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LEASE
DATED: AUGUST 4, 2000
MASSACHUSETTS INSTITUTE OF TECHNOLOGY, LESSOR
TRANSKARYOTIC THERAPIES, INC., LESSEE
28 OSBORN STREET, CAMBRIDGE, MASSACHUSETTS
TABLE OF CONTENTS
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1.0 REFERENCE DATA.............................................. 5
2.0 PREMISES; COMMON AREAS...................................... 6
2.1 PREMISES........................................... 6
2.2 COMMON AREAS....................................... 7
2.3 FUTURE IMPROVEMENTS BY LANDLORD.................... 7
3.0 TERM; COMMENCEMENT DATE; EXTENSION OPTIONS.................. 7
3.1 TERM; COMMENCEMENT DATE............................ 7
3.2 EXTENSION OPTIONS.................................. 7
4.0 RENT........................................................ 8
4.1 PAYMENT OF RENT.................................... 8
4.2 DETERMINATION OF FAIR MARKET RENT.................. 9
4.3 ADJUSTMENT TO BASE RENT............................ 10
5.0 PERMITTED USES.............................................. 10
6.0 TAXES; OPERATING EXPENSES; ELECTRICITY...................... 10
6.1 TAXES.............................................. 10
6.2 OPERATING EXPENSES................................. 11
6.3 PAYMENT OF OPERATING EXPENSES...................... 14
6.4 PAYMENT OF TAXES................................... 15
6.6 ABATEMENTS BY LESSOR; ALLOCATIONS.................. 16
7.0 INSURANCE................................................... 16
7.1 COMMERCIAL GENERAL LIABILITY INSURANCE............. 16
7.2 PROPERTY INSURANCE................................. 16
7.3 CERTIFICATE OF INSURANCE........................... 17
</TABLE>
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7.4 LESSOR'S INSURANCE................................. 17
7.5 WAIVER OF SUBROGATION.............................. 17
7.6 WAIVER OF RIGHTS................................... 18
8.0 ASSIGNMENT AND SUBLETTING................................... 18
9.0 PARKING..................................................... 21
10.0 LATE PAYMENT OF RENT........................................ 22
11.0 LESSEE'S COVENANTS.......................................... 22
12.0 CONSTRUCTION................................................ 27
13.0 CASUALTY AND EMINENT DOMAIN................................. 27
14.0 DEFAULTS; REMEDIES.......................................... 29
14.1 DEFAULTS; EVENTS OF DEFAULT........................ 29
14.2 TERMINATION........................................ 30
14.3 SURVIVAL OF COVENANTS.............................. 30
14.7 FURTHER REMEDIES................................... 32
15.0 REAL ESTATE BROKER.......................................... 33
16.0 NOTICES..................................................... 33
17.0 NO WAIVERS.................................................. 34
18.0 MANAGEMENT OF THE BUILDING.................................. 34
19.0 SIGNS....................................................... 34
</TABLE>
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20.0 LESSEE'S RIGHT TO TERMINATE EXISTING LEASE.................. 35
21.0 CONDITION PRECEDENT......................................... 35
22.0 QUIET ENJOYMENT; GROUND LEASES; MORTGAGES................... 35
22.1 QUIET ENJOYMENT.................................... 35
22.2 RIGHTS OF GROUND LESSORS AND MORTGAGEES............ 35
22.3 LEASE SUBORDINATE.................................. 35
23.0 SECURITY DEPOSIT............................................ 36
24.0 NOTICE OF LEASE; ESTOPPEL CERTIFICATES...................... 38
25.0 HOLDING OVER................................................ 38
26.0 LESSOR'S AGREEMENTS REGARDING ENVIRONMENTAL MATTERS......... 38
27.0 FORCE MAJEURE............................................... 38
28.0 ENTIRE AGREEMENT............................................ 39
29.0 APPLICABLE LAW, SEVERABILITY AND CONSTRUCTION............... 39
30.0 SUCCESSORS AND ASSIGNS...................................... 39
31.0 AUTHORITY................................................... 39
</TABLE>
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EXHIBIT A: Plan of the Premises
EXHIBIT B: Description of the Land
EXHIBIT C: Work Letter
EXHIBIT D: Lessor's Services
EXHIBIT E: Lessee's Services
EXHIBIT F: Permitted Floor Load
EXHIBIT G: Schedule of Lessor's Working Drawings Approved by Lessee
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LEASE
Dated: August 4, 2000
THIS LEASE is made as of this 4th day of August, 2000 by and between
MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a Massachusetts educational corporation
with a place of business at 238 Main Street, Cambridge, Massachusetts 02142
("LESSOR"), and TRANSKARYOTIC THERAPIES, INC., a Delaware corporation with a
principal place of business at 195 Albany Street, Cambridge, Massachusetts 02139
("LESSEE").
1.0 REFERENCE DATA. The following terms shall have the definitions set
forth in this Section 1.0:
PREMISES: The entire Building located at 28 Osborn Street,
Cambridge Massachusetts
RENTAL AREA OF
PREMISES: 180,807 square feet of Rental Area shown as Tenant
Area A containing 139,900 square feet and Tenant Area
B containing 40,907 square feet on EXHIBIT A hereto.
As used herein the term "Rental Area" shall mean space
available for rental in the Building.
RENTAL AREA OF
BUILDING: 180,807 square feet of Rental Area as shown on EXHIBIT
A hereto
LAND: The parcel of land on which the Building is located,
as described on EXHIBIT B attached hereto
TERM: A term commencing on the Commencement Date (as defined
in the Work Letter attached as Exhibit C) and
terminating at midnight on the day immediately
preceding the tenth anniversary of the Commencement
Date, with two (2) options to extend for an additional
five (5) Lease Years
ESTIMATED
COMMENCEMENT DATE: The fourth quarter of calendar 2001
BASIC RENT: For each Lease Year as follows:
For the first five years of the Term: $37.00 per
square foot of Rental Area per Lease Year ($6,689,859
per Lease Year)
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For the second five years of the Term: $42.00 per
square foot of Rental Area per Lease Year ($7,593,894
per lease year)
Basic Rent may be pro rated as set forth in Section
4.1 and may be adjusted as set forth in Section 4.3.
EXTENSION TERM: As provided in Section 3.2
LESSEE'S SHARE:
(OPERATING EXPENSES) 100%
LESSEE'S SHARE
(TAXES) 100%
SECURITY DEPOSIT: $7,680,000 as provided in Section 23.0
PERMITTED USE: Office, Laboratory, Research and Development
LESSEE'S
REPRESENTATIVE: Michael Astrue
2.0 PREMISES; COMMON AREAS.
2.1 PREMISES. Lessor hereby LEASES unto Lessee, the Premises
together with the benefit of, and subject to (as the case may
be) all rights, easements, covenants, conditions,
encumbrances, encroachments and restrictions of record as of
the date of this Lease. Lessor shall have the right, without
the necessity of obtaining Lessee's consent thereto or joinder
therein (but subject to the terms of Section 22.3 below), to
grant, permit, or enter into during the term of this Lease
such additional rights, easements, covenants, conditions,
encumbrances, encroachments and restrictions with respect to
the Land as Lessor may deem appropriate, PROVIDED THAT no such
rights, easements, covenants, conditions, encumbrances,
encroachments or restrictions shall materially adversely
affect Lessee's use of the Premises for the Permitted Use. At
any time during which Lessee is not the lessee of the entire
Building, Lessor hereby reserves the right to maintain, use,
repair and replace pipes, ducts, wires, meters and any other
equipment, machinery, apparatus and fixtures located within
the Premises. Lessee, its employees and invitees shall have
access to the Premises at all times; provided that, if Lessor
recaptures a portion of the Premises, such access shall be
subject to Lessor's reasonable security procedures. Lessee
shall be permitted to operate its business in the Premises
outside of the Building hours (as set forth in Paragraph 1 of
EXHIBIT D attached hereto), but if Lessor is managing the
Building, Lessee shall pay to Lessor, as Additional Rent,
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the cost of supplying services to the Premises, as described
on Exhibit D, at times other than such Building hours, such
payment to be due and payable no later than thirty (30) days
after Lessor gives written notice to Lessee of the amount of
such charges.
2.2 COMMON AREAS. Lessor also grants to Lessee, and Lessee's
invitees, the right, in common with others entitled thereto,
to use for the purposes for which they were designed, the
common facilities of the Building, including but not limited
to, all entrances, hallways, elevator foyers, air shafts,
elevator shafts and elevators, stairwells and stairs,
restrooms, passenger elevators, freight elevator, loading
bays, and the "Parking Area" referred to in Section 9.0 below
(collectively, the "COMMON AREAS"). The parties acknowledge
that unless Lessor recaptures a portion of the Premises during
the Term in which event control of the Common Areas will
revert to Lessor, this provision shall apply only to the
Parking Area.
2.3 FUTURE IMPROVEMENTS BY LANDLORD. Lessor has informed Lessee
that Lessor may construct one or more buildings on the Land in
addition to the Building in a manner which will not
unreasonably interfere with Lessee's enjoyment of the Premises
except for the relocation of parking spaces as provided for in
Section 9.0.
3.0 TERM; COMMENCEMENT DATE; EXTENSION OPTIONS.
3.1 TERM; COMMENCEMENT DATE. The initial term of this Lease (the
"INITIAL TERM") shall commence on the "COMMENCEMENT DATE" (as
defined in the Work Letter attached hereto as EXHIBIT C), and
expire on the day immediately preceding the tenth (10th)
anniversary thereof, unless sooner terminated as hereinafter
provided. For purposes of this Lease, the phrase "Term" shall
mean collectively (a) the Initial Term, and (b) if Lessee duly
exercises the "Extension Option," the "Extension Term" (as
these phrases are defined in Section 3.2 below). As used in
this Lease, "LEASE YEAR" means the twelve (12) month period
commencing on the Commencement Date, or a successive twelve
(12) month period included in the Term commencing on an
anniversary of that date, except that if this Lease is
terminated prior to the expiration of the Term, the last Lease
Year shall consist of less than twelve (12) months and shall
end on the effective date of such termination.
3.2 EXTENSION OPTIONS. Provided that both (i) an "EVENT OF
DEFAULT" (as defined in Section 14.1 below) is not outstanding
on the day on which Lessee purports to exercise the Extension
Option or prior to the first day of each Extension Term, and
(ii) the Lessee named herein and any Lessee Affiliates (as
defined in Section 8.0(i)) are actually occupying at least 25%
of the Rental Area of the Building as of each of said dates,
Lessee shall have the option ("EXTENSION OPTION") to extend
the Lease Term of this Lease for two additional periods of
five (5) years each (the "EXTENSION TERM(S)"), unless sooner
terminated as hereinafter provided, subject to all the terms
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of this Lease except for the change in Basic Rent as provided
in Section 4.2 of this Lease. Lessee shall exercise each
Extension Option, if at all, by giving written notice of
exercise to Lessor not earlier than twenty (20) months prior
to, nor later than eighteen (18) months prior to, the last day
of the Initial Lease Term or the first Extension Term as
applicable. If Lessee fails to give such notice to Lessor
within such time, Lessee shall be deemed to have waived the
right to exercise the Extension Option.
4.0 RENT.
4.1 PAYMENT OF RENT. Lessee shall pay Lessor, without offset or
deduction and without previous demand therefor, as items
constituting rent (collectively, "RENT"):
(a) Basic rent ("BASIC RENT") at the following rates, in
equal monthly installments, in advance, commencing on
the Commencement Date, and continuing thereafter on
the first day of each calendar month or portion
thereof during the Term :
(i) For the Initial Term: as stated in Section
1.0 above; and
(ii) for each Lease Year in an Extension Term, an
amount equal to the "Fair Market Rent" (as
defined in Section 4.2 below) of the
Premises as of the first day of the
Extension Term, but in no event shall Basic
Rent during an Extension Term be less than
$42 per square foot of Rental Area.
Basic Rent shall be PRO-RATED for partial months
occurring at the beginning or the end of the Term;
and shall also be PRO-RATED if a partial occupancy
occurs as described in the Work Letter attached
hereto as Exhibit C.
(b) All other costs, charges, or expenses which Lessee in
this Lease agrees to pay, or which Lessor pays or
incurs as the result of a default by Lessee
hereunder, including any penalty or interest which
may be added for nonpayment or late payment thereof
as provided in this Lease (collectively, "ADDITIONAL
RENT"). All recurring payments of Additional Rent,
such as payment on account of "Taxes" and "Operating
Expenses" (as these terms are hereinafter defined),
shall be due and payable on the same day on which
Basic Rent is due. Unless otherwise specifically
provided in this Lease, all non-recurring items
constituting Additional Rent shall be due and payable
within twenty (20) days after demand therefor by
Lessor.
All payments shall be made to Lessor or such agent, and at
such place, as Lessor shall, from time to time, in writing
designate, the following being now so designated:
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Meredith & Grew, Inc.
160 Federal Street
Boston, MA 02110-1701
Attention: John Sullivan
4.2 DETERMINATION OF FAIR MARKET RENT. As used in this Lease,
"Fair Market Rent" means the effective fair market rent for
the Premises in its "as is" condition as of the day with
respect to which such determination is being made, for a term
of five (5) years. Fair Market Rent shall be based upon the
rents generally in effect for similar first-class office,
laboratory and research and development space in similar
buildings in the Cambridge, Massachusetts area in which the
Premises is located, taking into account all facts and
circumstances customarily taken into account by prudent and
commercial reasonable lessors and lessees.
Within twenty (20) days after Lessor receives Lessee's notice
of exercise of the Extension Option, Lessor shall provide to
Lessee Lessor's good faith determination of Fair Market Rent.
If Lessor and Lessee are unable to agree on the Fair Market
Rent within twenty (20) days thereafter, then, Lessee may,
within ten (10) days after the expiration of such twenty (20)
day period, elect either to withdraw its notice of exercise,
in which event its right to extend the Term shall terminate,
or to request that the Fair Market Rent be determined by
appraisal. If Lessee elects the appraisal option, Lessor and
Lessee shall, not later than ten (10) days after Lessor
receives Lessee's notice electing its appraisal right, each
retain a real estate professional with at least ten (10)
years' continuous experience in the business of appraising or
marketing commercial real estate in the Cambridge,
Massachusetts vicinity, who shall, within thirty (30) days of
his or her selection, prepare a written report summarizing his
or her conclusion as to Fair Market Rent. Lessor and Lessee
shall simultaneously exchange such reports; PROVIDED, HOWEVER,
that if one party has not obtained such a report within
forty-five (45) days after receipt of the report of the other
party's appraiser, then the determination set forth in the
other party's report shall be final and binding upon the
parties. If both parties receive reports within such time and
the lesser of the two determinations is within ten (10%)
percent of the higher determination, then the average of these
determinations shall be deemed to be Fair Market Rent. If
these determinations differ by more than ten (10%) percent,
then Lessor and Lessee shall mutually select a person with the
qualifications stated above (the "Final Professional") to
resolve the dispute as to Fair Market Rent. If Lessor and
Lessee cannot agree upon the designation of the Final
Professional within twenty (20) days of the exchange of the
first valuation reports, either party may apply to the
American Arbitration Association, the Greater Boston Real
Estate Board, or any successor thereto for the designation of
a Final Professional. Within ten (10) days of the selection of
the Final Professional, Lessor and Lessee shall each submit to
the Final Professional a copy of their respective real
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estate professional's determination of Fair Market Rent.
The Final Professional shall not perform his or her own
valuation but rather shall, within thirty (30) days after
such submissions, select the submission which is closest to
the determination of Fair Market Rent which the Final
Professional would have made acting alone. The Final
Professional shall give notice of his or her selection to
Lessor and Lessee and such decision shall be final and
binding upon Lessor and Lessee. Each party shall pay the
fees and expenses of its real estate professional and
counsel, if any, in connection with any proceeding under
this paragraph, and the losing party shall pay the fees and
expenses of the Final Professional.
In the event that Fair Market Rent has not been finally
determined in the manner provided above as of the first day of
any Extension Term, then Basic Rent shall be due and payable
at the rate stated by Lessor as its good faith estimate of
Fair Market Rent, and Lessor and Lessee shall make such
adjustment (and payment or credit as necessary) within thirty
(30) days after Fair Market Rent is finally determined.
4.3 ADJUSTMENT TO BASE RENT. If Lessee exercises its option to
defer improving up to 20,000 square feet of Rental Area of the
Premises as permitted in the Work Letter attached hereto as
Exhibit C, Basic Rent shall be reduced by $3.00 per square
foot of unimproved area for a period of up to two years after
which Lessee will pay the full Basic Rent as set forth in
Section 1.0 without reduction. Lessee will pay Additional Rent
throughout the Term without reduction. In addition, if when
Lessor's work has been completed, the Building has not been
constructed in accordance with Lessor's Working Drawings (as
defined in the Work Letter) so that the Rental Area of the
Building is not as shown on Lessors' Working Drawings, Basic
Rent shall be adjusted based on the rates per square foot set
forth in Section 1.0.
5.0 PERMITTED USES. The Premises shall be occupied continuously be Lessee
and used for the Permitted Use only and for no other use.
6.0 TAXES; OPERATING EXPENSES; ELECTRICITY
6.1 TAXES. Lessee shall pay as Additional Rent, "Lessee's Share
(Taxes)" (as defined below) of the real estate taxes, special or
general assessments, water rents, rates and charges, sewer rents
and other impositions and charges imposed by governmental
authorities of every kind and nature whatsoever, extraordinary
as well as ordinary (provided that in no event shall Taxes
include any linkage or other development charges or
contributions paid to any government agency in connection with
rehabilitation or construction of any improvements on the Land),
and each and every installment thereof which shall or may during
the Term be charged, levied, laid, assessed, imposed, become due
and payable or become liens upon or for or with respect to the
Land or the Building or any appurtenances or equipment owned by
Lessor thereon or therein, or any part thereof, or on this
Lease, and any tax
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based on a percentage fraction or capitalized value of the
Rent (whether in lieu of or in addition to the taxes
hereinbefore described) (collectively, "TAXES"). Taxes shall
not include inheritance, estate, excise, succession,
transfer, gift, franchise, income, gross receipt, or profit
taxes except to the extent such are in lieu of or in
substitution for Taxes as now imposed on the Building, the
Land, the Premises or this Lease. "LESSEE'S SHARE (TAXES)"
shall be computed on the basis of a fraction whose numerator
is the Rental Area of the Premises and whose denominator is
the Rental Area (the "TAXABLE SQUARE FOOTAGE") of the entire
Building (including the Premises) recognized by the City of
Cambridge as being used for purposes which are not exempt
from real estate taxation as of the date on which the
assessment is made for the tax year in question. As of the
date of this Lease, Lessee's Share (Taxes) is as set forth in
Section 1.0 above. Lessee acknowledges that Lessee's Share
(Taxes) may vary from year to year depending upon whether the
use of portions of the Building or the Land changes from
exempt to non-exempt uses or vice-versa. If Lessor elects to
construct a new building on the Land as mentioned in Section
2.3, thereafter Taxes assessed against the Land and the
buildings thereon shall be equitably apportioned so that
Lessee is not made responsible for any increase in Taxes
attributable to Lessor's further development of the Land.
6.2 OPERATING EXPENSES. Lessee shall pay as Additional Rent Lessee's
Share of the "OPERATING EXPENSES" (as defined below) for the
Land and Building above the Operating Expense Base ("LESSEE'S
SHARE (OPERATING EXPENSES)"). "OPERATING EXPENSES" shall
include, without limitation, all commercially reasonable
expenses, costs, and disbursements of every kind and nature
which Lessor shall pay or become obligated to pay in connection
with the ownership, operation and maintenance of the Building or
the Land, including all facilities in operation on the
Commencement Date and such additional facilities in subsequent
years as may be determined by Lessor to be necessary or
beneficial for the operation of the Building or the Land or the
provision of services to lessees, including, but not limited to:
(a) all salaries, wages, fringe benefits, payroll taxes and
workmen's compensation insurance premiums related
thereto of and for employees engaged in the operation
of the Building and the Land (or a reasonable
allocation thereof for personnel who work in multiple
buildings);
(b) painting, repairs, maintenance and cleaning of all
Common Areas;
(c) utilities (including, without limitation, electricity,
water, sewer, gas and steam) which are not separately
chargeable to other lessees, including, without
limitation, lighting of exterior areas and the parking
area;
(d) maintenance and repair of the Building heating and
cooling systems, the
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plumbing systems, the fire detection and suppression
systems, the electrical system and the elevators;
(e) all maintenance, janitorial, and service agreements;
(f) all insurance, including the cost of casualty and
liability insurance applicable to the parking area, the
Land, the Building and Lessor's personal property used
in connection therewith;
(g) maintenance of landscaped areas and paved areas, and
snow removal;
(h) maintenance of the Building security system;
(i) commercially reasonable management fees; provided that
so long as Lessee assumes responsibility for management
of the Building as permitted by Section 18.1, the
management fee for each Lease Year shall not exceed
0.5% of Basic Rent and Additional Rent for such Lease
Year;
(j) if Lessee is not the lessee of the entire Building, the
fair market value of office space for the manager of
the Building;
(k) capital items which are for the purpose of reducing
Operating Expenses or upgrading services or which are
at any time required by a governmental authority or the
provisions of any insurance policy applicable to the
Premises, the Building or the Land, together with an
interest factor equal to ten percent (10%) per annum
amortized over the reasonable life of the capital items
on a straight line basis with the reasonable life being
determined by Lessor in accordance with generally
accepted accounting principles;
(l) reasonable expenses incurred in pursuing an application
for an abatement of Taxes, to the extent not deducted
from the abatement, if any, received;
(m) legal (excluding legal fees with respect to lease
negotiations or disputes with other lessees,
permitting, construction or other legal costs related
to the rehabilitation or construction of improvements
on the Land), accounting and other professional fees
and disbursements (excluding leasing commissions); and
(n) services to be provided by Lessor as set forth on
EXHIBIT "D" attached if Lessee does not elect to self
manage the Building and, if Lessee does so elect, to
the extent provided by Lessor.
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Operating Expenses shall not include the following:
(A) amounts paid as interest on, or amortization of, any
mortgage on the Land or the Building;
(B) the cost of providing services to other lessees of
the Building which are not also provided to Lessee;
(C) all expenses incurred by Lessor for Lessor's Work as
described in the Work Letter;
(D) salaries, wages, benefits and other expenses of
executive personnel of Lessor, or employees of Lessor
EXCEPT to the extent provided for in clause (a)
above, or any of Lessor's general administrative
expenses not specifically included above;
(E) capital expenditures which are not specifically
provided for above;
(F) utilities or services used or consumed in the
premises of other lessees of the Building but not in
the Premises;
(G) depreciation of the Building;
(H) repairs and replacements arising out of an exercise of
the power of eminent domain;
(I) costs or expenses resulting from Lessor's breach or
violation of a law, lease or other obligation
relating to the Land or the Building, including
fines, penalties and attorneys' fees;
(J) environmental testing, remediation or compliance
except (i) to the extent provided in Section 11.0(m)
below, or (ii) to the extent resulting from Lessee's
breach of Section 11.0(m) below, or (iii) relating to
indoor air quality; and
(K) any item for which, and to the extent that, Lessor is
compensated through the proceeds of insurance or
other payment by a third party.
As of the date of this Lease, Lessee's Share Operating Expenses
is as set forth in Paragraph 1.0.
Lessor further agrees that since one of the purposes of
Operating Expenses is to allow Lessor to require Lessee to pay
for the costs attributable to its Premises,
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Lessor agrees that (i) Lessor will not collect or be
entitled to collect Operating Expenses from all of its
lessees in an amount which is in excess of one hundred
percent (100%) of the Operating Expenses actually paid by
Lessor in connection with the operation of the Building,
and (ii) Lessor shall make no profit from Lessor's
collection of Operating Expenses. Lessor shall keep
complete books and records regarding Operating Expenses and
Taxes ("Charges"). All records shall be retained for at
least three (3) years. Lessee shall have the right to audit
such records at Lessee's expense at any time on reasonable
written notice to Lessor. If such audit reveals that
Lessee's pro rata share of any Charges has been overstated,
the Lessor shall immediately refund the overpayment.
In the event that the average occupancy rate for the Building is
less than ninety-five (95%) percent for any fiscal year, then
for purposes of calculating Operating Expenses, the Operating
Expenses for such fiscal year shall be increased by the
additional costs and expenses that Lessor reasonably estimates
would have been incurred if the average occupancy rate had been
ninety-five (95%) percent for such fiscal year. It is not the
intent of this provision to permit Lessor to charge Lessee for
any Operating Expenses attributable to unoccupied space, or to
seek reimbursement from Lessee for costs Lessor never incurred.
Rather, the intent of this provision is to allow Lessor to
recover only those increases in Operating Expenses properly
attributable to occupied space in the Building and this
provision is designed to calculate the actual cost of providing
a variable operating expense service to the portions of the
Building receiving such service. This "GROSS-UP" treatment shall
be applied only with respect to variable Operating Expenses
arising from services provided to Common Areas or to space in
the Building being occupied by lessees (which services are not
provided to vacant space or may be provided only to some
lessees) in order to allocate equitably such variable Operating
Expenses to the lessees receiving the benefits thereof.
Lessor acknowledges that so long as Lessee is the lessee of the
entire Building and is managing the Building, Lessee shall only
pay Additional Rent with respect to the foregoing items to the
extent incurred by Lessor which are expected to be limited to:
(1) the 0.5% management fee referred to in (i) above, (2)
insurance expense under Section 7.4 (to the extent MIT does not
self insure), (3) expenses to obtain an abatement under Section
6.6 and (4) snow removal under Section 18.1.
6.3 PAYMENT OF OPERATING EXPENSES. Within a reasonable time after
the Commencement Date, and thereafter within a reasonable time
after the end of each fiscal year (or portion thereof) included
in the Term, Lessor shall deliver to Lessee (i) a statement of
actual Operating Expenses for the fiscal year just ended, and
(ii) a budget of Operating Expenses for the then-current fiscal
year based on the actual Operating Expenses for the preceding
year and projected increases or decreases reasonably anticipated
by Lessor together with documentation in reasonable detail
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which evidence such Operating Expenses. Commencing on the
first day of the first calendar month after the delivery to
Lessee of such budget, Lessee shall pay to Lessor, as
Additional Rent, on account of its share of anticipated
Operating Expenses for the then-current year 1/12th of the
projected Operating Expenses. Upon delivery to Lessee of the
statement of actual Operating Expenses for the preceding
fiscal year, Lessor shall adjust Lessee's account
accordingly. If the total amount paid by Lessee on account of
the preceding fiscal year is less than the amount due
hereunder, Lessee shall pay the balance due within twenty
(20) days after delivery by Lessor of such statement. If the
total amount paid by Lessee on account of the preceding
fiscal year exceeds the amount due hereunder, such excess
shall be credited by Lessor against the monthly installments
of Additional Rent next falling due or refunded to Lessee
upon the expiration or termination of this Lease (unless such
expiration or termination is the result of an Event of
Default). Lessor reserves the right to revise the budget
during any fiscal year to cause it to more accurately reflect
the actual Operating Expenses being paid or incurred by
Lessor, and upon any such revision the parties shall make
adjustments in the same time and manner as hereinafter
provided for fiscal year-end adjustments. Lessor's current
fiscal year is July 1 - June 30, but Lessor reserves the
right to change the fiscal year at any time during the Term.
6.4. PAYMENT OF TAXES. Lessee shall pay to Lessor as Additional Rent,
within ten (10) days after receipt of each semi-annual (or
quarterly if applicable) tax bill for the Land and Building,
Lessee's Share (Taxes) of the amount of Taxes shown on the tax
bill in accordance with Section 6.1.
6.5 ABATEMENT OF TAXES. Lessee shall be privileged to seek a
reduction in the valuation of the Building and the Land
assessed for tax purposes and to contest in good faith by
appropriate proceedings, at Lessee's expense, the amount or
validity in whole or in part of any Imposition, provided that:
(a) Lessee shall provide Lessor with security satisfactory to
Lessor to assure payment of contested items (which at
Lessor's discretion may mean making deposits under Section
6.3 which would enable Lessor to pay the contested items
in full);
(b) Lessee shall immediately pay to Lessor any additional
amounts needed to enable Lessor to pay such contested item
or items if the protection of the Premises or of Lessor's
interest therein from any lien or claim shall, in the
reasonable judgment of Lessor, require such payment;
(c) Lessor shall not be required to join in any proceedings
referred to herein unless the provisions of any law, rule
or regulation at the time in effect shall require that
such proceedings be brought by or in the name of Lessor.
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Lessor shall not be subjected to any liability for the
payment of any costs or expenses in connection with any
such proceedings, and Lessee shall indemnify and save
harmless Lessor from any such costs and expenses.
Subject to the foregoing, and without cost to it, Lessor
shall execute and deliver any appropriate papers which
may be necessary to permit Lessee so to contest any valuation
or Taxes and shall further cooperate with Lessee in such
contest, as Lessee may from time to time reasonably request.
6.6. ABATEMENTS BY LESSOR; ALLOCATIONS. Lessor shall have a right
to seek a reduction in the valuation of the Land and Building
assessed for tax purposes and to prosecute any action or
proceeding theretofore commenced by Lessee, if such assessed
valuation or valuations shall in whole or in part relate and
pertain to any period of time during which Lessee is not
responsible for the payment of all Taxes hereunder. Lessee
shall be entitled to any refund of any Taxes, including any
penalties or interest thereon received by Lessor which have
been paid by Lessee, or which have been paid by Lessor but
previously reimbursed in full by Lessee.
7.0 INSURANCE
7.1 COMMERCIAL GENERAL LIABILITY INSURANCE. Lessee shall take out
and maintain in force throughout the Term (and for so long
thereafter as Lessee remains in occupancy) commercial general
liability insurance naming Lessor and persons claiming by,
through or under them, if any, as additional insureds against
all claims and demands for any injury to persons or property
which may be claimed to have occurred on the Premises, the
Building, the Land or on the ways adjoining the Land, in an
amount which at the beginning of the Term shall not be less than
$1,000,000 for personal injury or death of one person,
$5,000,000 in the aggregate for personal injury or death or more
than one person in a single occurrence, and $1,000,000 for
property damage, or such higher amounts as Lessor thereafter
determines to be consistent with sound commercial practice in
Cambridge, Massachusetts. Such policy shall also include
contractual liability coverage covering Lessee's liability
assumed under this Lease.
7.2 PROPERTY INSURANCE. Lessee shall take out and maintain
throughout the Term a policy of fire, vandalism, malicious
mischief, extended coverage and so-called all risk coverage
insurance insuring (i) all items or components of "LESSEE'S
WORK" (as defined in the Work Letter attached hereto as EXHIBIT
C) or "ALTERATIONS" (as defined in paragraph (f) of Section 11.0
below) which Lessee is by this Lease either entitled to or
required to remove upon the expiration or earlier termination of
this Lease, and (ii) "LESSEE'S PROPERTY" (as defined in
paragraph (i) of Section 11.0 below) for the benefit of Lessor
and Lessee, as their respective interests may appear, in an
amount equal to the replacement value thereof. Lessor shall be
named
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as a certificate holder on such policy.
7.3 CERTIFICATE OF INSURANCE. The insurance required by Sections 7.1
and 7.2 above shall be placed with insurers authorized to do
business in Massachusetts, with a rating of not less than
"A-VIII" in the current BEST'S INSURANCE REPORTS, and otherwise
reasonably satisfactory to Lessor. Such insurance shall provide
that it shall not be amended or canceled with respect to the
additional insureds or certificate holders without thirty (30)
days' prior written notice to each of them. Lessee shall furnish
to Lessor certificates of insurance for all insurance required
to be maintained by Lessee under this Lease, together with
evidence satisfactory to Lessor of the payment of all premiums
for such policies. Lessee, at Lessor's request, shall also
deliver such certificates and evidence of payment of premiums to
the holder of any mortgage affecting the Land and Building. If
at any time Massachusetts Institute of Technology ("MIT") is no
longer the Lessor, Lessor shall comply with this Section and
provide certificates to Lessee with respect to Lessor's
Insurance under Section 7.4.
7.4 LESSOR'S INSURANCE. Lessor shall take out and maintain in
force throughout the Term, in a company or companies
authorized to do business in Massachusetts, property
insurance on the Building (exclusive of "LESSEE'S PROPERTY"
(as defined in paragraph (i) of Section 11.0 below) and all
items or components of "LESSEE'S WORK" (as defined in the
Work Letter attached hereto as EXHIBIT C) or "ALTERATIONS"
(as defined in paragraph (f) of Section 11.0 below) which
Lessee is by this Lease either entitled to or required to
remove upon the expiration or earlier termination of this
Lease, as to which Lessee is required to maintain insurance
pursuant to Section 7.2 above) in an amount equal to the full
replacement value of the Building (exclusive of foundations
and those items set forth in the preceding parenthetical in
this sentence), covering all risks of direct physical loss or
damage and so-called "EXTENDED COVERAGE" risks. This
insurance may be maintained in the form of a blanket policy
covering the Building as well as other properties owned by
Lessor. Notwithstanding the foregoing provisions of this
Section 7.4, Lessor shall have the right, at any time during
the Term, to self-insure all or any portion of the coverages
required by this Section for so long as the Lessor is MIT.
7.5 WAIVER OF SUBROGATION. To the extent to which a waiver of
subrogation clause is available, Lessor and Lessee shall obtain
a provision in all insurance policies carried by such party
covering the Premises, including but not limited to contents,
fire and casualty insurance, expressly waiving any right on the
part of the insurer against the other party. If extra cost is
chargeable for such provision, then Lessee shall pay such extra
charge. Notwithstanding the foregoing, with respect to such
portion of the Term during which Lessor elects to self-insure
under Section 7.4 above, then for purposes of this Section 7.5,
Lessor shall be deemed to have maintained fire and all-risk
coverage in an amount equal to one hundred (100%) percent of the
replacement
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value of the Building (subject to the exceptions and
exclusions set forth in Section 7.4 above) with a waiver of
subrogation clause contained therein.
7.6. WAIVER OF RIGHTS. All claims, causes of action and rights of
recovery for any damage to or destruction of persons,
property or business which shall occur on or about the
Premises, the Building or the Land, which result from any of
the perils insured under any and all policies of insurance
maintained by Lessor or Lessee, are waived by each party as
against the other party, and the officers, directors,
employees, contractors, servants and agents thereof,
regardless of cause, including the negligence of the other
party and its respective officers, directors, employees,
contractors, servants and agents, but only to the extent of
recovery, if any, under such policy or policies of insurance;
PROVIDED, HOWEVER, that (i) this waiver shall be null and
void to the extent that any such insurance shall be
invalidated by reason of this waiver, and (ii) with respect
to such portion of the Term during which Lessor elects to
self-insure under Section 7.4 above, then for purposes of
this Section 7.6, Lessor shall be deemed to have maintained
fire and all-risk coverage in an amount equal to the full
insurable value of the Building.
8.0 ASSIGNMENT AND SUBLETTING
(a) Except as set forth in paragraph (i) below, Lessee shall not
mortgage, pledge, hypothecate, grant a security interest in, or
otherwise encumber this Lease or any sublease hereinafter
entered into by Lessee, or assign this Lease, or sublease the
Premises or any portion thereof (the term "SUBLEASE" shall be
deemed to include any arrangement pursuant to which a third
party is permitted by Lessee to occupy all or any portion of the
Premises) without obtaining, on each occasion, the prior written
consent of Lessor, which consent shall not be unreasonably
withheld or delayed; provided that Lessor may withhold its
consent in its entire discretion if, as the result of such
assignment or sublease, Lessee would no longer occupy fifty-one
percent (51%) of the Rental Area in Tenant Area A.
(b) If Lessee wishes to assign this Lease or sublease all or any
portion of the Premises, Lessee shall so notify Lessor in
writing and request Lessor's consent thereto. Such notice shall
include (i) the name of the proposed assignee or sublessee, (ii)
a general description of the types of business conducted by the
proposed assignee or sublessee and a reasonably detailed
description of the business operations proposed to be conducted
in the Premises by such person or entity, (iii) such financial
information concerning the proposed assignee or sublessee as
Lessor may reasonably require, and (iv) all terms and provisions
upon which such assignment or sublease is proposed to be made,
including a copy of the assignment or sublease agreement which
Lessee proposes to execute. Lessor shall have fifteen (15)
business days from the day on which it receives Lessee's notice
and such required information to give notice to Lessee that
either (i) Lessor consents to such
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assignment or sublease, or (ii) Lessor withholds its consent
to such assignment or sublease (together with a statement of
reasons for withholding of consent), or (iii) where
applicable, Lessor is exercising its right of recapture
pursuant to paragraph (e) below.
(c) If Lessor consents to an assignment or sublease: (i) Lessee
shall promptly deliver to Lessor a fully executed copy of said
assignment or sublease, which shall be in the form previously
submitted to Lessor for review; (ii) after any such assignment
or sublease, Lessee shall remain primarily liable to Lessor
hereunder (which liability shall be joint and several with the
assignee or sublessee); and (iii) if the aggregate rent and
other amounts payable to Lessee under or in connection with a
sublease, after deduction of the costs reasonably incurred by
Lessee in entering into such sublease (including, without
limitation, reasonable attorneys' fees and expenses and
brokerage commissions amortized on a straight line basis over
the term of the sublease and alteration costs amortized on a
straight-line basis over a term of ten (10) years) exceeds the
Rent payable hereunder with respect to the portion of the
Premises subject to such sublease, Lessee shall pay to Lessor,
as Additional Rent, one-half (1/2) of such excess immediately
upon receipt thereof by Lessee. In the event Lessee shall assign
its rights under this Lease, Lessee shall pay to Lessor as
Additional Rent, one half (1/2) of any net profit realized by
Lessee as the result of such assignment after deduction of the
costs reasonably incurred by Lessee in entering into such
assignment (including, without limitation, reasonable attorneys'
fees and expenses and brokerage commissions amortized on a
straight line basis over the remaining term of the Lease and
alteration costs amortized on a straight-line basis over a term
of ten (10) years). Lessee's obligation to pay Additional Rent
under this paragraph (c) shall not apply with respect to any
sublease of space in Tenant Area B during the first four (4)
years of the Term.
(d) If Lessor withholds its consent to such assignment or sublease
in accordance with its rights under this Lease, Lessee shall not
enter into the proposed assignment or sublease with such person
or entity.
(e) If Lessor elects, it shall have the right to consider Lessee's
request for Lessor's consent to any assignment of the Lease, or
a request for Lessor's consent to a sublease which (i) has a
proposed term (including extension options) of one year or more,
and (ii) together with any existing subleases would cause fifty
(50%) percent of the Rental Area of the Premises or more to be
occupied by lessees other than the Lessee and any Lessee
Affiliates (as defined in paragraph (i) below), as an offer to
Lessor to release from this Lease the portion of the Premises
which is proposed to be the subject of such sublease as well as
all other space occupied by tenants other than the Lessee (but
subject to such prior sublease agreements) or, in the case of a
proposed assignment of this Lease, the entire Premises for the
remainder of the term of this Lease. If Lessor accepts such
offer, then (i) in the case of a proposed
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sublease, this Lease shall be deemed to be amended as of the
proposed effective date of such sublease so as to delete from
the Premises all space proposed to be or presently occupied
by lessees other than the Lessee (with a commensurate
adjustment in Rent and Lessee's Share) for the proposed term
of sublease, or (ii) in the case of a proposed assignment,
this Lease shall terminate as of the proposed effective date
of such assignment as if such date was the last day of the
Term. Notwithstanding the foregoing, if Lessor elects to
recapture, Lessee shall have the option to rescind its
proposal to assign or sublet this Lease, such option to be
exercised within fifteen (15) days after its receipt of
Lessor's notice of recapture.
(f) Regardless of whether Lessor grants such consent, Lessee shall
reimburse Lessor on demand, as Additional Rent, for all
out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees) reasonably incurred by Lessor in
responding to a request for such consent.
(g) Lessee shall not be entitled to enter into any assignment or
sublease, or to request Lessor's consent thereto, during the
continuance of an Event of Default hereunder by Lessee.
(h) Any assignment or sublease entered into pursuant to this Section
8.0 shall be subject to all of the terms and provisions of this
Lease, including without limitation this Section 8.0. If Lessee
enters into any such assignment or sublease, Lessor may, at any
time and from time to time after the occurrence of an Event of
Default hereunder, collect rent from such assignee or sublessee,
and apply the net amount collected against Lessee's obligations
hereunder, but no such assignment or sublease or collection
shall be deemed an acceptance by Lessor of such assignee or
sublessee as a lessee hereunder or as a release of the original
named Lessee hereunder.
(i) In the event that Lessee desires to assign this Lease or to
sublease the Premises (or any portion thereof) to any
corporation, partnership, association or other business
organization directly or indirectly controlling or controlled by
Lessee or under common control with Lessee, or to any successor
by merger, consolidation or purchase of all or substantially all
of the assets of Lessee (a "Lessee Affiliate"), Lessee shall
give at least fifteen (15) business days' prior written notice
thereof to Lessor (unless Lessee is prohibited by applicable
laws, codes, rules or regulations, or by the terms of the
operative merger agreement or purchase and sale agreement from
providing notice to Lessor at such time, in which event such
notice shall be provided to Lessor as soon as Lessee is no
longer subject to such prohibition). No consent of Lessor shall
be required for any such assignment or sublease. Any assignee or
sublessee which claims an interest in this Lease pursuant to a
transfer of the type described in this paragraph (i) shall be
bound by all of the terms and conditions of this Lease. For the
purpose of this Lease, the sale of Lessee's capital stock
through any public exchange shall not be deemed an assignment or
sublease of
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the Lease or of the Premises.
(j) Notwithstanding anything contained in this Lease, Lessee shall
not, either voluntarily or by operation of law, make any
transfer of this Lease or the Premises (or any portion thereof)
which results in Lessee (or anyone claiming by, through or under
Lessee) collecting in connection with the Premises any rental or
other charge based on the net income or on the profits of any
person so as to render any part of the Rent due hereunder
"UNRELATED BUSINESS TAXABLE INCOME" of Lessor as described in
Section 512 of the Internal Revenue Code of 1986, as amended,
and any such transfer shall be void AB INITIO.
9.0 PARKING. Lessee shall have the right to lease in the parking area on
the Land (the "PARKING AREA") up to one and one-half (1 1/2) spaces per
1,000 square feet of Rental Area of Premises (the "ON-SITE PARKING
SPACES") by giving written notice to Lessor of the number of parking
spaces desired by Lessee not later than the Commencement Date.
Availability of the foregoing parking spaces is subject to reduction if
mandated by zoning and parking ordinances and regulations of the City
of Cambridge; provided that Lessor shall use all reasonable efforts to
maximize parking on the Land.
Lessee shall pay for each parking space leased hereunder, as Additional
Rent, in advance on the first calendar day of each month, (i) $160 per
month for the first Lease Year, and (ii) thereafter, an amount equal to
the Fair Market Rent of such parking spaces, as determined annually.
Fair Market Rent shall be determined in the manner provided in Section
4.2 above except that, if Lessor and Lessee are unable to agree on Fair
Market Rent, it shall be determined by one real estate professional
(rather than by two or three as provided in Section 4.2) who shall have
the qualifications stated in said Section and shall be mutually
acceptable to Lessor and Lessee.
Lessee agrees to comply with the following City of Cambridge
Transportation Demand Management practices if made applicable to the
Land: provision of MBTA passes for its employees and payment to Lessor
of an equitable share of the cost of providing shared shuttle services
and bicycle storage facilities for the Building; provided that such
compliance shall not result in a loss of parking spaces by Lessee or
adversely affect its use of such spaces.
If Lessor elects to construct one or more new buildings on the Parking
Area, Lessor shall have the right during the construction of the new
building to provide alternate parking spaces to Lessee which are not
located on the Land but are located within 1,000 feet of the Land in
satisfaction of its obligations under this Section 9.0. Upon completion
of such construction, Lessee shall again have the right to lease the On
Site Parking Spaces on the Land which may be located in the Parking
Area or may be located in a parking garage. The Additional Rent due for
parking spaces provided under this subparagraph shall be Fair Market
Rent, determined as set forth above in this Section 9.0, taking into
account the nature and location
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of the spaces. This subparagraph shall not affect the number of
spaces which Lessee is entitled to lease under this Section 9.0.
Lessor agrees that it will not relocate spaces off of the Land more
than twice during the Term and that the aggregate duration of any
such periods will not exceed two (2) years for 50% of the spaces to
which Lessee is entitled nor three (3) years for all of such spaces.
If Lessor breaches its agreement set forth in the preceding
sentence, Lessee shall not be required to pay parking fees for the
off site parking spaces which are in excess of these limits. During
the construction of any additional improvements on the Land, Lessor
shall take all reasonable measures in order to minimize disturbance
of Lessee's peaceful occupancy of the Building including, without
limitation, any disturbance thereof by construction noise, dust or
vibration so that Lessee's occupancy shall not be materially
adversely affected.
10.0 LATE PAYMENT OF RENT. Lessee agrees that in the event that any payment
of Basic Rent or Additional Rent shall remain unpaid at the close of
business on the tenth business day after the same is due and payable
hereunder (without reliance on any applicable grace period), there shall
become due to Lessor from Lessee, as Additional Rent, as compensation
for Lessor's extra administrative costs in investigating the
circumstances of late Rent, a late charge of two (2%) percent of the
amount overdue per calendar month (or portion thereof) during which such
amount remains outstanding. The assessment or collection of such a
charge shall not be deemed to be a waiver by Lessor of any default by
Lessee arising out of such failure to pay Rent when due. The foregoing
charge shall not be imposed with respect to Operating Expense charges
under dispute between Lessor and Lessee where Lessee has a reasonable
basis for its claim.
11.0 LESSEE'S COVENANTS. Lessee covenants, at its sole cost and expense,
during the Term and such further time as Lessee occupies any part of
the Premises:
(a) to pay when due the Basic Rent and all Additional Rent, and,
for so long as Lessee is the lessee of the entire Building or
if electricity and other utilities are separately metered at
any time during the Term, all charges for electricity and
other utilities;
(b) damage by fire or casualty and reasonable wear and tear
only excepted, to keep the Premises (including window and
entry glass) in as good order, repair and condition as the
same are in at the commencement of the Term, or may be put
in thereafter, Lessee acknowledging that as of the date of
this Lease the Premises are in good and satisfactory order,
repair and condition;
(c) not to injure, overload or deface the Premises or the
Building, nor to suffer or commit any waste therein, nor to
place a load upon any floor which exceeds the floor load
which the floor was designed to carry as disclosed on
Exhibit F (which may be subject to change from time to
time), nor to connect any equipment or apparatus to any
Building system (e.g., electrical, plumbing, mechanical)
which exceeds the capacity of such system, nor to permit on
the Premises any auction
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sale or any nuisance or the emission therefrom of any
objectionable vibration, noise, or odor, nor to permit the
use of the Premises for any purpose other than the
Permitted Use, nor any use thereof which is improper,
offensive, or contrary to any laws, ordinances, codes,
rules and regulations, or the provisions of any license,
permit or other governmental consent required for or
applicable now or at any time during the Term to the Land,
the Building, the Premises or Lessee's use thereof
(collectively, "LEGAL REQUIREMENTS"), or which is liable to
invalidate or increase the premiums for any insurance on
the Building or its contents, or liable to render necessary
any alterations or additions to the Building;
(d) not to obstruct in any manner any portion of the Building not
leased, or the sidewalks or approaches to the Building, or the
Parking Area, or any hallways or Common Areas, and to conform
to all reasonable rules now or hereafter made by Lessor for
the care and use of the Building, its facilities and
approaches;
(e) to comply with all Legal Requirements and all recommendations
of Lessor's fire insurance rating organization now or
hereafter in effect, to keep the Premises equipped with all
safety appliances, and to procure (and maintain in full force
and effect) all licenses and permits required by any Legal
Requirement or by the provisions of any applicable insurance
policy because of the use made of the Premises by Lessee
without hereby intending to vary the Permitted Use), and, if
requested by Lessor, to make all repairs, alterations,
replacements or additions so required in and to the Premises;
(f) not, without on each occasion obtaining the prior written
consent of Lessor, which consent will not be unreasonably
withheld or delayed, to make any alterations, renovations,
improvements and/or additions to the Premises (collectively,
"Alterations") except (i) those made pursuant to the Work
Letter attached hereto as EXHIBIT C, (ii) nonstructural
Alterations which, in the aggregate, cost less than $50,000
and do not affect the exterior of the Building, or (iii)
cosmetic items such as painting or carpet replacement
regardless of cost. Lessee shall not permit the making of
any holes in any part of the Building or the painting or
placing of any signs, awnings, or the like, visible from
outside of the Premises. Prior to commencing any
Alterations, Lessee shall: secure all necessary licenses,
permits and other governmental consents and approvals;
obtain the written approval of Lessor as to the plans and
specifications for such work; obtain the written approval of
Lessor as to the general contractor (or as to each trade
contractor if there is no general contractor); cause each
contractor and subcontractor to carry workmen's
compensation insurance in statutory amounts covering all of
the contractor's and subcontractor's employees; and cause
each general contractor (or each trade contractor if there
is no general contractor) and subcontractor to carry
comprehensive public liability insurance in amounts
reasonably satisfactory to Lessor (such insurance to be
written by companies reasonably satisfactory to Lessor
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and insuring Lessee and Lessor as well as the contractors
and subcontractors). All Alterations (other than Lessee's
removable personal property and trade fixtures) and all
"Lessee's Work" (as defined in the Work Letter) shall
remain part of the Premises and shall not be removed upon
the expiration or earlier termination of the Term EXCEPT
for those items which Lessor designates for removal in a
notice given to Lessee at the time that Lessee requests
Lessor's approval of such Alteration and those items
designated for removal under the Work Letter. Lessee shall
pay promptly when due the entire cost of such work. Lessee
shall not cause or permit any liens for labor or materials
performed or furnished in connection therewith to attach to
the Land or the Building, and shall discharge or bond any
such liens which may be filed or recorded against the
Premises within fifteen (15) days after the filing or
recording thereof. All such work shall be performed in a
good and workmanlike manner and in compliance with all
Legal Requirements and the provisions of all applicable
insurance policies. Promptly after the completion of any
Alterations, Lessee shall provide an as-built plan thereof
to Lessor. Lessee shall indemnify and hold Lessor harmless
from and against any and all suits, demands, causes of
action, claims, losses, debts, liabilities, damages,
penalties or judgments, including, without limitation,
reasonable attorneys' fees, arising from injury to any
person or property occasioned by or growing out of such
work, which indemnity shall survive the expiration or
termination of this Lease;
(g) to save Lessor harmless and indemnified from any loss, cost
and expense (including, without limitation, reasonable
attorneys' fees) arising out of or relating to (i) a claim
of injury to any person or damage to any property while on
the Premises, if not due to the negligence or willful
misconduct of Lessor or its officers, agents, employees,
servants or contractors, or the breach of Lessor's
obligations under this Lease; or to (ii) a claim of injury
to any person or damage to any property anywhere alleged to
be occasioned by any omission, neglect or default of Lessee
or of anyone claiming by, through, or under Lessee, or any
officer, agent, employee, servant, contractor or invitee of
any of the foregoing. Lessor agrees to indemnify and hold
harmless Lessee from and against all loss, cost and expense
(including, without limitation, reasonable attorneys' fees)
arising out of or relating to a claim for personal injury or
property damage resulting from the negligence or willful
misconduct of Lessor or its officers, agents, employees,
servants or contractors, or from the breach of Lessor's
obligations or representations under this Lease. The
provisions of this clause (g) shall survive the expiration
or termination of this Lease;
(h) to permit Lessor and Lessor's agents to examine the Premises
at reasonable times, subject to Lessee's reasonable security
regulations (provided 24 hours' notice is given to Lessee,
except in case of emergency), and if, at any time (subject
to the foregoing notice requirement) when Lessee is not the
lessee of the entire Building, Lessor shall so elect
(without hereby imposing any obligation on Lessor to do so),
to permit Lessor to make any repairs or additions Lessor may
deem necessary, provided that
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the same do not materially adversely affect Lessee's use of
the Premises for the Permitted Use; and at Lessee's expense
to remove any Alterations, signs, awnings, aerials,
flagpoles or the like not consented to in writing; and to
permit Lessor to show the Premises to prospective
purchasers and lessees and to keep affixed to any suitable
part of the Premises, during the nine (9) months preceding
the expiration of the Term, appropriate notices for letting
or selling;
(i) that all equipment, furniture, furnishings, fixtures and
property of every kind of Lessee and of all persons claiming
by, through or under Lessee which may be on the Premises from
time to time (collectively, "LESSEE'S PROPERTY") shall be at
the sole risk of Lessee, and Lessor shall not be liable if the
whole or any part thereof shall be destroyed or damaged by
fire, water or otherwise, or by the leakage or bursting of
water pipes, steam pipes, or other pipes, or by theft or from
any other cause unless caused by the negligence or willful
misconduct of Lessor;
(j) to pay promptly when due, all taxes of any kind levied,
imposed or assessed on Lessee's Property, which taxes shall be
the sole obligation of Lessee, whether the same is assessed to
Lessee or to any other person and whether the property on
which such tax is levied, imposed or assessed shall be
considered part of the Premises or personal property;
(k) by the end of business on the last day of the Term (or the
effective date of any earlier termination of this Lease as
herein provided), to remove (i) all of Lessee's Property,
and (ii) the items or components of Alterations designated
for removal as provided in clause (f) above and (iii) the
items or components of "LESSEE'S WORK" (as defined in the
Work Letter) designated for removal as provided in the Work
Letter (the items described in the foregoing clauses (i),
(ii) and (iii) are sometimes referred to, collectively, as
"Lessee's Removal Items"), in each case whether the same be
permanently affixed to the Premises or not, and to repair
any damage caused by any such removal to Lessor's reasonable
satisfaction; and peaceably to yield up the Premises clean
and in good order, repair and condition (reasonable wear and
tear, and damage by fire or other casualty or taking only
excepted); and to deliver the keys to the Premises to
Lessor. Any of Lessee's Removal Items which are not removed
by such date shall be deemed abandoned and may be removed
and disposed of by Lessor in such manner as Lessor may
determine, and Lessee shall pay to Lessor on demand, as
Additional Rent, the entire cost of such removal and
disposition, together with the costs and expenses incurred
by Lessor in making any incidental repairs and replacements
to the Premises necessitated by Lessee's failure to remove
any of Lessee's Removal Items, or by any other failure of
Lessee to comply with the terms of this Lease, and for use
and occupancy during the period after the expiration of the
Term and prior to Lessee's performance of its obligations
under this clause (k). Lessee shall further indemnify and
hold Lessor harmless from and against any and all suits,
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demands, causes of action, claims, losses, debts,
liabilities, damages, penalties or judgments, including,
without limitation, reasonable attorneys' fees, resulting
from Lessee's failure or delay in surrendering the Premises
as above provided (such indemnity to survive the expiration
or termination of this Lease);
(l) to pay Lessor's reasonable expenses, including reasonable
attorneys' fees, incurred in enforcing any obligations of
Lessee under this Lease;
(m) not to generate, store or use any "HAZARDOUS MATERIALS" (as
hereinafter defined) in or on the Premises or elsewhere in
the Building or on the Land (except in compliance with any
and all applicable Legal Requirements), or dispose of
Hazardous Materials from the Premises to any other location,
except a properly approved disposal facility and then only
in compliance with any and all Legal Requirements regulating
such activity, nor permit any occupant of the Premises to do
so. Lessee agrees to provide to Lessor copies of all
disclosures made to governmental authorities regarding the
presence of Hazardous Materials on the Premises. As used in
this Lease, "HAZARDOUS MATERIALS" means and includes any
chemical, substance, waste, material, gas or emission which
is radioactive or deemed hazardous, toxic, a pollutant, or a
contaminant under any statute, ordinance, by-law, rule,
regulation, executive order or other administrative order,
judgment, decree, injunction or other judicial order of or
by any governmental authority, now or hereafter in effect,
relating to pollution or protection of human health or the
environment. By way of illustration and not limitation,
"HAZARDOUS MATERIALS" INCLUDES "OIL", "HAZARDOUS MATERIALS",
"HAZARDOUS WASTE", AND "HAZARDOUS SUBSTANCE" as defined in
the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 ET SEQ., as amended,
the Resource Conservation and Recovery Act of 1976, 42
U.S.C. Section 6902 ET SEQ., as amended, and the Toxic
Substances Control Act, 15 U.S.C. 8601 et SEQ., as amended,
the regulations promulgated thereunder, and Massachusetts
General Laws, Chapter 21C and Chapter 21E and the
regulations promulgated thereunder. If any lender or
governmental authority requires testing to determine whether
there has been any release of Hazardous Materials and such
testing is required as a result of the acts or omissions of
Lessee in violation of this paragraph (m), then Lessee shall
reimburse Lessor upon demand, as Additional Rent, for the
reasonable costs thereof. Lessee shall execute affidavits,
certifications and the like, as may be reasonably requested
by Lessor from time to time concerning Lessee's best
knowledge and belief concerning compliance by Lessee with
the requirements of this Section 11.0(m). Lessor reserves
the right to enter the Premises at reasonable times subject
to Lessee's reasonable security regulations (provided
twenty-four (24) hours' notice is given to Lessee, except in
case of emergency) to inspect the same for Hazardous
Materials. Lessee shall indemnify, defend, and hold harmless
Lessor, and the holder of any mortgage on the Building or
the Land, from and against any claim, cost, expense,
liability,
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obligation or damage, including, without limitation,
attorneys' fees and the cost of litigation, arising from or
relating to the breach by Lessee or anyone claiming by,
through or under Lessee of the provisions of this clause
(m), and shall immediately discharge or cause to be
discharged any lien imposed upon the Building or the Land
in connection with any such claim. The provisions of this
clause (m) shall survive the expiration or termination of
this Lease;
(n) in case Lessee takes possession of the Premises prior to the
Commencement Date, to perform and observe all of Lessee's
covenants from and after the date upon which Lessee takes
possession except that no Rent shall accrue prior to the
beginning of the Term;
(o) not to permit any officer, agent, employee, servant,
contractor or visitor of Lessee, or of anyone claiming by,
through or under Lessee, to violate any covenant or obligation
of Lessee hereunder;
(p) to provide and pay for the services described in EXHIBIT E
attached hereto and, for any portion of the Term during which
Lessee is managing the Building as permitted by Section 18, to
operate and maintain the Building at all times as a first
class office, laboratory and research and development building
in Cambridge, Massachusetts and to provide and pay for the
services described in EXHIBIT D; and
(q) to remove all radioactive materials from the Premises or any
portion thereof prior to vacating such space during or at the
end of the Term in compliance with all Legal Requirements.
12.0 CONSTRUCTION. Lessor will finish the Premises in accordance with the
provisions of the work letter attached hereto as EXHIBIT C (the "WORK
LETTER").
13.0 CASUALTY AND EMINENT DOMAIN.
(a) In the event that the entire Premises or Building, or any
substantial part thereof, shall be taken by any exercise of
the right of eminent domain or shall receive any direct or
consequential or substantial damages for which Lessor or
Lessee or either of them shall be entitled to compensation
by reason of anything lawfully done in pursuance of any
public or other authority during the Term, then this Lease
shall terminate at the election of Lessor, which election
may be made notwithstanding Lessor's entire interest may not
have been divested. If such taking or damage substantially
reduces the floor space of the Premises so as to render the
Premises unusable for the Permitted Use after such taking,
Lessee shall have the right, effective when its possession
is disturbed, to terminate this Lease by notice in writing
to Lessor delivered within thirty (30) days of the first day
on which Lessee's possession is so disturbed. Lessor
reserves and excepts all rights to
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damage to the Premises and Building and the leasehold
hereby created, now accrued or hereafter accruing by reason
of any exercise of eminent domain, or by reason of anything
lawfully done in pursuance of any public or other authority
(except for damages for Lessee's Property and moving
expenses) and by way of confirmation, Lessee grants to
Lessor all of Lessee's rights to such damages (except as
aforesaid) and covenants to execute and deliver such
further instruments of assignment thereof as Lessor may
from time to time request.
(b) If the Building or any part thereof shall be damaged by fire
or other casualty to the extent that substantial alteration
or reconstruction of the Building shall, in Lessor's sole
opinion, be required (whether or not the Premises shall have
been damaged) or if as a result any mortgagee of the
Building requires that insurance proceeds payable in
connection with such casualty be used to retire the mortgage
debt, Lessor may, at its option, terminate this Lease by
notifying Lessee in writing of such termination within
thirty (30) days after the date of such damage, in which
event this Lease shall terminate on the date set forth in
such notice, and Lessor shall allow Lessee a fair diminution
of Rent from and after the date of such damage to the date
of such termination of this Lease to the extent the Premises
are unusable for the permitted uses hereunder.
(c) If the Premises shall be substantially damaged by fire or
other casualty such that Lessee reasonably determines that the
Premises are unusable for the Permitted Use, then Lessee may
terminate this Lease as of the date of the occurrence of such
damage by written notice thereof to Lessor within 30 days
after the date of such damage, in which event this Lease shall
terminate on the date set forth in such notice, and Lessor
shall allow Lessee a fair diminution of Rent from and after
the date of such damage to the date of such termination of
this Lease to the extent the Premises are unusable for the
permitted uses hereunder.
(d) In the case of damage to or taking of any portion of the
Premises or any portion of the Building, if this Lease is
not terminated as a result thereof, Lessor shall thereafter
diligently act to restore the Building and the Premises (or,
in case of taking, what remains thereof) to substantially
the condition in which they existed prior to the occurrence
of such taking or casualty, provided, however, that: (i) the
scope of work to be done by Lessor shall be limited to (a)
that set forth as "LESSOR'S WORK" in the Work Letter, and
(b) the contribution of "LESSOR'S CONTRIBUTION" towards the
performance of "LESSEE'S WORK" (as these terms are defined
in the Work Letter), but in no event shall Lessor be
required to spend in connection with the work described in
this clause (i) more than the amount of insurance proceeds
(provided that Lessor has maintained the required insurance
under Section 7.4 if MIT is not the Lessor under this Lease)
or taking award actually received and allocable thereto
(except that this limitation concerning the amount of
insurance proceeds shall not apply for such time as MIT
self-insures,
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partially or totally, pursuant to Section 7.4 above); (ii)
Lessor shall not be required to restore any Alterations or
any of Lessee's Work which Lessee is by this Lease either
entitled to or required to remove upon the expiration or
earlier termination of this Lease; (iii) Lessor shall not
be required to restore or replace any of Lessee's Property;
and (iv) promptly upon completion of such work by Lessor,
Lessee shall diligently act to restore and/or replace all
Alterations and Lessee's Work, and to restore or replace
all of Lessee's Property, to substantially the same
condition they were in prior to the occurrence of such
taking or casualty. In the event that Lessor fails to
substantially complete such restoration within six (6)
months of the occurrence of such taking or casualty, Lessee
shall have the option to terminate this Lease by giving
written notice to Lessor within forty-five (45) days after
the expiration of such 6-month period; PROVIDED, HOWEVER,
that if Lessor substantially completes such restoration
within such 45-day period then Lessee's termination notice
shall be deemed of no force or effect and this Lease shall
continue in full force and effect.
(e) Lessor shall not be liable for any inconvenience or annoyance
to Lessee or injury to the business of Lessee resulting in any
way from such taking or damage or the repair thereof, provided
that Lessor uses reasonable efforts to minimize inconvenience
and disruption to Lessee during such repair or restoration,
except that (i) Lessor shall allow Lessee a fair diminution of
Rent during the time and to the extent the Premises are
unusable for the Permitted Use, and (ii) in the event of a
partial taking, a just proportion of Rent, similarly
determined, shall be abated for the remainder of the Term.
14.0 DEFAULTS; REMEDIES
14.1 DEFAULTS; EVENTS OF DEFAULT. The following shall, if any
requirement for notice or lapse of time or both has not been
met, constitute defaults hereunder, and, if such conditions
have been met, constitute "EVENTS OF DEFAULT" hereunder:
(a) The failure of Lessee to perform or observe any of
Lessee's covenants or agreements hereunder concerning
the payment of money for a period of ten (10) days
after written notice thereof, PROVIDED, HOWEVER, that
Lessee shall not be entitled to such notice if Lessor
has given notice to Lessee of one or more previous
such failures within a twelve-month period, in which
event such failure shall constitute an Event of
Default hereunder upon the expiration of ten (10)
days after such payment was due;
(b) The failure of Lessee, without the necessity of any
notice from Lessor to Lessee, either (i) to maintain
the insurance required hereunder in full force and
effect, or (ii) to deliver an estoppel certificate to
Lessor within the time provided in Section 24.0
below);
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(c) The execution by Lessee of any assignment, sublease
or other agreement without the prior written approval
of Lessor as required by Section 8.0;
(d) The failure of Lessee to perform or observe any of
Lessee's other covenants or agreements hereunder for
a period of thirty (30) days after written notice
thereof (provided that, in the case of defaults not
curable in thirty (30) days through the exercise of
reasonable diligence, such 30-day period shall be
extended so long as Lessee commences cure within such
30-day period and thereafter prosecutes such cure to
completion with reasonable diligence, but such
extended cure period shall not in any event exceed
ninety (90) days after Lessor's initial notice to
Lessee); and
(e) if the leasehold hereby created shall be taken on
execution, or by other process of law, or if any
assignment shall be made of Lessee's property for the
benefit of creditors, or if a receiver, guardian,
conservator, trustee in bankruptcy or similar officer
shall be appointed to take charge of all or any part
of Lessee's assets by a court of competent
jurisdiction; or if a petition is filed by Lessee
under any bankruptcy or insolvency law; or if a
petition is filed against Lessee under any
bankruptcy or insolvency law and the same shall not
be dismissed within sixty (60) days from the date
upon which it is filed, or a lien or other
involuntary encumbrance is filed against Lessee's
leasehold (or against the Premises, the Building or
the Land based on a claim against Lessee) and is not
discharged or bonded within thirty (30) days after
the filing thereof.
14.2 TERMINATION. If an Event of Default shall occur, Lessor may,
at its option, immediately or any time thereafter and without
demand or notice, enter upon the Premises or any part thereof
in the name of the whole and repossess the same as of Lessor's
former estate and dispossess Lessee and those claiming through
or under Lessee and remove their effects, forcibly if
necessary, without being deemed guilty of any manner of
trespass and without prejudice to any remedies which might
otherwise be used for arrears of rent or preceding breach of
covenant, and upon such entry this Lease shall terminate. In
lieu of making such entry, Lessor may terminate this Lease
upon three (3) business days' prior written notice to Lessee.
Upon any termination of this Lease as the result of an Event
of Default, Lessee shall quit and peacefully surrender the
Premises to Lessor.
14.3 SURVIVAL OF COVENANTS.
(a) No such termination of this Lease shall relieve
Lessee of its liability and obligations under this
Lease and such liability and obligations shall
survive any such termination. Lessee shall indemnify
and hold Lessor harmless
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from all loss, cost, expense, damage or liability
arising out of or in connection with such
termination.
(b) In the event of any such termination Lessee shall pay
to Lessor the Rent up to the time of such
termination. Lessee shall remain liable for, and
shall pay on the days originally fixed for such
payment hereunder, the full amount of all Basic Rent
and Additional Rent as if this Lease had not been
terminated; PROVIDED, HOWEVER, if Lessor relets the
Premises, there shall be credited against such
obligation the amount actually received by Lessor
each month from such lessee after first deducting all
costs and expenses incurred by Lessor in connection
with releting the Premises.
(c) At the option of Lessor at any time after such
termination, in lieu of damages pursuant to paragraph
(b) above, Lessee shall pay to Lessor, on demand, as
and for liquidated and agreed damages for Lessee's
default, the present value, discounted at the prime
rate, of amount by which:
(i) the aggregate Rent which would have been
payable under this Lease by Lessee from the
date of such termination until what would
have been the last day of the Term but for
such termination, EXCEEDS
(ii) the fair and reasonable rental value of the
Premises for the same period, less Lessor's
reasonable estimate of expenses to be
incurred in connection with releting the
Premises, including, without limitation, all
repossession costs, brokerage commissions,
legal expenses, reasonable attorneys' fees,
alteration costs, and expenses of
preparation for such releting.
There shall be credited against Lessee's obligation
under this paragraph (c) all amounts actually
received by Lessor from Lessee pursuant to paragraph
(b) above or actually received by Lessor from
releting the Premises.
(d) If the Premises or any part thereof are relet by
Lessor for the period prior to what would have been
the last day of the Term but for such termination, or
any portion thereof, the amount of rent reserved upon
such releting shall be, PRIMA FACIE, the fair and
reasonable rental value for the part or the whole of
the Premises so relet during the term of the
releting.
(e) Nothing herein contained shall limit or prejudice the
right of Lessor to prove and obtain as liquidated
damages by reason of such termination, an amount
equal to the maximum allowed by any statute or rule
of law in effect at the time when, and governing the
proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to,
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or less than the amount of the difference referred to
above.
14.4 RIGHT TO RELET. At any time or from time to time after any
such termination, Lessor may relet the Premises or any part
thereof for such a term (which may be greater or less than the
period which would otherwise have constituted the balance of
the Term) and on such conditions (which may include
concessions or free rent) as Lessor, in its reasonable
discretion, may determine, and may collect and receive the
rents therefor. Lessor shall in no way be responsible or
liable for any failure to relet the Premises or any part
thereof, or for any failure to collect any rent due upon any
such releting; provided that Lessor shall have used reasonable
efforts to mitigate damages.
14.5 RIGHT TO EQUITABLE RELIEF. In the event there shall occur a
default or threatened default hereunder, Lessor shall be
entitled to enjoin such default or threatened default and
shall have the right to invoke any right and remedy allowed at
law or in equity or by statute or otherwise as though re-entry
and other remedies were not provided for in this Lease.
14.6 PERFORMANCE BY LESSOR. In the event of a default by Lessee
hereunder which continues beyond the expiration of the
applicable grace period, Lessor shall have the right to
perform such defaulted obligation of Lessee, including the
right to enter upon the Premises to do so. Lessor shall, as a
courtesy only, notify Lessee of its intention to perform such
obligation. In the event of a default by Lessee hereunder
which has not yet continued beyond the expiration of the
applicable grace period but which Lessor determines
constitutes an emergency threatening imminent injury to
persons or damage to property or a violation of law or an
ordinance or regulation, Lessor shall have the right to
perform such defaulted obligation of Lessee (including the
right to enter upon the Premises to do so) after giving Lessee
such notice (if any) as is reasonable under the circumstances.
In either event, the aggregate of (i) all sums so paid by
Lessor, (ii) interest (at the rate of 1-1/2% per month or the
highest rate permitted by law, whichever is less) on such sum,
and (iii) all necessary incidental costs and expenses in
connection with the performance of any such act by Lessor,
shall be deemed to be Additional Rent under this Lease and
shall be payable to Lessor immediately upon demand. Lessor may
exercise its rights under this Section 14.6 without waiving
any other of its rights or releasing Lessee from any of its
obligations under this Lease.
14.7 FURTHER REMEDIES. Nothing in this Lease contained shall
require Lessor to elect any remedy for a default or Event of
Default by Lessee hereunder, and all rights herein provided
shall be cumulative with one another and with any other rights
and remedies which Lessor may have at law or in equity in the
case of such a default or Event of Default.
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15.0 REAL ESTATE BROKER. Lessor and Lessee each represent to the other that
they have dealt with no broker in connection with this Lease other than
the Trammell Crow Company ("Broker"). Lessor shall pay the Broker as
part of a separate agreement. Lessee agrees to indemnify and hold
Lessor harmless from and against any claims for commissions or fees by
any person other than the Broker by reason of any act of Lessee or its
representatives. Lessor agrees to indemnify and hold Lessee harmless
from and against any claims for commissions or fees by any person other
than the Broker by reason of any act of Lessor or its representatives.
16.0 NOTICES. All notices, demands, or other communications hereunder shall
or may be given either to Lessor or to Lessee, the same shall be in
writing and shall be sent by hand delivery, or by registered or
certified mail, postage prepaid, or by Federal Express or other similar
overnight delivery service:
Lessor: Massachusetts Institute of Technology
238 Main Street - Suite 200
Cambridge, Massachusetts 02142
Attention: Steven C. Marsh, Managing
Director of Real Estate
with a copy to: Meredith & Grew, Inc.
238 Main Street
Cambridge, Massachusetts 02142
Attention: John Sullivan
and to: Stuart T. Freeland
Rackemann, Sawyer & Brewster
One Financial Center
Boston, Massachusetts 02111
Lessee: Transkaryotic Therapies, Inc.
195 Albany Street
Cambridge, Massachusetts 02139-4213
Attn: Senior Vice President of
Administration/General Counsel
with a copy to: Katharine E. Bachman, Esq.
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Any notice, demand or other communication shall be effective upon
receipt by or tender
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for delivery to the intended recipient thereof.
17.0 NO WAIVERS. Failure of Lessor to complain of any act or omission on the
part of Lessee, no matter how long the same may continue, shall not be
deemed to be a waiver by Lessor of any of its rights hereunder. No
waiver by Lessor at any time, expressed or implied, of any breach of
any provision of this Lease shall be deemed a waiver of a breach of any
other provision of this Lease or a consent to any subsequent breach of
the same or any other provision. No acceptance by Lessor of any partial
payment shall constitute an accord or satisfaction but shall only be
deemed a partial payment on account; nor shall any endorsement or
statement on any check or any letter accompanying any check or payment
be deemed an accord and satisfaction, and Lessor may accept such check
or payment without prejudice to Lessor's right to recover the balance
of such installment or pursue any other remedy available to Lessor in
this Lease or at law or in equity.
18.0 MANAGEMENT OF THE BUILDING.
18.1. So long as Lessee is lessee of the entire Building (whether or
not Lessee has sublet any portion thereof), Lessee shall have the right
to manage the Building in which event it shall be fully responsible for
the operation, maintenance and repair of the Building and the Land,
including the responsibility to provide the services described on
Exhibit D subject however to Lessor's obligations under the Work
Letter. Notwithstanding the foregoing, Lessor shall retain
responsibility for snow removal from the Land and from the sidewalks
adjacent to the Land.
18.2. If Lessee does not elect to manage the Building, Lessor shall
furnish the services described on EXHIBIT D attached hereto, the cost
of which shall be included in Operating Expenses. Lessor shall not be
liable in damages, nor in default hereunder, for any failure or delay
in furnishing any service rendered customarily to the Premises or
Building or agreed to by the terms of this Lease, due to any accident,
to the making of repairs, alterations or improvements, or to the
occurrence of an event of "Force Majeure" as defined in Section 27
below, or to any act or default of Lessee hereunder. No such failure
shall be held or pleaded as an eviction or disturbance in any manner
whatsoever of Lessee's possession or give Lessee any right to terminate
this Lease or give rise to any claim for set-off or any abatement of
Rent or of any of Lessee's obligations under this Lease.
19.0 SIGNS. So long as Lessee is, itself, physically occupying 95,000 square
feet of the Rental Area of the Building, Lessee shall have exclusive
right to control the placement of signs on the exterior of the Building
subject to the following requirements. All signs must be located on the
Building and must comply with all municipal regulations. Lessee must
obtain Lessor's approval of the location, size and appearance of all
signs prior to their placement on the Building. Lessee shall be
responsible, at its own expense, to obtain all permits and approvals
for signs. The rights granted to Lessee under this Section 19 will
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terminate and revert to Lessor if at any time Lessee no longer occupies
at least 95,000 square feet of the Rental Area of the Building.
20.0 LESSEE'S RIGHT TO TERMINATE EXISTING LEASE. Upon the execution and
delivery of this Lease Agreement by both parties and satisfaction of
the conditions set forth in Section 21, Lessee shall have the right to
notify Lessor of its election to terminate its existing lease of space
at 230 Albany Street, Cambridge, Massachusetts (the "Albany Street
Lease"), such termination to be effective not sooner than nine months
after the Commencement Date under this Lease. This right shall be
exercised by written notice to Landllord stating the date on which the
Albany Street Lease will terminate in compliance with the preceding
sentence.
21.0 CONDITION PRECEDENT. Lessor's obligations under this Agreement are
hereby made subject to the condition that Lessor shall have obtained
all permits made necessary by requirements specific to Lessee's Work or
Lessee's use of the Premises, Lessor hereby representing that it has
obtained a Building Permit for Lessor's Work.
22.0 QUIET ENJOYMENT; GROUND LEASES; MORTGAGES
22.1 QUIET ENJOYMENT. Lessor covenants that, provided that an Event of
Default has not occurred and is not then continuing, Lessee shall
quietly have and enjoy the Premises during the Term, without hindrance
or molestation from any person lawfully claiming by, through or under
Lessor.
22.2 RIGHTS OF GROUND LESSORS AND MORTGAGEES. No act or failure to act
on the part of Lessor which would entitle Lessee under the terms of
this Lease, or by law, to be relieved of Lessee's obligations hereunder
or to terminate this Lease, shall result in a release or termination of
such obligations or a termination of this Lease unless (i) Lessee shall
have first given written notice to Lessor's ground lessors and
mortgagees of record of the act or failure to act on the part of Lessor
which Lessee claims as the basis of Lessee's rights; and (ii) such
ground lessors and mortgagees, after receipt of such notice, have
failed or refused to correct or cure the condition within a reasonable
time thereafter, but nothing in this Lease shall be deemed to impose
any obligation on any such ground lessor or mortgagee to correct or
cure any such condition. No ground lessor shall be liable for the
failure to perform any of the obligations of Lessor hereunder unless
and until such ground lessor terminates its ground lease and takes
possession of the Premises, nor shall any mortgagee be liable for the
failure to perform any of the obligations of Lessor hereunder unless
and until such mortgagee enters upon and takes possession of the
Premises for purposes of foreclosure.
22.3 LEASE SUBORDINATE. This Lease is and shall be subject and
subordinate to any ground lease or mortgage hereafter on the Premises,
and to all advances under any such mortgage and to all renewals,
amendments, extensions and consolidations thereof,
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provided that Lessor shall obtain from such ground lessor or
mortgagee an agreement (a "NON-DISTURBANCE AGREEMENT") in
commercially reasonable form whereby such ground lessor or mortgagee
agrees not to disturb the possession of Lessee under this Lease or
to join Lessee in summary or foreclosure proceedings in the event
such ground lessor terminates its ground lease or such mortgagee
forecloses its interest against the Premises under its mortgage so
long as Lessee duly and promptly keeps and performs all of its
obligations hereunder, and Lessee shall enter into such agreement
and agree to attorn to such ground lessor or mortgagee as its
landlord under this Lease in the event of such foreclosure. In
confirmation of such subordination, Lessee shall execute and deliver
promptly a certificate in recordable form that Lessor or any ground
lessor or any mortgagee may request. Notwithstanding the foregoing
provisions of this Section, the holder of any mortgage on the
Premises may at any time subordinate its mortgage to this Lease by
written notice to Lessee. Lessor hereby represents that there is no
mortgage or ground lease of the Premises as of the date of this
Lease.
23.0 SECURITY DEPOSIT. Lessee shall, deposit with Lessor the Security
Deposit, of which not less than $680,000 shall be in the form of cash
(the "Cash Security") and the balance of which may be in the form of a
Letter of Credit as described in this Section (the "Letter of Credit"),
as security for the full and faithful payment and performance by Lessee
of its obligations under this Lease, and not as a prepayment of Rent.
The Cash Security shall be deposited with Lessor simultaneously with
the execution and delivery of this Lease and, if Lessee elects to
deliver a portion of the Security Deposit in the form of a Letter of
Credit, such letter shall be deposited with Lessor within two weeks
thereafter. For purposes of this Lease, the term "Security Deposit"
shall mean and include all Cash Security and any Letter of Credit
deposited with Lessor pursuant to this Section.
If Lessee elects to deliver a Letter of Credit, it shall be an
irrevocable standby letter of credit, in form and content and issued by
a commercial bank satisfactory to Lessor (in its sole discretion),
which Letter of Credit shall provide that it may be drawn upon in
Boston, Massachusetts (i) in part, upon the presentation of a sight
draft accompanied by a certificate signed by either the Managing
Director of Real Estate or the Treasurer of Lessor or the designee of
either, setting forth the amount due to Lessor by reason of the
occurrence of an Event of Default by Lessee hereunder, and (ii) in
whole, upon the presentation of a sight draft accompanied by a
certificate signed by either the Managing Director of Real Estate or
the Treasurer of Lessor or the designee of either, stating either that
(a) Lessor has terminated this Lease by reason of the occurrence of an
Event of Default by Lessee hereunder, or (b) the Lease Term has more
than thirty (30) days remaining and such Letter of Credit will expire
within thirty (30) days of such certificate and Lessee has not
deposited a substitute Letter of Credit in the form, amount and issued
by a bank as required by this Section. Lessee shall deposit the
original Letter of Credit with Lessor.
So long as MIT is the Lessor, any Cash Security held by Lessor pursuant
to this section
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may be commingled with Lessor's other funds, provided that, at any
time MIT is not the Lessor, any Cash Security shall be held in a
segregated interest bearing account. Lessor shall pay interest on
the Cash Security to Lessee annually at the rate of 4% per year
within ninety (90) days after the end of each fiscal year of the
Lessor. Unless Lessee elects to deliver to Lessor the entire
Security Deposit in the form of Cash Security, then during the Lease
Term (including the Extension Term, if any) Lessee will keep the
Letter of Credit in full force and in compliance with the provisions
of this Lease.
Lessor shall assign the Security Deposit to any transferee of the
Building from Lessor who takes title to the Building subject to this
Lease (or, in the case of the Letter of Credit, assign and deliver the
original Letter of Credit to such transferee) and thereafter Lessor
shall have no further responsibility therefor. Upon the expiration (or
earlier termination) of the Term of this Lease, Lessor shall inspect
the Premises, make such deductions from the Security Deposit as may be
required to cure any default by Lessee hereunder, and, if Lessee is not
then in default hereunder, pay the balance of the Cash Security (or
return the original Letter of Credit, as the case may be) to Lessee
within twenty (20) days of such expiration or termination. If Lessee is
in default at the time of such expiration or termination, the Lessor
shall be entitled to retain so much of the Security Deposit as Lessor
reasonably estimates to be Lessee's liability to Lessor under this
Lease and shall pay the balance, if any, to Lessee within such 20-day
period.
In the event that Lessor transfers the Premises to any transferee who
takes title to the Premises subject to this Lease and the bank issuing
the Letter of Credit does not consent to the transfer of any beneficial
interest in the Letter of Credit to such transferee or issue a
replacement Letter of Credit in identical form to such transferee, then
Lessor may draw on the Letter of Credit and the proceeds shall be held
and applied as Cash Security under this Section.
In the event that Lessor draws upon and applies or retains any portion
or all of the proceeds of the Letter of Credit, or applies all or any
portion of the Cash Security, towards the cure of an Event of Default
by Lessee hereunder or towards damages payable by Lessee to Lessor by
reason of the occurrence of an Event of Default by Lessee hereunder,
Lessee shall pay to Lessor, as Additional Rent, the amount so expended
by Lessor within ten (10) business days of notice given by Lessor so
that at all times (subject to the 10-business day grace period herein
referenced) Lessor shall be entitled to draw down upon the full
aggregate amount of the Letter of Credit (or hold the full Cash
Security, or some combination thereof) required to be deposited with
Lessor hereunder. Any failure of Lessee to deliver to Lessor the Cash
Security or Letter of Credit as prescribed herein or to restore any
amount drawn under the Letter of Credit or expended from the Cash
Security within the time and manner specified in this Section shall
constitute an Event of Default under the Lease and entitle Lessor to
immediately draw down the Letter of Credit then in force or effect and
Lessor shall retain such cash amounts (or the Cash Security, as
appropriate) as a Security Deposit pursuant to the provisions of
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this Section.
Lessee shall be solely responsible for the payment of all costs
associated with obtaining, replacing (as necessary), transferring,
extending and maintaining the Letter of Credit in accordance with the
terms of this Section.
24.0 NOTICE OF LEASE; ESTOPPEL CERTIFICATES. Lessor and Lessee agree that
this Lease shall not be recorded. However, upon the request of either
party, Lessor and Lessee shall execute and acknowledge a Notice of
Lease in mutually acceptable and recordable form. Furthermore, at such
time as the Commencement Date has been established, upon the request of
either party Lessor and Lessee shall execute and acknowledge an
appropriate amendment to such Notice of Lease (specifying the
Commencement Date) in recordable form.
From time to time during the Term, and without charge, either party
shall, within fifteen (15) business days of request by the other party,
certify by written instrument duly executed and acknowledged, to such
other party or to any person specified in the request by such other
party, regarding (a) the existence of any amendments or supplements to
this Lease; (b) the validity and force and effect of this Lease; (c)
the existence of any default; (d) the existence of any offsets,
counterclaims or defenses; (e) the Commencement Date and the expiration
date of the Term; (f) the amount of Rent due and payable and the date
to which Rent has been paid; and (g) any other matter reasonably
requested.
25.0 HOLDING OVER. If Lessee occupies the Premises after the day on which
the Term expires (or the effective date of any earlier termination as
herein provided) without having entered into a new lease thereof with
Lessor, Lessee shall be a Lessee-at-sufferance only, subject to all of
the terms and provisions of this Lease at 150% of the rate of the Basic
Rent in effect on the last day of the Term. Such a holding over, even
if with the consent of Lessor, shall not constitute an extension or
renewal of this Lease.
26.0 LESSOR'S AGREEMENTS REGARDING ENVIRONMENTAL MATTERS. Lessor agrees to
provide to Lessee copies of information presently in its possession and
which it hereafter obtains regarding the compliance of the Land and
Building with Legal Requirements relating to Hazardous Materials;
provided that Lessor makes no representation concerning the accuracy of
completeness of such information. Lessor agrees to remediate in
compliance with Legal Requirements any release of Hazardous Materials
on the Land or in the Building existing prior to the Commencement Date
unless caused by the actions of the Lessee or its agents.
27.0 FORCE MAJEURE. Neither Lessor nor Lessee shall be deemed to be in
default hereunder (and the time for performance of any of their
respective obligations hereunder other than the payment of money shall
be postponed) for so long as the performance of such obligation
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is prevented by strike, lock-out, act of God, absence of materials or
any other matter not reasonably within the control of the party which
must perform the obligation (collectively, "Force Majeure").
28.0 ENTIRE AGREEMENT. No oral statement or prior written matter shall have
any force or effect. This Agreement shall not be modified or canceled
except by writing subscribed to by all parties.
29.0 APPLICABLE LAW, SEVERABILITY AND CONSTRUCTION. This Lease shall be
governed by and construed in accordance with the laws of Massachusetts
and, if any provisions of this Lease shall to any extent be invalid,
the remainder of this Lease, and the application of such provisions in
other circumstances, shall not be affected thereby. The titles of the
several Sections contained herein are for convenience only and shall
not be considered in construing this Lease. Whenever the singular is
used and when required by the context it shall include the plural, and
the neuter gender shall include the masculine and feminine. The
Exhibits attached to this Lease are incorporated into this Lease by
reference. This Lease may be executed in several counterparts, each of
which shall be an original, but all of which shall constitute one and
the same instrument. The term "LESSOR" whenever used herein, shall mean
only the owner at the time of Lessor's interest herein, and no covenant
or agreement of Lessor, express or implied, shall be binding upon any
person except for defaults occurring during such person's period of
ownership nor binding individually upon any agent, fiduciary,
shareholder, officer, director or partner of Lessor, and the liability
of Lessor, in any event, shall be limited to Lessor's interest in the
Building. If more than one person or entity executes this Lease as
Lessee, the Lessee's obligations hereunder shall be the joint and
several obligation of such persons or entities. Unless repugnant to the
context, "LESSOR" and "LESSEE" mean the person or persons, natural or
corporate, named above as Lessor and as Lessee respectively, and their
respective heirs, executors, administrators, successors and assigns.
30.0 SUCCESSORS AND ASSIGNS. The terms, covenants and conditions of this
Lease shall run with the Land, and be binding upon and inure to the
benefit of Lessor and Lessee and their respective successors and
permitted assigns.
31.0 AUTHORITY. Contemporaneously with the signing of this Lease, Lessee
shall furnish to Lessor a certified copy of the resolution of the Board
of Directors or Managers of Lessee authorizing Lessee to enter into
this Lease and authorizing the person executing this Lease on behalf of
Lessee to do so.
WITNESS the execution hereof under seal as of the day and year first
above written.
LESSOR: MASSACHUSETTS INSTITUTE OF
TECHNOLOGY
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By:
--------------------------------
Steven C. Marsh, its
Managing Director of Real Estate
LESSEE: Transkaryotic Therapies, Inc.
By:
--------------------------------
Daniel E. Geffken,
Vice President Finance and
Chief Financial Officer
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EXHIBIT A
PLAN OF THE PREMISES
(see attached)
(Plan of the premises atached depicts the
physical plan of the premises)
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EXHIBIT B
DESCRIPTION OF THE LAND
The land in Cambridge Massachusetts known as 28 Osborn Street more
fully described as follows:
PARCEL NO. 1. A certain parcel of vacant land situated in said
Cambridge on the southerly side of Main Street bounded as follows: Beginning at
a point on the southerly side of Main Street distant westerly from the junction
of said southerly side of Main Street with the westerly side of Portland Street,
89.4 feet; thence running westerly and bounded northerly by said Main Street,
172 feet; thence turning and running southerly bounded westerly by a right of
way as shown on a plan hereinafter referred to, 300 feet; thence turning and
running easterly, bounded southerly by land now or formerly of the Allen &
Endicott Building Company, 172 feet; thence turning and running northerly by the
center line of a certain spur track as shown on said plan and bounded easterly
by land now or formerly of the H.B. Smith Company, 300 feet; containing
approximately 51,600 square feet of land; all as shown on a land entitled "Plan
of Premises sold from the estate of the Allen & Endicott Building Co.", E.E.
Bowker, Engineer and Surveyor, dated September 13, 1919, and duly recorded with
Middlesex South District Registry of Deeds, Plan Book 276, Plan 32.
PARCEL NO. 2. A certain parcel of vacant land situated in said
Cambridge on the northwesterly side of Albany Street, being marked "Lot B" on a
plan of land in said Cambridge, dated November 25, 1927, and recorded with said
Deeds, Book of Plans 407, Page 5, on December 2, 1927, bounded and described as
follows: Southeasterly by said Albany Street, by two lines forty-three and
20/100 (43.20) feet and two hundred twelve and 66/100 (212.66) feet; and
Westerly by land now or formerly of Isaac Kaplan, Trustee, one hundred
seventy-one and 20/100 (171.20) feet; Northerly by lot marked "A" on said plan,
being in part by the end of a twenty (20) foot passageway, thirty-two and 66/100
(32.66) feet; Westerly again by said lot marked "A", being the easterly line of
said passageway, one hundred twenty-seven and 10/100 (127.10) feet; Northerly by
land now or formerly of Midvale Cambria Company, one hundred seventy-two (172)
feet; and Easterly by the center line of a spur track, at land now or formerly
of H.B. Smith Company, one hundred forty-four and 04/100 (144.04) feet;
containing approximately 41,365 square feet of land.
PARCEL NO. 3. A certain parcel of land situated at 640 Main Street,
Cambridge, Massachusetts, bounded and described as follows:
NORTHERLY by said Main Street, eighty-nine and 40/100 (89.40);
feet;
EASTERLY and by Portland Street by two courses two hundred
SOUTHEASTERLY thirty and 87/100 (230.87) feet, and two hundred
thirty-seven and
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78/100 (237.78) feet; and
WESTERLY by land now or formerly of Allen & Endicott Building
Company four hundred forty-four and 52/100 (444.52)
feet;
being shown on a plan of premises sold from the estate of Allen & Endicott
Building Company, E.F. Bowker, Engineer and Surveyor, July 7, 1919 and filed in
Plan Book Vol. 302, Page 21 at Middlesex South Registry of Deeds, containing
33,809 square feet of land accordingly to said plan.
PARCEL NO. 4. The land with the buildings thereon situated in
Cambridge, Middlesex, County, Massachusetts, and being shown as Lot A and the
Lot lying to the South of said Lot A, as shown on plan entitled "Plan of Land in
Cambridge, Mass.", dated November 25, 1927, and recorded with the Middlesex
South District Registry in Book of Plans 407, Plan 5, bounded and described as
follows:
NORTHERLY by Main Street, one hundred forty-one and 2/100
(141.02) feet;
WESTERLY by Osborne Street, six hundred seventy-eight and
71/100 (678.71) feet
SOUTHEASTERLY by Albany Street, one hundred thirty-five and 13/100
(134.13) feet;
EASTERLY By Lot B as shown on the aforesaid plan, one hundred
seventy-one and 20/100 (171.20) feet;
SOUTHERLY by the same, thirty-two and 66/100 (32.66) feet; and
EASTERLY again by the same and by land now or formerly of
General Latex and Chemical Corp., four hundred
twenty-seven and 10/100 (427.10)feet; containing
83,178 square feet of land, more or less.
See also a plan entitled "Plan of Premises in Cambridge, surveyed for Alan and
Endicott, Trs." dated December 22, 1924, recorded with said Deeds in Plan Book
346, Plan 50 and refer to a deed recorded with said Deeds in Book 5047, Page
151.
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EXHIBIT C
WORK LETTER
This Work Letter is incorporated by reference into the Lease dated
August 4, 2000, by and between Massachusetts Institute of Technology, as Lessor,
and Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference
in the Lease not otherwise defined herein shall have the same meaning herein as
therein.
1. ADDITIONAL DEFINITIONS. Each of the following terms shall have the
meaning stated immediately after it:
COMMENCEMENT DATE. The first to occur of:
(i) six months after the date on which Lessor has
"substantially completed" Lessor's Work within the
tenantable area of the interior of the Building or a
portion thereof as described below and made such area
available to Lessee for the completion of Lessee's
Work ("Lessor's Delivery Date"), or
(ii) the date on which Lessee first conducts its business
in the Premises or a portion thereof, or
(iii) the date determined pursuant to Paragraph 8 of this
Work Letter.
If Lessor has completed Lessor's Work for a substantial
portion but less than all of the Premises and such portion may
reasonably be occupied by the Lessee for the Permitted Use
independently of the remaining portion, the Commencement Date
shall occur six months after such portion has been made
available to the Lessee for the completion of Lessee's Work
therein, and Basic Rent shall be prorated as set forth in
Section 4.1. If the Premises are delivered in two portions,
subparagraphs (i) (ii) and (iii) shall apply independently to
each portion. For the purposes of determining the expiration
date of the Initial Term and the earliest date on which
Lessee's existing lease at 230 Albany Street may be
terminated, the Commencement Date shall be deemed to be
Commencement Date for the portion last delivered.
CONSTRUCTION AUTHORIZATIONS. Collectively, all permits,
licenses and other consents and approvals required from any
governmental authority for the construction of Lessee's Work.
LESSEE'S GENERAL CONTRACTOR. A general contractor selected by
Lessee and approved in writing by Lessor, who will be engaged
by Lessee to construct Lessee's Work.
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LESSOR'S DELIVERY DATE. As defined above in this Paragraph 1.
LESSOR'S GENERAL CONTRACTOR. A general contractor selected by
Lessor engaged to construct Lessor's Work.
LESSOR'S WORK. The work shown on the Lessor's Working Drawings
to be performed by Lessor in connection with the completion of
the Premises as shown on SCHEDULE 1 to this Work Letter
entitled "Shell/Core Tenant Improvements Responsibility
Matrix" which plans shall be subject to Lessee's review and
approval not to be unreasonably withheld. Lessee has approved
the plans identified on Exhibit G to the Lease.
LESSEE'S WORK. All improvements, alterations and additions
which Lessee wishes to make to the Premises as part of the
initial preparation thereof for Lessee's occupancy and shall
include the items of work for which Lessee is made responsible
on SCHEDULE 1.
LESSOR'S CONTRIBUTION. The amount to be provided by Lessor to
Lessee in reimbursement of costs and expenses incurred by
Lessee in performing Lessee's Work, which amount shall not
exceed $37.50 per square foot of Rental Area of the Premises.
SPACE PLAN. A plan showing the general layout of the Premises,
including circulation elements and the location of primary
function areas, to be prepared by the Lessee.
LESSEE'S WORKING DRAWINGS. The working drawings and
specifications for Lessee's Work, to be prepared by Lessee and
Lessee's architect in accordance with this Work Letter.
Lessee's Working Drawings shall be prepared in compliance with
all applicable Legal Requirements and stamped by registered
Massachusetts professionals, and shall consist of all
architectural and engineering plans and specifications which
are required to finish the Premises or to obtain any
Construction Authorization required therefor.
LESSOR'S WORKING DRAWINGS. The working drawings and
specifications for Lessor's Work, to be prepared by Lessor and
Lessor's architect in accordance with this Work Letter.
Lessor's Working Drawings shall be prepared in compliance with
all applicable Legal Requirements and stamped by registered
Massachusetts professionals, and shall consist of all
architectural and engineering plans and specifications which
are required to perform Lessor's Work or to obtain any
Construction Authorization required therefor.
2. PREPARATION OF THE PREMISES. Lessor shall, at its sole cost and
expense, perform Lessor's
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Work. Lessor shall give written notice to Lessee approximately
thirty (30) days in advance of Lessor's anticipated substantial
completion of Lessor's Work, and Lessee shall have the right to
inspect Lessor's Work to confirm that the same has been completed in
accordance with the requirements of this Work Letter. Lessee shall
perform Lessee's Work at Lessee's sole cost and expense, subject to
the payment by Lessor of Lessor's Contribution as hereinbelow
provided.
Lessee shall have the right to defer the performance of Lessee's Work
for up to twenty thousand square feet of the Premises for a period of
two years after the Commencement Date without losing its right to
receive Lessor's Contribution with respect to such space; provided
however that Lessee shall install window blinds and make such other
improvements to the unimproved space as may be necessary so that it
presents the same appearance from the exterior of the Building as the
space which has been improved and occupied. If Lessee has not directed
Lessor to commence the improvement of the unimproved space prior to the
end of the two year period, Lessee's right to receive Lessor's
contribution with respect to such space shall terminate.
Lessor shall obtain from Lessor's General Contractor a guaranty against
construction defects for a period of not less than one (1) year.
Lessor agrees that, if Lessee is unable to occupy the Premises six (6)
months after Lessor's Delivery Date has occurred as described in
Paragraph 1 of this Work Letter because of a failure by Lessor to
complete one or more items of Lessor's Work reasonably necessary for
such occupancy, the Commencement Date shall be deferred until the
completion of such items of Lessor's Work. If the Premises are
delivered in two portions as described in Paragraph 1, the preceding
sentence shall apply independently to each portion except as set forth
in that paragraph. Lessor agrees further that, if Lessor's Work has not
been completed in its entirety by January 1, 2003, unless caused by a
Lessee Delay, Lessee shall have the right to terminate this Lease
without other recourse against the Lessor.
3. INSURANCE. Prior to the commencement of any design work on Lessee's
Work, Lessee shall provide to Lessor an original certificate of
insurance, in customary form, for each architect and engineer retained
by Lessee in connection with the design and/or construction of Lessee's
Work, which certificate shall evidence a current "errors and omissions"
insurance policy as in effect, in an amount reasonably acceptable to
Lessor. Prior to the commencement of the construction of Lessee's Work,
Lessee shall provide to Lessor an original certificate of insurance for
Lessee's General Contractor (or, if no general contractor is used, each
trade contractor) employed by Lessee in connection with the
construction of Lessee's Work, which certificate shall evidence a
current general liability insurance policy as in effect, in an amount
reasonably acceptable to Lessor, naming Lessor as an additional
insured.
4. SPACE PLAN. Within 90 days after the execution and delivery of this
Lease Agreement, Lessee shall prepare and deliver the Space Plan to
Lessor. Lessor shall review the Space
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Plan and meet with Lessee within 15 days of Lessor's receipt
thereof. In the event that Lessor determines the Space Plan to be
incomplete or inconsistent with the base building design, Lessor
will return the Space Plan to Lessee for corrections and/or
revisions. Lessee shall deliver a corrected Space Plan to Lessor at
Lessee's sole cost and expense within 15 days after return thereof
by Lessor. Upon mutual approval of the Space Plan, Lessee will cause
the preparation of Lessee's Working Drawings to commence.
5. LESSEE'S WORKING DRAWINGS. Lessee shall select an architect to prepare
architectural working drawings, which architect shall be subject to
Lessor's reasonable approval. Lessee shall use the MEP engineers
designated by Lessor to prepare those portions of the Lessee's Working
Drawings. Lessee shall deliver the schematic design component of
Lessee's Working Drawings to Lessor not later than December 1, 2000 and
the design development component of Lessee's Working Drawings not later
than March 1, 2001. Lessor shall review Lessee's Working Drawings and
give Lessee written notice within ten (10) days of receipt thereof
either that (i) it approves the Working Drawings, or (ii) it
disapproves the Working Drawings, together with a written list of
required modifications. If Lessor desires that all or any components of
Lessee's Work be removed upon the expiration or earlier termination of
the Term, Lessor shall so inform Lessee in such written notice. Lessee
shall be solely responsible for the preparation and completion of all
preliminary and final Lessee's Working Drawings.
Lessee shall revise the preliminary Lessee's Working Drawings to
incorporate the corrections and modifications requested by Lessor and
shall submit final Working Drawings to Lessor for its approval within
thirty (30) days after its receipt of the list of corrections and
modifications from Lessor. Lessor shall review the final Working
Drawings and, within fifteen (15) business days after receipt thereof,
Lessor shall either (a) notify Lessee that Lessor has approved the
final Working Drawings, or (b) provide to Lessee a list of corrections
and modifications which Lessor requires to be made to the Working
Drawings. Lessor shall also provide to Lessee within such 15-business
day period a supplementary list of those elements of Lessee's Work
which Lessee must remove at the expiration or earlier termination of
this Lease (if any). In the event Lessor returns the final Working
Drawings to Lessee for further correction or modification, Lessee shall
diligently correct the Working Drawings and re-submit them to Lessor
for approval pursuant to the preceding provisions of this paragraph
including the period of time within which the Working Drawings must be
submitted. No work shall be performed until final Lessee's Working
Drawings have been approved in writing by Lessor.
The review and/or approval by Lessor or its architect or engineers of
any plans, sketches or Working Drawings submitted by Lessee relating to
Lessee's Improvements shall not (i) constitute an opinion or
representation by Lessor that the same are in compliance with all
applicable Legal Requirements and the provisions of all applicable
insurance policies or as to the feasibility of constructing the work
shown thereon, or (ii) impose on Lessor any responsibility for a design
defect, it being agreed that all such responsibility shall remain
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solely with Lessee.
Lessee shall reimburse Lessor, promptly upon demand therefor, for all
costs and expenses reasonably incurred by Lessor in reviewing any
plans, drawings and specifications submitted by Lessee pursuant to this
Work Letter, which reimbursement shall be due and payable as Additional
Rent.
6. LESSEE'S GENERAL CONTRACTOR. Lessee shall obtain the prior reasonable
written approval of Lessor as to Lessee's General Contractor.
7. LESSEE'S WORK. Lessee shall be solely responsible for obtaining all
Construction Authorizations required for Lessee's Work. Lessee shall
apply for and maintain in full force and effect (or cause Lessee's
General Contractor to apply for and so maintain) all Construction
Authorizations required for the construction of Lessee's Work, and upon
completion of Lessee's Work shall obtain a certificate of occupancy for
the Premises from the appropriate governmental authority. Lessee shall
deliver to Lessor a copy of said certificate of occupancy promptly
after receiving the same.
Promptly after receiving all Construction Authorizations required for
Lessee's Work, Lessee shall cause Lessee's General Contractor to
commence construction and diligently to proceed to completion thereof.
All construction shall be performed in a good and workmanlike manner,
using new materials and in compliance with the Working Drawings, the
Construction Authorizations, all Legal Requirements, and the provisions
of all applicable insurance policies.
Lessee shall pay promptly for all labor and materials supplied to
Lessee in connection with Lessee's Work, shall not cause or permit any
liens for such labor or materials to attach to the Premises, and shall
bond or discharge any such lien which may be filed or recorded within
fifteen (15) days after Lessee receives actual notice of such filing or
recording.
The construction of Lessee's Work shall be subject to the requirements
set forth in Section 11.0(f) of the Lease. Lessor may inspect such work
at any time or times and shall promptly give notice to Lessee of any
observed defects. Lessee shall indemnify, defend and hold harmless
Lessor from and against any and all liability, damage, penalties or
judgments and from and against any claims, actions, proceedings and
expenses and costs in connection therewith, including reasonable
attorneys' fees, arising out of or resulting from the design or
construction of Lessee's Work.
Lessee shall obtain from Lessee's General Contractor a guaranty against
construction defects for a period of not less than one (1) year.
8. LESSEE'S DELAYS. Notwithstanding the definition of "Commencement Date"
set forth in Paragraph 1 above, if Lessor is delayed in substantially
completing the Premises as the
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result of the occurrence of any one or more of the following
(collectively, "Lessee's Delays"):
(a) delay in delivery by Lessee or its agents,
contractors, or consultants of the Space Plan or
Lessee's Working Drawings, or any other information,
plans, design work and detailed drawing beyond the
dates herein provided for such delivery, or
(b) Lessee's changes to Lessee's Working Drawings
(notwithstanding Lessor's approval of such changes),
or
(c) delays in performance by Lessee or any person
employed by Lessee which causes delays in the
completion of any work to be done by Lessor or which
shall otherwise delay the "substantial completion" of
the Premises, or
(d) any fault, negligence, omission, or failure to act on
the part of Lessee or its agents, contractors,
workmen, mechanics or suppliers,
then the Commencement Date shall be the date on which Lessor
reasonably estimates the Premises would have been
"substantially complete" but for such occurrence.
9. PAYMENT OF LESSOR'S CONTRIBUTION. Lessor shall make progress payments
towards the cost of Lessee's work pro rata with payments made to
Lessee's contractors by Lessee based on the estimated cost to complete
Lessee's Work determined from time to time during the construction of
Lessee's Work. (Thus, if the estimated cost of Lessee's Work is $60 per
square foot of Rental Area, Lessor's share of each progress payment
would be 62.5%) As a condition to Lessor's obligation to make a payment
of Lessor's Contribution, Lessee shall furnish to Lessor: (i) a
certificate from Lessee's architect on form AIA G702 indicating the
portion of Lessee's Work completed as of the date stated in Lessee's
request for payment is in accordance with the Working Drawings and
indicating that the construction of the work is progressing in
accordance with the applicable schedule and the estimated cost of
completion of Lessee's Work (Architect's Certificate") and (ii) partial
lien waivers from Lessee's General Contractor and any major
subcontractors covering all work completed and requisitioned as of the
date of Lessee's request for payment, subject to payment for all unpaid
and requisitioned work ("Lien Waivers"). Payment will be made within
ten (10) days of Lessee's request for payment together with the
Architect's Certificate and Lien Waivers.
10. LESSEE'S ACCESS TO THE PREMISES. Lessee and Lessee's agents, at
Lessee's sole risk, may, with Lessor's prior consent (which consent
shall not be unreasonably withheld or delayed), enter the Premises
prior to the completion of Lessor's Work in order to do such
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work as may be required to make the Premises ready for Lessee's use and
occupancy thereof. If Lessor permits such entry, such permission shall
be conditioned upon Lessee and Lessee's agents, contractors, workmen,
mechanics, suppliers and invitees, working in harmony with Lessor and
the general contractor and with other Lessees and occupants of the
Building. If at any time such entry shall cause or threaten to cause
disharmony or otherwise interfere with the orderly completion or
operation of the Building, Lessor shall have the right to withdraw such
permission upon twenty-four (24) hours written notice to Lessee. Any
such entry into and occupation of the Premises shall be deemed to be
under all of the terms, covenants, conditions and provisions of this
Lease except the covenant to pay Rent. Lessor shall not be liable in
any way for any injury, loss or damage which may occur to any of
Lessee's work and installations made in the Premises or to properties
placed therein during construction of the Premises, the same being at
Lessee's sole risk.
11. LESSOR'S AND LESSEE'S REPRESENTATIVES. Prior to the commencement of any
design work for the Premises, each party hereto shall designate in
writing to the other a person as "Lessor's Representative" and
"Lessee's Representative" respectively. Each party may rely on the
other's Representative with respect to all matters which pertain to
this Work Letter (including, but not limited to, authorizing changes in
the work or the use of overtime, or interpreting the Working Drawings),
each party having authorized its Representative to make decisions
binding upon such party with respect to such matters.
12. POSSESSION BY LESSEE. Subject to Lessee's right to bring claims under
the warranty of the General Contractor referred to in Section 2 of this
Work Letter and any warranties provided by subcontractors which Lessor
agrees to assign to Lessee as lessee of the entire building, all of
Lessor's Work shall be deemed to be accepted by Lessee except for such
items as are specified in a written notice given by Lessee to Lessor
not later than thirty (30) days after the date on which Lessee takes
possession of the Premises except for (i) latent defects not reasonably
discoverable within such 30-day period, and (ii) defects which are not
reasonably discoverable during such 30-day period because of the
seasonal impact of the defect. Lessor shall correct the items set forth
in such notice as soon as practicable, and in all events within thirty
(30) days after such notice.
13. UNION CONTRACTORS AND SUBCONTRACTORS REQUIRED. All general contractors
and subcontractors selected to perform work under this Work Letter must
be union contractors.
14. GENERAL. A breach by Lessee of any provision of this Work Letter shall
constitute a default under the Lease, for which Lessor shall have all
remedies therein provided.
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EXHIBIT D
SERVICES PROVIDED BY BUILDING MANAGER
This Exhibit is incorporated by reference into the Lease dated August 4, 2000,
by and between Massachusetts Institute of Technology, as Lessor, and
Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference in
the Lease not otherwise defined herein shall have the same meaning herein as
therein.
Lessor shall provide the following services at the Building unless Lessee elects
to manage the Building as permitted by Section 21 of the Lease Agreement in
which event Lessee shall be responsible to provide such services to itself and
any sublessees.:
1. Heating and air conditioning services for the Premises as demised at
the start of the Term for normal office operations between the hours of
8:00 a.m. and 6:00 p.m., Monday through Friday, except on national or
state holidays. Excluded from such services are air conditioning
requirements for computers or other exceptional office machinery. If
Lessee requires air conditioning or heating services at hours other
than those set forth above, Lessor shall provide such service, and
Lessee shall pay Lessor's costs to furnish such service as Additional
Rent.
2. Maintenance of the following: all Building heating equipment,
electrical equipment, and plumbing systems in public areas only; all
Building air conditioning equipment, excluding special air conditioning
equipment; all window frames and glass, unless the damage to any of the
above is caused by the willful neglect or misuse by Lessee.
3. Nightly (Monday-Friday) cleaning of the public corridors, stairwells,
lobbies, bathrooms; and cleaning of the windows, both inside and out,
two (2) times per year.
4. Extermination of all public and tenanted areas of the Building, as the
management of the Building deems necessary.
5. Structural maintenance of the Premises including repairs to the roof,
exterior walls of the building and structural damage to the floors.
6. landscaping maintenance, maintenance of the Parking Area (except for
snow removal), and other services as deemed necessary by Lessor for the
normal operation of the Building and the Land
7. Security for the Building as reasonably determined by Lessor.
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EXHIBIT E
SERVICES PROVIDED BY LESSEE
This Exhibit is incorporated by reference into the Lease dated August
4, 2000, by and between Massachusetts Institute of Technology, as Lessor, and
Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference in
the Lease not otherwise defined herein shall have the same meaning herein as
therein.
Lessee shall provide and pay for all maintenance of and repairs to the
Premises necessary to keep the Premises in good condition or in as good a
condition as the Premises were at the beginning of the Term or may be put in
thereafter (damage from taking or casualty or reasonable wear and tear only
excepted). Such repairs and maintenance shall include but not be limited to the
following:
A. The maintenance and repair of any plumbing systems within the
Premises (and serving solely the Premises), and the repair of
any damage to the Premises or to the Building caused by the
malfunction of such plumbing systems;
B. The maintenance and repair of all electrical wiring, outlets,
switches and light fixtures within the Premises (and serving
solely the Premises);
C. The maintenance and repair of all hardware within the
Premises;
D. The maintenance and repair of all walls, doors, ceilings, and
floors.
E. The replacement of fluorescent light tubes and ballasts. This
service is available through Building management on a time and
materials basis.
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EXHIBIT F
PERMITTED FLOOR LOAD
(Sheet attached depicts the permitted
floor load of the Premises)
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EXHIBIT G
SCHEDULE OF LESSOR'S WORKING DRAWINGS APPROVED BY LESSEE
(see attached)
(Schedule attached depicts the Lessor's working
drawings as approved by Lessee)
54
