Massachusetts-Cambridge-281 Albany Street - Massachusetts Institute of Technology and Alkermes Inc.
LEASE
DATED: JULY 26, 1993
BY MASSACHUSETTS INSTITUTE OF TECHNOLOGY, LESSOR
TO ALKERMES, INC., LESSEE
281 ALBANY STREET, CAMBRIDGE MASSACHUSETTS
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TABLE OF CONTENTS
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1. Parties and Premises................................................... 1
2. Expansion.............................................................. 1
3. Lease Term; Commencement Date; Extension Options....................... 3
3.1 Lease Term; Commencement Date................................. 3
3.2 Extension Option.............................................. 3
4. Rent; Determination of Fair Market Rent; Preliminary
Entry; Net Lease....................................................... 4
4.1 Payment of Rent............................................... 4
4.2 Determination of Fair Market Rent............................. 5
4.3 Preliminary Entry............................................. 7
4.4 Net Lease..................................................... 7
5. Permitted Use.......................................................... 7
6. Taxes.................................................................. 8
6.1 Taxes......................................................... 8
6.2 Payment of Taxes.............................................. 8
6.3 Abatement of Taxes............................................ 9
7. Utilities and Services................................................. 9
8. Insurance.............................................................. 11
8.1 Public Liability Insurance.................................... 11
8.2 Casualty Insurance............................................ 11
8.3 Certificate of Insurance...................................... 12
8.4 Lessor's Insurance............................................ 12
8.5 Waiver of Subrogation......................................... 12
8.6 Waiver of Rights.............................................. 13
9. Assignment and Subletting.............................................. 13
10. Parking................................................................ 17
11. Late Payment of Rent................................................... 17
12. Lessee's Covenants..................................................... 17
13. Construction........................................................... 26
13.1 Work Letter................................................... 26
13.2 Roof Load Capacity............................................ 26
13.3 Floor Loads................................................... 27
14. Eminent Domain and Casualty............................................ 27
14.1 Substantial Taking............................................ 27
14.2 Awards........................................................ 27
14.3 Substantial Casualty.......................................... 28
14.4 Repair and Restoration........................................ 28
14.5 Casualty During Last 12 Months................................ 30
(i)
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Page ii
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15. Defaults; Events of Default; Remedies.................................. 30
15.1 Defaults; Events of Default................................... 30
15.2 Termination................................................... 31
15.3 Survival of Covenants......................................... 32
15.4 Right to Relet................................................ 33
15.5 Right to Equitable Relief..................................... 33
15.6 Right to Self Help............................................ 33
15.7 Further Remedies.............................................. 34
16. Intentionally Deleted.................................................. 34
17. Real Estate Broker..................................................... 34
18. Notices................................................................ 34
19. No Waivers............................................................. 35
20. Lessor's Obligations................................................... 35
20.1 Generally..................................................... 35
20.2 Lessor's Maintenance.......................................... 36
21. Ground Leases; Mortgages............................................... 36
21.1 Rights of Ground Lessors and Mortgagees....................... 36
21.2 Lease Subordinate............................................. 37
22. Notice of Lease; Estoppel Certificates................................. 38
23. Holding Over........................................................... 38
24. Force Majeure.......................................................... 38
25. Signs.................................................................. 38
26. Entire Agreement....................................................... 39
27. Applicable Law, Severability and Construction.......................... 39
28. Successors and Assigns................................................. 40
29. Security Deposit....................................................... 40
30. Authority.............................................................. 41
EXHIBIT A: PLAN OF THE PREMISES
EXHIBIT B: PLAN OF THE LAND
EXHIBIT C: WORK LETTER
EXHIBIT D: COMMENCEMENT DATE AGREEMENT
(ii)
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LEASE
Dated: July 26, 1993
1. PARTIES AND PREMISES. MASSACHUSETTS INSTITUTE OF TECHNOLOGY ("Lessor")
hereby LEASES unto ALKERMES, INC. ("Lessee"), the following premises:
25,500 square feet of rentable area on the first floor (shown as the
hatched area on EXHIBIT A attached hereto) (the "Premises"), of the
building known as and numbered 281 Albany Street, Cambridge,
Massachusetts (the "Building"), which Building contains 32,000
rentable square feet and is located on the parcel of land (the "Land")
identified as Assessors Plan #67, Lots 32 and 33 as shown on the plan
attached hereto as EXHIBIT B attached hereto,
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, 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 affect Lessee's use of the Premises for the Permitted Uses
hereunder.
Lessor hereby grants to Lessee, as appurtenant to the Premises, the right
in common with Lessor and others to whom Lessor may have previously or may
hereafter grant rights, to enter into the basement of the Building for the
purpose of (i) installing an acid neutralization tank as part of "Lessee's
Work" (as defined in the Work Letter) and maintaining, repairing, replacing
and removing the same, and (ii) installing as part of Lessee's Work
additional equipment intended to service the Premises and maintaining,
repairing, replacing and removing the same, PROVIDED that such rights shall
be exercised so as not to interfere with any Building system serving the
second floor of the Building (whether solely or together with the first
floor thereof).
2. EXPANSION. Subject to the provisions of this Section, Lessee shall have the
option (the "Expansion Option") to subject the second floor of the
Building, containing
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approximately 6,500 rentable square feet (the "Expansion Premises"), to all
of the terms of this Lease (except for Basic Rent, which shall be
calculated in the manner provided below).
Lessee acknowledges that the Expansion Premises are currently occupied by
another lessee ("Current Occupant") whose lease expires on or about
December 31, 1994. Provided that both (i) an "Event of Default" (as
hereinafter defined) has not occurred and is not then continuing as of the
day on which Lessee purports to exercise the option herein granted, and
(ii) as of such date the Lessee named herein is actually occupying at least
twenty-five (25%) percent of the Premises, Lessee shall have the right to
lease the Expansion Premises for a term commencing on the date on which
Lessor delivers possession thereof to Lessee, and ending on the last day of
the "Lease Term" (as hereinafter defined), by giving written notice of
exercise to Lessor not later than July 1, 1994.
If Lessee exercises its right under this Section to lease the Expansion
Premises, then such space shall become subject to all of the terms of this
Lease EXCEPT that "Basic Rent" for such space shall be in an amount equal
to the "Fair Market Value" thereof (as these terms are hereinafter
defined). In the event that Lessee, for any reason whatsoever, fails or
refuses to give such notice by July 1, 1994, Lessee shall be deemed to have
waived its rights under this Section with respect to the Expansion Premises
for the remainder of the Lease Term.
If Lessee exercises the Expansion Option, then Lessor shall deliver the
Expansion Premises vacant and broom clean but otherwise in its "as is"
condition. Lessor shall use due diligence to deliver the Expansion Premises
to Lessee as soon as practicable, Effective upon the date on which Lessor
delivers to Lessee possession of the Expansion Premises, such space shall
be deemed to be part of the Premises for all purposes of this Lease, Lessee
shall commence paying Basic Rent and "Additional Rent" on account thereof,
and "Lessee's Share" (as these terms are hereinafter defined) shall be
appropriately modified.
Notwithstanding the foregoing provisions of this Section 2.0, in the event
that Lessor learns that the Expansion Premises will become vacant prior to
January 1, 1995, Lessor shall so notify Lessee. Provided that both (i) an
"Event of Default" (as hereinafter defined) has not occurred and is not
then continuing as of the day on which Lessee purports to exercise the
right herein granted, and (ii) as of such date the Lessee named herein is
actually occupying at least
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twenty-five (25%) percent of the Premises, Lessee shall have the right to
accelerate the exercise of the Expansion Option by giving written notice of
exercise to Lessor within twenty (20) days of receipt of Lessor's notice.
If Lessee exercises its right to accelerate the Expansion Option, then such
space shall become subject to all of the terms of this Lease as provided
hereinabove in this Section as of the date on which Lessor delivers
possession thereof to Lessee. If Lessee declines to accelerate the exercise
of the Expansion Option, then Lessee shall be deemed to have waived all
rights to exercise the Expansion Option at any time under this Section 2.0.
3. Lease Term; Commencement Date; Extension Options.
------------------------------------------------
3.1 LEASE TERM; COMMENCEMENT DATE. The initial term of this Lease (the
"Initial Lease Term") shall commence on the date (the "Commencement
Date") which is the first to occur of (i) the first day on which
Lessee occupies any portion of the Premises for the conduct of its
business operations, or (ii) August 15, 1993, and shall expire, unless
sooner terminated as hereinafter provided, on the day immediately
preceding the fifth (5th) anniversary of the Commencement Date. As
used in this Lease, "Lease Term" means the Initial Lease Term, as the
same may be extended pursuant to Section 3.2 below. On request of
either party, Lessor and Lessee shall execute and deliver a
Commencement Date Agreement in the form attached hereto as EXHIBIT D
setting forth the Commencement Date.
3.2 EXTENSION OPTION. Provided that both (i) an "Event of Default" (as
hereinafter defined) has not occurred and is not then continuing as of
either the day on which Lessee purports to give Lessor a "Lessee's
Notice of Exercise" (as hereinafter defined) or on the first day of
the "Extension Term" (as hereinafter defined), and (ii) the Lessee
named herein is actually occupying at least twenty-five (25%) percent
of the Premises as of each of said dates, Lessee shall have one (1)
option ("Extension Option"), to extend the Lease Term of this Lease
for a period of five (5) years ("Extension Term"), unless sooner
terminated as hereinafter provided, subject to all the terms of this
Lease except for the change in Basic Rent as provided in Section 4.2
of this Lease.
Lessee shall exercise the Extension Option, if at all, by giving
written notice of Lessee's exercise thereof ("Lessee's Notice of
Exercise") to Lessor not earlier than fifteen (18) months prior to,
nor later than nine
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(9) months prior to, the last day of the Initial Lease Term as the
case may be. If Lessee fails to give such Lessee's Notice of Exercise
within such time, Lessee shall be deemed to have waived the right to
exercise the Extension Option. The dates described in this paragraph
are summarized in the following table:
Notification Dates Extension Term
Not Before: Not After: Begins: Ends:
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5/15/1997 11/14/1997 8/15/1998 8/14/2003
Basic Rent shall be due and payable in the manner hereinafter provided
in Section 4.1 below.
4. Rent; Determination of Fair Market Rent; Preliminary Entry; Net Lease
---------------------------------------------------------------------
4.1 PAYMENT OF RENT. From and after the Commencement Date, 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:
(i) for each of the first five (5) Lease Years, $4.00 per
rentable square foot of the Premises ($102,000.00 per year;
$8,500.00 per month); and
(ii) for each Lease Year in the Extension Term, $6.00 per
rentable square foot of the Premises $153,000.00 per year;
$12,750.00 per month).
Basic Rent as set forth above does not include, and is in
addition to, any Basic Rent which may become due and payable with
respect to the Expansion Premises, calculated in the manner
provided in Section 4.2 below. Basic Rent shall be due and
payable 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 Lease Term.
Basic Rent shall be PRO-RATED for partial months occurring at the
beginning or the end of the Lease Term; and
(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
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hereunder, including any penalty or interest which may be added
for nonpayment or late payment thereof as provided in this Lease
(collectively, "Additional Rent").
As used in this Lease, "Lease Year" means the twelve (12) month period
commencing on the Commencement Date, and each successive twelve (12)
month period included in the Lease Term commencing on an anniversary
of that day, but if the expiration of the Lease Term or the earlier
termination of the Lease does not coincide with the termination of
such a twelve (12) month period, the term "Lease Year" shall mean the
portion of such twelve (12) month period before such expiration or
termination.
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:
Meredith & Grew, Inc.
160 Federal Street
Boston, MA 02110-1701
Attention: Kristin Blount
4.2 DETERMINATION OF FAIR MARKET RENT. As used in this Lease, "Fair Market
Rent" means the fair market rent for the portion of the Building with
respect to which "Fair Market Rent" is being determined in its "as is"
condition, excluding the value of the improvements completed by Lessee
therein but including the value of improvements made by Lessor, as of
the day with respect to which such determination is being made. Fair
Market Rent shall be based upon the rents generally in effect for
similar premises for first-class research and development/
manufacturing/ office uses in similar buildings in the Cambridge,
Massachusetts area in which the Premises is located, adjusted to a
"net" lease basis, taking into account all facts and circumstances
customarily taken into account by prudent and commercially reasonable
lessors and lessees (including, without limitation, concessions
typically offered in such market to renewing tenants).
Within twenty (20) days after Lessor receives Lessee's notice of
exercise of the Expansion Option), Lessor shall provide to Lessee
Lessor's good faith determination of the Fair Market Rent of the
Expansion Premises. If Lessor and Lessee are unable to agree on such
Fair Market Rent within twenty (20) days
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thereafter, then Lessor and Lessee shall, not later than sixty (60)
days after Lessor receives Lessee's notice, each retain a real estate
appraiser 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 one hundred (100) days
after Lessor receives Lessee's notice of exercise, 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 Appraiser") to resolve the dispute as to Fair Market
Rent. If Lessor and Lessee cannot agree upon the designation of the
Final Appraiser within thirty (30) days of the exchange of the first
appraisal 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 Appraiser. Within ten (10) days
of the selection of the Final Appraiser, Lessor and Lessee shall each
submit to the Final Appraiser a copy of their respective appraiser's
determination of Fair Market Rent. The Final Appraiser shall not
perform his own appraisal 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 Appraiser would have
made acting alone. The Final Appraiser shall give notice of his
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 appraiser and counsel, if any, in connection with any
proceeding under this paragraph, and the parties shall each pay
one-half of the fees and expenses of the Final Appraiser.
In the event that Fair Market Rent has not been finally determined in
the manner provided above with respect to the Expansion Premises as of
the day on which Basic Rent commences to be due and payable on account
of such space, then Basic Rent shall be due and payable at the
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rate provided by the Lessor, 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 PRELIMINARY ENTRY. Provided that an "Event of Default" (as hereinafter
defined) has not occurred hereunder, Lessee shall have the right to
enter upon the Premises prior to the Commencement Date to perform
"Lessee's Work" (as defined in the Work Letter). Such entry shall be
subject to the full and punctual performance by Lessee of all of
Lessee's covenants hereunder with respect to the Premises from and
after the date upon which Lessee first makes such entry except that
Lessee shall not be required to pay any Rent. If during this time
Lessee takes occupancy of any portion of the Premises and conducts it
business operations therein, then the first date of such occupancy
shall be deemed to be the Commencement Date as provided in Section 3.2
above. The period of such preliminary entry for the purposes of
performing Lessee's Work shall in all events end no later than the
Commencement Date.
4.4 NET LEASE. It is the intention of the Lessor and the Lessee that this
is a "net" lease and that the Rent herein specified shall be paid to
the Lessor in each month during the Lease Term, and that all costs,
expenses, and obligations of every kind relating to the Premises
whether usual or unusual, ordinary or extraordinary, foreseen or
unforeseen, which may arise or become due during the Lease Term, shall
be paid by Lessee except as otherwise specifically provided herein.
5. PERMITTED USE. The Premises shall be occupied by Lessee and used for the
following purposes (the "Permitted Uses") only and for no other:
office, research and development, laboratory, manufacturing and
distribution office uses, and ancillary uses thereto; in each case to
the extent permitted as a matter of right under the Zoning Ordinance
of the City of Cambridge, as amended from time to time.
Notwithstanding anything herein contained to the contrary, provided that
Lessee is not in default hereunder beyond the cure period provided in this
Lease, Lessee may discontinue its occupancy of the Premises or any part
thereof for any period of time during the Lease Term, provided that during
any such period, Lessee shall be bound by all of the
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obligations of Lessee under this Lease, including without limitation, the
obligation to pay Rent. If Lessee discontinues actual occupancy of the
entire portion of the Premises not then subleased pursuant to this Lease
(if any), and such discontinuance lasts for more than six (6) consecutive
months, Lessor shall have the right, in its sole discretion, to terminate
this Lease as to the entire portion of the Premises not so subleased (if
any) upon thirty (30) days' written notice to Lessee and payment to Lessee
of the "Termination Payment" (as defined in the next sentence), in which
event the Lease shall terminate as to that portion of the Premises as if
the date specified in such termination notice was the last day of the Lease
Term. As used in this Lease, the term "Termination Payment" shall mean the
unamortized portion (based on straight-line amortization over a 5-year
period commencing on the Commencement Date) of the cost of "Lessee's Work"
as of the effective date of such termination notice. Upon request by Lessor
during any period that Lessee has ceased to occupy the Premises as
aforesaid, Lessee shall provide to Lessor a reasonably detailed breakdown
of the cost of Lessee's Work paid or incurred by Lessee to enable Lessor to
calculate the amount of the Termination Payment.
6. Taxes.
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6.1 TAXES. As used in this Lease, "Taxes" means all 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
and each and every installment thereof which shall or may during the
Lease Term be charged, levied, laid, assessed, imposed, become due and
payable or become liens upon or for or with respect to the Premises,
the Building, the Land or any part thereof, or appurtenances or
equipment owned by Lessor thereon or therein or any part thereof or on
this Lease, and any tax based on a percentage fraction or capitalized
value of the Rent (whether in lieu of or in addition to the taxes
hereinbefore described). 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 or the Land.
6.2 PAYMENT OF TAXES. Lessee shall pay to Lessor, as Additional Rent, (i)
"Lessee's Share" (which term shall mean shall be seventy-nine and
sixty-eight hundredths percent (79.68%)) of Taxes, and (ii) Lessee's
pro-rata
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share of Taxes with respect to each of the "Off-Site Lots" (as defined
in Section 10 below) in which any of the parking spaces leased
hereunder by Lessee are located. Lessee shall make such payment in the
manner provided in Section 7 below. Lessee's obligations under this
Section 6 shall be pro-rated for partial tax years at the beginning or
end of the Lease Term.
6.3 ABATEMENT OF TAXES. Lessor may at any time and from time to time make
application to the appropriate governmental authority for an abatement
of Taxes with respect to the Land and/or the Building. If Lessor files
such an abatement application, Lessor shall pursue the same at its
sole cost and expense (subject to potential reimbursement as provided
below in this Section). If Lessor's application is successful and
Lessee has made any payment in respect of Taxes pursuant to Section
6.2 above for the period with respect to which the abatement was
granted, Lessor shall (a) deduct from the amount of the abatement all
expenses reasonably incurred by it in connection with the application,
(b) pay to Lessee Lessee's Share (adjusted for any period for which
Lessee had made a partial payment) of the abatement, with interest, if
any, paid by the governmental authority on such abatement, and (c)
retain the balance, if any.
Lessee shall have the right to file an application for abatement of
Taxes with respect to the Land and/or the Building only if (i) Lessee
first inquires in writing to Lessor whether Lessor intends to file
such an abatement application, and either (ii) (a) Lessor responds in
writing that Lessor does not intend to file such an application or,
(b) Lessee does not receive a response from Lessor within seven (7)
business days after the day such request is made. If Lessee files such
an abatement application, Lessee shall pursue the same at its sole
cost and expense (subject to potential reimbursement as provided below
in this Section) and shall keep Lessor informed of the status thereof.
If Lessee's application is successful, Lessee shall (a) deduct from
the amount of the abatement all expenses reasonably incurred by it in
connection with the application, (b) retain Lessee's Share (adjusted
for any period for which Lessee had made a partial payment) of the
abatement, with interest, if any, paid by the governmental authority
on such abatement, and (c) pay over the balance, if any, to Lessor.
7. UTILITIES AND SERVICES. Lessee shall make its own arrangements for the
provision of all utilities and
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services, including, without limitation, electricity, gas, heating fuels,
trash removal, telephone service, and all maintenance and service
agreements which are required for the Permitted Uses of the Premises, and
shall pay when due all charges therefor directly to the company which
provides such utility or service.
The only services which Lessor shall provide to the Premises, the Building
or the Land during the Lease Term (collectively, "Lessor's Services") shall
be: (i) common area maintenance, (ii) extermination, (iii) alarm services,
(iv) water and sewer, (v) snowplowing, paving, striping and general
maintenance of the parking lots in which are located parking spaces leased
by Lessee pursuant to Section 10.0 below, and (vi) such other services (if
any) as Lessor may reasonably determine from time to time are necessary for
the maintenance and operation of the Premises and which either are not
provided by Lessee or cannot as a matter of law be provided to the Premises
in the name of Lessee. It is agreed that property manager's fees shall not
exceed seven (7%) percent of gross rental revenue of the Building. It is
further agreed that the work performed (and the costs incurred) by Lessor
in initially placing in serviceable condition the parking lot(s) in which
the parking spaces are leased by Lessee pursuant to Section 10.0 below
shall not be included in "Lessor's Services" or charged to Lessee.
Within a reasonable time after the execution of this Lease, and thereafter
within a reasonable time after the end of each of Lessor's fiscal years (or
portion thereof) occurring during the Lease Term, Lessor shall deliver to
Lessee (i) a statement of (a) the cost of Lessor's Services and (b) Taxes
for the fiscal year just ended (the "Statement"), and (ii) a projection of
(a) the cost of Lessor's Services and (b) Taxes for the then-current fiscal
year. Commencing on the Commencement Date, and continuing on the first day
of each calendar month thereafter, Lessee shall pay to Lessor, as
Additional Rent, 1/12th of the total annualized amount of Lessee's Share of
(a) the cost of Lessor's Services and (b) Taxes. Upon delivery to Lessee of
the Statement 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 thirty (30) 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 installment 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
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Default). 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 Lease
Term.
Lessor shall not be held liable to anyone for the cessation of any of
Lessor's Services due to any accident, to the making of repairs,
alterations or improvements, or to the occurrence of an event of "Force
Majeure" (as hereinafter defined). Lessor shall have no obligation to
provide any services to the Premises, the Building, the Land or the Parking
Area other than those expressly identified above in this Section. In no
event shall Lessor be responsible for charges for any utilities or services
consumed by Lessee or provided to Lessee at the Premises.
8. Insurance
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8.1 PUBLIC LIABILITY INSURANCE. Lessee shall take out and maintain in
force throughout the Lease Term comprehensive public liability
insurance naming Lessor, Lessee, and persons claiming 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 in
the Premises, the Building, on the Land or on ways adjoining the Land,
in an amount which at the beginning of the Lease Term shall not be
less than $1,000,000 for injury or death of one person, $3,000,000 for
injury or death of more than one person in a single accident and
$500,000 for property damage, or such higher amounts as Lessor shall
reasonably determine are required by reason of Lessee's use of the
Premises, and which thereafter, if Lessor requires, shall be in such
higher amounts as are then consistent with sound commercial practice
in Cambridge, Massachusetts.
8.2 CASUALTY INSURANCE. Lessee shall take out and maintain throughout the
Lease Term a policy of fire, vandalism, malicious mischief, extended
coverage and so-called all risk coverage insurance insuring all of
"Lessee's Work", "Lessee's Property" and all "Alterations" (as these
terms are hereinafter defined) 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 as a certificate
holder on such policy. Lessor shall, at Lessee's cost and expense,
cooperate fully with Lessee and execute any and all consents and other
instruments and take all other actions necessary to obtain the largest
possible recovery. Lessor shall not carry any insurance concurrent in
coverage and contributing in the event of
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loss with any insurance required to be furnished by Lessee hereunder
if the effect of such separate insurance would be to reduce the
protection or the payment to be made under Lessee's insurance.
All insurance policies maintained pursuant to this Section 8.2 shall
include insurance against payment of rents in an amount sufficient to
pay all Rent which would otherwise be required to be paid under this
Lease during the period of restoration.
8.3 CERTIFICATE OF INSURANCE. All insurance required to be maintained by
Lessee hereunder: shall be placed with insurers reasonably
satisfactory to Lessor and authorized to do business in Massachusetts;
shall provide that it may not be canceled without at least thirty (30)
days prior written notice to each additional insured or certificate
holder named therein; and shall provide that it may not be amended
without at least ten (10) days prior written notice to each such
person. Lessee shall furnish to Lessor certificates of insurance for
all insurance required to be maintained by Lessee under this Lease,
together with evidence reasonably 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
to the holder of any mortgage affecting the Premises, the Building,
the Land or any portion thereof.
8.4 LESSOR'S INSURANCE. Lessor shall take out and maintain in force
throughout the Lease Term, in a company or companies authorized to do
business in Massachusetts, casualty insurance on the Building
(excluding "Lessee's Work", "Lessee's Property" and all "Alterations"
(as hereinafter defined)) 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
8.4, Lessor shall have the right, at any time during the Lease Term,
to self-insure all or any portion of the coverages required by this
Section.
8.5 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
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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 the party requesting such waiver
shall be responsible for the payment of such extra cost.
Notwithstanding the foregoing, with respect to such portion of the
Lease Term during which Lessor elects to self-insure under Section 8.4
above, then for purposes of this Section 8.5, Lessor shall be deemed
to have maintained fire and all-risk coverage in an amount equal to
one hundred (100%) percent of the insurable value of the Building
(subject to the exceptions and exclusions set forth in Section 8.4
above) with a waiver of subrogation clause contained therein.
8.6 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
Lease Term during which Lessor elects to self-insure under Section 8.4
above, then for purposes of this Section 8.6, Lessor shall be deemed
to have maintained fire and all-risk coverage in an amount equal to
one hundred (100%) percent of the insurable value of the Building
(subject to the exceptions and exclusions set forth in Section 8.4
above).
9. Assignment and Subletting.
-------------------------
(a) Lessee shall not mortgage, pledge, hypothecate, 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 (in the
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case of a proposed assignment or sublease) shall not be unreasonably
withheld, delayed or conditioned. Notwithstanding anything to the
contrary contained in this Lease, Lessee shall not have more than
three (3) subleases in effect at any one time (exclusive of subleases
entered into pursuant to paragraph 9.0(i) below), nor shall Lessee
have the right to assign this Lease or to sublet any portion of the
Premises during the first twelve (12) months after the Commencement
Date.
(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 twenty (20) 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 assignment or
sublease, or (ii) Lessor withholds its consent to such assignment or
sublease.
(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; (ii) 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 such assignment
or sublease, after deduction of the costs reasonably incurred by
Lessee in entering into such assignment or sublease (including,
without limitation, reasonable attorneys' fees and expenses, brokerage
commissions, and alteration costs amortized on a straight-line basis
over the term of such sublease), exceeds the Rent payable hereunder,
Lessee shall pay to Lessor immediately upon receipt thereof by Lessee,
as Additional Rent, (i) during the Initial Term, twenty-five (25%)
percent of such excess, and (ii) during the Extension Term, fifty
(50%) percent of such excess.
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(d) If Lessor withholds its consent to such assignment or sublease, Lessee
shall not enter into the proposed assignment or sublease with such
person or entity.
(e) 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, attorneys' fees)
reasonably incurred by Lessor in responding to a request for such
consent.
(f) 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.
(g) Any assignment or sublease entered into pursuant to this Section 9.0
shall be subject to all of the terms and provisions of this Lease,
including without limitation this Section 9.0. If Lessee enters into
any such assignment or sublease, Lessor may, at any time and from time
to time after the occurrence of a 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 Lessee of such assignee or
sublessee as a lessee hereunder or as a release of the original named
Lessee hereunder.
(h) Notwithstanding anything contained in this Lease, Lessee shall not
enter into any assignment or sublease with any person or entity if the
identity of the assignee or sublessee is inconsistent with the
investment policies of Lessor as set forth in writing by the Executive
Committee of Lessor prior to its receipt of Lessee's notice of such
proposed assignment or sublease, and any such transaction shall be
void AB INITIO. From time to time during the Term, Lessee may request
in writing that Lessor deliver to it copies of all investment policies
set forth in writing by the Executive Committee of Lessor since the
last request made by Lessee which are relevant to the Premises or to
this Lease, and Lessor shall provide the same within a reasonable time
after receiving such request. Lessee shall maintain the
confidentiality of all investment policies provided by Lessor pursuant
to this Section, and shall not disclose the contents thereof or
distribute copies thereof to any persons whatsoever
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(other than Lessee's counsel) without the prior written consent of
Lessor.
(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, Lessee shall give at
least twenty (20) 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 EXCEPT that Lessor shall have the
right to withhold its consent if the identity of the assignee or
sublessee is inconsistent with the investment policies identified in
the foregoing paragraph (h) of this Section. 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 including, without limitation,
those of the foregoing paragraph (h) of this Section, and if the
identity of such assignee or successor is inconsistent with such
investment policies, Lessor shall have the right to terminate this
Lease and to exercise against such assignee or sublessee the remedies
available to Lessor under this Lease, at law or in equity for a breach
of the provisions hereof by Lessee. 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 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
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Code of 1986, as amended, and any such transfer shall be void AB
INITIO.
10. PARKING. During the Initial Term, Lessee shall have the right, to use a
total of thirty-eight (38) parking spaces, subject to City of Cambridge
parking and zoning ordinances. These spaces may be located in one or more
parking lots located within 1,000 feet of the Land (collectively, the
"Off-Site Lots"). Such parking spaces shall be designated for use by Lessee
(but Lessor shall not be responsible for policing the use thereof). It is
agreed that initially the off-site parking spaces will be located on
Lessor's property at 252 Albany Street, but Lessor shall have the right to
relocate such spaces to other Off-Site Lots within 1,000 feet of the Land
from time to time during the Lease Term on thirty (30) days' prior written
notice to Lessee.
Lessee shall pay on account of such parking spaces, as Additional Rent, on
the same day and in the same manner in which payments are to be made
pursuant to Section 6.2 above, a percentage share of the Taxes assessed
upon each of the Off-Site Lots in which any of the leased parking spaces
are located, such percentage to be determined by dividing the number of
parking spaces leased by Lessee pursuant to this Section in each of such
Off-Site Lots as of the first day of the municipal fiscal year by the total
number of parking spaces contained in each if such Off-Site Lots.
During the Extension Term, Lessee shall pay, as Additional Rent, on the
same day on which Basic Rent is due and payable hereunder, rent on account
of each parking space leased at the then Fair Market Rent thereof, which
amount may be adjusted by Lessor from year to year.
11. 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,
there shall become due to Lessor from Lessee, as Additional Rent and as
compensation for Lessor's extra administrative costs in investigating the
circumstances of late Rent, a late charge of two percent (2%) of the amount
overdue. 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.
12. LESSEE'S COVENANTS. Lessee acknowledges that the Building is in good and
satisfactory order, repair and condition, and covenants, at its sole cost
and expense, during the Lease Term and such further time as Lessee holds
any part of the Premises:
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(a) to pay when due the Basic Rent and all Additional Rent, and all
charges for utilities and services supplied to the Premises pursuant
to agreements between Lessee and the appropriate utility company or
provider of such services;
(b) to keep the Premises, including, without limitation, the Building
systems (such as plumbing, heating, ventilation and air conditioning,
and electrical) located within or serving the Premises and window
glass and the non-structural portions of the roof (e.g., roof
membrane) (but EXCLUDING the exterior skin of the Building, the
structural components of the Building and the roof, and the Parking
Area), in as good order, repair and condition as the same are in as of
the date of this Lease or are hereafter put pursuant to the Work
Letter, excepting only damage by fire or other casualty or taking
which Lessee is not otherwise required by the terms of this Lease to
repair or restore, reasonable wear and tear, and damage caused by
other tenants of the Building;
(c) not to injure, overload or deface the Premises, 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 (Lessor
hereby represents and warrants to Lessee that the floor load of the
first floor of the Building is not less than 125 pounds per square
foot), nor to connect any equipment or apparatus to any Building
system which exceeds the capacity of such system, nor to permit on the
Premises any auction sale or any inflammable fluids or chemicals which
are not used, stored and disposed of in compliance with all laws,
ordinances, codes, rules and regulations, and the provisions of any
license, permit or other governmental consent or approval required for
or applicable now or at any time during the Lease Term to the Premises
or any portion thereof or Lessee's use thereof (collectively, "Legal
Requirements"), nor to permit any nuisance or the emission from the
Premises of any objectionable vibration, noise, or odor, nor to permit
the use of the Premises for any purpose other than the Permitted Uses,
nor any use thereof which is contrary to any 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;
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(d) not to obstruct in any manner any portion of the sidewalks or
approaches to the Building or any portion of the Parking Area;
(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 reasonable and
necessary safety appliances, and to procure (and maintain in full
force and effect) all licenses, permits and other governmental
consents and approvals 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 intending hereby to vary the
provisions of Section 5.0 above), and, if requested by Lessor, to make
all repairs, alterations, replacements or additions so required in and
to the Premises, and to cooperate with Lessor in the obtaining and
renewal by Lessor of all licenses, permits and other governmental
consents and approvals with respect to the Premises, the Building or
the Land which Lessor is required by applicable laws, ordinances,
codes, rules or regulations to obtain in its own name;
(f) not to make any alterations, renovations, improvements and/or
additions to the Premises (collectively, "Alterations"), without on
each occasion obtaining prior written consent of Lessor, which consent
may be withheld by Lessor in its reasonable discretion (taking into
account the effect of such proposed Alterations on the structural
integrity of the Building, whether such proposed Alterations would be
detrimental to the Building systems as modified by Lessee's Work, and
the effect of such proposed Alterations on the external appearance of
the Building), (except that no such prior written consent of Lessor
shall be required for Alterations which (i) shall not exceed $10,000
in each instance, and (ii) do not affect the structural integrity of
the Building, and (iii) are not detrimental to the Building systems as
modified by Lessee's Work, and (iv) do not affect the exterior
appearance of the Building, PROVIDED that in each such case (x) Lessee
shall still provide advance notice to Lessor of the intended
Alterations, and (y) such Alterations shall be subject to all of the
provisions of this paragraph (f) other than the requirement of
Lessor's prior consent); or to make any holes in any part of the
Building or paint or place any signs, awnings, aerials or flagpoles,
or the like, visible from outside of the Premises and not previously
consented to in writing by Lessor. Prior to commencing
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<PAGE> 23
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
(where such approval is required under this paragraph (f)); obtain the
written approval of Lessor as to the general contractor (not to be
unreasonably withheld, delayed or conditioned); cause each contractor
and subcontractor to carry worker'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) to carry comprehensive public
liability insurance in amounts reasonably satisfactory to Lessor (such
insurance to be written by companies reasonably satisfactory to Lessor
and insuring Lessee and Lessor as well as the contractors). After the
first two (2) requests for Lessor's approval of proposed Alterations,
Lessee shall reimburse Lessor, promptly upon demand therefor, for
one-half (1/2) of all out-of-pocket costs and expenses reasonably
incurred by Lessor in reviewing any plans, drawings and specifications
submitted by Lessee pursuant to this paragraph (f) (but Lessee shall
not be required to pay to Lessor more than $3,000.00 in connection
with any one set of Alterations and this charge shall not apply to any
Alterations proposed to be constructed by Lessee in the Expansion
Premises in anticipation of the initial occupancy thereof by Lessee),
which reimbursement shall be due and payable as Additional Rent. All
Alterations (other than Tenant's removable personal property and trade
fixtures) shall remain part of the Premises and shall not be removed
upon the expiration or earlier termination of the Lease Term EXCEPT
for those items which (i) either Lessor or Lessee designates for
removal in a notice given to the other party at the time that Lessee
requests Lessor's approval of such Alteration (if such approval is
required hereunder), or (ii) Lessee designates for removal at the time
that it notifies Lessor of its intent to make such Alteration (where
Lessor's prior approval is not required hereunder), or (iii) Lessor
designates for removal in a notice given to Lessee within ten (10)
days after Lessee notifies Lessor of its intent to make such
Alteration (where Lessor's prior approval is not required hereunder).
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
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filed or recorded within thirty (30) 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 (or, where appropriate in light of the nature or scope of the
Alterations, an as-built sketch) 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
damage to any property occasioned by or growing out of such work
performed prior to the last day of the Lease Term, which indemnity
shall survive the expiration or termination of this Lease provided
that such claim is asserted not later than three (3) years after the
expiration or earlier termination of the Lease Term. The provisions of
this paragraph (f) shall not apply to the performance of "Lessee's
Work" (as defined in the Work Letter) but shall apply to any
Alterations proposed by Lessee to be constructed in any space leased
pursuant to Section 2.0 above);
(g) to save Lessor harmless and indemnified from any loss, cost and
expense (including, without limitation, reasonable attorney's fees)
arising out of or relating to (i) a claim of injury to any person or
damage to any property while in 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 while in the Building (but not within
the Premises) or on the Land or on the sidewalks or ways adjoining the
Land, 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. The
provisions of this clause (g) shall survive the expiration or
termination of this Lease with respect to any claim arising prior to
the last day of the Lease Term regardless of whether such claim has
been asserted by the last day of the Lease Term;
(h) consistent with the provisions of this paragraph (h) concerning
Lessor's access to the Premises, to permit Lessor and Lessor's agents
to examine the Premises at reasonable times, and if Lessor shall so
elect (without
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hereby imposing any obligation on Lessor to do so), to permit Lessor
to make any repairs or additions Lessor may deem necessary; and at
Lessee's expense to remove any Alterations, signs, awnings, aerials or
flagpoles, or the like, not consented to in writing; and to permit
Lessor to show the Premises to prospective purchasers and tenants (at
reasonable times on reasonable advance notice to Lessee) and to keep
affixed to any suitable part of the Premises, during the nine (9)
months preceding the expiration of the Lease Term, appropriate notices
for letting or selling.
Notwithstanding anything to the contrary contained herein, except in
the event of an emergency requiring prompt attention in order to
prevent damage to life or serious property damage, Lessor shall be
permitted access to the Premises only upon at least twenty-four (24)
hours' prior written notice to Dr. William Kelley or such other
management level employee designated by Lessee, and when accompanied
by a representative of Lessee designated by Lessee. Any such access
shall only be permitted during Lessee's normal business hours and
shall not unreasonably interfere with Lessee's operations. Lessor
shall take all reasonable precautions necessary to minimize any
disruption of Lessee's activities. All persons entering the Premises
shall comply with all reasonable safety and security requirements of
Lessee. No access shall be permitted into those portions of the
Premises designated by Lessee as a "clean room" or as a secured area
except in the event of an emergency or at other times upon the
conditions set forth in the preceding provisions of this paragraph
(h). In the event of an emergency which occurs during traditional
business hours, prior to entering the Premises, Lessor shall provide
oral notice to Lessee. In the event of an emergency which does not
occur during traditional business hours, prior to entering the
Premises, Lessor shall provide notice to Lessee via telephonic
transmission to such telecopier numbers and telephonic pager numbers
as Lessee may provide from time to time;
(i) that all merchandise, furniture, fixtures, effects 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
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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; PROVIDED, HOWEVER, that Lessee shall have the right
to contest the amount of any such taxes by appropriate legal
proceedings diligently conducted in good faith, without cost, expense,
liability or damage to Lessor, provided in each case that: (i) no lien
or encumbrance shall attach to the Land, Building or any equipment and
improvements therein by reason of non-payment or otherwise by reason
of such contest; (ii) Lessee shall indemnify Lessor against liability
resulting from or incurred in connection with such contest; and (iii)
Lessee shall keep Lessor regularly advised as to the status of such
contest;
(k) by the end of business on the last day of the Lease Term (or the
effective date of any earlier termination of this Lease as herein
provided), to remove all of Lessee's Property, and those Alterations
designated for removal as provided in paragraph (f) above, 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 to remove the contents of all neutralization tanks installed by
Lessee in the Premises; and peaceably to yield up the Premises clean
and in good order, repair and condition (excepting only reasonable
wear and tear, and damage by fire or other casualty or taking which
Lessee is not otherwise required by the terms of this Lease to repair
or restore); and to deliver the keys to the Premises to Lessor. Any of
Lessee's Property or those Alterations designated for removal as
provided in paragraph (f) above, which is 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 Lessee's Property or any of
those Alterations designated for removal as provided in paragraph (f)
above, as required herein or by any other failure of
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<PAGE> 27
Lessee to comply with the terms of this Lease, and for use and
occupancy during the period after the expiration of the Lease Term and
prior to Lessee's performance of its obligations under this paragraph
(k). Lessee hereby acknowledges that any failure or delay on Lessee's
part in surrendering the Premises as above provided shall subject
Lessor to the expense of performing such work and the risk of losing a
successor tenant;
(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 except those identified in
writing to Lessor from time to time (such identification may take the
form of delivery by Lessee to Lessor of material safety data sheets
for such Hazardous Materials), and then only 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 applicable Legal Requirements, nor permit any occupant of the
Premises to do so. As used in this Lease, "Hazardous Materials" means
and includes any chemical, substance, waste, material, gas or emission
which is radioactive or is 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, including, without
limitation, those enumerated in the following sentence (collectively,
"Environmental Laws"). 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. Section 2601 ET SEQ.,
as amended, the regulations promulgated thereunder, and Massachusetts
General Laws, Chapter 21C and Chapter 21E and the regulations
promulgated thereunder. If at any time during the Lease Term, any
governmental authority, by reason of the use of the Premises made by
Lessee or
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anyone claiming by, through or under Lessee, requires testing to
determine whether there has been any release of Hazardous Materials by
Lessee, then Lessee shall reimburse Lessor upon demand, as Additional
Rent, for the reasonable costs thereof. If, in anticipation of the
commencement of the Lease Term or at any time during the Lease Term,
Lessee performs any testing to determine whether there has been any
release of Hazardous Materials onto or below the surface of the
Premises, Lessee shall promptly provide a copy of such report to
Lessor at no charge to Lessor. Lessee shall execute such affidavits as
may be reasonably requested by Lessor from time to time, concerning
Lessee's best knowledge and belief concerning the presence of
Hazardous Materials in or on the Premises. Subject to the provisions
of Section 12(h) above, Lessor reserves the right to enter the
Premises at reasonable times (provided twenty-four (24) hours' notice
is given to Lessee, except in case of emergency) to inspect the same
for Hazardous Materials. Lessee's obligations under this paragraph (m)
shall include, if at any time during the Lease Term Lessee uses or
stores radioactive materials on the Premises, compliance with all
so-called "close-out" procedures of the Nuclear Regulatory Commission
or other federal, state or local governmental authorities having
jurisdiction over radioactive materials, regardless of whether or not
such procedures are completed prior to the expiration or earlier
termination of the Lease Term. Lessee shall indemnify, defend, and
hold harmless Lessor, and the holder of any mortgage on the Premises
or any portion thereof, from and against any claim, cost, expense,
liability, obligation or damage, including, without limitation,
reasonable attorneys' fees and the cost of litigation, arising from or
relating to the breach by 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.
Lessee shall not be responsible for any noncompliance with
Environmental Laws or Legal Requirements to the extent attributable to
conditions already existing on the date hereof, or contamination
caused by Lessor or any other tenant of Lessor (excluding Lessee and
anyone claiming by, through or under Lessee) or their respective
employees, agents and invitees after the date hereof. Nothing herein
shall be deemed to create an obligation on the part of Lessee with
respect to (1) contamination already existing before the date hereof,
or (2) contamination caused by Lessor or any other
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tenant of Lessor (excluding Lessee and anyone claiming by, through or
under Lessee) or their respective agents, employees or invitees after
the date hereof. For purposes of this paragraph 12(m) and this Lease,
the term "contamination" shall mean the uncontained presence of
Hazardous Materials at the Premises, or arising from the Premises,
which requires remediation under any applicable Environmental Law or
Legal Requirement.
Nothing herein shall be deemed to impair Lessee's right to contest any
governmental agency's orders or directives with respect to
environmental matters PROVIDED that (i) such contest is diligently
conducted in good faith, in the name of Lessee, without cost, expense,
liability or damage to Lessor; (ii) such contest shall not subject
Lessor to civil or criminal penalty or to prosecution for a crime, nor
subject the Land, the Building or any part thereof to being condemned
or vacated, or subject to any lien or encumbrance, by reason of such
contest; (iii) before the commencement of such contest, Lessee shall
furnish to Lessor the bond of a surety company reasonably satisfactory
to Lessor, in form and substance reasonably satisfactory to Lessor, or
other security in a form reasonably acceptable to Lessor, in an amount
equal to one hundred percent (100%) of the cost of compliance with
such order or directive (as reasonably estimated by Landlord); (iv)
Lessee shall indemnify Lessor against the cost of such compliance and
liability resulting from or incurred in connection with such contest
or non-compliance; and (v) Lessee shall keep Lessor regularly advised
as to the status of such proceedings in good faith.
The provisions of this clause (m) shall survive the expiration or
termination of this Lease; and
(n) not to permit any officer, agent, employee, servant, contractor or
visitor of Lessee to violate any covenant or obligation of Lessee
hereunder.
13. Construction
------------
13.1 WORK LETTER. The Premises shall be renovated and finished in
accordance with the provisions of the Work Letter attached hereto as
EXHIBIT C.
13.2 ROOF LOAD CAPACITY. Lessee shall cause its structural engineer to
inspect the roof of the Building in those locations in which Lessee
intends to install roof-top
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equipment as part of "Lessee's Work" (as defined in the Work Letter).
If such engineer determines that the roof load capacity is less than
30 pounds per square foot in any of such locations: (i) Lessee shall
notify Lessor in writing; and (ii) as part of Lessee's Work, Lessee
shall reinforce such portions of the roof as reasonably required for
the roof-top equipment which Lessee intends to install; and (iii) upon
completion of Lessee's Work (as evidenced by a "Certificate of
Substantial Completion" issued by Lessee's architect) and the
commencement of the payment of Rent by Lessee, Lessee shall be
entitled to submit to Lessor for reimbursement paid invoices for the
cost of such reinforcement of the roof. Provided that such invoices
are reasonably satisfactory in form and content to Lessor, then Lessor
shall promptly reimburse Lessee for such cost. The amount of such
reimbursement shall be fully amortized over the portion of the Initial
Lease Term remaining as of the date of such payment by Lessor to
Lessee, on a straight-line basis. Lessee shall pay such amounts in
equal monthly installments, as Additional Rent, at the same time and
in the same manner as Basic Rent.
13.3 FLOOR LOADS. In the event that at any time during the performance of
Lessee's Work, Lessee's structural engineer determines that the floor
load of the first floor of the Premises is less than 125 pounds per
square foot, Lessee shall notify Lessor in writing. If requested by
Lessee, Lessor shall, at its sole cost and expense and without
reimbursement from Lessee, be responsible for reinforcing such
portions of the first floor of the Building so as to achieve a floor
load of at least 125 pounds per square foot.
14. Eminent Domain and Casualty.
----------------------------
14.1 SUBSTANTIAL TAKING. In the event that (i) more than fifty (50%)
percent of the rentable area of the Premises then occupied by the
named Lessee itself, shall be taken by any exercise of the right of
eminent domain or other lawful power in pursuance of any public or
other authority during the Lease Term, then this Lease shall terminate
as of the time that possession is taken by the taking authority.
14.2 AWARDS. Lessor reserves and excepts all rights to damage to the
Premises, the Building, the Land 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
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any public or other authority, and by way of confirmation, Lessee
grants to Lessor all of Lessee's rights to such damages and covenants
to execute and deliver such further instruments of assignment thereof
as Lessor may from time to time request. Lessee shall be entitled only
to such award, if any, as is specifically allocated by the taking
authority to Lessee on account of relocation expenses or other damages
suffered by Lessee as a result of such taking.
14.3 SUBSTANTIAL CASUALTY. If the Premises are damaged by fire or other
casualty, Lessee shall promptly notify Lessor thereof. If the Premises
or any part thereof shall be so damaged to the extent that more than
fifty (50%) percent of the rentable area of the Premises then occupied
by the named Lessee itself is rendered unusable by Lessee for the
operation of its business in the Premises (whether by reason of direct
or indirect damage from the casualty), or if the Building is so
damaged (regardless of whether or not the Premises are damaged) that
Lessee is deprived of all reasonable access to the Premises or all
reasonable use of the Premises, then in either case either Lessor or
Lessee may terminate this Lease by giving written notice of such
termination to the other party within sixty (60) days after the date
of such damage, in which event this Lease shall terminate on the date
set forth in such notice. In the event that this Lease is terminated
pursuant to this Section 14.3: (i) Rent shall be abated, to the extent
the Premises are unusable for the Permitted Uses, from and after the
date of such damage to the date of such termination of this Lease, and
no further Rent shall accrue or be payable after the date of such
termination; and (ii) Lessee shall turn over and assign to Lessor all
insurance proceeds (and rights to receive the same) relating to
Lessee's Work and any Alterations EXCEPT for the portion (if any) of
such proceeds which is allocable to the actual cash value of the
components thereof which had previously been designated in writing to
by one party to the other as items to be removed upon the expiration
of the Lease Term.
14.4 REPAIR AND RESTORATION. In the event of a taking which does not result
in the termination of this Lease pursuant to Section 14.1 above, or a
casualty which does not result in the termination of this Lease
pursuant to Section 14.3 above, the Premises shall be repaired and
restored in the manner provided in this Section. Lessor shall
diligently act to restore the Building and the Premises (exclusive of
Lessee's Work,
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any Alterations made by Lessee, and Lessee's Property) 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) in no event shall Lessor be required to
spend in connection with restoring the Premises more than the amount
of insurance proceeds or taking award actually received and allocable
thereto (except that this limitation with respect to insurance
proceeds shall not apply to casualties occurring during such time as
Lessor self-insures pursuant to Section 8.4 above); (ii) Lessor shall
not be required to restore or replace any of Lessee's Work,
Alterations or Lessee's Property; and (iii) promptly upon completion
of such work by Lessor, Lessee shall diligently act to restore and/or
replace Lessee's Work, the Alterations and all of Lessee's Property to
substantially the same condition they were in prior to the occurrence
of such taking or casualty. All work performed by Lessor or by Lessee
pursuant to this Section shall be performed in a good and workerlike
manner, and in compliance with all Legal Requirements. 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. Rent shall be abated from and after the
date of such taking or damage to the date on which Lessor
substantially completes the restoration described above, to the extent
the Premises are unusable for the Permitted Uses, but the amount of
such abatement shall in no event exceed the amount received by Lessor
under the rental loss insurance policy required by Section 8.2 above.
Notwithstanding the foregoing provisions of this Section:
(a) in the event that Lessor has not substantially completed, within
one (1) year after the date of such taking or damage (which
period shall be extended by the duration of any and all events of
Force Majeure), the restoration work which it is required by this
Section to perform, then Lessee shall have the right to terminate
this Lease by giving thirty (30) days' written notice to Lessor
within thirty (30) days after the end of such 1-year period (as
such 1-year period may be extended as provided above); and
(b) in the event that Lessor determines that the amount of insurance
proceeds available for the repair and restoration work for which
Lessor is
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responsible under this Section and Lessor refuses to provide the
funds necessary to make up such deficit, Lessor shall notify
Lessee within thirty (30) days of the occurrence of such
casualty. Lessee shall then have the right to terminate this
Lease by giving written notice to Lessor within fifteen (15) days
after Lessee's receipt of Lessor's notice.
14.5 CASUALTY DURING LAST 12 MONTHS. Notwithstanding anything to the
contrary contained in this Lease, in the event that a material portion
of the Premises is damaged by a fire or other casualty occurring
during the last twelve (12) months of the Lease Term, either party may
terminate this Lease by giving written notice to the other within
thirty (30) days of the occurrence of such damage. If this Lease is so
terminated, Lessee shall turn over and assign to Lessor all insurance
proceeds (and rights to receive the same) relating to the Building
EXCEPT as otherwise provided in the last sentence of Section 14.3
above. However, if Lessee has exercised an Extension Option prior to
the occurrence of such casualty, then this Section 14.5 shall not
apply and neither party shall have the right to terminate this Lease
pursuant to this Section 14.5.
15. Defaults; Events of Default; Remedies.
--------------------------------------
15.1 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 requirements 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) business days after written notice
thereof, PROVIDED, HOWEVER, that Lessee shall not be entitled to
such notice if Lessor has given notice to Lessee of two 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) business days after such payment
was due;
(b) The failure of Lessee to maintain the insurance required
hereunder in full force and effect;
(c) The failure of Lessee to perform or observe any of Lessee's other
covenants or agreements hereunder
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for a period of thirty (30) days after written notice thereof
(provided that, in the case of defaults not reasonably curable in
thirty (30) days through the exercise of reasonable diligence,
such 30-day period shall be extended for so long as Lessee
commences cure within such period and thereafter prosecutes such
cure to completion continuously and with reasonable diligence);
and
(d) if the leasehold hereby created shall be taken on execution, or
by other process of law, and such taking is not vacated by a
final order of a court of competent jurisdiction within sixty
(60) days thereafter; 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
property by a court of competent jurisdiction, and such
appointment is not vacated by a final order of a court of
competent jurisdiction within sixty (60) days thereafter; 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
if 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.
15.2 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, 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 five (5) 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.
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15.3 SURVIVAL OF COVENANTS. 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 from all loss, cost, expense,
damage or liability arising out of or in connection with such
termination.
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 reletting the Premises.
At any time within one (1) year after such termination, and regardless
of whether Lessee has made any payments to Lessor pursuant to the
preceding paragraph of this Section, Lessor may demand and Lessee
agrees to pay to Lessor on such demand, as and for liquidated and
agreed damages for Lessee's default, the present value of the amount
by which:
(a) 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 Lease Term but for such
termination, EXCEEDS
(b) the greater of (i) 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 reletting the
Premises, including, without limitation, all repossession costs,
brokerage commissions, legal expenses, reasonable attorneys'
fees, alteration costs, and expenses of preparation for such
reletting, or (ii) the sum of (A) the amount actually received
or to be by Lessor from reletting the Premises pursuant to
leases which are in effect as of the date on which Lessor
elects to proceed under this paragraph, and (B) the amount (if
any) actually received by Lessor from Lessee pursuant to the
preceding paragraph of this Section on account of any period
after such termination.
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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 Lease Term but for
such termination, or any portion thereof, the amount of rent reserved
upon such reletting 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 reletting.
In the event of the filing of a petition by or against Lessee under
any federal bankruptcy or insolvency law now or hereafter in effect,
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, or less than the amount of the difference referred
to above.
15.4 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 Lease 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 reletting.
15.5 RIGHT TO EQUITABLE RELIEF. In the event of the occurrence of an Event
of Default hereunder, Lessor shall be entitled to seek to enjoin the
continuance thereof 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.
15.6 RIGHT TO SELF HELP. In the event of the occurrence of an Event of
Default hereunder, 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
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damage to property, 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 the
"prime" rate from time to time thereafter published in THE WALL STREET
JOURNAL plus 1-1/2% per annum 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 15.6 without waiving
any other of its rights or releasing Lessee from any of its
obligations under this Lease.
15.7 FURTHER REMEDIES. Nothing in this Lease contained shall require Lessor
to elect any remedy for an 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 Event of Default.
16. Intentionally Deleted.
---------------------
17. 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 Meredith
& Grew, Inc. ("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 arising from a breach by Lessee of the foregoing representation.
Lessor agrees to indemnify and hold Lessee harmless from and against any
claims for commissions or fees by the Broker or any other person by reason
of a breach by Lessor of the foregoing representation.
18. NOTICES. Whenever by the terms of this Lease notice, demand, or other
communication shall or may be given either to Lessor or to Lessee, the same
shall be in writing and shall be sent by hand, or by registered or
certified mail, postage prepaid, or by Federal Express or other similar
overnight delivery service, to:
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Lessor: Massachusetts Institute of Technology
Suite 200
238 Main Street
Cambridge, Massachusetts 02142
Attention: Philip A. Trussell,
Director of Real Estate
with a copy to: Peter Friedenberg, Esquire
Rackemann, Sawyer & Brewster
One Financial Center
Boston, Massachusetts 02111
Lessee: Alkermes, Inc.
64 Sidney Street
Cambridge, Massachusetts 02139
Attention: Michael J. Landine,
Chief Financial Officer
Any notice, demand or other communication shall be effective upon receipt
by or tender for delivery to the intended recipient thereof.
19. NO WAIVERS. Failure of either Lessor or Lessee to complain of any act or
omission on the part of the other, no matter how long the same may
continue, shall not be deemed to be a waiver by such non-complaining party
of any of its rights hereunder. No waiver by either Lessor or Lessee 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.
20. Lessor's Obligations.
--------------------
20.1 Generally. Lessor shall:
---------
(a) not obstruct in any manner any portion of the sidewalks or
approaches to the Building or any portion of the Parking Area
leased to Lessee hereunder;
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<PAGE> 39
(b) pay Lessee's reasonable expenses, including reasonable attorneys'
fees, incurred in enforcing any obligations of Lessor under this
Lease; and
(c) save Lessee harmless and indemnified from any loss, cost and
expense (including, without limitation, reasonable attorney's
fees) arising out of or relating to a claim of injury to any
person or damage to any property while on the Premises, in the
Building, on the Land or on the sidewalks or ways adjoining the
Land occasioned by any omission, neglect or default of Lessor or
any officer, agent, employee, servant, contractor or invitee of
Lessor. The provisions of this paragraph (c) shall survive the
expiration or termination of this Lease with respect to any claim
arising prior to the last day of the Lease Term regardless of
whether such claim is asserted prior to the last day of the Lease
Term.
20.2 LESSOR'S MAINTENANCE. Lessor shall maintain: (i) the structural
components of the Building, (ii) the roof and exterior skin of the
Building, and (iii) the Parking Area in good order, repair and
condition, excepting only (a) damage by fire or other casualty or
taking which Lessor is not otherwise required by the terms of this
Lease to repair or restore, (b) reasonable wear and tear, or (c) the
negligent acts or omissions or willful misconduct of Lessee, anyone
claiming by, through or under Lessee, or any of the officers,
employees, agents, servants, contractors or invitees of any of the
foregoing. Notwithstanding the foregoing, any and all maintenance,
repair or replacement required to be made to any of the structural
components of the Building, or to the roof or the exterior skin of the
Building or to the Parking Area by reason of (i) any of Lessee's Work,
or any Alterations made by or on behalf of Lessee, or (ii) any act or
omission of Lessee, anyone claiming by, through or under Lessee, or
any of the officers, employees, agents, servants, contractors or
invitees of any of the foregoing, shall be solely the responsibility
of Lessee.
21. Ground Leases; Mortgages.
------------------------
21.1 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
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<PAGE> 40
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.
21.2 LEASE SUBORDINATE. This Lease is and shall be subject and subordinate
to any ground lease or mortgage now or hereafter on the Premises, and
to all advances under any such mortgage and to all renewals,
amendments, extensions and consolidations thereof, provided that the
holder of such ground lessor's interest or mortgagee's interest enters
into a non-disturbance and attornment agreement with Lessee which
provides that in the event that such ground lessor or mortgagee
succeeds to Lessor's interest hereunder, then, provided that Lessee is
not in default hereunder beyond the cure period provided in this
Lease, such party shall recognize and be bound by the terms of this
Lease. In the event that any ground lessor or the holder of any
mortgage succeeds to Lessor's interest in the Premises or any portion
thereof, Lessee hereby agrees to attorn to such ground lessor or
mortgagee. In confirmation of such subordination, Lessee shall execute
and deliver promptly any certificate in recordable form that Lessor or
any ground lessor or any mortgagee may reasonably 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 to Lessee that as of the date of this Lease,
there are no mortgages or ground leases encumbering the Premises or
any portion thereof.
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22. 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.
From time to time during the Lease Term, and without charge, either party
shall, within fifteen (15) business days of request by the other, certify
by written instrument duly executed and acknowledged, to the requesting
party or to any person reasonably specified by the requesting 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 known default or Event of Default; (d) the existence of any offsets,
counterclaims or defenses; (e) the Commencement Date and the expiration
date of the Lease 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.
23. HOLDING OVER. If Lessee occupies the Premises after the day on which the
Lease 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 tenant-at-sufferance only, subject to all of the
terms and provisions of this Lease at two and one-half (2 1/2) times the
then-effective Basic Rent stated in Section 4.0 above. Such a holding over,
even if with the consent of Lessor, shall not constitute an extension or
renewal of this Lease. For purposes of this Section, the failure of Lessee
to complete by the last day of the Lease Term or the effective date of any
earlier termination as herein provided the "close-out" procedures required
by the Nuclear Regulatory Commission or any other federal, state or local
governmental agency having jurisdiction over the use of radioactive
materials within the Premises shall constitute a holding over and subject
Lessee to the provisions of this Section.
24. 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 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").
25. SIGNS. Lessee shall have the right to install up to two signs on the
Building, identifying its name and business, provided that (i) Lessee shall
obtain Lessor's reasonable prior written approval as to the location, size,
shape and
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<PAGE> 42
appearance of each sign, and as to the plans and specifications relating to
such installation; (ii) Lessee shall install each such sign at its sole
cost; (iii) Lessee shall, at its sole cost, obtain all licenses, permits
and other governmental consents and approvals required by applicable Legal
Requirements to install the signs; (iv) Lessee shall cause such
installation to be done in a good and workmanlike manner and in accordance
with all applicable Legal Requirements, the provisions of applicable
insurance policies, and the requirements of all existing restrictions,
easements and encumbrances of record affecting the Land; (v) Lessee shall,
at its sole cost, maintain the signs in good operating condition and in
accordance with all applicable Legal Requirements, the provisions of
applicable insurance policies, and the requirements of all existing
restrictions, easements and encumbrances of record affecting the Land; and
(vi) Lessee shall, at its sole cost, remove the signs on or prior to the
date on which the Lease Term expires or this Lease is terminated and
restore the surface of the Land and/or the Building to the condition in
which it was prior to the installation of the signs. Lessor shall cooperate
with Lessee, at no cost to Lessor, in connection with the filing of any
application with the City of Cambridge necessary to obtain approval of the
signs as approved by Lessor.
All work done by or on behalf of Lessee pursuant to this Section shall be
subject to the requirements set forth in Section 12.0(f) above. 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, resulting from any work performed by or on behalf of Lessee pursuant
to this Section. Such signs shall be at Lessee's sole risk, and Lessor
shall not have no responsibility to maintain any insurance on them or
otherwise be responsible for any damage or destruction thereto.
26. 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.
27. 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
39
<PAGE> 43
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
officer, director, employee, fiduciary, shareholder or any beneficiary
under any trust, and the liability of Lessor, in any event, shall be
limited to Lessor's interest in the Building. If Lessee is several persons
or a partnership, Lessee's obligations are joint or partnership and also
several. 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.
28. SUCCESSORS AND ASSIGNS. The terms, covenants and conditions of this Lease
shall be binding upon and inure to the benefit of Lessor and Lessee and
their respective successors and permitted assigns.
29. SECURITY DEPOSIT. Lessee has deposited with Lessor contemporaneously with
its delivery to Lessor of executed counterparts of this Lease $8,500.00
(the "Security Deposit") as security for the full and faithful payment and
performance by Lessee of its obligations under this Lease from and after
the date of execution hereof by Lessee, and not as a prepayment of Rent.
The Security Deposit shall be kept in a money market savings account
separate from other funds of Lessor, and shall bear interest at the rate in
effect from time to time on such account, which interest shall be paid to
Lessee annually. Lessor may use the Security Deposit to cure any Event of
Default by Lessee (whether occurring prior to the Rent Commencement Date
hereunder or thereafter), and Lessee shall immediately pay to Lessor on
demand, as Additional Rent, the amount so expended and such additional
amount as is required to cause the Security Deposit to equal the amount of
$8,500.00. Lessor shall assign the Security Deposit to any successor owner
of the Building and thereafter Lessor shall have no further responsibility
therefor. Upon the expiration (or
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<PAGE> 44
earlier termination) of the Lease Term, Lessor shall inspect the Premises,
make such deductions from the Security Deposit as may be required to cure
any Event of Default by Lessee hereunder, and, if Lessee is not then in
default hereunder, pay the balance of the Security Deposit, if any, to
Lessee within thirty (30) days of such expiration or termination. If Lessee
is in default hereunder at the time of such expiration or termination, then
Lessor shall be entitled to retain so much of the Security Deposit as
Lessor reasonably estimates to be Lessee's liability to Lessor hereunder
and shall pay the balance, if any, to Lessee within such 30-day period.
30. AUTHORITY. Lessee hereby represents and warrants to Lessor that Michael J.
Landine has the authority to execute this Lease on behalf of Lessee. Lessee
shall furnish to Lessor a certified copy of the resolution of the Board of
Directors of Lessee ratifying Lessee's execution of the Lease promptly
after the July 1993 Board meeting. Lessor shall furnish appropriate
evidence of the authority of Lessor to enter into this Lease.
WITNESS the execution hereof in multiple counterparts under seal the day
and year first above written.
LESSOR: MASSACHUSETTS INSTITUTE OF
TECHNOLOGY
Date: July 28, 1993 By: /s/ Philip A. Trussell
--------------------------------- -----------------------------------
Philip A. Trussell,
Director of Real Estate
Hereunto duly authorized
LESSEE: ALKERMES, INC.
Date: July 26, 1993 By: /s/ Michael J. Landine
--------------------------------- -----------------------------------
Michael J. Landine
Chief Financial Officer
Hereunto duly authorized
41
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EXHIBIT A
PREMISES
--------
See attached plan.
A-1
<PAGE> 46
EXHIBIT B
THE LAND
--------
See attached plan.
B-1
<PAGE> 47
EXHIBIT C
WORK LETTER
-----------
This Work Letter is incorporated by reference into the Lease dated July 26,
1993 by and between Massachusetts Institute of Technology, as Lessor, and
Alkermes, 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:
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.
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.
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. The 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.
2. PREPARATION OF THE PREMISES. Lessor is leasing the Premises to Lessee in
its "as is" condition, and Lessor shall have no obligation to perform any
repairs or make any improvements to the Premises in anticipation of
Lessee's occupancy thereof. Lessee shall perform Lessee's Work at Lessee's
sole cost and expense.
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
C-1
<PAGE> 48
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 the 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.
3. WORKING DRAWINGS. Lessee shall be solely responsible for the preparation
and completion of all preliminary and final Working Drawings. Lessee shall
retain its own architects and engineers to prepare Working Drawings,
provided that Lessor first approves such engineers and architects so
selected by Lessee, which approval shall not be unreasonably withheld or
delayed. Lessee shall provide copies of the preliminary Working Drawings to
Lessor, together with a list of elements of Lessee's Work which Lessee
intends to remove from the Premises upon the expiration or earlier
termination of this Lease. Lessor shall provide to Lessee within ten (10)
business days thereafter a list of corrections and modifications which
Lessor requires to be made to the Working Drawings. Lessor shall also
provide to Lessee within such 10-business day period a list of those
elements of Lessee's Work which Lessee must remove at the expiration or
earlier termination of this Lease.
Lessee shall revise the preliminary Working Drawings to incorporate the
corrections and modifications requested by Lessor and shall submit final
Working Drawings to Lessor for its approval. Lessor shall review the final
Working Drawings and, within ten (10) 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 10-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 Working Drawings to Lessee for correction or
modification, Lessee shall diligently correct the Working Drawings and
resubmit them to Lessor for approval pursuant to the preceding provisions
of this paragraph. No work shall be performed until final Working Drawings
have been approved in writing by Lessor.
C-2
<PAGE> 49
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 solely with Lessee.
Lessee shall reimburse Lessor promptly upon demand therefor for all
out-of-pocket costs and expenses reasonably incurred by Lessor in
connection with the review by Lessor's architect, engineer or other
consultant (but not for Lessor's "in-house" review) of any plans, drawings
and specifications submitted by Lessee pursuant to this Work Letter, which
reimbursement shall be due and payable as Additional Rent.
4. LESSEE'S GENERAL CONTRACTOR. Lessee shall obtain the prior reasonable
written approval of Lessor as to Lessee's General Contractor.
5. LESSEE'S WORK. Lessee shall be solely responsible for obtaining all
Construction Authorizations required for Lessee's Work. Promptly after
receiving the same, 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.
6. DELAYS. No delays in the preparation of preliminary drawings, plans or
specifications, or in the preparation of Working Drawings, or in the
performance and completion of Lessee's Work, regardless of the cause
thereof, shall affect the Commencement Date or the Rent Commencement Date.
A breach of any provision of this Work Letter shall constitute a default
under the Lease, for which Lessor shall have all remedies therein provided.
7. 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, which person shall be available during
ordinary business hours to review the progress of the work
C-3
<PAGE> 50
and to respond to issues which arise during construction. Each party may
rely on the other's Representative with respect to all matters which
pertain to this Work Letter, each party having authorized its
Representative to make decisions binding upon such party with respect to
such matters.
C-4
<PAGE> 51
EXHIBIT D
FORM OF COMMENCEMENT DATE AGREEMENT
-----------------------------------
This Exhibit is incorporated by reference into the Lease dated July 26,
1993 by and between Massachusetts Institute of Technology, as Lessor, and
Alkermes, Inc. as Lessee.
COMMENCEMENT DATE AGREEMENT
---------------------------
THIS COMMENCEMENT DATE AGREEMENT is made this __ day of ________, 199_ by
and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY ("Lessor") and ALKERMES, INC.
("Lessee"). Reference is made to a Lease between Lessor and Lessee dated July
26, 1993 (the "Lease"), pursuant to which Lessor leased to Lessee a portion of
the building located at 281 Albany Street, as more particularly described in the
Lease (the "Premises"). Capitalized terms used in this Commencement Date
Agreement which are defined in the Lease and not otherwise defined herein shall
have the same meaning herein as therein.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Lessor and Lessee hereby agree that the Commencement
Date for all purposes of the Lease is _______________________________, and that
the last day of the Initial Lease Term is ___________________.
WITNESS the execution hereof under seal the day and year first above
written.
LESSOR: MASSACHUSETTS INSTITUTE OF
TECHNOLOGY
By:
------------------------------------
Philip A. Trussell,
Director of Real Estate
Hereunto duly authorized
Date: ______________, 199_
LESSEE: ALKERMES, INC.
By:
------------------------------------
Name:
Title:
Hereunto duly authorized
Date: ______________, 199_
D-1