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ARTICLE I


REFERENCE DATA


1.1         SUBJECTS REFERRED TO:


Each reference in this Lease to any of the following subjects shall be construed to incorporate the data stated for that subject in this Section 1.1:


LANDLORD:

California State Teachers’ Retirement System



MANAGING AGENT:

Clarion Partners, LLC



LANDLORD’S & MANAGING AGENT’S ADDRESS:


c/o Clarion Partners, LLC


One Federal Street


Boston, MA 02110


Attn.: Asset Manager



TENANT:

Cubist Pharmaceuticals, Inc., a Delaware corporation



TENANT’S ADDRESS (FOR NOTICE AND BILLING):



a.

Prior to commencement of occupancy:




65 Hayden Avenue, Lexington, MA 02421



b.

After commencement of occupancy:




55 Hayden Avenue, Lexington, MA 02421



BROKERS:

Richards, Barry Joyce & Partners and Grubb & Ellis Company



PREMISES:

The space in the building at 45/55 Hayden Avenue, Lexington, Massachusetts (the Building) located on the fourth (4th) and second (2nd) floors of the Building as shown on Exhibit A.


RENTABLE FLOOR AREA OF THE PREMISES: Approximately 15,475 rentable square feet consisting of approximately 6,755 rentable square feet located on the second (2nd) floor of the Building and 8,720 rentable square feet located on the fourth (4th) floor of the Building


TOTAL RENTABLE FLOOR AREA OF THE BUILDING: Approximately 190,079 square feet


ALLOWANCE FOR INITIAL ALTERATIONS: $433,300 ($28.00) per rentable square foot)


PARKING:           Three (3) parking spaces per 1,000 rentable square feet of Premises


TERM COMMENCEMENT DATE:   Lease Execution Date





RENT COMMENCEMENT DATE:

August 1, 2004



TERM:

Commencing on the Term Commencement Date and continuing until July 31, 2009 unless sooner terminated as provided herein


ANNUAL RENT:

Rent Commencement



Date – January 31, 2005

$22.00 per rentable square foot


February 1, 2005 – January 31, 2006

$23.00 per rentable square foot


February 1, 2006 – January 31, 2007

$24.00 per rentable square foot


February 1, 2007 – January 31, 2008

$25.00 per rentable square foot


February 1, 2008 – July 31, 2009

$26.00 per rentable square foot



TOTAL ANNUAL AGGREGATE RENT:

Rent Commencement Date - January 31, 2005 -
$340,450.00 ($28,370.83 per month; based upon
$22.00 per rentable square foot)
February 1, 2005 – January 31, 2006 -
$355,925.00 ($29,660.42 per month; based upon
$23.00 per rentable square foot)
February 1, 2006 – January 31, 2007 -
$371,400.00 ($30,950.00 per month; based upon
$24.00 per rentable square foot)
February 1, 2007 – January 31, 2008 -
$386,875.00 ($32,239.58 per month; based upon
$25.00 per rentable square foot)
February 1, 2008 – July 31, 2009 -
$402,350.00 ($33,529.17 per month; based upon
$26.00 per rentable square foot)




PERMITTED USES:

Office Uses and Computer Lab Uses and uses incidental thereto (provided that such computer lab use shall not exceed 6,755 rentable square feet and such computer lab use shall be in compliance with all laws and shall comply with the provisions of this Lease)



COMMERCIAL GENERAL LIABILITY INSURANCE:  See Article VI


SECURITY DEPOSIT:

$355,000.00 (as the same may be reduced pursuant to Article XI hereof)



TENANT’S REPRESENTATIVE FOR THE PURPOSES OF ARTICLE III:


Steve Lewis
c/o Cubist Pharmaceuticals
65 Hayden Avenue
Lexington, MA 02421
Phone (781) 860-8365


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LANDLORD’S REPRESENTATIVE FOR THE PURPOSES OF ARTICLE III:


Deke Schultze
c/o Clarion Realty Services
880 Winter Street
Waltham, MA 02451
Phone (781)522-0312


LEASE EXECUTION DATE:

January     , 2004


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1.2         EXHIBITS.


The exhibits listed below in this section are incorporated in this Lease by reference and are to be construed as part of this Lease:



EXHIBIT A

Plan showing Premises.







EXHIBIT B

Intentionally Deleted







EXHIBIT C

Landlord’s Services







EXHIBIT D

Rules and Regulations







EXHIBIT E

Extension Option







EXHIBIT F

Tenant Work Agreement







EXHIBIT G

Right of First Offer







EXHIBIT H

Holidays










ARTICLE I REFERENCE DATA





1.1

SUBJECTS REFERRED TO:


1.2

EXHIBITS





ARTICLE II PREMISES AND TERM





2.1

DESCRIPTION OF PREMISES


2.2

TERM





ARTICLE III CONSTRUCTION





3.1

DELIVERY OF PREMISES


3.2

PREPARATION OF PREMISES FOR OCCUPANCY


3.3

GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION


3.4

ALTERATIONS AND ADDITIONS


3.5

REPRESENTATIVES





ARTICLE IV RENT





4.1

ANNUAL RENT


4.2

ANNUAL OPERATING COST AND REAL ESTATE TAX ESCALATION


4.3

ESTIMATED ANNUAL OPERATING EXPENSE AND REAL ESTATE TAX ESCALATION PAYMENT


4.4

ELECTRICITY


4.5

CHANGE OF FISCAL YEAR



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4.6

PAYMENTS


4.7

AUDITS


4.8

CAPITAL EXPENDITURES





ARTICLE V LANDLORDS COVENANTS





5.1

LANDLORD’S COVENANTS DURING THE TERM


5.1.1

Building Services


5.1.2

Additional Building Services


5.1.3

Repairs


5.1.4

Tenant Directory


5.1.5

Food Service


5.1.6

Quiet Enjoyment


5.1.7

Monument Signage


5.2

INTERRUPTIONS





ARTICLE VI TENANT’S COVENANTS





6.1

TENANT’S COVENANTS DURING THE TERM


6.1.1

Tenant’s Payments


6.1.2

Repairs and Yielding Up


6.1.3

Occupancy and Use


6.1.4

Rules and Regulations


6.1.5

Safety Appliances


6.1.6

Assignment and Subletting


6.1.7

Indemnity


6.1.8

Tenant’s Insurance


6.1.9

Tenant’s Insurer Rating; Certification of Insurance


6.1.10

Landlord’s Right of Entry


6.1.11

Loading


6.1.12

Landlord’s Costs


6.1.13

Tenant’s Property


6.1.14

Labor or Materialmen’s Liens


6.1.15

Changes or Additions


6.1.16

Holdover


6.1.17

Independent Covenants





ARTICLE VII DAMAGE AND DESTRUCTION; CONDEMNATION





7.1

FIRE OR OTHER CASUALTY


7.2

EMINENT DOMAIN





ARTICLE VIII RIGHTS OF MORTGAGEE





8.1

PRIORITY OF LEASE


8.2

RIGHTS OF MORTGAGE HOLDERS; LIMITATION OF MORTGAGEE’S LIABILITY


8.3

NO PREPAYMENT OR MODIFICATION, ETC



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8.4

NO RELEASE OR TERMINATION


8.5

CONTINUING OFFER





ARTICLE IX DEFAULT





9.1

EVENTS OF DEFAULT


9.2

TENANT’S OBLIGATIONS AFTER TERMINATION





ARTICLE X MISCELLANEOUS





10.1

NOTICE OF LEASE


10.2

INTENTIONALLY DELETED


10.3

NOTICES FROM ONE PARTY TO THE OTHER


10.4

BIND AND INURE


10.5

NO SURRENDER


10.6

NO WAIVER, ETC


10.7

NO ACCORD AND SATISFACTION


10.8

CUMULATIVE REMEDIES


10.9

LANDLORD’S RIGHT TO CURE


10.10

ESTOPPEL CERTIFICATE


10.11

WAIVER OF SUBROGATION


10.12

ACTS OF GOD


10.13

BROKERAGE


10.14

SUBMISSION NOT AN OFFER


10.15

APPLICABLE LAW AND CONSTRUCTION


10.16

AUTHORITY OF TENANT


10.17

MISCELLANEOUS


10.18

ASSIGNMENT OF LEASE AND/OR RENTS


10.19

PARKING


10.20

RIGHT OF FIRST OFFER





ARTICLE XI SECURITY DEPOSIT



ARTICLE II


PREMISES AND TERM


2.1         DESCRIPTION OF PREMISES.


Subject to and with the benefit of the provisions of this Lease, Landlord hereby leases to Tenant, and Tenant leases from Landlord, the Premises.


Subject to Landlord’s rights reserved in this Lease, Tenant shall have, as appurtenant to the Premises, the right to use in common with others entitled thereto: (a) the common facilities included in the Building or on the lot on which the Building is located (the “Lot”), including, without limitation, sidewalks, parking, loading areas, lobbies, elevators, restrooms and the like, and (b) the building service fixtures and equipment serving the Premises.


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Landlord reserves the right from time to time, without unreasonable interference with Tenant’s use, (a) to install, repair, replace, use, maintain and relocate for service to the Premises building service fixtures and equipment wherever located in the Building or on the Lot and (b) to alter or relocate any common facilities.  Landlord also reserves the right at all reasonable times upon reasonable advance notice (except no notice is required in the event of an emergency) to enter upon the Premises, inspect the same and show the same to others, and in Landlord’s discretion to make repairs, alterations or substitutions for the protection and maintenance of the Building or any part thereof.


Landlord also reserves the right to enter the Premises to install ducts, wires, beams, walls and other equipment provided that such ducts, etc. are located above dropped ceilings, below the slab between demising walls, attached to bearing columns, and the like so that no such materials are visible in the Premises.


2.2         TERM.


To have and to hold for a period (the “Term”) commencing on the Term Commencement Date and continuing for the Term, unless sooner terminated as provided herein, subject to Tenant’s option to extend the Term, as set forth in Exhibit E attached hereto and incorporated herein.


ARTICLE III


CONSTRUCTION


3.1         DELIVERY OF PREMISES.


Tenant acknowledges that Tenant has had an opportunity to inspect the Premises.  The Premises, shall be delivered to Tenant “As Is,” “Where Is” with all faults and without representations, warranty or guaranty of any kind by Landlord to Tenant.


3.2         PREPARATION OF PREMISES FOR OCCUPANCY.


Tenant agrees to accept the Premises in its “As Is,” “Where Is” condition and configuration, it being agreed that Landlord shall not be required to perform any work or, except as provided below with respect to the Allowance, incur any costs in connection with the construction or demolition of any improvements in the Premises.


Tenant, following the Term Commencement Date and provided there is no default by Tenant hereunder, shall have the right to perform alterations and improvements in the Premises (the “Initial Alterations”) in accordance with the Tenant Work Agreement attached hereto as Exhibit F and subject to all of the terms and obligations of this Lease except for Tenant’s obligation to pay Annual Rent hereunder.  Notwithstanding the foregoing, Tenant and its contractors shall not have the right to perform Initial Alterations in the Premises unless and until Tenant has complied with all of the terms and conditions of the Tenant Work Agreement and Article III of this Lease.  Tenant shall be responsible for all elements of the design of Tenant’s plans, including without limitation the “Space Plan” and the “Construction Drawings and Specifications” as defined in the Tenant Work Agreement (including, without limitation,


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compliance with law, functionality of design, the structural integrity of the design, the configuration of the Premises and the placement of Tenant’s furniture, appliances and equipment), and Landlord’s approval of Tenant’s plans shall in no event relieve Tenant of the responsibility for such design.


3.3         GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION.


All construction work required or permitted by this Lease, whether by Landlord or by Tenant, shall be done in a good and workmanlike manner, using new materials of first quality and in compliance with all applicable laws and all lawful ordinances, regulations and orders of governmental authority and insurers of the Building and the Lot.  Either party may inspect the work of the other at reasonable times and promptly shall give notice of observed defects.


3.4         ALTERATIONS AND ADDITIONS.


This Section 3.4 shall apply before and during the Term.  Tenant shall not make any alterations and additions to the Premises except in accordance with plans and specifications first approved by Landlord which approval shall not be unreasonably withheld or delayed.  In no event shall any alterations or additions be considered or approved by Landlord which (a) involve or might affect any structural or exterior element of the Building or building mechanical systems, including the common facilities of the Building, or (b) will require unusual expense to readapt the Premises to normal office use on Lease termination or increase the cost of insurance or taxes on the Building or the Lot.  Landlord shall allow for the installation and use by Tenant of a sprinkler system for use in conjunction with Tenant’s occupancy of the Premises which installation shall be completed in accordance with the terms of the Tenant Work Agreement attached hereto as Exhibit F.  All alterations and additions shall become a part of the Premises, unless and until Landlord, at its option, shall, at the time of approval of the plans therefor, specify the same for removal pursuant to Section 6.1.2. All of Tenant’s alterations and additions and installation and delivery of telephone systems, furnishings, and equipment shall be coordinated with any work being performed by Landlord and shall be performed in such manner, and by such persons as shall maintain harmonious labor relations and not cause any damage to the Building or interference with Building construction or operation and, except for installation of furnishings, equipment and telephone systems, and except as otherwise expressly set forth herein, shall be performed by general contractors first approved by Landlord, which approval shall not be unreasonably withheld.  Before commencing any work Tenant shall: secure all licenses and permits necessary therefor; deliver to Landlord a statement of the names of all its contractors and subcontractors (the identity of which must have been previously approved by Landlord as hereinabove contemplated) and the estimated cost of all labor and material to be furnished by them; and cause each contractor and subcontractor to carry worker’s compensation insurance in statutory amounts covering all the contractor’s and subcontractor’s employees and comprehensive public liability insurance pursuant to the requirements of Section 6.1.9 hereof.  Tenant agrees to pay promptly when due, and to defend and indemnify Landlord from and against, the entire cost of any work done on the Premises by Tenant, its agents, employees or independent contractors, and not to cause or permit any liens for labor or materials performed or furnished in connection therewith to attach to the Building or the Lot and immediately to discharge any such liens which may so attach.  Tenant shall pay within fourteen (14) days after being billed therefor by Landlord, as additional rent, one hundred percent (100%) of any increase


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in real estate taxes on the Premises not otherwise billed to Tenant which shall, at any time after the commencement of the Term, be directly attributable to any alteration, addition or improvement to the Premises made by or on behalf of Tenant.


Landlord will not approve any construction, alterations, or additions requiring unusual expense to readapt the Premises to normal office use on lease termination or increasing the cost of, insurance or taxes on the Building or of Landlord’s services called for by Section 5.1.


In connection with the installation of telecommunication equipment by Tenant, such installation shall occur only in such locations and in such a manner as approved in writing by the Landlord and none of such wires, ducts or equipment shall be located in areas outside the Premises, provided, however, that Tenant may install wires and cables in risers and ducts outside the Premises which are in existence on the date of this Lease and for which there exists, in Landlord’s sole discretion, adequate space for Tenant’s wires and cables.  Telephone switches, antennae, electronic distribution boxes and similar equipment shall only be located within the Premises.  Landlord shall not be liable for any loss, damage or interruption of service related to such facilities, except to the extent caused by the negligence or willful misconduct of Landlord, its agents, contractors or employees.


3.5         REPRESENTATIVES.


Each party authorizes the other to rely in connection with their respective rights and obligations under this Article III upon approval and other actions on the party’s behalf by Landlord’s Representative in the case of the Landlord or Tenant’s Representative in the case of Tenant or by any person designated in substitution or addition by notice to the party relying.


ARTICLE IV


RENT


4.1         ANNUAL RENT.


Tenant agrees to pay to Landlord, without any offset or reduction whatever (except as made in accordance with the express provisions of this Lease), the Annual Rent in equal monthly installments in advance on the first day of each calendar month included in the Term after the Rent Commencement Date; and for any portion of a calendar month at the beginning or end of the Term, at the proportionate rate payable for such portion, in advance.  Upon execution of this Lease, Tenant shall pay the first month of Annual Rent due hereunder.


4.2         ANNUAL OPERATING COST AND REAL ESTATE TAX ESCALATION.


In addition to Annual Rent, Tenant shall pay to Landlord as additional rent, Tenant’s proportionate share of Annual Operating Costs (as hereinafter defined) which is in excess of the total Operating Costs incurred during calendar year 2004. In addition, Tenant shall also pay to Landlord as additional rent, Tenant’s proportionate share of Real Estate Taxes (as hereinafter defined) which is in excess of the total Real Estate Taxes incurred for fiscal year 2005. Tenant’s proportionate share of Annual Operating Costs shall be determined by multiplying Annual Operating Costs by a fraction, the numerator of which is the Rentable Floor Area of the Premises


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and the denominator of which is the Total Rentable Floor Area of the Building.  In the event that the Building is not fully occupied, such Annual Operating Costs shall be adjusted to reflect the costs which would be incurred if the Building were 100% occupied.  Tenant’s proportionate share of Real Estate Taxes shall be determined by multiplying annual Real Estate Taxes by a fraction, the numerator of which is the Rentable Floor Area of the Premises and the denominator of which is the Total Rentable Floor Area of the Building.


Annual Operating Costs shall mean the actual expenses paid or incurred by Landlord in the operation, maintenance and management of the Building and Lot.  Operating Costs shall include without limitation:


(a) service, repair, replacement (in accordance with the following paragraph) and other maintenance to the Building and Lot and components thereof; (b) wages and salaries (and taxes and other charges imposed upon employers with respect to such wages and salaries) and fringe benefits and worker’s compensation insurance premiums paid to persons employed by the Landlord for rendering service in the operation, maintenance, and repair of the Building and Lot and related facilities and amenities; (c) cost of independent contractors hired for the operation, maintenance and repair of the Building and Lot and related facilities and amenities (which payments may be to affiliates of Landlord provided the same are at reasonable rates consistent with the type of occupancy and the services rendered); (d) costs of electricity, steam, water, fuel, heating, lighting, air conditioning, sewer, and other utilities chargeable to the operation and maintenance of the Building and Lot exclusive of electricity costs passed through directly to tenants; (e) cost of insurance for and relating to the Building and the Lot, including fire and extended coverage (or such greater coverages as Landlord may elect to carry), elevator, boiler, sprinkler leakage, water damage, public liability and property damage, plate glass, and rent protection; (f) costs of supplies; (g) costs of window cleaning, janitorial services, security services, landscaping, snow and ice removal and painting; (h) sales or use taxes on supplies and services; (i) consulting, accounting fees, legal, tax appeal, engineering and other professional fees and expenses; (j) management fees; (k) contributions, costs or expenses related to common areas or facilities of any office park or development of which the Building or Lot are a part, (l) alterations and improvements to the Building and Lot made by reason of any requirement of any insurance underwriters or any federal, state, or local statutes, regulations, ordinances, or any other duly constituted public authorities having jurisdiction over the Building and Lot; (m) any losses incurred by Landlord in connection with providing cafeteria style food service to the Building as set forth in Section 5.1.5 of this Lease; and (n) without limiting any of the foregoing, any other expense or charge which, in accordance with sound accounting and management principles generally accepted, would be construed as an operating expense.  The term Operating Costs shall not include the interest and amortization on mortgages for the Building and Lot or leasehold interests therein; any charge for depreciation; leasing commissions or legal fees for the negotiation and enforcement of leases; and the cost of special services rendered to tenants (including Tenant) for which a special charge is made.


Operating Costs shall also exclude:


(a)          the cost of painting, decorating and redecorating for any tenant, and any work or service performed or rendered exclusively, to a greater extent or in a materially more favorable manner for any tenant, including Tenant;


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(b)         costs relating to maintaining Landlord’s existence as a corporation, partnership or other entity;


(c)          advertising and other fees and costs incurred in procuring tenants;


(d)         franchise or income taxes imposed on Landlord;


(e)          the cost of any items for which Landlord is reimbursed by insurance, condemnation awards, refund, rebate or otherwise and any expenses for repairs and maintenance to the extent covered and reimbursed by warranties, guarantees and service contracts;


(f)            costs incurred by Landlord relating to any violation by any other tenant of the terms and conditions of any lease of space in the Building; and


(g)         costs paid directly by individual tenants to suppliers, including tenant electricity, telephone and other utility costs.


Real Estate Taxes shall mean and all real estate taxes and assessments, general or special, ordinary or extraordinary, foreseen or unforeseen, imposed upon the Building and Lot and any future improvement of whatever kind thereto or thereon.  Real Estate Taxes shall include, without limitation:


(a)          real estate taxes on the Building and Lot; (b) installments and interest on assessments for public betterments or public improvements assessed after the date of this Lease; and (c) expenses of any proceedings for abatement of taxes and assessments with respect to any fiscal year or fraction of a fiscal year.


4.3         ESTIMATED ANNUAL OPERATING EXPENSE AND REAL ESTATE TAX ESCALATION PAYMENT.


If, with respect to any fiscal year or fraction thereof during the Term, Landlord estimates that Tenant will be obligated to pay Annual Operating Costs, then Tenant shall pay, as additional rent, on the first day of each month of such fiscal year and each ensuing fiscal year thereafter, Estimated Monthly Operating Expense Cost Payments equal to 1/12th of the estimated Annual Operating Cost Escalation for the respective fiscal year, with an appropriate additional payment or refund to be made within 30 days after Landlord’s Statement (as hereafter defined) is delivered to Tenant.  Landlord may adjust such Estimated Monthly Annual Operating Cost Payment from time to time and at any time during a fiscal year (but not more than twice each year), and Tenant shall pay, as additional rent, on the first day of each month following receipt of Landlord’s notice thereof, the adjusted Monthly Annual Operating Cost Payment.


As soon as practicable after the end of each fiscal year ending during the Term and after lease termination, Landlord shall render a statement (Landlord’s Statement) in reasonable detail and according to generally accepted accounting practices certified by Landlord and showing for the preceding fiscal year or fraction thereof, as the case may be, Landlord’s Annual Operating Costs, and Tenant’s proportionate share thereof, as defined above.


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If, with respect to any fiscal year or fraction thereof during the Term, Landlord estimates that Tenant will be obligated to pay annual Real Estate Taxes, then Tenant shall pay, as additional rent, on the first day of each month of such fiscal year and each ensuing fiscal year thereafter, Estimated Monthly Real Estate Tax Payments equal to 1/12th of the estimated annual Real Estate Tax escalation for the respective fiscal year, with an appropriate additional payment or refund to be made within 30 days after a copy of the actual Real Estate Tax Bill for the Premises and the Lot is delivered to Tenant showing, for the preceding fiscal year or fraction thereof, as the case may be, Landlord’s Real Estate Taxes, and Tenant’s proportionate share thereof.  Landlord may adjust such Estimated Monthly Real Estate Tax Payment from time to time and at any time during a fiscal year (but not more than twice each year), and Tenant shall pay, as additional rent, on the first day of each month following receipt of Landlord’s notice thereof, the adjusted Monthly Real Estate Tax Payment.


4.4         ELECTRICITY.


Tenant will be billed for electricity for Tenant’s lights and outlet consumption on a monthly basis based on Landlord’s annual estimate of electricity charges per rentable square foot.  Should the actual average expense to Landlord per square foot for Tenant’s electricity be different than Landlord’s estimate, an additional charge or a credit will be made at the end of each year’s occupancy to be paid with or credited against the next monthly charge for Tenant’s electricity.  Notwithstanding the foregoing, Landlord reserves the right to assess Tenant’s charge for electricity based on an engineer’s survey of Tenant’s electrical usage conducted from time to time or on the sub-metering of all or part of the Premises.  Such charges for Tenant’s electricity shall be paid by Tenant as additional rent at the same time and in the same manner as payments of Annual Rent.


Tenant covenants and agrees that its use of electric current (including without limitation, the electric current necessary for any supplemental HVAC at the Premises) shall not exceed 6.0 watts per rentable square foot of floor area on the fourth floor of the Premises and 80 watts per rentable square foot of floor area on the second floor of the Premises and that its total connected lighting load will in no event exceed the maximum load from time to time permitted by applicable governmental regulations.  In the event Tenant introduces into the Premises personnel or equipment which overloads the capacity of the Building’s electrical system or in any other way interferes with the system’s ability to perform properly, supplementary systems including check meters may, if and as needed, at Landlord’s option, be provided by Landlord, at Tenant’s expense.  Landlord shall not in any way be liable or responsible to Tenant for any loss or damage or expense which Tenant may sustain or incur if, during the Term of this Lease, either the quantity or character of electric current is changed or electric current is no longer available or suitable for Tenant’s requirements due to a factor or cause beyond Landlord’s control.


Landlord reserves the exclusive right to provide electric and other utility service to the Building.  Tenant may request permission from Landlord (which consent may be withheld in its sole discretion) to arrange electric and other utility service exclusively serving the Premises.  Should such permission be granted, however, such service shall be installed only in such locations and in such manner as shall be specifically approved by Landlord in its sole discretion, Tenant shall be responsible for restoration of any damage caused by such installation and Tenant shall be responsible for removal of such installations at the termination of this Lease.  Landlord


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may limit Tenant’s choice of electrical or other utility providers in order to avoid proliferation of such services to the Building or for any other reason.  In no event, however, shall Landlord be responsible for any damages or inconvenience caused by interruption in or poor quality of electricity or other utility services provided to the Building or the Premises unless such damages are caused by the negligence or willful misconduct of Landlord, its agents or employees.


4.5         CHANGE OF FISCAL YEAR.


Landlord shall have the right from time to time to change the periods of accounting under Section 4.2 to any annual period other than a calendar year, and upon any such change all items referred to in Section 4.2 shall be appropriately apportioned.  In all Landlord’s Statements rendered under Section 4.2, amounts for periods partially within and partially without the accounting periods shall be appropriately apportioned, and any items which are not determinable at the time of a Landlord’s Statement shall be included therein on the basis of Landlord’s estimate, and with respect thereto Landlord shall render promptly after determination a supplemental Landlord’s Statement, and appropriate adjustment shall be made according thereto.


4.6         PAYMENTS.


All payments of Annual Rent and additional rent shall be made to Managing Agent, or to such other person as Landlord may from time to time designate.  If any installment of Annual Base Rent or additional rent or payments due on account of leasehold improvements is paid more than five (5) days after the due date thereof (provided that Tenant shall not receive such five (5) day grace period more often than twice during any twelve (12) month period), at Landlord’s election, it shall bear interest at a rate equal to the average prime commercial rate from time to time established by the three largest national banks plus 4% per annum from such due date, which interest shall be immediately due and payable as further additional rent.


4.7         AUDITS.


Within two (2) months after receipt of Landlord’s statement (as defined in Section 4.3), Tenant may request to audit (at Tenant’s expense) Landlord’s Operating Costs for the preceding fiscal year.  Such audit shall take place at Landlord’s Office in the Metropolitan Boston Area where its books and records are kept or at such other location in the Metropolitan Boston area designated by Landlord.  Such audit may only be conducted by an independent, nationally recognized firm of certified public accountants.  In no event may such firm be compensated on a contingency fee basis or in any other manner which is dependent upon the results of such audit or inspection.  If such audit discloses a discrepancy in excess of 5% of the annual Operating Costs, and Landlord concurs with such audit, appropriate adjustments shall be paid to Landlord or Tenant, as the case may be.  If the Landlord does not concur with the results of such audit, the matter shall be submitted to binding arbitration with the American Arbitration Association at its office in Boston, Massachusetts in accordance with procedures designated by its applicable rules.


4.8         CAPITAL EXPENDITURES.


If Landlord shall make a capital expenditure, Tenant shall pay, in addition to Tenant’s proportionate share of Annual Operating Costs, Tenant’s proportionate share of the annual charge-off of such capital expenditure so long as it is incurred (i) to reduce the anticipated


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amount of Operating Costs or to prevent an anticipated increase in Operating Costs, (ii) to maintain the condition of the building as a first-class office building in the suburban Lexington, Massachusetts market, or (iii) in order to comply with requirements of law promulgated and enacted after the date of this Lease.  Annual charge-off shall be determined by dividing the original capital expenditure plus an interest factor, reasonably determined by Landlord, as being the interest rate then being charged for long-term mortgages, by institutional lenders on like properties within the locality in which the Building is located, by the number of years of useful life reasonably contemplated for such capital expenditure.  Useful life shall be determined reasonably by Landlord in accordance with generally accepted practices in effect at the time of making such expenditure.  Landlord represents, to the best of Landlord’s knowledge without independent investigation, that as of the Lease Execution Date, the only planned capital expenditure at the Building costing in excess of $70,000 is the installation of an energy management system for the Building.  The foregoing representation shall in no way derogate from Landlord’s right to make any future capital expenditures in accordance with the terms of this Lease.


ARTICLE V


LANDLORDS COVENANTS


5.1         LANDLORD’S COVENANTS DURING THE TERM.


Landlord covenants during the Term:


5.1.1         Building Services.  To furnish during normal working hours heat, air-conditioning, elevator service, cleaning service, hot and chilled water service as shown in Exhibit C.  “Normal working hours” shall mean the hours of 8:00 a.m. through 6:00 p.m.  Monday through Friday and the hours of 8:00 a.m. through 1:00 p.m. on Saturdays, and no hours on legal holidays (as listed in Exhibit H to Lease and as such list of holidays may be reasonably amended by Landlord from time to time) and Sundays; provided, however, that Tenant shall have access to the Building 24 hours a day, 365 days a year, by means of a key or other access device to the main lobby of the Building to be provided to Tenant by Landlord.  Tenant shall pay when due all amounts and charges for such services during hours other than normal working hours and shall indemnify and hold harmless Landlord from and against any and all claims, liabilities, damages, losses, costs and expenses (including reasonable attorney’s fees) in connection therewith.  Landlord’s current hourly rate for such services during other than normal working hours is $50.00 per hour.  Landlord has the right to increase such hourly charge upon prior notice to Tenant.  Landlord is not and shall not be required to furnish to Tenant or any other occupant of the Premises telephone or other communication service.


5.1.2         Additional Building Services.  To furnish, through Landlord’s employees or independent contractors, reasonable additional Building operation services upon reasonable advance request of Tenant at rates from time to time established by Landlord to be paid by Tenant;


5.1.3         Repairs.  Except as otherwise provided in Article VII, to make such repairs to the roof, exterior walls, floor stabs, other structural components and common facilities of the


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Building as may be necessary to keep them in good and serviceable condition consistent with the operation of the Building as a first-class office and research facility; however, the parties hereby recognize and agree that the Premises is being delivered to Tenant with Leibert units connected thereto and in no event shall Landlord at any time have any obligation to maintain, repair or replace any such Leibert units, it being the sole responsibility of Tenant.  Notwithstanding the foregoing, Tenant shall have no obligation to remove or restore such Leibert units.


5.1.4         Tenant Directory.  To include Tenant’s name on the Tenant directory maintained by Landlord in the main lobby of the Building.


5.1.5         Food Service.  Landlord may, in its sole discretion, provide, within the Building, a cafeteria style food service appropriate for the number of patrons which will use the facility.  Landlord reserves the right to approve Tenant’s use of a food service operator other than the Landlord’s food service operator, if any.


5.1.6         Quiet Enjoyment.  That Landlord has the right to make this Lease and that Tenant on paying the rent and performing its obligations hereunder shall peacefully and quietly have, hold and enjoy the Premises throughout the Term without any manner of hindrance or molestation from Landlord or anyone claiming under Landlord, subject however to all the terms and provisions hereof.


5.1.7         Monument Signage.  In the event that Tenant leases more than fifty percent (50%) of the Rentable Floor Area of the Building from Landlord, to include Tenant’s name on the existing monument signage outside the Building.


5.2         INTERRUPTIONS.


Landlord shall not be liable to Tenant for any compensation or reduction of rent by reason of inconvenience or annoyance, injury, death or for loss of business arising from power or other utility losses or shortages, air pollution or contamination, or from the necessity of Landlord’s entering the Premises for any of the purposes in this Lease authorized, or for repairing the Premises or any portion of the Building or the Lot or for any interruption or termination (by reason of any cause reasonably beyond Landlord’s control, including without limitation, loss of any applicable license or government approval) of the food service provided by Landlord pursuant to Section 5.1.5. Landlord shall use reasonable efforts to promptly restore such service.  Tenant hereby waives all claims against Landlord, its agents, servants, employees, invitees, or contractors for any injury to or death of any person or damage to or destruction of property in or about the Premises or the Lot by or from any cause whatsoever, including, without limitation, gas, fire, oil, electricity or leakage of any character from the roof, walls, basement or other portion of the Premises or the Lot, but excluding, however, the gross negligence or willful misconduct of Landlord.


In case Landlord is prevented or delayed from making any repairs, alterations or improvements, or furnishing any service or performing any other covenant or duty to be performed on Landlord’s part, by reason of any cause beyond Landlord’s reasonable control, Landlord shall not be liable to Tenant therefor, nor, except as expressly otherwise provided in Article VII, shall Tenant be entitled to any abatement or reduction of rent by reason thereof, nor


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shall the same give rise to a claim in Tenant’s favor that such failure constitutes actual or constructive total or partial, eviction from the Premises.


Landlord reserves the right to stop any service or utility system when necessary by reason of accident or emergency or until necessary repairs have been completed.  Except in case of emergency repairs, Landlord will give Tenant reasonable advance notice of any contemplated stoppage and will use reasonable efforts to avoid unnecessary inconvenience to Tenant by reason thereof.


Landlord also reserves the right to institute such policies, programs and measures as may be necessary, required or expedient for the conservation or preservation of energy or energy services or as may be necessary or required to comply with applicable codes, rules, regulations or standards.


ARTICLE VI


TENANT’S COVENANTS


6.1         TENANT’S COVENANTS DURING THE TERM.


Tenant covenants during the Term and such further time as Tenant occupies any part of the Premises:


6.1.1         Tenant’s Payments.  To pay when due (a) all Annual Rent, (b) all taxes which may be imposed on Tenant’s personal property in the Premises (including, without limitation, Tenant’s fixtures and equipment) regardless to whomever assessed, (c) as additional rent, Tenant’s proportionate share of Annual Operating Costs, (d) all charges by public utilities for electricity, telephone (including service inspections therefor) and other services rendered to the Premises not otherwise required hereunder to be furnished by Landlord without charge and not consumed in connection with any services required to be furnished by Landlord without charge, and (e) as additional rent, all charges to Landlord for services rendered pursuant to Section 5.1.2 hereof.


6.1.2         Repairs and Yielding Up.  Except as otherwise provided in Article VII and Section 5.1.3, to keep the Premises in good order, repair and condition, reasonable wear, damage by fire or other casualty, damage by taking, and damage caused by Landlord’s failure to perform its obligations only excepted; and at the expiration or termination of this Lease peaceably to yield up the Premises and all alterations and additions therein in such order, repair and condition, first removing all goods and effects of Tenant, all cabling and wiring and any alterations and additions, the removal of which is specified to be removed by Landlord by notice to Tenant given prior to the expiration of the Term, and repairing all damage caused by such removal and leaving them clean and neat.  If Tenant shall request, Landlord will inform Tenant whether or not Landlord will require removal of any alterations of installations at the expiration of the Term, at the time of Landlord’s plan review and approval of any such requested alterations or installations.  Tenant may, throughout the Term, at its expense, replace its own light bulbs in the Premises to Building standards.


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6.1.3         Occupancy and Use.  To use and occupy the Premises only for the Permitted Uses; not to injure or deface the Building or the Lot; to keep the Premises clean and in a neat and orderly condition; and not to permit in the Premises any use thereof which is improper, offensive, contrary to law or ordinances, or liable to create a nuisance or to create an unsafe or hazardous condition, or to invalidate or increase the premiums for any insurance on the Building or its contents or liable to render necessary any alteration or addition to the Building; not to dump, flush, or in any way introduce any hazardous substances or any other toxic substances into the septic, sewage or other waste disposal system serving the Premises; not to generate, store or dispose of hazardous substances in or on the Premises (except for customary quantities of cleaning supplies that are used in small amounts in accordance with all laws), or the Lot or dispose of hazardous substances from the Premises to any other location without the prior written consent of Landlord and then only in compliance with the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901 et seq., and all other applicable laws, ordinances and regulations; to notify Landlord immediately of any incident which would require the filing of a notice under applicable federal, state, or local law; not to use, store or dispose of hazardous substances on the Premises without first submitting to Landlord a list of all such hazardous substances and all permits required therefore and thereafter providing to Landlord on an annual basis Tenant’s certification that all such permits have been renewed with copies of such renewed permits; and to comply with the orders and regulations of all governmental authorities with respect to zoning, building, fire, health and other codes, regulations, ordinances or laws applicable to the Premises.  “Hazardous substances” as used in this paragraph shall mean “hazardous substances” as defined in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 and regulations adopted pursuant to said Act, and “hazardous substances”, “hazardous wastes”, “toxic substances”, “toxic wastes” and terms of similar import under other applicable federal and state statutes and regulations adopted pursuant thereto.


The Premises shall be used only for the Permitted Use and for no other use whatsoever.  Tenant shall not use or permit the use of the Premises for any purpose which is illegal, dangerous to persons or property or which, in Landlord’s reasonable opinion, unreasonably disturbs any other tenants of the Building or interferes with the operation of the Building.  Tenant shall comply with all laws, including the Americans with Disabilities Act, regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises.  Tenant, within three (3) days after receipt, shall provide Landlord with copies of any notices it receives regarding a violation or alleged violation of any Laws.


6.1.4         Rules and Regulations.  To comply with the Rules and Regulations set forth in Exhibit D and all other reasonable Rules and Regulations hereafter made by Landlord, of which Tenant has been given notice, for the care and use of the Building and the Lot and their facilities and approaches, it being understood that Landlord shall not be liable to Tenant for the failure of other tenants of the Building to conform to such Rules and Regulations.


6.1.5         Safety Appliances.  To keep the Premises equipped with all safety appliances required by law or ordinance or any other regulation of any public authority because of any use made by Tenant and to procure all licenses and permits so required because of such use and, if requested by Landlord, to do any work so required because of such use, it being understood that the foregoing provisions shall not be construed to broaden in any way Tenant’s Permitted Uses.


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6.1.6         Assignment and Subletting.  Not without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed, to assign, mortgage, pledge, encumber, sell or transfer this Lease, in whole or in part, to make any sublease, or to permit occupancy of the Premises or any part thereof by anyone other than Tenant, voluntarily or by operation of law (any of the foregoing being referred to herein as a “transfer”) (it being understood that in no event shall Landlord consent to any transfer other than a sublease if the same is on terms more favorable to the successor occupant than to the then occupant); as additional rent, to reimburse Landlord promptly for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting; no assignment or subletting shall affect the continuing primary liability of Tenant (which, following assignment, shall be joint and several with the assignee); no consent to any of the foregoing in a specific instance shall operate as a waiver in any subsequent instance.  Landlord’s consent to any proposed assignment or subletting is required both as to the terms and conditions thereof, and as to the creditworthiness of the proposed assignee or subtenant and as to the consistency of the proposed assignee’s or subtenant’s business with other uses and tenants in the Building.  In the event that any assignee or subtenant pays to Tenant any amounts in excess of the rent payable hereunder by Tenant, Tenant shall pay to Landlord, as additional rent, fifty percent (50%) of such excess rent as and when received by Tenant.  For purposes of this Section 6.1.6, the term “rent” shall mean all Annual Rent, additional rent or other payment and/or consideration payable hereunder.  Tenant’s obligation to pay fifty percent (50%) of such excess shall not apply to a permitted assignment or subletting in which the imputed value of this Lease is aggregated with the value of Tenant’s business in connection with a corporate transaction with a Permitted Affiliate (as defined below).  If Tenant requests Landlord’s consent to assign this Lease or sublet all or any portion of the Premises, Landlord shall have the option, exercisable by written notice to Tenant given within thirty (30) days after receipt of such request, to terminate this Lease.  In clarification of the foregoing, in the event of a proposed sublease for less than all of the rentable square feet of the Premises, Landlord shall only have the option to terminate the Lease with respect to that portion of the Premises included as a part of such sublease.  Notwithstanding the foregoing, Landlord shall waive such termination right (a) in the event of a transfer to a Permitted Affiliate (as defined below); or (b) in the event that the term of the proposed sublease is for a duration which is less than the lesser of: (i) 2 years; or (ii) one half of the remaining Term under this Lease,


Without limitation, it is agreed mat Landlord’s consent shall not be considered unreasonably withheld if: (l) the proposed transferee’s financial condition does not meet the criteria Landlord uses to select Building tenants having similar leasehold obligations; (2) the proposed transferee’s business is not suitable for the Building considering the business of the other tenants and the Building’s prestige, or would result in a violation of another tenant’s rights; (3) the proposed transferee is a governmental agency or occupant of the Building; (4) any portion of the Building or Premises would likely become subject to additional or different laws as a consequence of the proposed Transfer; (5) the assignee or subtenant proposes to use the Premises (or part thereof) for a purpose other than the purpose for which the Premises may be used as stated in Section 1.1 hereof; (6) the proposed subtenant or assignee is a tenant or subtenant of any portion of the Building so long as comparable space is then available, or is reasonably expected to become available within the next six (6) months following the date of the proposed transfer; or (7) there exists a Tenant default, or event which with the giving of notice or the passage of time, or both, would constitute a default, unless the same is cured within the


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applicable cure period.  Tenant shall not be entitled to receive monetary damages based upon a claim that Landlord unreasonably withheld its consent to a proposed transfer and Tenant’s sole remedy shall be an action to enforce any such provision through specific performance or declaratory judgment.  Any attempted transfer in violation of this Section shall, at Landlord’s option, be void.  Consent by Landlord to one or more transfer(s) shall not operate as a waiver of Landlord’s rights to approve any subsequent transfers.  In no event shall any transfer release or relieve Tenant from any obligation under this Lease.


If Landlord shall consent to the proposed assignment or subletting, as the case may be, then, in such event, Tenant may thereafter sublease or assign pursuant to Tenant’s notice, as given hereunder; provided, however, that if such assignment or sublease shall not be executed and delivered to Landlord within sixty (60) days after the date of Landlord’s consent, the consent shall be deemed null and void and the provisions of Section 6.1.6 shall be applicable.


As part of its request for Landlord’s consent to a transfer, Tenant shall provide Landlord with financial statements for the proposed transferee, a complete copy of the proposed assignment, sublease and other contractual documents and such other information as Landlord may reasonably request.  Landlord shall, by written notice to Tenant within thirty (30) days of its receipt of the required information and documentation, either: (1) consent to the transfer by the execution of a consent agreement in a form reasonably designated by Landlord or reasonably refuse to consent to the transfer in writing; or (2) exercise its right to terminate this Lease with respect to the portion of the Premises that Tenant is proposing to assign or sublet.  Any such termination shall be effective on the proposed effective date of the transfer for which Tenant requested consent.


Notwithstanding the foregoing, Tenant may assign this Lease (or sublet to an entity described in the following clause (i)) without Landlord’s consent to (i) an entity controlling, controlled by or under common control with Tenant, or (ii) an entity purchasing all or substantially all of Tenant’s business, assets and liabilities, or (iii) any entity into or with which Tenant is merged or consolidated, provided that any such entity described in the foregoing clauses (ii) and (iii) must have a net worth at least equal to the net worth of Tenant at the time of the assignment (such entity described in clauses (i), (ii) or (iii), a “Permitted Affiliate”).


It shall be a condition of the validity of any assignment or subletting hereunder, that both Tenant and the assignee or sublessee agree directly with Landlord in a separate written instrument reasonably satisfactory to Landlord which contains terms and provisions reasonably required by Landlord, including, without limitation, the agreement of the assignee or sublessee to be bound by all the obligations of the Tenant hereunder, including, without limitation, the obligation to pay the rent and other amounts provided for under this Lease (but in the case of a partial subletting, such subtenant shall agree on a pro rata basis to be so bound), but such assignment or subletting shall not relieve the Tenant named herein of any of the obligations of the Tenant hereunder, Tenant shall remain fully and primarily liable therefor and the liability of Tenant and such assignee (or subtenant, as the case may be) shall be joint and several.  Further, and notwithstanding the foregoing, the provisions hereof shall not constitute a recognition of the assignment or the assignee thereunder or the sublease or the subtenant thereunder, as the case may be, and at Landlord’s option, upon the termination of the Lease, the assignment or sublease shall be terminated.


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As additional rent, Tenant shall reimburse Landlord promptly for reasonable out-of-pocket legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting.


If this Lease be assigned, or if the Premises or any part thereof be sublet or occupied by anyone other than Tenant, Landlord may upon prior notice to Tenant, at any time and from time to time, upon an Event of Default, collect rent and other charges from the assignee, sublessee or occupant and apply the net amount collected to the rent and other charges herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or a waiver of the provisions of Section 6.16 hereof, or the acceptance of the assignee, sublessee or occupant as a tenant or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained, the Tenant herein named to remain primarily liable under this Lease.


No assignment or subletting under any of the provisions of Section 6.1.6 shall in any way be construed to relieve Tenant from obtaining the express consent in writing to Landlord to any further assignment or subletting.


6.1.7         Indemnity.  To defend, with counsel approved by Landlord, all actions against Landlord, any partner, member, trustee, stockholder, officer, director, employee or beneficiary of Landlord, Managing Agent, holders of mortgages secured by the Premises or the Building and Lot and any other party having an interest in the Premises (“Indemnified Parties”) with respect to, and to pay, protect, indemnify and save harmless, to the extent permitted by law, all Indemnified Parties from and against, any and all liabilities, losses damages, costs, expenses (including reasonable attorney’s fees and expenses), causes of action, suits, claims, demands or judgments of any nature (a) to which any Indemnified Party is subject because of its estate or interest in the Premises, or (b) arising from or related to (i) injury to or death of any person, or damage to or loss of property, on the Premises unless caused by the gross negligence or willful misconduct of Landlord or its servants or agents, (ii) injury to or death of any person, or damage to or loss of property on adjoining sidewalks, streets or ways, or connected with the use, condition or occupancy of the foregoing, where liability is claimed to have resulted from the negligence of Tenant or its servants or agents, (iii) violation of this Lease, (iv) any act, fault, omission, or other misconduct of Tenant or its agents, employees, contractors, licensees, sublessees or invitees or (v) the use, generation, storage or disposal of Hazardous Materials by Tenant or its agents, employees or invitees on the Premises, the Building or Lot or any portion thereof or any surrounding area or the presence of Hazardous Materials thereon including, without limitation, any and all liabilities, losses, damages, costs, expenses (including reasonable attorney’s fees and expenses), causes of action, suits, claims, demands or judgments of any nature arising from or related to removal of or other remediation of any Hazardous Materials or precautions required to protect against the release of Hazardous Materials into the environment to the extent required by any Environmental Laws (as defined below).


As used herein, “Hazardous Materials” shall mean and include, but shall not be limited to, any petroleum product and all hazardous or toxic substances or wastes including any asbestos-containing materials, waste oils, solvents and chlorinated oils, polychlorinated biphenyls (PCBs), or substances which are included under or regulated by any federal, state or local law, rule or regulation (whether now existing or hereafter enacted or promulgated, as they


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may be amended from time to time) pertaining to the environment, contamination or clean-up (all such laws, rules and regulations being referred to collectively as the “Environmental Laws”).


6.1.8         Tenant’s Insurance.  Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease:


(a)          Commercial general liability insurance which insures against claims for bodily injury, personal injury, advertising injury, and property damage based upon, involving, or arising out of the use, occupancy, or maintenance of the Premises and the Lot, indemnifying Landlord and Tenant against all claims and demands for (i) injury to or death of any person or damage to or loss of property, on the Premises or adjoining walks, streets or ways, or connected with the use, condition or occupancy of any of the foregoing unless caused by the negligence of Landlord or its servants or agents, (ii) violation of this Lease, or (iii) any act, fault or omission, or other misconduct of Tenant or its agents, employees, contractors, licensees, sublessees or invitees, in amounts which shall, at the beginning of the Term.  Such insurance shall afford, at a minimum, the following limits:


Each Occurrence


$

1,000,000


General Aggregate


$

2,000,000


Products/Completed Operations Aggregate


$

1,000,000


Personal and Advertising Injury Liability


$

1,000,000


Fire Damage Legal Liability


$

50,000


Medical Payments


$

5,000



Any general aggregate limit shall apply on a per location basis.  Tenant’s commercial general liability insurance shall name Landlord, its trustees, officers, directors, agents, and employees, Landlord’s mortgagees, Landlord’s managing agent and Landlord’s representatives, as additional insureds.  This coverage shall include blanket contractual liability, broad form property damage liability, premises/operations and products/completed operations hazards, and shall contain an exception to any pollution exclusion which insures damage or injury arising out of heat, smoke, or fumes from a hostile fire.  Such insurance shall be written on an occurrence basis and contain a standard separation of insureds provision.


(b)         Business automobile liability insurance covering owned, hired and non-owned vehicles with limits of $1,000,000 combined single limit per occurrence.


(c)        &#