
earliest convenience.
Jim, on behalf of the other members of our senior management team
and Board of Directors who have met and talked with you over these
past several weeks, we are very excited with the prospect of your
joining us. I know you will find Biogen the type of organization
which will be challenging yet responsive to your very impressive
background and skills.
Sincerely,
James L. Vincent
Chairman & Chief Executive Officer
Enclosures
Accepted and Agreed:
Mr. James R. Tobin Date January 17, 1994
EXHIBIT 10.20
August 30, 1993
Irvin D. Smith, Ph.D.
Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Dear Irv:
I am very please to confirm your appointment to the position
of Vice President, QA/QC and Drug Development, effective August 1,
1993. You will become a member of the Operating Team and report to
me. As we both have agreed, this appointment will be for a two-
year period.
Your annual base salary is $225,000. At year-end 1993, and
for each year thereafter, you will be eligible to receive a cash
bonus based on the attainment of your performance objectives and
against a target of 30% of your base salary. Your salary will be
reviewed at year-end 1994.
I will propose to the Compensation and Management Resources
Committee at our September meeting that you be granted an option to
purchase up to 25,000 shares of Biogen Common Stock, with a two-
year, straight line vesting schedule. Furthermore, you will have
special rights to exercise the option beyond your termination date
of employment, consistent with the terms of the stock option grant
made to you on your previous appointment to Bioferon which are
specified in my letter to you dated April 1, 1991.
You will refrain from engaging in any activity that might
raise an issue regarding your adherence to any remaining
contractual obligations you may have to your previous employer. If
you have any questions regarding possible conflicts, you will
consult promptly with the Legal Department.
Irv, I look forward to your contributions as a key member of
our senior management team over these next several years.
Sincerely,
James L. Vincent
Chairman & Chief Executive Officer
cook.employee.smith.ltr
EXHIBIT 10.29
EXTENSION AGREEMENT
This Extension Agreement dated as of December 31, 1993, is
between Biogen, Inc., a Massachusetts corporation ("Biogen"), and
Biogen Medical Products Limited Partnership, a Massachusetts
limited partnership (the "Partnership").
WHEREAS, Biogen and the Partnership entered into a Development
Contract dated May 15, 1984, as amended October 10, 1989 and
extended December 2, 1992, relating to gamma interferon and
interleukin-2 (the "Development Contract"); and
WHEREAS, the Development Contract will expire on December 31,
1993, and the parties wish to extend such date to December 31,
1994.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Section 12(e) is hereby amended by deleting the date
"December 31, 1993" and substituting therefor "December
31, 1994."
2. In all other respects the Development Contract is hereby
ratified and confirmed.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above.
BIOGEN MEDICAL PRODUCTS LIMITED
PARTNERSHIP
By its General Partner
BIOGEN, INC.
By: /s/ James L. Vincent
BIOGEN, INC.
By: /s/ Michael J. Astrue
EXHIBIT 10.42
TRACT V
L E A S E
--------------------------------------------------
NORTH PARCEL LIMITED PARTNERSHIP
Landlord
-with-
BIOGEN REALTY LIMITED PARTNERSHIP
Tenant
--------------------------------------------------
TABLE OF CONTENTS
Page
1. DEFINITIONS........................................... 1
2. DEMISE AND TERM; STATUS OF TITLE...................... 14
3. FIXED ANNUAL RENT..................................... 20
4. NET LEASE: NON-TERMINABILITY.......................... 22
5. PAYMENT OF IMPOSITIONS................................ 24
6. UTILITIES AND SERVICES................................ 30
7. CONSTRUCTION OF CERTAIN BUILDING IMPROVEMENTS......... 31
8. USE; COMPLIANCE WITH LAWS............................. 46
9. REPAIRS AND MAINTENANCE............................... 51
10. ALTERATIONS........................................... 53
11. CONDITIONS FOR TENANT'S WORK.......................... 54
12. MECHANICS' AND OTHER LIENS............................ 55
13. INDEMNIFICATION AND NON-LIABILITY OF LANDLORD......... 58
14. INSURANCE............................................. 62
15. DAMAGE OR DESTRUCTION................................. 68
16. CONDEMNATION.......................................... 72
17. ASSIGNMENT AND SUBLETTING............................. 75
18. LEASEHOLD MORTGAGES................................... 94
19. SURRENDER OF PREMISES................................. 100
20. CONDITIONAL LIMITATIONS - DEFAULT PROVISIONS.......... 101
21. SELF-HELP............................................. 108
22. QUIET ENJOYMENT....................................... 110
23. PARKING PRIVILEGES.................................... 110
24. PURCHASE AND SALE CONTRACT............................ 111
25. EXCAVATION OF ADJOINING PROPERTY; ENCROACHMENTS;
EASEMENTS............................................. 135
26. SIGNS................................................. 137
27. TENANT'S PAYMENTS..................................... 138
28. CUMULATIVE REMEDIES................................... 139
29. INVALIDITY OF PARTICULAR PROVISIONS................... 140
30. WAIVER................................................ 140
31. STATUS REPORTS........................................ 141
32. BANKRUPTCY OR INSOLVENCY.............................. 141
33. BROKERAGE PROVISION................................... 147
34. RECORDING AND NOTICE OF LEASE......................... 148
35. RELATIONSHIP OF THE PARTIES........................... 149
36. NOTICES............................................... 149
37. CAPTIONS.............................................. 150
38. COUNTERPARTS.......................................... 150
39. ENTIRE AGREEMENT...................................... 150
40. PROVISIONS BINDING.................................... 151
41. POST TERMINATION SALE OR FINANCING.................... 151
42. INTENTIONALLY OMITTED................................. 156
43. LANDLORD LIABILITY.................................... 156
44. GOVERNING LAW......................................... 158
EXHIBIT A-LEGAL DESCRIPTION................................
EXHIBIT B-DEVELOPMENT AREA MAP.............................
EXHIBIT C-SCHEDULE OF PRIVATE DESIGN RESTRICTIONS..........
EXHIBIT D-APPROVAL LETTER FROM REDEVELOPMENT AUTHORITY
RE: FOUNDATION AND STRUCTURAL PLANS AND
SPECIFICATIONS...................................
EXHIBIT E-PURCHASE PRICE TO BE PAID BY TENANT FOR
PURCHASE OF DEMISED PREMISES.....................
EXHIBIT F-FORM OF DEED.....................................
EXHIBIT G-NOTICE OF LEASE..................................
EXHIBIT H-INTENTIONALLY OMITTED............................
EXHIBIT I-DETERMINATION OF FAIR MARKET VALUE OF THE
PROPERTY (RESPECTING APPLICATION OF
SECTION 41 HEREOF)...............................
EXHIBIT J-DEFINITION OF PROJECT COSTS (RESPECTING
APPLICATION OF SECTION 41 HEREOF)................
<PAGE>
L E A S E
THIS LEASE made as of the 6th day of October, 1993, between NORTH
PARCEL LIMITED PARTNERSHIP, a Massachusetts Limited Partnership having
an office at Fourteen Cambridge Center, Cambridge, Massachusetts 02142
(hereinafter called the "Landlord"), and BIOGEN REALTY LIMITED
PARTNERSHIP, a Massachusetts limited partnership having a usual place
of business at Fourteen Cambridge Center, Cambridge, Massachusetts
02142 (hereinafter called the "Tenant").
W I T N E S E T H T H A T:
1. DEFINITIONS. For the purposes of this Lease, unless the
context otherwise requires, the following words and terms shall have
the meanings indicated (whether or not such words and terms are
capitalized):
(a) Affiliate: a Person directly or indirectly
controlling, controlled by, or under common control with
Landlord, Tenant or any other Affiliate of either Landlord
or Tenant.
(b) Additional Rent: all rent, additional rent and other
charges and sums payable by Tenant under or in respect of
this Lease, whether payable to Landlord or any other Person,
but excluding Fixed Annual Rent.
(c) The Authority or the Redevelopment Authority (both
terms being used interchangeably): The Cambridge
Redevelopment Authority, a public body politic and
corporate.
(d) Building or Improvements (both terms being used
interchangeably): The "Improvements" (as defined in and
approved pursuant to the Land Disposition Agreement) to be
constructed on the Demised Premises by Tenant in accordance
with the requirements of this Lease together with all
alterations, additions, improvements, restorations and
replacements thereof.
(e) Building Equipment: all machinery, apparatus,
equipment, personal property and fixtures of every kind and
nature whatsoever hereafter attached to or used in
connection with the operation or maintenance of the
Building, including, but not limited to, all heating,
lighting and power equipment, engines, pipes, pumps, tanks,
motors, conduits, plumbing, cleaning, fire prevention,
refrigeration, ventilating, air cooling and air conditioning
equipment and apparatus, elevators, ducts and compressors,
and any and all alterations, additions, improvements,
restorations and replacements of any thereof, but excluding
improvements for water, gas and electricity and other
similar equipment or improvements owned by any public
utility company.
(f) Demised Premises: that certain parcel of land in
Cambridge, Massachusetts, described in Exhibit A annexed
hereto and made a part hereof (also sometimes
interchangeably called the "Land" or the "Premises"),
together with all rights, privileges and easements now or
hereafter pertaining thereto. The Demised Premises is
limited to the parcel of land described in said Exhibit A
and does not include the Improvements.
(g) Development Area: an area on the north side of
Broadway and the south side of Binney Street in said
Cambridge, shown on a map annexed hereto as Exhibit B and
made a part hereof.
(h) Intentionally Omitted
(i) Impositions: defined in Section 5(a) hereof.
(j) Insurance Requirements: the requirements of any
insurer of the Demised Premises or the Building (as the case
may be), and the requirements of the local Board of Fire
Underwriters insofar as they pertain to the Demised Premises
or the Building (as the case may be).
(k) Landlord: the owner from time to time of Landlord's
interest under this Lease so that, in the event of any
transfer of the Landlord's entire interest in the Demised
Premises, Landlord shall be and hereby is entirely relieved
and freed of all obligations of Landlord hereunder, and it
shall be deemed without further agreement between the
parties that such grantee, transferee or assignee has
assumed and agreed to perform and observe all obligations of
Landlord hereunder, whether then accrued or thereafter
accruing. Notwithstanding the foregoing, the Landlord named
herein agrees that it shall not convey the Demised Premises
to another Person prior to the first to occur of (i) the
occurrence of an "Event of Default" (defined in Section 20
(a) hereof and (ii) the issuance of a "Certificate of
Completion" (hereinafter defined in this Section 1).
(l) Legal Requirements: all laws, statutes, ordinances,
rules and regulations (including, but not limited to, the
Kendall Square Urban Renewal Plan, building codes, zoning
regulations and ordinances, and environmental laws and
regulations), and the orders, rules, regulations and
requirements of all Federal, State and municipal
governments, and the appropriate agencies, officers,
departments, boards and commissions thereof, whether now or
hereafter in force, which may be applicable to the Demised
Premises, or any part thereof, or the use or manner of use
of all or any part of the Demised Premises, or the sidewalks
and curbs adjacent thereto, or to the Building and the
Building Equipment.
(m) Person: a natural person or persons, a partnership, a
corporation, and any other form of business or legal
association and entity.
(n) Chapter 121A Agreement: The 121A Agreement executed
and delivered by the Commonwealth of Massachusetts and
Biogen, Inc., pursuant to the 121A Application dated June
11, 1993, as approved.
(o) The 6A Contract: That certain Agreement entered into
respecting the Demised by and between Tenant and the City of
Cambridge pursuant to which Tenant agrees, inter alia, to
make certain payments respecting real estate taxes, said
Agreement being executed according and pursuant to
Massachusetts General Laws, Chapter 121A, Section 6A.
(p) Land Disposition Agreement or Land Disposition Contract
(both terms being used interchangeably): That certain
agreement entitled "Supplemental Land Disposition Contract"
dated October 6, 1993 between the Redevelopment Authority
and North Parcel Limited Partnership.
(q) Certificate of Completion: A certificate of completion
issued by the Authority pursuant to the Land Disposition
Contract respecting the full completion of the Building and
other improvements on the Demised Premises.
(r) Option Agreement: That certain agreement entitled
"Acquisition, Option And Cooperation Agreement" dated as of
October 6, 1993 by and between North Parcel Limited
Partnership and Biogen, Inc.
(s) Hazardous Materials Indemnity: That certain Agreement
entitled "Indemnity Agreement Regarding Hazardous Materials"
dated as of October 6, 1993, from Tenant and Biogen, Inc.,
to and for the benefit of the "Transaction Parties" and the
other "Indemnified Parties" (both as therein defined).
(t) Environmental Laws: defined in Section 1 of the
Hazardous Materials Indemnity and herein incorporated by
reference as if fully set forth herein.
(u) Hazardous Materials: defined in Section 1 of the
Hazardous Materials Indemnity and herein incorporated by
reference as if fully set forth herein.
(v) Release (also herein sometimes called "Release of
Hazardous Materials"): defined in Section 1 of the
Hazardous Materials Indemnity and herein incorporated by
reference as if fully set forth herein.
(w) Threat of Release (also herein sometimes called "Threat
of Release of Hazardous Materials"): defined in Section 1
of the Hazardous Materials Indemnity and herein incorporated
by reference as if fully set forth herein.
(x) Biogen Guaranty: That certain "Unconditional Guaranty
And Indemnity" dated as of October 6, 1993 from Biogen,
Inc., to the "Transaction Parties" (as therein defined).
(y) Zuckerman/Linde Guaranty: That certain Guaranty And
Indemnity Agreement dated as of October 6, 1993 by and among
Mortimer B. Zuckerman, Edward H. Linde and Biogen, Inc.
(z) Authority Deed: The deed of the Demised Premises dated
October 6, 1993 by and between the Redevelopment Authority,
as grantor, and the Landlord, as grantee, which deed is to
be recorded with the Middlesex South District Registry of
Deeds.
(aa) Fixed Rent Commencement Date: The twenty-first (21st)
calendar day after the date on which the Redevelopment
Authority issues the Certificate of Completion.
(bb) Fixed Annual Rent: For the period commencing on the
Fixed Rent Commencement Date and continuing through the day
immediately preceding the first annual anniversary of the
Fixed Rent Commencement Date, the Fixed Annual Rent shall be
at an annual rate equal to the purchase price calculated for
purposes hereof pursuant to Section 24 (b)(i) of this Lease
as if the Closing occurred on the "Closing Date" as defined
in Section (b)(ii); and for each lease year thereafter
during the balance of the Lease Term the Fixed Annual Rent
shall be at an annual rate equal to twenty percent (20%) of
the aforesaid purchase price (which, for purposes hereof, is
to be calculated as immediately above set forth).
Notwithstanding the foregoing, if and only if the Closing of
the sale of fee title to the Demised Premises under Section
24 does not occur as a direct result of either (1) the
willful, wrongful failure of Landlord to take such actions
for Landlord to so close or (2) a failure not caused by
Landlord or Tenant, the Fixed Annual Rent for each lease
year during the Lease Term shall be at an annual rate equal
to ten percent (10%) of the aforesaid purchase price (which,
for purposes hereof, is to be calculated as above set
forth).
(cc) Private Design Restrictions: The design requirements
and building restrictions set forth in Exhibit C attached
hereto.
(dd) Landlord's Fee Policy of Title Insurance: That
certain owner's policy of title insurance issued by Lawyers
Title Insurance Corporation to Landlord by incident to
Landlord's acquisition of fee title to the Demised Premises
from the Redevelopment Authority.
(ee) Governmental Directives: As defined in Section 7(h)
hereof.
(ff) Master Easement Agreement: That certain "Parcel 2
Easement Agreement (Master Utility and Access Easements)"
dated March 19, 1990 recorded with the Middlesex South
District Registry of Deeds in Book 20443, Page 013, as
amended.
(gg) Site Remediation: As defined in Section 7 (h) hereof.
(hh) Approved Construction Plans And Specifications: As
defined in Section 7 (a)(ii) hereof.
(ii) Agreement For Creation Of Certain Easements: That
certain instrument entitled "Agreement For The Creation Of
Certain Easements" dated September 19, 1983 by and between
COM/Energy Steam Company and Cambridge Center Associates.
(jj) Transaction Documents: the Land Disposition
Agreement; the Option Agreement; the Limited Partnership
Agreement dated as of October 6, 1993 creating Landlord (the
"Partnership Agreement"); the Stockholders Agreement dated
as October 6, 1993 among ZL North Associates, Biogen, Inc.,
and N. P. Corp. (the "Stockholders Agreement"); this Lease;
all other ground leases from time to time executed and
delivered pursuant to the provisions of the Option
Agreement; the Parking Garage Lease dated as of October 6,
1993 between Cambridge Center North Trust, an affiliate of
Landlord, and Biogen Realty Limited Partnership (the
"Parking Garage Lease"); the Hazardous Materials Indemnity;
the Biogen Guaranty; the Zuckerman/Linde Guaranty; the
"Negative Pledge Agreement", the "Fourteen Cambridge Center
Lease", any "Parcel 3 Parking Agreement", the "Conditional
Assignment of Beneficial Interest in West Parcel Trust", the
"Tract Acquisition Promissory Note" for any Tract, the
"Tract Acquisition Mortgage And Security Agreement" for any
Tract and the "Deed Obligations" (all defined in the Option
Agreement) and all other agreements and instruments between
or from Landlord, Affiliates of Landlord (including, without
limitation, Zuckerman/ Linde Affiliates) and/or Biogen,
Inc., and Affiliates of Biogen, Inc.
(kk) Restoration: As defined in Section 15(a) hereof.
(ll) Zuckerman/Linde Affiliates: Any trust, entity,
partnership, corporation or other form of business
organization owned (in whole or in part) by, controlled by
or affiliated with Mortimer B. Zuckerman, Edward H. Linde or
both including, but not limited to, Ten Cambridge Center
Trust, Eleven Cambridge Center Trust and Cambridge Center
North Trust.
(mm) Tract VI Exclusive Easement And Option Agreement:
That certain Exclusive Easement and Option Agreement dated
October 6, 1993 by and between the Redevelopment Authority
and Landlord relating to "Tract VI" (as therein defined),
the same to be recorded with the Middlesex South District
Registry of Deeds immediately following the recording of the
Authority Deed.
(nn) The North Garage Site Tieback Easement Agreement:
That certain "Tieback Easement Agreement" dated as of
October 6, 1993 from the Trustees of Cambridge Center North
Trust, as grantor (sometimes called "CCNT"), to Landlord, as
grantee, which easement agreement is to be recorded with the
Middlesex South District Registry of Deeds pursuant to
which, at the request of Tenant, certain easements were
granted by CCNT burdening the parcel of land known as the
North Garage site (more particularly described in said
easement agreement) for the benefit of the Improvements to
be constructed on the Demised Premises by Tenant hereunder.
(oo) The 10CC Tieback Easement Agreement: That certain
"Tieback Easement Agreement" dated as of October 6, 1993
from the Trustees of Ten Cambridge Center Trust, as grantor
(sometimes called "10CCT"), to Landlord, as grantee, which
easement agreement is to be recorded with the Middlesex
South District Registry of Deeds pursuant to which, at the
request of Tenant, certain easements were granted by 10CCT
burdening the parcel of land known as Ten Cambridge Center
(more particularly described in said easement agreement) for
the benefit of the Improvements to be constructed on the
Demised Premises by Tenant hereunder.
(pp) The Tieback Easement Agreements shall mean both the
North Garage Tieback Easement Agreement and the 10CC Tieback
Easement Agreement. The grantors under both of the same are
herein collectively called the "Tieback Easement Grantors".
(qq) The Zoning And Development Restrictions (also
interchangeably called the "Zoning Restrictions And
Limitations: The provisions and requirements set forth in
Section 22 of the Option Agreement. For purposes hereof,
all references in said Section 22 to "Buyer" shall be deemed
to be and mean Tenant and all references to "Seller" shall
be deemed to be and mean Landlord.
(rr) Insolvency Proceeding:
(i) The taking of any of the following actions by any
Person or entity: (A) the application for, or consent to,
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its property; (B) the making of
a general assignment for the benefit of its creditors; (C)
the commencement of a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect); (D) the
filing of a petition seeking to take advantage of any other
law providing for the relief of debtors; (E) consenting to
any petition filed against it seeking an order for relief
under the Federal Bankruptcy Code (as now or hereafter in
effect) or of any other law providing for the relief of
debtors; (F) the taking of any action under the laws of its
jurisdiction of incorporation or organization similar to any
of the foregoing; or
(ii) The commencement of any proceeding or case
against any Person or entity in any court seeking: (A) the
liquidation, reorganization, dissolution, winding up, or
composition or readjustment of its debts; (B) the
appointment of a trustee, receiver, custodian, liquidator or
the like of it or of all or any substantial part of its
assets; (C) the entry of an order for relief under the
Federal Bankruptcy Code (as now or hereafter in effect); or
(D) similar relief in respect of such Person or entity under
any law providing for the relief of debtors.
Various other words or terms which are defined in other Sections
of this Lease shall have the meanings specified in such other Sections
for all purposes of this Lease, unless the context otherwise
requires. Various other words or terms which are defined in other
Sections of this Lease shall have the meanings specified in such other
Sections for all purposes of this Lease, unless the context otherwise
requires.
2. DEMISE AND TERM; STATUS OF TITLE.
(a) Landlord, for and in consideration of the rents,
Additional Rent, terms, covenants and conditions herein reserved and
contained, does hereby demise and lease to Tenant, and Tenant does
hereby take and hire from Landlord, upon and subject to the terms,
covenants and conditions herein set forth, the Demised Premises.
(b) TO HAVE AND TO HOLD the Demised Premises for a term of
ninety nine (99) years (sometimes herein called the "Lease Term")
commencing on the date hereof and expiring on the day preceding the
ninety ninth (99th) anniversary of the date hereof, unless this Lease
shall sooner terminate as hereinafter provided.
(c) The Demised Premises are demised and leased subject
to:
(i) the rights of any parties in possession thereof
and the existing state of the title thereof as of
the commencement of the term of this Lease
including, without limitation, (a) the provisions
and conditions of the Authority Deed , (b) the
provisions and conditions of the Land Disposition
Agreement, (c) the provisions and conditions of
the Master Easement Agreement (and all easements,
rights, grants and other agreements from time to
time executed and/or granted pursuant thereto),
(d) the provisions and conditions of the Agreement
For Creation Of Certain Easements (and all
easements, rights, grants and other agreements
from time to time executed and/or granted pursuant
thereto) and (e) the matters set forth in the
Landlord's Fee Policy of Title Insurance and in
the lessee's policy of title insurance issued to
Tenant in connection with Tenant's execution of
this Lease, all of which Tenant has approved;
(ii) discrepancies, conflicts in boundary, shortages in
area, encroachments or any other facts which an
accurate survey or physical inspection thereof
would disclose;
(iii) any facts, rights, interests or claims which are
not shown by the public records whether or not the
same could be ascertained by an inspection of said
Demised Premises or by making inquiry of persons
in possession thereof;
(iv) all Legal Requirements, whether now or hereafter
in force, and any existing and/or future
violations thereof;
(v) taxes, assessments, easements, claims of
easements, encumbrances, pending proceedings for
vacating, opening or changing of streets or
highways preceding entry of the ordinance or order
therefor, any of which are not shown by the public
records;
(vi) any liens of mechanics, materialmen and laborers
for work or services performed or to be performed
or materials furnished or to be furnished in
connection with the Demised Premises and the
construction of buildings, structures and other
improvements thereon;
(vii) the right and easements hereby reserved unto
Landlord to enter onto the Demised Premises for
the purpose set forth in Section 25(c) hereof;
(viii) the condition of the Demised Premises, it being
covenanted and agreed by Tenant that the
provisions of Section 7 (h) shall apply respecting
the presence of Hazardous Materials, the Release
and/or Threat of Release of Hazardous Materials
and the other matters, set forth therein all as
more fully set forth in said Section 7 (h), that
Tenant has executed and delivered the Hazardous
Materials Indemnity or has executed and delivered
a Joinder with respect thereto; and that Biogen,
Inc., has executed and delivered the Hazardous
Materials Indemnity and the Biogen Guaranty;
(ix) that certain "Cambridge Center North Garage
Parking Lease" dated as of October 6, 1993,
between the Trustees of Cambridge Center North
Trust, as landlord, and Biogen Realty Limited
Partnership, as tenant (a notice of which is to be
recorded with the Middlesex South District
Registry of Deeds) and any "Parcel 3 Parking
Agreements" (defined in the Option Agreement)
including, without limitation, in both cases the
rights and obligations set forth therein and any
future leases which from time to time may be
executed pursuant thereto;
(x) the Private Design Restrictions;
(xi) the condition of the Demised Premises as set forth
in the Land Disposition Agreement, without
representation or warranty of any kind, type or
nature by Landlord;
(xii) the requirements of all Environmental Laws and
Governmental Directives, whether now or hereafter
in force, and any existing and/or future
violations thereof; and
(xiii) The obligations, terms, provisions and conditions
of the Tract VI Exclusive Easement And Option
Agreement. The Demised Premises are also demised
together with the benefit of the Tract VI
Exclusive Easement And Option Agreement. Tenant
covenants and agrees to assume and to timely and
fully perform and observe the obligations, terms,
provisions and conditions of the Tract VI
Exclusive Easement And Option Agreement and Tenant
shall, and does hereby agree to, indemnify and
hold Landlord harmless from and against all loses,
liabilities, costs, damages and claims (including,
without limitation, attorneys fees of counsel
selected by Landlord) resulting from, claimed to
have resulted from or in any way arising out of
the failure of Tenant to timely, fully, completely
and properly perform and observe the obligations,
terms, provisions and conditions of the Tract VI
Exclusive Easement And Option Agreement and the
provisions hereof shall survive any expiration or
other termination of this Lease and/or the Land
Disposition Agreement. The covenants, agreements,
provisions and indemnity of Tenant, all as
hereinabove set forth, are collectively sometimes
called "Tenant's Assumption And Indemnity
Respecting Exclusive Easement/Option Agreement".
(xiv) The obligations, terms, provisions and conditions
of the Tieback Easement Agreements. The Tieback
Easement Agreements are solely for the benefit of
Tenant in order to facilitate construction of the
Improvements which, as designed by or for Tenant,
require the easements set forth in the Tieback
Easement Agreements. Accordingly, Tenant
acknowledges, covenants and agrees (a) that
Landlord shall have no obligation, duty or
liability (i) to perform the obligations, terms,
conditions and provisions set forth in the Tieback
Easement Agreements and/or (ii) to perform any
work in, to, under or with respect to the
properties burdened by the Tieback Easement
Agreements including, without limitation, any
excavation, soil removal, any other site work of
any type, nature or description or any hazardous
materials' assessment, removal, remediation,
transport, disposal or other clean up associated
in any way with the performance of any of the
foregoing (collectively called the "Easement Work
And Remediation") and (b) Tenant shall be solely
responsible, at its cost and expense, to perform,
and be bound by all obligations and liabilities
arising out of or in any way connected with, the
Easement Work And Remediation. All Easement Work
And Remediation shall be performed by Tenant in
accordance with the requirements of all applicable
Legal Requirements, Insurance Requirements,
Environmental Laws (including, without limitation,
Governmental Directives) and the requirements of
all Governmental Bodies (including, without
limitation, the Redevelopment Authority). The
Demised Premises are also demised together with
the benefit of the Tieback Easement Agreements.
Tenant covenants and agrees to assume and to
timely and fully perform and observe all
obligations, terms, provisions and conditions in
connection with Tenant's exercise of the rights
granted under the Tieback Easement Agreements and
Tenant shall, and does hereby agree to, indemnify
and hold Landlord and Affiliates of Landlord
(including, without limitation, Boston Properties,
Inc., Mortimer B. Zuckerman, Edward H. Linde,
CCNT, 10CCT and other Zuckerman/Linde Affiliates)
harmless from and against all losses, liabilities,
costs, damages and claims (including, without
limitation, attorneys fees) resulting from,
claimed to have resulted from or in any way
arising out of the failure of Tenant to timely,
fully, completely and properly (i) perform and
observe the obligations, terms, provisions and
conditions of the Tieback Easement Agreements
and/or (ii) comply with Environmental Laws
(including, without limitation, Governmental
Directives) relating to any and all Easement Work
And Remediation. The terms of this
indemnification shall be governed by the Hazardous
Materials Indemnity. The provisions hereof shall
survive any expiration or other termination of
this Lease and/or the Land Disposition Agreement.
The covenants, agreements and provisions of
Tenant, all as hereinabove set forth and in the
Hazardous Materials Indemnity, are collectively
called "Tenant's Assumption And Indemnity
Respecting Tieback Easement Agreements". The
provisions hereof shall be in addition to the
provisions of Sections 7 (h)(i) and 7 (h)(ii) of
this Lease.
(xv) The Zoning And Development Restrictions.
(xvi) Such documents, instruments and other matters as
are contemplated by the Transaction Documents.
(d) Landlord and Tenant hereby acknowledge the existence of
the "Option Agreement" (defined in Section 1 hereof). Tenant hereby
acknowledges and confirms to Landlord that Landlord neither has made,
nor is hereby making, any representation or warranty with respect to
the condition of the Demised Premises or its fitness or suitability
for any
particular use, and Landlord shall not be liable for any latent or
patent defects therein. Further, Tenant accepts the title to, and
the physical condition of, the Demised Premises in their present
condition "as is". Without limiting the provisions of this Section 2
(d), Section 2 (c)(xiii) and/or Section 2 (c)(xiv), Tenant shall, at
its sole cost, expense and liability, (i) perform the obligations,
conditions, terms and provisions of the instruments set forth or
referred to in Section 2 (c) hereof and (ii) comply with the
provisions and other requirements of the Zoning And Development
Restrictions.
3. FIXED ANNUAL RENT.
(a) Commencing on the Fixed Rent Commencement Date and
continuing for the balance of the term of this Lease, Tenant covenants
and agrees to pay to Landlord an annual fixed rent (hereinafter called
the "Fixed Annual Rent") in an annual amount equal to the applicable
"Fixed Annual Rent" (as defined in Section 1 hereof).
(b) The Fixed Annual Rent shall be payable in equal monthly
installments, in advance, on the Fixed Rent Commencement Date and on
the first day of each calendar month during the unexpired term of this
Lease from and after the date when Fixed Annual Rent first becomes due
and payable, pursuant to the provisions of subparagraph (a) above.
Fixed Annual Rent for any partial month at the beginning of the term
shall be prorated on a daily basis. Said monthly installments of
Fixed Annual Rent, as well as all Additional Rent, shall, unless
otherwise specifically provided herein, be paid promptly when due,
without notice or demand therefor and without deduction, abatement or
set-off of any amount for any reason whatsoever, at the office of the
Landlord set forth above, or at such other place or to such other
person as Landlord may from time to time designate by notice to
Tenant. The Fixed Annual Rent and all other amounts payable by Tenant
to Landlord hereunder shall be paid in lawful money of the United
States which shall be legal tender for the payment of all debts and
dues, public and private, at the time of payment.
(c) If any installment or installments of Fixed Annual Rent
shall not be paid within ten (10) days after the same shall become due
hereunder, then, in addition to, and without waiving or releasing, any
other rights and remedies of Landlord, a late charge of three percent
(3%) per month (computed on a 30-day month) on the amount of each such
installment or installments (computed from the due date(s) thereof)
shall become immediately due and payable to Landlord, and the same may
be collected on demand or as Additional Rent in accordance with the
provisions of Section 20(a)(iv) hereof.
(d) Landlord and Tenant hereby agree, acknowledge and
confirm that nothing contained in this Section 3 shall be deemed to
modify, amend, waive or in any other way alter or affect the
provisions of Section 24 hereof and the obligations of the parties
under said Section 24.
4. NET LEASE: NON-TERMINABILITY.
(a) It is the purpose and intent of Landlord and Tenant
that this Lease constitute, and be construed as, an absolutely net
lease, whereby under all circumstances and conditions (whether or not
now or hereafter existing or within the contemplation of the parties)
the Fixed Annual Rent shall be a completely net return to Landlord
throughout the term of this Lease; and unless and to the extent
specifically otherwise provided herein Tenant shall indemnify and hold
harmless Landlord from and against any and all expenses, costs,
liabilities, obligations and charges whatsoever, which shall arise or
be incurred or become due, during the term of this Lease, with respect
to or in connection with, the Demised Premises, the Improvements or
the Building Equipment, and the operation, management, maintenance and
repair thereof.
(b) Unless expressly otherwise provided herein, this Lease
shall not terminate, nor shall Tenant have any right to terminate this
Lease, nor shall Tenant be entitled to any abatement or reduction of
rent hereunder, nor shall the obligations of Tenant hereunder be
affected by reason of (i) any damage to or destruction of all or any
part of the Demised Premises, the Building or the Building Equipment,
from whatever cause (except only and to the extent (if at all)
specifically otherwise provided in Section 15 hereof), (ii) the taking
of the Demised Premises, the Building or the Building Equipment, or
any portion thereof, by eminent domain or otherwise for any reason
(except only and to the extent (if at all) specifically otherwise
provided in Section 16 hereof), (iii) the prohibition, limitation or
restriction of Tenant's use of all or any part of the Demised
Premises, the Building or the Building Equipment, from whatever cause,
or any interference with such use, unless caused by the wrongful
intentional acts or gross negligence (but not the negligent acts or
omissions) of Landlord or its employees, in which event this Lease may
not be terminated by Tenant, but Tenant shall, in such limited
circumstances, be entitled to an equitable adjustment in the Fixed
Annual Rent according to the nature and extent, and limited to the
duration, of the interference with Tenant's use of the Demised
Premises, (iv) any eviction by paramount title or otherwise, or (v)
any other cause whether similar or dissimilar to the foregoing, any
present or future law to the contrary notwithstanding. It is the
intention of the parties hereto that the obligations of Tenant
hereunder shall be separate and independent covenants and agreements,
that Fixed Annual Rent (as the same may be adjusted for the wrongful
intentional acts of Landlord or its employees, as set forth in (iii)
above), Additional Rent and all other sums payable by Tenant hereunder
shall continue to be payable in all events and that the obligations of
Tenant hereunder shall continue unaffected, unless the requirement to
pay or to perform the same shall have been excused pursuant to an
express provision of this Lease.
5. PAYMENT OF IMPOSITIONS.
(a) Tenant covenants to pay, as Additional Rent, throughout
the term of this Lease, directly to the appropriate taxing or other
Governmental authorities having jurisdiction, before any fine,
penalty, interest or cost may be added thereto for the non-payment
thereof, all taxes (including, without limitation, payments in lieu of
or in addition to such taxes and/or excises as are provided for in
and/or are to be paid pursuant to that certain Chapter 121A Agreement
defined in Section 1 hereof and/or the 6A Contract defined in Section
1 hereof), assessments (including but not limited to all assessments
for public improvements or benefits, payable during the term of this
Lease), water, sewer and other rents, rates and charges, charges for
public utilities, excises, levies, licenses and permit and inspection
fees and other Governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever, which at any time during the term of this Lease are
assessed, levied, confirmed, imposed upon, or grow or become due or
payable out of or in respect of or become a lien on (a) the Demised
Premises or any part thereof or any appurtenance thereto, the Building
or the Building Equipment, (b) the Fixed Annual Rent, any Additional
Rent reserved or payable hereunder or any other sums payable by Tenant
hereunder, or (c) this Lease or the leasehold estate hereby created or
which arise in respect of the Demised Premises, the Building or the
Building Equipment,, or the operation, possession, occupancy or use
thereof (all of which taxes, assessments, charges, interest, penalties
or like charges are sometimes hereinafter referred to collectively as
the "Impositions" and individually as an "Imposition"); provided,
however, that:
(i) If, by law, any Imposition is or may be payable,
at the option of the taxpayer, in installments,
Tenant may pay such Imposition in installments
(with any accrued interest due and payable on the
unpaid balance of the Imposition) and shall pay
each such installment as the same respectively
become due and before any fine, penalty, further
interest or cost may be added thereto. In any
event, however, Tenant shall pay the full amount
of all installments of any such Imposition, (but
not including the installments arise and which are
due and payable for periods after the expiration
of the term of this Lease), at least one (1) year
prior to the expiration of the term of this Lease;
(ii) Impositions, whether or not a lien upon the
Demised Premises, the Building or the Building
Equipment, shall be apportioned between Landlord
and Tenant at the beginning and, with respect to
Impositions which are both levied and payable
during the last twelve (12) months of the term of
this Lease and are not deferred installments of
earlier Impositions, at the expiration or sooner
termination of the term of this Lease, so that
Tenant shall pay only the portion of such
Impositions which are allocable to the term of
this Lease; provided, however, Landlord need not
make any apportionment in Tenant's favor (a) if
this Lease shall be terminated by reason of a
default on the part of the Tenant or (b) if the
Tenant shall purchase the Demised Premises
pursuant to Section 24 hereof or otherwise.
(b) Nothing herein contained shall require Tenant to pay
income taxes assessed against Landlord, or any capital levy,
corporation franchise, excess profits, estate, succession, inheritance
or transfer taxes of Landlord, unless such taxes are imposed or levied
upon or assessed as a total or partial substitute for, or in lieu of,
any other Imposition required to be paid by Tenant pursuant to this
Section 5, in which event, the same shall be deemed Impositions and
shall be paid by Tenant; provided, however, (i) that Tenant shall
timely make all of the payments required by the Chapter 121A Agreement
and the 6A Contract irrespective of when the term of this Lease
commences, expires or otherwise terminates and notwithstanding the
foregoing provisions of this Section 5(b) and notwithstanding the
provisions of items (i) and (ii) of Section 5(a) and (ii) that if at
any time during the term of this Lease, the method of taxation shall
be such that there shall be levied, assessed or imposed on Landlord
(as a total or partial substitute for or in lieu of or in addition to,
any other Imposition) a capital levy, gross receipts or other tax on
the rents received therefrom and/or a franchise tax or an assessment,
levy or charge measured by or based, in whole or in part, upon such
rents, the Demised Premises (including but not limited to the
acquisition, leasing, use or value thereof) or the present or any
future improvements (including the Building, the Building Equipment
and any Alteration to the Building) on the Demised Premises or on the
construction thereof and/or measured in whole or in part by Landlord's
income from the Demised Premises, then all such taxes, assessments,
levies and charges, or the part thereof so measured or based, shall be
deemed to be included within the term "Impositions" for the purposes
hereof, but only to the extent that such taxes would be payable if the
Demised Premises were the only property of Landlord, and Tenant shall
pay and discharge the same as herein provided in respect of the
payment of Impositions. Tenant shall furnish to Landlord, promptly
after payment of any Impositions, and in all events not later than
fifteen (15) days prior to the date when any Imposition would become
delinquent, official receipts or other satisfactory proof evidencing
payment of such Impositions. In addition, Tenant shall furnish to
Landlord, semi-annually, throughout the term of this Lease, a
certificate executed by an authorized official of Tenant, stating that
all Impositions have been paid to date. Upon Tenant's failure to pay
such Impositions or failure to provide proof of such payment or
failure to deliver any such certificates, as above provided, and the
continuation of such failure for ten (10) days after notice thereof
from Landlord, Landlord shall have the right, at Landlord's option, to
require Tenant to: (i) promptly deposit with Landlord funds for the
payment of current Impositions required to be paid by Tenant
hereunder; and (ii) also deposit one-twelfth (1/12th) of the current
annual Impositions or those of the preceding years, if the current
amounts thereof have not been fixed, on the first day of each month in
advance, except that all additional funds required for any payments
thereof shall also be deposited as aforesaid on the first day of the
final month during which or at the end of which a payment is due and
payable without interest or penalty. Any deposits so received by
Landlord shall be held in a fiduciary capacity and applied to the
payment of such Impositions, but in no event shall the Tenant be
entitled to receive interest upon, or any payments on account of
earning or profits derived from, such payments by the Tenant to the
Landlord.
(c) Tenant shall have the right to contest the amount or
validity, in whole or in part, of any Imposition by appropriate
proceedings diligently conducted in good faith, but only after payment
of such Imposition unless such payment would operate as a bar to such
contest or interfere materially with the prosecution thereof, in which
event, notwithstanding the provisions hereof, Tenant may postpone or
defer payment of such Imposition if, but only if (i) neither the
Demised Premises nor any part thereof would by reason of such
postponement or deferment be in danger of being forfeited or lost, and
(b) Tenant shall have deposited with Landlord the amount so contested
and unpaid, together with all interest and penalties in connection
therewith and all charges that may or might be assessed against or
become a charge on the Demised Premises or any part thereof, or the
Building, in such proceedings (which amount shall be deposited by
Landlord in an interest bearing account of a bank selected by Tenant
and approved by Landlord, or otherwise invested by Landlord with the
reasonable prior approval of Tenant), or shall have furnished to
Landlord security reasonably satisfactory to Landlord sufficient to
cover said amount, interest, penalties and charges or has provided
evidence reasonably satisfactory to Landlord of Tenant's ability to
pay as and when due said amount, interest, penalties and charges.
Tenant further agrees that each such contest shall be promptly
prosecuted to a final conclusion. Tenant will pay and save Landlord
harmless against any and all losses, judgments, decrees and costs
(including all attorneys' fees and expenses) in connection with any
such contest and will, promptly after the final settlement, compromise
or determination of such contest, fully pay and discharge the amounts
which shall be levied, assessed, be payable therein or in connection
therewith, together with all penalties, fines, interests, costs and
expenses thereof or in connection therewith, or may direct Landlord to
pay out of such deposits, the amount of such Impositions so due and
payable; and, upon such payment, Landlord shall return, with such
interest as shall have accrued thereon, the balance, if any, of the
amount deposited with it with respect to such Impositions as
aforesaid. If, at any time during the continuance of such
proceedings, Landlord shall deem the amount deposited or the security
posted, as aforesaid, insufficient, Tenant shall, upon demand, make an
additional deposit or provide additional security satisfactory to
Landlord of such sums as Landlord may require reasonably, and upon
failure of Tenant to do so, the amount theretofore deposited or the
security posted may be applied by Landlord to the payment, removal and
discharge of such Impositions, and the interest and penalties in
connection therewith, together with any costs, fees or other liability
accruing in any such proceedings, with only the balance, if any, being
returned to Tenant.
6. UTILITIES AND SERVICES.
(a) Tenant agrees to pay or cause to be paid, when due, all
charges for water, sewer, electricity, gas, heat, power, telephone or
other communication service or other utility or service used, rendered
or supplied to, upon or in connection with the Demised Premises or the
Building throughout the term of this Lease, and to indemnify and hold
harmless Landlord against and from any claims, liability, damage,
loss, cost or expense on such account. The provisions hereof shall
survive any termination or expiration of this Lease.
(b) Tenant expressly agrees that Landlord is not, nor shall
it be, required to furnish to Tenant or any other permitted occupant
of the Demised Premises or the Building during the term of this Lease,
any of such utilities or any other facilities, equipment, labor,
materials or any services of any kind whatsoever, whether similar or
dissimilar.
7. CONSTRUCTION OF CERTAIN BUILDING IMPROVEMENTS.
(a)(i) Tenant recognizes and acknowledges the fact that the
Demised Premises on which the Improvements are to be constructed is a
portion of Parcel 2, so-called, of the Kendall Square Urban Renewal
Project, as designated by the Redevelopment Authority under an urban
renewal plan (as it may have been amended and may hereafter be
amended) adopted by the Redevelopment Authority and approved by the
Cambridge City Council. Tenant further recognizes that Landlord's fee
title to the Demised Premises has been acquired by Landlord subject to
the terms and conditions of the "Land Disposition Agreement" (defined
in Section 1 hereof), a true copy of which Land Disposition Agreement
has been delivered previously to Tenant. Tenant hereby acknowledges
that it has approved, and accepts the terms, provisions and
requirements of, the Land Disposition Agreement. Further, Tenant
hereby covenants and agrees with Landlord that Tenant shall timely,
fully and punctually comply with, observe and perform, or shall cause
to be complied with, observed and performed, (i) all of the
obligations of Redeveloper under and pursuant to the terms, provisions
and requirements of the Land Disposition Agreement and (ii) all of the
obligations of the grantee under and pursuant to the Authority Deed.
Without limiting the generality of the foregoing, Tenant shall comply
with, observe and perform the obligations and requirements of Section
1(c) of the Land Disposition Agreement. Tenant shall provide Landlord
with copies of all notices, communications and other submissions made
to or received from the Redevelopment Authority under the Land
Disposition Agreement and the Authority Deed unless Landlord shall
have already received copies of the same. Tenant shall, and does
hereby agree to, indemnify and hold Landlord harmless from and against
all loss, cost, damage and claims (including, without limitation,
attorneys fees of counsel selected by Landlord) resulting from or in
any way arising out of the failure of Tenant to timely, fully and
completely perform or caused to be performed (i) any of the
obligations of the Redeveloper under and pursuant to the terms,
provisions and requirements of the Land Disposition Agreement and/or
(ii) any of the obligations of the grantee under and pursuant to the
terms, provisions and requirements of the Authority Deed.
Notwithstanding the foregoing, the within indemnity shall not apply if
and to the extent that Landlord by its willful and wrongful acts
prevents Tenant from complying with the requirements of the Land
Disposition Agreement or the Authority Deed, as the case may be. The
provisions hereof shall survive any expiration or other termination of
this Lease and/or the Land Disposition Agreement and any reversion of
title to the Redevelopment Authority. Without limiting the generality
of the foregoing and notwithstanding any other provision of this
Lease, Tenant covenants and agrees that no occupancy of the
Improvements shall occur until the Redevelopment Authority shall issue
a Certificate of Completion for the Improvements except with the prior
written approval of the Authority.
(a)(ii) Tenant confirms to Landlord its understanding that,
consistent with the provisions of the Land Disposition Agreement, the
Authority must approve plans and specifications for construction of
the Improvements upon the Demised Premises. Tenant acknowledges and
agrees that Tenant shall cause to be prepared and bear all costs of
preparation, submission, presentation and revision as may be required
of plans, specifications and any related materials necessary to obtain
said approval of the Authority. Tenant covenants and agrees that the
Improvements and the plans and specifications therefor shall be in
conformity with the requirements of the Land Disposition Agreement and
shall be in conformity with the Private Design Restrictions and the
Zoning Restrictions And Limitations and all plans and specifications
(and revisions thereto) submitted to the Redevelopment Authority shall
incorporate and conform with the requirements of the Private Design
Restrictions and the Zoning Restrictions And Limitations. Landlord
agrees to cooperate with Tenant seeking approval of the plans and
specifications from the Authority but the obligation to seek and
obtain such approval shall be the sole obligation of Tenant. Attached
hereto as Exhibit D is a letter dated October 6, 1993 from the
Redevelopment Authority to both Landlord and Tenant pursuant to which
certain plans and specifications have been approved respecting
foundation and structural work (collectively the "Approved F and S
Plans") and stating that approval of plans and specifications which
fully comply with the Land Disposition Agreement must still be
submitted to and approved by the Redevelopment Authority (the
"Remaining Plans And Specifications"). Tenant shall promptly use due
diligence in obtaining the approval of the Redevelopment Authority of
the Remaining Plans And Specifications. Notwithstanding anything to
the contrary contained in this Lease, no construction of the
Improvements or other construction or site work of any type to the
Demised Premises (other than the aforesaid foundation and structural
work in accordance with the Approved F and S Plans) shall be commenced
until Tenant obtains the approval from the Redevelopment Authority of
the Remaining Plans And Specifications for the Improvements, otherwise
complies with the requirements of the Land Disposition Agreement
regarding such approval and delivers to Landlord a true and complete
set of said Remaining Plans And Specifications as so approved by the
Redevelopment Authority together with a true and complete copy of the
Redevelopment Authority's approval thereof. The F and S Plans and the
Remaining Plans And Specifications as so approved by the Redevelopment
Authority are hereinafter sometimes collectively called the "Approved
Construction Plans and Specifications".
(b) At its sole cost and expense, Tenant covenants and
agrees to construct the Improvements on the Demised Premises. Tenant
further covenants and agrees that the Improvements (i) shall be in
compliance with the Private Design Restrictions, the Zoning
Restrictions And Limitations and the Approved Construction Plans and
Specifications, (ii) shall comply with all Environmental Laws and the
requirements of all governmental agencies, authorities or other bodies
having jurisdiction respecting "Site Remediation" (defined in Section
7 (h) hereof), (iii) shall comply with all other applicable Legal
Requirements and (iv) shall comply with all "Governmental Directives"
defined in Section 7(h) hereof).
(c)(i) Prior to the execution of this Lease by Landlord and as a
condition precedent to Landlord acquiring title to the Demised
Premises from the Redevelopment Authority, Tenant shall deliver to
Landlord:
(1) copies of the Approved F and S Plans,
(2) copies of all permits, licenses, approvals and the
like (collectively, the "Permits") as Tenant has
obtained as of the date hereof which are required
for the construction and intended use of the
Improvements, in accordance with applicable Legal
Requirements, Environmental Laws and Governmental
Directives therefor including, without limitation,
building permits, curb cut permits, Permits relat-
ing to the use of utilities, permits required
under the Federal Clean Air Act, as amended, the
Federal Clean Water Act, as amended, and by State
law or regulations consistent with the
requirements of said Acts and Permits required
under Environmental Laws and by Governmental
Directives; provided, however, that Tenant shall
promptly obtain and deliver to Landlord all such
other required Permits prior to commencing work
covered thereby,
(3) a copy of the general contract for construction of
the Building as executed (the "Construction
Contract") with a reputable and experienced
general contractor (the "General Contractor"). In
addition, Tenant shall cause the General
Contractor (a) to name as additional insureds
Landlord and its Affiliates (including, without
limitation, such Zuckerman/Linde Affiliates as
Landlord shall reasonably specify) (i) on all of
the General Contractor's liability insurance
(primary and excess), and (ii) on General
Contractor's builder's risk insurance (or fire and
extended coverage insurance) respecting the
Improvements (if pursuant to the Construction
Contract the General Contractor is obligated to
maintain same) and (b) shall cause the General
Contractor to deliver to Landlord prior to
commencing any work appropriate certificates with
respect to the foregoing (which shall be
acceptable to Landlord in its reasonable
judgment).
(4) Copies of the other "Project Contracts" as
executed. The Project Contracts are the contracts
and agreements for and related to the construction
of the Improvements and related work (as, for
example, site work and Site Remediation) entered
into by Tenant with the architects, engineers,
geotechnical engineers and other consultants and
professionals (collectively called the "Project
Professionals") and,
(5) the Hazardous Materials Indemnity and the Biogen
Guaranty. In the event that the Hazardous
Materials Indemnity and/or the Biogen Guaranty
have been executed and delivered prior to the
execution of this Lease, Tenant shall,
concurrently with the execution of this Lease,
execute and deliver to Landlord a Joinder with
respect to the obligations under the Hazardous
Materials Indemnity and the Biogen Guaranty. No
separate consideration is payable for the
Hazardous Materials Indemnity or the Biogen
Guaranty (or such Joinder) all of said documents
being a material inducement to (a) Landlord's
execution of the Land Disposition Agreement with
the Redevelopment Authority, (b) Landlord's
acquisition of title to the Demised Premises and
(c) Landlord's execution of this Lease.
(c)(ii) Concurrently with the execution and delivery of
this Lease, Landlord shall cause the executed Zuckerman/Linde
Guarantee to be delivered to Tenant.
(c)(iii) As security for Tenant's performance of its
obligations under this Lease, Tenant hereby collaterally assigns to
Landlord the Approved Construction Plans And Specifications, the
Permits, the Construction Contract and the Project Contracts. In
addition, concurrently with the execution and delivery of this Lease,
Tenant shall deliver to Landlord the written consents of the General
Contractor and all Project Professionals to such assignments and the
use of all of the foregoing by Landlord, such consents to be in form
and substance acceptable to Landlord (sometimes collectively called
the "Consents"). In the case of any "Event of Default" (defined in
Section 20(a) hereof), Landlord shall have the right, at its sole and
exclusive option and in addition to any and all other rights and
remedies under this Lease and under applicable law, to complete
construction of the Improvements (and Building Equipment) in
accordance with the provisions of Section 21 hereof using the Approved
Construction Plans And Specifications, the Permits, the Construction
Contract and/or the Project Contracts but Landlord shall have no
obligation for sums or obligations due from Tenant under the
Construction Contract and/or the Project Documents for periods prior
to Landlord's exercise of rights hereunder and the Consents shall so
acknowledge.
(d) Once having complied with the conditions precedent to
commencement of construction of the Improvements as set forth in (c)
above (and, therefore, once this Lease is executed and delivered),
Tenant shall promptly commence construction of the Improvements and
prosecute construction of the Improvements to completion in the manner
and in accordance with the provisions of the Land Disposition
Agreement. The construction of the Improvements (including, but not
limited to, all site work and Site Remediation) shall be done in a
good and workmanlike manner and in compliance with the requirements of
(i) all Environmental Laws, (ii) all applicable Legal Requirements,
(iii) all applicable Insurance Requirements, (iv) all Permits, (v) all
Governmental Directives, (vi) the Approved Construction Plans And
Specifications, (vii) the Private Design Restrictions, (viii) the
Zoning And Development Restrictions, (ix) all other applicable
provisions of this Lease (including, without limitation, the matters
set forth in Section 2(c) hereof), (x) the provisions of the Land
Disposition Agreement and (xi) the provisions of the Authority Deed.
(e) During the course of construction of the Improvements,
Tenant shall have the right (at its sole cost and expense) to effect
changes and alterations to the Approved Construction Plans And
Specifications but only provided (i) that any such changes or
alterations shall comply with the Private Design Restrictions and the
Zoning Restrictions And Limitations and (ii) that any such changes or
alterations shall comply with the requirements, terms and provisions
of the Land Disposition Agreement (including, without limitation,the
provisions of Section 1(c) thereof) and the Authority Deed and Tenant
first shall obtain such approvals, consents or the like as shall be
required therefor from the Redevelopment Authority and (iii) that any
such changes or alterations shall comply with applicable Legal
Requirements and Tenant first shall obtain such permits and approvals
from the applicable Governmental agencies and the like having
jurisdiction as shall be necessary or required and (iv) that any such
changes or alterations shall comply with all Environmental Laws
(including, without limitation, all Governmental Directives) and (v)
that any such changes or alterations are first approved by the
Redevelopment Authority and any other Governmental agencies and the
like having jurisdiction and (vi) that any such changes or alterations
are first approved by Landlord (Landlord's review and approval right
being limited to a determination of whether or not there is compliance
with the Private Design Restrictions), which approval of Landlord,
Landlord agrees will not be unreasonably withheld or delayed.
(f) Landlord or its representatives may enter upon the
Demised Premises and the Improvements during the progress of
construction of Improvements for the sole purposes of determining if
construction is being performed in accordance with the requirements of
this Lease including, without limitation, the requirements of the Land
Disposition Agreement, the Authority Deed and the Private Design
Restrictions. Landlord shall promptly notify Tenant of any alleged
failure by Tenant to comply with those requirements but the failure to
do so shall not relieve Tenant of any of its obligations under this
Lease and shall not impose or result in any liability on Landlord.
Landlord's entry shall be during normal business hours upon reasonable
prior notice to Tenant and if and to the extent entry to the Building
is reasonably necessary for the aforesaid purposes, Landlord shall
observe the reasonable security requirements of Tenant and shall be
accompanied by a representative of Tenant if Tenant shall so require.
(g) Tenant hereby agrees to be fully liable for the payment
of, and to cause to be paid to third parties, the entire cost of
construction of the Improvements. Title to the Building and the
Building Equipment, when erected, constructed, installed or placed
upon the Demised Premises (but not title to the Demised Premises),
shall automatically pass to, vest in and belong to Tenant until the
expiration or sooner termination of the term of this Lease, whereupon
title to the Building and the Building Equipment as have been erected
and installed upon the Demised Premises shall automatically pass to,
vest in and become the absolute property of, the Landlord, except in
the circumstance where the Tenant acquires fee title to the Demised
Premises consistent with the provisions hereinafter set forth in
Section 24 of this Lease, and subject to the provisions of Section 41
hereof.
(h) (i) As a material inducement for Landlord to enter
into the Land Disposition Agreement with the Redevelopment Authority,
to acquire title to the Demised Premises from the Redevelopment
Authority and to enter into this Lease, (i) Tenant hereby covenants
and agrees to assume all obligations, responsibilities and liabilities
with respect to Hazardous Materials, Releases and Threat of Release
and compliance with all Environmental Laws, Governmental Directives
and other applicable Legal Requirements relating to Hazardous
Materials, Releases and Threats of Release, in any such case whether
in, on, under, with respect to or affecting (a) the Demised Premises
and/or the Improvements and (b) properties adjacent to the Demised
Premises and to the extent caused by or resulting from Hazardous
Materials (or the Release or Threat of Release of Hazardous Materials)
in, on, under or from the Demised Premises, the Improvements, or the
use or other operation (including, without limitation, construction)
at or on the Demised Premises or of the Improvements (collectively for
purposes of this Lease called "Hazardous Materials Matters") and (ii)
Tenant hereby covenants and agrees that Tenant shall perform any and
all assessment, containment, removal, remediation, transport, disposal
and other clean up of the aforesaid Hazardous Materials Matters,
(collectively called the "Site Remediation"), all of the same to be
performed in accordance with the requirements of all Environmental
Laws and other applicable Legal Requirements including, without
limitation, the requirements of all orders, waivers and other
directives (collectively called "Governmental Directives") of all
governmental boards, agencies, departments, units, commissions,
entities and other instrumentalities (collectively called
"Governmental Bodies") and (iii) in furtherance of the foregoing,
Tenant covenants and agrees to timely file such applications, waivers
and other documents as shall be required by Governmental Bodies having
jurisdiction with respect to Environmental Laws, any of the aforesaid
Hazardous Materials Matters, and/or Site Remediation and (iv) Tenant
acknowledges and agrees that neither Landlord nor Affiliates of
Landlord (including, without limitation, Boston Properties, Inc.,
Mortimer B. Zuckerman, Edward H. Linde and other Zuckerman/Linde
Affiliates) have made any warranties, representations, certifications
or any other statements regarding (a) the presence of any of the
aforesaid Hazardous Materials Matters subject to Section 17 (c), (d),
(e) and (f) of the Option Agreement, (b) compliance (or lack of
compliance) of the Demised Premises with Environmental Laws,
Governmental Directives and Insurance Requirements and other
applicable Legal Requirements (including, without limitation, any
matters relating to zoning of the Demised Premises and the
Improvements), (c) any matters relating to Site Remediation, (d) the
present or future physical condition of the Demised Premises or its
suitability for any specific purpose and (e) the operation, size,
operating expenses, Impositions or carrying charges affecting or
relating to the Demised Premises and/or the Improvements and (v)
Landlord and Affiliates of Landlord (including, without limitation,
Boston Properties, Inc., Mortimer B. Zuckerman, Edward H. Linde and
other Zuckerman/Linde Affiliates) shall have absolutely no liability
or obligation of any kind or type to Tenant or any other person or
Governmental Body regarding (a) compliance with Environmental Laws,
Governmental Directives and other applicable Legal Requirements, (b)
the existence or presence of any of the aforesaid Hazardous Materials
Matters, (c) Site Remediation and/or (d) any of the other matters set
forth above in this Section 7 (h)(i) subject to section 17 (c), (d),
(e) and (f) of the Option Agreement. Tenant acknowledges and agrees
that Tenant is not relying in any way on Landlord or Affiliates of
Landlord (including, but not limited to, Boston Properties, Inc.,
Mortimer B. Zuckerman, Edward H. Linde and other Zuckerman/Linde
Affiliates) and that Tenant is relying on the consultants, engineers
and other professionals engaged directly by and working solely for
Tenant. In furtherance, of the foregoing and as a material inducement
for Landlord and its Affiliates to enter into the "Transaction
Documents" (defined in Section 1 hereof), Tenant has executed and
delivered the Hazardous Materials Indemnity or has executed and
delivered a Joinder with respect to the obligations of Tenant under
the Hazardous Materials Indemnity and Biogen, Inc., has executed and
delivered the Biogen Guaranty and the Hazardous Materials Indemnity.
The provisions of this Section 7 (h)(i) shall survive the expiration
or any termination of this Lease, the conveyance of the Demised
Premises by Landlord to Tenant, the expiration or any termination of
the Land Disposition Agreement and any reversion or forfeiture of
title to the Demised Premises.
(ii) Pursuant to the provisions of Section 2 (c)(xiii)
of this Lease, the Premises are leased by Landlord to Tenant subject
to and together with the benefit of the Tract VI Exclusive Easement
And Option Agreement. All obligations and requirements of Tenant
under Section 7 (h)(i) hereof shall apply not only with respect to the
Demised Premises, other premises and the matters all as set forth in
said Section 7 (h)(i) but shall, in addition and not in limitation of
the subject matter of said Section 7 (h)(i), apply with respect to
"Tract VI" (defined in the Tract VI Exclusive Easement And Option
Agreement). Accordingly, for purposes of this Section 7 (h)(ii), all
references in said Section 7 (h)(i) to the Demised Premises shall be
deemed to be references to Tract VI. The provisions hereof (a) shall
survive the expiration or other termination of this Lease (including,
without limitation, the conveyance of the Demised Premises as
contemplated by Section 24 hereof) and/or the Tract VI Exclusive
Easement And Option Agreement and (b) shall continue to apply
notwithstanding the assignment by Landlord to Tenant of Landlord's
interest in the Tract VI Exclusive Easement And Option Agreement
and/or the acquisition by Tenant (or other person) of Tract VI.
8. USE; COMPLIANCE WITH LAWS.
(a) For so long as this Lease remains in full force and
effect, Tenant covenants and agrees that the Demised Premises and the
Improvements (including the Building Equipment) shall be used and
occupied only for the uses permitted under Section 14.21.2 of the City
of Cambridge Zoning Ordinance and for no other uses or purposes. In
no event shall Tenant use, improve, permit or suffer the use,
improvement or occupancy of, the Demised Premises, the Improvements,
the Building Equipment, or any part thereof, (i) in any unlawful
manner, or for any illegal purpose, or in any manner which will
constitute a nuisance, (ii) in any manner contrary to or in violation
of the Land Disposition Agreement, the Authority Deed, the Private
Design Restrictions, the Zoning And Development Restrictions or the
Urban Renewal Plan (as amended), and (iii) other than for the purposes
and in the manner and to the extent permitted by the Legal
Requirements, the Environmental Laws, the Governmental Directives, the
Insurance Requirements and any certificate of occupancy hereafter
applicable or issued with respect to the Demised Premises and the
Improvements.
(b) (i) Tenant shall, throughout the term of this Lease,
at Tenant's sole cost and expense, promptly comply, or cause
compliance, with the Private Design Restrictions, the Zoning
Restrictions And Limitations, all Legal Requirements, Environmental
Laws, Governmental Directives and Insurance Requirements, affecting
the Demised Premises and the Improvements (including the Building
Equipment), or any part thereof, or the use thereof, foreseen or
unforeseen, ordinary as well as extraordinary, and whether or not the
same shall presently be within the contemplation of the parties or
shall involve any change of governmental policy or require structural
or extraordinary repairs, alterations or additions, and irrespective
of the cost thereof. The provisions and conditions of Section 11
shall also apply to any work required to be performed by Tenant under
this Section 8. Tenant further agrees that it will, at its own cost
and expense, promptly and fully perform and observe, or cause to be
fully performed and observed, all requirements, obligations and
conditions of all instruments of record as of the date of this Lease
including, without limitation, the Kendall Square Urban Renewal Plan
(whether or not recorded), or which are recorded subsequent to the
date of this Lease by reason of the actions or non-actions of Tenant,
insofar as the same shall be in force and shall affect or be
applicable to the Demised Premises and the Improvements, or any
portion thereof or shall impose any obligation upon Landlord or the
fee owner of the Demised Premises or upon the Tenant or any tenant or
other occupant of the Demised Premises and/or the Improvements.
(b) (ii) Tenant shall have the right to contest by
appropriate legal proceedings diligently conducted in good faith in
the name of Tenant, without cost, expense or liability to Landlord,
the validity or application of any Legal Requirements and, only if by
the terms of any such contested Legal Requirement, compliance
therewith may be delayed legally pending the prosecution of any such
proceeding, Tenant may delay such compliance therewith until the final
determination of such proceeding provided however that as a condition
precedent to delaying such compliance, Tenant shall provide to
Landlord such security and assurances reasonably acceptable to
Landlord (i) respecting and demonstrating the ability of Tenant to so
comply if such final determination shall require compliance, (ii)
demonstrating that the Demised Premises and the Improvements,
Landlord's interest in the Demised Premises and the validity of
Permits shall not be adversely affected or impaired as a result of or
during any such contest, (iii) demonstrating that the Permits shall
not lapse as a result of or during any such contest, (iv)
demonstrating that such contest and any resultant delays occasioned
thereby (including, without limitation, delays in the course or time
of construction or completion of the Improvements will not cause,
create or result in a default under or termination of the Land
Disposition Agreement. In addition, Tenant shall keep Landlord
informed of the status of any such contest. Further, Tenant shall
indemnify and hold Landlord harmless from and against any and all
loss, cost, expense, damage and liability (including reasonable
attorneys fees) occasioned, arising out of or resulting from any such
contest and the failure of Tenant to comply with any such contested
Legal Requirement. The provisions of the foregoing sentence shall
survive the expiration or termination of this Lease and the Land
Disposition Agreement.
(c) Tenant shall, at its sole cost and expense, obtain and
keep in force and effect any and all Permits and all other necessary
approvals, licenses, certificates or other authorizations required in
connection with the lawful and proper construction of the
Improvements, the Building Equipment and other improvement of the
Demised Premises, the use, occupancy, operation and management of the
Demised Premises, the Improvements, the Building Equipment, and the
signs thereat; and Tenant shall indemnify and hold harmless Landlord
from and against all claims, liabilities, damages, loss, costs and
expenses (including, without limitation, reasonable attorneys' fees)
in connection therewith. Upon the expiration or sooner termination of
the term of this Lease, Tenant promptly shall, except in the circum-
stance where Tenant acquires fee title to the Demised Premises
pursuant to the provisions of Section 24 hereof, deliver all such
Permits, approvals, licenses, certificates and authorizations to
Landlord which relate to the Demised Premises, the Building or the
Building Equipment which were obtained by or issued to Tenant and are
then in force, together with an assignment or conveyance thereof to
Landlord, in such form and substance as Landlord shall require
reasonably.
(d) Unless expressly provided elsewhere in this Lease, no
abatement, diminution or reduction of the Fixed Annual Rent, or of any
Additional Rent, shall be claimed by, or allowed to, Tenant for any
inconvenience, interruption, cessation or loss of business or
otherwise caused, directly or indirectly, by any present or future
laws, rules, requirements, orders, directions, ordinances or
regulations of the United States of America, or of the State, county
or municipal or other local government, or of any other municipal,
governmental or lawful authority or Governmental Bodies whatsoever
(including, without limitation, Environmental Laws, Legal Requirements
and Governmental Directives), or by priorities, rationing or
curtailment of labor, materials, or by war, civil commotion, lockouts,
strikes or riots, or any matter or thing resulting therefrom, or by
any other cause or causes beyond the control of Landlord or Tenant,
nor shall this Lease be affected by any such causes. No diminution of
the amount of space used by Tenant caused by legally required changes
in the construction, equipment, operation or use of the Demised
Premises, the Improvements or the Building Equipment shall entitle
Tenant to any reduction or abatement of the Fixed Annual Rent or
Additional Rent or any other charges required to be paid by Tenant
pursuant to the terms of this Lease.
9. REPAIRS AND MAINTENANCE.
(a) Landlord shall have absolutely no liability or
obligation whatsoever to build any improvements on the Demised
Premises, to construct the Improvements, to install any Building
Equipment or to make any repairs, replacements, alterations,
restorations or renewals of any nature or description to the Demised
Premises, the Improvements or the Building Equipment, whether interior
or exterior, ordinary or extraordinary, structural or non-structural,
foreseen or unforeseen, or to make any expenditure whatsoever in
connection with this Lease or to inspect or maintain the Demised
Premises, the Improvements or the Building Equipment in any way.
Tenant hereby waives the right to make repairs, replacements, renewals
or restorations at the expense of Landlord pursuant to any applicable
laws.
(b) In the event that any improvements made to the Demised
Premises, whether situated upon the Demised Premises at the
commencement of the term of this Lease or thereafter constructed
thereon, shall encroach upon any property, street or right-of-way
adjoining or adjacent to the Demised Premises, or shall violate the
agreements or conditions contained in any restrictive covenant
affecting the Demised Premises or any part thereof, or shall hinder or
obstruct any easement or right-of-way to which the Demised Premises is
subject as of the date of this Lease, or shall impair the rights of
others under any such easement or right-of-way, then, promptly after
written request of Landlord or of any other person affected by any
such encroachment, violation, hindrance, obstruction or impairment,
Tenant shall, at its own cost and expense, either (i) obtain valid and
effective waivers or settlements of all claims, liabilities and
damages resulting from each such encroachment, violation, hindrance,
obstruction or impairment, whether the same shall affect Landlord,
Tenant or both, or (ii) make such changes in the improvements to the
Demised Premises and take such other action as shall be necessary to
remove such encroachments, hindrances or obstructions and to end such
violations or impairments, including, if necessary, the alteration or
removal of any building, structure or other improvements made to the
Demised Premises. Any such alteration or removal shall be made in
conformity with the requirements of Section 11 hereof.
10. ALTERATIONS.
After the Improvements shall have been completed (which
completion shall be evidenced by a Certificate of Completion issued by
the Redevelopment Authority), Tenant shall have the right, at its sole
cost and expense, to make additions, alterations and changes to the
Building (collectively called "Alterations") provided Tenant and such
Alterations (i) comply with all of the requirements of the Land
Disposition Agreement (including, but not limited, to Section 1(c) and
Section 8(c) thereof) and the Authority Deed, (ii) comply with the
Private Design Restrictions, the Zoning Restrictions And Limitations,
all Environmental Laws, all Governmental Directives, all applicable
Legal Requirements, all applicable Insurance Requirements and all
"Permitted Encumbrances" (defined in Section 24 hereof) and (iii)
Tenant shall first obtain all Permits as shall be necessary or
required for any such Alterations. Prior to conveyance of the Demised
Premises to Tenant, as respects Alterations, Tenant shall comply with
the requirements of the Land Disposition Agreement whether or not the
same shall have been terminated.
<PAGE>
11. CONDITIONS FOR TENANT'S WORK.
(a) Tenant agrees that all construction, repairs,
alterations, additions, improvements, rebuilding, restoration and
other work which Tenant shall be required or permitted to do under the
provisions of this Lease, including the provisions of Sections 7, 8,
9, 10, 15 and 16 (each hereinafter in this Section called the "Work")
shall be done in all cases upon and subject to the applicable
provisions of this Lease and all of the following terms and conditions
which Tenant shall comply with at its sole cost, expense and
liability:
(i) all Work shall be commenced only after all
required municipal and other governmental permits,
authorizations and approvals shall have been
obtained by Tenant, at its own cost and expense.
Landlord will, on Tenant's written request,
execute any documents necessary to be signed by
Landlord to obtain any such permits, authori-
zations and approvals, provided that Tenant shall
discharge any expense or liability of Landlord in
connection therewith;
(ii) all Work shall be performed in a good and
workmanlike manner and in accordance and shall
comply with all Environmental Laws, Legal
Requirements, Governmental Directives, Insurance
Requirements, the Private Design Restrictions, the
Zoning Restrictions And Limitations. the
requirements, conditions and provisions of the
Land Disposition Agreement (including, without
limitation, the provisions of Section 8(c)
thereof) and the plans and specifications therefor
which shall be in compliance with the foregoing
requirements of this Section 11(a)(ii) and the
requirements of Section 7 of this Lease.
(iii) the cost of all Work shall be paid promptly;
(iv) at all times when any Work is in progress, Tenant
shall maintain or cause to be maintained (x)
worker's compensation insurance covering all
persons employed in connection with the Work, in
an amount at least equal to the minimum amount of
such insurance required by law, and (y) for the
mutual benefit of Landlord (and, if applicable,
any Affiliate of Landlord supervising construction
of the Building or any Alteration thereto or
thereof) and Tenant (i) if the Work is the
construction of the Building which increases the
size of or the square foot floor area of the
Building, builder's risk insurance, in completed
value non-reporting form, covering all physical
loss, in an amount reasonably satisfactory to
Landlord, and (ii) commercial general liability
insurance against claims for bodily injury, death
or property damage occurring in or about the
Demised Premises, with limits of not less than
$10,000,000 for bodily injury or death to any
number of persons in respect of any one accident
or occurrence, and property damage in respect of
such accident or occurrence. Such commercial
general liability insurance shall be in addition
to the insurance required under Section 14(a)(i)
hereof, but may be effected by an endorsement, if
obtainable, upon the insurance policy referred to
in said Section 14. The provisions and conditions
of Section 14(b) hereof shall apply to any
insurance which Tenant shall be required to
maintain or cause to be maintained under this
subsection.
(b) The conditions of Sections 7 and 11 shall have been
complied with, to the extent applicable to the Work.
12. MECHANICS' AND OTHER LIENS.
(a) Tenant shall not suffer or permit any mechanics' or
other liens to be filed against the Demised Premises, or any part
thereof, or against Tenant's leasehold estate therein, by reason of
any work, labor, services or materials done for, or supplied to, or
claimed to have been done for or supplied to, Tenant or anyone holding
the Demised Premises, or any part thereof, through or under Tenant.
If any such mechanics' lien shall at any time be filed against the
Demised Premises, Tenant shall cause the same to be discharged of
record or bonded within twenty (20) days after the date of filing of
the same. If Tenant shall fail to discharge any such mechanics' lien
within such period, then, in addition to any other right or remedy of
Landlord, Landlord may, but shall not be obligated to, procure the
discharge of the same either by deposit in court or by bond, and/or
Landlord shall be entitled, at Landlord's option, to compel the
prosecution of an action for the foreclosure of such mechanics' lien
by the lienor and to pay the amount of the judgment, if any, in favor
of the lienor with interest, costs and allowances. Any amount paid by
Landlord for any of said purposes, and all reasonable legal and other
expenses of Landlord, including reasonable counsel fees, in defending
any such action or in procuring the discharge of any such lien,
together with interest at the "Interest Rate" (hereinafter defined)
from the date of payment or deposit, shall become due and payable
forthwith by Tenant to Landlord, upon demand by Landlord therefor, and
for non-payment thereof, Landlord shall have the remedies herein
provided for the non-payment of Fixed Annual Rent and Additional Rent.
The "Interest Rate" shall be an annual rate equal to the sum of (i)
four percent (4%) and the Base Rate from time to time announced by The
First National Bank of Boston as its Base Rate calculated daily and on
the basis of a 360 day year; provided, however, if said Base Rate
shall no longer be used or if The First National Bank of Boston shall
cease to exist (whether by merger, dissolution or otherwise) then
Landlord shall reasonably select such other comparable rate and/or
bank for purposes of the determination of the Interest Rate.
(b) Nothing contained in this Lease shall be deemed to be,
or construed in any way as constituting, the consent or request of
Landlord, express or implied, by inference or otherwise, to any third
party for the performance, at Landlord's expense, of any labor or the
furnishing of any materials or equipment for any construction,
rebuilding, alteration, improvement or repair of or to the Demised
Premises, the Improvements, the Building Equipment, or any part
thereof, nor as giving Tenant any right, power or authority to
contract for or permit the rendering of any services or the furnishing
of any materials or equipment which might in any way give rise to the
right to file any lien against Landlord's interest in the Demised
Premises. Further, Landlord hereby gives notice to all persons who
may furnish labor or materials to Tenant at the Demised Premises that
Landlord does not consent to the filing of any mechanics' or other
lien against Landlord's interest or estate in the Demised Premises,
and that all persons furnishing labor and materials to Tenant shall
look only to Tenant's credit and such security as Tenant may furnish
for the payment of all such labor and materials.
13. INDEMNIFICATION AND NON-LIABILITY OF LANDLORD.
(a) In addition to (i) the provisions of Sections 7 (h)(i)
and 7 (h)(ii) hereof, (ii) the provisions of Sections 2 (c)(xiii) and
2 (c)(xiv) hereof, (iii) the provisions of the Hazardous Materials
Indemnity (and any Joinder thereto executed by Tenant and (iv) the
provisions of the Biogen Guaranty, Tenant agrees, at its sole cost and
expense, to indemnify and hold harmless Landlord, all Affiliates of
Landlord (including, without limitation, Mortimer B. Zuckerman, Edward
H. Linde and Boston Properties, Inc. and all Zuckerman/Linde
Affiliates, each of the foregoing for purposes hereof being called an
"Indemnified Party" and all of the foregoing being collectively called
the "Indemnified Parties") against and from any and all claims by or
on behalf of any person arising from or in connection with (i) the
construction, installation repair, alteration and Restoration of the
Improvements, the Building Equipment, or any Alteration thereto or
thereof, or the conduct or management of, and the payment for, any
Work or thing whatsoever done in, on or about the Demised Premises by
or on behalf of Tenant (or any person holding or claiming through or
under Tenant) during the term of this Lease; (ii) the condition of the
Demised Premises, the Improvements or the Building Equipment whether
before or during the term of this Lease; (iii) the use, operation or
management of the Demised Premises, the Improvements and the Building
Equipment; (iv) any breach or default on the part of Tenant in the
performance of any of Tenant's covenants or obligations under this
Lease; (v) any breach, default or failure on the part of Tenant to
timely and fully perform, observe and comply with all of the
obligations of the "Redeveloper" under the Land Disposition Agreement
or the obligations of the grantee under the Authority Deed; (vi) any
act, negligence or fault of Tenant, or any of its agents, servants,
employees, contractors, invitees or licensees, or of any person
holding or claiming through or under Tenant; (vii) any accident,
injury or damage whatsoever caused to any person (other than those
caused by the negligent acts or omissions or wrongful intentional acts
of Landlord or its agents, servants, employees or contractors
occurring after the date hereof) occurring during the term of this
Lease, in or about the Improvements, the Demised Premises, or upon the
sidewalks adjacent thereto. Further, Tenant agrees to indemnify and
hold harmless the Indemnified Parties against and from all costs,
counsel fees, expenses and liabilities incurred in connection with or
in defending any of the foregoing claims or any actions or
proceedings brought thereon; and in case any action or proceeding be
brought against any of the Indemnified Parties by reason of any such
claim, Tenant, upon notice from any Indemnified Party, agrees to
resist or defend such action or proceeding (with counsel first
approved by such Indemnified Party, which approval shall not be
unreasonably withheld) unless Tenant causes the same to be discharged
and satisfied. In addition, Tenant shall indemnify and hold harmless
the Indemnified Parties against and from any costs and expenses paid
or incurred by the Indemnified Parties (including reasonable counsel
fees) in obtaining possession of the Demised Premises after default by
Tenant or upon the expiration or sooner termination of this Lease, or
in enforcing any of Tenant's obligations hereunder. Without limiting
the generality of Section 13(c) hereof and notwithstanding the
foregoing, Tenant shall not be obligated to indemnify Mortimer B.
Zuckerman and Edward H. Linde for those matters specifically
guaranteed by said Mortimer B. Zuckerman and Edward H. Linde under the
Zuckerman/Linde Guaranty but the provisions of this sentence and the
Zuckerman/Linde Guaranty shall not limit the indemnities provided in
this Section 13(a) to Landlord and all Affiliates of Landlord (except
in regard to said Mortimer B. Zuckerman and Edward H. Linde, it being
agreed that this Section 13(a) shall exclude only indemnity to said
Mortimer B. Zuckerman and Edward H. Linde for the matters specifically
set forth in the Zuckerman/Linde Guaranty).
(b) Tenant agrees that Landlord shall not be responsible or
liable to Tenant, or any person claiming by, through or under Tenant
for, or by reason of (i) any defect in the Demised Premises, the
Improvements, the Building Equipment or any other equipment,
machinery, wiring, apparatus or appliances whatsoever now or hereafter
situated in, at or upon the Demised Premises or the Improvements, or
(ii) any failure or defect of water, heat, electric light or power
supply, or of any apparatus or appliance in connection therewith, or
from any injury or loss or damage to personal property resulting
therefrom, or (iii) any injury, loss or damage to any person or to the
Demised Premises, the Improvements or the Building Equipment, or to
any property of Tenant or of any other person, contained in or upon
the Demised Premises or the Improvements, caused by or arising or
resulting from the electric wiring or plumbing, water, steam, sewerage
or other pipes, or by or from any machinery or apparatus, or by or
from any defect in or leakage, bursting or breaking up of same, or by
or from any leakage, running or overflow of water or sewerage in any
part of the Demised Premises, the Improvements or the Building
Equipment, or by or from any other defect whatsoever, or (iv) any
injury or damage caused by, arising or resulting from lightning, wind,
tempest, water, snow or ice, in or upon or coming through or falling
from the roof, walls, windows or otherwise, or by or from other
actions of the elements, or from any injury or damage caused by or
arising or resulting from acts or negligence of any occupant or
occupants of the Demised Premises or the Improvements or of any
subtenant, licensee, invitee or contractor of Tenant (or of any other
person holding or claiming by, through or under Tenant).
(c) Nothing contained in this Section 13 shall be construed
as an indemnity against the consequences of the negligent acts,
omissions or the wrongful intentional acts of the Indemnified Parties
or their agents, servants, employees or contractors occurring after
the date hereof, or a waiver of any right or remedy Tenant may have as
a result thereof. The provisions of this Section 13 shall survive the
expiration and any termination of this Lease and the Land Disposition
Agreement including the conveyance of the Demised Premises as
contemplated in Section 24 hereof.
14. INSURANCE.
(a) Throughout the term of this Lease, Tenant shall, at its
own cost and expense, provide and keep in force for the mutual benefit
of Landlord and Tenant (and, if required, the Authority), the
following insurance:
(i) commercial general public liability insurance
against claims for bodily injury, death or
property damage occurring in or about the Demised
Premises (including, without limitation, bodily
injury, death or property damage resulting direct-
ly or indirectly from any change, alteration,
improvement or repair thereof) with limits of not
less than $10,000,000.00 (or such higher amount as
Landlord may from time to time reasonably require)
for bodily injury or death to any number of
persons in respect of any one accident or
occurrence, and property damage in respect of such
accident or occurrence. Such insurance shall
include a contractual liability endorsement
covering Tenant's indemnities under Section 13(a)
hereof;
(ii) insurance (with provision for deductible of not
more than $10,000.00) covering the Building and
Building Equipment against loss or damage by fire
and such other risks as are customarily included
in broad form extended coverage endorsements
covering "all risks" and which are attached to
fire insurance policies covering property in the
City of Cambridge similar to the Building to be
constructed by Tenant under Section 7 of this
Lease, in amounts sufficient to prevent Landlord
or Tenant from becoming a co-insurer under the
terms of the applicable policies, but in no event
in an amount less than one hundred percent (100%)
of the full replacement cost thereof (such
replacement cost to be determined from time to
time, but not more frequently than once in any
twenty-four (24) calendar months, at Tenant's
expense, at the request of the Landlord by an
appraiser selected by Tenant and approved by Land-
lord and the insurance carrier). During the
performance of any construction, the insurance to
be maintained by Tenant under this subdivision
(ii) shall be maintained under a "builder's risk"
policy of insurance, with extended coverage
endorsements as aforesaid. To the extent of any
deductible from the limits of the policy required
under this subdivision (ii), Tenant shall be
deemed a self-insurer;
(iii) workers' compensation insurance subject to
statutory limits or better in respect of any work
or other operations on or about the Demised
Premises;
(iv) boiler and machinery explosion insurance in
respect of any steam and pressure, boilers and
similar apparatus, if any, located on the Demised
Premises in such amount as is from time to time
reasonable and customarily maintained for similar
properties situated in the City of Cambridge, and
if a sprinkler system shall be located in the
Building, sprinkler leakage insurance in amounts
reasonably satisfactory to Landlord, in either
case having due regard to the height and type of
Building, its construction, use and occupancy
(with any dispute under this subdivision (iv)
being determined by arbitration as hereinafter
provided); and
(v) such other insurance and in such amounts as
Landlord or the Authority from time to time may
reasonably request against such other insurable
hazards which at the time in question are commonly
insured against in the case of property similar to
and situated in Cambridge, Massachusetts.
(b) All insurance to be provided and kept in force by
Tenant under the provisions of this Lease (except workers'
compensation insurance) shall name as the insured Tenant and Landlord
(and such Affiliates (including, without limitation such
Zuckerman/Linde Affiliates) as Landlord shall reasonably require
(collectively called "Additional Landlord Insured Parties"), and to
the extent required under the Land Disposition Agreement or otherwise,
the Authority and the City of Cambridge, as their respective interests
may appear but as to liability insurance, Landlord and Additional
Landlord Insured Parties shall be named as additional insureds. All
such insurance shall be obtained and shall be and remain in full force
and effect by Tenant prior to Tenant's entry upon the Demised Premises
for any purposes contemplated by this Lease, and shall be procured
from reputable and financially sound insurance companies of recognized
responsibility licensed to do business in the Commonwealth of
Massachusetts, except that premiums for insurance policies covering a
period in excess of one year may be paid by Tenant in annual
installments if such method of payment is permitted under such
policies. True copies of the policies of such insurance shall be
delivered to the Landlord. Said policies shall be for a period of not
less than one year and shall contain a provision whereby the same
cannot be canceled or modified unless Landlord is given at least
thirty (30) days' prior written notice of such cancellation or modifi-
cation, and whereby provision is further made for the fact that any
loss otherwise payable thereunder shall be payable notwithstanding any
act or negligence of Landlord or Tenant which might, absent such
agreement, result in a forfeiture of all or part of the payment of
such loss. Tenant shall procure and pay for renewals of such
insurance from time to time at least thirty (30) days before the
expiration thereof, and Tenant shall promptly deliver to Landlord
evidence of such renewal, as required above. The proceeds of loss
under the policies of insurance required to be obtained by Tenant
under subdivision (ii), (iv), and (v) shall be payable to Tenant and
shall be used in the "Restoration" (defined in Section 15 hereof).
(c) Tenant hereby waives any right to recovery against
Landlord and Affiliates of Landlord (including, without limitation,
Boston Properties, Inc., Mortimer B. Zuckerman, Edward H. Linde and
all Zuckerman/Linde Affiliates) for injury or loss due to the hazards
covered by the insurance coverages required to be maintained by Tenant
pursuant to this Lease. Landlord hereby waives any right to
recovery against Tenant and Biogen, Inc., for injury or loss due to
the hazards covered by such insurance (if any) maintained by Landlord
with respect to the Demised Premises. Any insurance carried or
required to be carried by Tenant shall include a clause or endorsement
denying to the insurer rights of subrogation against Landlord and
Affiliates of Landlord (including, without limitation, Boston
Properties, Inc., Mortimer B. Zuckerman, Edward H. Linde and all
Zuckerman/Linde Affiliates. Further, any insurance carried by
Landlord with respect to the Demised Premises shall include a clause
or endorsement denying the insurer rights of subrogation against
Tenant and Biogen, Inc. If extra premium is payable on account of any
such clause or endorsement, Tenant shall pay such extra premium. In
addition, Tenant shall not carry separate or additional insurance,
concurrent in form and contributing, in the event of any loss or
damage to the Demised Premises, the Improvements or the Building
Equipment, with any insurance required to be obtained by Tenant under
this Lease, unless such separate or additional insurance shall comply
with and conform to all of the provisions and conditions of this
Section 14 (including, without limitation, the provisions of this
Section 14 (c)). Tenant shall promptly give notice to Landlord of
such separate or additional insurance and deliver a certificate of
such policies to Landlord which shall include the waiver of
subrogation or shall be accompanied by an endorsement waiving
subrogation.
(d) Upon the expiration or sooner termination of this
Lease, other than by reason of the purchase of the Demised Premises by
Tenant pursuant to the provisions of Section 24 hereof, Landlord may,
at its option, elect to continue in force any or all of the policies
of insurance required to be obtained by Tenant under this Lease, and
in such case Landlord shall promptly reimburse Tenant for the amount
of the unearned premium; provided, however, Landlord shall not be
required to make any such reimbursement to Tenant if this Lease shall
terminate as a result of any default on the part of Tenant.
(e) Landlord may from time to time, but not more frequently
than once every twenty-four (24) months, require that the amount of
the commercial general liability insurance to be provided and kept in
force by Tenant under this Lease be increased, so that the amount
thereof shall be that commonly carried in the case of premises
similarly situated in the City of Cambridge with due regard to the
height and type of Improvements and Building Equipment, their
construction, use and occupancy. In no event shall the amount of
commercial general liability insurance be less than the amount
specified in this Lease as the amount required to be maintained in
force.
15. DAMAGE OR DESTRUCTION.
(a) If the Building or the Building Equipment shall be
damaged or destroyed by fire or other casualty, whether or not covered
by insurance, Tenant shall forthwith give notice thereof to Landlord
and shall, with reasonable diligence, repair, restore, replace or
rebuild the same (the "Restoration") to as nearly as may be
practicable its condition and character immediately prior to such
damage or destruction except that if such fire or other casualty shall
occur while the Building is being constructed, then Tenant shall, with
reasonable diligence, complete the Building (after complying, in
either case, with the provisions and conditions of Sections 7 and 10
of this Lease, to the extent applicable). The provisions and
conditions of Section 11 shall similarly apply to the Restoration.
However, in the event that, after the issuance of a
Certificate of Completion by the Redevelopment Authority for the
Improvements, the Building shall be damaged or destroyed by fire or
other casualty (whether or not covered by insurance), Tenant may
perform the Restoration to such other condition or character as is
permitted under the Land Disposition Agreement subject to Tenant's
compliance with the provisions of the Land Disposition Agreement and
provided that such Restoration as is the subject of this paragraph
shall comply with all applicable Legal Requirements, Environmental
Laws (including, without limitation, Governmental Directives),
Insurance Requirements, the requirements of all Governmental Bodies
(including, without limitation, the Redevelopment Authority, if
applicable) and the provisions of the Private Design Restrictions and
the Zoning Restrictions And Limitations. Tenant acknowledges and
agrees that nothing contained in this paragraph shall modify, amend or
impair or postpone the provisions and requirements of Section 24
hereof (including, without limitation, the calculation of the purchase
price which shall based on the Building as it existed as of the time
of the issuance of the Certificate of Completion).
(b) INTENTIONALLY OMITTED
(c) The insurance proceeds collected on account of damage
or destruction to the Building and the Building Equipment shall be
used to pay for the cost of the Restoration. Tenant covenants and
agrees that if said insurance monies shall be insufficient to pay the
entire cost of the Restoration, Tenant will pay the entire deficiency.
If any of the insurance monies paid by the insurance company shall
remain after the completion of the Restoration, the excess shall be
retained by or paid over to Tenant subject, however, to the provisions
of the Land Disposition Agreement, if any. Further, if the damage or
destruction is of such a nature that it is caused by an event which is
not covered by the insurance required to be carried and maintained by
Tenant, Tenant shall be obligated to perform the Restoration and pay
for the entire cost of the Restoration. In no event shall Landlord
have any obligation to pay for any portion of the Restoration or to
otherwise perform or be obligated respecting any such damage or
destruction or the Restoration.
(d) In the event of any such damage or destruction by fire
or other casualty, the provisions of this Lease shall be unaffected
and, in addition, Tenant shall remain and continue liable for the
payment of all Fixed Annual Rent and Additional Rent required
hereunder to be paid by Tenant, as though no such damage or
destruction had occurred.
(e) If Tenant shall fail to commence the Restoration within
one hundred eighty (180) days from the date of such damage or
destruction (or within such shorter time period as may be set forth in
the Land Disposition Agreement), or having commenced the Restoration
shall fail to complete the same in accordance with the provisions of
this Lease with reasonable diligence, and such failure shall continue
for a period of thirty (30) days (as such 30-day period may be
extended by unavoidable delays in completion of the Restoration due to
causes beyond Tenant's control, such as Acts of God, strikes, etc.,
but excluding financial inability to perform) Landlord may, at its
option, and without limitation of its remedies on account of Tenant's
default, and upon serving notice upon Tenant that it elects to do so,
perform the Restoration upon the terms and conditions provided in
Section 21 hereof except that no further notice need be given
respecting said Section 21. In such event, and whether or not this
Lease may theretofore have been terminated by reason of any default by
Tenant, any insurance monies shall be paid over to Landlord.
(f) Landlord and Tenant each agrees that it will cooperate
with the other, to such extent as such other party may reasonably
require, in connection with the prosecution or defense of any action
or proceeding arising out of, or for the collection of any insurance
monies that may be due in the event of, any loss or damage, and that
they will execute and deliver to such other parties such instruments
as may be required to facilitate the recovery of any insurance monies.
(g) To the extent that the provisions of this Section shall
conflict with the provisions of any laws of the Commonwealth of
Massachusetts or any agency or political subdivision thereof,
controlling the rights and obligations of parties to leases in the
event of damage by fire or other casualty to leased space, the
provisions of this Section 15 shall govern and control and such
conflicting laws shall be deemed waived by the parties hereto.
16. CONDEMNATION.
(a) If, at any time during the term of this Lease, title to
the whole or materially all of the Demised Premises or the Building
shall be taken by the exercise of the right of condemnation or eminent
domain, this Lease shall terminate, and Tenant shall be relieved of
its obligation to pay future Fixed Annual Rent and Additional Rent, on
the later of (i) the vesting of title in the condemning authority, or
(ii) transfer of possession to the condemning authority (the
"Condemnation Termination Date"). Upon such termination, the Fixed
Annual Rent and Additional Rent shall be apportioned and paid to the
date of such termination, and the total award made with respect to the
taking shall be paid to the Landlord and distributed as follows:
(x) the Landlord shall first be entitled to
receive out of the proceeds of the condemnation
award a sum calculated for purposes hereof
pursuant to Exhibit E attached hereto as if the
Closing occurred on the Condemnation Termination
Date; and
(y) any balance remaining to Tenant.
For the purposes of this Section, "materially all of the
Demised Premises" shall be deemed to have been taken if:
(i) Prior to the issuance of a Certificate of
Completion respecting the Improvements, so much of
the Demised Premises shall be taken as results in
the inability of Tenant to complete construction
of the Building in accordance with applicable
requirements of this Lease, or
(ii) Subsequent to the issuance of said Certificate of
Completion, more than fifty percent (50%) of the
gross floor area of the Building (as determined by
a registered architect selected by Tenant and
reasonably approved by Landlord) shall be taken or
shall be rendered by a taking unusable for the
purposes for which the same were being used
immediately prior to the taking, or
(iii) All reasonable means of ingress and egress to and
from the Demised Premises are to be permanently
eliminated by reason of such a taking and no
reasonable substitute means of ingress and egress
is provided.
(b) If at any time during the term of this Lease title to
less than the whole or materially all of the Demised Premises or the
Building shall be taken as aforesaid, then the entire balance of the
award shall be applied and paid over towards the cost of demolition,
repair and restoration, substantially in the manner and subject to the
same terms and conditions as those provided in Section 15 hereof
respecting Restoration of the Building in the event of damage or
destruction by fire or other casualty. Any balance remaining after
payment of such costs of demolition, repair and restoration, as
aforesaid, shall be paid over to Tenant. If, however, the cost of
such demolition, repairs and restoration shall exceed the net amount
of the award paid to Tenant, Tenant shall pay the deficiency.
(c) Subject to the provisions of the next preceding
paragraph, if less than the whole or materially all of the Demised
Premises shall be taken as aforesaid, then, in such event, this Lease
shall not terminate by reason thereof and Tenant shall continue to
pay, in the manner and at the time herein specified, the full amount
of the Fixed Annual Rent, Additional Rent and other charges payable by
Tenant under this Lease.
(d) If, at any time after the date hereof, the whole or any
part of Tenant's interest under this Lease shall be taken or condemned
by any competent authority for its or their temporary use or
occupancy, this Lease shall not terminate by reason thereof and Tenant
shall continue to pay, in the manner and at the time herein specified,
the full amount of the Fixed Annual Rent and Additional Rent and such
other charges as are payable hereunder by Tenant, and, except only to
the extent that Tenant may be prevented from so doing pursuant to the
terms of the order of the condemning authority, Tenant shall perform
and observe all of the other terms, covenants, conditions and
obligations hereunder on the part of Tenant to be performed and
observed as though such taking had not occurred. In the event of any
such taking as in this paragraph referred to, Tenant shall be entitled
to receive the entire amount of any award made for such taking,
whether paid by way of damages, rent or otherwise; provided, however,
that if such period of temporary use or occupancy shall extend beyond
the expiration of the term of this Lease, such award, whether paid in
a lump sum or in installments covering at least the last twelve (12)
months of the term of this Lease, shall be equitably apportioned
between Landlord and Tenant as of such date of expiration of the term
of this Lease. Tenant agrees that upon the termination of any such
period of temporary use or occupancy it will, at its sole cost and
expense, restore the Demised Premises, as nearly as may be
practicable, to the condition in which the same were immediately prior
to such taking.
17. ASSIGNMENT AND SUBLETTING.
(a) (i) Prior to the issuance of a Certificate of
Completion by the Redevelopment Authority pursuant to the Land
Disposition Agreement for the Building and the improvements on the
Demised Premises, (x) Tenant shall have no right to assign this Lease
or to sublet (which term includes, without limitation, licenses,
concessions and the like) the Demised Premises and/or the Building
(whether in whole or in part) and (y) Tenant shall not sell, convey,
assign, otherwise transfer or issue any stock, partnership interest,
beneficial interest or other ownership interest in Tenant (herein
collectively called "Ownership Interest In Tenant"). Any such
purported assignment or subletting shall be void ab initio, shall
confer no rights on or in favor of third parties and, at Landlord's
sole and exclusive option, shall constitute an Event of Default under
this Lease. Further, Landlord shall have the right of specific
performance, injunctive relief and other equitable remedies with
respect to the foregoing.
(a) (ii) Notwithstanding the foregoing provisions of
Section 17 (a)(i) above, prior to the issuance of said Certificate of
Completion and on the express condition that there shall be no "Event
of Default" (defined in Section 20) and this Lease shall be in full
force and effect, Tenant shall have the right to assign all (but not
less than all) of its interest in this Lease or to assign all (but not
less than all) of the Ownership Interest In Tenant, in either case to
a corporation or other entity wholly owned by Biogen, Inc., to a
corporation or other entity which wholly owns both Tenant and Biogen,
Inc., or to a corporation or other entity under common control with
both Tenant and Biogen, Inc.; provided, however, that irrespective of
any such assignment and as a condition thereto (a) Tenant shall remain
fully, directly and primarily liable to Landlord for the prompt,
timely and complete performance of all obligations under this Lease
(including, without limitation, the obligations under Section 24), (b)
said assignee shall agree in a written instrument acceptable to
Landlord to be fully, directly and primarily liable to Landlord for
the prompt, timely and complete performance of all obligations,
covenants and agreements on the part of Tenant to be performed under
this Lease (including, without limitation, the obligations under
Section 24), (c) the obligations of Tenant and such assignee shall be
joint and several and such written instrument shall so provide, (d)
Tenant and Biogen, Inc., shall not be relieved of any of their
obligations and liabilities under and pursuant to the Hazardous
Materials Indemnity and Biogen, Inc., shall confirm same in a written
instrument to Landlord but no such written confirmation shall be
required of Tenant, the provisions hereof constituting Tenant's
agreement to same, (e) Biogen, Inc., shall not be relieved of any of
its obligations and liabilities under the Biogen Guaranty and Biogen
shall so confirm same in a written instrument to Landlord and (f)
Tenant shall give at least fifteen (15) days prior written notice to
Landlord respecting such assignment (i) certifying the name and
address of such assignee and the information (including type of
entity) demonstrating and certifying that such assignee is a permitted
assignee as above described and (ii) delivering to Landlord all of the
written instruments required pursuant to the foregoing provisions of
this Section 17 (a)(ii).
Notwithstanding the provisions of items (d) and
(e) of the immediately preceding paragraph, if the assignee to whom
Tenant's interest in this Lease is assigned pursuant to this Section
17 (a)(ii) shall be an entity into which Biogen, Inc., shall be merged
and as a result of which Biogen, Inc., shall cease to exist (the
"Biogen Successor"), the Biogen Successor shall assume and agree
directly with Landlord (in a written instrument acceptable to
Landlord) to assume and perform all obligations of Biogen, Inc., under
both the Hazardous Materials Indemnity and the Biogen Guaranty
irrespective of when any of such obligations arise (including, but not
limited to, all obligations, covenants, claims, conditions and
requirements under both the Hazardous Materials Indemnity and the
Biogen Guaranty accruing, existing or arising prior to such
assignment); and on the date of such assignment the Biogen Successor
shall have at least the financial capability and liquidity as Biogen,
Inc., as approved by Landlord, which approval shall not be
unreasonably withheld or delayed in which case Biogen, Inc., shall
have no further obligation under the Hazardous Materials Indemnity or
the Biogen Guaranty; provided, that the foregoing shall not affect or
otherwise impair any claims made under the Hazardous Materials
Indemnity and/or the Biogen Guaranty. Tenant shall provide or cause
to be provided to Landlord such financial and other information
respecting the Biogen Successor as shall be reasonably necessary for
Landlord to review the financial capability and liquidity of the
Biogen Successor. Any such assignment shall be subject to the terms
of this Lease including, without limitation, the provisions of Section
24 hereof which shall not be postponed, amended, modified or in any
way altered or delayed by any such assignment.
(a) (iii) (1) In addition and notwithstanding the foregoing
provisions of Section 17 (a)(i) above, prior to the issuance of said
Certificate of Completion and on the express condition that there
shall be no "Event of Default" (defined in Section 20) and this Lease
shall be in full force and effect, Tenant shall have the right to
assign all (but not less than all) of its interest in this Lease to a
"Qualified Purchaser" (hereinafter defined) provided, however, that
irrespective of any such assignment and as a condition thereto (a)
there shall be no default existing under, and the proposed assignment
to a Qualified Purchaser shall not violate, the Land Disposition
Agreement and the Land Disposition Agreement shall be in full force
and effect, (b) Tenant shall remain fully, directly and primarily
liable to Landlord for the prompt, timely and complete performance of
all obligations under this Lease (including, without limitation, the
obligations under Section 24), (c) said Qualified Purchaser as
assignee shall agree in a written instrument acceptable to Landlord to
be fully, directly and primarily liable to Landlord for the prompt,
timely and complete performance of all obligations, covenants and
agreements on the part of Tenant to be performed under this Lease
(including, without limitation, the obligations under Section 24), (d)
the obligations of Tenant and said Qualified Purchaser as assignee
shall be joint and several and such written instrument shall so
provide but no such written instrument shall be required by Tenant,
the provisions hereof constituting Tenant's agreement to same, (e)
Tenant and Biogen, Inc., shall not be relieved of any of their
obligations and liabilities under and pursuant to the Hazardous
Materials Indemnity and Biogen, Inc., shall confirm same in a written
instrument to Landlord but no such written confirmation shall be
required of Tenant, the provisions hereof constituting Tenant's
agreement to same, (f) Biogen, Inc., shall not be relieved of any of
its obligations and liabilities under the Biogen Guaranty and Biogen
shall so confirm same in a written instrument to Landlord, (g) such
assignment shall not violate the terms of the Land Disposition
Agreement and Tenant shall have obtained any approval for such
assignment that may be required under the Land Disposition Agreement
and (h) Tenant shall give at least fifteen (15) days prior written
notice to Landlord respecting such assignment (i) certifying the name
and address of such proposed Qualified Purchaser as assignee
(including type of entity) and (ii) certifying and delivering to
Landlord all of the information, data and other documentation required
under the definition of "Qualified Purchaser" (set forth below) as
shall be necessary or required in order to satisfy the requirements
set forth in said definition of Qualified Purchaser and (iii)
delivering to Landlord all of the written instruments required
pursuant to the foregoing provisions of this Section 17 (a)(iii) and
(iv) such other information as Landlord may reasonably require.
For purposes hereof, the term "Qualified
Purchaser" shall mean an entity which acquires this Lease together
with substantial operating assets of Biogen, Inc., including, without
limitation, all or substantially all of the leased or owned
improvements of Biogen, Inc. (and its affiliates which shall include
Tenant) in East Cambridge, Massachusetts which must consist of at
least 200,000 square feet of gross floor area of leased or owned
improvements of Biogen, Inc. (and its affiliates including Tenant) in
East Cambridge, Massachusetts and all of the assets and other rights
of Biogen, Inc. (and its affiliates including Tenant) in, relating
and/or pertaining to Parcel 2 of the Kendall Square Urban Renewal
Area; provided, however, that as a result of such change the owner of
such assets (a) is not primarily involved in the business of real
estate development (which term "real estate Development" shall
include, but not be limited to, the construction, development,
acquisition, leasing, management, sale and/or other operation of real
estate and/or improvements on real estate), (b) has a shareholder's or
owner's equity as determined in accordance with "GAAP" (hereinafter
defined) at least equal to One Hundred Twenty Five Million Dollars
($125,000,000.00) plus the "CPI Amount" (hereinafter defined), (c) has
net income as determined in accordance with GAAP, but excluding
interest and investment income and income from extraordinary events,
of at lease (1) Seven Million Dollars ($7,000,000.00) plus the CPI
Amount for the fiscal year immediately prior to such proposed
assignment and (2) One Dollar ($1.00) for each of at least two of the
last three fiscal years prior to such proposed assignment and (3)
Twenty Million Dollars ($20,000,000.00) plus the CPI Amount in the
aggregate for the last three fiscal years prior to such proposed
assignment, (d) has Fifty Million Dollars ($50,000,000.00) plus the
CPI Amount in cash or marketable securities at the time of such
proposed assignment and (e) has sufficient funds in the reasonable
determination of Landlord committed to the construction and completion
of the Improvements so as to timely complete the Improvements and
obtain a Certificate of Completion from the Redevelopment Authority.
"GAAP" shall mean generally accepted accounting principles
consistently applied throughout (and/or with respect to) the relevant
period(s). The "CPI Amount" shall be and mean an amount equal to the
product of the amount in question times the percentage increase, if
any, in the Consumer Price Index (1982-1984 = 100) of all items for
urban wage earners and clerical workers published by the Bureau of
Labor Statistics of the U.S. Department of Labor for Boston,
Massachusetts (the "Index") (or if there ceases to be any such
publication, any other substantially equivalent index generally
recognized to measure changes in the cost of living for Boston,
Massachusetts) between the Index last published prior to the date of
this Lease and the Index last published prior to the proposed
assignment.
In addition to the foregoing provisions of this
Section 17 (a)(iii)(1), the Qualified Purchaser to whom Tenant's
interest in this Lease is assigned pursuant to this Section 17
(a)(iii) shall assume and agree directly with Landlord (in a written
instrument acceptable to Landlord) to assume and perform all
obligations of Tenant and Biogen, Inc., under the Hazardous Materials
Indemnity and the obligations of Biogen, Inc., under the Biogen
Guaranty, in each case irrespective of when any of such obligations
arise (including, but not limited to, all obligations, covenants,
claims, conditions and requirements under both the Hazardous Materials
Indemnity and the Biogen Guaranty accruing, existing or arising prior
to such assignment); Tenant and Biogen,Inc., shall not be released
from their obligations under the Hazardous Materials Indemnity, the
obligations of Tenant, Biogen, Inc., and the Qualified Purchaser being
joint and several; and Biogen, Inc., shall not be released from its
obligations under the Biogen Guaranty, the obligations of Biogen,
Inc., and the Qualified Purchaser being joint and several.
(a) (iii) (2) This Section 17 (a)(iii)(2) shall only apply
to an assignment made pursuant to the provisions of Section 17
(a)(iii)(1) above. Provided that on both the effective date of such
an assignment and the tenth (10th) annual anniversary of the effective
date of such assignment (the "Tenth Anniversary") all of the
"Conditions" (hereinafter set forth) and "Additional Conditions" (also
hereinafter set forth) shall be satisfied, Tenant shall be released of
all of the obligations of Tenant under this Lease first arising after
the Tenth Anniversary (but not those arising on or before the Tenth
Anniversary) and Biogen, Inc., and Tenant shall have no obligation
under the Hazardous Materials Indemnity for "Releases" (as therein
defined) on the Demised Premises first occurring after the Tenth
Anniversary and caused by such assignee (it being covenanted and
agreed that the Hazardous Materials Indemnity shall remain in full
force and effect for all other Releases and for all other matters
thereunder) and Biogen, Inc. shall have no obligation under the Biogen
Guaranty for events under this Lease first occurring after the Tenth
Anniversary and caused by such assignee (it being covenanted and
agreed that the Biogen Guaranty shall remain in full force and effect
for and with respect to all other matters, causes and events). In no
case shall the Qualified Purchaser be released from any obligations
under this Lease, under the Hazardous Materials Indemnity and/or under
the Biogen Guaranty. The "Conditions shall consist of all of the
following:
(a) there shall not exist any Event of Default or any
event which with the passage of time or the giving
of notice or both would constitute an Event of
Default (for purposes hereof called an "Other
Event"). Without limiting the foregoing
provisions of this item (a), there shall be no
Event of Default or Other Event on the part of
Tenant (and/or the assignee) under Section 24
hereof. With respect only to Other Events, Tenant
shall have the right, by written notice to
Landlord, to request a statement of such Other
Defaults, if any, of which Landlord has actual
knowledge and promptly after receipt of any such
written request, Landlord shall provide to Tenant
a written statement of such Other Events, if any,
as Landlord has actual knowledge of; provided,
however, that Landlord shall have no obligation to
inspect the Demised Premises, the Improvements or
the Building Equipment or to make any inquiry of
third parties or their records and files
(including, without limitation, the Redevelopment
Authority or other Governmental Bodies).
(b) this Lease shall be in full force and effect.
(c) Landlord shall not have exercised any of its
rights or remedies as provided in this Lease
and/or under applicable law respecting any Event
of Default or any Other Event.
(d) there shall be no breach or default under the
Hazardous Materials Indemnity, the Hazardous
Materials Indemnity shall be in full force and
effect and the Indemnified Parties under the
Hazardous Materials Indemnity shall not have
exercised any of their rights and remedies under
the Hazardous Materials Indemnity and\or under
applicable law respecting the matters covered by
Hazardous Materials Indemnity (and shall not have
commenced any proceedings in respect thereof).
(e) there shall be no breach or default under the
Biogen Guaranty, the Biogen Guaranty shall be in
full force and effect and the parties for whose
benefit the Biogen Guaranty has been given shall
not have rightfully exercised any of their rights
and remedies under the Biogen Guaranty and/or
under applicable law respecting the matters
covered by the Biogen Guaranty (and shall not have
rightfully commenced any proceedings in respect
thereto).
(f) the Qualified Purchaser shall have met at the
effective date of the assignment, and on the Tenth
Anniversary the Qualified Purchaser shall continue
to meet, the requirements set forth under the
definition of Qualified Purchaser, it being agreed
that any requirement which specifies an adjustment
respecting the CPI Amount shall have the CPI
Amount updated in the case of the Tenth
Anniversary to the Tenth Anniversary.
The following shall be additional conditions to the aforesaid release
of Tenant (the "Additional Conditions"): (i) Tenant shall provide to
Landlord such information, documentation and materials (certified by
Tenant and such assignee) as to the requirements of the Qualified
Purchaser as assignee specified in the definition of "Qualified
Purchaser" (hereinabove set forth) as shall be required (updated in
the case of the Tenth Anniversary) and (ii) should Tenant wish to
avail itself of the provisions of this Section 17 (a)(iii)(2), Tenant
shall have the obligation to satisfy, demonstrate satisfaction and
comply with the provisions hereof, (iii) the assignee shall execute a
written instrument or instruments (acceptable to Landlord) confirming
that it is and shall remain (a) fully, directly and primarily liable
to Landlord for the prompt, timely and complete performance of all
obligations, covenants and agreements on the part of Tenant to be
performed under this Lease (including, without limitation, the
obligations under Section 24), (b) fully, directly and primarily
liable under the Biogen Guaranty and (c) fully, directly and primarily
liable under the Hazardous Materials Indemnity as the Tenant under
this Lease (and as the "Purchaser", if applicable, under the Hazardous
Materials Indemnity. The provisions of Sections 17 (a)(iii)(1) and
(a)(iii)(2) shall not postpone, amend, modify or in any way alter or
delay the provisions of Section 24 hereof.
(b) (i) After the issuance of such Certificate of
Completion and on the express condition that there shall be no "Event
of Default" (defined in Section 20) and this Lease shall be in full
force and effect, Tenant shall have the right to assign its interest
in this Lease, to assign all of the Ownership Interest In Tenant or to
sublet the Building in whole or in part; provided, however, that
Landlord first approves the financial capability and liquidity of the
proposed assignee or proposed sublessee, as the case may be, to
perform all of the obligations under this Lease as and when due or
required (which approval shall not be unreasonably withheld or
delayed) and provided, further, that irrespective of any such
assignment or subletting (a) Tenant shall remain fully, directly and
primarily liable to Landlord for the prompt, timely and complete
performance of all obligations, covenants and agreements on the part
of Tenant to be performed (including, without limitation, the
obligations of Section 24) under this Lease, (b) said assignee or
subtenant, as the case may be, shall agree in a written instrument
acceptable to Landlord to be fully, directly and primarily liable to
Landlord for such prompt, timely and complete performance under this
Lease, (c) the obligations of Tenant and such assignee (or sublessee,
as the case may be) shall be joint and several and such written
instruments shall so provide but no such written instrument shall be
required of Tenant, the provisions hereof constituting Tenant's
agreement to same, (d) Biogen, Inc. (and the Biogen Successor pursuant
to Section 17 (a)(ii)) and Tenant shall not be relieved of any their
obligations and liabilities under and pursuant to the Hazardous
Materials Indemnity and Biogen, Inc. (and the Biogen Successor
pursuant to Section 17 (a)(ii)) shall confirm same in a written
instrument to Landlord but no such written confirmation shall be
required of Tenant, the provisions hereof constituting Tenant's
agreement to same, (e) Biogen, Inc. (and the Biogen Successor pursuant
to Section 17 (a)(ii)) shall not be relieved of any of its (or their)
obligations and liabilities under the Biogen Guaranty and Biogen,
Inc., shall so confirm the same in a written instrument to Landlord,
(f) such assignment shall not violate the terms of the Land
Disposition Agreement and Tenant shall have obtained any approval for
such assignment that may be required under the Land Disposition
Agreement and (g) Tenant shall give at least twenty (20) days' prior
written notice to Landlord of the name, address and terms of such
assignment or subletting and such financial and other information
respecting the proposed assignee or subtenant as shall be reasonably
necessary for Landlord to review the financial capability and
liquidity of the proposed assignee or subtenant, as the case may be,
to perform the obligations under this Lease as and when due or
required. Any such assignment or subletting shall be subject to the
terms of the Lease including the provisions of Section 24 hereof which
shall not be postponed, amended, modified or in any way altered or
delayed by any such assignment or subletting.
(b) (ii) This Section 17 (b)(ii) shall only apply to an
assignment made pursuant to the provisions of Section 17 (b)(i) above.
Provided that on both the effective date of such an assignment and the
tenth (10th) annual anniversary of the effective date of such
assignment (the "Tenth Anniversary") all of the "Conditions"
(hereinafter set forth) and "Additional Conditions" (also hereinafter
set forth) shall be satisfied, Tenant shall be released of all of the
obligations of Tenant under this Lease first arising after the Tenth
Anniversary (but not those arising on or before the Tenth Anniversary)
and Biogen, Inc., and Tenant shall have no obligation under the
Hazardous Materials Indemnity for "Releases" (as therein defined) on
the Demised Premises first occurring after the Tenth Anniversary and
caused by such assignee (it being covenanted and agreed that the
Hazardous Materials Indemnity shall remain in full force and effect
for all other Releases and for all other matters thereunder) and
Biogen, Inc. shall have no obligation under the Biogen Guaranty for
events under this Lease first occurring after the Tenth Anniversary
and caused by such assignee (it being covenanted and agreed that the
Biogen Guaranty shall remain in full force and effect for and with
respect to all other matters, causes and events). The "Conditions
shall consist of all of the following:
(a) there shall not exist any Event of Default or any
event which with the passage of time or the giving
of notice or both would constitute an Event of
Default (for purposes hereof called an "Other
Event"). Without limiting the foregoing
provisions of this item (a), there shall be no
Event of Default or Other Event on the part of
Tenant and/or the assignee under Section 24
hereof. With respect only to Other Events, Tenant
shall have the right, by written notice to
Landlord, to request a statement of such Other
Defaults, if any, of which Landlord has actual
knowledge and promptly after receipt of any such
written request, Landlord shall provide to Tenant
a written statement of such Other Events, if any,
as Landlord has actual knowledge of; provided,
however, that Landlord shall have no obligation to
inspect the Demised Premises, the Improvements or
the Building Equipment or to make any inquiry of
third parties or their records and files
(including, without limitation, the Redevelopment
Authority or other Governmental Bodies).
(b) this Lease shall be in full force and effect.
(c) Landlord shall not have exercised any of its
rights or remedies as provided in this Lease
and/or under applicable law respecting any Event
of Default or any Other Event.
(d) there shall be no breach or default under the
Hazardous Materials Indemnity, the Hazardous
Materials Indemnity shall be in full force and
effect and the Indemnified Parties under the
Hazardous Materials Indemnity shall not have
exercised any of their rights and remedies under
the Hazardous Materials Indemnity and\or under
applicable law respecting the matters covered by
Hazardous Materials Indemnity (and shall not have
commenced any proceedings in respect thereof).
(e) there shall be no breach or default under the
Biogen Guaranty, the Biogen Guaranty shall be in
full force and effect and the parties for whose
benefit the Biogen Guaranty has been given shall
not have rightfully exercised any of their rights
and remedies under the Biogen Guaranty and/or
under applicable law respecting the matters
covered by the Biogen Guaranty (and shall not have
rightfully commenced any proceedings in respect
thereto).
(f) at both the effective date of the assignment and
on the Tenth Anniversary, Landlord (in the
exercise of its reasonable business judgment)
shall have approved the financial capability and
liquidity of the assignee to perform all of the
obligations of the Tenant under this Lease.
The following shall be additional conditions to the aforesaid release
of Tenant (the "Additional Conditions"): (i) Tenant shall provide to
Landlord such information, documentation and materials (certified by
Tenant and such assignee) as to the assignee's financial condition and
liquidity as shall be necessary for Landlord's evaluation hereunder
and (ii) should Tenant wish to avail itself of the provisions of this
Section 17 (b)(ii), Tenant shall have the obligation to satisfy,
demonstrate satisfaction and comply with the provisions hereof, (iii)
the assignee shall execute a written instrument (acceptable to
Landlord) covenanting and agreeing to be fully, directly and primarily
liable to Landlord for the prompt, timely and complete performance of
all obligations, covenants and agreements on the part of Tenant to be
performed under this Lease (including, without limitation, the
obligations under Section 24) and (iv) the assignee shall execute a
written instrument or a Joinder to the Hazardous Materials Indemnity
(in either case as required by and acceptable to Landlord) covenanting
and agreeing to be fully, directly and primarily liable to Landlord
for the prompt, timely and complete performance of all obligations,
covenants and agreements under the Hazardous Materials Indemnity
arising after the Tenth (10th) Anniversary. The provisions of this
Section 17 (b)(ii) shall not postpone, amend, modify or in any way
alter or delay the provisions of Section 24 hereof.
(c) Further, if this Lease be assigned pursuant to Section
17(a)(ii) or Section 17(b), as the case may be, or if the Premises or
any part thereof be sublet pursuant to Section 17(b), Landlord may
upon prior notice to Tenant, at any time and from time to time after
the occurrence of an Event of Default, collect Fixed Annual Rent,
Additional Rent, and other charges herein reserved, but no such
assignment, subletting, or collection shall be deemed a release of
Tenant, or Biogen, Inc. (and a Biogen Successor, if applicable) or the
acceptance of the assignee or sublessee as a tenant or a release of
Tenant from the performance by Tenant of all of the obligations,
agreements, provisions and covenants on the part of Tenant contained
in this Lease or set forth in the Hazardous Waste Indemnity or a
release of Biogen, Inc. (and a Biogen Successor, if applicable) from
the performance of its obligations under the Hazardous Waste Indemnity
and/or the Biogen Guaranty.
(d) No assignment, subletting or use of the Demised
Premises and/or Improvements by any third party shall affect the
purpose for which the Demised Premises and Improvements may be used as
stated in this Lease.
18. LEASEHOLD MORTGAGES. Subject to Tenant's compliance with
the terms, conditions and requirements of the Land Disposition
Agreement and provided that there shall be no Event of Default under
this Lease, Tenant is hereby given the right by Landlord, without
Landlord's prior written consent, to mortgage its interest in this
Lease to a "Leasehold Mortgagee" (hereinafter defined) solely for the
purpose set forth in Section 601 of Part II (as modified) of the Land
Disposition Agreement, under a first Leasehold Mortgage (the
"Leasehold Mortgage") and to assign this Lease as collateral security
for such Leasehold Mortgage, upon the condition that all rights
acquired under such Leasehold Mortgage shall be subject and
subordinate to each and all of the covenants, conditions and
restrictions set forth in this Lease and in the Land Disposition
Agreement, and to all rights and interests of Landlord under this
Lease, none of which covenants, conditions or restrictions is or shall
be waived by Landlord by reason of the right given so to mortgage
Tenant's interest in this Lease, except as expressly provided herein.
In no event shall Landlord be obligated in any way to mortgage
Landlord's interest in the Demised Premises for any Tenant purpose and
Tenant shall have no right to require Landlord to mortgage Landlord's
interest in the Demised Premises.
If Tenant shall so mortgage its leasehold interest in this Lease,
and if the Leasehold Mortgagee shall, within thirty (30) days of its
execution, send to Landlord a true copy thereof, together with written
notice specifying the name and address of the Leasehold Mortgagee and
the pertinent recording data with respect to such Leasehold Mortgage,
Landlord agrees that so long as such Leasehold Mortgage shall remain
unsatisfied of record or until written notice of satisfaction is given
by the holder thereof to Landlord, the following provisions shall
apply:
(a) There shall be no cancellation, surrender or
modification of this Lease by joint action of Landlord
and Tenant without the prior consent in writing of the
Leasehold Mortgagee;
(b) Landlord shall, upon serving Tenant with any notice of
default, simultaneously serve a copy of such notice
upon the holder of such Leasehold Mortgage. The
Leasehold Mortgagee shall thereupon have the same
period, after service of such notice upon it, to remedy
or cause to be remedied the defaults complained of, and
Landlord shall accept such performance by or at the
instigation of such Leasehold Mortgagee as if the same
had been done by Tenant;
(c) Anything herein contained notwithstanding but provided
that the Land Disposition Agreement shall be and remain
in full force and effect and there shall be no defaults
existing thereunder and there remain sufficient time
under the Land Disposition Agreement to complete the
Improvements and to obtain a Certificate of Completion
therefor, while such Leasehold Mortgage remains
unsatisfied of record, or until written notice of
satisfaction is given by the holder thereof to
Landlord, if any default shall occur which, pursuant to
any provision of this Lease, entitles Landlord to
terminate this Lease, and if before the expiration of
ten (10) days from the date of service of notice of
termination upon such Leasehold Mortgagee such
Leasehold Mortgagee shall have notified Landlord of its
desire to nullify such notice and (i) shall have paid
to Landlord all Fixed Annual Rent, Additional Rent and
other payments provided for in this Lease, and then in
default, (ii) shall agree in a written instrument
acceptable to Landlord to assume directly with Landlord
the obligations of Tenant under this Lease (including,
without limitation, the obligation to complete
construction of and obtain a Certificate of Completion
for the Improvements in accordance with the provisions
of this Lease and the Land Disposition Agreement) and
(iii) shall have complied or shall commence the work
of complying with all of the other requirements of this
Lease, if any are then in default, and shall prosecute
the same to completion with reasonable diligence, then
in such event Landlord shall not be entitled to
terminate this Lease by reason of such default and any
notice of termination theretofore given shall be void
and of no effect;
(d) If the Landlord shall elect to terminate this Lease by
reason of any default of Tenant, the Leasehold
Mortgagee shall not only have the right to nullify any
notice of termination in the manner set forth in and
subject to compliance with the provisions of subsection
(c) above, but shall also have the right to postpone
and extend the specified date for the termination of
this Lease as fixed by Landlord in its notice of
termination, for a period of not more than four (4)
months, provided and on the condition (i) that the Land
Disposition Agreement shall be and remain in full force
and effect and there shall be no defaults existing
thereunder, (ii) that the Improvements can reasonably
be completed and a Certificate of Completion therefor
can be obtained within the remainder of the time period
established in the Land Disposition Agreement for such
completion and (iii) such Leasehold Mortgagee (1) shall
cure or cause to be cured any then existing money
defaults and shall pay the Fixed Annual Rent,
Additional Rent and other charges as and when due under
this Lease (2) shall agree in a written instrument
acceptable to Landlord to assume directly with Landlord
the obligations of Tenant under this Lease and the
obligations respecting the Demised Premises under the
Land Disposition Agreement (including, without
limitation, the obligation to complete construction of
and obtain a Certificate of Completion for the
Improvements in accordance with the provisions of the
Land Disposition Agreement) and (3) shall comply with
and perform all of the other terms, conditions and
provisions of this Lease on Tenant's part to be
complied with and performed, and provided further that
the Leasehold Mortgagee shall forthwith take steps to
acquire or sell Tenant's interest in this Lease by
foreclosure of the Leasehold Mortgage or otherwise and
shall prosecute the same to completion with all due
diligence. If at the end of said four (4) month period
the Leasehold Mortgagee shall not have so acquired or
sold Tenant's interest in this Lease, the provisions
hereof shall automatically cease and this Lease shall
terminate;
(e) Landlord agrees that the name of the Leasehold
Mortgagee may be added to the "Mortgagee Endorsement"
of any and all insurance policies required to be
carried by Tenant hereunder on condition that the
insurance proceed are to be applied in the manner
specified in this Lease and that the Leasehold Mortgage
and collateral documents shall so provide;
(f) Provided that the Land Disposition Agreement shall not
have been terminated and shall remain in full force and
effect and there are no defaults thereunder and
provided, further, that the Improvements can reasonably
be completed and a Certificate of Completion therefor
can be obtained within the time period established for
completion in the Land Disposition Agreement, Landlord
agrees that, in the event of termination of this Lease
by reason of any default by Tenant other than for
nonpayment of Fixed Annual Rent or Additional Rent and
other payments herein provided for, Landlord will enter
into a new lease of the Demised Premises with the
Leasehold Mortgagee, for the remainder of the term,
effective as of the date of such termination only if
the Land Disposition Agreement permits same, at the
Fixed Annual Rent and Additional Rent and upon all of
the terms, provisions, covenants and agreements as
contained in this Lease (including, without limitation,
compliance with the requirements of the Land
Disposition Agreement) and subject only to the same
conditions of title as this Lease is subject to on the
date of the execution hereof, and to the rights, if
any, of any parties then in possession of any part of
the Demised Premises, provided:
(1) Said Leasehold Mortgagee shall make written
request upon Landlord for such new lease
within five (5) day after the date of such
termination and such written request is
accompanied by payment to Landlord of all
sums then due to Landlord under this Lease;
(2) Said Leasehold Mortgagee shall pay to
Landlord at the time of the execution and
delivery of said new lease (which date for
execution of such new lease shall not be
later than twenty (20) days following the
date when such Leasehold Mortgagee obtains
possession of the leasehold interest in the
Demised Premises), any and all sums which
would at the time of the execution and
delivery thereof, be due pursuant to this
Lease but for such termination, and in
addition thereto, any expenses, including
reasonable attorneys' fees, to which Landlord
shall have been subjected by reason of such
default;
(3) Said Leasehold Mortgagee shall perform and
observe, and shall agree directly with
Landlord to perform and observe, all of the
terms, requirements, covenants, obligations
and conditions contained in this Lease on
Tenant's part to be performed (including,
without limitation, completion of and
obtaining a Certificate of Completion for the
Improvements in accordance with the
provisions of this Lease and the Land
Disposition Agreement and the purchase of the
Demised Premises pursuant to Section 24
hereof) and shall further remedy any other
conditions or matters which Tenant under the
terminated lease was obligated to perform
under the terms of this Lease;
(4) The tenant under such new lease shall have
the same right, title and interest in and to
the buildings and improvements on the Demised
Premises as Tenant had under the terminated
lease;
(5) If the Leasehold Mortgagee acquires both the
Tenant's interest in this Lease and the
Landlord's interest in this Lease, this Lease
shall remain in full force and effect and the
estates of the Landlord and Tenant shall not
merge.
From the date on which the Leasehold Mortgagee shall
serve upon Landlord the aforesaid notice of the
exercise of its right to a new lease, such Leasehold
Mortgagee may use and enjoy the Demised Premises
without hindrance by Landlord provided and on the
condition that such Leasehold Mortgagee timely and
fully complies with the foregoing provisions and
requirements of this subparagraph (f) and that there
shall not occur any Event of Default under such new
lease;
(g) The proceeds from any insurance policies or arising
from a condemnation may be held by Leasehold Mortgagee
and in any case shall be distributed pursuant to the
provisions of this Lease;
(h) The Leasehold Mortgagee shall be given notice of any
legal proceedings between the parties hereto relating
to this Lease or the Demised Premises, and shall have
the right to intervene therein and be made a party to
such proceedings, and the parties hereto do hereby
consent to such intervention. In the event that the
Leasehold Mortgagee shall not elect to intervene or
become a party to such proceedings, the Leasehold
Mortgagee shall receive notice and a copy of any
decision made in said legal proceedings;
(i) No Leasehold Mortgagee, or any party claiming by,
through or under a Leasehold Mortgagee, shall become
personally liable for the performance or observance of
any covenants or conditions to be performed or observed
by Tenant unless and until such Leasehold Mortgagee (or
such party claiming by, through or under the Leasehold
Mortgagee) shall exercise its rights under subsection
(c), subsection (d) and/or subsection (f) hereof or
otherwise becomes the owner of Tenant's interest
hereunder upon the exercise of any remedy provided in
any Leasehold Mortgage or enters into a new lease with
Landlord pursuant to the foregoing provisions of this
Section 18. Notwithstanding anything herein to the
contrary, upon the occurrence of any of the foregoing,
the Leasehold Mortgagee covenants and agrees directly
with Landlord to complete the Improvements and obtain a
Certificate of Completion in accordance with the
requirements of this Lease and the Land Disposition
Agreement;
(j) The term "Mortgage", whenever used herein, shall
include supplementary security instruments, such as,
without limitation, conditional assignments of leases
and rents, as well as financing statements, security
agreements and other documentation required pursuant to
the Uniform Commercial Code; and
(k) The term "Leasehold Mortgagee" shall mean a bank, trust
company, insurance company, pension fund or other
recognized institutional first mortgage lender.
19. SURRENDER OF PREMISES. Tenant shall, upon the expiration
or sooner termination of this Lease for any reason whatsoever (other
than by reason of the purchase of the Demised Premises by Tenant
pursuant to Section 24 hereof), surrender to Landlord the Demised
Premises and the Building (including the Building Equipment), together
with all alterations and replacements thereof then on the Demised
Premises, in good order, condition and repair, except for reasonable
wear and tear, and shall surrender all keys for the Building to
Landlord at the place then fixed for the payment of Fixed Annual Rent.
Tenant shall at such time remove all trade equipment, business and
trade fixtures, and other trade materials and equipment (the "Tenant's
Property"), placed, installed, supplied or made by it in or on the
Demised Premises or the Building at Tenant's cost and expense (without
any contribution or reimbursement therefor by Landlord), provided that
any resultant damage to the Demised Premises or the Building
occasioned by such removal shall be repaired promptly by the Tenant by
and at the expense of the Tenant. The term "Tenant's Property" shall
not include or be deemed to include the Building Equipment. The
provisions of this paragraph shall survive the expiration or sooner
termination of this Lease. Any of Tenant's Property (or like property
of subtenants) which shall remain in, at or upon the Demised Premises
or the Building for five (5) days after the expiration or sooner
termination of this Lease may, at the option of Landlord, be deemed to
be abandoned property, and the same may be retained by Landlord, as
its sole property, or disposed of by Landlord at Tenant's expense in
such manner as Landlord may see fit, without further notice to or
demand upon Tenant, and without accountability or liability therefor.
Nothing in this Section shall modify or impair the provisions of
Section 41 hereof.
20. CONDITIONAL LIMITATIONS - DEFAULT PROVISIONS.
(a) This Lease and the term of this Lease are subject to
the limitation that if, at any time during the term of this Lease, any
one or more of the following events (herein called an "Event of
Default") shall occur, that is to say:
(i) If an Insolvency Proceeding occurs with respect to
Tenant and:
(A) (x) is voluntary on the part of Tenant or (y) if
not voluntary on the part of Tenant, is not
dismissed, vacated or set aside within sixty (60)
days after its occurrence;and
(B) is not coincidental with a similar Insolvency
Proceeding with respect to Biogen, Inc.; or
(ii) The modification or rejection of any material
obligation of Tenant, Biogen, Inc. or any other
Affiliate of Biogen, Inc. under any Transaction
Documents or of any material right of Landlord or any
Affiliate of Landlord under any Transaction Documents
in any voluntary Insolvency Proceeding with respect to
Tenant, Biogen, Inc. or any Affiliate of Biogen, Inc.
which is a party to a Transaction Document or an
involuntary Insolvency Proceeding with respect to
Tenant, Biogen, Inc. or any Affiliate of Biogen, Inc.
which is a party to a Transaction Document unless such
involuntary Insolvency Proceeding is dismissed, set
aside or vacated within sixty (60) days after the date
of its occurrence.
(iii) If Tenant shall fail to pay any installment of the
Fixed Annual Rent or any Additional Rent, or any part
thereof, when the same shall become due and payable and
such failure shall continue for ten (10) days after the
receipt of notice thereof from Landlord to Tenant; or
(iv) If Tenant shall fail to maintain insurance in
accordance with applicable requirements of this Lease
and such failure shall continue for more than twenty
(20) days after receipt of notice thereof from
Landlord; or
(v) If Tenant shall fail to perform or observe any other
requirement of this Lease (not hereinabove in this
subparagraph (a) specifically referred to) on the part
of Tenant to be performed or observed (other than the
payment of a sum of money) and such failure shall
continue for thirty (30) days after receipt of notice
thereof from Landlord to Tenant, or if said default
shall reasonably require longer than thirty (30) days
to cure, if Tenant shall fail to commence to cure said
default within thirty (30) days after receipt of notice
thereof and continuously prosecute the curing of the
same to completion with due diligence; or
(vi)If Tenant shall be liquidated or dissolved, or
shall begin proceedings towards its liquidation or
dissolution, or shall, in any manner, permit the
divestiture of substantially all of its assets,
other than through a sale, merger or consolidation
to or with one or more entities wherein the
surviving entity or transferee of the assets, as
the case may be, shall deliver to the Landlord an
acknowledged instrument in recordable form
assuming all obligations, covenants and
responsibilities of Tenant under this Lease.
Notwithstanding anything herein contained, the
foregoing shall not be deemed to be or constitute
a consent to any sale, divestiture or other
transfer of this Lease or a waiver of the
provisions of Section 17 hereof.
(vii) Subject to the rights of assignment granted pursuant to
Section 33 of the Option Agreement in respect of the
Option Agreement, the dissolution of Biogen, Inc.
(other than Tenant) or any Affiliate of Biogen, Inc.
which is a party of a Transaction Document.
Then, upon the happening of any one or more of the aforementioned
Events of Default, Landlord may (x) give to Tenant a notice
(hereinafter called "notice of termination") terminating this Lease at
the expiration of five (5) days from the date of service of such
notice of termination, and at the expiration of such five (5) days,
this Lease and the term of this Lease, as well as all of the right,
title and interest of the Tenant hereunder, shall wholly cease and
expire in the same manner and with the same force and effect as if the
date of expiration of such 5-day period were the date originally
specified herein for the expiration of the term of this Lease, and
Tenant shall then quit and surrender the Demised Premises and the
Building (including Building Equipment) to Landlord and/or (y)
Landlord or Landlord's agents or servants may, by any suitable action
or proceeding at law, immediately or at any time thereafter re-enter
the Demised Premises and remove therefrom and from the Building
Tenant, its agents, employees, servants, licensees, and any subtenants
and other persons, and all or any of its or their property therefrom,
and repossess and enjoy the Demised Premises and the Building
(including Building Equipment), together with all additions,
alterations and improvements thereto; but, in either case, Tenant
shall remain liable as hereinafter provided.
(b) If this Lease shall be terminated as hereinabove
provided, all of the right, title, estate and interest of Tenant (i)
in and to the Building, the Building Equipment, and Tenant's Property,
all changes, additions and alterations therein, and all renewals and
replacements thereof, (ii) in and to all rents, income, receipts,
revenues, issues and profits issuing from the Demised Premises and the
Building, or any part thereof, whether then accrued or to accrue,
(iii) in and to all insurance policies and all insurance monies paid
or payable thereunder, and (iv) in the then entire undisbursed balance
of any funds in the hands of the Depository, shall automatically pass
to, vest in and belong to Landlord, without further action on the part
of either party, free of any claim thereto by Tenant.
(c) If this Lease is terminated or if Landlord shall
re-enter the Demised Premises as aforesaid, or in the event of the
termination of this Lease, or of re-entry, by or under any proceeding
or action or any provision of law by reason of an Event of Default
hereunder on the part of Tenant, Tenant shall pay to Landlord as
damages, at the election of Landlord, either:
(i) A sum which at the time of such termination of
this Lease or at the time of any such re-entry by
Landlord, as the case may be, represents the then
value of the excess, if any, of (i) the aggregate
amount of the Fixed Annual Rent and Additional
Rent which would have been payable by Tenant
(conclusively presuming the average Additional
Rent under Section 5 to be the same as were
payable for the twelve (12) calendar months (or if
less than twelve (12) calendar months have then
elapsed since the date hereof, the partial year
immediately preceding such termination or
re-entry), for the period commencing with such
earlier termination of this Lease or the date of
any such re-entry, as the case may be, and ending
with the date contemplated as the expiration date
hereof if this Lease had not so terminated or if
Landlord had not so re-entered the Demised
Premises, over (ii) the aggregate rental value of
the Demised Premises (conclusively presuming the
average Additional Rent under Section 5 to be the
same as were payable for the twelve (12) calendar
months (or if less than twelve (12) calendar
months have then elapsed since the date hereof,
the partial year immediately preceding such
termination or re-entry), discounted at the rate
of ten percent (10%) per annum compounded monthly,
or
(ii) A sum equal to any deficiency between the Fixed
Annual Rent and Additional Rent which would have
been payable by Tenant had this Lease not so
terminated and the net amount, if any, of the
rents, Additional Rent and other charges collected
on account of the lease or leases of the Demised
Premises for each month of the period which would
otherwise have constituted the balance of the term
of this Lease. Any such reletting may be for a
period shorter or longer than the remaining term
of this Lease, but in no event shall Tenant be
entitled to receive any excess of such credits
over the sums payable by Tenant to Landlord
hereunder, nor shall Tenant be entitled in any
suit for the collection of damages pursuant to
this Section to a credit in respect of any net
rents from a reletting, except to the extent that
such net rents are actually received by Landlord.
Suit or suits for the recovery of such damages, or
any installments thereof, may be brought by
Landlord from time to time at its election, and
nothing contained herein shall be deemed to (x)
require Landlord to postpone suit until the date
when the term of this Lease would have expired if
it had not been so terminated, or had Landlord not
re-entered the Demised Premises, or (y) preclude
the bringing of additional or subsequent suits.
Nothing herein contained shall be construed to
limit or preclude recovery by Landlord against
Tenant of any sums or damages to which, in
addition to the damages particularly provided
above, Landlord lawfully may be entitled by reason
of any default hereunder on the part of Tenant.
In computing such damages there shall be added to
the said deficiency such expenses as Landlord may
incur in connection with re-letting, such as legal
expenses, attorneys' fees, brokerage, advertising
and for keeping the Demised Premises in good order
or for preparing the same for re-letting. Any
such damages shall be paid in monthly installments
by Tenant on the rent day specified in this Lease.
Landlord, in putting the Demised Premises in good
order or preparing the same for re-rental, may, at
Landlord's option, make such alterations, repairs,
replacements, and/or decorations in the Demised
Premises as Landlord, in Landlord's sole judgment,
considers advisable and necessary for the purpose
of re-letting the Demised Premises, and the making
of such alterations, repairs, replacements, and/or
decorations shall not operate or be construed to
release Tenant from liability hereunder as
aforesaid. Landlord shall in no event be liable
in anyway whatsoever for failure to re-let the
Demised Premises, or in the event that the Demised
Premises are relet, for failure to collect the
rent thereof under such re-letting, and in no
event shall Tenant be entitled to receive any
excess, if any, of such net rents collected over
the sums payable by Tenant to Landlord hereunder.
In the event of a breach by Tenant of any of the
covenants or provisions hereof beyond the
applicable grace period, if any, Landlord shall
have the right of injunction and the right to
invoke any remedy allowed at law or in equity as
if re-entry and other remedies were not herein
provided for. Mention in this Lease of any
particular remedy shall not preclude Landlord from
any other remedy, in law or in equity.
(d) Tenant, for itself and any and all persons claiming
through or under Tenant, including its creditors, upon the termination
of this Lease and of the term of this Lease in accordance with the
terms hereof, or in the event of entry of judgment for the recovery of
the possession of the Demised Premises in any action or proceeding, or
if Landlord shall enter the Demised Premises by process of law or
otherwise, hereby waives any right of redemption provided or permitted
by any statute, law or decision now or hereafter in force, and does
hereby waive, surrender and give up all rights or privileges which it
or they may or might have under and by reason of any present or future
law or decision, to redeem the Demised Premises or for a continuation
of this Lease for the term of this Lease hereby demised after having
been dispossessed or ejected therefrom by process of law, or
otherwise.
(e) The words "re-enter" and "re-entry" as used herein are
not restricted to their technical legal meanings.
(f) Notwithstanding any of the foregoing provisions of
this Section 20, upon the happening of any one or more of the Events
of Default, in addition to the rights and remedies set forth in this
Section 20, Landlord may exercise such other rights as are provided
for elsewhere in this Lease and/or under applicable law. Nothing in
this Section 20 shall modify or impair the provisions of Section 41
hereof.
21. SELF-HELP. If Tenant shall at any time fail to make any
payment or perform any act which Tenant is obligated to make or
perform under this Lease, then in addition to any and all other rights
and remedies under this Lease and under applicable law, Landlord may,
but shall not be obligated so to do, after twenty (20) days' notice to
and demand upon Tenant, or without notice to or demand upon Tenant in
the case of any emergency, and without waiving, or releasing Tenant
from, any obligations of Tenant in this Lease contained, make such
payment or perform such act which Tenant is obligated to perform under
this Lease in such manner and to such extent as may be reasonably
necessary, and, in exercising any such rights, pay any reasonably
necessary and incidental costs and expenses, employ counsel and incur
and pay reasonable attorneys' fees. All sums so paid by Landlord and
all reasonable and necessary costs and expenses of Landlord incidental
thereto, together with interest thereon at the annual rate equal to
the sum of (i) the Base Rate from time to time announced by The First
National Bank of Boston as its Base Rate and (ii) two percent (2%),
from the date of the making of such expenditures by Landlord, shall be
deemed to be Additional Rent and, except as otherwise in this Lease
expressly provided, shall be payable to the Landlord on demand, and if
not promptly paid shall be added to any rent then due or thereafter
becoming due under this Lease, and Tenant covenants to pay any such
sum or sums with interest as aforesaid, and Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the non-payment thereof by Tenant as in the
case of default by Tenant in the payment of Fixed Annual Rent.
Notwithstanding the foregoing, if said Base Rate shall no longer be
used or if The First National Bank of Boston shall cease to exist
(whether by merger, dissolution or otherwise) then Landlord shall
reasonably select such other comparable rate and/or bank for purposes
of the determination of the interest rate.
22. QUIET ENJOYMENT. Landlord agrees that Tenant, upon paying
the Fixed Annual Rent, Additional Rent and other charges herein
reserved, and performing and observing the covenants, conditions and
agreements hereof upon the part of Tenant to be performed and
observed, shall and may peaceably hold and enjoy the Demised Premises
during the term of this Lease, without interruption or disturbance
from Landlord or persons claiming through or under Landlord, subject,
however, to the terms of this Lease. This covenant shall be construed
as running with the land to and against subsequent owners and
successors in interest, and is not, nor shall it operate or be
construed as, a personal covenant of Landlord, except to the extent of
the Landlord's interest in the Demised Premises, and thereafter this
covenant and any and all other covenants of Landlord contained in this
Lease shall be binding upon Landlord and upon such subsequent owners
and successors in interest of Landlord's interest under this Lease, to
the extent of their respective interests, as and when they shall
acquire the same, and then only for so long as they shall retain such
interest.
23. PARKING. Tenant represents that it has, by separate
documentation, arranged with affiliates of Landlord for all such
parking required to satisfy applicable zoning requirements and its
operational requirements and Landlord shall have no obligation
whatsoever to provide any parking.
24. PURCHASE AND SALE.
(a) Upon and subject to the terms and conditions contained
in this Section, and in consideration of the premises and the mutual
covenants contained herein, and such other consideration separate and
apart from the consideration underlying the Lease, the receipt and
sufficiency whereof are hereby acknowledged, the Landlord
unconditionally agrees to and shall sell and convey, and the Tenant
unconditionally agrees to and shall purchase, the Demised Premises
described in Exhibit A hereto (hereinafter sometimes referred to for
purposes of this Section as the "Premises").
(b) (i) The purchase price payable for the Premises is as
set forth in Exhibit E attached hereto and hereby incorporated herein
by reference and shall be payable on the closing by Federal Funds
immediately available to the Landlord at The First National Bank of
Boston, Boston, Massachusetts or such other bank in the City of Boston
as Landlord shall specify by written notice to Tenant.
(b) (ii) The closing (the "Closing") shall be held at the
Middlesex South District Registry of Deeds presently located
at 208 Cambridge Street, Cambridge, Massachusetts (or at such other
location in which said Registry of Deeds may be located), or at such
other place in the City of Boston as the parties may agree, at 10:30
A.M. on that date (the "Closing Date") which is twenty (20) days after
the date on which the Authority issues a Certificate of Completion
pursuant to applicable provisions of the Land Disposition Agreement or
such other date as the parties may mutually agree on in writing . If
the Closing Date determined under this Section is not a day on which
banks in Boston, Massachusetts are open for the regular conduct of
business (a "Business Day"), then the Closing Date shall be postponed
to the next succeeding Business Day. Landlord covenants that it will
not prior to the Closing Date either transfer to others fee title to
the Premises or grant any mortgage or other security interest in the
Premises to others. (b) (iii) It is agreed that time is of
the essence of the agreements contained in this Section 24.
The provisions of this Section 24 shall expire on the death of
the last now living relative or heir, of any degree of
consanguinity, of the late President of the United States, John F.
Kennedy, but nothing contained in this sentence shall be deemed to
postpone, extend or in any way modify the provisions of Section 24
(b)(ii).
(c) (i) The Premises shall be sold and conveyed subject to
the following (collectively, the "Purchase And Sale Permitted
Encumbrances" and also sometimes in this Lease called the "Permitted
Encumbrances"):
(1) applicable Environmental Law, and Legal
Requirements and the conditions and provisions of
all Permits and "Government Directives" (defined
in Section 7 (h) hereof);
(2) all subleases and other occupancy agreements
entered into or arranged by Tenant for space in
the Building to be constructed by Tenant on the
Premises but nothing herein shall be construed as
a waiver or modification of the provisions of
Section 17 hereof;
(3) any state of facts an accurate survey and
inspection would disclose;
(4) possible lack of or revocable nature of the right,
if any, to maintain or use any space, facilities
or appurtenances outside the lines of the
Premises, whether on, over or under the ground;
(5) Impositions and all installments thereof, whether
payable prior to or after the Closing. If at the
time of Closing the Premises shall be subject to
any liens for unpaid real estate taxes or other
Impositions, and/or any interest or penalty
thereon, the same shall not be deemed a lien or
encumbrance on or objection to title, and Tenant
shall take title subject thereto;
(6) the terms and conditions of the Land Disposition
Agreement;
(7) Agreement For Creation Of Certain Easements (and
all easements, rights, grants and other agreements
executed and/or granted pursuant thereto);
(8) notices of violation of any Environmental Laws
and/or Legal Requirements issued by any Federal,
State or municipal Governmental Body or Bodies
having jurisdiction, against or affecting the
Premises, the Improvements and/or the Building
Equipment (including, without limitation, notices
of violations of, or the failure to comply with,
the requirements of all "Governmental Directives"
(defined in Section 7 (h) hereof) issued by
applicable Governmental Bodies);
(9) any lien or encumbrance placed on the Premises (i)
by or with the written consent of the Tenant, (ii)
arising out of the use, occupancy, construction or
maintaining by Tenant or any Person claiming by,
through or under Tenant of the Premises, the
Improvements and/or the Building Equipment (but
nothing herein shall be deemed to modify Section
17 hereof), (iii) arising out of any breach or
default of the Tenant or (iv) resulting from any
cause not created by the act or omission of the
Landlord;
(10) the condition of the Premises, it being covenanted
and agreed by Tenant that the provisions of
Section 7 (h) shall apply respecting the presence
of Hazardous Materials, the Release or Threat of
Release of Hazardous Materials and other matters,
all as more fully set forth in said Section 7 (h);
that Tenant has executed and delivered the
Hazardous Materials Indemnity or has executed and
delivered a Joinder with respect thereto; and that
Biogen,Inc., has executed and delivered the
Hazardous Materials Indemnity and the Biogen
Guaranty;
(11) the terms and conditions of the Authority Deed;
(12) those matters set forth in the Lessee's Policy of
Title Insurance obtained by Tenant incident to the
consummation of this Lease and those matters set
forth in the Owner's Policy of Title Insurance, if
any, issued to Landlord incident to its
acquisition of title to the Premises;
(13) the right of first offer and first refusal
reserved in the Deed of the Premises between
Landlord and Tenant, which Deed shall be in the
form of Exhibit F attached hereto and which Deed
shall be executed and acknowledged by Tenant and
recorded with the aforesaid Registry of Deeds;
(14) that certain "Cambridge Center North Garage
Parking Lease" dated as of October 6, 1993,
between the Trustees of Cambridge Center North
Trust, as landlord, and Biogen Realty Limited
Partnership, as tenant (a notice of which is to be
recorded with the Middlesex South District
Registry of Deeds) and any "Parcel 3 Parking
Agreements" (defined in the Option Agreement)
including, without limitation, in both cases the
rights and obligations set forth therein and any
future leases which may be executed pursuant
thereto;
(15) the provisions of the Kendall Square Urban Renewal
Plan (as amended) and as it may hereafter be
amended;
(16) the provisions of the Private Design Restrictions;
(17) any other lien or encumbrance on the Premises
which is of record on the date hereof, including,
without limitation, the terms and provisions of
this Lease (including a Notice of this Lease in
the form of Exhibit G attached hereto) and the
Master Easement Agreement (and all easements,
rights, grants and other agreements executed
and/or granted pursuant thereto);
(18) the provisions of Section 24 (c)(ii) hereof;
(19) The Zoning And Development Restrictions;
(20) the obligations, terms, provisions and conditions
of the Exclusive Easement And Option Agreement and
the provisions of
Section 24 (e)(ii) hereof; and
(21) the obligations, terms, provisions and conditions
of the Tieback Easement Agreements and the
provisions of Section 24 (e)(iii) hereof.
(22) such documents, instruments and other matters as
are contemplated by the Transaction Documents.
(c) (ii) Exhibit E provides the mechanism for determining
the purchase price to be paid by Tenant to Landlord for the Premises
on the Closing Date. In the event that at any time or from time to
time during the "Additional Improvements Period" (hereinafter
defined), Tenant (or any successor(s) or assigns(s) of Tenant as the
then owner of the Premises) shall construct, cause to be constructed
or shall permit any tenant or occupant of the Premises and/or the then
existing Improvements to construct any "Additional Improvements"
(hereinafter defined), then on the "Payment Date" (hereinafter
defined), Tenant (or such successor or assign, as the case may be)
shall pay to Landlord the "Additional Improvements Amount"
(hereinafter defined) which shall be in addition to the purchase price
paid by Tenant to Landlord for the sale by Landlord and the purchase
by Tenant of the Premises. The provisions hereof (i) are an integral
part of the transaction evidenced by this Lease without which Landlord
would not have executed and delivered this Lease, (ii) shall be deemed
to be a covenant running with the Premises and shall be binding upon
Tenant (any assignee of Tenant pursuant to Section 17 hereof) and the
successors and assigns of Tenant and any such assignee, (iii) shall be
included in the deed conveying the Premises from Landlord pursuant to
this Section 24, (iii) shall survive the expiration or any termination
of this Lease and the Closing and the delivery and recording of the
deed given by Landlord pursuant to this Section 24 and (iv) shall be a
Permitted Encumbrance as set forth in Section 24 (c)(i) hereof.
The "Additional Improvements Period" shall be the
period (x) commencing on the later of (i) the date of issuance of the
Certificate of Completion by the Redevelopment Authority for the
Improvements and (ii) the Closing Date hereinbefore referred to in
this Section 24 and (y) ending on August 31, 2010. The term
"Additional Improvements" shall mean any additions, alterations or
other improvements from time to time constructed in, on or to the
Premises (or any portion thereof) and/or the Improvements (including,
but not limited to, any free standing additional building or
buildings, any additions to existing Improvements or other
enlargements) which increase the gross floor area of the Building
constructed on the Premises by Tenant as measured in accordance with
the provisions of the Cambridge Zoning Ordinance from time to time in
effect and applicable to the Premises. The "Additional Improvements
Amount" shall be the product of (i) the gross floor area of the
Additional Improvements as measured in accordance with the provisions
of the Cambridge Zoning Ordinance from time to time in effect and
applicable to the Premises and (ii) an amount per square foot equal to
the "Base Square Foot Price" (hereinafter defined). The "Base Square
Foot Price" shall be $3.00 increased by the increase, if any, in the
"Price Index" (hereinafter defined) between January 1, 1994 and the
Payment Date. The "Price Index" shall be the Consumer Price Index for
Urban Wage Earners and Clerical Workers, All Items - Series A (1982-
1984 = 100), for Boston if available, and if not U.S. City Average,
first published in revised form in 1978 by the Bureau of Labor
Statistics, U.S. Department of Labor; provided that if such index is
no longer published at the time of the purchase of the Demised
Premises by Tenant a comparable Price Index reflecting changes in the
cost of living determined in a similar manner shall be chosen by
agreement of the parties acting reasonably and promptly. The "Payment
Date" shall be the date on which the City of Cambridge shall issue a
building permit for the then subject Additional Improvements but if a
building permit shall not be required for the then subject Additional
Improvements the Payment Date shall be the date the then subject
Additional Improvements are commenced; provided, however, that if
pursuant to the Land Disposition Agreement or Authority Deed payment
cannot be made respecting the subject Additional Improvements until
completion thereof and the issuance of a Certificate of Completion by
the Redevelopment Authority, then the Payment Date shall be the date
such Additional Improvements are completed and a Certificate of
Completion is issued therefor (if required) by the Redevelopment
Authority.
(d) In the event of (i) a taking of the Premises, or any
part thereof, by the exercise of a right of condemnation or eminent
domain, or (ii) damage to the Building located on the Premises by fire
or other casualty, between the date hereof and the Closing, then,
regardless of the extent of such taking, damage or destruction, the
agreements contained in this Section 24 shall remain unaffected
thereby and the parties shall close the transaction as herein provided
notwithstanding such occurrence, without any diminution or abatement
of the purchase price; except, however, that in the event of the
termination of this Lease as provided in Section 16 (a), the proceeds
of any condemnation award received by Landlord shall be credited
against the purchase price payable by Tenant.
Landlord agrees that, prior to the Closing or the
cancellation of the agreements contained herein pursuant to Section 16
(a), it will not adjust, compromise or otherwise settle any
proceeding, or accept the awards made in any proceeding pursuant to
which the Premises may be condemned or taken by eminent domain, nor
will it adjust, compromise or otherwise settle any claims which
Landlord might have under insurance policies in which it is named as
an insured, in each case without the prior written consent of the
Tenant.
(e) (i) The following deliveries shall be made at the
Closing:
(1) Landlord shall execute, acknowledge and deliver a
quitclaim deed to the Premises in recordable form,
so as to convey to Tenant good and clear record
and marketable fee simple title to the Premises,
free and clear of all liens and encumbrances,
except for, and subject to, the Permitted
Encumbrances.
(2) Tenant shall pay all transfer taxes and stamp
costs, all recording costs by reason of the
delivery or recording of the deed and all other
federal, state, county or municipal taxes,
excises, impositions or levies applicable to or
imposed on transfer of real property, the
conveyance of the Premises or the delivery or
recording of the deed (whether now or hereafter in
effect) and whether assessed to sellers or buyers
of real property (excluding any income taxes of
Landlord) it being the intent of the parties that
the purchase price be net to Landlord.
(3) Landlord shall execute, acknowledge and deliver to
Tenant an assignment of all insurance proceeds and
condemnation awards$or claims or rights thereto,
if any there be, then payable to the Landlord, all
without representation or warranty by or recourse
against Landlord.
(4) The Tenant shall deliver the purchase price
described in subsection (b)(i) above in the manner
specified therein.
(5) The parties shall execute and deliver to each
other such other instruments and documents, and
shall pay or cause to be paid such sums of money,
to which either may be entitled pursuant to any of
the other provisions of this Section or which may
be required reasonably in connection with the
Closing and consistent with the provisions of this
Section. Each such instrument and document to be
delivered at the Closing shall be consistent with
the applicable provisions of this Section, shall
be in the form or contain the information or
provisions provided for in this Section, and shall
otherwise be reasonably satisfactory in form and
substance to the parties.
(6) Landlord shall cause its counsel, to deliver an
opinion in form and substance reasonably
satisfactory to Tenant relating to the due
execution of the Deed and other instruments
executed by Landlord at the Closing;
(7) Tenant shall cause its counsel, Mintz, Levin,
Cohn, Ferris, Glovsky And Popeo, P.C., to deliver
an opinion in form and substance reasonably
satisfactory to Landlord relating to the due
execution of the Deed and other Closing
instruments executed by Tenant at the Closing; and
(8) To the extent same are in Landlord's possession,
Landlord shall deliver to Tenant all instruments
and documents collateral thereto, and all
licenses, permits, authorizations and approvals of
any Governmental authorities relating to the
Premises.
(e) (ii) Pursuant to the provisions of Section 2 (c)(xiii)
of this Lease, the Premises were leased by Landlord to Tenant subject
to and together with benefit of the Tract VI Exclusive Easement And
Option Agreement and Tenant agreed to and provided to Landlord
"Tenant's Assumption And Indemnity Respecting Exclusive
Easement/Option Agreement" (as set forth in said Section 2 (c)(xiii).
As one of the Permitted Encumbrances, the Premises shall be conveyed
subject to and together with the benefit of the obligations, terms,
provisions and conditions of the Tract VI Exclusive Easement And
Option Agreement. Concurrently with the execution and delivery of the
Deed of the Premises, (a) Landlord shall assign its interest in the
Tract VI Exclusive Easement And Option Agreement to Tenant and (b) in
addition to Tenant's Assumption And Indemnity Respecting Exclusive
Easement/Option Agreement, Tenant shall confirm directly with Landlord
and Affiliates of Landlord (including, without limitation, Mortimer B.
Zuckerman, Edward H. Linde, Boston Properties, Inc. and other
Zuckerman/Linde Affiliates) Tenant's Assumption And Indemnity
Respecting Exclusive Easement/Option Agreement, it being covenanted
and agreed that the obligations of Tenant thereunder commenced on the
date of execution of this Lease, shall continue in full force and
effect and uninterrupted notwithstanding the conveyance of the
Premises by Landlord and shall survive the delivery of the deed of the
Premises by Landlord and the expiration or any termination of this
Lease. "Tract VI" (defined in the Tract VI Exclusive Easement And
Option Agreement") shall be subject to and shall comply with the
Private Design Restrictions and Zoning Restrictions And Limitations
whether or not said Tract VI shall be purchased pursuant to Paragraph
D of the Tract VI Exclusive Easement And Option Agreement. In
addition, concurrently with said purchase of Tract VI, the Tenant, as
purchaser, shall execute a Joinder to the Hazardous Materials
Indemnity but the provisions of this sentence shall not limit,
restrict or otherwise modify the foregoing provisions or Section 2
(c)(xiii), Section 2 (c)(xiv) or Section 7 (h)(ii) of this Lease.
Further, in the event that at any time or from
time to time during the "Tract VI Improvement Period" (hereinafter
defined), Tenant (or any successor(s) or assign(s) of Tenant) shall
acquire title to Tract VI and shall construct, cause to be constructed
or shall permit any tenant or occupant to construct any "Tract VI
Improvements" (hereinafter defined), then upon the "Tract VI Payment
Date" (hereinafter defined), Tenant (or such successor or assign, as
the case may be) shall pay to Landlord the "Tract VI Improvements
Amount" (hereinafter defined) which shall be in addition to the
purchase price paid by Tenant to Landlord for the Premises and the
"Additional Improvements Amount" (referred to in Section 24 (c)(ii))
and shall be additional consideration. The provisions hereof (i) are
an integral part of the transaction evidenced by this Lease without
which Landlord would not have executed and delivered this Lease, (ii)
shall be deemed to be a covenant running with Tract VI and shall be
binding upon Tenant (and any assignee of Tenant) and the successors
and assigns of Tenant and any such assignee, (iii) shall survive the
expiration or any termination of this Lease, the Closing under this
Section 24, the delivery and recording of the deed of the Premises
pursuant to this Section 24, the assignment of the Tract VI Exclusive
Easement and Option Agreement and the acquisition of title to Tract VI
and (iv) shall be a Permitted Encumbrance as set forth in Section 24
(c)(i) hereof.
The Tract VI Improvement Period shall be the
period commencing on the date of acquisition of title to Tract VI from
the Redevelopment Authority by Tenant (any assignee of Tenant or any
successor or assign of Tenant) and ending on August 31, 2010. The
term "Tract VI Improvements" shall mean any buildings or other
improvements from time to time constructed on Tract VI (including,
without limitation, any free standing buildings or improvements
constructed on Tract VI and any additions, alterations and other
improvements to the improvements constructed on the Premises which
additions, alterations and other improvements are located on Tract
VI). The "Tract VI Improvements Amount" shall be the product of (i)
the gross floor area of the Tract VI Improvements as measured in
accordance with the provisions of the Cambridge Zoning Ordinance from
time to time in effect and applicable to Tract VI and (ii) an amount
per square foot equal to the "Base Square Foot Price" (hereinafter
defined). The "Base Square Foot Price" shall be $3.00 increased by
the increase, if any, in the "Price Index" (hereinafter defined)
between January 1, 1994 and the Tract VI Payment Date. The "Price
Index" shall be the Consumer Price Index for Urban Wage Earners and
Clerical Workers, All Items - Series A (1982-1984 =100), for Boston if
available, and if not U.S. City Average, first published in revised
form in 1978 by the Bureau of Labor Statistics, U.S. Department of
Labor; provided that if such Index is no longer published at the time
of the purchase of the Demised Premises by Tenant a comparable Price
Index reflecting changes in the cost of living determined in a similar
manner shall be chosen by agreement of the parties acting reasonably
and promptly. The "Tract VI Payment Date" shall be the date on which
the City of Cambridge shall issue a building permit for the then
subject Tract VI Improvements but if a building permit shall not be
required for the then subject Tract VI Improvements the Tract VI
Payment Date shall be the date the then subject Tract VI Improvements
are commenced; provided, however that if pursuant to any supplemental
land disposition agreement or other document between the Redevelopment
Authority and the owner of Tract VI payment cannot be made respecting
the subject Tract VI Improvements until completion thereof and the
issuance of a certificate of completion by the Redevelopment
Authority, then the Tract VI Payment Date shall be the date said Tract
VI Improvements are completed and a certificate of completion is
issued therefor (if required) by the Redevelopment Authority.
The provisions of this subsection (e)(ii) and of
subsection (e)(iii) shall be set forth either in the Deed to the
Premises (in which case Tenant shall join in said Deed) or in a
separate written instrument in recordable form executed, sealed,
acknowledged and delivered by and between Landlord and Tenant which
Landlord shall have the right to record.
(e) (iii) As one of the Permitted Encumbrances, the
Premises shall be conveyed subject to and together with the benefit of
the obligations, terms, provisions and conditions of the Tieback
Easement Agreements. In addition to the "Tenant's Assumption And
Indemnity Respecting Tieback Easement Agreements" (as referred to in
Section 2 (c)(xiv) hereof), Tenant, concurrently with the execution
and delivery of the Deed of the Premises, shall confirm directly with
Landlord and Affiliates of Landlord (including, without limitation,
Mortimer B. Zuckerman, Edward H. Linde, Boston Properties, Inc., and
other Zuckerman/Linde Affiliates) Tenant's Assumption And Indemnity
Respecting Tieback Easement Agreements, it being covenanted and agreed
that the obligations of Tenant thereunder commenced on the date of
execution of this Lease, shall continue in full force and effect and
uninterrupted notwithstanding the conveyance of the Premises by
Landlord and shall survive the delivery of the Deed of the Premises by
Landlord and the expiration or any termination of this Lease.
(f) Tenant represents and warrants to the Landlord that:
(i) it has examined, inspected and investigated, to its full
satisfaction, the physical nature and condition of the Premises
including, without limitation, the matters set forth in or which are
the subject matter of Sections 7 (h)(i) and (7) (h)(ii), it being
covenanted and agreed by Tenant that the provisions of Sections 7 (h)
(i) and 7 (h)(ii) shall apply respecting Hazardous Materials, the
Release and/or Threats of Release of Hazardous Materials and the other
matters, all as more fully set forth in said Sections 7 (h)(i) and 7
(h)(ii); that Tenant has executed and delivered the Hazardous
Materials Indemnity or has executed and delivered a Joinder with
respect thereto; and that Biogen has executed and delivered the
Hazardous Materials Indemnity and the Biogen Guaranty; (ii) neither
Landlord nor any agent, officer, director, employee, partner,
representative of Landlord, or Affiliates of Landlord (including
without limitation, Boston Properties, Inc., Mortimer B. Zuckerman,
Edward H. Linde and other Zuckerman/Linde Affiliates) has made any
representation or warranty whatsoever regarding the Premises, the
Improvements or any part of the Premises or Improvements, or regarding
anything relating to the subject matter of the agreements contained in
this Section including, without limiting the generality of the
foregoing, (x) representations as to the present or future physical
nature, condition or suitability of the Premises, operation, size or
zoning of the Premises or the Improvements, operating expenses,
Impositions or carrying charges affecting the Premises or the
Improvements; (y) any of the matters set forth in Sections 7 (h)(i)
and 7 (h)(ii) hereof; and (z) any of the matters set forth in this
subsection (f); and (iii) it will take ownership to the Premises in
its "as is" condition on the Closing Date. The provisions hereof
shall survive any termination of this Lease, the conveyance of
Premises and the recordation of the deed.
(g) As of the Closing Date, Landlord shall be the owner of
good and clear record and marketable fee simple title to the Premises,
subject only to those matters defined as Permitted Encumbrances in
subsection (c)(i) hereof. If, notwithstanding the foregoing, the
title to the Premises is not as aforesaid or if the Premises become
additionally encumbered, in either case by an affirmative act or
wrongful failure to act of Landlord, Landlord shall exercise all
reasonable diligence to remove any such title defects or additional
encumbrances, failing which Tenant shall have the right, but not the
obligation, to remove any defects or such additional encumbrances and
if (but only if) such defects or encumbrances are the result of
Landlord's affirmative acts or wrongful failure to act to offset
against the purchase price all reasonable and necessary costs and
expenses incurred thereby. Concurrently with the execution and
delivery of this Lease, Tenant has obtained a commitment (and shall
deliver to Landlord a copy) respecting its purchase of the Premises
under this Section 24 from a recognized title insurance company
(including, without limitation, any of Lawyers Title Insurance
Corporation, Commonwealth Title Insurance Company, Chicago Title
Insurance Company, Ticor Title Insurance Company or other title
insurer selected by Tenant and first approved by Landlord (which
approval shall not be unreasonably withheld or delayed) and herein
called the "Title Insurer") and Tenant hereby approves said commitment
and all matters set forth therein.
If, as of the Closing Date, title to the Premises shall
not be as provided in this Section, Tenant shall have the option to
either (a) cancel its agreement to purchase the Premises contained in
this Section, in which event the agreements contained in this Section
24 shall wholly cease and terminate, and neither party shall have any
further claim against or liability to the other by reason of the
agreements contained in this Section, or (b) consummate the Closing
without any reduction of the purchase price or allowance against the
same except as otherwise provided in the preceding paragraph hereof,
and without any other liability on the part of the Landlord on account
of the agreements contained in this Section except with respect to
such provisions of this Section which may survive the Closing or (c)
adjourn the Closing as provided immediately below. If, at the
Closing, Landlord shall be unable to convey fee title to the Premises
in accordance with the provisions of this Section, either party may,
by written notice given to the other at or prior to the Closing, elect
to adjourn the Closing for a reasonable period to deal with such
inability, but in no event shall the last such adjournment extend the
Closing Date for a period in excess of one hundred eighty (180) days
from the original Closing Date. If Landlord shall fail to perform its
obligation under this Section, then due to the uniqueness of the
Premises and the fact that Tenant shall have constructed the Building
thereon, Tenant shall have all rights and remedies available at law
and in equity as a result of any such breach, including, without
limitation, the right to specific performance of Landlord's obligation
hereunder.
(h) If, on the Closing Date, the Tenant shall wrongfully
fail to perform its obligation to purchase the Premises as herein
provided and such failure shall continue for ten (10) days after
written notice from Landlord to Tenant, the Landlord shall have the
right:--
(i) without limitation of the right of Landlord to
damages (excluding consequential and indirect
damages but not direct damages), to demand and
receive specific performance by the Tenant of the
Tenant's obligations to purchase the Premises, or
(ii) to terminate the Tenant's obligation to purchase
the Premises by suitable notice to the Tenant,
whereupon the position of the parties under this
Lease shall revert to the status quo ante just as
if the provisions of this Section 24 had never
been included in this Lease, or
(iii) to terminate this Lease, and to seek and obtain
damages from Tenant resulting from such failure,
or
(iv) to resort to any and all remedies available to
Landlord at law or in equity.
With the exception of item (i) above, the provisions of this
Section 24 (h) are subject to the provisions of Section 41 hereof.
(i)(1) As of the date hereof, Landlord represents and
warrants to Tenant as follows:
(a) Landlord has no actual knowledge of any
pending action against Landlord before any court
or administrative agency of which Tenant or
Tenant's Affiliates do not have knowledge, the
unfavorable resolution of which would have a
material adverse effect against Landlord or would
adversely affect Landlord's ability to enter into
and consummate the agreements contained in this
Section 24; and
(b) Landlord has all requisite power and
authority to make the agreements contained in this
Section and to consummate the transactions
contemplated hereby.
(i)(2) As of the date hereof, Tenant represents and
warrants to Landlord as follows:
(a) Tenant has full right, power and authority,
corporate or otherwise, to enter into the
agreements contained in this Section, perform its
obligations hereunder and consummate its purchase
of the fee simple title to the Premises, and all
action requisite thereto, corporate or otherwise,
has been duly and validly taken;
(b) Tenant has no actual knowledge of any pending
action against Tenant before any court or
administrative agency, the unfavorable resolution
of which would have a material adverse effect
against Tenant or which would adversely affect
Tenant's ability to enter into and consummate the
agreements contained in this Section 24; and
(c) the agreements contained in this Section, the
performance of Tenant's obligations hereunder and
its acquisition of fee simple title to the
Premises, as contemplated hereby, does not and
shall not breach or violate any agreement,
document, instrument, decree or order to which the
Tenant is a party or by which the Tenant or any
property or assets of the Tenant is or may be
bound.
(i)(3) As a condition precedent to the respective
agreements and obligations of Landlord and Tenant contained in this
Section 24, the representations and warranties contained in this
subsection (i) shall be true and correct at and as of the Closing
Date, as though the same were made at and as of the Closing Date, and
on the Closing Date, each of Landlord and Tenant shall have delivered
to the other a certificate to such effect, the representations and
warranties contained in which shall survive the Closing and the
execution and delivery of the Deed to the Premises.
(j) This Section, and Tenant's rights hereunder, shall not
be assigned and any purported assignment shall be null and void and of
no force or effect, except that Tenant may assign the entirety of this
Lease in the manner, on the terms and conditions and as provided in
Section 17 hereof.
(k) It is understood and agreed that all understandings and
agreements heretofore had between the parties hereto with respect to
the subject matter of this Section are merged herewith, and this
Section alone fully and completely expresses their agreement.
(l) The delivery and acceptance of the Deed conveying fee
title to the Premises shall be deemed to be an acknowledgement, for
all purposes, of the full performance and discharge of every
representation, warranty, agreement and obligation on the part of each
of the parties to be performed pursuant to the provisions of this
Section, except those which are herein specifically stated to survive
the Closing and the delivery of the Deed.
(m) The Landlord and Tenant each covenant and agree that
those obligations under this Section and each document and instrument
delivered at the Closing which survive the delivery of the Deed, shall
be independent of their obligations under this Lease, and no default
on the part of either party in respect of such surviving obligations
shall be deemed to be a default on the part of that party under its
obligations under this Lease except as to any obligations which are
contained in both this Section and in any other Section of this Lease
and with respect to which a party is in default under the terms of
this Lease. Nothing in this subsection shall waive any rights or
remedies to which a party may be entitled under this Section or by law
on account of a default in any of the obligations to be performed by
the other party hereto. If this Lease is terminated for any reason
other than the occurrence of an Event of Default specified in Section
20 hereof, the provisions of this Section 24 shall survive and
continue to be in full force and effect. However, if this Lease is
terminated on account of an Event of Default specified in Section 20
hereof, the provisions contained in this Section 24 shall not survive
the termination of this Lease.
(n) The Tenant acknowledges that neither the Landlord nor
any successors of Landlord nor any of the partners (general or
limited) of Landlord or successor of Landlord, nor any officers,
directors, employees, agents, trustees, beneficiaries or Affiliates of
Landlord (including, without limitation, Mortimer B. Zuckerman, Edward
H. Linde and Boston Properties, Inc.) shall be held to any personal
liability hereunder, nor shall resort be had to their private property
for the satisfaction of any claim hereunder or in connection with the
affairs or obligations of Landlord or any successors of Landlord, but
the Premises only shall be liable and Tenant agrees to look solely to
the Premises in satisfaction of any liability under this Section of
the Landlord or any successors of Landlord. Nothing in this
subsection shall limit the guarantee obligations of Mortimer B.
Zuckerman and Edward H. Linde specifically set forth in the
Zuckerman/Linde Guaranty.
(o) The unenforceability or invalidity of any one or more
provisions hereof shall not affect the validity or enforceability of
any of the other provisions hereof.
(p) This Section shall be governed by, and construed and
enforced in accordance with the law of, The Commonwealth of
Massachusetts, as the same may from time to time exist.
(q) This Lease shall terminate upon and as of the date of
the acquisition by Tenant of title to the Premises pursuant to this
Section 24; provided, however, that there shall survive such
termination those provisions and obligations set forth in this Lease
which, according to the terms thereof, specifically survive
termination of this Lease.
25. EXCAVATION OF ADJOINING PROPERTY; ENCROACHMENTS; EASEMENTS.
(a) If any excavation or other building operation shall be
about to be made or shall be made on any adjoining premises or
streets, Tenant shall permit the owner or lessee of such adjoining
premises and their respective representatives, to enter the Demised
Premises and to shore the foundations and walls of the Building
thereon, and to do any other act or thing reasonably necessary for the
safety or preservation of the Demised Premises and the Building.
Landlord shall use reasonable efforts to cause such owner or lessee
performing such work to use reasonable efforts to minimize disruption
to Tenant's use of the Demised Premises but Landlord shall not be held
liable for any inconvenience, annoyance, disturbance, loss of business
or other damage arising therefrom, and Tenant's obligations hereunder
shall not thereby be affected. Nothing contained in this Section 25
(a)(i) shall be construed as a waiver of any rights of Tenant against
persons other than Landlord.
(b) If any excavation or other building operation shall be
about to be made or shall be made on any adjoining premises or
streets, Landlord shall permit or shall cause the applicable Affiliate
of Landlord (as the case may be) to permit the Tenant and its
respective representatives to enter the premises of Landlord or the
premises of Landlord's Affiliate (as the case may be) and to shore the
foundations and walls of any building thereon, and to do any other act
or thing reasonably necessary for the safety or preservation of the
premises of Landlord and the building thereon. Tenant shall use
reasonable efforts to minimize disruption to Landlord's or the
Affiliate of Landlord's use of its premises and the use of Landlord's
or such Affiliate of Landlord's (as the case may be) tenants and
occupants but Tenant shall not be held liable for any inconvenience,
annoyance, disturbance, loss of business or other damages arising
therefrom, and Landlord's obligations hereunder shall not thereby be
affected. Nothing contained in this Section 25 (b) shall be construed
as a waiver of any rights of Landlord or Landlord's Affiliates against
persons other than Tenant.
(c) Tenant agrees that the Landlord or the parties to the
Master Easement Agreement and the Agreement For Creation Of Certain
Easements shall have, throughout the term of this Lease, the rights
and easements as set forth in the Master Easement Agreement and the
Agreement for creation Of Certain Easements (as the case may be)
respecting the Demised Premises including, without limitation, the
right to grant the easements, grants, rights and other agreements as
therein set forth.
In the exercise of the rights hereunder, any entry onto the Demised
Premises, and construction undertaken incident to the exercise of the
rights and easements reserved hereunder, shall be performed in a
manner so as not to interfere unreasonably with Tenant's use and
enjoyment of the Demised Premises or the Building, and the party
performing such work shall, at its expense, restore any damages to the
Demised Premises or the Building caused by or resulting from the
exercise by Landlord of the rights and easements reserved by this
Section.
26. SIGNS. Tenant may, during the term of this Lease, upon
obtaining any and all necessary permits from governmental authorities
(including, without limitation, the Authority) erect and maintain, at
Tenant's sole cost and expense, signs of such dimensions and materials
as it may deem reasonably appropriate in or about the Demised
Premises. Tenant shall have the further right to designate the name
of the Building as the "Biogen, Inc., Building" or such other name as
it chooses in its discretion; provided, however, that the Building
address shall be numbered in Cambridge Center in the manner consistent
with the numbering system in use at Parcel 2 of the Development Area.
27. TENANT'S PAYMENTS.
(a) Each and every payment and expenditure, other than
Fixed Annual Rent and other than costs for original construction,
alterations, repairs and replacement which are required to be paid by
Tenant under this Lease, shall be deemed to be Additional Rent
hereunder, whether or not the provisions requiring payment of such
amounts specifically so state, and shall be payable, unless otherwise
provided in this Lease, within ten (10) days after written demand by
Landlord, and in the case of the non-payment of any such amount,
Landlord shall have, in addition to all of its other rights and
remedies, all the rights and remedies available to Landlord hereunder
or by law in the case of non-payment of Fixed Annual Rent. Unless
expressly otherwise provided in this Lease, the performance and
observance by Tenant of all the terms, covenants and conditions of
this Lease to be performed and observed by Tenant hereunder shall be
performed and observed by Tenant at Tenant's sole cost and expense.
(b) No payment by Tenant, nor acceptance by Landlord, of a
lesser sum than the Fixed Annual Rent and Additional Rent then due
shall be deemed to be other than on account of the earliest
installment of such rent due, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept such
cheek or payment without prejudice to Landlord's right to recover the
balance of such installment or pursue any other remedy in this Lease
provided. The delivery of keys to any employee of Landlord or to
Landlord's agent or any employee thereof shall not operate as a
termination of this Lease or a surrender of the Demised Premises. No
payment by Tenant shall be deemed to be a waiver by Tenant of its
right to contest either the amount thereof or Tenant's liability
therefor, but nothing herein contained shall be construed or
interpreted as limiting Tenant's obligations herein elsewhere
contained to pay the Fixed Annual Rent and Additional Rent without
abatement, set-off or deduction.
28. CUMULATIVE REMEDIES. The specific remedies to which either
party hereto may resort under the terms of this Lease are cumulative
and are not intended to be exclusive of any other remedies or means of
redress to which such party lawfully may be entitled in case of any
breach or threatened breach by the other party of any provisions of
this Lease. In addition to the other remedies provided in this Lease,
either party shall be entitled to seek the restraint by injunction of
the violation or attempted or threatened violation of any of the
covenants, conditions or provisions of this Lease or to seek a decree
compelling specific performance of any such covenants, conditions or
provisions. The provisions of this Section 28 are subject to the
provisions of Section 43 hereof.
29. INVALIDITY OF PARTICULAR PROVISIONS. If any term of this
Lease, or the application thereof to any person or circumstances,
shall to any extent be invalid or unenforceable, the remainder of this
Lease, 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 Lease shall be valid and
enforceable to the fullest extent permitted by law.
30. WAIVER. Failure on the part of either party to complain of
any action or non-action on the part of the other party, no matter how
long the same may continue, shall never be deemed to be a waiver by
either party of any of its rights hereunder. The acceptance by
Landlord of Fixed Annual Rent, Additional Rent or any other charges
paid by Tenant hereunder shall not be or be deemed to be a waiver by
Landlord of any default by Tenant, whether or not Landlord knows of
such default. No waiver at any time of any of the provisions hereof
by either party shall be construed as a waiver of any of the other
provisions hereunder, and a waiver at any time of any of the
provisions hereof shall not be construed as a waiver at any subsequent
time of the same provisions.
31. STATUS REPORTS. At any time and from time to time, either
party, on at least ten (10) days' prior written request given to the
other party, will deliver to the party making such request a statement
in writing certifying that this Lease is unmodified and in full force
and effect (or if there shall have been modifications that the same is
in full force and effect as modified and stating the modifications),
and the dates to which the Fixed Annual Rent, Additional Rent and
other charges as are reserved herein have been paid and stating
whether or not, to the best knowledge of the party executing such
certificate, the party requesting such statement is in default in
performance of any covenant, agreement or condition contained in this
Lease and, if so, specifying each such default of which the executing
party may have knowledge.
32. BANKRUPTCY OR INSOLVENCY. (a) In the event that the Tenant
shall become a Debtor under the United States Bankruptcy Code, 11
U.S.C. SS101-1330 (the "Bankruptcy Code"), and the Trustee or the
Tenant as Debtor-In-Possession under the Bankruptcy Code ("Debtor-In-
Possession") shall elect to assume this Lease for the purpose of
assigning the same or otherwise, such election and assignment may only
be made if all the terms and conditions of this Section are satisfied.
(b) No election by the Trustee or Tenant as a Debtor-In-
Possession to assume this Lease, whether under Chapter 7 or 11 of the
Bankruptcy Code, shall be effective unless each of the following
conditions, which the Landlord and the Tenant acknowledge and agree
are commercially reasonably in the context of a bankruptcy case of the
Tenant, have been satisfied:
(1) The Trustee or the Debtor-In-Possession has cured
all monetary and non-monetary defaults (except for
such defaults of the kind specified in 11 U.S.C.
S365 (B)(2), or has provided the Landlord adequate
assurance (as hereinafter defined) that:
(A) Within the later of ten (10) days from the
date of such assumption and the remaining
number of days in any applicable grace
period, all such monetary defaults under this
Lease will be cured; and
(B) Within the later of thirty (30) days from the
date of such assumption and the remaining
number of days in any applicable grace
period, all such non-monetary defaults under
this lease will be cured.
(2) The Trustee or Debtor-In-Possession has
compensated, or has provided to the Landlord
adequate assurance (as hereinafter defined) that
within ten (10) days from the date of assumption
the Landlord will be compensated for any pecuniary
loss incurred by the Landlord arising from such
defaults of the Tenant, the Trustee, or Debtor-In-
Possession.
(3) The Trustee or the Debtor-In-Possession has
provided the Landlord with adequate assurance (as
hereinafter defined) of the future performance of
each of the Tenant's, the Trustee's and/or Debtor-
In-Possession's obligations under this Lease;
provided, further, that the obligations imposed
upon the Trustee or Debtor-In-Possession under
this Lease shall continue with respect to the
Tenant or any assignee of this Lease after the
completion of the bankruptcy proceedings, subject
to any further or increased obligations which
thereafter are imposed by any provisions of this
Lease.
(4) The assumption of this Lease will not breach any
provision of the Land Disposition Agreement.
(5) The assumption has been ratified and approved by
order of such court or courts as have jurisdiction
under the Bankruptcy Code.
For the purposes of this paragraph (b), the Landlord
and the Tenant acknowledge that in the contest of a bankruptcy case
involving the Tenant, "adequate assurance" shall mean at a minimum:
(i) The Trustee or Debtor-In-Possession has and will
continue to have sufficient unencumbered assets
after the payment of all secured obligations and
administrative expenses to assure the Landlord
that the Tenant, Trustee or Debtor-In-Possession
will have sufficient funds to fulfill the
obligations of the Tenant under this Lease,
including without limitation, maintenance of the
Demised Premises and the Building and the Building
Equipment; completion of all required improvements
(including the Building) in accordance with the
Land Disposition Agreement and this Lease;
compliance with all other applicable provisions of
the Land Disposition Agreement (except for such
defaults of the kind specified in 11 U.S.C S365
(b)(2); and the purchase of the Demised Premises
after completion of the Building, as provided in
this Lease; and
(ii) The Bankruptcy Court or such court as is
exercising jurisdiction over the bankruptcy
proceeding shall have entered an order segregating
sufficient cash payable to the landlord and/or the
Trustee or Debtor-In-Possession shall have granted
a valid and perfected first lien and security
interest and/or mortgage in property of the
Tenant, the Trustee or Debtor-In-Possession,
reasonably acceptable as to value and kind to the
Landlord, to secure to the Landlord the obligation
of the Trustee or Debtor-In-Possession to cure any
monetary and/or nonmonetary defaults under this
Lease within the time periods set forth in
paragraph (b(1) above.
(c) If the Trustee or Debtor-In-Possession has assumed this
Lease pursuant to the terms and provisions of paragraphs (a) and (b)
hereof, for the purpose of assigning (or elects to assign) the
Tenant's interest under this Lease, or the estate created thereby, to
any other person or entity, such interest or estate may be so assigned
only if the intended assignee has provided adequate assurance
reasonably satisfactory to Landlord of the future performance (as
defined in this paragraph (c)) of all of the terms, covenants and
conditions of this Lease to be performed by the Tenant.
For the purposes of this paragraph (c), the Landlord
and the Tenant acknowledge that, "adequate assurance of future
performance" shall mean at a minimum that each of the following
conditions have been satisfied, and the Landlord has so acknowledged
in writing:
(1) The assignee has submitted a current financial
statement audited by a certified public accountant
and which shows a net worth and working capital in
amounts reasonably determined to be sufficient by
the Landlord to assure the future performance by
such assignee of the Tenant's obligations under
this Lease;
(2) The assignee has submitted in writing evidence,
reasonably satisfactory to the Landlord, of
substantial experience in construction and
operating projects of comparable scope and size to
the Demised Premises and the Building;
(3) The Landlord has obtained all consents and waivers
from any third-party required under any lease,
mortgage,financing arrangement or other agreement
(including, without limitation, the Land
Disposition Agreement) by which the Landlord is
bound to permit the Landlord to consent to such
assignment;
(4) All additional information required to be supplied
under Section 17 hereof has been provided to
Landlord and all other provisions, conditions and
requirements set forth in said Section 17 for an
assignment of the Tenant's interest in this Lease
or the estate created by this Lease have been
complied with; and
(5) The assignee has deposited with the Landlord a
security deposit in an amount equal to one year's
Fixed Annual rent, one year's Additional Rent and
such other charges as Landlord reasonably
estimates will be payable under this Lease during
the one-year period following such assignment.
If this Lease is assumed in a bankruptcy case involving
the Tenant and thereafter Tenant is liquidated (under Chapter 7 of the
Bankruptcy Code or otherwise) or files or has filed against it a
subsequent petition for reorganization under Chapter 11 of the
Bankruptcy Code, Landlord may, at its option, terminate this Lease and
all rights of Tenant hereunder, by giving Tenant notice of its
election to so terminate.
(d) When, pursuant to the Bankruptcy Code, the trustee or
Debtor-In-Possession shall be obligated to pay reasonable use and
occupancy charges for the use of the Demised Premises and/or any
improvements thereon or any portion thereof, such charges shall be
payable at a rate which is not less than the amount which would have
been due under the terms of this Lease for the period in question for
Fixed Annual Rent, Additional Rent and any other charges payable by
the Tenant under this Lease.
(e) The rights and remedies of the Landlord and the Tenant
contained in the provisions of this Section 32 are and shall be deemed
to be in addition to, and not in limitation of, all other rights and
remedies of the Landlord and the Tenant under the other terms of this
Lease and under applicable statutory or case law. If the term of this
Lease has expired or been terminated in accordance with the provisions
hereof, this Lease shall not be revived, and no stay or other
proceeding shall nullify, postpone or otherwise affect the expiration
or earlier termination of the term of this Lease or prevent the
Landlord from regaining possession of the Demised Premises thereupon.
(f) In addition to the restrictions on assignment contained
in Section 17 hereof, neither the whole nor any portion of Tenant's
interest in this Lease or its estate in the Demised Premises shall
inure to the benefit of, be assignable to or otherwise pass to any
trustee, receiver, assignee for the benefit of creditors, or any other
person or entity or otherwise by operation of law under the laws of
any state having jurisdiction of the person or property of Tenant,
unless Landlord shall have consented to such transfer in writing. No
acceptance by landlord of rent or any other payments from any trustee,
receiver, assignee, person or other entity shall be deemed to
constitute such consent by Landlord, nor shall it be deemed a waiver
of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
33. BROKERAGE PROVISION. Landlord and Tenant each represents
and warrants to the other that it has dealt with no real estate
brokers or other persons or entities which have been, are or will be
entitled to any broker's or finder's fee or any similar commission or
fee in connection with this Lease (including, without limitation, the
transactions contemplated in Section 24) except Fallon, Hines &
O'Connor, Inc. (the "Recognized Broker"). Landlord and Tenant each
agree to indemnify, hold harmless, protect and defend the other from
and against any and all loss, damage, liability and expense, including
costs and reasonable attorneys' fees which such other party incurs or
sustains by reason of the breach by the indemnifying party of its
foregoing warranty and representation. Tenant shall be solely
responsible to pay to the Recognized Broker such commission, brokerage
and/or fee as shall be due to the Recognized Broker and Tenant shall
indemnify and hold Landlord and its Affiliates (including, without
limitation, Mortimer B. Zuckerman, Edward H. Linde, Boston Properties,
Inc., and other Zuckerman/Linde Affiliates) harmless from and against
any and all claims of the Recognized Broker. The obligations set
forth in this Section 33 shall survive the expiration or any
termination of this Lease and the Closing and the delivery of the Deed
conveying fee simple title to the Premises pursuant to Section 24 or
otherwise.
34. RECORDING AND NOTICE OF LEASE. Tenant agrees not to record
the within Lease, but each party hereto agrees, on the request of the
other, to execute a Notice of Lease in form recordable and complying
with applicable law and reasonably satisfactory to Landlord's and
Tenant's attorneys. In no event shall such document set forth the
rental or other charges payable by Tenant under this Lease; and any
such document shall expressly state that it is executed pursuant to
the provisions contained in this Lease, and is not intended to vary
the terms and conditions of this Lease. The form of such Notice Of
Lease is attached hereto as Exhibit G.
35. RELATIONSHIP OF THE PARTIES. It is the intention of the
parties hereto to create the relationship of landlord and tenant and
no other relationship whatsoever, and unless expressly otherwise
provided herein, nothing herein shall be construed to make the parties
hereto liable for any of the debts, liabilities or obligations of the
other party.
36. NOTICES. All notices, demands, requests, consents,
approvals or other communications (for the purposes of this Lease
collectively called "Notices") required or permitted to be given under
this Lease including, without limitation, all Notices under Section 24
hereof shall be in writing and shall be sent by hand, by registered or
certified mail, return receipt requested, or by recognized overnight
or other commercial courier, postage or delivery charges, as the case
may be, prepaid, addressed to the party to be notified at its address
first above set forth or to such other address as such party shall
have specified most recently by like Notice. At the same time any
Notice is given to Landlord, a copy thereof shall be sent to Boston
Properties, Inc., 8 Arlington Street, Boston, Massachusetts 02116,
Attention: General Counsel. At the same time any Notice is given to
Tenant a copy thereof shall be sent to Mintz, Levin, Cohn, Ferris,
Glovsky And Popeo, P. C., One Financial Center, Boston, Massachusetts
02111, Attention: Joel R. Bloom, Esquire. All such Notices shall be
effective when received; provided that (i) if receipt is refused,
Notice shall be effective upon the first occasion that such receipt is
refused or (ii) if the Notice is unable to be delivered due to a
change of address of which no Notice was given, Notice shall be
effective upon the date such delivery was attempted.
37. CAPTIONS. The captions of the several Sections of this
Lease are for convenience and reference only, and the words contained
therein shall in no way be held to explain, modify, amplify or aid in
the interpretation, construction or meaning of the provisions of this
Lease.
38. COUNTERPARTS. This Lease may be executed in several
counterparts, each of which shall be deemed an original, and such
counterparts shall constitute but one and the same instrument.
39. ENTIRE AGREEMENT. This Lease constitutes the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior dealings between them with
respect to such subject matter, and there are no verbal or collateral
understandings, agreements, representations or warranties not
expressly set forth in this Lease. No subsequent alteration,
amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant, unless reduced to writing and signed by the party
or parties to be charged therewith. Notwithstanding the foregoing,
Tenant acknowledges and agrees that the Hazardous Materials Indemnity
has been executed, or a Joinder thereto has been executed, by the
Tenant and delivered by the Tenant and the other parties executing, or
joining in, same and the Biogen Guaranty has been executed and
delivered by the parties executing same and the Hazardous Materials
Indemnity and the Biogen Guaranty are and shall remain in full force
and effect and each is an integral part of the transaction evidenced
by this Lease. Nothing herein shall be deemed to modify the
Zuckerman/Linde Guaranty.
40. PROVISIONS BINDING. Except as herein expressly provided
otherwise, the terms, covenants and conditions hereof shall run with
the land, and shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Notwithstanding the
foregoing, assignment and subletting is governed exclusively by
Section 17 of this Lease.
41. POST TERMINATION SALE OR FINANCING. Notwithstanding
anything to the contrary contained in this Lease, in the event that
(i) Tenant shall complete the Improvements in the manner provided in
this Lease and the Land Disposition Agreement and (ii) Tenant shall
obtain from the Redevelopment Authority a Certificate of Completion
therefor and (iii) the closing of the purchase by Tenant from Landlord
of the Demised Premises pursuant to Section 24 hereof shall not occur
and (iv) this Lease shall terminated subsequent to the issuance of
said Certificate of Completion (the "Lease Termination") (said items
(i), (ii), (iii) and (iv) being collectively called the "Subject
Events"), then the parties hereto hereby agree as follows:
1. Landlord shall have the absolute right to manage,
maintain, repair, make replacements to, lease and
otherwise operate the "Property" (hereinafter defined).
The term "Property" shall mean the Demised Premises and
the Improvements thereon.
2. (A) Landlord shall use reasonable efforts to sell the
Property or to place first mortgage financing on the
Property within three (3) years following the Lease
Termination.
(B) Any such sale or mortgage financing shall be
conducted in good faith and in a commercially
reasonable manner. A sale of the Property at a public
auction (herein called a "Public Auction Sale") or a
sale of the Property using the services of such
recognized commercial real estate brokerage firm (a
"Recognized Brokerage Firm") as Landlord shall select
(herein called a "Sale Through A Broker") or a mortgage
financing with an institutional mortgage lender using
the services of a Recognized Brokerage Firm (herein
called a "Mortgage Financing Through A Broker") shall
be deemed to be a sale conducted in good faith and in a
commercially reasonable manner.
Accordingly, any Public Auction Sale or any Sale
Through A Broker and the terms and conditions thereof
of either type of sale (including, without limitation,
the amount of the purchase price and payment terms) or
a Mortgage Financing Through A Broker (including,
without limitation, principal amount of loan, interest
rate, payment terms, prepayment premiums and
provisions, fees, points and other costs) shall be
conclusively binding on Tenant, and Landlord and
Affiliates of Landlord (including, but not limited to
Boston Properties, Inc., Mortimer B. Zuckerman, Edward
H. Linde and other Zuckerman/Linde Affiliates) shall
have no obligation or liability whatsoever to Tenant
and/or Affiliates of Tenant (including, without
limitation, Biogen, Inc.) respecting or in any way
arising out of the terms and conditions of any such
Public Auction Sale or any Sale Through A Broker or any
such Mortgage Financing Through A Broker or the manner
in which any such Public Auction Sale or Sale Through A
Broker or any such Mortgage Financing Through A Broker
is conducted or otherwise consummated.
Notwithstanding anything contained in this Section 41
to the contrary, Tenant acknowledges and agrees that
Landlord shall have no obligation to pursue, accept,
obtain or consummate any mortgage financing which
involves recourse to any assets of Landlord, Affiliates
of Landlord (including, without limitation, Boston
Properties, Inc., Mortimer B. Zuckerman, Edward H.
Linde and other Zuckerman/Linde Affiliates) or any
other person other than the Property or which involves
or requires any guarantees or indemnities.
(C) Without limiting the generality of subsections
2(A) and 2(B) hereof, Landlord shall have the right, in
its sole discretion, to determine the timing of any
sale or mortgage financing of the Property, it being
covenanted and agreed that Landlord shall have no
obligation to accelerate or delay the conduct and/or
consummation of any sale or mortgage financing and that
Landlord and Affiliates of Landlord (including, without
limitation, Boston Properties, Inc., Mortimer B.
Zuckerman, Edward H. Linde and other Zuckerman/Linde
Affiliates) shall have no liability or obligation to
Tenant and Affiliates of Tenant (including, without
limitation, Biogen, Inc.) relating to or arising out of
the timing of any such sale or mortgage financing.
3. There shall be paid to Tenant the "Lease Termination
Building Amount" (hereinafter defined). Landlord
agrees that upon the occurrence of all of the Subject
Events, a lien for the benefit of Tenant shall
automatically attach to the Property to secure the
payment to Tenant of the Lease Termination Building
Amount (herein called "Tenant's Lien"). Landlord
agrees to enter into such documentation as Tenant may
reasonably require to establish Tenant's Lien, such
documentation to be entered into promptly after the
occurrence of all of the Subject Events. However, the
failure of Landlord to enter into such documentation
shall in no way affect the validity of Tenant's Lien or
the obligation to pay the Lease Termination Building
Amount to Tenant. This subsection (3) is subject to
the provisions, conditions and limitations set forth in
this Section 41.
4. The Landlord's obligation to pay to Tenant the Lease
Termination Building Amount shall be limited to the
obligation to promptly pay to Tenant the "Net Proceeds"
(hereinafter defined) received by the Landlord from (a)
the sale to a third party of the Property or (b) a
mortgage financing of the Property. The Landlord shall
have no obligation to pay the Tenant the Lease
Termination Building Amount from any source other than
from Net Proceeds.
5. If the Net Proceeds from a sale of the Property are
less than the Lease Termination Building Amount, upon
the payment of the Net Proceeds to the Tenant, the
Landlord shall have no further obligation to pay the
balance of the Lease Termination Building Amount to
Tenant.
6. If the Net Proceeds from a mortgage financing of the
Property are less than the Lease Termination Building
Amount, the Tenant's Lien reduced by any such Net
Proceeds so received shall be fully subordinated to the
lien of such mortgage financing and Landlord shall have
the continuing obligation to pay the balance of the
Lease Termination Building Amount to Tenant upon any
subsequent sale or mortgage financing of the Property
until such time as the Lease Termination Building
Amount shall have been fully paid, such obligation to
be subject to the provisions of this Section 41
including, but not limited to subsection (4) hereof.
7. Upon the full payment of the Lease Termination Building
Amount or upon the sale of the Property and payment of
the Net Proceeds of such sale to the Tenant, the Tenant
shall deliver to the Landlord such documentation as may
be required to extinguish Tenant's Lien. Concurrently
with a sale of the Property (i) Tenant's Lien shall
automatically cease, terminate and be null and void and
(ii) in confirmation thereof Tenant shall deliver to
Landlord a written instrument in recordable form
terminating Tenant's Lien (the "Lien Termination"). If
Tenant shall fail to deliver the Lien Termination to
Landlord concurrently with such sale, Landlord is
hereby appointed as Tenant's attorney in fact and shall
have Tenant's power of attorney (coupled with an
interest and non-terminable) to execute, seal,
acknowledge, deliver and record the Lien Termination.
8. As used herein, "Lease Termination Building Amount"
shall mean the greater of (a) the "Fair Market Value Of
The Property" (hereinafter defined) and (b) the
"Project Costs" (also hereinafter defined).
9. As used herein, "Net Proceeds" shall mean the gross
purchase price or loan amount obtained in such sale or
mortgage financing less (a) the purchase price Landlord
was to receive had closing on the sale of the Demised
Premises occurred pursuant to Section 24 hereof;
provided, however, that said purchase price shall be
calculated as of the date of the sale or mortgage
financing under this Section 41, (b) a fee payable to
North Parcel Corporation or such other person or entity
designated by Boston Properties,Inc. in the amount of
$100,000.00 and (c) all fees, costs and expenses
(including, without limitation, points, brokerage
commissions and other charges) incurred by the Landlord
in connection with any sale or mortgage financing under
this Section 41, (d) all fees, costs and expenses
incurred by Landlord in terminating this Lease and
prosecuting and/or defending any actions and claims in
regard to such termination or the provisions of Section
24 hereof, (e) all fees, costs and expenses incurred by
the Landlord in the repair, maintenance, improvement or
leasing of the Property on or before such sale or
mortgage financing which have not been reimbursed to
the Landlord from rents or other income received from
the Property or from a sale or mortgage financing and
(f) any amounts due to Landlord pursuant to any other
sections or provisions of this Lease (excluding the
purchase price pursuant to Section 24 (b)(i), provision
for which is made in item (a) above.
10. As used herein, "Fair Market Value Of The Property"
shall mean the fair market value of the Property as of
the date of the Lease Termination determined as
provided in Exhibit I attached hereto.
11. As used herein, "Project Costs" shall mean and be as
defined in Exhibit J attached hereto.
12. The provisions of this Section 41 shall survive the
Subject Events and shall run with the land.
42. INTENTIONALLY OMITTED.
43. LANDLORD LIABILITY. Tenant shall neither assert nor seek to
enforce any claim (whether for breach of this Lease or otherwise)
against any of Landlord's assets or property other than Landlord's
interest in the Demised Premises or against the assets of any
successors of Landlord other than such successor's or successors'
interest in the Demised Premises, as the case may be, and Tenant
agrees to look solely to such interest in the Demised Premises for the
satisfaction of any liability of Landlord (or any successors of
Landlord, as the case may be) whether under this Lease or otherwise,
it being specifically agreed that neither Landlord, nor any successor
holders of Landlord's interest hereunder, nor any partners (whether
general or limited) of Landlord (nor any successors of Landlord), nor
any officers, directors, employees, agents, trustees, beneficiaries,
or Affiliates of Landlord (including, without limitation, Mortimer B.
Zuckerman, Edward H. Linde, Boston Properties, Inc., and other
Zuckerman/Linde Affiliates) or any successors of Landlord shall ever
be personally liable for any such liability. This paragraph shall not
limit any right that Tenant might otherwise have to seek to obtain
injunctive relief against Landlord or Landlord's
successors-in-interest, or to take any other action, which shall not
in any such cases involve the personal liability of Landlord (or any
successor holder of Landlord's interest hereunder, or any officers,
directors, employees, agents,trustees, beneficiaries, or Affiliates of
Landlord (including, without limitation, Mortimer B. Zuckerman, Edward
H. Linde and Boston Properties, Inc., and other Zuckerman/Linde
Affiliates) or any successors of Landlord) to respond in monetary
damages from Landlord's assets other than Landlord's interest or such
successor's interest (as the case may be) in said Demised Premises, as
aforesaid. In no event shall Landlord, or any successor holders of
Landlord's interest hereunder, or any officers, directors, employees,
agents, trustees, beneficiaries, or Affiliates of Landlord (including,
without limitation, Mortimer B. Zuckerman, Edward H. Linde and Boston
Properties, Inc., and other Zuckerman/Linde Affiliates) or any
successors of Landlord ever be liable for indirect and/or
consequential damages. Nothing herein contained shall limit the
guarantee obligations of Mortimer B. Zuckerman and Edward H. Linde as
specifically set forth in the Zuckerman/Linde Guaranty.
44. GOVERNING LAW. This Lease shall be governed exclusively by
the provisions hereof and by the law of the Commonwealth of
Massachusetts, as the same may from time to time exist excluding,
however, the laws that may from time to time exist applicable to
conflicts of law or choice of law.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed, under seal, by persons hereunto duly
authorized, as of the date set forth on the first page of this Lease.
LANDLORD
NORTH PARCEL LIMITED PARTNERSHIP
BY: NORTH PARCEL CORPORATION,
ITS GENERAL PARTNER
By: /s/ Edward H. Linde
Name: Edward H. Linde
Title Treasurer
HEREUNTO DULY AUTHORIZED
TENANT
BIOGEN REALTY LIMITED PARTNERSHIP
BY: BIOGEN REALTY CORPORATION,
ITS GENERAL PARTNER
By: /s/ James C. Mullen
Name: James C. Mullen
Office: Vice President
HEREUNTO DULY AUTHORIZED
[SEAL]
<PAGE>
EXHIBIT A
[LEGAL DESCRIPTION OF TRACT IS TO BE SET FORTH HEREIN]
<PAGE>
EXHIBIT B
[NOTE: THIS EXHIBIT SHALL LIST AS PERMITTED ENCUMBRANCES THE
FOLLOWING:]
1. Those matters set forth or referred to in Section 24 (c)(i)(1)
through Section 24 (c)(i)(22) of the Lease.
2. The provisions of Section 24 (c)(ii) of the Lease (i.e.
pertaining to the "Additional Improvements" and the "Additional
Improvements Amount").
3. The provisions of Section 24 (e)(ii) of the Lease (i.e.
pertaining to the "Tract VI Exclusive Easement And Option
Agreement" and to the "Tract VI Improvements" and the "Tract VI
Improvements Amount".
4. The provisions of Section 24(e)(iii) of the Lease (i.e.
pertaining to the "Tieback Easement Agreements").
<PAGE>
EXHIBIT C
Exhibit C is to be the right of first offer/first refusal to
purchase the Premises (i.e. the parcel of land described in Exhibit A
and all improvements thereon). The terms of the right of first
offer/first refusal are to be substantially the same as set forth in
Section II of the "Form of Offer/Refusal Agreement" attached to the
Option Agreement dated as of October 6, 1993 between Grantor and
Biogen, Inc.. The grantee of the first offer/first refusal (the
"Premises Offeree") shall be North Parcel Corporation or such other
person, firm or entity designated by Boston Properties, Inc., or its
successors or assigns. Further, the Premises Offeree shall have the
right to have the first offer/first refusal attached to and
incorporated in this Deed or set forth in a separate written agreement
in recordable form from the Grantee, as offeror, to the Premises
Offeree, as offeree.
<PAGE>
EXHIBIT E
PURCHASE PRICE
The purchase price shall be the sum of:
(1) all amounts under the "Tract Acquisition Loan" (as defined in the
Option Agreement) for the Demised Premises due at the closing
under this Section 24; and
(2) the "Net Fee Interest Purchase Price" being the product of (a)
the gross floor area of the Building to be constructed on the
Demised Premises by the Tenant as measured in accordance with the
Cambridge Zoning Ordinance at the later of (i) the time of
issuance of the Certificate of Completion by the Redevelopment
Authority and (ii) the date of closing under Section 24 of the
Lease to which this exhibit is attached, and (b) an amount per
square foot of said gross floor area equal to (i) Three Dollars
($3.00) increased by (ii) a cumulative carry rate equal to five
percent (5%) per annum, applied and compounded monthly for the
period starting with the date of execution of the Lease to which
this exhibit is attached (the "Lease Execution Date") until the
date of closing of the purchase of the Demised Premises by the
Tenant.
If the amounts referenced in (1) above have previously been advanced
to the Landlord by a loan or loans from Tenant to Landlord, then the
amounts thereof shall be as set forth in any note or notes evidencing
such loan or loans, and payment of this portion of the purchase price
shall be made by cancellation of such debts and return to Landlord of
such notes and cancellation of any security or other instruments
related thereto. If the amounts referenced in (1) above have been
otherwise funded by Landlord in accordance with and subject to the
terms of the Option Agreement, then Landlord shall within thirty (30)
days after the Lease Execution Date furnish to Tenant a written
statement certifying the amounts thereof.
<PAGE>
TRACT V
EXHIBIT F
DEED
NORTH PARCEL LIMITED PARTNERSHIP, a Massachusetts limited
partnership whose address is Fourteen Cambridge Center, Cambridge,
Massachusetts 02142 ("Grantor"), in consideration of $_____________
[INSERT PURCHASE PRICE DETERMINED PURSUANT TO SECTION 24 AND EXHIBIT E
OF LEASE] paid, grants unto BIOGEN REALTY LIMITED PARTNERSHIP, a
Massachusetts limited partnership whose address is Fourteen Cambridge
Center 02142 (the "Grantee"), with QUITCLAIM COVENANTS, the land in
the City of Cambridge, Middlesex County, Massachusetts described as
follows:
That certain parcel of land, together with all of the Grantor's
rights, if any, in all buildings and other improvements thereon, more
particularly described in Exhibit A attached hereto and hereby
incorporated herein by reference. [NOTE: EXHIBIT A TO BE THE LEGAL
DESCRIPTION OF TRACT V]. The parcel of real estate described in said
Exhibit A and the buildings and other improvements located (or from
time to time located) thereon are herein collectively called the
"Premises".
The Premises are hereby conveyed subject to the matters set forth
in Exhibit B attached hereto and hereby incorporated herein by
reference (the "Permitted Encumbrances"). By its acceptance hereof,
Grantee covenants and agrees to perform and observe all of the
obligations contained in the Permitted Encumbrances as and when due
and/or required.
In consideration of Grantor's conveyance of the Premises to
Grantee and other good and valuable consideration, the receipt and
sufficiency of which Grantee hereby acknowledges, Grantee hereby
grants to the "Premises Grantee" the right of first offer and first
refusal to purchase the Premises as set forth in Exhibit C attached
hereto and hereby incorporated herein by reference. Grantee hereby
joins in the execution of this Deed for the purpose of said grant by
Grantee to the Premises Grantee.
For Grantor's title see deed of Cambridge Redevelopment Authority
dated [INSERT DATE OF DEED FROM CRA TO NPLP], recorded with the
Middlesex South District Registry of Deeds in Book _____, Page ___.
<PAGE>
WITNESS THE EXECUTION HEREOF under seal as of the ______ day of
_________, ____.
NORTH PARCEL LIMITED PARTNERSHIP
BY NORTH PARCEL CORPORATION, ITS
GENERAL PARTNER
WITNESS:
By___________________________
_________________________ Name_________________________
Title________________________
HEREUNTO DULY AUTHORIZED
BIOGEN REALTY LIMITED PARTNERSHIP
BY BIOGEN REALTY CORPORATION, ITS
GENERAL PARTNER
WITNESS:
By___________________________
_________________________ Name_________________________
Title________________________
HEREUNTO DULY AUTHORIZED
COMMONWEALTH OF MASSACHUSETTS
_______________ COUNTY
_________ __, ____
Then personally appeared before me the above-named
________________________ and acknowledged that he is the
________________________ of the above-named corporation and that he
executed this instrument on behalf of such corporation as such general
partner as its free act and deed.
______________________________
NOTARY PUBLIC
My Commission Expires:
______________________
COMMONWEALTH OF MASSACHUSETTS
_______________ COUNTY
_________ __, ____
Then personally appeared before me the above-named
__________________________ and acknowledged that he is the
________________________ of BIOGEN REALTY CORPORATION, the General
Partner of BIOGEN REALTY LIMITED PARTNERSHIP and that he executed the
foregoing instrument on behalf of such corporation as such general
partner as its free act and deed.
______________________________
NOTARY PUBLIC
My Commission Expires:
______________________
<PAGE>
EXHIBIT G
TRACT V
NOTICE OF LEASE
In accordance with Massachusetts General Laws, Chapter 183,
Section 4, as amended, and without intending to vary the terms of the
lease (as hereinafter defined) notice is hereby given of the following
described lease (the "Lease"):
Landlord:
North Parcel Limited Partnership, a Massachusetts limited
partnership
Tenant:
Biogen Realty Limited Partnership, a Massachusetts limited
partnership
Date Of Execution Of Lease:
October 6, 1993
Description Of Demised Premises:
That certain parcel of unimproved land located in Cambridge,
Massachusetts, more particularly described in Exhibit A attached to
the Lease and attached hereto as Exhibit A.
Term:
Pursuant to Section 2(b) of the Lease, the term thereof is for a
period of ninety nine (99) years commencing on October 6, 1993 and
expiring on the day preceding the ninety ninth (99th) anniversary of
said date, unless the Lease shall sooner terminate as provided in the
Lease.
Purchase And Sale Of Demised Premises:
Upon and subject to the terms and conditions of Section 24 of the
Lease, Landlord shall sell and Tenant shall purchase the Demised
Premises.
Private Design Restrictions:
Tenant's development on the Demised Premises is subject to
compliance with the "Private Design Restrictions" (defined in Section
1 of the Lease and attached to the Lease as Exhibit C).
<PAGE>
Zoning Restrictions/Limitations:
Landlord and Tenant have agreed upon certain zoning and
development restrictions and limitations, the same being attached to
the Lease as Exhibit H.
Payment Of Additional Improvements Amount:
Pursuant to the provisions of Section 24(c)(ii) of the Lease, if
at any time or from time to time during the "Additional Improvements
Period" (as defined in the Lease), Tenant (or any successor(s) or
assign(s) of Tenant) shall construct, cause to be constructed or shall
permit any tenant or occupant of the Demised Premises and/or the then
existing "Improvements" defined in the Lease) to construct any
"Additional Improvements" (defined in said Section 24(c)(ii) of the
Lease), then on the "Payment Date" (also defined in said Section
24(c)(ii) of the Lease), Tenant (or such successor or assign, as the
case may be) shall pay to Landlord the "Additional Improvements
Amount" (defined in said Section 24(c)(ii) of the Lease).
Obligations Of Tenant Respecting Tract VI And Tract VI Exclusive
Easement And Option Agreement:
Pursuant to Section 2 (c)(xiii) of the Lease, (a) the Demised
Premises are leased to Tenant subject, inter alia, to the obligations,
terms, provisions and conditions of the "Tract VI Exclusive Easement
And Option Agreement" (defined in said Section 2 (c)(xiii) and (b)
Tenant covenants and agrees to assume and to timely and fully perform
and observe the obligations, terms, provisions and conditions of the
Tract VI Exclusive Easement And Option Agreement, all as more fully
described in said Section 2 (c)(xiii).
Payment Of Tract VI Improvements Amount:
Pursuant to the provisions of Section 24 (e)(ii) of the Lease, in
the event that at any time or from time to time during the "Tract VI
Improvement Period" (defined in the Lease), Tenant (or any
successor(s) or assign(s) of Tenant) shall acquire title to "Tract VI"
(defined in the Tract VI Exclusive Easement And Option Agreement
referred to above) and shall construct, cause to be constructed or
shall permit any tenant or occupant to construct any "Tract VI
Improvements" (defined in said Section 24 (e)(ii) of the Lease), then
on the "Tract VI Payment Date" (also defined in said Section 24
(e)(ii) of the Lease), Tenant (or such successor or assign, as the
case may be) shall pay to Landlord the "Tract VI Improvements Amount"
(defined in said Section 24 (e)(ii) of the Lease).
Post Termination Sale Or Financing:
Pursuant to Section 41 of the Lease, Landlord and Tenant have
agreed on the terms and conditions respecting the sale and financing
of the Demised Premises and the "Improvements" (defined in the Lease)
in the event that (i) Tenant completes the Improvements in the manner
set forth in the Lease and the "Land Disposition Agreement" (defined
in the Lease) and (ii) Tenant, shall obtain from the "Redevelopment
Authority" (defined in the Lease) a "Certificate of Completion"
(defined in the Lease) for the Improvements and (iii) the closing of
the purchase by Tenant from Landlord of the Demised Premises pursuant
to Section 24 of the Lease shall not occur and (iv) the Lease shall be
terminated subsequent to the issuance of said Certificate of
Completion.
Executed as an instrument under seal as of the 6th day of October
1993.
LANDLORD:
NORTH PARCEL LIMITED PARTNERSHIP
BY NORTH PARCEL CORPORATION, ITS
GENERAL PARTNER
By /s/ Edward J. Linde
Name Edward J. Linde
Title Treasurer
TENANT:
BIOGEN REALTY LIMITED PARTNERSHIP
BY BIOGEN REALTY CORPORATION,
ITS GENERAL PARTNER
By /s/ James C. Mullen
Name James C. Mullen
Title Vice President
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK
October 6, 1993
Then personally appeared before me the above-named EDWARD H.
LINDE and acknowledged that he is the TREASURER of NORTH PARCEL
CORPORATION, the General Partner of NORTH PARCEL LIMITED PARTNERSHIP
and that he executed this instrument on behalf of such corporation as
such general partner as its free act and deed.
/s/ Kathleen A. Buchanan
NOTARY PUBLIC
My Commission Expires:
April 4, 1997
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK
October 6, 1993
Then personally appeared before me the above-named JAMES C.
MULLEN and acknowledged that he is the VICE PRESIDENT of BIOGEN REALTY
CORPORATION, the General Partner of BIOGEN REALTY LIMITED PARTNERSHIP
and that he executed the foregoing instrument on behalf of such
corporation as such general partner as its free act and deed.
JENNIFER RENNE LASSITER
NOTARY PUBLIC
My Commission Expires:
November 4, 1994
<PAGE>
EXHIBIT I
DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY
(RESPECTING APPLICATION OF SECTION 41 OF THE LEASE)
With reference to the determination under Section 41 of the Lease
of the "Fair Market Value Of The Property" as of the date of the Lease
termination, the following procedures and requirements shall apply:
If, within thirty (30) days after the date of the Lease
Termination (the "Negotiation Period"), Landlord and Tenant are
unable to agree on the fair market value of the Property in as is
condition as of the date of the Lease Termination, each of
Landlord and Tenant shall, by written notice to the other given
within ten (10) days after the expiration of the Negotiation
Period (time being of the essence), appoint a broker affiliated
with a major Boston commercial real estate brokerage firm and
having at least ten (10) years experience in dealing in
properties of a nature and type generally similar to the Property
located in the general Cambridge-Boston area. The notice from
each of Landlord and Tenant shall make specific reference to this
Section 41. Within ten (10) days after the selection of the last
of the aforesaid two (2) brokers, said two (2) brokers so
selected shall select a third broker also having at least the
affiliation and experience referred to above. Within thirty (30)
days after the selection of the third broker, the three (3)
brokers so selected, by majority opinion, shall make a
determination of the fair market value of the Property in as is
condition as of the date of the Lease Termination. The brokers
shall advise Landlord and Tenant in writing by the expiration of
said thirty (30) day period of said determination of the fair
market value of the Property in as is condition as of the Lease
Termination.
If the brokers are unable to agree at least by majority opinion
on a determination of the fair market value of the Property in as
is condition as of the date of the Lease Termination, then the
brokers shall send written notice to Landlord and Tenant by the
end of said thirty (30) day period for making said determination,
which notice shall set forth the individual determinations of the
fair market value of the Property in as is condition as of the
date of the Lease Termiantion, and the highest such determination
and the lowest such determination shall be disregarded and the
remaining determination shall be deemed to be the determination
of the fair market value of the Property in as is condition as of
the date of the Lease Termination.
Each party shall pay the costs and expenses of the broker
selected by it and each shall pay one half (1/2) of the costs and
expenses of the third broker.
EXHIBIT 11
BIOGEN, INC. and SUBSIDIARIES
Computation of Earnings Per Share
(in thousands, except per share amounts)
1993 1992 1991
Primary earnings per share
Weighted average number of
shares outstanding . . . . . . . . . 31,972 31,025 26,041
Shares deemed outstanding from
the assumed exercise of stock
options and warrants . . . . . . . . 2,748 3,173 3,923
Total. . . . . . . . . . . . . . . . . 34,720 34,198 29,964
Net income . . . . . . . . . . . . . . $32,417 $38,311 $7,186
Preferred stock dividends. . . . . . . - - - - 2,679
Earnings applicable
to common stock. . . . . . . . . . . $32,417 $38,311 $4,507
Primary earnings per
share of common stock. . . . . . . . $ 0.93 $ 1.12 $ 0.15
<PAGE>
EXHIBIT 11 - CONTINUED
BIOGEN, INC. and SUBSIDIARIES
Computation of Earnings Per Share
(in thousands, except per share amounts)
1993 1992 1991
Fully diluted earnings per share
Weighted average number of
shares outstanding . . . . . . . . . 31,972 31,025 26,041
Shares deemed outstanding from
the assumed exercise of stock
options and warrants . . . . . . . . 3,152 4,404 4,067
Shares deemed outstanding
from the assumed conversion
of preferred stock . . . . . . . . . - - - - 2,029
Total. . . . . . . . . . . . . . . . . 35,124 35,429 32,137
Earnings applicable to
common stock . . . . . . . . . . . . $32,417 $38,311 $7,186
Fully diluted earnings
per share of common stock. . . . . . $ 0.92(a)$ 1.08 $ 0.22(b)
(a)This calculation is submitted in accordance with Regulation S-K item 601
(b) (11) although not required by Footnote 2 to Paragraph 14 of APB Opinion
No. 15 because it results in dilution of less than 3%.
(b)This calculation is submitted in accordance with Regulation S-K item 601
(b) (11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an anti-dilutive result.
EXHIBIT 13
SELECTED FINANCIAL DATA
(in thousands, except per share amounts)
Years Ended December 31 1989 1990 1991 1992 1993
Total revenues . . . . . . $ 40,894$ 59,415$ 69,577$ 135,114$ 149,287
Royalties and product sales. 24,725 44,920 56,477 121,714 136,418
Total expenses . . . . . . . 37,680 51,695 62,391 96,803 116,870
Net income . . . . . . . . . 3,214 7,720 7,186 38,311 32,417
Earnings per common
share, primary . . . . . . 0.01 0.07 0.15 1.12 0.93
Cash and marketable securities 110,205 104,146 185,990 227,888 270,351
Total assets . . . . . . . . 145,241 158,485 253,067 311,192 356,950
Shareholders' equity . . . . 139,235 145,742 238,989 284,953 325,174
Average shares outstanding, 23,499 25,430 29,964 34,198 34,720
primary
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
Biogen, Inc. (the "Company") is a biopharmaceutical company principally
engaged in developing and manufacturing drugs for human healthcare through
genetic engineering. The Company's primary source of revenues consists of
royalties received from licensees that sell products based on technology
developed by the Company. These royalties, which have included certain
one-time payments, are primarily derived from sales of alpha interferon and
hepatitis B products. Until Biogen markets its own products directly,
royalties are expected to remain the Company's major source of revenues.
As the majority of revenues that Biogen receives is based on product
sales by its licensees and other events over which the Company has no
control, the Company's total revenues and income may continue to fluctuate
and quarter to quarter comparisons may not necessarily be meaningful.
RESULTS OF OPERATIONS
1993 AS COMPARED TO 1992
Revenues
Biogen's total revenues in 1993 were $149.3 million as compared to
$135.1 million in 1992, an increase of 10%, which resulted mostly from
higher royalties and product sales.
Revenues from royalties and product sales grew to $136.4 million in
1993 from $121.7 million in 1992, an increase of 12%. This increase was
due primarily to ongoing royalties received from licensee sales of alpha
interferon. Sales of alpha interferon, sold by Schering-Plough Corporation
("Schering"), were $572 million in 1993 as compared to $478 million in
1992. The increase in alpha interferon sales is primarily attributable to
the continued use of alpha interferon in Japan for the treatment of
hepatitis C since its approval in mid-1992. Sales of hepatitis B vaccines,
sold by SmithKline Beecham plc ("SmithKline") and Merck & Co., Inc.
("Merck"), increased 10% due mostly to higher sales levels in Europe. The
Company, in general, expects continued increases in sales of licensed
products but at lower growth rates than had been experienced during 1992
and 1993. However, there are numerous health care reform initiatives
currently underway in the United States and other major pharmaceutical
markets and it is not yet clear what effect, if any, these initiatives or
other developments may have on product sales by the Company's licensees.
In addition, these sales levels may fluctuate from quarter to quarter due
to the timing and extent of major events such as new indication approvals
or licensing arrangements. In the first quarter of 1994, the Company
licensed certain patent rights for gene expression to Eli Lilly and Company
("Lilly"). The Company expects to recognize approximately $15 million in
royalties from Lilly in 1994, the majority of which will be recognized in
the first quarter.
Revenues from research and development contracts for 1992 were from an
AIDS research and development funding agreement entered into during the
third quarter of 1989 with an insurance company. As of December 31, 1992,
all funds had been recognized under this contract.
Interest income for 1993 increased from 1992 due primarily to the
increase in invested funds generated from higher revenue and profit levels.
<PAGE>
Expenses
Total expenses were $114.7 million in 1993 as compared to $95.2 million
in 1992. Cost of sales increased $2.8 million due to the higher level of
royalty income received during 1993. Research and development costs were
$79.3 million in 1993 compared to $60.4 million in 1992, an increase of
31%. The increase in research and development costs was due primarily to
the expanded clinical development of the Company's lead drug candidates,
Hirulog(TM) thrombin inhibitor and recombinant beta interferon. Both drug
candidates are in Phase II and Phase III clinical trials for a variety of
indications. The increase in research and development costs was also
attributable to a charge in the fourth quarter related to obtaining rights
to beta interferon patents for worldwide manufacture and sale. The Company
expects its research and development costs to continue to increase as it
expands the clinical programs for Hirulog(TM), recombinant beta interferon
and other therapeutics.
Other expenses decreased $2.4 million in 1993 as compared to 1992.
During the first quarter of 1993, the Company incurred a charge of
approximately $1.8 million to write off its remaining interest in a
European joint venture which followed a $5.1 million write-down that was
incurred in the second half of 1992. These adjustments occurred as a
result of the venture entering bankruptcy proceedings and the Company's
reassessment of its European operations strategy. During the second
quarter of 1993, the Company incurred a charge of approximately $4.3
million as a result of a patent settlement between Schering and Genentech,
Inc. The settlement includes a worldwide license to certain patented
technology and processes of Genentech, Inc. used to produce recombinant
alpha interferon by Schering, the Company's licensee. In 1992, the Company
also incurred costs relating to disputes of the royalty arrangements under
certain of its licensing agreements including an adverse ruling rendered in
the fourth quarter of 1992 regarding the rate of royalties payable from
international sales of hepatitis B vaccines by SmithKline. The Company has
received leave to appeal this decision from the English Chancery Court. In
the first quarter of 1993, SmithKline initiated arbitration in the United
States regarding similar royalty provisions in a separate agreement
governing sales of hepatitis B vaccines by SmithKline in the United States.
The amount in dispute at the end of 1993 was approximately $14 million.
The Company believes that an adverse ruling in the United States is not
probable.
Income tax expense was $2.2 million for 1993 which is substantially
less than the amount computed at U.S. federal statutory rates because of
the utilization of net operating loss carryforwards. Effective January 1,
1992, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 109, Accounting for Income Taxes, which is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have
been recognized in the Company's financial statements or tax returns.
Adoption of this statement had no effect on the Company's consolidated
financial position and results of operations as income taxes were formerly
accounted for using the asset and liability approach in accordance with
SFAS No. 96.
1992 AS COMPARED TO 1991
Revenues
Biogen's total revenues in 1992 were $135.1 million as compared to
$69.6 million in 1991, an increase of 94%, which resulted mostly from
higher royalties and product sales.
Revenues from royalties and product sales grew to $121.7 million in
1992 from $56.5 million in 1991, an increase of 116%. This increase was
due primarily to ongoing royalties received from licensee sales of alpha
interferon and hepatitis B vaccine, which more than doubled from 1991.
Sales of alpha interferon were $478 million in 1992 as compared to $251
million in 1991. The significant increase in alpha interferon sales was
primarily attributable to sales in Japan for the treatment of hepatitis C.
Sales of hepatitis B vaccines, sold by SmithKline and Merck, also increased
significantly. The increase in sales of hepatitis B vaccines was due
largely to a mandatory vaccination program that was put in place in 1992
for workers covered by OSHA regulations and a large increase in the number
of childhood vaccinations in the United States.
Revenues from research and development contracts for 1992 and 1991 were
from an AIDS research and development funding agreement entered into during
the third quarter of 1989 with an insurance company.
Interest income for 1992 increased from 1991 due primarily to the
increase in invested funds resulting from the common stock offering
completed on December 2, 1991 and cash generated from higher revenue and
profit levels.
Expenses
Total expenses were $95.2 million in 1992 as compared to $62.1 million
in 1991. Cost of sales increased $5.4 million due to the higher level of
royalty income received during 1992. Research and development costs were
$60.4 million in 1992 compared to $44.3 million in 1991, an increase of
36%. The increase in research and development costs was due primarily to
the expanded clinical development of the Company's lead drug candidates,
Hirulog(TM) thrombin inhibitor and recombinant beta interferon. The
increase in research and development costs was also attributable to a
charge in the first quarter related to the upgrade of certain manufacturing
equipment as well as higher patent expenses.
General and administrative expenses increased $2.7 million in 1992 as
compared to 1991. A significant portion of this increase was due to higher
legal expenses and personnel-related costs.
Other expenses increased $8.9 million in 1992 as compared to 1991.
This increase includes a charge of $5.1 million for the write-down of the
Company's fifty percent interest in a European joint venture. In addition,
the Company incurred costs relating to disputes of the royalty arrangements
under certain of its licensing agreements including an adverse ruling
rendered in the fourth quarter of 1992 regarding the rate of royalties
payable from international sales of hepatitis B vaccines by SmithKline.
Income tax expense increased in 1992 as compared to the 1991 amount as
a result of increased pretax earnings and was substantially less than the
amount computed at U.S. federal statutory rates because of the utilization
of net operating loss carryforwards.
FINANCIAL CONDITION
At December 31, 1993, cash, cash equivalents and marketable securities
amounted to $270.4 million, a $42.5 million increase from the $227.9
million on hand at the end of 1992. Working capital was $277.6 million at
December 31, 1993, an increase of $35.4 million from December 31, 1992.
Net cash provided from operating activities in 1993 was $47.6 million while
the Company's common stock option and purchase plans provided $7.8 million.
Outflows of cash included investments in property and equipment and patents
of $13.5 million. Property and equipment additions related primarily to
expanding and upgrading the Company's manufacturing and research facilities
in Cambridge, Massachusetts. Also, during the fourth quarter of 1993, the
Company commenced construction of a 150,000 square foot building in
Cambridge, Massachusetts to house research laboratories and offices. The
anticipated cost of construction including land is approximately $40
million. Upon completion of the building in 1995, the Company has the
option, subject to certain conditions, to obtain a secured term loan with
a bank for up to $25 million for a period of up to 10 years.
In May 1993, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain
Investments in Debt and Equity Securities. The Company will adopt the
provisions of SFAS No. 115 effective January 1, 1994. The Company does not
expect the adoption of this statement to have a significant effect on its
consolidated financial condition and results of operations.
The Company is the general partner of Biogen Medical Products Limited
Partnership ("BMPLP"). BMPLP was formed for the continued development of
commercial products based on gamma interferon and interleukin-2 (the
"partnership products"). The Company agreed to extend the term of the
development contract with BMPLP until December 31, 1994. The Company did
not incur any significant costs with respect to BMPLP in 1993 but has the
option to provide up to $9.2 million to BMPLP to continue development of
the partnership products.
The Company believes that the financial resources available to it,
including its current working capital and its existing and anticipated
contractual relationships, may be sufficient to finance its planned
operations and capital expenditures for the near term. However, the
Company expects that it may have additional funding needs, the extent of
which will depend upon the level of royalties and product sales, the
outcome of clinical trial programs, the receipt and timing of required
regulatory approvals for products, the results of research and development
efforts and business expansion opportunities. Accordingly, from time to
time, the Company may obtain funding through various means which could
include collaborative agreements, lease financings, sales of equity or debt
securities and other financing arrangements.
<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31 1993 1992
ASSETS
CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . $ 74,546$ 85,863
Marketable securities. . . . . . . . . . . . 195,805 142,025
Accounts receivable:
Affiliate . . . . . . . . . . . . . . . . . - - 1,005
Other . . . . . . . . . . . . . . . . . . . 31,695 32,410
Other. . . . . . . . . . . . . . . . . . . . 7,378 7,144
Total current assets . . . . . . . . . . . . 309,424 268,447
======= =======
PROPERTY AND EQUIPMENT
Leasehold improvements . . . . . . . . . . . 31,544 29,407
Equipment. . . . . . . . . . . . . . . . . . 28,555 23,934
Construction in progress . . . . . . . . . . 4,012 - -
Total cost . . . . . . . . . . . . . . . . . 64,111 53,341
Less accumulated depreciation. . . . . . . . 25,611 21,035
Property and equipment, net. . . . . . . . . 38,500 32,306
OTHER ASSETS
Investment in joint venture. . . . . . . . . - - 1,803
Patents, net of amortization of $5,782 in 1993
and $4,213 in 1992. . . . . . . . . . . . . 7,164 6,548
Other. . . . . . . . . . . . . . . . . . . . 1,862 2,088
Total other assets . . . . . . . . . . . . . 9,026 10,439
$356,950$ 311,192
======== =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable:
Affiliate. . . . . . . . . . . . . . . . . $ - -$ 708
Other. . . . . . . . . . . . . . . . . . . . 2,916 3,188
Accrued expenses and other . . . . . . . . . . 28,860 22,343
Total current liabilities. . . . . . . . . . . 31,776 26,239
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share
(55,000,000 shares authorized; issued:
1993 - 32,299,835;
1992 - 31,733,749) . . . . . . . . . . . . 323 317
Additional paid-in capital . . . . . . . . . 353,247 345,445
Deficit. . . . . . . . . . . . . . . . . . . (28,462) (60,879)
Accumulated translation adjustment . . . . . 66 70
Total shareholders' equity . . . . . . . . . 325,174 284,953
$356,950 $311,192
. . . . . . . . . . . . . . . . . . . . . . ======== ========
See Notes to Consolidated Financial Statements.<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Years Ended December 31 1993 1992 1991
REVENUES
Royalties and product sales. . . . . . $ 136,418$ 121,714$ 56,477
Research and development contracts . . . - - 2,035 4,965
Interest . . . . . . . . . . . . . . . . 12,869 11,365 8,135
Total revenues . . . . . . . . . . . . . 149,287 135,114 69,577
EXPENSES
Cost of sales. . . . . . . . . . . . . . 12,139 9,384 4,033
Research and development . . . . . . . . 79,315 60,399 44,292
General and administrative . . . . . . . 17,236 16,985 14,328
Other. . . . . . . . . . . . . . . . . . 5,980 8,415 (522)
Total expenses . . . . . . . . . . . . . 114,670 95,183 62,131
INCOME BEFORE INCOME TAXES . . . . . . . . 34,617 39,931 7,446
Income taxes . . . . . . . . . . . . . . . 2,200 1,620 260
NET INCOME . . . . . . . . . . . . . . . . 32,417 38,311 7,186
Preferred stock dividends. . . . . . . . . - - - - 2,679
EARNINGS APPLICABLE TO COMMON STOCK. . . . $32,417 $38,311 $4,507
EARNINGS PER SHARE OF COMMON STOCK
Primary. . . . . . . . . . . . . . . . . $ 0.93 $ 1.12 $ 0.15
Fully diluted. . . . . . . . . . . . . . $ 0.92 $ 1.08 $ 0.15
Average number of shares outstanding
Primary. . . . . . . . . . . . . . . . . 34,720 34,198 29,964
Fully diluted. . . . . . . . . . . . . . 35,124 35,429 29,964
Royalties and product sales include amounts from affiliates of $160 in 1992
and $1,867 in 1991.
See Notes to Consolidated Financial Statements.<PAGE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31 1993 1992 1991
CASH FLOWS FROM OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . $ 32,417$ 38,311 $7,186
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization . . . . . . 6,657 7,141 5,064
Write-down of investment in joint venture 1,803 5,118 - -
Other . . . . . . . . . . . . . . . . . . (330) 306 (1,155)
Changes in:
Accounts receivable . . . . . . . . 1,720 (15,026)(5,174)
Other current assets. . . . . . . . (234) (2,359) (1,372)
Accounts payable, accrued expenses
and other liabilities. . . . . . 5,537 9,561 1,335
Net cash provided from operating activities . .47,570 43,052 5,884
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities, net. . (53,228) (11,557) (37,274)
Acquisitions of property and equipment . . (10,770) (9,379) (8,426)
Additions to patents . . . . . . . . . . . (2,697) (2,933) (2,634)
Net cash used by investing activities. . . (66,695) (23,869) (48,334)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock and option exercises. 7,808 10,033 89,455
Preferred stock dividends paid . . . . . . - - - - (2,932)
Net cash provided from financing activities. . 7,808 10,033 86,523
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . . . (11,317) 29,216 44,073
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR. . . . . . . . . . . . . . . . . . 85,863 56,647 12,574
CASH AND CASH EQUIVALENTS, END OF YEAR . . $ 74,546$ 85,863$ 56,647
See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
BIOGEN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
Years Ended December 31, 1993, 1992 and 1991
<CAPTION>
Additional Accumulated Share-
Preferred Common Paid-in Translation holders'
Stock Stock Capital Deficit Adjustment Equity
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990. $ 28 $ 229 $246,017 $(103,444) $2,912 $145,742
Preferred dividends . . . . (2,932) (2,932)
Conversion of preferred to common (28) (28)
Issuance of common. . . . . 69 81,416 81,485
Exercise of options . . . . 10 7,988 7,998
Net income. . . . . . . . . 7,186 7,186
Translation adjustment. . . (462) (462)
Balance, December 31, 1991. - - 308 335,421 (99,190) 2,450 238,989
Issuance of common. . . . . 345 345
Exercise of options . . . . 9 9,679 9,688
Net income. . . . . . . . . 38,311 38,311
Write-down of joint venture (3,352) (3,352)
Translation adjustment. . . 972 972
Balance, December 31, 1992. - - 317 345,445 (60,879) 70 284,953
Issuance of common. . . . . 475 475
Exercise of options . . . . 6 7,327 7,333
Net income. . . . . . . . . 32,417 32,417
Translation adjustment. . . (4) (4)
Balance, December 31, 1993. $ - - $ 323 $353,247 $(28,462) $ 66 $325,174
See Notes to Consolidated Financial Statements.
</TABLE>
BIOGEN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Biogen, Inc. (the "Company") is a biopharmaceutical company principally
engaged in developing and manufacturing drugs for human healthcare through
genetic engineering. The Company's revenues are generated from the
worldwide sales by licensees of five products, including alpha interferon
and hepatitis B vaccines and diagnostic products. Biogen is focused
primarily on developing and testing products for the treatment of
cardiovascular disease, inflammatory diseases, AIDS, certain cancers and
viruses.
Consolidation Principles
The financial statements include the accounts of Biogen, Inc. and its
subsidiaries, each of which is wholly owned. Intercompany balances and
transactions have been eliminated.
Translation of Foreign Currencies
Adjustments resulting from the translation of the financial statements of
the Company's foreign operations are excluded from the determination of net
income and accumulated in a separate component of shareholders' equity.
Foreign exchange transaction gains and losses are included in the results
of operations. Such amounts for the years presented were insignificant.
Cash, Cash Equivalents and Marketable Securities
For purposes of reporting cash flows, the Company considers time deposits
and certificates of deposit purchased with a maturity of 90 days or less to
be cash equivalents. Marketable securities are carried at cost which
approximates market. The Company invests in U.S. government securities and
corporate bonds and notes with strong credit ratings. The Company limits
the amount of investment exposure to any one institution.
Property and Equipment
Property and equipment is carried at cost and depreciation is calculated on
the straight-line basis over the estimated useful lives of the assets.
Leasehold improvements are being amortized over the terms of leases, up to
20 years. Equipment is being depreciated over estimated useful lives from
5 to 10 years.
<PAGE>
Patents
The costs of patents and patent applications are amortized on the straight-
line basis over estimated useful lives, up to 15 years.
Revenues
The Company receives revenues under license agreements with a number of
third parties that sell products based on technologies developed by the
Company. All of these agreements provide for the payment of royalties to
the Company based on sales of the licensed product. The Company records
these revenues based on estimates of the sales that occurred during the
relevant period. Many of these agreements also provide for the payment of
one-time, non-refundable fees when the agreement is signed or when
commercial goals are achieved. These fees are recorded as revenue in
accordance with the terms of the particular agreement. Revenues from
research and development contracts were derived from a collaborative
agreement with an insurance company (see note 4).
Research and Development Expenses
Research and development costs are expensed as incurred.
Income Taxes
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, Accounting for Income Taxes, which
is an asset and liability approach that requires the recognition of
deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the Company's financial
statements or tax returns. Adoption of this statement had no effect on the
Company's consolidated financial position and results of operations as
income taxes were formerly accounted for using the asset and liability
approach in accordance with SFAS No. 96.
Earnings Per Share of Common Stock
Earnings per share of common stock is computed by dividing net income,
after deducting preferred stock dividends, by the weighted average number
of shares of common stock and common stock equivalents outstanding, which
include options and warrants. For 1991, primary earnings per share has
been substituted for fully diluted earnings per share since the fully
diluted calculation produced an antidilutive result.
<PAGE>
2. BIOGEN MEDICAL PRODUCTS LIMITED PARTNERSHIP
The Company is the general partner of Biogen Medical Products Limited
Partnership ("BMPLP"). BMPLP was formed for the continued development of
commercial products based on gamma interferon and interleukin-2 (the
"partnership products").
Under terms of a development contract, the Company performs research and
development work on behalf of BMPLP, which is reimbursable at cost.
Expenses incurred by the Company as a result of this work were $.8 million
in 1992 and $.9 million in 1991. BMPLP has earned revenues from sales or
licensing arrangements related to the partnership products which have been
payable to the Company as repayment of a loan made by the Company. The
amounts earned from BMPLP and included in the Company's royalties and
product sales revenues were $.2 million in 1992 and $1.9 million in 1991.
Revenues and expenses recorded with respect to BMPLP by the Company in 1993
were insignificant.
The Company agreed to extend the term of the development contract with
BMPLP until December 31, 1994. The Company has the option to provide up to
an additional $9.2 million to BMPLP to continue development of the
partnership products.
3. INVESTMENT IN JOINT VENTURE
During the third quarter of 1992, the Company incurred a charge of
approximately $5.1 million, included in other expenses, for the write-down
of its fifty percent interest in a European joint venture. In connection
with this write-down the Company discontinued use of the equity method of
accounting for the venture. During the first quarter of 1993, the Company
incurred a charge to other expenses of approximately $1.8 million for the
write-off of its remaining interest in the venture. These adjustments
occurred as a result of the venture entering bankruptcy proceedings and the
Company's reassessment of its European operations strategy.
4. RESEARCH AND DEVELOPMENT AGREEMENT
During 1989, the Company entered into a funding arrangement for one of its
research projects with an insurance company, which expired on December 31,
1992. Under this agreement, the Company received $20 million.
Approximately $5 million of this amount was received in exchange for
issuing 1.8 million common stock warrants with an exercise price of $17 per
share. The Company began receiving the remainder of the funds at the end
of 1989 at a rate of fifty percent of development costs incurred, subject
to certain limits. These payments were used to partially fund the
Company's development costs for rsCD4-based products. Biogen will pay
royalties to the insurance company on worldwide sales of rsCD4-based
products subject to specified maximums.
<PAGE>
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments at
December 31, are as follows:
1993 1992
Carrying Fair Carrying Fair
(in thousands) Amount Value Amount Value
Cash and cash equivalents. . . $74,546 $74,546 $85,863 $85,863
Marketable securities. . . . . 195,805 197,504 142,025 144,333
The carrying amount of cash and cash equivalents approximates fair value
because of the short maturity of those instruments. The fair values of
marketable securities and other investments are estimated based on quoted
market prices for those investments.
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 115, Accounting for Certain
Investments in Debt and Equity Securities. The Company will adopt the
provisions of SFAS No. 115 effective January 1, 1994. The Company does not
expect the adoption of this statement to have a significant effect on its
consolidated financial condition and results of operations.
6. ACCRUED EXPENSES AND OTHER
The following items are included in accrued expenses and other at December
31:
(in thousands) 1993 1992
Royalties and licensing fees . . . . . . . $14,614 $12,385
Clinical trial costs . . . . . . . . . . . 4,614 1,033
Restructuring. . . . . . . . . . . . . . . 3,725 3,025
Income taxes . . . . . . . . . . . . . . . 2,481 1,515
Other. . . . . . . . . . . . . . . . . . . 3,426 4,385
$28,860 $22,343
======= =======
<PAGE>
7. PENSIONS
The Company has a defined benefit pension plan which provides benefits to
substantially all of its employees. The Company also has a supplemental
retirement benefit plan, adopted in 1991, which covers certain employees.
The pension plans are noncontributory with benefit formulas based on
employee earnings and credited years of service. The Company's funding
policy for its pension plans is to contribute amounts deductible for
federal income tax purposes. Funds contributed to the plans are invested
primarily in fixed income and equity securities. Pension cost for the
years ended December 31 are summarized below:
(in thousands) 1993 1992 1991
Service cost . . . . . . . . . . . . . . . $ 477 $ 356 $ 308
Interest cost. . . . . . . . . . . . . . . 236 215 196
Actual return on plan assets . . . . . . . (113) (155) (291)
Net amortization and deferral. . . . . . . (33) (28) 124
Net pension cost . . . . . . . . . . . . . $ 567 $ 388 $ 337
The funded status of the defined benefit plans at December 31, is as
follows:
(in thousands) 1993 1992
Actuarial present value of:
Vested benefits obligation. . . . . . . . $(2,462) $(1,441)
Non-vested benefits . . . . . . . . . . . (266) (158)
Accumulated benefit obligation. . . . . . $(2,728) $(1,599)
Projected benefit obligation . . . . . . . $(4,018) $(2,506)
Plan assets at fair value. . . . . . . . . $1,815 $1,772
Projected benefit obligation in excess
of plan assets. . . . . . . . . . . . . . $(2,203) $ (734)
Unrecognized net asset . . . . . . . . . . (104) (125)
Unrecognized net (gain) loss . . . . . . . 559 (427)
Unrecognized prior service cost. . . . . . 202 222
Accrued pension cost . . . . . . . . . . . $(1,546) $(1,064)
The projected benefit obligation was determined using an assumed discount
rate of 7.5% for 1993 and 9% for 1992. The assumed long-term compensation
increase rates were 5% for 1993 and 6% for 1992. The assumed long-term
rate of return on plan assets was 8% for both years.
<PAGE>
8. INCOME TAXES
The components of income (loss) before income taxes and of income tax
expense for the years ended December 31 follow:
(in thousands) 1993 1992 1991
Income (loss) before income taxes:
Domestic. . . . . . . . . . . . . . . . . $37,218 $45,522 $6,879
Foreign . . . . . . . . . . . . . . . . . (2,601) (5,591) 567
$34,617 $39,931 $7,446
Income tax expense:
Federal . . . . . . . . . . . . . . . . . $1,700 $1,300 $ 120
State . . . . . . . . . . . . . . . . . . 476 313 115
Foreign . . . . . . . . . . . . . . . . . 24 7 25
$2,200 $1,620 $ 260
====== ====== ======
Deferred tax assets (liabilities) are comprised of the following at
December 31:
(in thousands) 1993 1992
Tax credits. . . . . . . . . . . . . . . . $15,210 $9,936
Loss carryforwards . . . . . . . . . . . . 31,753 39,729
Other. . . . . . . . . . . . . . . . . . . 4,858 4,035
Gross deferred tax assets. . . . . . . . . 51,821 53,700
Depreciation and amortization. . . . . . . (4,222) (2,442)
Gross deferred tax liabilities . . . . . . (4,222) (2,442)
Deferred tax assets valuation allowance. . (47,599) (51,258)
$ - - $ - -
========== =========
The net change in the valuation allowance was a decrease of $3.7 million in
1993 and $4.0 million in 1992. Of the $47.6 million valuation allowance at
December 31, 1993, $28.2 million relating to deductions for non-qualified
stock options will be credited to paid-in capital if realized.
The Company increased its gross deferred tax assets and liabilities in 1993
as a result of legislation enacted in the United States during the current
year increasing the corporate tax rate from 34% to 35% commencing January
1, 1993.<PAGE>
A reconciliation between the amount of reported income tax expense and the
amount computed using the U.S. federal statutory rate of 35% for 1993 and
34% for 1992 and 1991 follows:
(in thousands) 1993 1992 1991
Income at statutory rates. . . . . . . . . $12,116 $13,577 $2,532
Foreign income at other than U.S. rates. . (253) (655) 56
Utilization of net operating loss
carryforwards. . . . . . . . . . . . . . (11,159) (14,070) (2,510)
Effects of losses not currently utilizable 1,187 2,562 - -
Other. . . . . . . . . . . . . . . . . . . 309 206 182
Reported income tax expense. . . . . . . . $2,200 $1,620 $ 260
At December 31, 1993, the Company had net operating loss carryforwards
available in the United States for federal income tax return purposes of
$89 million and tax credits of $11 million which expire at various dates
through 2008. Total income tax payments for the years ended December 31,
1993, 1992 and 1991 amounted to $983,000, $745,000 and $197,000,
respectively.
9. COMMITMENTS AND CONTINGENCIES
The Company rents laboratory and office space and certain equipment under
noncancellable operating leases. The rental expense under these leases,
which terminate at various dates through 2004, amounted to $3.6 million in
1993 ($3.5 million in 1992 and $3.3 million in 1991). The lease agreements
contain various clauses for renewal at the option of the Company and, in
certain cases, escalation clauses linked generally to rates of inflation.
At December 31, 1993, minimum annual rental commitments under
noncancellable leases were as follows:
(in thousands)
Year
1994 . . . . . . . . . . . . . . . . . . . . . . $4,249
1995 . . . . . . . . . . . . . . . . . . . . . . 4,230
1996 . . . . . . . . . . . . . . . . . . . . . . 4,086
1997 . . . . . . . . . . . . . . . . . . . . . . 3,856
1998 . . . . . . . . . . . . . . . . . . . . . . 1,919
Thereafter . . . . . . . . . . . . . . . . . . . 3,399
Total minimum lease payments . . . . . . . . . . $21,739
<PAGE>
During the fourth quarter of 1993, the Company commenced construction of a
150,000 square foot building in Cambridge, Massachusetts to house research
laboratories and offices. The anticipated cost of construction including
land is approximately $40 million. Upon completion of the building in
1995, the Company has the option, subject to certain conditions, to obtain
a 7.5% secured term loan with a bank for up to $25 million for a period of
up to 10 years.
In the fourth quarter of 1992, SmithKline Beecham plc ("SmithKline")
received a favorable foreign arbitration decision against Biogen regarding
the rate of royalties payable on international sales of hepatitis B
vaccines by SmithKline. The Company has received leave to appeal this
decision from the English Chancery Court. In the first quarter of 1993,
SmithKline initiated arbitration in the United States regarding similar
royalty provisions in a separate agreement governing sales of hepatitis B
vaccines by SmithKline in the United States. The amount in dispute at the
end of 1993 was approximately $14 million. The Company believes that an
adverse ruling in the United States is not probable.
In the first quarter of 1994, the Company licensed certain patent rights
for gene expression to Eli Lilly and Company ("Lilly"). The Company
expects to recognize approximately $15 million in royalties from Lilly in
1994, the majority of which will be recognized in the first quarter.
10. SHAREHOLDERS' EQUITY
Convertible Exchangeable Preferred Stock
The Company has authority to issue 20,000,000 shares of $.01 par value
preferred stock. On June 24, 1991, the Company completed the redemption of
its $2.125 convertible exchangeable preferred stock. Virtually all of the
2,760,000 shares of convertible exchangeable preferred stock then
outstanding were converted into common stock at a rate of 1.6393 shares of
common stock for each share of convertible exchangeable preferred stock.
As a result of this conversion, the Company no longer pays dividends on the
convertible exchangeable preferred stock, which totaled $5.9 million per
year.
Common Stock
The Company has authority to issue 55,000,000 shares of $.01 par value
common stock. On December 2, 1991, the Company completed a public offering
of 2,300,000 shares of its common stock at a price of $37.00 per share.
The proceeds of the offering, after deducting related costs, were
approximately $81.1 million.
Shareholder Rights Plan
In 1989, the Company's Board of Directors declared a dividend of one
preferred share purchase right (a "right") for each share of common stock
outstanding. Each right entitles the holder to purchase from the Company
one one-hundredth of a share of $.01 par value Series A junior
participating preferred stock at a price of $68.00 per one-hundredth of a
share, subject to certain adjustments. The rights are exercisable only if
a person or group acquires 20% or more of the outstanding common stock of
the Company or commences a tender offer which would result in the ownership
of 20% or more of the outstanding common stock of the Company; or if 10% of
the Company's common stock is acquired and the acquirer is determined by
the Board of Directors to be an adverse person (as defined in the rights
plan). Once a right becomes exercisable, the plan allows the Company's
shareholders to purchase common stock at a substantial discount. Unless
earlier redeemed, the rights expire on May 8, 1999. The Company is
entitled to redeem the rights at $.01 per right subject to adjustment for
any stock split, stock dividend or similar transaction.
As of December 31, 1993, the Company has authorized the issuance of 400,000
shares of Series A junior participating preferred stock for use in
connection with the shareholder rights plan.
Share Option and Purchase Plans
The Company has several plans and arrangements under which it may grant
options to employees, Directors, Scientific Board members and consultants
to purchase common stock. Options are granted for periods of up to 10
years and become exercisable in installments over periods of up to 7 years
or upon the achievement of scientific or other goals. Activity under these
plans and arrangements follows:
1993 1992 1991
Outstanding, January 1 . . . . . . . . . . 4,785,293 4,381,635 4,770,677
Granted. . . . . . . . . . . . . . . . . . 917,327 1,464,153 781,829
Exercised. . . . . . . . . . . . . . . . . (564,021) (902,278)(1,010,603)
Cancelled. . . . . . . . . . . . . . . . . (383,269) (158,217) (160,268)
Outstanding, December 31 . . . . . . . . . 4,755,330 4,785,293 4,381,635
Options were exercised during the three years ended December 31, 1993 at
prices ranging from $4.25 to $41.50 per share. The exercise price of options
outstanding at December 31, 1993, 1992 and 1991 ranged from $4.25 to $48.38
per share. At December 31, 1993, 2,260,508 options were exercisable and
1,840,056 shares were reserved for issuance of additional options which may
be granted under the plans.
The Company also has an employee stock purchase plan covering substantially
all of its employees. This plan allows employees to purchase common stock at
85% of the lower of the fair market value at either the date of the beginning
of the plan period or the purchase date. Purchases under this plan are
subject to certain limitations and may not exceed an aggregate of 250,000
shares during the term of the plan; no shares may be issued after December
31, 1997. Through December 31, 1993, 87,783 shares have been issued under
this plan.
Common Stock Warrants
At December 31, 1993, 1.8 million warrants issued in connection with a
research agreement with an insurance company were outstanding. Each warrant
entitles the holder to purchase one share of the Company's common stock and
may be exercised at $17.00 per share through December 31, 1996. At December
31, 1993, 602,800 warrants issued in connection with the research and
development arrangement with BMPLP were outstanding. Each warrant entitles
the holder to purchase one share of the Company's common stock and may be
exercised at $20.00 per share through June 30, 1994.
<PAGE>
11. GEOGRAPHIC DATA
Revenues, excluding interest, were derived in the following geographic areas
for the years ended December 31:
(in thousands) 1993 1992 1991
United States. . . . . . . . . . . . . . . $45,846 $45,885 $21,937
Japan. . . . . . . . . . . . . . . . . . . 43,959 27,576 1,986
Europe . . . . . . . . . . . . . . . . . . 32,273 41,582 30,653
Other. . . . . . . . . . . . . . . . . . . 14,340 8,706 6,866
$136,418 $123,749 $61,442
======= ======= ======
The Company received revenues from two unrelated parties in 1993 accounting
for 57% and 25% of revenues before interest (two unrelated parties in 1992
accounting for 53% and 28%, and two unrelated parties in 1991 accounting for
46% and 18%).
<PAGE>
12. QUARTERLY FINANCIAL DATA (UNAUDITED)
(in thousand, except per share amounts)
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
1993
Total revenues . . . . . . . $35,421 $37,854 $37,305 $38,707 $149,287
Royalties and product sales. 32,540 34,714 33,942 35,222 136,418
Total expenses . . . . . . . 24,161 32,210 26,030 34,469 116,870
Net income . . . . . . . . . 11,260 5,644 11,275 4,238 32,417
Earnings per share of common stock
Primary. . . . . . . . . . 0.32 0.17 0.33 0.11 0.93
Fully diluted. . . . . . . 0.32 0.17 0.32 0.11 0.92
1992
Total revenues . . . . . . . $19,122 $20,905 $40,603 $54,484 $135,114
Royalties and product sales. 15,541 17,649 37,489 51,035 121,714
Total expenses . . . . . . . 18,308 20,240 29,463 28,792 96,803
Net income . . . . . . . . . 814 665 11,140 25,692 38,311
Earnings per share of common stock
Primary . . . . . . . . . 0.02 0.02 0.33 0.75 1.12
Fully diluted . . . . . . 0.02 0.02 0.32 0.72 1.08
Total expenses for the third quarter of 1992 includes a charge of
approximately $5.1 million for the write-down of a fifty percent interest in
a European joint venture. Royalties and product sales for the third and
fourth quarters of 1992 include approximately $10 million and $14 million
which relate to licensee sales of the prior quarter. Total year figures are
audited.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Biogen, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of shareholders' equity
present fairly, in all material respects, the financial position of Biogen,
Inc. and its subsidiaries at December 31, 1993, and 1992, and the results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Boston, Massachusetts
January 20, 1994
<PAGE>
SHAREHOLDER INFORMATION SEC FORM 10-K
CORPORATE HEADQUARTERS A copy of the Company's annual report
to the Securities and Exchange
Biogen, Inc. Commission on Form 10-K is available
14 Cambridge Center without charge upon written request
Cambridge, MA 02142 to the Corporate Communications
Telephone: (617) 252-9200 Department, Biogen, Inc.,
Fax: (617) 252-9617 14 Cambridge Center, Cambridge, MA
02142.
ANNUAL MEETING: TRANSFER AGENT:
Friday, June 3, 1994 at For shareholder questions regarding
10:00 a.m. at Corporate lost certificates, address changes,
Headquarters. All changes of ownership or name in
shareholders are welcome. which the shares are held, direct
inquiries to:
MARKET FOR SECURITIES: State Street Bank and Trust Company
Biogen's securities are P.O. Box 8200
quoted on the NASDAQ Boston, MA 02266-8200
National Market System. Telephone: (800) 426-5523
Common stock symbol: BGEN.
Warrant symbol: BGENW. INDEPENDENT ACCOUNTANTS:
Price Waterhouse
As of February 25, 1994, 160 Federal Street
there were approximately Boston, MA 02110
3,581 holders of record of
the Company's Common Stock. U.S. LEGAL COUNSEL
The Company has not paid any Mintz, Levin, Cohn, Ferris, Glovsky
dividends on its Common Stock and Popeo, P.C.
since its inception, and One Financial Center
does not intend to pay any Boston, MA 02111
dividends in the foreseeable
future. The quarterly high
and low closing sales price
of the Common Stock on the
NASDAQ National Market System
for 1993 and 1992 are as follows:
High Low
FISCAL 1993 The Biogen logo is a registered
First Quarter 47 3/4 24 1/4 trademark of Biogen, Inc.
Second Quarter 39 25 3/4 Hirulog (TM) is a trademark of
Third Quarter 37 1/4 25 3/4 Biogen, Inc.
Fourth Quarter 42 1/4 34 1/2 Intron(R)A is a registered trademark
of Schering-Plough Corporation.
FISCAL 1992
First Quarter 43 3/4 26
Second Quarter 26 1/2 18 1/4
Third Quarter 34 1/2 22 1/4
Fourth Quarter 49 3/4 29 1/4
Exhibit 22
SUBSIDIARIES OF BIOGEN, INC.
State or Other
Jurisdiction of
Name Incorporation
Biogen Securities Corp. Massachusetts
Biogen Realty Corp. Massachusetts
Biogen GmbH Germany
Biogen Limited U.K.
