EX-10.1 2 a2029877zex-10_1.txt EXHIBIT 10.1 LEASE by and between KENDALL SQUARE, LLC LANDLORD, and GENZYME CORPORATION, TENANT ARTICLE I REFERENCE DATA 1.1 SUBJECTS REFERRED TO ANNUAL FIXED RENT RATE PER Subject to Sections 4.1(b), 10.11 RENTABLE SQUARE FOOTAGE and 10.12 hereof, an amount OF PREMISES: determined by (a) dividing (i) the Project Cost by (ii) the Rentable Square Footage of Building and (b) multiplying the result thereof by ***** APPROXIMATE TERM: Subject to Section 10.12 hereof, fifteen (15) years. BUILDING: The building now known as Building D, Cambridge Research Park, Cambridge, Massachusetts, to be constructed by Landlord and containing approximately 300,000 rentable square feet ("r.s.f."), of which approximately 15,000 r.s.f. shall be ground floor retail space (the "Retail Space"). Tenant shall have the right to name the Building "The Genzyme Building," "Genzyme Center" or a similar name, but in each case including the street address of the Building. COMPLEX: An approximately ten acre parcel of land, including the Lot and all buildings thereon and improvements thereto hereafter constructed by Landlord or by an Affiliate of Landlord (as such term is defined below in this Section 1.1), in Cambridge, Massachusetts currently owned by Landlord and shown on a plan entitled "Master Plan" dated June 1, 1999, Scale 1"=50', a reduced copy of which is attached as EXHIBIT A hereto, but excluding any portion of the Complex which is not hereafter owned by Landlord or an Affiliate of Landlord. EXPANSION SPACES: As determined and defined in Section 10.11 hereof. INITIAL ESTIMATED ANNUAL ADDITIONAL RENT FOR BUILDING: ***** * Confidential Treatment has been requested for the marked portion pursuant to Rule 24b-2 and filed separately with the Commission. INITIAL ESTIMATED ANNUAL ADDITIONAL RENT FOR COMPLEX: ***** LANDLORD: Kendall Square, LLC, formerly known as Cambridge Research Park, LLC, a Delaware limited liability company. LANDLORD'S ARCHITECT: As determined pursuant to Section 3.1.1 hereof. LANDLORD'S ADDRESS: c/o Lyme Properties, LLC 101 Main Street Cambridge, Massachusetts 02142 LANDLORD'S CONTRACTOR: As determined pursuant to Section 3.1.1 hereof. LANDLORD'S REPRESENTATIVE: Each of David E. Clem and Robert L. Green LEASE YEAR: Each consecutive period of twelve (12) calendar months commencing on the Commencement Date if it occurs on the first day of a calendar month and otherwise commencing on the first day of the month immediately following the month in which the Commencement Date occurs, and each anniversary of such date. LOT: The land on which the Building is to be constructed and shown on EXHIBIT A as being generally bounded by Atheneum Street, Kendall Street, Easement, and land of others, the legal description of which (and a plan for which) shall be prepared by Landlord prior to the commencement of construction of the Base Building Improvements by Landlord and attached hereto as EXHIBIT A-1 and which plan shall be attached hereto as Exhibit A-2. MANAGING AGENT: To be determined by Landlord based upon a list of managing agents proposed from time to time by Landlord and approved by Tenant, such approval not to be unreasonably withheld, conditioned or delayed. * Confidential Treatment has been requested for the marked portion pursuant to Rule 24b-2 and filed separately with the Commission. -2- OPTIONS TO EXTEND: Two (2) Options to Extend the Term of this Lease for successive periods of ten (10) years each, in accordance with Section 10.12 hereof. PERMITTED USES: General office uses and accessory uses customarily incidental to general office uses. PREMISES: Those portions of the Building demised to Tenant under this Lease from time to time, as such portions are determined pursuant to Section 3.1.1 hereof and subject to Sections 5.1.2 and 10.11 hereof. PROJECT COST: As determined pursuant to Section 3.1.1 hereof. COMMERCIAL LIABILITY INSURANCE LIMITS: Bodily Injury: $10,000,000 Property Damage: $10,000,000 RENTABLE SQUARE As determined pursuant to Section FOOTAGE OF BUILDING: 2.3 hereof, but the Building is currently estimated to consist of 300,000 r.s.f. of space. RENTABLE SQUARE As determined pursuant to Section FOOTAGE OF PREMISES: 2.3 hereof, but the Premises are currently estimated to consist initially of approximately 235,000 r.s.f. of space in the Building to be constructed by Landlord on the Lot; and the Rentable Square Footage of Premises shall be increased at such time as each Expansion Space is demised to Tenant; and the Expansion Spaces are currently estimated to consist of approximately 50,000 r.s.f. of space, in the aggregate, in the Building to be constructed by Landlord on the Lot, subject to Sections 5.1.2 and 10.11 hereof. SCHEDULED SUBSTANTIAL COMPLETION DATE: September 1, 2002 SCHEDULED TERM COMMENCEMENT DATE: December 1, 2002 -3- TENANT: Genzyme Corporation, a Massachusetts corporation. TENANT'S ADDRESS One Kendall Square (For Notice and Billing): Building 1400 Cambridge, Massachusetts 02139 TENANT'S ARCHITECT: To be determined by Tenant. TENANT'S PROPORTIONATE FRACTION FOR BUILDING: As determined and as the same may be adjusted pursuant to Sections 2.3 and 10.11 hereof. TENANT'S PROPORTIONATE FRACTION FOR COMPLEX: As determined and as the same may be adjusted pursuant to Sections 2.3 and 10.11 hereof. TENANT'S CONSTRUCTION REPRESENTATIVE: To be identified by Tenant by notice to Landlord. TENANT'S LEASE REPRESENTATIVE: Evan M. Lebson TERM COMMENCEMENT DATE: The earlier of (a) the date that is ninety-one (91) days after the Substantial Completion Date or (b) the date on which Tenant's personnel occupy all or any portion of the Premises for the conduct of any aspect of Tenant's business (as opposed to the conduct by Tenant of any of Tenant's Work or the installation in the Premises of fixtures, furnishings, equipment or personal property); provided, however, if Tenant only occupies a portion of the Premises for the conduct of its business prior to the date determined by the preceding clause (a), Tenant shall only be obligated to pay Rent calculated with respect to such portion of the Premises so occupied. TERMEXPIRATION DATE: The last day of the fifteenth Lease Year, subject to two (2) Options to Extend for successive periods of ten (10) years each, in accordance with Section 10.12. -4- The following capitalized terms shall have the respective meanings set forth below or as referenced in this Lease: ADA REQUIREMENTS: The Americans with Disabilities Act (42 U.S.C.ss. 12101 ET SEQ.) and the regulations and Accessibility Guidelines for Buildings and Facilities issued pursuant thereto. ADDITIONAL RENT ADJUSTMENT DATE: As defined in Section 4.2.4 ADDITIONAL RENT: All rent, charges and other sums, other than Fixed Rent, due Landlord pursuant to this Lease. AFFILIATE OF LANDLORD: A person or entity controlled by, controlling or under common control with Landlord. AFFILIATE OF TENANT: Any entity controlled by, controlling or under common control with Tenant. ANNUAL BUILDING MAINTENANCE AND OPERATION CHARGE: As defined in Section 4.2.4 ANNUAL COMPLEX MAINTENANCE AND OPERATION CHARGE: As defined in Section 4.2.4. ANNUAL MAINTENANCE CHARGE: The sum of the Annual Building Maintenance and Operation Charge, the Annual Complex Maintenance and Operation Charge and the Nonstandard Charge. ANNUAL TAX, INSURANCE AND UTILITY CHARGE: The sum of the Initial Tax Charge, the Initial Insurance Charge and the Initial Utility Charge. APPRAISER: A commercial real estate broker having at least ten (10) years experience in the commercial leasing market in the City of Cambridge, Massachusetts. APPROVED CONTRACTOR: As defined in Section 3.2.1. ARBITRATOR: As defined in Section 10.13. ARCHITECT'S CONTRACT: As defined in Section 3.1.1. AVAILABILITY NOTICE: As defined in Section 10.18 BASE BUILDING IMPROVEMENTS: As defined in Section 3.1.1. BROKERS: Trammel Crow Company and Insignia/ESG. BUILDING COMMON AREAS: Interior and exterior common areas and facilities of the Building and the Lot. CASUALTY RESTORATION COMPLETION DATE: As defined in Section 6.1. CDD: Community Development Department of the City of Cambridge, Massachusetts. CHANGE ORDERS: As defined in Section 3.1.2. -5- CHAPTER 91 DETERMINATION: As defined in Section 3.1.4. COMMENCEMENT DATE: As defined and determined pursuant to Section 2.2. COMPLEX COMMON AREAS: Interior and exterior common areas and facilities of the Complex. CONFIDENTIAL INFORMATION: Any and all knowledge, information, data, materials, trade secrets, and other work product of a confidential nature gained, obtained, derived, produced, generated or otherwise acquired by Landlord with respect to Tenant's business. CONSTRUCTION CONTRACT: As defined in Section 3.1.1. CONSTRUCTION DOCUMENTS: As defined in Section 3.2.1. DESIGN DEVELOPMENT DOCUMENTS: As defined in Section 3.1.1. DESIGN PROCESS LETTER: Letter dated January 17, 2000 from David Clem of Lyme Properties, LLC to Henri Termeer, President and CEO of Tenant. DEVELOPER'S FEE: As defined in Section 3.1.1. DEVELOPMENT APPROVALS: As defined in Section 3.1.4. EARLY OCCUPANCY SPACE: As defined in Section 10.11. ENVIRONMENTAL AGREEMENT: The Environmental Agreement between Landlord and Tenant in the form of EXHIBIT E hereto. ENVIRONMENTAL REMEDIATION: As defined in Section 3.1.3. ESTIMATED ANNUAL ADDITIONAL RENT: Landlord's estimate of the total amount of Additional Rent which may be due from Tenant for any particular Lease Year with respect to the Building, Lot and Complex. ESTIMATED ANNUAL MAINTENANCE CHARGE: Landlord's reasonable estimate of the Annual Maintenance Charge. ESTIMATED ANNUAL TAX, INSURANCE AND UTILITY CHARGE: Landlord's reasonable estimate of the Annual Tax, Insurance and Utility Charge. EVENT OF DEFAULT: As defined in Section 7.1. EXCLUDED TAXES: Any income taxes, excess profits taxes, excise taxes, franchise taxes, or any taxes or assessments with respect to the Garage and other buildings leased or available for lease (and the parcels of land upon which such buildings are situated), other than the Building, the Lot and any building or portion of a building in the Complex which is not available for lease (and the parcel(s) of land on which the same may be located), in the Complex. EXERCISE NOTICE: As defined in Section 10.12. -6- EXPANSION SPACES: As defined in Section 10.11. EXTENSION PERIODS: As defined in Section 10.12. EXTENSION RENT: As defined in Section 10.12. FAIR MARKET RENT: As defined in Section 10.12. FINAL DESIGN DOCUMENTS: As defined in Section 3.1.1. FINAL PROJECT BUDGET: All hard costs and soft costs incurred by Landlord in connection with the construction of the Base Building Improvements as reflected in a final project budget to be mutually approved by Landlord and Tenant, as provided in Section 3.1.1. FIRST EXPANSION SPACE: As defined in Section 10.11. FIXED RENT: As defined in Section 4.1. GARAGE OWNER: The owner of the Garage. GARAGE PARKING SPACES: Tenant's Parking Spaces and the Valet Parking Spaces. GARAGE: The underground parking structure to be constructed and/or owned by Landlord or an Affiliate of Landlord south of Kendall Street, as shown on EXHIBIT A hereto. HOLDER: As defined in Section 8.1. IMPOSITIONS: As defined in Section 4.2.4(1)(a). INDEMNIFIED PARTIES: As defined in Section 5.1.6. INITIAL ESTIMATED ANNUAL ADDITIONAL RENT FOR BUILDING: As defined in Section 4.2. INQUIRY NOTICE: As defined in Section 10.12. LABOR UNREST: As defined in Section 3.2.1. LANDLORD MILESTONE DATE: As defined in Section 3.2. LANDLORD'S STATEMENT: As defined in Section 4.2.4. LANDLORD'S WORK: The construction of the Base Building Improvements in accordance with the Final Design Documents as affected by Change Orders. MCP: Massachusetts Contingency Plan, 310 CMR 40.0000 ET SEQ., as amended. MEPA CERTIFICATE: Certificate of the Secretary of Environmental Affairs on the Final Environmental Impact Report dated April 15, 1999. -7- MINOR ALTERATION: As defined in Section 3.2.1. MITIGATION EXPENSES: As defined in Section 3.1.1. MORTGAGE: Mortgages, deeds of trust or other similar instruments evidencing other voluntary liens or encumbrances, and modifications, consolidations, extensions, renewals, replacements and substitutes thereof. NONSTANDARD CHARGE: As defined in Section 4.2.4. NONSTANDARD COSTS: As defined in Section 4.2.4. OPTION TO LEASE: The option to lease with respect to Building B executed by Landlord and Tenant simultaneously with the execution hereof. OPTIONS TO EXTEND: As defined in Section 10.12. ORDER OF CONDITIONS: Order of Conditions issued July 12, 1999 by the City of Cambridge Conservation Commission. OUTSIDE COMPLETION DATE: As defined in Section 3.2. PARKING FEE: As defined in Section 10.14. PRELIMINARY DESIGN CONCEPT: As defined in Section 3.1.1. PROGRESS SCHEDULE: As set forth in EXHIBIT B hereto. PTDM APPROVAL: The PTDM Decision, the PTDM Letter and PTDM Plan. PTDM DECISION: PTDM Ordinance Final Decision issued April 20, 1999 by the CDD. PTDM LETTER: The Letter dated April 20, 1999 to Robert L. Green of Lyme Properties from Susanne Rasmussen of the CDD attached to the PTDM Decision. PTDM PLAN: Landlord's Parking Transportation Demand Management Plan dated April 9, 1999. PUD APPROVAL: The PUD Permit and the Settlement Agreement. PUD PERMIT: A Special Permit issued by the City of Cambridge Planning Board, Case No. PB #141 filed April 7, 1999 (the "PUD Permit"), recorded with the Middlesex South District Registry of Deeds (the "Registry") in Book 31137, Page 89. PUNCH LIST ITEMS: Minor items which can be fully completed by Landlord within thirty (30) days without material interference with Tenant and other items which because of the season or weather or the nature of the item are not practicable to do at the time, provided that none of said items is necessary to perform Tenant's Work. RELEVANT MARKET: As defined in Section 10.12(b). -8- REMEDIATION DOCUMENTS: The documents set forth on EXHIBIT E-1 hereto. RENTABLE SQUARE FEET, RENTABLE SQUARE FOOTAGE OR R.S.F.: The rentable square footage of the space in question as measured in accordance with the standard set forth in Section 2.3. RESPONSE ACTION OUTCOME: As such term is defined in the MCP. ROFR NOTICE: As defined in Section 10.18. ROFR SPACE: As defined in Section 10.18. ROFR: As defined in Section 10.18. SCHEMATIC DESIGN DOCUMENTS: As defined in Section 3.1.1. SETTLEMENT AGREEMENT: A Settlement Agreement dated May 24, 1999 among Barbara Broussard, Mary DeFreitas, the East Cambridge Planning Team and Landlord. SNDA: Subordination, Non-disturbance and Attornment Agreement. SUBDIVISION: As defined in Section 9.1.6. SUBLEASE COSTS: As defined in Section 5.2.1. SUBLEASE PROFITS: As defined in Section 5.2.1. SUBSEQUENT APPROVALS: As defined in Section 3.1.4. SUBSTANTIAL COMPLETION DATE: As defined in Section 3.2. SUBSTITUTE TAXES: As defined in Section 4.2.1. TENANT DELAY: As defined in Section 3.1.1. TENANT'S PROPERTY: All of the furnishings, fixtures, equipment, effects and property of every kind, nature and description owned or leased by Tenant or by any person claiming by, through or under Tenant which, during the continuance of this Lease or any occupancy of the Premises by Tenant or anyone claiming under Tenant, may be on the Premises. TENANT'S PROPORTIONATE FRACTION FOR BUILDING: As defined in Section 2.3 TENANT'S PROPORTIONATE FRACTION FOR COMPLEX: As defined in Section 2.3. TENANT'S WORK: As defined in Section 3.2.1. TI FACTOR: As defined in Section 10.11. TITLE EXCEPTIONS: Item Nos. 2 through 12, inclusive set forth in Schedule B, Part 1 of the Title Policy. -9- TITLE POLICY: Owner's Policy No. 136-00-336684 dated August 19, 1998, issued by Lawyer's Title Insurance Corporation. TMA: The Charles River Transportation Management Association or any other transportation management association of which Landlord is a member. TRANSFER: As defined in Section 9.1.6. UTILITIES: As defined in Section 4.2.3. UTILITY SERVICE PROVIDER or UTILITY SERVICE PROVIDERS: As defined in Section 4.2.3. UTILITY SERVICES: As defined in Section 4.2.3. VALET PARKING FEE: As defined in Section 10.14. VALET PARKING SPACES: As defined in Section 10.14. 1.2 EXHIBITS. The Exhibits listed below in this section are incorporated in this Lease by reference and are to be construed as a part of this Lease: EXHIBIT A Plan showing Complex EXHIBIT A-1 Legal Description EXHIBIT A-2 Plan showing Lot EXHIBIT A-3 Confirmation of Commencement Date and Rentable Square Footage EXHIBIT A-4 Confirmation of Location of Expansion Spaces EXHIBIT B Progress Schedule EXHIBIT B-1 Project Budget Form EXHIBIT B-2 Annual Maintenance Charge Categories EXHIBIT C Rules and Regulations EXHIBIT D SNDA Form EXHIBIT E Environmental Agreement EXHIBIT E-1 Remediation Documents 1.3 TABLE OF CONTENTS ARTICLE I......................................................................1 1.1 SUBJECTS REFERRED TO..................................................1 1.2 EXHIBITS.............................................................10 1.3 TABLE OF CONTENTS....................................................10 -10- ARTICLE II....................................................................14 2.1 PREMISES.............................................................14 2.2 TERM.................................................................15 2.3 MODIFICATION OF CERTAIN DEFINITIONS; CERTIFICATE REGARDING...........15 ARTICLE III...................................................................16 3.1 INITIAL DESIGN AND CONSTRUCTION......................................16 3.1.1 Architect Selection Process, Development of Design Documents Landlord's Contractor and Project Cost........................16 3.1.2 Change Orders.................................................23 3.1.3 Environmental Remediation.....................................25 3.1.4 Development Approvals and Title Exceptions....................25 3.2 PREPARATION OF PREMISES FOR PERFORMANCE OF TENANT'S WORK.............27 3.2.1. Performance of Tenant's Work..................................29 3.3 GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION........................34 3.4 REPRESENTATIVES......................................................34 3.5 LANDLORD INDEMNITY AND CORRECTION OF LANDLORD'S WORK.................34 ARTICLE IV....................................................................35 4.1 FIXED RENT...........................................................35 4.2 ADDITIONAL RENT......................................................35 4.2.1 Real Estate Taxes.............................................36 4.2.2 Insurance.....................................................37 4.2.2.1 Insurance Taken Out by Tenant........................37 4.2.2.2 Insurance Taken Out by Landlord......................38 4.2.2.3 Tenant Reimbursement of Insurance Taken Out by Landlord.............................................39 4.2.2.4 Certain Requirements Applicable to Insurance Policies.............................................39 4.2.2.5 Waiver of Subrogation................................39 4.2.3 Utilities for Premises......................................40 4.2.4 Common Area Maintenance and Expenses........................41 4.2.5 Payments on Account of Taxes, Insurance and Utilities.......45 4.3 LATE PAYMENT OF RENT.................................................46 ARTICLE V.....................................................................47 5.1 AFFIRMATIVE COVENANTS................................................47 -11- 5.1.1 Perform Obligations.........................................47 5.1.2 Occupancy and Use...........................................47 5.1.3 Repair and Maintenance......................................48 5.1.4 Compliance with Law.........................................48 5.1.5 Tenant's Work...............................................50 5.1.6 Indemnity...................................................50 5.1.7 Landlord's Right to Enter...................................51 5.1.8 Personal Property at Tenant's Risk..........................51 5.1.9 Payment of Landlord's Cost of Enforcement...................52 5.1.10 Yield Up....................................................52 5.1.11 Estoppel Certificate........................................52 5.1.12 Landlord's Expenses Re: Consents............................53 5.1.13 Rules and Regulations.......................................53 5.1.14 Loading.....................................................53 5.1.15 Holdover....................................................53 5.2 NEGATIVE COVENANTS...................................................54 5.2.1 Assignment and Subletting...................................54 5.2.2 Nuisance....................................................55 5.2.3 Installation, Alterations or Additions......................55 ARTICLE VI....................................................................56 6.1 DAMAGE BY FIRE.......................................................56 6.2 CONDEMNATION.........................................................59 6.3 AWARD................................................................60 ARTICLE VII...................................................................60 7.1 EVENTS OF DEFAULT....................................................60 7.2 REMEDIES.............................................................61 7.3 REMEDIES CUMULATIVE..................................................62 7.4 LANDLORD'S RIGHT TO CURE DEFAULTS....................................62 7.5 EFFECT OF WAIVERS OF DEFAULT.........................................63 7.6 NO ACCORD AND SATISFACTION...........................................63 ARTICLE VIII..................................................................63 8.1 RIGHTS OF MORTGAGE HOLDERS...........................................63 8.2 SUPERIORITY OF LEASE; OPTION TO SUBORDINATE..........................64 -12- 8.3 LEASE AMENDMENTS.....................................................64 ARTICLE IX....................................................................65 9.1 AFFIRMATIVE COVENANTS................................................65 9.1.1 Perform Obligations.........................................65 9.1.2 Repairs.....................................................65 9.1.3 Compliance with Law.........................................65 9.1.4 Indemnity...................................................66 9.1.5 Estoppel Certificate........................................66 9.1.6 Subdivision.................................................66 ARTICLE X.....................................................................67 10.1 NOTICES FROM ONE PARTY TO THE OTHER..............................67 10.2 QUIET ENJOYMENT..................................................67 10.3 EASEMENTS; CHANGES TO LOT LINES..................................67 10.4 LEASE NOT TO BE RECORDED.........................................67 10.5 BIND AND INURE; LIMITATION OF LANDLORD'S LIABILITY...............68 10.6 ACTS OF GOD......................................................68 10.7 LANDLORD'S DEFAULT...............................................68 10.8 BROKERAGE........................................................69 10.9 APPLICABLE LAW AND CONSTRUCTION..................................69 10.10 SUBMISSION NOT AN OFFER..........................................70 10.11 EXPANSION OF PREMISES............................................70 10.12 OPTIONS TO EXTEND................................................72 10.13 ARBITRATION......................................................74 10.14 PARKING..........................................................75 10.15 CONFIDENTIAL INFORMATION.........................................76 10.16 SIGNAGE..........................................................76 10.17 BUILDING B LEASE.................................................77 10.18 RIGHT OF FIRST REFUSAL...........................................77 10.19 RETAIL TENANTS...................................................78 10.20 ACCESS...........................................................78 10.21 COOPERATION......................................................78 -13- ARTICLE II PREMISES AND TERM 2.1 PREMISES. Landlord hereby leases and demises to Tenant and Tenant hereby leases from Landlord, subject to and with the benefit of the terms, covenants, conditions and provisions of this Lease, the Premises. Tenant shall have, as appurtenant to the Premises, the right to use in common with others, if any, entitled thereto (i) the common areas and common facilities, if any, included in the Building, on the Lot or in the Complex, (ii) the building service fixtures and equipment serving the Premises, and (iii) subject to Section 10.14 hereof, (a) the right to use that number of nonreserved parking spaces determined by dividing the Rentable Square Footage (as the same shall be determined pursuant to Section 2.3 hereof and as the same may be increased pursuant to Section 10.11 hereof) by 500 ("Tenant's Parking Spaces") in the underground parking garage located south of Kendall Street as shown on Exhibit A hereto (the "Garage") and (b) the right to use that number of nonreserved Valet Parking Spaces, as such term is defined and such number is determined pursuant to Section 10.14 hereof. To the extent that the Premises includes all of the rentable square footage on a particular floor of the Building, Tenant shall have exclusive use of the common areas on such floors, but Landlord shall have the rights set forth in the next paragraph hereof. Landlord reserves the right from time to time, without unreasonable interference with Tenant's use, (a) to install, repair, replace, use, maintain and relocate for service to the Premises and to other parts of the Building, or either, building service fixtures and equipment wherever located in the Building, including the perimeter walls of the Premises, on the roof of the Building, in mechanical penthouses and in any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, wires and appurtenant fixtures, ducts, electric or other utilities, telecommunications equipment or other Building facilities, as well as the right of access (which right of access shall be at reasonable times and upon reasonable notice, except in the case of emergency) through the Premises for the purpose of operation, maintenance and repair, provided, however, that the Annual Fixed Rent, Additional Rent (as defined in Section 4.2 hereof) and other charges payable hereunder by Tenant shall be proportionally reduced in the event that any such installation or relocation of service materially reduces the usable floor area of the Premises (other than a temporary reduction to accommodate installation, repair, replacement, maintenance and relocation of such service); notwithstanding the foregoing provisions of this clause (a), to the extent that the Premises include all of the rentable square footage on a particular floor of the Building, Landlord's right to install, repair, replace, use, maintain and relocate such building service fixtures and equipment on such floor of the Building shall be limited to placing or installing such building service fixtures and equipment in shafts, pipes, stacks, conduits, chases and risers located within the central core common area of such floor or in such other locations on such floor as may be set forth in the Final Design Documents; (b) to construct, alter or relocate any Building Common Areas and/or Complex Common Areas (provided that, except for any construction, alteration or relocation of Complex Common Areas required or permitted by the Development Approvals or Subsequent Approvals, no such construction, alteration or relocation of any such Complex Common Areas shall substantially or materially increase any payments due from Tenant under this Lease and any such construction, alteration or relocation shall be -14- substantially similar in quality and utility to Complex Common Areas being altered or relocated or substantially similar to common areas of first-class, mixed use projects in the Relevant Market); and (c) after construction of the Building to construct, alter or relocate any Building Common Areas, subject to approval by Tenant, such approval not to be unreasonably withheld, delayed or conditioned. 2.2 TERM. To have and to hold for a period (the "Term") commencing on the Term Commencement Date (as such term is defined in Section 1.1 hereof) (the "Commencement Date") and continuing until the Term Expiration Date, unless sooner terminated as provided herein, including Section 3.2 and Article VII hereof, and subject to extension in accordance with the terms of Section 10.12 hereof. 2.3 MODIFICATION OF CERTAIN DEFINITIONS; CERTIFICATE REGARDING COMMENCEMENT DATE. Landlord and Tenant acknowledge that the actual rentable square footage of the Premises, the Expansion Spaces (as such term is defined in Section 10.11 hereof) and the Building may, upon completion of construction of the Base Building Improvements (as hereinafter defined), be different than the estimates as set forth in Article I hereof. Accordingly, after completion of construction of the Base Building Improvements, Landlord will notify Tenant of the Rentable Square Footage of the Premises, the Expansion Spaces and the Building, all of which shall be measured by Landlord's Architect in accordance with the ANSI/BOMA Z65.1-1996 Standard Method for Measuring Building Rentable Area, approved June 7, 1996 for a single tenant building. Landlord's Architect's measurement shall be subject to review and approval by Tenant's Architect for conformity to the foregoing standard. If necessary, Landlord and Tenant will execute an amendment to this Lease modifying the definitions of Rentable Square Footage of Premises, Rentable Square Footage of Building, the location in the Building of the Premises and the Expansion Spaces, Tenant's Proportionate Fraction for Building, Tenant's Proportionate Fraction for Complex, Initial Estimated Annual Additional Rent for Building, Initial Estimated Annual Additional Rent for Complex, and such other terms and provisions, if any, of this Lease as may be necessary to reflect such actual measurements. Landlord and Tenant will also execute, upon request of either, a certificate, substantially in the form of Exhibit A-3 hereto, acknowledging, INTER ALIA, the Commencement Date of this Lease as provided for in Section 2.2 hereof, after such Commencement Date has occurred (as described in Section 3.2 hereof), and the Rentable Square Footage of the Building, the Premises and the Expansion Spaces. After such measurement by Landlord's Architect, the Premises, the Expansion Spaces and the Building shall not be subject to remeasurement without the consent of Landlord and Tenant. Anything in this Lease to the contrary notwithstanding, the Premises, as initially demised, shall include all of the Rentable Square Footage in the Building other than the Expansion Spaces and the Retail Space. "Tenant's Proportionate Fraction for Building" shall be the ratio, expressed as a percentage, of the Rentable Square Footage of Premises, including the Expansion Spaces and any ROFR Space (from and after the dates on which each of the Expansion Spaces or any ROFR Space is demised to Tenant), to the Rentable Square Footage of Building. "Tenant's Proportionate Fraction for Complex" shall be the ratio, expressed as a percentage, of the Rentable Square Footage of the Premises, including the Expansion Spaces and -15- any ROFR Space, when applicable, to the Rentable Square Footage of all buildings (other than any garages in the Complex and any building or portion thereof which is not available for lease such as an information kiosk), including the Building, which Landlord is permitted to develop in the Complex pursuant to the PUD Approval. Landlord shall have the right to estimate on a good faith basis, from time to time, the Rentable Square Footage of all such buildings prior to the construction thereof. From time to time after construction of each building in the Complex, Landlord shall notify Tenant of the Rentable Square Footage of such buildings and shall provide to Tenant, upon Tenant's request, such information as Tenant may reasonably request with respect to the calculation thereof. Within thirty (30) days after notice of such Rentable Square Footage, Tenant shall pay to Landlord or Landlord shall credit to Additional Rent next due from Tenant, as applicable, any underpayment owed or overpayment made, as applicable, by Tenant based upon the estimated Rentable Square Footage of such buildings, on account of Tenant's Proportionate Fraction for Complex of taxes and assessments and Tenant's Proportionate Fraction for Complex of the Annual Complex Maintenance and Operation Charge and the actual Rentable Square Footage of such buildings. ARTICLE III BASE BUILDING IMPROVEMENTS 3.1 INITIAL DESIGN AND CONSTRUCTION. 3.1.1 ARCHITECT SELECTION PROCESS, DEVELOPMENT OF DESIGN DOCUMENTS, LANDLORD'S CONTRACTOR AND PROJECT COST. Landlord has initiated a design competition for the Building as more fully set forth in a letter dated January 17, 2000 from David Clem of Lyme Properties, LLC to Henri Termeer, President and CEO of Tenant (the "Design Process Letter"), which is incorporated herein by reference thereto. Landlord and Tenant agree to cooperate in connection with the design competition as set forth in the Design Process Letter. Upon completion of such design competition, Landlord and Tenant shall mutually select Landlord's Architect (for purposes of this Lease the term "Landlord's Design Team" shall be deemed to refer not only to Landlord's Architect but also to the principal engineers, architects and other design consultants employed by Landlord or Landlord's Architect for the design and construction of the Building) and Landlord's Design Team (to the extent then identified). Landlord and Tenant shall also mutually establish and agree upon (i) a preliminary design concept for the Building (the "Preliminary Design Concept"), which shall be based upon Tenant's program, outline building specifications, schedule requirements, and (ii) a preliminary hard and soft cost budget for the Base Building Improvements (the "preliminary Project Cost budget"). Such selection of Tenant's Architect and Landlord's Design Team (to the extent then identified), the establishment and agreement upon the Preliminary Design Concept and the establishment and agreement upon such preliminary Project Cost budget shall be made by the respective dates for each set forth in the progress schedule attached as Exhibit B hereto (the "Progress Schedule"). Landlord and Tenant acknowledge and agree that the Progress Schedule represents a good faith estimate of the respective dates upon which the items set forth in the Progress Schedule are to occur but that the Progress Schedule is subject to finalization by Landlord and Tenant upon selection of Landlord's Architect and Landlord's Contractor. Accordingly, references in this Lease to the Progress -16- Schedule shall mean the Progress Schedule attached hereto as Exhibit B as the same may be finalized. The Preliminary Design Concept shall describe the general scope and quality of the Building and shall identify those portions of the Building which will constitute the Premises initially leased to Tenant and the Expansion Spaces. If despite the diligent and good faith efforts of Landlord and Tenant the parties are unable to mutually select Landlord's Architect, to establish a mutually acceptable Preliminary Design Concept and/or a mutually acceptable preliminary Project Cost budget by the applicable dates set forth in the Progress Schedule, either Landlord or Tenant may terminate this Lease upon thirty (30) days' prior written notice to the other party. During such thirty (30) day period Landlord and Tenant shall use diligent and good faith efforts to select such Architect, establish such Preliminary Design Concept and/or preliminary Project Cost budget, as applicable, failing which this Lease shall terminate on the date set forth in such notice. In the event of such termination, all third party, out-of-pocket costs incurred by Landlord in connection with the design competition and design process solely for the Building shall be shared equally by Landlord and Tenant. Landlord and Tenant also agree to cooperate in good faith in connection with the design of the Building and the Base Building Improvements and the development of a mutually acceptable Final Project Budget (as defined below). Neither Landlord nor Tenant shall be required to approve any Design Documents unless the Building includes at least 285,000 r.s.f. of office space and at least 15,000 r.s.f. of ground floor retail space and each Expansion Space includes approximately 25,000 r.s.f. of contiguous space on a single floor of the Building. The size, layout, design and base building fit-up of the Building and Base Building Improvements and the Final Project Budget shall be mutually agreed upon by Landlord and Tenant. Landlord and Tenant acknowledge and agree that during design development process contemplated hereby, Tenant, with Landlord's approval, which approval shall not be unreasonably withheld, conditioned or delayed, shall have the right to approve and/or design base building electrical, mechanical, HVAC and other systems and design specifications (such as, by way of example, entranceway and lobby design, internal stair location, elevator size and finish, location of electrical and telecom rooms and equipment, location of mechanical shaftways and equipment, structural bay spaces, window mullions spacing and sill depth and height, floor to floor heights and the like), provided that the specifications for such base building elements are equal or better than the quality of the specifications therefor in a newly constructed, first-class office tower in Cambridge. Each party acknowledges and agrees that it is in its best interest for the Substantial Completion Date to occur on or before the Scheduled Substantial Completion Date and that the Final Project Budget be substantially consistent with the preliminary Project Cost budget and the updates thereto. Accordingly, each party hereby agrees that it shall keep the other party informed of the progress and status of its efforts to achieve the various milestones and other scheduled completion dates set forth on the Progress Schedule; and that if either party concludes that a milestone or other scheduled completion date will not be met, such party shall use reasonable efforts to notify the other party of the occurrence of any act, event, condition, omission or circumstance which could have a substantial or material impact on: (i) the ability to achieve the various milestone and other scheduled completion dates set forth on the Progress Schedule; (ii) the cost or financial viability of the construction of the Building or Complex; or (iii) Tenant's use and occupancy of the Premises. -17- After Landlord's Architect and the Landlord's Design Team have been selected and Landlord and Tenant have mutually established the Preliminary Design Concept, Landlord shall enter into a contract (the "Architect's Contract") with Landlord's Architect. The Architect's Contract shall be subject to Tenant's prior approval, which approval shall not be unreasonably withheld, conditioned or delayed. The Architect's Contract shall include provisions requiring Landlord's Architect to submit all Design Documents (as hereinafter defined) for each stage in the design process simultaneously to both Landlord and Tenant sufficiently prior to the applicable Design Document completion date for such design stage set forth in the Progress Schedule, in order to provide Landlord and Tenant with reasonably sufficient time (in any event not less than ten (10) business days for initial review of the applicable Design Document) following receipt of such submission to review, comment on and approve such submission prior to such completion date, to be responsible for the adequacy, accuracy and completeness of the Final Design Documents approved by Landlord and Tenant, and to cause the Final Design Documents to comply with all applicable laws, regulations, building codes, building design standards, the Development Approvals, Subsequent Approvals, agreed upon floor loading limits, and with respect to all materials, equipment and special designs, processes or products, that the same do not infringe any patent or other proprietary rights of others. Contemporaneously with the selection of Landlord's Architect, Landlord shall retain a construction manager or similar consultant (the "Construction Cost Estimator"), reasonably satisfactory to the Tenant, to work with and provide pre-construction services for Landlord, Tenant and Landlord's Architect to develop, and provide value engineering services to control, a preliminary Project Cost budget and updates thereto during the Schematic Design Documents phase and the Design Development Documents phase. The parties acknowledge that Landlord may, subject to Tenant's reasonable approval, elect, at any time, to hire such Construction Cost Estimator as Construction Manager/General Contractor for the Building. Subject to the limitations hereafter set forth with respect to Tenant's right to disapprove bids with respect to the Construction Contract, each of Landlord and Tenant shall have the right to approve such preliminary Project Cost budget and updates thereto, which approvals shall not be unreasonably withheld, conditioned or delayed. Landlord shall cause Landlord's Architect to prepare schematic architectural plans, structural and engineering plans, elevations and building sections, and site plans for the Building based upon the Preliminary Design Concept ("Schematic Design Documents"), which shall mean a conceptual design of the Base Building Improvements illustrating the scale and relationship of the components of the Base Building Improvements and calculating the gross floor area and Rentable Square Footage of the Building. Additionally, the Construction Cost Estimator shall prepare an updated budget for the Base Building Improvements for approval by Landlord and Tenant. The Schematic Design Documents shall show walkways and plazas for the Building and Lot, major landscape features, hardscaping, scale and relationship of other major components of the Building and Lot, pedestrian and vehicular (including service) access and flow through the Lot, lighting, survey information such as existing elevations, benchmarks and utilities, and any known construction limits. The Schematic Design Documents shall also include models, color renderings and outline specifications indicating all basic materials and systems of the proposed Base Building Improvements. The Schematic Design Documents and all subsequent Design Documents shall be prepared and distributed by Landlord's Architect in both hard copy and electronic format. -18- During the development of the Schematic Design Documents, Landlord and Tenant shall meet with representatives of the CDD (as defined in Section 3.1.4 hereof) and their respective consultants to review and refine the design of the Building and the Lot. Thereafter, Landlord shall seek approval of the Schematic Design Documents by the Planning Board (as defined in Section 3.1.4 hereof), and Tenant shall cooperate with Landlord in connection therewith. If despite the good faith efforts of Landlord and Tenant the Planning Board rejects the design reflected in the Schematic Design Documents or insists upon major changes to the Schematic Design Documents which are unacceptable to either Landlord or Tenant and if as a result thereof Landlord is unable to obtain approval of the Schematic Design Documents by the Planning Board by the date set forth in the Progress Schedule, as the same may be changed by any Tenant Delay, either Landlord or Tenant may terminate this Lease upon thirty (30) days prior written notice. If Planning Board approval of the Schematic Design Documents is not obtained by the end of such thirty-day period, this Lease shall thereupon terminate. In the event of such termination, all third party, out-of-pocket costs incurred by Landlord in connection with the design competition and design process solely for the Building and Lot shall be shared equally by Landlord and Tenant. Planning Board approval of the Schematic Design Documents shall be a Subsequent Approval (as defined in Section 3.1.4 hereof). Landlord and Tenant agree to cooperate in connection with any conditions imposed by the Planning Board in connection with the Planning Board's approval of the Schematic Design Documents, such as further review of the Design Documents by the CDD. At such time as the Schematic Design Documents have been approved by Landlord and Tenant (and by the Planning Board, if Landlord elects to have the Schematic Design Documents approved by the Planning Board), Landlord shall cause (i) Landlord's Architect to prepare further details and development of the Schematic Design Documents (the "Design Development Documents") for the Building and the Base Building Improvements, which shall mean plans, sections and elevations, typical construction details, and equipment layouts showing the scope, relationships, forms, size and appearance of the Base Building Improvements and calculating the gross floor area and the Rentable Square Footage of the Building and (ii) the Construction Cost Estimator, based upon such Design Development Documents, to prepare an updated budget for the Base Building Improvements, each for approval by Landlord and Tenant. Design Development Documents shall include architectural, mechanical and electrical drawings and details of the Building, exterior materials to be incorporated in the Building, walkways and other plaza areas on the Lot, a site and landscape plan for the Lot showing all site development and landscape detail for lighting, paving, landscaping, utilities, grading, drainage, access and service areas. The Design Development Documents shall also include outline specifications indicating all basic materials and mechanical and electrical systems of the proposed Base Building Improvements. As with the Schematic Development Documents, the Design Development Documents shall be prepared and distributed in both hard copy and electronic format. At such time as the Design Development Documents have been approved by Landlord and Tenant, Landlord shall cause (i) Landlord's Architect to prepare detailed construction drawings and specifications ("Final Design Documents") which shall set forth in detail the requirements for construction of Landlord's Work (including all architectural, mechanical, electrical and structural drawings and detailed specifications), shall be fully coordinated with one another and with field conditions as they exist on the Lot, shall show all work necessary to complete Landlord's Work, including all cutting, fitting, and patching and all connections to the -19- mechanical and electrical systems and components of the Base Building Improvements, and shall include calculations of the gross floor area and the Rentable Square Footage of the Base Building Improvements and (ii) the Construction Cost Estimator, based upon such Final Design Documents, to prepare an updated budget for the Base Building Improvements, each for approval by Landlord and Tenant. The Final Design Documents shall be used for the construction of the Base Building Improvements and shall be based upon the Design Development Documents and other information which is relevant to the design and construction of the Base Building Improvements. The Final Design Documents shall be prepared and stamped by Landlord's Architect. The Preliminary Design Concept, the Schematic Design Documents and the Final Design Documents (collectively, the "Design Documents") shall not include any of Tenant's Work (as hereinafter defined). As used herein, the term "Base Building Improvements" shall mean the items of work and materials to be performed and supplied by Landlord in accordance with the Final Design Documents as affected by Change Orders (as such term is hereafter defined) and the term "Landlord's Work" shall mean the construction of the Base Building Improvements in accordance with the Final Design Documents as affected by Change Orders. The preliminary and final Schematic Design Documents, the preliminary and final Design Development Documents, and the Final Design Documents shall be submitted to both Landlord and Tenant for review and comment in accordance with the dates and requirements included in the Progress Schedule, which shall be incorporated, to the extent applicable, in the Architect's Contract. In each instance both parties shall have until the respective completion dates set forth in the Progress Schedule to review each submission and to notify the other party of approval or disapproval. Tenant may disapprove any new items shown on a submission which are not in compliance with (i) the Preliminary Design Concept with regard to the Schematic Design Documents, (ii) the Schematic Design Documents with regard to the Design Development Documents, or (iii) the Design Development Documents with regard to the Final Design Documents, specifying and detailing in each case such objections. To the extent that any such submission is consistent with prior submissions approved by Tenant, such submission shall be approved by Tenant, PROVIDED HOWEVER, that Tenant shall have the right, with Landlord's approval, to make modifications as set forth in the next sentence hereof. Tenant, with the approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, shall have the right to modify the design of the Base Building Improvements at any time during the design process contemplated hereby, provided that if as a result of any such design change (a) any particular Design Document submission is not approved by the applicable completion date set forth on the Progress Schedule, or (b) any such design change delays the Substantial Completion Date, such lack of approval or design change shall constitute a Tenant Delay for purposes of Section 3.2. In the event Tenant shall fail to object to any Design Documents submissions by the applicable completion date for such submission set forth in the Progress Schedule, provided that Tenant had received such submission not less than five (5) business days prior to the applicable completion date, such failure shall constitute a Tenant Delay for purposes of Section 3.2. If Tenant objects to any such submission because such submission is inconsistent with the prior submission approved by Tenant, Landlord shall cause Landlord's Architect to modify such submission to respond to Tenant's objection and submit such modified submission to Tenant within five (5) business days after receipt of Tenant's objections for approval by Tenant in the same manner as with regard to the prior submission. Rejection of new items included in any submission that are inconsistent with the approvals given -20- for prior design phases shall not give rise to a Tenant Delay so long as the initial rejection was delivered within the dates established in the Progress Schedule, as modified. Landlord and Tenant agree to cooperate with one another diligently and in good faith so as to complete the review and approval of all Design Document submission by the applicable completion dates set forth in the Progress Schedule. Upon approval of the Final Design Documents, Landlord shall solicit bids from general contractors or construction managers mutually identified by Landlord and Tenant by the date set forth in the Progress Schedule. Landlord and Tenant shall mutually determine whether such bids shall be submitted on the basis of a guaranteed maximum or fixed price contract basis. Upon receipt of bids from such general contractors or construction managers, Landlord and Tenant shall mutually select Landlord's Contractor from among such bidders and thereupon Landlord shall enter into a contract (the "Construction Contract") with Landlord's Contractor for construction of the Base Building Improvements. The parties acknowledge that if Landlord and Tenant have agreed to hire the Construction Cost Estimator to serve as Construction Manager/General Contractor for the Building, instead of soliciting bids from general contractors or construction managers as described above, such Construction Manager shall instead be required to solicit bids from all subcontractors, and in such case Landlord and Tenant shall be entitled to approve the subcontractors selected by the Construction Manager and require Landlord's Contractor to enter into such subcontracts. The Construction Contract shall be subject to Tenant's prior approval, which approval shall not be unreasonably withheld, conditioned or delayed. If, after such bids are received, none of such bids is acceptable to Tenant and/or Tenant seeks any change in previously approved Design Documents, and as a result thereof Tenant fails or refuses to approve the Final Project Budget (as hereinafter defined) by the date set forth in the Project Schedule, such failure or refusal shall constitute a Tenant Delay. Additionally, Tenant shall have no right to withhold approval of any general contractor bid or any subcontractor bid if the total amount of all such bids does not exceed by more than fifteen percent (15%) the estimated amount thereof set forth in the preliminary budget for Project Cost or the updated budget for Project Cost, as the case may be, then most recently approved by Landlord and Tenant. As used in this Lease, the term "Project Cost" shall mean (i) all hard costs and soft costs incurred by Landlord in connection with the construction of the Base Building Improvements as reflected in a final project budget (the "Final Project Budget") to be mutually approved by Landlord and Tenant based upon, INTER ALIA, all amounts payable by Landlord pursuant to the Architect's Contract and the Construction Contract, and including all liabilities and expenses of all architectural and engineering services relating to Landlord's Work, appropriate amounts for the other line item categories set forth on the Project Budget form attached hereto as Exhibit B-1 (the "Project Budget Form"), (ii) the net amount of all Change Orders (as hereinafter defined), (iii) a pro-rata portion of all "Mitigation Expenses" (as such term is hereafter defined) incurred by Landlord or any Affiliate of Landlord pursuant to the Development Approvals and the Subsequent Approvals (as such terms are defined in Section 3.1.4 hereof), which pro-rata portion shall be equal to the ratio of the gross floor area of the Building (as such gross floor area is determined pursuant to the Cambridge Zoning Ordinance) to 1,313,000 square feet (being the maximum amount of gross floor area, determined pursuant to the Cambridge Zoning Ordinance, permitted to be developed in the Complex pursuant to the PUD Approval (as such term is defined in Section 3.1.4 hereof) except as hereinafter set forth and (iv) taxes and assessments for -21- the Building and Lot, utility and insurance costs for the Building and Lot and all other operating and maintenance costs for the Building and Lot, in each case incurred by Landlord for the period from the Substantial Completion Date through the Term Commencement Date. The term "Mitigation Expenses" shall mean all capital expenses for housing linkage payments and public open space linkage payments required pursuant to the PUD Approval with respect to the Building, costs of traffic mitigation required by the Development Approvals and Subsequent Approvals and infrastructure improvements for the Complex required by the Development Approvals and Subsequent Approvals. Tenant's pro-rata share of capital expenses for housing linkage payments and public open space linkage payments required pursuant to the PUD Approval with respect to the Building shall be equal to the ratio of the Rentable Square Footage of Premises to the Rentable Square Footage of Building. For purposes of determining Project Cost, the line item amount for Land and Environmental Remediation shall be fixed at $60.00 per r.s.f. regardless of the actual cost of such line item; Project Cost shall not include any amount for construction of the Garage (as hereinafter defined) or for the leasing of (or the making of any tenant improvements to) the Expansion Spaces to tenants; the developer's fee shall be fixed at five percent (5%) of Project Cost (exclusive, however, of the line item amounts for Land and Environmental Remediation, Development Fee/Supervision (the "Developer's Fee") and Interest on Landlord's Equity (as such term is hereinafter defined)); the broker's fee shall not exceed $7.50 per r.s.f. and no amount shall be included in Project Cost for general or administrative expenses of Landlord or for improvements to the Retail Space in excess of the cost of Base Building Improvements related thereto, and no amount shall be included in Project Cost for any interest, charges or fees paid or payable by Landlord with respect to any construction loan financing for the Project. Project Cost shall include an amount determined by multiplying all components of the Project Cost (exclusive, however, of the line item for the Developer's Fee) by twelve percent (12%) per annum for the period commencing as of the date the cost of each such component is incurred through and including the Term Commencement Date (as so determined, "Interest on Landlord's Equity"), it being understood and agreed by Landlord and Tenant that Interest on Landlord's Equity with respect to any component of Project Cost that Landlord has acquired, purchased or incurred prior to the date of execution of this Lease, such as the cost of the Land & Environmental component of the Project Cost, shall be deemed to begin to accrue, not as of the date that the cost was actually incurred, but rather as of the execution date of this Lease. Landlord shall account for all Project Costs on a so-called "open book" basis. Within ninety (90) days after the Substantial Completion Date, Landlord shall deliver to Tenant a full accounting of the Project Cost incurred as of the Substantial Completion Date; Tenant, from the date hereof through the date which is twelve (12) months after receipt of such full accounting of Project Cost, may review all of Landlord's books and records relating to the incurrence and payment of the Project Cost in order to verify and confirm the accuracy thereof. If Landlord incurs any cost or expense properly includable in Project Cost after the Substantial Completion Date (including, without limitation, any Mitigation Expenses) which is not included in the full accounting, Landlord shall notify Tenant thereof and Landlord shall provide Tenant with such documentation with respect thereto as Tenant reasonably may request. Landlord and Tenant acknowledge and agree that the incurrence of additional costs and expenses by Landlord after the Substantial Completion Date which are properly includable in Project Cost will result in an increase in the Annual Fixed Rent Rate, which increase shall be effective as of the date of incurrence thereof. -22- Tenant shall have the right (but not the obligation) to offer to finance up to twenty percent (20%) of the Project Cost as hereinafter provided ("Tenant Financing"). If Tenant shall desire to offer Tenant Financing, Tenant shall give Landlord written notice ("Financing Notice") of such offer not later than thirty (30) days after Landlord and Tenant have agreed upon the first preliminary Project Budget; such Financing Notice shall specify the amount (the "Tenant Financing Amount") and other financial terms of such Tenant Financing described below. Delivery by Tenant of a Financing Notice shall constitute a representation by Tenant that it has the capacity to provide such Tenant Financing. If Tenant offers to provide Tenant Financing and all of the terms and conditions thereof, including without limitation, all documents evidencing and securing Tenant Financing, are acceptable to Landlord and its construction and/or permanent lenders, in their respective sole discretion, Tenant shall make a loan to Landlord for an amount equal to the Tenant Financing Amount. The Financing Notice shall specify the interest rate per annum payable on such Tenant Financing loan and the repayment schedule (interest only until maturity; or payments of principal and interest based upon the amortization period specified by Tenant in the Financing Notice), which interest rate and repayment schedule shall be subject to Landlord acceptance or rejection. Such Tenant Financing loan shall be due and payable not later than the scheduled expiration date of the initial Term of the Lease, and shall be secured by a mortgage on the Lot and Building, which mortgage shall be subject and subordinate to the lien of any mortgage granted to any lender now or hereafter providing Landlord with construction and/or permanent financing ("Landlord's Project Financing"). The amount by which the Project Cost exceeds the Tenant Financing Amount is herein referred to as the "Landlord Project Cost Portion". Tenant agrees that upon any uncured Event of Default hereunder, Landlord shall be entitled to offset against any payments due under the Tenant Financing loan any amount owed by Tenant to Landlord pursuant to this Lease. In addition, Tenant agrees that it will enter into any intercreditor agreement (which may include typical subordinate lender standstill agreements) requested by any lender providing Landlord's Project Financing. Tenant shall disburse the proceeds of such Tenant Financing loan to Landlord on the Commencement Date, and Landlord shall apply such proceeds to pay down Landlord's Project Financing by the Tenant Financing Amount. If Tenant provides Tenant Financing as aforesaid, the definition of Annual Fixed Rent Rate set forth in Section 1.1 shall be deemed to be revised to read as follows: Subject to Sections 4.1(b), 10.11 and 10.12 thereof, an amount equal to (a) the sum of (i) the product of (x) the Landlord Project Cost Portion multiplied by (y) twelve percent (12%) plus (ii) the product of (x) the Tenant Financing Amount multiplied by (y) the Tenant Financing interest rate per annum payable on the Tenant Financing (or debt service constant if Tenant elects to have the Tenant Financing amortized), divided by (b) the Rentable Square Footage of the Building. 3.1.2 CHANGE ORDERS. Tenant and Landlord recognize that it may be necessary or advisable to make certain changes to the Final Design Documents or the Base Building Improvements from time to time. Any changes shall be made in accordance with this Lease. -23- (a) In the event that Tenant shall request or authorize any Change Order (as hereinafter defined) or additional services from Landlord with respect to the Base Building Improvements for the purpose of upgrading or changing the scope, manner of performance, or quality of the Base Building Improvements, including any change of design, subcontractor, supplier or materials made at the request of Tenant, such Change Order when implemented by Landlord may result in a change in the Progress Schedule and/or the Project Cost. As used herein, the term "Change Order" shall mean (A) a written order from Landlord which Landlord determines is necessary to carry out the approved design and construction of the Base Building Improvements, whether due to any mistake or omission in, or clarification of, the Design Documents, or (B) a written order to Landlord from Tenant requesting or authorizing a Change in Landlord's Work or an adjustment of the Project Cost or the Progress Schedule. Landlord shall provide Tenant with copies of all proposed and final Change Orders. In addition: subject to the last sentence of this Subparagraph (a), (i) with respect to additive Change Orders, the Project Cost shall be increased by an amount equal to the change in the cost of Landlord's Work (as determined pursuant to the Construction Contract and/or the Architect's Contract) attributable to such Change Order, and (ii) with respect to deductive Change Orders, the Project Cost shall be reduced by the change in the cost of Landlord's Work (as determined pursuant to the Construction Contract and/or the Architect's Contract) attributable to such Change Order. Additive or deductive Change Orders shall result in an increase or decrease, respectively, in the Developer's Fee (but not in any change of the percentage thereof), and Landlord shall be reimbursed by Tenant, either directly or through an increase or decrease, as applicable, in the Project Cost, for the actual cost of overhead and profit, if any, which Landlord is required to pay to Landlord's Contractor on account of any additive Change Order as set forth in the Construction Contract approved by Tenant and Landlord. Anything herein to the contrary notwithstanding, Tenant's approval of a Change Order shall be required for each of the following, which approval shall not be unreasonably withheld, conditioned or delayed: (1) A change in the rentable square footage of the Premises by more than four percent (4%) in the aggregate; (2) A change in the rentable square footage of any floor included within the Premises by more than five percent (5%) in the aggregate; (3) Any material change in the elevator systems or mechanical or electrical systems serving the Premises with the result that such systems would be significantly different than those shown on the Final Design Documents; (4) Any material change in standard structural floor load capacities from those shown on the Final Design Documents; (5) Any material change in the quality of materials and fixtures used in the lobby of the Building, passenger elevator cabs serving the Premises, or washrooms serving the Premises with the result that the same would be significantly different from to those shown on the Final Design Documents; (6) Any change in the exterior design or appearance of the Building; or -24- (7) Any individual Change Order which increases the Project Cost by more than $500,000.00. (b) If Tenant requests or requires any Change Order for the Base Building Improvements, Landlord shall submit all such Change Orders with plans, specifications, pricing and a schedule of values if appropriate to Tenant for its review and approval, which approval shall not be unreasonably withheld, delayed or conditioned. No Change Order for the Base Building Improvements requested by Tenant shall be effective unless approved by Landlord's Representative and Tenant's Construction Representative in writing, such approval not to be unreasonably withheld, delayed or conditioned. Tenant may withdraw any Change Order requested by Tenant at any time prior to Tenant's Construction Representative having given its approval to such Change Order. Promptly, but not later than ninety (90) days after the Term Commencement Date, Landlord shall deliver a set of as built plans and operating and maintenance manuals for the Base Building Improvements to Tenant. 3.1.3 ENVIRONMENTAL REMEDIATION. Landlord shall be responsible for undertaking and completing environmental remediation of the Lot ("Environmental Remediation") pursuant to an Environmental Agreement (the "Environmental Agreement") between Landlord and Tenant in the form of EXHIBIT E hereto. Landlord has delivered to Tenant the documents set forth on EXHIBIT E-1 hereto (the "Remediation Documents") and Landlord will provide Tenant with such additional information pertaining to Environmental Remediation and hazardous substances present on other portions of the Lot as Tenant reasonably may request, including correspondence with regulatory authorities and other governmental bodies with respect to the Environmental Remediation. Landlord will provide Tenant with notice of any circumstances relating to the Environmental Remediation which could delay the Substantial Completion Date, as affected by any Tenant Delay, by more than thirty (30) days. 3.1.4 DEVELOPMENT APPROVALS AND TITLE EXCEPTIONS. Reference is hereby made to (i) a Special Permit issued by the City of Cambridge Planning Board (the "Planning Board"), Case No. PB #141 filed April 7, 1999 (the "PUD Permit"), recorded with the Middlesex South District Registry of Deeds (the "Registry") in Book 31137, Page 89 as affected by a Settlement Agreement dated May 24, 1999 among Barbara Broussard, Mary DeFreitas, the East Cambridge Planning Team and Landlord (the "Settlement Agreement") (the PUD Permit and the Settlement Agreement are herein collectively referred to herein as the "PUD Approval"), (ii) PTDM Ordinance Final Decision issued April 20, 1999 by the Community Development Department ("CDD") of the City of Cambridge (the "PTDM Decision"), the Letter dated April 20, 1999 to Robert L. Green of Lyme Properties from Susanne Rasmussen of the CDD (the "PTDM Letter") attached to the PTDM Decision, and Landlord's Parking Transportation Demand Management Plan dated April 9, 1999 (the "PTDM Plan") (the PTDM Decision, the PTDM Letter and PTDM Plan are collectively referred to herein as the "PTDM Approval"), (iii) a Certificate of the Secretary of Environmental Affairs on the Final Environmental Impact Report dated April 15, 1999 (the "MEPA Certificate"), (iv) an Order of Conditions issued July 12, 1999 by the City of Cambridge Conservation Commission (the "Order -25- of Conditions") and (v) a Determination for Issuance of a Waterways License Amendment dated December 8, 1999, issued by the Executive Office of Environmental Affairs of the Commonwealth of Massachusetts (the "Chapter 91 Determination"), (collectively, the "Development Approvals"). Reference is also hereby made to Item Nos. 2 through 12, inclusive (the "Title Exceptions") set forth in Schedule B, Part 1 of Owner's Policy No. 136-00-336684 dated August 19, 1998, issued by Lawyer's Title Insurance Corporation (the "Title Policy"). Tenant acknowledges that Landlord has delivered to Tenant copies of the Development Approvals, the Title Exceptions and the Title Policy. This Lease, and the development, construction and operation of the Building, the Lot and the Complex, shall be subject to the Development Approvals, the license to be issued pursuant to the Chapter 91 Determination, the Title Exceptions and all other determinations, approvals, decisions and actions of governmental authorities having jurisdiction of the Complex hereafter issued pursuant to or contemplated by the Development Approvals and delivered to Tenant ("Subsequent Approvals"). Each of Landlord and Tenant, in the exercise of their respective rights and the performance of their respective obligations pursuant to this Lease, shall observe and comply with all requirements of the Development Approvals and Subsequent Approvals. Landlord, however, shall not enter into any Subsequent Approval which will materially and adversely decrease the amount of parking spaces available at the Complex. Without limiting the generality of the foregoing, to the extent required for compliance with the PUD Permit and the PTDM Approval, as the same may be affected by Subsequent Approvals (but only for so long as the same remain in force and effect from time to time), Tenant shall comply with the following: (a) Tenant shall comply with the obligations of the PTDM Approval applicable to tenants, employers and/or employees in the Complex, (b) Tenant shall cooperate with Landlord in the implementation of the Additional Recommendations set forth in the PTDM Letter if the mode split goal of the PTDM Approval is not achieved, (c) Tenant shall cooperate with Landlord and/or the Charles River Transportation Management Association or any other transportation management association of which Landlord is a member (a "TMA") in implementing the PTDM Approval and TMA programs (and Tenant is hereby encouraged to participate in all TMA programs), (d) Tenant shall establish a guaranteed ride home program for Tenant's employees as provided in the PUD Approval and the PTDM Approval, as the same may be affected by Subsequent Approvals, (e) Tenant shall, either directly or through a program established by Landlord or a TMA for tenants of the Complex, complete surveys pursuant to Section III D of the PTDM Plan, (f) as required by the PUD Approval and PTDM Approval, as the same may be affected by Subsequent Approvals, Tenant shall contract with the MBTA and subsidize transit passes and commuter rail passes in an amount not less than 60% of the cost thereof or such higher percentage as Landlord may require if mode split commitments are not achieved, (g) as provided in the PTDM Approval, as the same may be affected by Subsequent Approvals, Tenant shall cooperate with Landlord in connection with surveys concerning attitudes of employees and customers of Tenant in order to refine and develop transportation demand management programs, (h) Tenant shall provide Tenant's employees with information provided to Tenant by or on behalf of Landlord pursuant to the PTDM Plan, including information on the advantages and benefits of telecommuting, flexible time, compressed work week programs, the materials to be provided pursuant to Section VII A of the PTDM Plan and other programs recommended by the City of Cambridge, (i) as provided in the PTDM Approval, as the same may be affected by Subsequent Approvals, Tenant is hereby encouraged to use a commuter choice program which allows qualifying employees the option of receiving the cash value of a -26- Tenant's Parking Space, (j) Tenant shall participate in and pay a reasonable share (which shall not be less than Tenant's Proportionate Fraction for Complex) of the cost of any TMA shuttle bus service serving the Complex, as contemplated by the PTDM Approvals, and (k) Tenant shall cooperate with Landlord with respect to all other aspects of the PTDM Approval. 3.2 PREPARATION OF PREMISES FOR PERFORMANCE OF TENANT'S WORK. During the course of performance of Landlord's Work, Landlord and Tenant shall meet on not less than a monthly basis to review the progress of Landlord's Work. Landlord agrees to use reasonable and diligent efforts to have the Premises ready for the performance of Tenant's Work on or before the Scheduled Substantial Completion Date which Substantial Completion Date shall, however, be extended for a period equal to that of (a) any delays due to Acts of God, labor disputes or unrest, riots, fire, unusual delays in deliveries, casualties or other causes beyond Landlord's reasonable control (collectively, "Force Majeure Events") and (b) any delays due to (i) any Change Order, (ii) any act, omission or neglect of Tenant, or of any employee, agent, or separate contractor of Tenant, (iii) the concurrent performance of the Base Building Improvements and Tenant's Work, (iv) Tenant's failure to furnish information or approve any of the Design Documents, the Architect's Contract, the Construction Contract or the Project Cost by the applicable dates set forth in the Progress Schedule or to respond to any request by Landlord for information or approval within the time period required by the Progress Schedule, or if no time period is required by the Progress Schedule, within five (5) business days of Landlord's request, or (v) any breach or default by Tenant in the performance of Tenant's obligations pursuant to this Lease, even if such breach or default is cured (collectively, "Tenant Delay"). In the event of any such Force Majeure Event, Landlord shall use reasonable efforts to eliminate the cause of such delays or to secure alternate supplies. If any one or more Force Majeure Events shall delay the Substantial Completion Date by more than one hundred eighty (180) days, either Landlord or Tenant may terminate this Lease upon not less than fifteen (15) days prior written notice to the other. A Tenant Delay shall not affect the Substantial Completion Date unless Landlord has given Tenant notice thereof and Tenant fails to cure the same within two (2) business days, PROVIDED, HOWEVER, that Landlord shall not be required to provide Tenant with any notice or opportunity to cure with respect to any date set forth in the Progress Schedule by which Tenant must take any action, and any failure or refusal by Tenant to take such action by any such date set forth in the Progress Schedule, which failure or refusal in fact results in a delay, shall constitute a Tenant Delay. As used herein, the term "Substantial Completion Date" shall mean and refer to the date on which: (i) the Base Building Improvements have been substantially completed in accordance with the Final Design Documents, as affected by Change Orders, without material deviation therefrom as certified by Landlord's Architect and confirmed by Tenant's Architect, which confirmation shall not be unreasonably withheld, delayed or conditioned, with the exception of minor items which can be fully completed by Landlord within thirty (30) days without material interference with Tenant and other items which because of the season or weather or the nature of the item are not practicable to do at the time, provided that none of said items is necessary to perform Tenant's Work (collectively "Punch List Items"), (ii) if Tenant's Work has not then commenced, a Certificate of Occupancy from the City of Cambridge (or a Temporary Certificate of Occupancy with conditions which can be satisfied without material interference with the performance of Tenant's Work ) shall have been obtained, (iii) the Premises are broom clean and free of debris except to the extent, if any, resulting from Tenant's Work, and (iv) all utilities required for the -27- use of the Premises have been brought by Landlord to the location(s) shown on the Final Design Documents, as the same may be affected by Change Orders; provided, however, that if the Substantial Completion Date does not occur on or before the Scheduled Substantial Completion Date due to any Tenant Delay, then solely for purposes of determining the Commencement Date under Section 2.2 and other applicable provisions of this Lease, the Base Building Improvements shall be deemed to be substantially completed, and the Substantial Completion Date shall be deemed to have occurred, on the date on which the Substantial Completion Date would have occurred taking into account any Force Majeure Events but without taking into account any Tenant Delay. If Landlord's Architect has certified that the Base Building Improvements are substantially complete but Tenant's Architect does not confirm the same within five (5) business days thereafter, Landlord's Architect and Tenant's Architect shall immediately select a third independent architect who shall conclusively determine whether the Base Building Improvements are substantially complete. Landlord and Tenant shall share equally the costs of such third architect. Landlord's Work shall be deemed to have been performed as of the date on which the Base Building Improvements are substantially complete (as certified by Landlord's Architect and confirmed by Tenant's Architect or such independent architect) except for latent defects, Punch List Items and items which do not conform with the requirements of the Final Design Documents, as affected by Change Orders, and as to which Tenant or Tenant's Architect shall have given written notice to Landlord prior to such date. If Tenant or Tenant's Architect does not provide such written notice prior to the date on which the Base Building Improvements are substantially complete, a certificate of substantial completion by a licensed architect or registered engineer shall be conclusive evidence that Landlord has performed all such obligations except for latent defects, Punch List Items and items stated in such certificate to be incomplete or not in conformity with such requirements. Landlord shall use reasonable and diligent efforts to complete Punch List Items within thirty (30) days after the Substantial Completion Date and in a manner which will not unreasonably interfere with the performance of Tenant's Work (as defined in Section 3.2.1 hereof). Landlord represents that Landlord has the capacity to effect financial arrangements to enable Landlord to complete Landlord's Work, and to otherwise enable Landlord to fulfill all of its obligations under this Lease. After the commencement of construction of Landlord's Work, Landlord shall furnish to Tenant, at Tenant's request, a copy of the portions of Landlord's financing commitment for construction of the Building confirming the availability of construction financing therefor. Tenant agrees to observe any reasonable limitations on dissemination thereof to others that Landlord may impose. Notwithstanding the foregoing, (A) if Landlord has not commenced the Environmental Remediation of the Lot by the date set forth in the Progress Schedule, (B) if Landlord has not filed a Response Action Outcome Statement (as such term is defined in the Massachusetts Contingency Plan, 310 CMR 40.0000 ET SEQ., as amended ("MCP")) for the Lot by the date set forth in the Progress Schedule, (C) if a building permit for the Base Building Improvements has not been issued by the date set forth in the Progress Schedule, (D) if construction of the Base Building Improvements has not commenced by the date set forth in the Progress Schedule (each of the foregoing being referred to as a "Landlord Milestone Date"), Tenant shall have the right to terminate this Lease as hereinafter set forth. Upon request of Tenant, Landlord shall provide such evidence as Tenant reasonably may request to evidence achievement of each Landlord Milestone Date. Each of the Landlord Milestone Dates shall be extended by one business day for each day of Tenant Delay occurring before a respective Landlord Milestone Date. If -28- Landlord is in default with respect to any Landlord Milestone Date, as extended as aforesaid by any Tenant Delay, Tenant shall notify Landlord within five (5) business days thereof. If Landlord does not cure the default or alleged default within thirty (30) business days after receipt of such notice, Tenant, upon written notice, may thereupon terminate this Lease. If the Garage and the streets and roadways of the Complex necessary for access to the Building and Garage are not substantially complete by the date of substantial completion of Tenant's Work to be performed in connection with Tenant's initial occupancy of the Premises then Tenant, as Tenant's sole remedy, shall receive a credit against the initial and succeeding payments of the Parking Fee due hereunder, until such credit is fully exhausted, equal to two day's Parking Fee (for all of Tenant's Garage Parking Spaces or for such number of Tenant's Garage Parking Spaces as may be unavailable, as applicable) for each day from substantial completion of Tenant's Work until the Garage and such street and roadway work are substantially complete. In the event Landlord's Work shall not be substantially completed by the Scheduled Substantial Completion Date specified in Section 1.1 (as and to the extent such Scheduled Substantial Completion Date may be extended by Tenant Delays and delays caused by Force Majeure Events), then after the Term does commence, Tenant, as Tenant's sole remedy, shall receive a credit against the initial and succeeding payments of Annual Fixed Rent due hereunder, until such credit is fully exhausted, equal to one day's Annual Fixed Rent for each day from the Scheduled Substantial Completion Date (as so extended) until the date that Landlord's Work is substantially completed. In the event Landlord's Work shall not be substantially completed within one hundred eighty (180) days after the Scheduled Substantial Completion Date (as and to the extent such Scheduled Substantial Completion Date may be extended by Tenant Delays and delays caused by Force Majeure Events) (such 180th day is referred to herein as the "Outside Completion Date"), Tenant may at any time thereafter, but prior to Landlord's Work being substantially completed, notify Landlord of Tenant's election to terminate this Lease. Tenant shall give Landlord no less than thirty (30) days' prior notice of Tenant's intention to terminate this Lease before notifying Landlord of Tenant's election to terminate this Lease; it being understood and agreed, however, that Tenant may give notice of such intention as early as thirty (30) days prior to the Outside Completion Date. 3.2.1. PERFORMANCE OF TENANT'S WORK. Except for the Base Building Improvements to be performed by Landlord in accordance with the Design Documents, all of Tenant's initial interior improvements, fixtures, finishes, furnishings, furniture, telephones, movable equipment and signs (collectively, "Tenant's Work"), shall be performed and provided at the sole cost and expense of Tenant. Tenant's performance of Tenant's Work shall be coordinated with any work being performed by Landlord and/or by any Affiliate of Landlord in the Building, on the Lot or in the Complex in such manner as to maintain harmonious labor relations during the performance of Landlord's Work (which Landlord expects will be performed by union contractors) and thereafter and not to damage the Building or Lot or interfere with Building or Lot operations or with any work being performed by or on behalf of Landlord or any Affiliate of Landlord in the Complex. All work described in -29- Tenant's Work shall be performed by an Approved Contractor. For purposes of this Lease, an "Approved Contractor" shall mean a contractor or mechanic identified by Tenant in writing, who has been approved by Landlord in writing (such approval not to be unreasonably withheld, delayed or conditioned). Contractors may be approved in one of two ways. First, Tenant may submit to Landlord in writing from time to time a list (or a revised list) of contractors that Tenant anticipates using from time to time to perform Tenant's Work. If Landlord fails to object to any of the contractors identified on such list within ten (10) days after receipt of such list from Tenant, all contractors identified on such list shall be deemed "Approved Contractors". Second, Tenant may submit to Landlord from time to time requests for Landlord to approve specific contractors (not already on the list of Approved Contractors) to perform Tenant's Work. Landlord shall have the right, upon written notice to Tenant to withdraw its approval of any previously Approved Contractors at any time for any cause as determined in Landlord's reasonable judgment. A contractor's failure to provide or maintain adequate insurance levels shall be a reasonable basis for Landlord to withhold or withdraw approval unless Tenant notifies Landlord in writing that such contractor shall be covered by insurance then being maintained by Tenant and if Tenant provides documentary evidence that said Contractor is covered and of the amount of coverage. Additionally, Landlord may withhold or withdraw approval of any contractor proposed by Tenant or previously approved by Landlord to perform any Tenant's Work if Landlord determines, in Landlord's sole but reasonable discretion, that any contractor proposed or previously approved by Landlord by Tenant for the performance of any Tenant's Work does not have a sufficient bonding capacity or may cause picketing, labor unrest, strikes, protests or similar activities (collectively "Labor Unrest"). If after approval of an Approved Contractor by Landlord, any Labor Unrest shall occur or be threatened on account of any Tenant's Work, Landlord shall have the right to require cessation of Tenant's Work until resolution of such Labor Unrest. Except as set forth in Sections 3.2.1 and 5.1.10 hereof, all initial Tenant's Work which may constitute a fixture, part of the real estate, a part of a Building system or Building utilities shall become a part of the Premises and upon termination of this Lease shall be considered to be the property of the Landlord. Unless Tenant agrees to readapt the Premises for a typical general office layout prior to the expiration or termination of the Lease, Tenant shall not effect any Tenant's Work (or any alterations or additions to the Premises after performance of the initial Tenant's Work) that might require any unusual expense to reuse the Premises for any general office use. Tenant's Work shall be performed in accordance with complete, consistent, final construction drawings and specifications ("Construction Documents") approved by Landlord in writing, which approval shall not be unreasonably withheld, conditioned or delayed. The Construction Documents shall be prepared and stamped by Tenant's Architect. Landlord reserves the right to reject, in whole or in part, any or all of the Construction Documents which in its reasonable opinion fail to comply with Sections 3.2.1, 3.3 and 5.1.5 of this Lease within fifteen (15) business days of its receipt thereof (the "Review Period"). The Review Period shall not commence unless and until Tenant delivers a complete set of Construction Documents. If Landlord shall disapprove the Construction Documents, it shall state specifically the reasons therefor, and Tenant shall promptly revise and resubmit the Construction Documents. If Landlord fails to respond to Tenant's request for approval of the Construction Documents within the Review Period, then the Construction Documents shall be deemed approved. Upon completion of Tenant's Work to prepare the Premises for Tenant's initial occupancy, -30- Tenant shall provide Landlord with a set of as-built plans, and operating and maintenance manuals therefor. Tenant shall be solely responsible for the liabilities of and expenses of all architectural and engineering services relating to Tenant's Work and for the adequacy, accuracy, and completeness of the Construction Documents approved by Landlord. The Construction Documents (i) shall set forth in detail the requirements for construction of the Tenant's Work (including all architectural, mechanical, electrical and structural drawings and detailed specifications), (ii) shall be fully coordinated with one another and with field conditions as they exist in the Premises and elsewhere in the Building, and (iii) shall show all work necessary to complete the Tenant's Work including all cutting, fitting, and patching and all connections to the mechanical and electrical systems and components of the Building. Tenant agrees to indemnify and hold Landlord harmless if any Tenant's Work described in the Construction Documents (a) fails to comply with all applicable laws, regulations, building codes, building design standards, the Development Approvals and Subsequent Approvals, (b) in any manner affects any structural component of the Building (including, without limitation, exterior walls, exterior windows, core walls, roofs or floor slabs), (c) in any respect is incompatible with the electrical and mechanical components and systems of the Building, (d) affects the exterior of the Building, (e) fails to conform to floor loading limits, and (f) with respect to all materials, equipment and special designs, processes or products, infringes any patent or other proprietary rights of others. Landlord's approval or deemed approval of the Construction Documents and the performance of Tenant's Work pursuant to the Construction Documents shall not result in any liability of Landlord, and Landlord's approval of Construction Documents shall signify only Landlord's consent to Tenant's Work shown thereon and shall not result in any responsibility of Landlord concerning compliance of Tenant's Work with laws, regulations, or codes, coordination of any aspect of Tenant's Work with any other aspect of Tenant's Work, or the feasibility of constructing Tenant's Work without material damage or harm to the Building, all of which shall be the sole responsibility of Tenant. If Tenant enters into a contract with Landlord's Contractor for the performance of Tenant's Work to prepare the Premises for Tenant's initial occupancy, Landlord agrees that Tenant shall have a license to enter the Premises at such time or times prior to the Term Commencement Date as Landlord, in its sole but reasonable discretion, may permit to enable Tenant to carry out Tenant's Work. Upon any such entry by Tenant prior to the Term Commencement Date, Tenant shall be subject to, and perform all of its obligations under this Lease except for the obligation to pay Rent, which obligation shall not arise until the Term Commencement Date occurs. An Approved Contractor may be used by Tenant until Landlord notifies Tenant that an Approved Contractor is no longer approved due to such Approved Contractor's failure to comply in any material respect with the requirements of the Construction Documents and/or this Lease. Tenant shall procure all necessary governmental permits, licenses and approvals before undertaking any Tenant's Work. When any Tenant's Work is in progress, Tenant shall cause to be maintained insurance as may be required by Landlord covering any additional hazards due to such Tenant Work, for the benefit of Landlord. It shall be a condition of Landlord's approval of any Tenant's Work that certificates of such insurance issued by a responsible insurance company qualified to do business in Massachusetts and having a Best's Insurance Rating of A- or better, -31- shall have been deposited with Landlord, that Tenant has provided Tenant's certification of the insurable value of the work in question for casualty insurance purposes, and that all of the other conditions of the Lease have been satisfied. Tenant shall reimburse Landlord for up to $25,000 of the reasonable, out-of-pocket, third party costs of reviewing proposed Construction Documents and Tenant's Work and inspecting installation of the same. At all times while performing Tenant's Work, Tenant shall require each Approved Contractor performing Tenant's Work to comply with all applicable laws, regulations, permits and policies relating to such work. In performing Tenant's Work, each Approved Contractor shall comply with Landlord's requirements set forth in Section 3.2.1, Section 3.3, Section 5.1.5 and Section 5.2.3 hereof relating to the time and methods for such work, use of delivery elevators and other Building facilities and each Approved Contractor shall not interfere with or disrupt Landlord's Contractor. Each Approved Contractor shall in all events work on the Premises without causing labor disharmony, coordination difficulties, or delay or impairment of any guaranties, warranties or obligations of any contractors of Landlord and without causing unreasonable interference with the rights of other tenants in the Building. If any Approved Contractor uses any Building services or facilities prior to the Commencement Date, such Contractor, jointly and severally with Tenant, shall agree to reimburse Landlord for the cost thereof based on Landlord's schedule of charges established from time to time (and if no such charges have been established, then based on Landlord's reasonable charge established at the time). Tenant shall include a provision in each contract with each Approved Contractor whereby such Approved Contractor shall, by entry into the Building or onto the Lot or Complex, agree to indemnify and hold Landlord harmless from any claim, loss or expense arising in whole or in part out of any act or neglect committed by such person while in the Building or on the Lot or Complex, to the same extent as Tenant has so agreed in this Lease, which indemnities of Tenant and Approved Contractor shall be joint and several. Subject to Tenant's right to contest amounts due to any Approved Contractor, Tenant shall pay on or prior to date when any such payment is due the entire cost of all Tenant's Work so that the Premises shall always be free of liens for labor or materials. If any mechanic's lien (which term shall include all similar liens relating to the furnishing of labor and materials) is filed against the Premises, the Building, the Lot or the Complex or any part thereof (regardless of whether Tenant contests the same) which is claimed to be attributable to Tenant, its agents, employees or contractors, Tenant shall promptly discharge the same by payment or filing any necessary bond within thirty (30) days after Tenant has notice (from any source) of such mechanic's lien. Tenant shall prepare and complete not less than seventy-five percent (75%) of the Rentable Square Footage of Premises for Tenant's occupancy within nine (9) months after the Substantial Completion Date. If Tenant does not prepare and complete the entire Premises for Tenant's occupancy within nine (9) months after the Substantial Completion Date, Tenant shall deposit with Landlord on or before the end of such nine-month period a completion bond, letter of credit or similar security in the amount of Landlord's reasonable estimate of the cost to so complete the Premises. The form and substance of such bond, letter of credit or similar security shall be subject to Landlord's approval, which approval shall not be unreasonably withheld, conditioned or delayed. After the performance of Tenant's Work to prepare the Premises for Tenant's initial occupancy, (i) all Tenant's Work shall be subject to all provisions of this Lease relating to Tenant's Work to prepare the Premises for Tenant's initial occupancy, except as expressly set -32- forth herein, and (ii) Landlord and Tenant shall agree in writing, at the time Landlord approves any alteration or addition, whether Tenant will be required to, permitted to or forbidden to, at Tenant's sole cost and expense, remove any such alteration or addition and/or to readapt, repair or restore the Premises to substantially the condition the same were in prior to such alteration or addition upon the expiration or termination of this Lease. Landlord's approval of any alteration or addition which is not a Minor Alteration (as hereinafter defined in this Section 3.2) shall be deemed to have been given if Landlord fails to notify Tenant of its objection thereto within fifteen (15) business days after Tenant's request for such approval. In circumstances in which Tenant desires the right to remove additions or alterations at the expiration or termination of this Lease, Landlord shall reasonably agree, and such agreement shall not be unreasonably withheld, conditioned or delayed (and shall be deemed to have been given if Landlord fails to notify Tenant of its objection thereto within fifteen (15) business days after Tenant's request for such agreement), to permit such removal where items installed by Tenant are in the nature of equipment, but are so affixed to Building that such items may be construed as fixtures. Tenant's rights to remove additions or alterations hereunder shall not apply to replacement of items included in Tenant's Work that are replaced due to the fact that such items have worn out or become substantially obsolete. After the performance of Tenant's Work, all changes and additions shall be part of the Building except such items as by writing at the time of approval the parties agree either shall be removed or left by Tenant on termination of this Lease, or shall be removed or left at Tenant's election. Notwithstanding the foregoing, the parties hereby agree that for any non-structural alterations or additions to the Premises which do not involve modifications to the Building operating systems and for which the cost may be reasonably estimated to be less than $100,000 (each a "Minor Alteration"): (i) Landlord's prior written consent shall not be required unless such Minor Alteration requires a building permit from the City of Cambridge, in which case Landlord's reasonable consent shall be required, provided that such consent shall be deemed to have been given if Landlord fails to notify Tenant of its objection to such Minor Alteration within five (5) days after Tenant's request for Landlord's consent with respect thereto, and (ii) if Landlord's consent was not obtained therefor, upon the expiration or termination of this Lease, Tenant shall readapt, repair and restore the affected portion of the Premises to substantially the condition the same were in prior to such Minor Alteration. Additionally, Tenant shall give prior written notice to Landlord of any Minor Alteration for which the cost may be reasonably estimated to be less than $100,000 but greater than $25,000 and regardless of whether Landlord's consent is required. The parties further agree that after the performance of Tenant's Work to prepare the Premises for Tenant's initial occupancy (a) any request for Landlord's consent to any alteration or addition (including, without limitation, any Minor Alteration) shall be accompanied by drawings and specifications in reasonable detail given the size and scope of the proposed alteration or addition, and (b) Tenant shall furnish Landlord as-built drawings showing any and all alterations or additions (including, without limitation, any and all Minor Alterations) made by Tenant or any assignee, sublessee or licensee of Tenant within 30 days after completion of the same. -33- 3.3 GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION. All construction work required or permitted by this Lease, whether by Landlord or by Tenant, shall be done at the sole risk of the party performing such work, in a good and workmanlike manner employing new materials of good quality, and in compliance with all Development Approvals, Subsequent Approvals, applicable laws, codes, ordinances, regulations and orders of any governmental authority or insurer of the Building, including the Americans with Disabilities Act (42 U.S.C. ss. 12101 ET SEQ.) and the regulations and Accessibility Guidelines for Buildings and Facilities issued pursuant thereto (collectively, the "ADA Requirements"). Either party may inspect the work of the other at reasonable times and shall give notice of observed defects. Landlord shall not be responsible for any loss, damage, or injury resulting from the installation of any components, fixtures, or equipment provided they were appropriately specified and installed in accordance with the manufacturer's or supplier's instructions; provided, however, that Landlord shall assign any and all contractor's, manufacturer's and supplier's warranties with respect to the Base Building Improvements, including, without limitation, Landlord's Contractor's warranty as set forth in the Construction Contract, to Tenant for the Term of this Lease, upon the expiration or sooner termination of which such warranties shall automatically revert to Landlord. 3.4 REPRESENTATIVES. Each party authorizes the other to rely in connection with their respective rights and obligations under this Article III upon approval and other actions on the party's behalf by Landlord's Representative in the case of Landlord and Tenant's Lease Representative in the case of Tenant lease matters and Tenant's Construction Representative, in the case of Tenant design and construction matters, or by any person hereafter designated in substitution or addition by notice to the party relying. 3.5 LANDLORD INDEMNITY AND CORRECTION OF LANDLORD'S WORK. Landlord agrees to indemnify and hold Tenant harmless if any of Landlord's Work described in the Final Design Documents (a) fails to comply with all applicable laws, regulations, building codes, building design standards, the Development Approvals and Subsequent Approvals and (b) with respect to all materials, equipment and special designs, processes or products, infringes any patent or other proprietary rights of others. If within one year after the Substantial Completion Date (i) any item of Base Building Improvements does not conform with the Final Design Documents or (ii) there is any latent defect or any other defect in the Base Building Improvements caused by faulty workmanship performed on behalf of Landlord or materials installed on behalf of Landlord, Landlord, upon written notice thereof from Tenant prior to the expiration of such one-year period, shall forthwith cause such nonconformity or defect to be corrected without cost or expense to Tenant. -34- ARTICLE IV RENT 4.1 FIXED RENT. (a) MONTHLY INSTALLMENTS; DEFINITIONS. Commencing on the Commencement Date, Tenant covenants and agrees to pay Fixed Rent (as hereinafter defined) for the Premises to Landlord by wire transfer as Landlord may from time to time direct in writing, without any offset or reduction whatsoever (except as may be made in accordance with the express provisions of this Lease), or in the absence of wire transfer instructions from Landlord, at the Original Address of Landlord or at such other place or to such other person or entity as Landlord may by notice to Tenant from time to time direct, in the amount of (x) the Annual Fixed Rent Rate set forth in Article I multiplied by (y) the Rentable Square Footage of the Premises, and subject to adjustment as set forth in Sections 4.1(b), 5.1.2, 10.11 and 10.12 hereof (collectively "Fixed Rent" or "Annual Fixed Rent"), in equal installments equal to 1/12th of the Fixed Rent in advance on the first day of each calendar month included in the Term; and for any portion of a calendar month at the beginning or end of the Term, at that rate payable in advance for such portion. (b) ADJUSTMENT OF ANNUAL FIXED RENT. On the tenth anniversary of the Commencement Date, each of the Annual Fixed Rent for the Premises (as initially demised to Tenant) determined pursuant to Section 1.1 hereof, and the Annual Fixed Rent for the Expansion Spaces as determined pursuant to Section 10.11 hereof, shall be increased by an amount determined by multiplying the Annual Fixed Rent for the first Lease Year by twenty-one and nine tenths percent (21.9%). For example, if for the first Lease Year the Annual Fixed Rent for the Premises (as initially demised to Tenant) is *****, such increase shall equal ***** and if the Annual Fixed Rent (including the TI Factor) for both the Expansion Spaces as determined pursuant to Section 10.11(c) is *****, such increase shall equal *****. The respective Annual Fixed Rent for the Premises (as initially demised to Tenant) and the Expansion Spaces, increased as aforesaid, shall be effective from the tenth anniversary of the Commencement Date through the end of the fifteenth Lease Year. (c) Landlord shall send advance written notice to Tenant on a monthly basis of the amount of Fixed Rent and Additional Rent due pursuant to this Lease; such advance written notice shall be given not later than five (5) business days prior to the first day of each calendar month. 4.2 ADDITIONAL RENT. As used herein, the term "Additional Rent" shall mean all rent, charges and other sums, other than Fixed Rent, due Landlord pursuant to this Lease. All regularly recurring items of Additional Rent, such as the Annual Maintenance Charge, shall be paid by Tenant to Landlord by wire transfer as Landlord may from time to time direct in writing, or in the absence of wire transfer instructions from Landlord, at the Original Address of Landlord. Nonrecurring items of Additional Rent shall be paid by Tenant to Landlord by check or wire transfer as Tenant may from time to time elect. In order that the Fixed Rent shall be absolutely net to Landlord, * Confidential Treatment has been requested for the marked portion pursuant to Rule 24b-2 and filed separately with the Commission. -35- commencing on the Commencement Date, Tenant covenants and agrees to pay, as Additional Rent, without any offset or reduction whatsoever except as expressly set forth in this Lease, taxes, municipal or state betterment assessments, insurance costs, utility charges and the Annual Maintenance Charge with respect to the Premises as provided in this Section 4.2 as follows: As used herein, the term "Estimated Annual Additional Rent" shall mean and refer to Landlord's estimate of the total amount of Additional Rent which may be due from Tenant for any particular Lease Year with respect to the Building, Lot and Complex. Landlord shall furnish Tenant with a statement within sixty (60) days after the commencement of each Lease Year setting forth the amount of Landlord's Estimated Annual Additional Rent for such Lease Year. Landlord's good faith estimate of the Estimated Annual Additional Rent for the first "fiscal year" (as such term is defined in Section 4.2.4 hereof) of the Term is set forth in Section 1.1 as the "Initial Estimated Annual Additional Rent for Building" and "Initial Estimated Annual Additional Rent for Complex". 4.2.1 REAL ESTATE TAXES. Tenant shall pay directly to the Landlord: (i) Tenant's Proportionate Fraction for Building and Tenant's Proportionate Fraction for Complex, respectively, of all taxes, assessments (special or otherwise), levies, fees, water and sewer rents and charges, and all other government levies and charges, general and special, ordinary and extraordinary, foreseen and unforeseen, which are, at any time during the Term hereof, imposed or levied upon or assessed against the Premises, the Building, the Lot or the Complex, and (ii) the full amount of any tax or assessment imposed or levied upon or against (A) any Fixed Rent, Additional Rent or other sum payable hereunder, (B) this Lease, or the leasehold estate hereby created, or which arise in respect of the operation, possession or use of the Premises; (C) all gross receipts or similar taxes imposed or levied upon, assessed against or measured by any Fixed Rent, Additional Rent or other sum payable hereunder; and (D) all sales, value added, use and similar taxes at any time levied, assessed or payable on account of the acquisition, leasing or use of the Premises (and Tenant's Proportionate Fraction for Building and Tenant's Proportionate Fraction for Complex, respectively, of any such taxes if they are levied, assessed or payable on account of the acquisition, leasing or use of the entire Building Lot or the Complex) which may become a lien on the Building, the Lot, the Premises or the Complex (collectively "taxes and assessments" or if singular "tax or assessment"). For each tax or assessment period, or installment period thereof, wholly included in the Term, all such payments shall be made by Tenant not more than twenty (20) days after receipt of an invoice therefor. For any fraction of a tax or assessment period, or installment period thereof, included in the Term at the beginning or end thereof, Tenant shall pay to Landlord, within twenty 20 days after receipt of an invoice therefor, Tenant's Proportionate Fraction for Building and Tenant's Proportionate Fraction for Complex, as applicable, of taxes and assessments so levied or assessed or becoming payable which is allocable to such included period. At Landlord's option, Tenant shall pay taxes and assessments in accordance with Section 4.2.5 hereof. Subject to Tenant's payment to Landlord of taxes and assessments as and when required by this Section 4.2.1, Landlord agrees to pay such tax and assessments to the proper authorities prior to delinquency and to provide Tenant with evidence of such payment upon request therefor. Anything herein to the contrary notwithstanding, if and to the extent that the Lot is not a separately assessed parcel, Landlord shall make reasonable allocation of any taxes and assessments between the Lot and the Building and the Complex of which the Lot is a part. -36- Tenant may apply for any abatement of, or otherwise contest, any tax or assessment, provided that the expenses of such proceedings, including, without limitation, any penalties, interest, late fees or charges, and attorneys' fees incurred as a result thereof, shall be paid by Tenant. Landlord and Tenant shall discuss and may mutually agree upon any other tax initiatives available for the Lot or Building. Nothing contained in this Lease shall, however, require Tenant to pay any income taxes, excess profits taxes, excise taxes, franchise taxes, or any taxes or assessments with respect to the Garage and other buildings leased or available for lease (and the parcels of land upon which such buildings are situated), other than the Building, the Lot and any building or portion of a building in the Complex which is not designed and available for lease to third parties (and the parcel(s) of land on which the same may be located) in the Complex ("Excluded Taxes"), estate, succession, inheritance or transfer taxes, provided, however, that if at any time during the Term the present system of ad valorem taxation of real property shall be changed so that in lieu of the whole or any part of the ad valorem tax on real property, there shall be assessed on Landlord a capital levy or other tax on the gross rents received with respect to the Building, the Lot, or the Complex or all of them, or a federal, state, county, municipal, or other local income, franchise, excise or similar tax, assessment, levy or charge (distinct from any now in effect) measured by or based, in whole or in part, upon gross rents, then any and all of such taxes, assessments, levies or charges, to the extent so measured or based ("Substitute Taxes"), Tenant's Proportionate Fraction for Building and Tenant's Proportionate Fraction for Complex, respectively, of Substitute Taxes shall be payable by Tenant; provided, however, that (i) Tenant's obligation with respect to the aforesaid Substitute Taxes shall be limited to the amount thereof as computed at the rates that would be payable if the Building and Lot and buildings not available for lease (and the parcel(s) of land on which the same may be located) were the only property of Landlord, and (ii) only that portion of the Substitute Taxes in excess of the Excluded Taxes shall be payable by Tenant. Landlord shall furnish to Tenant a copy of any notice of any public, special or betterment assessment received by Landlord concerning the Building and Lot. 4.2.2 INSURANCE. 4.2.2.1 INSURANCE TAKEN OUT BY TENANT. Tenant shall take out and maintain throughout the Term of this Lease the following insurance: (a) Comprehensive general liability insurance indemnifying Landlord and Tenant against all claims and demands for (i) injury to or death of any person or damage to or loss of property, on the Premises, in the Building or on the Lot or adjoining walks, streets or ways, or connected with the use, condition or occupancy of any thereof unless caused by the negligence of Landlord or its servants or agents, (ii) violation of this Lease, or (iii) any act, fault or omission, or other misconduct of Tenant or its agents, contractors, licensees, sublessees or invitees, in amounts which shall, at the beginning of the Term, be at least equal to the limits set forth in Section 1.1, and, from time to time during the Term, shall be for such higher limits, if any, as are customarily carried in the area in which the Premises, Building and Lot are located for property similar to the Premises, Building and Lot and used for similar purposes, PROVIDED, HOWEVER, Landlord shall not require an increase in such limits more frequently than once every -37- three years, and in no event shall such limits exceed the limits required for buildings in Cambridge similar to the Building, and shall be written on the "Occurrence Basis"; and (b) Worker's compensation insurance with statutory limits covering all of the Tenant's employees working on the Premises. All insurance required to be carried by Tenant pursuant to this Lease may be provided under one or more "blanket" insurance policies covering other locations and facilities operated by Tenant or any Affiliate of Tenant, provided that such blanket policies otherwise comply with the provisions of this Section. In addition, Tenant may satisfy the $10,000,000 per occurrence liability insurance coverage, as the same may be increased pursuant to Section 4.2.2.1(a) hereof, with excess liability (so-called "umbrella") coverage, so long as Tenant maintains primary liability coverage of not less than $5,000,000, as the same may be increased pursuant to Section 4.2.2.1(a) hereof. (c) Landlord acknowledges that Tenant shall have the right, at its sole election, and at Tenant's sole expense, independently to obtain all risk fire and casualty and boiler/sprinkler damage insurance similar to that described in Sections 4.2.2.2(b) and (c) below for the purpose of providing Tenant with insurance proceeds to fund any Tenant's Restoration Fund described in Section 6.1(h) below. However, Tenant shall not be obligated to file any claim or use any proceeds from such insurance for the benefit of Landlord. 4.2.2.2 INSURANCE TAKEN OUT BY LANDLORD. Landlord shall take out and maintain throughout the Term of this Lease the following insurance: (a) Comprehensive general liability insurance for the Building, the Lot and the Complex of the same nature and type as described in Section 4.2.2.1(a) of this Lease, and with the same policy limits or such higher policy limits as Landlord may reasonably determine; and (b) All risk, fire and casualty insurance on a one hundred percent (100%) replacement cost basis, together with rental loss coverage and, if the Building is located in a flood zone, flood coverage to the extent the same is available, insuring the Building and its rental value, and Complex Common Areas; and (c) Insurance against loss or damage from sprinklers and from leakage or explosions or cracking of boilers, pipes carrying steam or water, or both, pressure vessels or similar apparatus, in the so-called "broad form", in such amounts as are customary and commercially reasonable for buildings in the Cambridge, Massachusetts area which are of like kind and quality to the Building and have office uses, and insurance against such other hazards and in such amounts as may from time to time be required by any bank, insurance company or other lending institution holding a first mortgage on the Building, the Lot or the Complex. Landlord shall have no obligation to insure Tenant's personal property or chattels, including without limitation, Tenant's trade fixtures. -38- 4.2.2.3 TENANT REIMBURSEMENT OF INSURANCE TAKEN OUT BY LANDLORD. Tenant shall from time to time reimburse Landlord within thirty (30) days of Landlord's invoice for Tenant's Proportionate Fraction for Building and Tenant's Proportionate Fraction for Complex of Landlord's costs incurred in providing the insurance provided pursuant to Section 4.2.2.2 of this Lease, equitably prorated in the case of blanket policies to reflect the insurance coverage reasonably attributable to the Premises, the Building, the Lot, other buildings in the