Master Manufacturing Services Agreement
Confidential Materials Omitted, Designated Herein as [***], and Filed Separately with the Securities and Exchange Commission
Master Manufacturing Services Agreement
September 27, 2016
Table of Contents
1.2
PRODUCT AGREEMENTS
.
4
1.5
SECTIONS AND HEADINGS
.
10
1.7
APPENDIX 1, SCHEDULES AND EXHIBITS
.
10
2.1
MANUFACTURING SERVICES
.
11
2.2
ACTIVE MATERIAL YIELD.
13
3.2
ACTIVE MATERIALS AND QUALIFICATION OF ADDITIONAL SOURCES OF SUPPLY.
15
4.1
FIRST YEAR PRICING
.
16
4.2
PRICE ADJUSTMENTS – SUBSEQUENT YEARS’ PRICING
.
16
4.3
PRICE ADJUSTMENTS – CURRENT YEAR PRICING
.
18
4.4
ADJUSTMENTS DUE TO TECHNICAL CHANGES OR REGULATORY AUTHORITY REQUIREMENTS
.
18
4.5
MULTI-COUNTRY PACKAGING REQUIREMENTS.
19
5.1
ORDERS AND FORECASTS
.
19
5.2
RELIANCE BY PATHEON
.
21
5.4
DELIVERY AND SHIPPING
.
22
5.5
INVOICES AND PAYMENT
.
22
6.2
PRODUCT RECALLS AND RETURNS
.
24
6.3
PATHEON’S RESPONSIBILITY FOR DEFECTIVE AND RECALLED PRODUCTS.
24
6.4
DISPOSITION OF DEFECTIVE OR RECALLED PRODUCTS
.
25
6.5
HEALTHCARE PROVIDER OR PATIENT QUESTIONS AND COMPLAINTS
.
25
7.1
QUARTERLY REVIEW
.
26
7.2
GOVERNMENTAL AGENCIES
.
26
7.3
RECORDS AND ACCOUNTING BY PATHEON
.
26
7.6
NOTIFICATION OF REGULATORY INSPECTIONS
.
27
7.8
REGULATORY FILINGS
.
27
8.2
TERMINATION FOR CAUSE
.
29
8.3
PRODUCT DISCONTINUATION
.
29
8.4
OBLIGATIONS ON TERMINATION
.
29
9.2
CLIENT WARRANTIES
.
31
9.3
PATHEON WARRANTIES
.
32
9.4
DEBARRED PERSONS
.
33
10.1
CONSEQUENTIAL DAMAGES
.
33
10.2
LIMITATION OF LIABILITY
.
34
10.3
PATHEON INDEMNITY
.
34
10.4
CLIENT INDEMNITY
.
35
10.5
REASONABLE ALLOCATION OF RISK
.
35
11.1
CONFIDENTIAL INFORMATION
.
35
1
1.2
USE OF CONFIDENTIAL INFORMATION
.
40
1
1.4
PHOTOGRAPHS AND RECORDINGS
.
39
11.5
PERMITTED DISCOSURE
.
40
1
1.7
RETURN OF CONFIDENTIAL INFORMATION
.
404
12.1
COMMERCIAL DISPUTES
.
38
12.2
TECHNICAL DISPUTE RESOLUTION
.
38
13.2
INTELLECTUAL PROPERTY
.
40
13.4
INDEPENDENT CONTRACTORS
.
40
13.8
ADDITIONAL PRODUCT
.
41
13.11
ENTIRE AGREEMENT
.
42
13.13
NO THIRD PARTY BENEFIT OR RIGHT
.
43
13.14
EXECUTION IN COUNTERPARTS
.
43
13.15
USE OF CLIENT NAME
.
43
MASTER MANUFACTURING SERVICES AGREEMENT
THIS MASTER MANUFACTURING SERVICES AGREEMENT (the "Agreement")
is
made as of September 27, 2016 (the “
Effective Date
”)
B E T W E E N:
PATHEON MANUFACTURING SERVICES LLC
,
a limited liability company existing under the laws of the State of Delaware
("
Patheon
"),
- and -
KERYX BIOPHARMACEUTICALS, INC.
a corporation existing under the laws of the State of Delaware
("
Client
").
THIS AGREEMENT WITNESSES THAT in consideration of the rights conferred and the obligations assumed herein, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each party), and intending to be legally bound the parties agree as follows:
ARTICLE 1
STRUCTURE OF AGREEMENT AND INTERPRETATION
1.1
Master Agreement
.
This Agreement establishes the general terms and conditions under which Patheon or any Affiliate of Patheon may perform Manufacturing Services for Client or any Affiliate of Client, at the manufacturing site where Patheon or the Affiliate of Patheon resides. This “master” form of agreement is intended to allow the parties, or any of their Affiliates, to contract for the manufacture of multiple Products through Patheon’s global network of manufacturing sites through the issuance of site specific Product Agreements without having to re-negotiate the basic terms and conditions contained herein.
1.2
Product Agreements
.
This Agreement is structured so that a Product Agreement may be entered into by the parties for the manufacture of a particular Product or multiple Products at a Patheon manufacturing site. Each Product Agreement will be governed by the terms and conditions of this Agreement unless the parties to the Product Agreement expressly modify the terms and conditions of this Agreement in the Product Agreement. Unless otherwise agreed by the parties, each Product Agreement will be in the general form and contain the information set forth in Appendix 1 hereto.
1.3
Definitions
.
The following terms will, unless the context otherwise requires, have the respective meanings set out below and grammatical variations of these terms will have corresponding meanings:
"
Active Materials
",
“Active Pharmaceutical Ingredients” or “API”
means the materials listed in a Product Agreement on Schedule D;
"
Active Materials Credit Value
" means the value of the Active Materials for certain purposes of this Agreement, as set forth in a Product Agreement on Schedule D;
“
Actual Annual Yield
” or “
AAY
” has the meaning specified in Section 2.2(a);
"
Affiliate
" means:
|
|
(a)
|
a business entity which owns, directly or indirectly, a controlling interest in a party to this Agreement, by stock ownership or otherwise; or
|
|
|
(b)
|
a business entity which is controlled by a party to this Agreement, either directly or indirectly, by stock ownership or otherwise; or
|
|
|
(c)
|
a business entity, the controlling interest of which is directly or indirectly common to the majority ownership of a party to this Agreement;
|
For this definition, "control" means the ownership of shares carrying at least a majority of the votes for the election of the directors of a corporation;
“Annual Product Review Report”
means the annual
product review
report
prepared by
Patheon as described in Title 21 of the United States Code of Federal Regulations, Section 211.180(e);
"
Annual Report"
means the annual report to the FDA prepared by Client regarding the Product as described in Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2);
"
Annual Volume
" means the minimum volume of Product to be manufactured in any Year of this Agreement as set forth in Schedule B;
"
Applicable Laws
" means (i) for Patheon, all Laws, including, without limitation, (A) those of the State of North Carolina or the local jurisdiction for Patheon Affiliate, in any event being the jurisdiction where the Manufacturing Site is located, and (B) FDA and EMA regulations, governing or related to any and all activities of Patheon and its Affiliates under this Agreement; and (ii) for Client and the Products, the Laws of all jurisdictions where the Products are manufactured, distributed, and marketed as these are agreed and understood by the parties in this Agreement;
"
Authority
" means any governmental or regulatory authority, subdivision, department, body or agency or any court, tribunal, bureau, commission or other similar body, whether federal, state, provincial, county or municipal;
“
Breach Notice
” has the meaning specified in Section 8.2(a);
"
Business Day
" means a day other than a Saturday, Sunday or a day that is a statutory holiday in the jurisdiction of the applicable manufacturing site;
“
Capital Equipment Agreement
” means a separate agreement that the parties may enter into that will address responsibility for the purchase of capital equipment and facility modifications that may be required to perform the Manufacturing Services under a particular Product Agreement;
"
cGMPs
" means, as applicable, current good manufacturing practices as described in:
|
|
(a)
|
Parts 210 and 211 of Title 21 of the United States' Code of Federal Regulations;
|
|
|
(b)
|
EC Directive 2003/94/EC; and
|
|
|
(c)
|
Division 2 of Part C of the
Food and Drug Regulations
(Canada);
|
together with the latest Health Canada, FDA and EMA guidance documents pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time;
“Client Intellectual Property”
means (a) Intellectual Property of Client existing prior to the Effective Date, including but not limited to, inventions, ideas, discoveries, developments, technical information, know-how and confidential information existing prior to the Effective Date, (b) Intellectual Property that is developed, discovered or created outside of either Party’s performance under this Agreement which is specific to, or dependent upon, Client’s Active Material, Product, and/or any Client Confidential Information, and (c) Intellectual Property that is developed, discovered, or created in connection with this Agreement which is specific to, or dependent upon, Client’s Active Material, Product, and/or any Client Confidential Information.
“
Client Property
” has the meaning specified in Section 8.4(e);
“
Client-Supplied Components
” means those Components to be supplied by Client or that have been supplied by Client, excluding the API;
“
CMC
” has the meaning specified in Section 7.8(c);
"
Components
" means, collectively, all packaging components, raw materials, ingredients, and other materials (including labels, product inserts and other labelling for the Products) required to manufacture the Products in accordance with the Specifications, other than the Active Materials;
“
Confidential Information
” has the meaning specified in Section 11.1;
“
Deficiencies
” have the meaning specified in Section 7.8(d);
"
Deficiency Notice
" has the meaning specified in Section 6.1(a);
“Delivery Date”
means the date scheduled for shipment of Product under a Firm Order as set forth in Section 5.1(d);
“Disclosing Party
” has the meaning specified in Section 11.1;
"
EMA
"
means the European Medicines Agency;
"
FDA
" means the United States Food and Drug Administration;
"
Firm Orders
" have the meaning specified in Section 5.1(c);
“
Force Majeure Event
” has the meaning specified in Section 13.7;
"
GST
" has the meaning specified in Section 13.16(a)(ii);
"
Health Canada
" means the section of the Canadian Government known as Health Canada and includes, among other departments, the Therapeutic Products Directorate and the Health Products and Food Branch Inspectorate;
“
Importer of Record
” has the meaning specified in Section 3.2(a);
“
Initial Product Term
” has the meaning specified in Section 8.1;
“
Initial Set Exchange Rate
” means as of the Effective Date of a Product Agreement, the initial exchange rate set forth in the Product Agreement to convert one unit of the billing currency into the Patheon Manufacturing Site local currency, calculated as the daily average interbank exchange rate for conversion of one unit of the billing currency into the Patheon Manufacturing Site local currency during the 90 day period immediately preceding the Effective Date as published by OANDA.com “The Currency Site” under the heading “FxHistory: historical currency exchange rates” at
www.OANDA.com
/convert/fxhistory
;
“
Initial Term
” has the meaning specified in Section 8.1;
"
Intellectual Property
" includes, without limitation, rights in patents, patent applications, formulae, trademarks, process, trademark applications, trade-names, Inventions, copyrights, industrial designs, trade secrets, and know how;
"
Invention
" means information about any innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable;
"
Inventory
" means all inventories of Components and work-in-process produced or held by Patheon for the manufacture of the Products but, for greater certainty, does not include the Active Materials;
"
Laws
" means all laws, statutes, ordinances, regulations, rules, by-laws, judgments, decrees or orders of any Authority;
“Long Term Forecast
” has the meaning specified in Section 5.1(a);
"
Manufacturing Services
" means the manufacturing, quality control, quality assurance, analytical testing, stability testing, packaging, and related services, as set forth in this Agreement, required to manufacture Product or Products using the Active Materials and Components;
"
Manufacturing Site
" means the facility owned and operated by Patheon where the Manufacturing Services will be performed as identified in a Product Agreement;
“Materials”
means all Components and other items required to manufacture the Products in accordance with the Specifications, other than the Active Materials;
"
Maximum Credit Value
" means the maximum value of Active Materials that may be credited by Patheon under this Agreement, as set forth in a Product Agreement on Schedule D;
“
Minimum Market Requirement
” means the minimum percentage of Client’s or its Affiliates’ requirements for a Product in the Territory, if any, that must be purchased from Patheon or its Affiliates.
"
Minimum Order Quantity
" means the minimum number of batches of a Product to be produced during the same cycle of manufacturing as set forth in a Product Agreement on Schedule B;
“
Obsolete Stock
” has the meaning specified in Section 5.2(b);
“
Competitor
” means (a) in the case of Patheon, a business that derives greater than 50% of its revenues from performing contract pharmaceutical development or commercial manufacturing services and (b) in the case of Client, a business whose primary focus is the research, development and/or commercialization of products that are competitive with the Products;
“Patheon Intellectual Property”
means Intellectual Property generated or derived by Patheon before performing any Manufacturing Services, developed by Patheon while performing the Manufacturing Services, or otherwise generated or derived by Patheon in its business which Intellectual Property is not specific to or dependent upon, Client’s Active Material, Product, and/or Client Confidential Information, including, without limitation, Inventions and Intellectual Property which may apply to manufacturing processes or the formulation or development of drug products, drug product dosage forms or drug delivery systems unrelated to the specific requirements of the Product(s);
“
Persistent Supply Failure
” means Patheon’s failure to supply at least
[***]
of the quantity of Product ordered by Client (i) for
[***]
or longer of any forecast period; or (iii) on
[***]
or more orders during a Year.
“
PPI
” has the meaning specified in Section 4.2(a);
“Price”
means the price measured in US Dollars to be charged by Patheon for performing the Manufacturing Services, and includes the cost of Components (other than Client-Supplied Components), certain cost items as set forth in a Product Agreement on Schedule B, and annual stability testing costs as set forth in a Product Agreement on Schedule C;
"
Product(s)
" means the product(s) listed in a Product Agreement on Schedule A;
“
Product Agreement
” means the agreement between Patheon and Client issued under this Agreement in the form set forth in Appendix 1 (including Schedules A to E) under which Patheon will perform Manufacturing Services at a particular Manufacturing Site;
“
Product Claims
” have the meaning specified in Section 6.3(d);
"
Quality Agreement
" means the agreement (the general form of which is set forth in Exhibit B) between the parties entering a Product Agreement that sets out the quality assurance standards for the Manufacturing Services to be performed by Patheon for Client;
“
Recall
” has the meaning specified in Section 6.2(a);
“
Recipient
” has the meaning specified in Section 11.1;
"
Regulatory Authority
" means the FDA, EMA, and Health Canada and any other foreign regulatory agencies or Authorities competent to grant marketing approvals for pharmaceutical products including the Products in the Territory;
“
Remediation Period
” has the meaning specified in Section 8.2(a);
“
Representatives
” means a party’s directors, officers, employees, advisers, agents, consultants, subcontractors, service partners, professional advisors, or representatives;
“Resident Jurisdiction
" has the meaning specified in Section 13.16(a)(i);
“Set Exchange Rate”
means the exchange rate to convert one unit of the billing currency into the Patheon Manufacturing Site local currency for each Year, calculated as the average daily interbank exchange rate for conversion of one unit of the billing currency into the Patheon Manufacturing Site local currency during the full year period (October 1
st
[preceding year] to September 30
th
) as published by OANDA.com “The Currency Site” under the heading “FxHistory: historical currency exchange rates” at
www.OANDA.com
/convert/fxhistory
;
“
Shortfall Credit
” has the meaning specified in Section 2.2(b);
"
Specifications
" means the file, for each Product, which is given by Client to Patheon in accordance with the procedures listed in a Product Agreement on Schedule A and which contains documents relating to each Product, including, without limitation:
|
|
(a)
|
specifications for Active Materials and Components;
|
|
|
(b)
|
manufacturing specifications, directions, and processes;
|
|
|
(c)
|
storage requirements;
|
|
|
(d)
|
all environmental, health and safety information for each Product including material safety data sheets; and
|
|
|
(e)
|
the finished Product specifications, packaging specifications and shipping requirements for each Product;
|
all as updated, amended and revised from time to time by Client in accordance with the terms of this Agreement;
“
Surplus
” has the meaning specified in Section 2.2(c);
“
Target Yield
” has the meaning specified in Section 2.2(a);
"
Tax
" or "
Taxes
" have the meaning specified in Section 13.16(a);
"
Technical Dispute
" has the meaning specified in Section 12.2;
"
Territory
" means the geographic area described in a Product Agreement where Products manufactured by Patheon will be distributed by Client;
"
Third Party Rights
" means the Intellectual Property of any third party;
"
VAT
" has the meaning specified in Section 13.16(d);
"
Year
" means in the first year of this Agreement or in the first year of a Product Agreement, the period from the Effective Date up to and including December 31 of the same calendar year, and thereafter will mean a calendar year.
“Yield Tolerance”
has the meaning specified in Section 2.2(b); and
“
Zero Forecast Period
”
has the meaning specified in Section 5.1(g).
1.4
Currency
.
Unless otherwise agreed in a Product Agreement, all monetary amounts expressed in this Agreement are in United States Dollars (USD).
1.5
Sections and Headings
.
The division of this Agreement into Articles, Sections, Subsections, and Appendix, Schedules and Exhibits and the insertion of headings are for convenience of reference only and will not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section, Appendix, Schedule or Exhibit refers to the specified Section, Appendix, Schedule or Exhibit to this Agreement. In this Agreement, the terms "
this Agreement
", "
hereof
", "
herein
", "
hereunder
" and similar expressions refer to this Agreement as a whole and not to any particular part, Section, Appendix, Schedule or Exhibit of this Agreement.
1.6
Singular Terms
.
Except as otherwise expressly stated or unless the context otherwise requires, all references to the singular will include the plural and vice versa.
1.7
Appendix 1, Schedules and Exhibits
.
Appendix 1 (including the Schedules thereto) and the following Exhibits are attached to, incorporated in, and form part of this Agreement:
Appendix 1 - Form of Product Agreement (Including Schedules A to E)
|
|
Exhibit A
|
- Technical Dispute Resolution
|
Exhibit B - Commercial Quality Agreement
|
|
Exhibit C
|
- Monthly Active Materials Inventory Report
|
|
|
Exhibit D
|
- Report of Annual Active Materials Inventory Reconciliation and Calculation of Actual Annual Yield
|
|
|
Exhibit E
|
- Example of Price Adjustment Due to Currency Fluctuation
|
ARTICLE 2
PATHEON'S MANUFACTURING SERVICES
2.1
Manufacturing Services
.
Patheon will perform the Manufacturing Services for the Territory for the fees specified in a Product Agreement in Schedules B and C to manufacture Products for Client. Schedule B to a Product Agreement sets forth a list of cost items that are included or not included in the Price for Products; all cost items that are not included in the Price are subject to additional fees to be paid by the Client. Patheon may amend the fees set out in Schedules B and C to a Product Agreement as set forth in Article 4. Patheon may change the Manufacturing Site for the Products only with the prior written consent of Client, this consent not to be unreasonably withheld. Unless otherwise agreed in a Product Agreement, the Minimum Market Requirement shall be
[***]
of Client’s annual commercial requirements for Products offered for sale in the Territory for any Year. Patheon shall have the right, and the obligation, to supply the Minimum Market Requirement, provided that the Minimum Market Requirement shall be reduced to
[***]
in the event of any Persistent Supply Failure. Subject to any applicable Minimum Market Requirement, this Agreement is non-exclusive and nothing in this Agreement shall prevent Client from obtaining services from third parties that are equivalent or similar to the Manufacturing Services. To the extent specified in a Product Agreement, Patheon will be entitled to any applicable manufacturing tax credits that arise from performing the Manufacturing Services under this Agreement. In performing the Manufacturing Services, Patheon and Client agree that:
|
|
(a)
|
Conversion of Active Materials and Components
. Patheon will convert Active Materials and Components into Products.
|
|
|
(b)
|
Quality Control and Quality Assurance
. Patheon will perform the quality control and quality assurance testing specified in the Quality Agreement. Batch review and release to Client will be the responsibility of Patheon’s quality assurance group. Patheon will perform its batch review and release responsibilities in accordance with Patheon’s standard operating procedures. Prior to shipment of Products to Client, Patheon will provide to Client a certificate of analysis, certificate of origin (BSE / TSE statement) and a certificate of compliance, including a statement that the batch has been manufactured and tested in accordance with Specifications and cGMPs. Client Quality Assurance will review such documents prior to release. For routine or standard batches with no major issues or only minor deviations, Client will use good faith efforts to release the batches within 5 Business Days, or as otherwise agreed. Client will have sole responsibility to authorize a shipment from the manufacturing site and for the release of Products to the market. The form and style of batch documents, including, but not limited to, batch production records, lot packaging records, equipment set up control, operating parameters, and data printouts, raw material data, and laboratory notebooks are the exclusive property of Patheon. Specific Product related information contained in those batch documents is Client property.
Notwithstanding the foregoing, Client may make reasonable requests and shall be entitled to review the raw testing data, and other information set forth in the Quality Agreement.
|
|
|
(c)
|
Components
. Patheon will purchase and test all Components (with the exception of Client-Supplied Components) at Patheon's expense and as required by the Specifications.
|
|
|
(d)
|
Stability Testing
. Patheon will conduct stability testing on the Products in accordance with the protocols set out in the Specifications for the separate fees and during the time periods set out in Schedule C to a Product Agreement. Patheon will not make any changes to these testing protocols without prior written approval from Client. If a confirmed stability test failure occurs, Patheon will notify Client within one Business Day, after which Patheon and Client will jointly determine the proceedings and methods to be undertaken to investigate the cause of the failure, including which party will bear the cost of the investigation. The parties will use good faith efforts to determine the root cause of any failures and to allocate the costs. Patheon will give Client all stability test data and results at Client’s request.
|
|
|
(e)
|
Packaging and Artwork
. Patheon will package the Products as set out in the Specifications. Client will be responsible for the cost of artwork development. Patheon will determine and imprint the batch numbers and expiration dates for each Product shipped. The batch numbers, expiration dates, serialization numbers, and 2D bar codes will be affixed on the Products and on the shipping carton of each Product as outlined in the Specifications and as required by cGMPs. Client may, in its sole discretion, make changes to labels, product inserts, and other packaging for the Products. Those changes will be submitted by Client to all applicable Regulatory Authorities and other third parties responsible for the approval of the Products. Client will be responsible for the cost of labelling obsolescence when changes occur, as contemplated in Section 4.4. Patheon's name will not appear on the label or anywhere else on the Products unless: (i) required by any Laws; or (ii) Patheon consents in writing to the use of its name. At least 90 days prior to the Delivery Date of Product for which new or modified artwork is required, Client will provide at no cost to Patheon, final camera ready artwork for all packaging Components to be used in the manufacture of the Product that meet the Specifications. For the avoidance of doubt, the parties acknowledge and agree that Client will be responsible for complying with any and all regulatory requirements for the labeling of the Product.
|
|
|
(f)
|
Active Materials and Client-Supplied Components
. At least
[***]
before the scheduled production date, Client will deliver the Active Materials and any Client-Supplied Components to the Manufacturing Site DDP (Incoterms 2010), at no cost to Patheon, in sufficient quantity to enable Patheon to manufacture the desired quantities of Product and to ship Product on the Delivery Date. If the Active Materials and/or Client-Supplied Components are not received
[***]
before the scheduled production date, Patheon may delay the shipment of Product by the same number of days as the delay in receipt of the Active Materials and/or Client-Supplied Components. But if Patheon is unable to manufacture Product to meet this new shipment date due to prior third party production commitments, Patheon may delay the shipment until a later date as agreed to by the parties. All shipments of Active Material will be accompanied by certificate(s) of analysis from the Active Material manufacturer and the Client, confirming the identity and purity of the Active Materials and its compliance with the Active Material specifications. For Active Materials or Client-Supplied Components which may be subject to import or export, Client agrees that its vendors and carriers will comply with applicable requirements of the U.S. Customs and Border Protection Service and the Customs Trade Partnership Against Terrorism.
|
|
|
(g)
|
Intentionally omitted.
|
|
|
(h)
|
Validation Activities (if applicable)
. Patheon shall assist in the development and approval of the validation protocols for analytical methods and manufacturing procedures (including packaging procedures) for the Products. The fees for this service are not included in the Price and will be set out separately in Schedule C to a Product Agreement.
|
|
|
(i)
|
Additional Services
. If Client requests services other than those expressly set forth herein or in any Product Agreement (such as qualification of a new packaging configuration or shipping studies, or validation of alternative batch sizes), Patheon will provide a good faith and reasonable written quote of the fee for the additional services and Client will advise Patheon whether it wishes to have the additional services performed by Patheon. The scope of work and fees will be set forth in a separate agreement signed by the parties. If so agreed by the parties, the terms and conditions of this Agreement will apply to these services. Such additional services or items not included in the costs may include, but are not limited to, third party supplier fees for the purchase or use of columns, standards, tooling, non-standard pallets, PAPR or PPE suits (where applicable) and other project-specific items necessary for Patheon to perform the Manufacturing Services, and which are not included as Components.
|
2.2
Active Material Yield
.
|
|
(a)
|
Reporting
. Patheon will give Client a monthly inventory report of the Active Materials held by Patheon using the inventory report form set out in Exhibit C, which will contain the following information for the month by lot number:
|
Quantity Received:
The total quantity of Active Materials that complies with the Specifications and is received at the Manufacturing Site during the applicable period.
Quantity Dispensed:
The total quantity of Active Materials dispensed at the Manufacturing Site during the applicable period. The Quantity Dispensed is calculated by adding the Quantity Received to the inventory of Active Materials that complies with the Specifications held at the beginning of the applicable period, less the inventory of Active Materials that complies with the Specifications held at the end of the period. The Quantity Dispensed will only include Active Materials received and dispensed in commercial manufacturing of Products including Active Materials lost in the warehouse prior to and during dispensing, and will not include any
[***]
.
Quantity Converted:
The total amount of Active Materials contained in the Products manufactured with the Quantity Dispensed (including any additional Products produced in accordance with Section 6.3(a) or 6.3(b)), delivered by Patheon, and not rejected, recalled or returned in accordance with Section 6.1 or 6.2 because of Patheon’s failure to perform the Manufacturing Services in accordance with Specifications, cGMPs, and Applicable Laws.
Within
[***]
after the end of each Year, Patheon will prepare an annual reconciliation of Active Materials on the reconciliation report form set forth in Exhibit D including the calculation of the "
Actual Annual Yield
" or "
AAY
" for the Product at the Manufacturing Site during the Year. AAY is the percentage of the Quantity Dispensed that was converted to Products and is calculated as follows:
Quantity Converted during the Year
x 100%
Quantity Dispensed during the Year
After Patheon has produced a minimum of
[***]
successful commercial production batches of Product and has produced commercial production batches for at least
[***]
at the Manufacturing Site, the parties will agree on the target yield for the Product at the Manufacturing Site (each, a "
Target Yield
"). If the parties are unable to agree upon the Target Yield, they will resolve the matter pursuant to the technical dispute process set forth in Section 12.2. The Target Yield will be revised annually to reflect the actual manufacturing experience as agreed to by the parties.
|
|
(b)
|
Shortfall Credit Calculation
. If the Actual Annual Yield falls more than the Yield Tolerance (set forth in the Product Agreement) below the respective Target Yield, then the shortfall for the Year (the "
Shortfall
") will be calculated as follows:
|
Shortfall Credit = [(Target Yield – Yield Tolerance) – AAY] * Active Materials Credit Value * Quantity Dispensed
|
|
(c)
|
Surplus Calculation
. If the Actual Annual Yield is more than the respective Target Yield in a Year, then the surplus for that Year (the "Surplus") will be determined based on the following calculation:
|
Surplus = [AAY -- Target Yield] * Active Materials Credit Value * Quantity Dispensed
Credit for Shortfall
. If there is a Shortfall for a Product in a Year, then Patheon will credit Client’s account for the amount of the Shortfall not later than
[***]
after the end of the Year. Each credit under this Section 2.2(d) will be summarized on the reconciliation report form set forth in Exhibit D. Upon expiration or termination of a Product Agreement, any remaining credit owing under this Section will be paid to Client. The Annual Shortfall, if any, will be disclosed by Patheon on the reconciliation report form.
Surplus Credit
. If there is a Surplus for a Product in a Year, then Patheon will be entitled to apply the amount of the Surplus as a credit against any Shortfall for that Product which may occur in the next Year. If there is no Shortfall in the next Year the Surplus credit will expire.
Each credit under this Section 2.2 will be summarized on the reconciliation report prepared in the form set forth in Exhibit D. Upon expiration or termination of a Product Agreement, any remaining Shortfall credit amount owing under this Section 2.2 will be paid to Client.
|
|
(e)
|
Maximum Credit
. Patheon's liability for Active Materials calculated in accordance with this Section 2.2 for any Product in a Year will not exceed, in the aggregate, the Maximum Credit Value set forth in Schedule D to a Product Agreement.
|
|
|
(f)
|
No Material Breach
. It will not be a material breach of this Agreement by Patheon under Section 8.2(a) solely because the Actual Annual Yield is less than the Target Yield, so long as the Shortfall is not the result of Patheon failing to meet any obligation set forth in this Agreement.
|
ARTICLE 3
CLIENT'S OBLIGATIONS
3.1
Payment
.
Client will pay Patheon for performing the Manufacturing Services according to the Prices specified in Schedules B and C in a Product Agreement. These Prices may be subject to adjustment under other parts of this Agreement.
3.2
Active Materials and Qualification of Additional Sources of Supply
.
|
|
(a)
|
Client will at its sole cost and expense deliver the Active Materials to Patheon in accordance with Section 2.1(f). If applicable, Patheon and the Client will reasonably cooperate to permit the import of the Active Materials to the Manufacturing Site. Client’s obligation will include obtaining the proper release of the Active Materials from the applicable Customs Agency and Regulatory Authority.
Client or Client’s designated broker will be the “
Importer of Record
” for Active Materials imported to the Manufacturing Site. The Active Materials will be held by Patheon on behalf of Client as set forth in this Agreement. Title to the Active Materials will at all times remain the property of Client. Any Active Materials received by Patheon will only be used by Patheon to perform the Manufacturing Services. Client will be responsible for paying for all rejected Product that arises from defects in the Active Materials which could not be reasonably discoverable by Patheon using the test methods set forth in the Specifications.
|
|
|
(b)
|
If Client asks Patheon to qualify an additional source for the Active Material or any Component, Patheon may agree to evaluate the Active Material or Component to be supplied by the additional source to determine if it is suitable for use in the Product. The parties will agree on the scope of work to be performed by Patheon at Client’s cost. For an Active Material, this work may include: (i) laboratory testing to confirm the Active Material meets existing specifications; (ii) manufacture of an experimental batch of Product that will be placed on three months accelerated stability; and (iii) manufacture of three full-scale validation batches that will be placed on concurrent stability (one batch may be the registration batch if manufactured at full scale). Section 6.1(d) will apply to all Product manufactured using the newly approved Active Material or Component because of the limited material characterization that is performed on additional sources of supply.
|
|
|
(b)
|
Patheon will promptly advise Client if it encounters supply problems, including delays and/or delivery of non-conforming Active Material or Components from a Client designated additional source; and (ii) Patheon and Client will cooperate to reduce or eliminate any supply problems from these additional sources of supply. Client will be obligated to certify all Client designated sources of supply on an annual basis at its expense and will provide Patheon with copies of these annual certifications, as further set forth in the Quality Agreement, and pursuant to Patheon’s standard certification form. If Patheon agrees to certify a Client designated additional sources of supply on behalf of Client, it will do so at Client’s expense.
|
ARTICLE 4
CONVERSION FEES AND COMPONENT COSTS
4.1
First Year Pricing
.
The Price for the first Year will be listed in Schedules B and C in a Product Agreement and will be subject to the adjustments set forth in Sections 4.2 and 4.3. The Price may also be increased or decreased by Patheon at any time upon written notice to Client if there are changes to the underlying manufacturing, packaging or testing assumptions set forth in Schedule B of the Product Agreement that result in an increase or decrease in the cost of performing the Manufacturing Services. Patheon shall provide documentation as to why such Price for the first year is being increased or decreased; provided however, Patheon will not be required to give information to Client that is subject to obligations of confidentiality between Patheon and its suppliers.
4.2
Price Adjustments – Subsequent Years’ Pricing
.
After the first Year of the Product Agreement, Patheon may adjust the Price effective January 1
st
of each Year as follows:
|
|
(a)
|
Manufacturing and Stability Testing Costs
. For Products manufactured in the United States or Puerto Rico, Patheon may adjust the conversion component of the Price and the annual stability testing costs for inflation, based upon the preliminary number for any increase in the Producer Price Index pcu325412325412 for Pharmaceutical Preparation Manufacturing (“
PPI
”) published by the United States Department of Labor, Bureau of Labor Statistics in August of the preceding Year compared to the final number for the same month
of the Year prior to that, unless the parties otherwise agree in writing. On or before
[***]
, Patheon will give Client a statement setting forth the calculation for the inflation adjustment to be applied in calculating the Price for the next Year. For Products manufactured outside the United States or Puerto Rico, Patheon may similarly adjust the Price for inflation using an inflation index to be agreed by the parties in a Product Agreement.
|
|
|
(b)
|
Component Costs
. If Patheon incurs an increase in Component costs during the Year, it may increase the Price for the next Year to pass through the additional Component costs at Patheon’s actual cost. If Patheon obtains a decrease in Component costs during the Year, it will decrease the Price for the next Year to pass through
[***]
of the cost savings to the Client. On or before
[***]
, Patheon will give Client information about the increase or decrease in Component costs which will be applied to the calculation of the Price for the next Year to reasonably demonstrate that the Price increase or decrease is justified. But Patheon will not be required to give information to Client that is subject to obligations of confidentiality between Patheon and its suppliers.
|
|
|
(c)
|
Pricing Basis
. Client acknowledges that the Price in any Year is quoted based upon the Minimum Order Quantity and the Annual Volume specified in Schedule B to a Product Agreement. The Price is subject to change if the specified Minimum Order Quantity changes or if the Annual Volume is not ordered in a Year. For greater certainty, if Patheon and Client agree that the Minimum Order Quantity will be reduced or the Annual Volume in the lowest tier will not be ordered in a Year whether as a result of a decrease in estimated Annual Volume or otherwise and, as a result of the reduction, Patheon demonstrates to Client that its costs to perform the Manufacturing Services or to acquire the Components for the Product will increase on a per unit basis (including the amount of the increase), then Patheon may increase the Price by an amount sufficient to absorb the documented increased costs. On or before
[***]
, Patheon will give Client a statement and sufficient justification setting forth the information to be applied in calculating those cost increases for the next Year, and the parties will use good faith efforts to approve any such increases. Such cost increase must be approved by Client in advance of cost increases going into effect; provided however, the price increase will not be unreasonably denied if the foregoing process is used and justified. Patheon will not be required to give information to Client that is subject to obligations of confidentiality between Patheon and its suppliers.
|
|
|
(d)
|
Adjustments Due to Currency Fluctuations
. If the parties agree in a Product Agreement to invoice in a currency other than the local currency for the Manufacturing Site, Patheon will adjust the Price to reflect currency fluctuations. The adjustment will be calculated after all other annual Price adjustments under this Section 4.2 have been made. The adjustment
will proportionately reflect the increase or decrease, if any, in the Set Exchange Rate compared to the Set Exchange Rate established for the prior Year or the Initial Set Exchange Rate, as the case may be. An example of the calculation of the price adjustment (for a Canadian Manufacturing Site invoiced in USD) is set forth in Exhibit E.
|
|
|
(e)
|
Tier Pricing (if applicable)
.
The pricing in Schedule B of a Product Agreement is set forth in Annual Volume tiers based upon the Client’s volume forecasts under Section 5.1. The Client will be invoiced during the Year for the unit price set forth in the Annual Volume tier based on the [***] forecast provided in [***]. Within [***], Patheon will send Client a reconciliation of the actual volume of Product ordered by the Client during the Year with the pricing tiers. If Client has overpaid during the Year, Patheon will issue a credit to the Client for the amount of the overpayment [***] or will issue payment to the Client for the overpayment [***]. If Client has underpaid during the Year, Patheon will issue an invoice to the Client under Section 5.6 for the amount of the underpayment [***]. If Client disagrees with the reconciliation, the parties will work in good faith to resolve the disagreement amicably. If the parties are unable to resolve the disagreement [***], the matter will be handled under Section 12.1.
|
|
|
(f)
|
For all Price adjustments under this Section 4.2, Patheon will deliver to Client on or before
[***]
a revised Schedule B to the Product Agreement to be effective for Product delivered on or after the first day of the next Year. If in any Year Patheon would have been entitled to increase the Price based on any of the provisions of this Section 4.2 but Patheon did not exercise its right to do so, then solely at the expiry of the next subsequent Year, Patheon will be entitled to make a cumulative adjustment for the two year period going forward as if it had made adjustments for each of the two Years. Under no circumstance shall Patheon be entitled to make a price adjustment hereunder for a Year by going back past the immediately prior Year (if no such adjustment had been made for such immediately prior Year). It is not the intention of this section for any such adjustments to be applied retroactively.
|
4.2.1 The Parties acknowledge that Sterile Products are not included in this Agreement.
4.3
Price Adjustments – Current Year Pricing
.
During any Year, the Prices set out in Schedule B of a Product Agreement will be adjusted as follows:
Extraordinary Increases or Decreases in Component Costs
. If, at any time, market conditions result in Patheon's cost of Components being materially greater than normal forecasted increases, then Patheon will be entitled to an adjustment to the Price for any affected Product to compensate it for the increased Component costs. Changes materially greater than normal forecasted increases will have occurred if: (i) the cost of a Component increases or decreases
[***]
of the cost for that Component upon which the most recent fee quote was based; or (ii) the aggregate cost for all Components required to manufacture a Product increases or decreases
[***]
of the total Component costs for the Product upon which the most recent fee quote was based. If Component costs have been previously adjusted to reflect an increase in the cost of one or more Components, the adjustments set out in (i) and (ii) above will operate based on the last cost adjustment for the Components.
For a Price adjustment under this Section 4.3, Patheon will deliver to Client a revised Schedule B to the Product Agreement and budgetary pricing information, adjusted Component costs or other documents reasonably sufficient to demonstrate that a Price adjustment is justified. Patheon will have no obligation to deliver any supporting documents that are subject to obligations of confidentiality between Patheon and its suppliers. The revised Price will be effective for any Product delivered on or after the first day of the month following Client’s receipt of the revised Schedule B to the Product Agreement.
4.4
Adjustments Due to Technical Changes or Regulatory Authority Requirements
.
|
|
(a)
|
Technical Changes to Requirements
. Technical changes requested by Client will only be implemented following a technical and cost review that Patheon will perform and are subject to Client and Patheon reaching agreement on Price changes required because of the amendment. Technical changes requested by Patheon will only be implemented following an assessment by Patheon and the Client regarding the technical changes that may have an effect on certain areas including, but not limited to Regulatory filings, fees, etc. All technical changes requested by Patheon require the written approval of Client, the approval not to be unreasonably withheld. If Client accepts a proposed Price change, the proposed change in the Specifications and the associated scope of work will be implemented at Client’s cost. All costs relating to the technical changes, including re-validations of the process, or stability program shall be determined by the parties after good faith discussions, and the Price change will become effective only for those orders of Products that are manufactured under the revised Specifications. In addition, Client agrees to purchase, at Patheon's cost (including all costs incurred by Patheon for the purchase and handling of the Inventory), all Inventory for Firm Orders used under the "old" Specifications and purchased or maintained by Patheon in order to fill Firm Orders or under Section 5.2, if the Inventory can no longer be used under the revised Specifications. Open purchase orders for Components no longer required under any revised Specifications that were placed by Patheon with suppliers in order to fill Firm Orders or under Section 5.2 will be cancelled where possible, and if the orders may not be cancelled without penalty, will be assigned to and satisfied by Client.
|
|
|
(b)
|
Regulatory Changes to Authority Requirements
. Regulatory changes to the Specifications requested by Client will be implemented immediately, and will be followed by a good faith effort from both parties to evaluate the cost impact. Regulatory changes to the Manufacturing Site will only be implemented following the written approval of Client, the approval not to be unreasonably withheld. The cost of any such changes shall be agreed to in advance by the parties after good faith discussions.
|
4.5
Multi-Country Packaging Requirements
.
If Client decides to have Patheon perform Manufacturing Services for the Product for countries outside the Territory, then Client will inform Patheon of the packaging requirements for each new country and Patheon will prepare a quotation for consideration by Client of any additional costs for Components (other than Client-Supplied Components) and the change over fees for the Product destined for each new country. The agreed additional packaging requirements and related packaging costs and change over fees will be set out in a written amendment to this Agreement.
ARTICLE 5
ORDERS, SHIPMENT, INVOICING, PAYMENT
5.1
Orders and Forecasts
.
|
|
(a)
|
Long Term Forecast
. When each Product Agreement is executed, Client will give Patheon a non-binding
[***]
forecast of Client’s volume requirements for the Product for the
[***]
of the term of the Product Agreement (the “
Long Term Forecast
”). The Long Term Forecast will thereafter be updated annually,
[***]
. If Patheon is unable to accommodate any portion of the Long Term Forecast, it will notify Client and the parties will agree on any revisions to the forecast.
|
|
|
(b)
|
Rolling
[***]
Forecast
. When each Product Agreement is executed, Client will give Patheon a non-binding
[***]
forecast of the volume of Product that Client expects to order in the
[***]
of commercial manufacture of the Product. This forecast will then be updated by Client on or before the
[***]
on a rolling forward basis. Client will update the forecast forthwith if it determines that the volumes estimated in the most recent forecast have changed by more than
[***]
. The most recent
[***]
forecast will prevail.
|
|
|
(c)
|
Firm Orders.
On a rolling basis during the term of the Product Agreement, Client will issue an updated
[***]
forecast on or before the
[***]
. This forecast will
start on
[***]
. Unless otherwise agreed in the Product Agreement, the first
[***]
of this updated forecast will be considered binding firm orders. Concurrent with the
[***]
forecast, Client will issue a new firm written order in the form of a purchase order or otherwise (“
Firm Order
”) by Client to purchase and, when accepted by Patheon, for Patheon to manufacture and deliver the agreed quantity of the Products. The Delivery Date will not be less than
[***]
following the date that the Firm Order is submitted. Firm Orders submitted to Patheon will specify Client's purchase order number, quantities by Product type, monthly delivery schedule, and any other elements necessary to ensure the timely manufacture and shipment of the Products. The quantities of Products ordered in those written orders will be firm and binding on Client and may not be reduced by Client. Further, for
[***]
of the
[***]
forecast, Client commits that its Firm Orders for each of those months will be no less than
[***]
, respectively, of the forecasted amounts for
[***]
. If Client orders less than the agreed volume, the parties will meet to discuss how to smooth production to meet demand. If it is not possible to smooth production to meet forecasted demand, Client will compensate Patheon for not meeting the Firm Order commitment by paying the
[***]
for the shortfall between what Client actually ordered and its Firm Order commitment as set forth above or as otherwise provided for in the applicable Product Agreement. The forgoing shall be Patheon’s sole and exclusive remedy for Client’s failure to meet the Firm Order commitment. No amounts shall be payable to Patheon if Client is unable to make the Firm Order commitment because of Force Majeure or because the Product is taken off the market due in response to an action by an Authority or otherwise as required by Applicable Law. Patheon commits to make
[***]
of the forecasted amounts available to Client, and will reserve
[***]
of its capacity to meet that commitment. Patheon shall notify Client as soon as possible of impending capacity constraints in relation to Client’s forecasts and/or changes in Client’s demands.
|
|
|
(d)
|
Acceptance of Firm Order
. Patheon will accept Firm Orders by sending an acknowledgement to Client within
[***]
of its receipt of the Firm Order. The acknowledgement will include, subject to confirmation from the Client, the Delivery Date for the Product ordered. The Delivery Date may be amended by agreement of the parties or as set forth in Section 2.1(f). If Patheon fails to acknowledge receipt of a Firm Order within the
[***]
period, the Firm Order will be deemed to have been accepted by Patheon.
|
|
|
(e)
|
Cancellation of a Firm Order
. Except for
[***]
, if Client cancels a Firm Order, Client will pay Patheon the
[***]
for the Firm Order. For purposes of this provision,
[***]
. Patheon will use commercially reasonable efforts to mitigate all costs related to a cancellation of a Firm Order and to deploy its resources to other clients.
|
(i) Patheon and the Client understand that there may be uncertainties and necessary adjustments in production schedules during the first 6 months of Manufacturing. The parties agree that they will work together closely to expedite deliveries and manage the scheduling of the initial Product launch.
(ii) If,
[***]
, Patheon is unable to deliver the quantity of Product ordered under a Firm Order
[***]
of the Delivery Date due to an act or omission by Patheon (a “
Late Delivery
”),
[***]
. Nothing herein shall preclude Client from exercising any other rights it may have under this Agreement in connection with Patheon’s failure to timely delivery Product.
(iii) A Late Delivery will not be a material breach of this Agreement by Patheon for the purposes of Section 8.2. If Patheon has
[***]
Late Deliveries in any
[***]
, the parties will meet as necessary to amicably resolve the reasons for the Late Deliveries. The parties will agree on a delivery improvement plan
[***]
. If, after the delivery improvement plan is in place, Patheon has
[***]
Late Deliveries in any
[***]
, Client may exercise its right to terminate this Agreement for cause under Section 8.2(a) without a further opportunity to cure.
(iv) For clarity, a Late Delivery will not include any delay in shipment of Product caused by events outside of Patheon’s reasonable control, such as a Force Majeure Event, a delay in delivery of API or Materials (provided that Patheon ordered Materials with sufficient lead time for such Materials to be delivered on a timely basis), a delay in Product release approval from Client, inaccurate Client forecasts, or receipt of non-conforming API or Components supplied by Client.
|
|
(g)
|
Zero Volume Forecast
. If Client forecasts zero volume for
[***]
(the “
Zero Forecast Period”
), then Patheon will have the option, at its sole discretion, to provide a
[***]
notice to Client of Patheon’s intention to terminate the Product Agreement on a stated day within the Zero Forecast Period. Client thereafter will have
[***]
to either (i) withdraw the zero forecast and re-submit a reasonable volume forecast, or (ii) negotiate other terms and conditions on which the Product Agreement will remain in effect. Otherwise, Patheon will have the right to terminate the Product Agreement at the end of the
[***]
notice period.
|
5.2
Reliance by Patheon
.
(a) Client understands and acknowledges that Patheon will rely on the Firm Orders and rolling forecasts submitted under Sections 5.1(a) (b) and (c) in ordering the Components (other than Client-Supplied Components) required to meet the Firm Orders. In addition, Client understands that to ensure an orderly supply of the Components
,
Patheon may want to purchase the Components in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods referred to in Section 5.1(a) or to meet the production requirements of any longer period agreed to by Patheon and Client. Accordingly, Client authorizes Patheon to purchase Components to satisfy the Manufacturing Services requirements for Products
[***]
contemplated in the most recent forecast given by Client under Section 5.1(a). Patheon may make other purchases of Components to meet Manufacturing Services requirements for longer periods if agreed to in writing by the parties. The Client will give Patheon written authorization to order Components for any launch quantities of Product requested by Client which will be considered a Firm Order when accepted by Patheon.
(b) Client will reimburse Patheon for the cost of Components ordered by Patheon under Firm Orders or under Section 5.2(a) that are not included in finished Products manufactured for Client within six months after the forecasted month for which the purchases have been made (or for a longer period as the parties may agree) or if the Components have expired or are rendered obsolete due to changes in artwork or applicable regulations during the period (collectively, “
Obsolete Stock
”). This reimbursement will include Patheon’s cost to purchase (plus a
[***]
handling fee) and destroy the Obsolete Stock. If any non-expired Components are used in Products subsequently manufactured for Client or in third party products manufactured by Patheon, Client will receive credit for any costs of those Components previously paid to Patheon by Client.
(c) If Client fails to take possession or arrange for the destruction of non-expired Components (whose purchase was authorized by Client per Section 5.2 (a))
[***]
or, in the case of the delivery of conforming finished Product not accepted by Client
[***]
, Client will pay Patheon
[***]
per pallet, per month thereafter for storing the Components or finished Product. During the parties’ normal quarterly reviews, Patheon will detail all potential storage costs. To the extent applicable, storage fees for Components or Product which contain controlled substances or require refrigeration will be charged at
[***]
per pallet per month. Storage fees are subject to a one pallet minimum charge per month. Patheon may ship finished Product held by it longer than
[***]
to the Client at Client’s expense on
[***]
written notice to the Client.
5.3
Minimum Orders
.
Client may only order Manufacturing Services for batches of Products at or greater than the Minimum Order Quantities as set out in Schedule B to a Product Agreement.
5.4
Delivery and Shipping
.
Upon acceptance from Client’s Quality Assurance Department, the Product will be delivered to Client after it has been manufactured and released to the Client by Patheon and released by Client; provided however that such acceptance release by Client shall be within
[***]
of receipt of all required batch documentation and release to ship by Patheon. Delivery of Products will be made EXW (Incoterms 2010) Patheon’s shipping point unless otherwise agreed in a Product Agreement. Risk of loss or of damage to Products will remain with Patheon until Patheon loads the Products onto the carrier’s vehicle for shipment at the shipping point at which time risk of loss or damage will transfer to Client. Patheon will, in accordance with Client’s instructions and as agent for Client, at Client’s risk, (i) arrange for shipping to be paid by Client and (ii) at Client’s risk and expense, obtain any export license or other official authorization necessary to export the Products. Client will arrange for insurance and will select the freight carrier used by Patheon to ship Products and may monitor Patheon’s shipping and freight practices as they pertain to this Agreement. Products will be transported in accordance with the Specifications.
5.5
Invoices and Payment
.
Invoices will be sent by email to the email address given by Client to Patheon in writing. Invoices will be issued when the Product is manufactured and released by Patheon and Client. Patheon will also give Client an invoice covering any Inventory or Components which are to be purchased by Client
under Section 5.2 of this Agreement. Each invoice will, to the extent applicable, identify Client’s Manufacturing Services purchase order number, Product numbers, names and quantities, unit price, freight charges, and the total amount to be paid by Client. Client will pay all invoices within
[***]
of the date of Client’s receipt of an undisputed invoice. If any portion of an invoice is disputed, the Client will pay Patheon for the undisputed amount and the parties will use good faith efforts to reconcile the disputed amount as soon as practicable. Interest on undisputed past due accounts will accrue at
[***]
per month which is equal to an annual rate of
[***]
.
ARTICLE 6
PRODUCT CLAIMS AND RECALLS
6.1
Product Claims
.
(a)
Product Claims
. Client has the right to reject any portion or all of any shipment of Products that deviates from the Specifications, cGMPs, or Applicable Laws without invalidating any remainder of the shipment. Client will inspect the Products manufactured by Patheon upon receipt and will give Patheon written notice (a "
Deficiency Notice
") of all claims for Products that deviate from the Specifications, cGMPs, or Applicable Laws within
[***]
after Client’s receipt thereof (or, in the case of any defects not reasonably susceptible to discovery upon receipt of the Product, within
[***]
after discovery by Client, but not after the expiration date of the Product). Should Client fail to give Patheon the Deficiency Notice within the applicable
[***]
period, then the delivery will be deemed to have been accepted by Client on the
[***]
after delivery or discovery, as applicable. Patheon will have no liability for any deviations for which it has not received notice within the applicable
[***]
period.
(b)
Determination of Deficiency
. Upon receipt of a Deficiency Notice, Patheon will have
[***]
to advise Client by notice in writing that it disagrees with the contents of the Deficiency Notice. If Client and Patheon fail to agree within ten days after Patheon's notice to Client as to whether any Products identified in the Deficiency Notice deviate from the Specifications, cGMPs, or Applicable Laws, then the parties will mutually select an independent qualified investigator and/or laboratory to evaluate if the Products deviate from the Specifications, cGMPs, or Applicable Laws. This evaluation will be binding on the parties. If the evaluation certifies that any Products deviate from the Specifications, cGMPs, or Applicable Laws, Client may reject those Products in the manner contemplated in this Section 6.1 and Patheon will be responsible for the cost of the evaluation. If the evaluation does not so certify for any of the Products, then Client will be deemed to have accepted delivery of the Products on
[***]
after delivery (or, in the case of any defects not reasonably susceptible to discovery upon receipt of the Product, on
[***]
after discovery thereof by Client, but not after the expiration date of the Product) and Client will be responsible for the cost of the evaluation.
(c)
Shortages and Price Disputes
.
Claims for shortages in the amount of Products shipped by Patheon or a Price dispute will be dealt with by reasonable agreement of the parties. Any claim for a shortage or a Price dispute will be deemed waived if it has not been presented within
[***]
of the date of a compliant invoice meeting the requirements of this Agreement.
(d)
Product Rejection for Finished Product Specification Failure
. Internal process specifications will be defined and agreed upon. If after a full investigation as set forth in Section 6.1(b), it is determined that Patheon manufactured Product in accordance with the agreed upon in-process specifications, cGMP, the batch production record, Patheon’s standard operating procedures for manufacturing and the other requirements of the Agreement and the applicable Product Agreement, and a batch or portion of batch of Product does not meet a finished Product Specification, Client will pay Patheon
[***]
for the non-conforming Product. Patheon will be responsible for the materials and Client will be responsible for the API. The API in the non-conforming Product will be included in the “Quantity Converted” for purposes of calculating the “Actual Annual Yield” under Section 2.2(a). If it is determined that the Product failure is due to error on Patheon’s part, Patheon will pay for product disposal, provide a certificate of destruction to the Client, and the API in the non-conforming Product will be excluded from the “Quantity Converted” for purposes of calculating the “Actual Annual Yield” under Section 2.2(a).
6.2
Product Recalls and Returns
.
(a)
Records and Notice
. Patheon and Client will each maintain records necessary to permit a Recall of any Products delivered to Client or customers of Client. Each party will promptly notify the other by telephone (to be confirmed in writing) of any information which might affect the marketability, safety or effectiveness of the Products or which might result in the Recall or seizure of the Products. Upon receiving this notice or upon this discovery, each party will stop making any further shipments of any affected Products in its possession or control until a decision has been made whether a Recall or some other corrective action is necessary. The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by Client. "
Recall
" will mean any action (i) by Client to recover title to or possession of quantities of the Products sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Products from the market); or (ii) by any Authorities to detain or destroy any of the Products. Recall will also include any action by either party to refrain from selling or shipping quantities of the Products to third parties which would have been subject to a Recall if sold or shipped.
(b)
Recalls
. If (i) any Authority issues a directive, order or, following the issuance of a safety warning or alert about a Product, a written request that any Product be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (iii) Client determines that any Product should be Recalled or that a "Dear Doctor" letter is required relating the restrictions on the use of any Product, Patheon will co-operate as reasonably required by Client, having regard to all applicable laws and regulations.
(c)
Product Returns
. Client will have the responsibility for handling customer returns of the Products. Patheon will give Client any assistance that Client may reasonably require to handle the returns.
6.3
Patheon’s Responsibility for Defective and Recalled Products
.
(a)
Defective Product
. If Client rejects Products under Section 6.1 and the deviation is determined to have arisen from Patheon’s failure to provide the Manufacturing Services in accordance with the Specifications, cGMPs, Applicable Laws, or the other requirements of this Agreement or the applicable Product Agreement) Patheon will credit Client’s account for Patheon’s invoice price for the defective Products. If Client previously paid for the defective Products, Patheon will promptly, at Client’s election, either: (i) refund the invoice price for the defective Products; (ii) offset the amount paid against other amounts due to Patheon hereunder; or (iii) replace the Products with conforming Products without Client being liable for payment therefore under Section 3.1, contingent upon the receipt from Client of all Active Materials and Client-Supplied Components required for the manufacture of the replacement Products. For greater clarity, Patheon’s responsibility for any loss of Active Materials in defective Product will be captured and calculated in the Active Materials Yield under Section 2.2. Patheon shall promptly reimburse Client for all costs related to the production and shipment of the Client-Supplied Components to Patheon related to the defective Product.
(b)
Recalled Product
. If a Recall or return results from, or arises out of, a failure by Patheon to provide Product that conforms with the Specifications, cGMPs, Applicable Laws or the other requirements of this Agreement or the applicable Product Agreement, in addition to the amounts described under Section 6.3(a), Patheon will also be responsible for the documented out-of-pocket expenses of the Recall or return. For greater clarity, Patheon’s responsibility for any loss of Active Materials in Recalled Product will be captured and calculated in the Active Materials Yield under Section 2.2. In all other circumstances, Recalls, returns, or other corrective actions will be made at Client's cost and expense.
(c)
Replacement Product
. If (i) Client rejects Product under Section 6.3(a) and Patheon or (ii) (A) an independent laboratory pursuant to Section 6.1 determines that or (B) Product is recalled because the Product manufactured and released by Patheon deviates from the Specifications, GMPs, Applicable Laws, or any other requirement of this Agreement or the applicable Product Agreement, Client shall have the right to avail itself of the remedies set forth in Section 6.3(a) above.
(d)
Except as set forth in Sections 6.3(a) and (b) above, Patheon will not be liable to Client nor have any responsibility to Client for any deficiencies in, or other liabilities associated with, any Product manufactured by it, (collectively, "
Product Claims
"). For greater certainty, Patheon will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications, the safety, efficacy, or marketability of the Products or any distribution thereof, (ii) results from a defect in a Component that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iii) results from a defect in the Active Materials, Client-Supplied Components or Components supplied by a Client designated additional source that is not reasonably discoverable by Patheon using the test methods set forth in the Specifications, (iv) is caused by actions of third parties occurring after the Product is shipped by Patheon under Section 5.4, (v) is due to packaging design or labelling defects or omissions for which Patheon has no responsibility, (vi) is due to any unascertainable reason despite Patheon having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, and Applicable Laws, or (vii) is due to any other breach by Client of its obligations under this Agreement.
6.4
Disposition of Defective or Recalled Products
.
Client will not dispose of any damaged, defective, returned, or Recalled Products for which it intends to assert a claim against Patheon without Patheon’s prior written authorization to do so. Alternatively, Patheon may instruct Client to return the Products to Patheon. Patheon will bear the cost of disposition for any damaged, defective, returned or Recalled Products for which it bears responsibility under Section 6.3. In all other circumstances, Client will bear the cost of disposition, including all applicable fees for Manufacturing Services, for any damaged, defective, returned, or Recalled Products.
6.5
Healthcare Provider or Patient Questions and Complaints
.
Client will have the sole responsibility for responding to questions and complaints from its customers. Questions or complaints received by Patheon from Client's customers, healthcare providers or patients will be promptly referred to Client. Patheon will co-operate as reasonably required to allow Client to determine the cause of and resolve any questions and complaints. This assistance will include follow-up investigations, including testing. In addition, Patheon will give Client all agreed upon information that will enable Client to respond properly to questions or complaints about the Products as set forth in the Quality Agreement. Unless it is determined that the cause of the complaint resulted from a failure by Patheon to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws, all costs incurred under this Section 6.5 will be borne by Client.
6.6
Sole Remedy
.
Except for the indemnity set forth in Section 10.3
[***]
and subject to the limitations set forth in Sections 10.1 and 10.2, the remedies described in this Article 6, along with any termination rights permitted under this Agreement, will be Client’s sole remedy for any failure by Patheon to provide the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws.
ARTICLE 7
CO-OPERATION
7.1
Quarterly Review
.
Each party will forthwith upon execution of this Agreement appoint one of its employees to be a relationship manager responsible for liaison between the parties. The relationship managers will meet not less than quarterly to review the current status of the business relationship and manage any issues that have arisen. At each Quarterly Review, Patheon should prepare and provide Client data and reports relating to manufacturing, yield performance, analytical results, inventory, forecasts, and any other matters reasonably requested by Client. Also, Patheon should provide all of the past and on-going quality issues specifically related to Client’s Products including Out Of Trend (OOT), Out Of specifications (OOS), deviation investigations and reports.
7.2
Governmental Agencies
.
Subject to Section 7.8, except as otherwise required by Applicable Law, Client (or its designated representatives) shall be the sole communicator with any Authority, including but not limited to governmental agencies, such as the FDA and EMA, responsible for granting regulatory approval for the Products, regarding the Products. Except as otherwise required by Applicable Law or otherwise permitted in this Section 7, Patheon shall not initiate contact with any Authority regarding the Products or respond to any inquiry or communication from any Authority regarding the Products without Client’s prior written approval. If Client is required to submit to an Authority any information concerning the Products or any services provided hereunder, Patheon will provide Client copies of such documentation, data and other information as shall be necessary or reasonably desirable for such submission to the Authorities and such other information in such form as Client may reasonably request. Patheon shall also cooperate and consult as reasonably requested by Client and/or required by the Authorities for development of additional data or performance of studies concerning the Product. Client shall pay Patheon’s reasonable costs and fees for performance under this section. Patheon shall also provide, if required by the Authorities, information concerning its laboratory, manufacturing, quality control procedures and CMC matters with respect to its activities under this Agreement, including any Product Agreement. Patheon shall provide Client all documentation, data and information referred to in this Section 7.2 reasonably in advance of their required submission to allow for Client’s review and comment. Patheon shall endeavor in good faith to satisfactorily resolve/incorporate all Client comments prior to submission.
7.3
Records and Accounting by Patheon
.
Patheon will keep records of the manufacture, testing, and shipping of the Products, and retain samples of the Products as are necessary to comply with manufacturing regulatory requirements applicable to Patheon, as well as to assist with resolving Product complaints and other similar investigations. Further information regarding the Records and Accounting by Patheon is set forth in the parties’ Quality Agreement.
7.4
Inspection
.
Client may inspect Patheon reports and records relating to this Agreement during normal business hours and with reasonable advance notice, but a Patheon representative must be present during the inspection.
7.5
Access
.
Patheon will give Client reasonable access at agreed times to the areas of the Manufacturing Site in which the Products are manufactured, stored, handled, or shipped to permit Client to verify that the Manufacturing Services are being performed in accordance with the Specifications, cGMPs, and Applicable Laws, including reasonable access to the appropriate manufacturing areas while Client products are being manufactured. But, with the exception of “for-cause” audits, Client will be limited each Year to
[***]
cGMP-type audit, lasting no more than
[***]
, and involving no more than
[***]
. Client may request additional cGMP-type audits, additional audit days, or the participation of additional auditors subject to payment to Patheon of
[***]
for each additional audit day and
[***]
per audit day for each additional auditor. The right of access set forth in Sections 7.4 and 7.5 will not include a right to access or inspect Patheon’s financial records.
7.6
Notification of Regulatory Inspections
.
Patheon will notify Client as soon as possible but no more than
[***]
of receipt of any inspections by any Authority specifically involving the Products or otherwise relating to quality matters at the Manufacturing Site or the other facilities in which the Manufacturing Services are performed. Patheon will also notify Client of receipt of any form 483’s or warning letters or any other significant regulatory action or communication from any Authority that relate to the Products or the facility in which the Manufacturing Services are performed or could otherwise reasonably be expected to impact Patheon’s ability to perform hereunder, and provide Client with a copy of such FDA Form 483s, warning letter or any other documents relating to significant regulatory action or communication from any Authority. In connection with any response by Patheon to such Authority related to Products, Patheon shall provide Client all relevant documentation, data and information reasonably in advance of the required submission to allow for Client’s review and comment. Patheon shall endeavor in good faith to satisfactorily resolve/incorporate all Client comments prior to submission
7.7
Reports
.
Patheon will supply
[***]
all Product data in its control, including release test results, change controls, complaint test results, and all investigations (in manufacturing, testing, and storage), that Client reasonably requires in order to complete any filing under any applicable regulatory regime, including any Annual Report that Client is required to file with the FDA. Any additional report requested by Client beyond the scope of cGMPs and customary FDA requirements will be subject to an additional fee to be agreed upon between Patheon and the Client.
7.8
Regulatory Filings
.
(a)
Regulatory Authority
. Client will have the sole responsibility for filing all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture of the Products. Patheon will assist Client, to the extent consistent with Patheon’s obligations under this Agreement, to obtain Regulatory Authority approval for the commercial manufacture of all Products as quickly as reasonably possible.
(b)
Verification of Data
. Prior to filing any documents with any Regulatory Authority that incorporate data generated by Patheon, Client will give Patheon a copy of the relevant portions of the documents incorporating this data to give Patheon the opportunity to verify the accuracy and regulatory validity of those documents as they relate to Patheon generated data. Patheon will promptly review the proposed submission and in no event shall take more than
[***]
(or such shorter period as required to meet the submission date for the relevant document) to perform this review and the parties may agree to a shorter time for the review as needed.
(c)
Verification of CMC
. Prior to filing with any Regulatory Authority any documentation which is or is equivalent to the FDA’s Chemistry and Manufacturing Controls (all such documentation herein referred to as “
CMC
”) related to any Marketing Authorization, such as a New Drug Application or Abbreviated New Drug Application, Client will give Patheon a redacted copy of the Drug-Product portion of the CMC as well as all supporting documents which have been relied upon to prepare the CMC. This disclosure will permit Patheon to verify that the CMC accurately describes the work that Patheon has performed and the manufacturing processes that Patheon will perform under this Agreement. Patheon requires
[***]
to perform this review but the parties may agree to a shorter time for the review as needed. Client will give Patheon copies of all FDA filings at the time of submission which contain CMC information regarding the Product.
(d)
Deficiencies
. If, in Patheon’s sole discretion, acting reasonably, Patheon determines that any of the information given by Client under clauses (b) and (c) above is inaccurate or deficient in any manner whatsoever (the "
Deficiencies
"), Patheon will notify Client in writing of the Deficiencies. The parties will work together to have the Deficiencies resolved prior to any pre-approval inspection.
(e)
Client Responsibility
. For clarity, the parties agree that in reviewing the documents referred to in clause (b) above, Patheon’s role will be limited to verifying the accuracy of the description of the work undertaken or to be undertaken by Patheon. Subject to the foregoing, Patheon will not assume any responsibility for the accuracy of any application for receipt of an approval by a Regulatory Authority. The Client is solely responsible for the preparation and filing of the application for approval by the Regulatory Authority and any relevant costs will be borne by the Client.
7.9
Inspection by Regulatory Authorities
.
If Client does not give Patheon the documents requested under clause 7.7(b) above within the time specified and if Patheon reasonably believes that Patheon’s standing with a Regulatory Authority may be jeopardized, Patheon may, in its sole discretion, delay or postpone any inspection by the Regulatory Authority until Patheon has reviewed the requested documents and is satisfied with their contents.
ARTICLE 8
TERM AND TERMINATION
8.1
Initial Term
.
This Agreement will become effective as of the Effective Date and will continue until December 31, 2021 (the "
Initial Term
"), unless terminated earlier by one of the parties in accordance herewith. This Agreement will automatically renew after the Initial Term for successive terms of two Years each if there is a Product Agreement in effect, unless either party gives written notice to the other party of its intention to terminate this Agreement at least 24 months prior to the end of the then current term. In any event, the legal terms and conditions of this Agreement will continue to govern any Product Agreement in effect as provided in Section 1.2. Each Product Agreement will have an initial term of five Years from the start of commercial manufacture at the Manufacturing Site for the Product unless the parties agree to a different number of Years in the applicable Product Agreement (each, an “
Initial Product Term
”). Product Agreements will automatically renew after the Initial Product Term for successive terms of two Years each unless either party gives written notice to the other party of its intention to terminate the Product Agreement at least 24 months prior to the end of the then current term.
8.2
Termination for Cause
.
(a)
Either party at its sole option may terminate this Agreement or a Product Agreement upon written notice where the other party has failed to remedy a material breach of any of its representations, warranties, or other obligations under this Agreement or the Product Agreement and in the case of curable material breaches within 60 days following receipt of a written notice (the "
Remediation Period
") of the breach that expressly states that it is a notice under this Section 8.2(a) (a "
Breach Notice
"). The aggrieved party's right to terminate this Agreement or a Product Agreement under this Section 8.2(a) may only be exercised for a period of 60 days following the expiry of the Remediation Period in the case of remediable breaches (where the breach has not been remedied) and if the termination right in connection with such remediable material breach is not exercised during this period then the aggrieved party will be deemed to have waived the breach of the representation, warranty, or obligation described in the Breach Notice.
(b)
Either party at its sole option may immediately terminate this Agreement or a Product Agreement upon written notice, but without prior advance notice, to the other party if: (i) the other party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by the other party; or (iii) this Agreement or a Product Agreement is assigned by the other party for the benefit of creditors.
(c)
Client may terminate a Product Agreement upon 30 days' prior written notice if any Authority takes any action, or raises any objection, that prevents Client from researching, developing, importing, exporting, purchasing, selling or otherwise commercializing the Product (an “
Authority Action
”). But if this occurs, Client must still fulfill all of its obligations under Section 8.4 below and under any Capital Equipment Agreement regarding the Product.
(d)
Either party may terminate this Agreement or a Product Agreement upon six months' prior written notice if the other party assigns under Section 13.6 any of its rights under this Agreement or a Product Agreement to an assignee that, in the opinion of the non-assigning party acting reasonably, is (i) not a credit worthy substitute for the other party or (ii) a Competitor of the non-assigning party.
8.3
Product Discontinuation
.
Client will give at least
[***]
advance notice (or such shorter period if required pursuant to an Authority Action) if it intends to no longer order Manufacturing Services for a Product due to this Product's discontinuance in the market.
8.4
Obligations on Termination
.
If a Product Agreement is completed, expires, or is terminated in whole or in part for any reason, then:
|
|
(a)
|
Client will take delivery of and pay for all undelivered Products that are manufactured and/or packaged under a Firm Order, at the price in effect at the time the Firm Order was placed;
|
|
|
(b)
|
Client will purchase, at Patheon's cost plus
[***]
handling fee, the Inventory applicable to the Products which was purchased, produced or maintained by Patheon in contemplation of filling Firm Orders or in accordance with Section 5.2 prior to notice of termination being given; provided that Patheon will make commercially reasonable efforts to mitigate any costs payable by Client in connection therewith, which may include canceling any pending orders for such Components, returning or selling items in the Inventory back to its supplier(s) if possible, or otherwise utilizing such Inventory or Components with other Patheon clients or otherwise in Patheon’s business;
|
|
|
(c)
|
Client will satisfy the purchase price payable under Patheon's orders with suppliers of Components, if the orders were made by Patheon in reliance on Firm Orders or in accordance with Section 5.2, and thereafter Client will have sole right, title and interest in and to such Components;
|
|
|
(d)
|
Client acknowledges that no Patheon Competitor will be permitted access to the Manufacturing Site;
|
|
|
(e)
|
Client will make commercially reasonable efforts, at its own expense, to remove from Patheon site(s),
[***]
, all unused Active Material and Client-Supplied Components, all applicable Inventory and Materials (whether current or obsolete), supplies, undelivered Product, chattels, equipment or other moveable property owned by Client, related to the Agreement and located at a Patheon site or that is otherwise under Patheon’s care and control (“
Client Property
”). If Client fails to remove the Client Property
[***]
following the completion, termination, or expiration of the Product Agreement, Client will pay Patheon
[***]
per pallet, per month, one pallet minimum (except, if applicable, Client will pay
[***]
per pallet, per month, one pallet minimum, for any of the Client Property that contains controlled substances, requires refrigeration or other special storage requirements) thereafter for storing the Client Property and will assume any third party storage charges invoiced to Patheon regarding the Client Property; provided that no such charges shall be applicable and payable by Client if Client notifies Patheon to destroy/dispose of such Client Property. Patheon will invoice Client for the storage charges as set forth in Section 5.5 of this Agreement;
|
|
|
(f)
|
Pursuant to a reasonable written request from Client to Patheon, Patheon shall transfer to Client and/or its designee any and all Client Intellectual Property in Patheon’s possession and shall provide to Client and/or its designee Patheon Intellectual Property, so as to permit Client and/or its designee(s) to produce/manufacture Products with such technical assistance being provided in accordance with a plan provided to Patheon by Client. To the extent transferable, Patheon shall also transfer any license(s) obtained specifically for the production/manufacture of Products under this Agreement. Patheon hereby grants to Client
[***]
any and all Patheon Intellectual Property to make, have made, use, offer for sale, sell, and import Products, which license shall survive termination of this Agreement. However, no Competitor of Patheon in the business of contract development or manufacture of drug products will be permitted to have access to Patheon’s manufacturing site. The third party manufacturer will be required to sign a customary and appropriate confidentiality agreement with Patheon concerning the nondisclosure of Patheon confidential information that may be involved in the transfer;
|
|
|
(g)
|
Except to the extent necessary to complete performance pursuant to subsection (f) or to exercise rights that survive the termination of this Agreement, each party as a receiving party shall deliver to the disclosing party such disclosing party’s Confidential Information in the receiving party’s possession or control. Notwithstanding anything in this Agreement that may be to the contrary, Client (and its designees) may continue to retain and use Patheon Confidential Information that is required to maintain marketing approval for a Product and/or is useful to production/manufacture of the Product;
|
|
|
(h)
|
Promptly following any notice of termination of expiration, Patheon will update and confirm the technical information and specifications for the Product as set forth in the Specifications (Schedule A), Stability Testing protocols and procedures (Schedule C) and the Quality Agreement (Exhibit B) as applicable, to the extent required to reflect any needed changes to manufacturing and validation methods;
|
|
|
(i)
|
Each party will continue to comply with their obligations under Applicable Law which survive termination of this Agreement;
|
Any termination or expiration of this Agreement or a Product Agreement will not affect any outstanding obligations or payments due prior to the termination or expiration, nor will it prejudice any other remedies that the parties may have under this Agreement or a Product Agreement or any related Capital Equipment Agreement. For greater certainty, termination of this Agreement or of a Product Agreement for any reason will not affect the obligations and responsibilities of the parties under Articles 10, 11, 12 and 13 and Sections 1.3, 1.5, 1.6, 1.7, 6.2, 6.3, 6.4, 6.5, 6.6, 7.2, 7.3, 7.4, 7.5, 7.6, 7.8, and 8.4, all of which survive any termination.
ARTICLE 9
REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1
Authority
.
Each party covenants, represents, and warrants that it has the full right and authority to enter into this Agreement and that it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder.
9.2
Client Warranties
.
Client covenants, represents, and warrants that:
|
|
(i)
|
the Specifications for each of the Products are its or its Affiliate's property and that Client may lawfully disclose the Specifications to Patheon;
|
|
|
(ii)
|
any Client Intellectual Property, used by Patheon in performing the Manufacturing Services according to the Specifications (A) is Client’s or its Affiliate's unencumbered property, (B) may be lawfully used as directed by Client, and (C) to the knowledge of Client does not infringe and will not infringe any Third Party Rights;
|
|
|
(iii)
|
the performance of the Manufacturing Services by Patheon for any Product under this Agreement or any Product Agreement or the use or other disposition of any Product by Patheon as may be required to perform its obligations under this Agreement or under any Product Agreement, to the knowledge of Client, does not and will not infringe any Third Party Rights;
|
|
|
(iv)
|
there are no actions or other legal proceedings against Client, concerning the infringement of Third Party Rights related to any of the Specifications, or any of the Active Materials and the Components, or the sale, use, or other disposition of any Product made in accordance with the Specifications;
|
|
|
(b)
|
Quality and Compliance
.
|
|
|
(i)
|
the Specifications for all Products conform to all applicable cGMPs and Applicable Laws;
|
|
|
(ii)
|
the Products, if labelled and manufactured in accordance with the Specifications and in compliance with applicable cGMPs and Applicable Laws may be lawfully sold and distributed in every jurisdiction in which Client markets the Products; and
|
|
|
(iii)
|
on the date of shipment, the API will conform to the specifications for the API that Client has given to Patheon and that the API will be adequately contained, packaged, and labelled and will conform to the affirmations of fact on the container.
|
9.3
Patheon Warranties
.
Patheon covenants, represents, and warrants that:
|
|
(a)
|
it will perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws;
|
|
|
(b)
|
it has or shall have and shall maintain all necessary licences, permits, and approvals required by any Regulatory Authority for the manufacture of the Product;
|
|
|
(c)
|
it has disclosed and will disclose to Client all warnings or other notices from any applicable Regulatory Authority it has received relating to its Manufacturing Site to the extent that such notice or warning would affect Patheon’s ability to perform the Manufacturing Services in accordance with this Agreement;
|
|
|
(d)
|
it shall not at any time without Client's prior written consent:
|
|
|
(i)
|
make any changes to the manufacturing, packaging, testing, or storage of the Product; or
|
|
|
(ii)
|
knowingly take any actions which would likely affect the validation status or quantity of the Product
|
|
|
(e)
|
any Patheon Intellectual Property used by Patheon to perform the Manufacturing Services (i) is Patheon’s or its Affiliate's unencumbered property, (ii) may be lawfully used by Patheon, and (iii) does not knowingly infringe and will not knowingly infringe any Third Party Rights;
|
|
|
(f)
|
the Product when delivered will be in compliance with the certificate of analysis provided by Patheon to Client with respect thereto;
|
|
|
(g)
|
all right, title and interest in the Product will be transferred to Client free of any and all liens, security interests or other encumbrances (provided however, Client has provided all API and Client Supplied Components to Patheon free of any and all liens, security interests or other encumbrances; and
|
|
|
(h)
|
the Manufacturing Services and other work performed hereunder will be performed in a professional, expeditious and workmanlike manner, consistent with industry standards.
|
9.4
Debarred Persons
.
Patheon covenants that it will not in the performance of its obligations under this Agreement use the services of any person debarred or suspended under 21 U.S.C. §335(a) or (b). Patheon represents that it does not currently have, and covenants that it will not hire, as an officer or an employee any person who has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the
Federal
Food, Drug, and Cosmetic Act
(United States).
9.5
Permits
.
Client will be solely responsible for obtaining or maintaining, on a timely basis, any permits or other regulatory approvals for the Products or the Specifications, including, without limitation, all marketing and post-marketing approvals.
Patheon will maintain at all relevant times all governmental permits, licenses, approval, and authorities required to enable it to lawfully and properly perform the Manufacturing Services.
9.6
No Warranty
.
EACH PARTY HERETO MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT, INCLUDING ANY IMPLIED REPRESENTATION OR WARRANTY WITH RESPECT TO (I) MERCHANTABILITY, NON-INFRINGEMENT, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II) THE LIKELIHOOD OF SUCCESS OF ANY APPLICATION FOR MARKETING AUTHORIZATION RELATING TO ANY PRODUCTS CURRENTLY IN DEVELOPMENT OR FOR WHICH MARKETING AUTHORIZATION HAS NOT YET BEEN GRANTED EITHER IN THE U.S. OR IN ANY OTHER COUNTRY, OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF ANY PRODUCTS AFTER THE EFFECTIVE DATE.
ARTICLE 10
REMEDIES AND INDEMNITIES
10.1
Consequential Damages
.
Except in connection with
[***]
provisions of this Agreement (all the foregoing the “
Exceptions
”), under no other circumstances whatsoever will either party be liable to the other in contract, tort, negligence, breach of statutory duty, or otherwise for (i) any (direct or indirect) loss of profits, of production, of anticipated savings, of business, or goodwill or (ii) for any other liability, damage, costs, or expense of any kind incurred by the other party of an indirect or consequential nature, regardless of any notice of the possibility of these damages.
10.2
Limitation of Liability
.
(a)
Defective or Recalled Product
. Other than in the case of the Exceptions, Patheon’s maximum aggregate liability to Client for any obligation to (i) refund, offset or replace any defective Product under Section 6.3(a) or (ii) replace any recalled Products under Section 6.3(b), will not
[***]
. This Section 10.2(a) will not be subject to Section 10.2(c).
(b)
Active Materials
. Except (i) as expressly set forth in Section 2.2, (ii) in connection with the Exceptions, (iii)
[***]
and (iv) as otherwise provided under this Agreement, Patheon will not be responsible for any loss or damage to the Active Materials and Patheon’s maximum responsibility for loss or damage to the Active Materials will not exceed the Maximum Credit Value set forth in Schedule D of a Product Agreement.
(c)
Maximum Liability
. Other than in the case of the Exceptions,
[***]
and as provided under Section 10.2(a) above, Patheon’s maximum liability to Client under this Agreement or any Product Agreement for any reason whatsoever will not exceed on a per Product basis
[***]
.
(d)
Nothing in this Agreement is intended to limit either party’s liability for death or personal injury caused by its negligence or fraudulent misrepresentation
.
10.3
Patheon Indemnity
.
(a) Patheon agrees to defend and indemnify and hold harmless Client, its officers, employees, Affiliates and agents against all losses, damages, fines, penalties, costs, expenses (including reasonable attorneys’ fees and court costs), claims, suits, proceedings, demands, judgments and liability to, from and in favour of third parties (other than Affiliates) (all the foregoing, “
Third-Party Claims
”) resulting from, or relating to (i) any claim that is the result of a failure by Patheon to perform its obligations under this Agreement, including that the Manufacturing Services were not performed in accordance with the Specifications, cGMPs, and Applicable Laws and the other requirements of this Agreement and the applicable Product Agreement, (ii) the gross negligence or willful misconduct of Patheon or any of its personnel, representatives, Affiliates or subcontractors or, (iii) any claim of infringement or alleged infringement of any Third Party Rights regarding the use of Patheon Intellectual Property pursuant to this Agreement (but excluding any Client Intellectual Property included or utilized in connection therewith) except to the extent that such Third Party Claims are due to the negligence or wrongful act(s) of Client, its officers, employees, agents, or Affiliates.
(b) If a Third-Party Claim occurs for which indemnification is sought under the foregoing, Client will: (a) promptly notify Patheon of the Third-Party Claim; (b) use commercially reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Patheon in the defense of the Third-Party Claim (at Patheon’s sole cost and expense); and (d) permit Patheon to control the defense and settlement of the Third-Party Claim, all at Patheon's cost and expense. Client and the other indemnitees may participate in the defense and settlement of any Third-Party Claim using counsel of its own choice at its own expense. Patheon shall not settle any Third-Party Claim in a manner that adversely affects the rights of the Client or any other indemnitee without the Client’s or such other indemnitee’s prior written consent, which shall not be unreasonably withheld or delayed. The Client's or any other indemnitee’s failure to perform any obligations under this Section shall not relieve Patheon of its obligations hereunder, except to the extent that Patheon can demonstrate that it has been materially prejudiced as a result of such failure.
10.4
Client Indemnity
.
(a) Client agrees to defend and indemnify and hold harmless Patheon, its officers, employees, and agents against all Third-Party Claims resulting from, or relating to any claim of infringement or alleged infringement of any Third Party Rights in the Products, or any portion thereof (but excluding any Patheon Intellectual Property included or utilized in connection therewith), or any claim that is the result of a breach of this Agreement by Client, including, without limitation, any representation or warranty contained herein, except to the extent that the Third-Party Claims are due to the negligence or wrongful act(s) of Patheon, its officers, employees, Affiliates or agents.
(b) If a Third-Party Claim occurs for which indemnification is sought under the foregoing, Patheon will: (a) promptly notify Client of the Third-Party Claim; (b) use commercially reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Client in the defense of the Third-Party Claim (at Client’s sole cost and expense); and (d) permit Client to control the defense and settlement of the Third-Party Claim, all at Client's cost and expense. Patheon and the other indemnitees may participate in the defense and settlement of any Third-Party Claim using counsel of its own choice at its own expense. Client shall not settle any Third-Party Claim in a manner that adversely affects the rights of Patheon or any other indemnitee without Patheon’s or such other indemnitee’s prior written consent, which shall not be unreasonably withheld or delayed. Patheon's or any other indemnitee’s failure to perform any obligations under this Section shall not relieve Client of its obligations hereunder, except to the extent that the Client can demonstrate that it has been materially prejudiced as a result of such failure.
10.5
Reasonable Allocation of Risk
.
This Agreement (including, without limitation, this Article 10) is reasonable and creates a reasonable allocation of risk for the relative profits the parties each expect to derive from the Products. Patheon assumes only a limited degree of risk arising from the manufacture, distribution, and use of the Products because Client has developed and holds the marketing approval for the Products, Client requires Patheon to manufacture and label the Products strictly in accordance with the Specifications, and Client, not Patheon, is best positioned to inform and advise potential users about the circumstances and manner of use of the Products.
ARTICLE 11
CONFIDENTIALITY
11.1
Confidential Information
.
“
Confidential Information
” means any information disclosed by the Disclosing Party to the Recipient (whether disclosed in oral, written, electronic or visual form) that is non-public, confidential or proprietary including, without limitation, information relating to the Disclosing Party’s patent and trademark applications, process designs, process models, drawings, plans, designs, data, databases and extracts therefrom, formulae, methods, know-how and other intellectual property, its clients or client confidential information, finances, marketing, products and processes and all price quotations, manufacturing or professional services proposals, information relating to composition, proprietary technology, and all other information relating to manufacturing capabilities and operations. In addition, all analyses, compilations, studies, reports or other documents prepared by any party's Representatives containing the Confidential Information will be considered Confidential Information. Samples or materials provided hereunder as well as any and all information derived from the approved analysis of the samples or materials will also constitute Confidential Information. Furthermore, any data, reports, information, deliverables, test results, and materials related to the Product generated or made by Patheon under this Agreement (all the foregoing, “
Deliverables
”) and Product shall be deemed Confidential Information of Client.
For the purposes of this ARTICLE 11, a party or its Representative receiving Confidential Information under this Agreement is a “
Recipient
,” and a party or its Representative disclosing Confidential Information under this Agreement is the
“Disclosing Party
.”
11.2
Use of Confidential Information
.
The Recipient will use the Confidential Information solely for the purpose of meeting its obligations under this Agreement. The Recipient will keep the Confidential Information strictly confidential and will not disclose the Confidential Information in any manner whatsoever, in whole or in part, other than to those of its Representatives who (i) have a need to know the Confidential Information for the purpose of this Agreement; (ii) have been advised of the confidential nature of the Confidential Information and (iii) have obligations of confidentiality and non-use to the Recipient no less restrictive than those of this Agreement. Recipient will protect the Confidential Information disclosed to it by using all reasonable precautions to prevent the unauthorized disclosure, dissemination or use of the Confidential Information, which precautions will in no event be less than those exercised by Recipient with respect to its own confidential or proprietary Confidential Information of a similar nature.
11.3
Exclusions
.
The obligations of confidentiality will not apply to the extent that the information:
(a) is or becomes publicly known through no breach of this Agreement or fault of the Recipient or its Representatives;
(b) is in the Recipient's possession at the time of disclosure by the Disclosing Party other than as a result of the Recipient's breach of any legal obligation;
(c) is or becomes known to the Recipient on a non-confidential basis through disclosure by sources, other than the Disclosing Party, having the legal right to disclose the Confidential Information, provided that the other source is not known by the Recipient, after due inquiry, to be bound by any obligations (contractual, legal, fiduciary, or otherwise) of confidentiality to the Disclosing Party with respect to the Confidential Information;
(d) is independently developed by the Recipient without use of or reference to the Disclosing Party's Confidential Information as evidenced by Recipient’s written records; or
(e) is expressly authorized for release by the written authorization of the Disclosing Party.
Any combination of information which comprises part of the Confidential Information are not exempt from the obligations of confidentiality merely because individual parts of that Confidential Information were publicly known, in the Recipient’s possession, or received by the Recipient, unless the combination itself was publicly known, in the Recipient’s possession, or received by the Recipient.
11.4
Photographs and Recordings
.
Except as required by Law, neither party will take any photographs or videos of the other party’s facilities, equipment or processes, nor use any other audio or visual recording equipment (such as camera phones) while at the other party’s facilities, without that party’s express written consent.
11.5
Permitted Disclosure
.
Notwithstanding any other provision of this Agreement, the Recipient may disclose Confidential Information of the Disclosing Party to the extent required, as advised by counsel, in response to a valid order of a court or other governmental body or as required by law, regulation or stock exchange rule. But the Recipient will advise the Disclosing Party in advance of the disclosure to the extent practicable and permissible by the order, law, regulation or stock exchange rule and any other applicable law, will reasonably cooperate with the Disclosing Party, if required, in seeking an appropriate protective order or other remedy, and will otherwise continue to perform its obligations of confidentiality set out herein. If any public disclosure is required by law, the parties will consult concerning the form of announcement prior to the public disclosure being made.
Furthermore, no provision of this Agreement shall be construed so as to preclude disclosure of Patheon Confidential Information by Client as may be reasonably necessary or useful for Client to secure from any Authority necessary marketing or other approvals or licenses for a Product.
Client may disclose this Agreement to one or more third parties (i) in connection with a proposed sale, merger, financing, loan, investment or similar transaction (each a “
Potential Transaction
”) so long as those third parties subject to obligations of confidentiality and are limited to using information derived from this Agreement solely for purposes of evaluating whether to enter into one or more of the Potential Transactions and no other purpose.
11.6
Marking
.
The Disclosing Party agrees to use reasonable efforts to summarize in writing the content of any oral disclosure or other non-tangible disclosure of Confidential Information within 30 days of the disclosure, but failure to provide this summary will not affect the nature of the Confidential Information disclosed if the Confidential Information was identified as confidential or proprietary when disclosed orally or in any other non-tangible form. Notwithstanding the foregoing, any information which by its nature is confidential and would be judged so under a reasonable standard, or is disclosed, or provided, under circumstances reasonably indicating it is confidential or proprietary, shall be considered Confidential Information regardless of whether a party has marked the Confidential Information as “Confidential” or “Proprietary” or has otherwise identified the information as being confidential.
11.7
Return of Confidential Information
.
Upon the written request of the Disclosing Party, the Recipient will promptly return the Confidential Information to the Disclosing Party or, if the Disclosing Party directs, destroy all Confidential Information disclosed in or reduced to tangible form including any copies thereof and any summaries, compilations, analyses or other notes derived from the Confidential Information except for one copy which may be maintained by the Recipient for its records. The retained copy will remain subject to all confidentiality provisions contained in this Agreement.
11.8
Remedies
.
The parties acknowledge that monetary damages may not be sufficient to remedy a breach by either party of this Agreement and agree that the non-breaching party will be entitled to seek specific performance, injunctive and/or other equitable relief (without the need to post bond or other security or to otherwise demonstrate monetary damages) to prevent breaches of this Agreement and to specifically enforce the provisions hereof in addition to any other remedies available at law or in equity. These remedies will not be the exclusive remedies for breach of this Agreement but will be in addition to any and all other remedies available at law or in equity.
ARTICLE 12
DISPUTE RESOLUTION
12.1
Commercial Disputes
.
If any dispute arises out of this Agreement or any Product Agreement (other than a dispute under Section 6.1(b) or a Technical Dispute, as defined herein), the parties will first try to resolve it amicably. In that regard, any party may send a notice of dispute to the other, and each party will appoint, within ten Business Days from receipt of the notice of dispute, a single representative having full power and authority to resolve the dispute. The representatives will meet as necessary in order to resolve the dispute. If the representatives fail to resolve the matter within one month from their appointment, or if a party fails to appoint a representative within the ten Business Day period set forth above, the dispute will immediately be referred to the Chief Executive Officer (in the case or Client) or to the Chief Operating Officer (in the case of Patheon), or another officer as he/she may designate, of each party who will meet and discuss as necessary to try to resolve the dispute amicably. Should the parties fail to reach a resolution under this Section 12.1, the dispute will be referred to a court of competent jurisdiction in accordance with Section 13.17.
12.2
Technical Dispute Resolution
.
If a dispute arises (other than disputes under Sections 12.1) between the parties that is exclusively related to technical aspects of the manufacturing, packaging, labelling, quality control testing, handling, storage, or other activities under this Agreement (a "
Technical Dispute
"), the parties will make all reasonable efforts to resolve the dispute by amicable negotiations. In that regard, senior representatives of each party will, as soon as possible and in any event no later than ten Business Days after a written request from either party to the other, meet in good faith to resolve any Technical Dispute. If, despite this meeting, the parties are unable to resolve a Technical Dispute within a reasonable time, and in any event within 30 Business Days of the written request, the Technical Dispute will, at the request of either party, be referred for determination to an expert in accordance with Exhibit A. If the parties cannot agree that a dispute is a Technical Dispute, Section 12.1 will prevail. For greater certainty, the parties agree that the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by itself indicate compliance by Patheon with its obligations for the Manufacturing Services and further that nothing in this Agreement (including Exhibit A) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.
12.3
Injunctive Relief
.
Nothing in this Article 12 above shall prevent a party from seeking and obtaining temporary or preliminary injunctive or equitable relief to protect the interests of such party pending the outcome of the dispute resolution proceedings set forth above.
ARTICLE 13
MISCELLANEOUS
13.1
Inventions
.
(a) For the term of this Agreement, Client hereby grants to Patheon a non-exclusive, paid-up, royalty-free, non-transferable license of Client’s Intellectual Property which Patheon must use in order to perform the Manufacturing Services solely for Client.
(b) All Intellectual Property generated or derived by Patheon while performing the Manufacturing Services, to the extent it is specific to the development, manufacture, use, and sale of Client’s Product that is the subject of the Manufacturing Services along with all Deliverables (such Intellectual Property and Deliverables collectively, “
Client Arising Intellectual Property
”), will be the exclusive property of Client.
(c) All Patheon Intellectual Property will be the exclusive property of Patheon. Patheon hereby grants to Client
[***]
to use the Patheon Intellectual Property used by Patheon to perform the Manufacturing Services to enable Client to manufacture the Product(s).
(d) Each party will be solely responsible for the costs of filing, prosecution, and maintenance of patents and patent applications on its own Inventions. Each party will cooperate with the other party in the filing and prosecution of patent applications related to Inventions in which such other party has an ownership interest as a result of activities under this Agreement or otherwise in the registering, perfecting or recording its rights in or to its respective Intellectual Property. Such cooperation will include, but not be limited to, furnishing supporting data and affidavits for the prosecution of patent applications and completing and signing forms needed for the prosecution, assignment and maintenance of patent applications, and causing its personnel (including all subcontractors) to irrevocably waive, to the extent permitted by Law, any and all claims such personnel (including all subcontractors) may now or hereafter have in any jurisdiction to so-called "moral rights" or rights of droit moral.
(e) Either party will give the other party written notice, as promptly as practicable, of all Inventions which can reasonably be deemed to constitute improvements or other modifications of the Products or processes or technology owned or otherwise controlled by the party.
(f) Patheon agrees, and will cause its personnel (including all subcontractors) to agree, that with respect to any Client Arising Intellectual Property that may qualify as "work made for hire" as defined in 17 U.S.C. §101, such Client Arising Intellectual Property are hereby deemed a "work made for hire" for Client. To the extent that any of the Client Arising Intellectual Property do not constitute a "work made for hire", Patheon hereby irrevocably assigns, and shall cause its personnel (including all subcontractors) to irrevocably assign to Client, in each case without additional consideration, all right, title and interest throughout the world in and to the Client Arising Intellectual Property, including all intellectual property rights therein.
13.2
Intellectual Property
.
Subject to Section 13.1, all Client Intellectual Property will be owned by Client and all Patheon Intellectual Property will be owned by Patheon. Neither party has, nor will it acquire, any interest in any of the other party’s Intellectual Property unless otherwise expressly agreed to in writing. Neither party will use any Intellectual Property of the other party, except as specifically authorized by the other party or as required for the performance of its obligations under this Agreement.
13.3
Insurance
.
Each party will maintain commercial general liability insurance, including blanket contractual liability insurance covering the obligations of that party, including any storage obligations, under this Agreement through the term of this Agreement and for a period of three years thereafter. This insurance will have policy limits of not less than (i) $
[***]
for each occurrence for personal injury or property damage liability; and (ii) $
[***]
in the aggregate per annum for product and completed operations liability. If requested each party will give the other a certificate of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date, and the limits of liability. The insurance certificate will further provide for a minimum of 30 days' written notice to the insured of a cancellation of, or material change in, the insurance. If a party is unable to maintain the insurance policies required under this Agreement through no fault of its own, then the party will forthwith notify the other party in writing and the parties will in good faith negotiate appropriate amendments to the insurance provision of this Agreement in order to provide adequate assurances.
13.4
Independent Contractors
.
The parties are independent contractors and this Agreement and any Product Agreement will not be construed to create between Patheon and Client any other relationship such as, by way of example only, that of employer-employee, principal agent, joint-venturer, co-partners, or any similar relationship, the existence of which is expressly denied by the parties. A party shall have no authority to bind or act on behalf of the other Party. This Agreement shall not entitle Patheon to participate in any benefit plan or program of Client. Patheon shall be responsible for, and agrees to comply with, obligations under all applicable tax laws for payment of income and, if applicable, self-employment tax. Patheon is not entitled to worker’s compensation coverage by Client, and Patheon hereby waives any and all rights Patheon may have to be covered under Client’s worker’s compensation policies.
13.5
No Waiver
.
Either party's failure to require the other party to comply with any provision of this Agreement or any Product Agreement will not be deemed a waiver of the provision or any other provision of this Agreement or any Product Agreement, with the exception of Sections 6.1 and 8.2 of this Agreement.
13.6
Assignment
.
|
|
(a)
|
Patheon may not assign this Agreement or any Product Agreement or any of its associated rights or obligations without the written consent of Client, this consent not to be unreasonably withheld. But Patheon may arrange for subcontractors to perform specific testing services arising under any Product Agreement with the consent of Client, not to be unreasonably delayed or withheld. Further it is specifically agreed that Patheon may subcontract any part of the Manufacturing Services under a Product Agreement to any of its Affiliates.
|
|
|
(b)
|
Subject to Section 13.6(a), Client may assign this Agreement or any Product Agreement or any of its associated rights or obligations without approval from Patheon. But Client will give Patheon prior written notice of any assignment, any assignee will covenant in writing with Patheon to be bound by the terms of this Agreement or the Product Agreement, and Client will remain liable hereunder. Any partial assignment of this Agreement or a Product Agreement will be subject to Patheon’s cost review of the assigned Products, such review to be performed on an expeditious basis. Client will reimburse Patheon for any costs incurred by Patheon in connection with the partial assignment including any expenses incurred by Patheon for any due diligence audits in connection with the partial assignment
.
|
|
|
(c)
|
Despite the foregoing provisions of this Section 13.6, either party may assign this Agreement or any Product Agreement to any of its Affiliates or to a successor to or purchaser of all or substantially all of its business, but the assignee must execute an agreement with the non-assigning party whereby it agrees to be bound hereunder.
|
13.7
Force Majeure
.
Neither party will be liable for the failure to perform its obligations under this Agreement or any Product Agreement if the failure is caused by an event beyond that party's reasonable control, including, but not limited to, strikes, riots, quarantines, communicable disease outbreaks, wars, acts of terrorism, fires, floods, storms, interruption of or delay in transportation, lack of or inability to obtain fuel, power or components, or compliance with any order or regulation of any government entity acting within colour of right provided that that any of these affect the ability to produce or manufacture the Product (a "
Force Majeure Event
"). A party claiming a right to excused performance under this Section 13.7 will immediately notify the other party in writing of the extent of its inability to perform, which notice will specify the event beyond its reasonable control that prevents the performance. The parties may agree to excuse a party from the timelines for payment under this Agreement do to a Force Majeure Event, but such event shall not relieve a party from an obligation to pay money (including any interest for delayed payment) which would otherwise be due and payable under this Agreement or any Product Agreement.
13.8
Additional Product
.
Additional Products may be added to, or existing Products deleted from, any Product Agreement by amendments to the Product Agreement including Schedules A, B, C, D, and E as applicable.
13.9
Notices
.
Unless otherwise agreed in a Product Agreement, any notice, approval, instruction or other written communication required or permitted hereunder will be sufficient if made or given to the other party by personal delivery, by express delivery (like FedEx, UPS, DHL), by sending the same by certified first class mail, postage prepaid (return receipt requested) to the respective addresses set forth below:
If to Client:
Keryx Biopharmaceuticals, Inc.
One Marina Park Drive, 12
th
Floor
Boston, MA 02210
Attention: CEO
With a copy (which will not constitute notice) to:
Keryx Biopharmaceuticals, Inc.
One Marina Park Drive, 12
th
Floor
Boston, MA 02210
Attention: General Counsel
If to Patheon:
[***]
With a copy to:
[***]
or to any other addresses given to the other party in accordance with the terms of this Section 13.9. Notices or written communications made or given by personal delivery will be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after being deposited in the United States, Canada, or European Union mail, postage prepaid or upon receipt, whichever is sooner. Routine notices relating to invoices, purchase orders and forecasts may be sent by email.
13.10
Severability
.
If any provision of this Agreement or any Product Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, that determination will not impair or affect the validity, legality, or enforceability of the remaining provisions, because each provision is separate, severable, and distinct.
13.11
Entire Agreement
.
This Agreement, together with the applicable Product Agreement, and the Quality Agreement, constitutes the full, complete, final and integrated agreement between the parties relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions, or understandings concerning the subject matter hereof. Any modification, amendment, or supplement to this Agreement or any Product Agreement must be in writing and signed by authorized representatives of both parties. In case of conflict, the prevailing order of documents will be this Agreement, the Product Agreement, and the Quality Agreement.
13.12
Other Terms
.
No terms, provisions or conditions of any purchase order or other business form or written authorization used by Client or Patheon will have any effect on the rights, duties, or obligations of the parties under or otherwise modify this Agreement or any Product Agreement, regardless of any failure of Client or Patheon to object to the terms, provisions, or conditions unless the document specifically refers to this Agreement or the applicable Product Agreement and is signed by both parties.
13.13
No Third Party Benefit or Right
.
For greater certainty, nothing in this Agreement or any Product Agreement will confer or be construed as conferring on any third party any benefit or the right to enforce any express or implied term of this Agreement or any Product Agreement.
13.14
Execution in Counterparts
.
This Agreement and any Product Agreement may be executed in two or more counterparts, by original or facsimile signature, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
13.15
Use of Client Name
.
Patheon will not make any use of Client’s name, trademarks or logo or any variations thereof, alone or with any other word or words, without the prior written consent of Client.
13.16
Taxes
.
(a) The Client will bear all taxes, duties, levies and similar charges (and any related interest and penalties) ("
Tax
" or "
Taxes
"), however designated, imposed as a result of the provision by the Patheon of Services under this Agreement, except:
|
|
(i)
|
any Tax based on net income or gross income that is imposed on Patheon by its jurisdiction of formation or incorporation ("
Resident Jurisdiction
");
|
|
|
(i)
|
any Tax based on net income or gross income that is imposed on Patheon by jurisdictions other than its Resident Jurisdiction if this tax is based on a permanent establishment of Patheon; and
|
|
|
(ii)
|
any Tax that is recoverable by Patheon in the ordinary course of business for purchases made by Patheon in the course of providing its Services, such as Value Added Tax (as more fully defined in subparagraph (d) below), Goods & Services Tax ("
GST
") and similar taxes.
|
(b) If the Client is required to bear a tax, duty, levy or similar charge under this Agreement by any state, federal, provincial or foreign government, including, but not limited to, Value Added Tax, the Client will pay the tax, duty, levy or similar charge and any additional amounts to the appropriate taxing authority as are necessary to ensure that the net amounts received by Patheon hereunder after all such payments or withholdings equal the amounts to which Patheon is otherwise entitled under this Agreement as if the tax, duty, levy or similar charge did not exist.
(c) Patheon will not collect an otherwise applicable tax if the Client's purchase is exempt from Patheon's collection of the tax and a valid tax exemption certificate is furnished by the Client to Patheon.
(d) If subparagraph 13.16 (a)(iii) does not apply, any payment due under this Agreement for the provision of Services to the Client by Patheon is exclusive of value added taxes, turnover taxes, sales taxes or similar taxes, including any related interest and penalties (hereinafter all referred to as "
VAT
"). If any VAT is payable on a Service supplied by Patheon to the Client under this Agreement, this VAT will be added to the invoice amount and will be for the account of (and reimbursable to Patheon by) the Client. If VAT on the supplies of Patheon is payable by the Client under a reverse charge procedure (i.e., shifting of liability, accounting or payment requirement to recipient of supplies), the Client will ensure that Patheon will not effectively be held liable for this VAT by the relevant taxing authorities or other parties. Where applicable, Patheon will use its reasonable commercial efforts to ensure that its invoices to the Client are issued in such a way that these invoices meet the requirements for deduction of input VAT by the Client, if the Client is permitted by law to do so.
(e) Unless consented to by Patheon (such consent not to be unreasonably withheld, conditioned or delayed), any Tax that Client pays, or is required to pay, but which Client believes should properly be paid by Patheon pursuant hereto may not be offset against sums due by Client to Patheon whether due pursuant to this Agreement or otherwise. Further, for any Tax remitted by Client but as to which Patheon is liable hereunder, if so requested by Client, Patheon shall promptly reimburse Client for such amounts paid on Patheon’s behalf.
13.17
Governing Law
.
This Agreement and any Product Agreement, unless otherwise agreed by the parties in the Product Agreement, will be construed and enforced in accordance with the laws of the State of New York and the laws of the United States of America applicable therein, without application of conflicts of laws provisions that would otherwise apply the substantive law of another jurisdiction. Subject to the alternative dispute resolutions provision set forth in Article 12 above, any legal suit, action or proceeding arising out of or related to this Agreement or the services provided hereunder shall be instituted exclusively in the federal courts of the United States or the courts of the State of New York, in each case located in New York County, New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. The UN Convention on Contracts for the International Sale of Goods will not apply to this Agreement.
[Signature page to follow]
IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Agreement as of the Effective Date.
PATHEON MANUFACTURING SERVICES LLC
By: /s/
[***]
Name:
[***]
Title: Director, Business Management
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ Greg Madison
Name: Greg Madison
Title: President & CEO
APPENDIX 1
FORM OF PRODUCT AGREEMENT
(Includes Schedules A to E)
PRODUCT AGREEMENT
This Product Agreement (this “
Product Agreement
”) is issued under the Master Manufacturing Services Agreement dated
[insert date]
between Patheon Manufacturing Services LLC and Keryx Biopharmaceuticals, Inc. (the “
Master Agreement
”), and is entered into
[insert effective date]
(the “
Effective Date
”), between Patheon Manufacturing Services LLC, a limited liability company existing under the laws of the State of Delaware, having a principal place of business at 5900 Martin Luther King Jr. Highway, Greenville, NC 27834
[or Patheon Affiliate address]
(“
Patheon
”) and Keryx Biopharmaceuticals, Inc. a corporation existing under the laws of the State of Delaware, having a principal place of business at One Marina Park Drive, 12
th
Floor, Boston, MA 02210 (“
Client
”).
The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement. All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.
The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.
|
|
1.
|
Product List and Specifications
(See Schedule A attached hereto)
|
|
|
2.
|
Minimum Order Quantity, Annual Volume, and Price
(See Schedule B attached hereto)
|
|
|
3.
|
Annual Stability Testing and Validation Activities (if applicable)
(See Schedule C attached hereto)
|
|
|
4.
|
Active Materials, Active Materials Credit Value, and Maximum Credit Value
(See Schedule D attached hereto)
|
5. Territory
: (insert the description of the Territory here)
|
|
6.
|
Manufacturing Site
: (insert address of Patheon Manufacturing Site where the Manufacturing Services will be performed)
|
|
|
7
.
|
Governing Law
: (if applicable under Section 13.17 of the Master Agreement)
|
|
|
8
.
|
Inflation Index:
(if applicable under Section
4.2(a) of the Master Agreement
for Products manufactured outside of the Unites States or Puerto Rico)
|
|
|
9
.
|
Currency
: (if applicable under Section 1.4 of the Master Agreement)
|
|
|
10
.
|
Initial Set Exchange Rate
: (if applicable under Section 4.2(d) of the Master Agreement)
|
11
.
Initial Product
Term:
(if applicable under Section 8.1 of the Master Agreement)
12
.
Notices
: (if applicable under Section 13.9 of the Master Agreement)
|
|
13.
|
Other Modifications to the Master Agreement
: (if applicable under Section 1.2 of the Master Agreement)
|
________________________________________
IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Product Agreement as of the Effective Date set forth above.
PATHEON MANUFACTURING SERVICES LLC
By: _____________________________
Name: ___________________________
Title: _____________________________
KERYX BIOPHARMACEUTICALS, INC.
By: _____________________________
Name: ___________________________
Title: _____________________________
SCHEDULE A
PRODUCT LIST AND SPECIFICATIONS
Product List
Specifications
Prior to the start of commercial manufacturing of Product under this Agreement Client will give Patheon the originally executed copies of the Specifications as approved by the applicable Regulatory Authority. If the Specifications received are subsequently amended, then Client will give Patheon the revised and originally executed copies of the revised Specifications. Upon acceptance of the revised Specifications, Patheon will give Client a signed and dated receipt indicating Patheon’s acceptance of the revised Specifications.
SCHEDULE B
MINIMUM ORDER QUANTITY, ANNUAL VOLUME, AND PRICE
The following cost items are included in the Price for the Products
:
[***]
The following cost items are not included in the Price for the Products
:
[***]
SCHEDULE C
ANNUAL STABILITY TESTING [and VALIDATION ACTIVITIES (if applicable)]
Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products. This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing.
[***]
SCHEDULE D
ACTIVE MATERIALS
|
|
|
Active Materials
|
Supplier*
|
|
|
*
In the future Client may supply Patheon with the API from other suppliers which are not yet listed above.
ACTIVE MATERIALS CREDIT VALUE
The Active Materials Credit Value will be as follows:
|
|
|
|
PRODUCT
|
ACTIVE MATERIALS
|
ACTIVE MATERIALS
CREDIT VALUE
|
|
|
Client’s actual cost for Active Materials not to exceed $____ per kilogram
|
MAXIMUM CREDIT VALUE
Patheon's liability for Active Materials calculated in accordance with Section 2.2 of the Master Agreement
[for any Product]
in a Year will not exceed, in the aggregate, the maximum credit value set forth below:
|
|
|
PRODUCT
|
MAXIMUM CREDIT VALUE
|
|
[***]
per Year to Patheon under this Product Agreement
.
|
(a)
SCHEDULE E
REPORTING REQUIREMENTS
[End of Product Agreement]
EXHIBIT A
TECHNICAL DISPUTE RESOLUTION
Technical Disputes which cannot be resolved by negotiation as provided in Section 12.2 will be resolved in the following manner:
1.
Appointment of Expert
. Within ten Business Days after a party requests under Section 12.2 that an expert be appointed to resolve a Technical Dispute, the parties will jointly appoint a mutually acceptable neutral expert with experience and expertise in the subject matter of the dispute. If the parties are unable to so agree within the ten Business Day period, or in the event of disclosure of a conflict by an expert which results in the parties not confirming the appointment of the expert, then an expert (willing to act in that capacity hereunder) will be appointed by an experienced arbitrator on the roster of the American Arbitration Association.
2.
Not Arbitrator
. No expert will be deemed to be an arbitrator and the provisions of the Federal Arbitration Act, 9 U.S.C. §§ 1-16, or of any other applicable statute (foreign or domestic) and the law relating to arbitration will not apply to the expert or the expert's determination or the procedure by which the expert reaches his determination under this Exhibit A.
3.
Procedure
. Where an expert is appointed:
|
|
(a)
|
Timing
. The expert will be so appointed on condition that (i) he promptly fixes a reasonable time and place for receiving representations, submissions or information from the parties and that he issues the authorizations to the parties and any relevant third party for the proper conduct of his determination and any hearing and (ii) he renders his decision (with full reasons) within 15 Business Days (or another other date as the parties and the expert may agree) after receipt of all information requested by him under Paragraph 3(b) hereof.
|
|
|
(b)
|
Disclosure of Evidence
. The parties undertake one to the other to give to any expert all the evidence and information within their respective possession or control as the expert may reasonably consider necessary for determining the matter before him which they will disclose promptly and in any event within five Business Days of a written request from the relevant expert to do so.
|
|
|
(c)
|
Advisors
. Each party may appoint any counsel, consultants and advisors as it feels appropriate to assist the expert in his determination and so as to present their respective cases so that at all times the parties will co-operate and seek to narrow and limit the issues to be determined.
|
|
|
(d)
|
Final and Binding
. The determination of the expert will, except for fraud or manifest error, be final and binding upon the parties.
|
|
|
(e)
|
Costs
. Each party will bear its own costs for any matter referred to an expert hereunder and, in the absence of express provision in the Agreement to the contrary, the costs and expenses of the expert will be shared equally by the parties.
|
For greater certainty, the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by itself indicate compliance by Patheon with its obligations for the Manufacturing Services and further that nothing in this Agreement (including this Exhibit A) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.
EXHIBIT B
COMMERCIAL QUALITY AGREEMENT
EXHIBIT C
MONTHLY ACTIVE MATERIALS INVENTORY REPORT
TO: KERYX BIOPHARMACEUTICALS, INC.
FROM: PATHEON MANUFACTURING SERVICES LLC
|
|
RE:
|
Active Materials monthly inventory report under Section 2.2(a) of the Master Manufacturing Services Agreement dated • (the "
Agreement
")
|
Reporting month:
Active Materials on hand
|
|
at beginning of month:
|
kg (A)
|
Active Materials on hand
|
|
Quantity Received during month:
|
kg (C)
|
|
|
Quantity Dispensed during month:
|
kg
|
(A + C – B)
|
|
Quantity Converted during month:
|
kg
|
(total Active Materials in Products produced
and not rejected, recalled or returned)
Capitalized terms used in this report have the meanings given to the terms in the Agreement.
DATE:
PATHEON MANUFACTURING SERVICES LLC
Per:
Name:
Title:
EXHIBIT D
REPORT OF ANNUAL ACTIVE MATERIALS INVENTORY RECONCILIATION
AND CALCULATION OF ACTUAL ANNUAL YIELD
TO: KERYX BIOPHARMACEUTICALS, INC.
|
|
FROM:
|
PATHEON MANUFACTURING SERVICES LLC
|
|
|
RE:
|
Active Materials annual inventory reconciliation report and calculation of Actual Annual Yield under Section 2.2(a) of the Master Manufacturing Services Agreement dated • (the "
Agreement
")
|
Reporting Year ending:
Active Materials on hand
|
|
at beginning of Year:
|
kg (A)
|
Active Materials on hand
|
|
Quantity Received during Year:
|
kg (C)
|
|
|
Quantity Dispensed during Year:
|
kg (D)
|
(A + C - B)
|
|
Quantity Converted during Year:
|
kg (E)
|
(total Active Materials in Products produced
and not rejected, recalled or returned)
|
|
Active Materials Credit Value:
|
$
/ kg (F)
|
|
|
Actual Annual Yield:
|
% (H)
|
((E ∕ D) * 100)
|
|
(((G – Yield Tolerance) - H) ∕ 100) * F * D
|
(if a negative number, insert zero)
|
Based on the foregoing reimbursement calculation Patheon will reimburse Client the amount of $
.
Surplus Credit: $ (J)
(H – G ∕ 100) * F * D
Based on the foregoing reimbursement calculation Patheon may carry forward one Year a Surplus Credit in the amount of $ .
Capitalized terms used in this report have the meanings given to the terms in the Agreement.
DATE:
PATHEON MANUFACTURING SERVICES LLC
Per:
Name:
Title:
EXHIBIT E
EXAMPLE OF PRICE ADJUSTMENT DUE TO CURRENCY FLUCTUATION
Section 4.2(d)
Time period: 10/01/11 to 09/30/12.
Average (365 days):
0.998
-- "Set Exchange Rate"
SAMPLE EXCHANGE CALCULATION
Initial Exchange Rate:
1.000
CAD/USD
Set Exchange Rate:
0.998
CAD/USD
Initial Price:
3.59
Revised Price (FX):
3.70
(Material price and PPI adjustments)
Calculation:
[Revised Price (After FX)] = [Revised Price (Before FX)] X [Initial Exchange Rate] / [Set Exchange Rate]
= 3.70 X [1.000 / 0.998]
= 3.71
Confidential Materials Omitted, Designated Herein as [***], and Filed Separately with the Securities and Exchange Commission
PRODUCT AGREEMENT
This Product Agreement (this “
Product Agreement
”) is issued under the Master Manufacturing Services Agreement dated September 27, 2016 between Patheon Manufacturing Services LLC and Keryx BioPharmaceuticals (the “
Master Agreement
”), and is entered into October 5, 2016 (the “
Effective Date
”), between Patheon Manufacturing Services LLC, a limited liability company existing under the laws of the State of Delaware, having a principal place of business at
[***]
(“
Patheon
”) and Keryx BioPharmaceuticals, Inc., a corporation existing under the laws of Delaware, having a principal place of business at One Marina Park Drive, 12
th
Floor, Boston, MA 02210 (“
Client
”).
The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement. All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.
The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.
|
|
3.
|
Product List and Specifications
(See Schedule A attached hereto)
|
|
|
4.
|
Minimum Order Quantity, Annual Volume, and Price
(See Schedule B attached hereto)
|
|
|
3.
|
Annual Stability Testing and Validation Activities (if applicable)
(See Schedule C attached hereto)
|
|
|
4.
|
Active Materials, Active Materials Credit Value, and Maximum Credit Value
(See Schedule D attached hereto)
|
|
|
5.
|
Client Supply Chain Inventory Documentation Requirements
(See Schedule E attached hereto)
|
|
|
6.
|
Yearly Forecasted Volume:
Not applicable
|
7. Territory
: USA
|
|
8.
|
Manufacturing Site
:
[***]
|
|
|
9
.
|
Governing Law
: New York per the Master Agreement
|
|
|
10
.
|
Inflation Index:
Per Section
4.2(a) of the Master Agreement
|
|
|
12
.
|
Initial Set Exchange Rate
: Not applicable
|
13
.
Initial Product
Term:
From the Effective Date until December 31, 2021.
14
.
Notices
: Per Section 13.9 of the Master Agreement
|
|
15.
|
Other Modifications to the Master Agreement
: (if applicable under Section 1.2 of the Master Agreement)
|
________________________________________
IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Product Agreement as of the Effective Date set forth above.
PATHEON MANUFACTURING SERVICES LLC
By: /s/
[***]
Name:
[***]
Title: Director, Business Management
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ Greg Madison
Name: Greg Madison
Title: President & CEO
SCHEDULE A
PRODUCT LIST AND SPECIFICATIONS
Product List
Auryxia
[***]
Specifications
[***]
SCHEDULE B
MINIMUM ORDER QUANTITY, ANNUAL VOLUME, AND PRICE
[***]
SCHEDULE C
ANNUAL STABILITY TESTING
Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products. This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing.
SCHEDULE D
ACTIVE MATERIALS
|
|
|
Active Materials
|
Supplier
|
Auryxia, Fexeric
|
[***]
|
ACTIVE MATERIALS CREDIT VALUE
The Active Materials Credit Value will be as follows:
|
|
|
|
PRODUCT
|
ACTIVE MATERIALS
|
ACTIVE MATERIALS
CREDIT VALUE
|
Auryxia, Fexeric
|
Ferric Citrate
|
[***]
|
MAXIMUM CREDIT VALUE
Patheon's liability for Active Materials calculated in accordance with Section 2.2 of the Master Agreement
[for any Product]
in a Year will not exceed, in the aggregate, the maximum credit value set forth below:
|
|
|
PRODUCT
|
MAXIMUM CREDIT VALUE
|
Auryxia, Fexeric
|
[***]
per Year to Patheon under this Product Agreement
.
|
YIELD TOLERANCE
[***]
SCHEDULE E
Client Supply Chain Inventory Documentation Requirements
[***]
Confidential Materials Omitted, Designated Herein as [***], and Filed Separately with the Securities and Exchange Commission
PRODUCT AGREEMENT
FOR FERRIC CITRATE IR TABLETS (BRC)
This Product Agreement (this “
Product Agreement
”) is issued under the Master Manufacturing Services Agreement dated 27 September 2016 between Patheon Manufacturing Services LLC and Keryx BioPharmaceuticals (the “
Master Agreement
”), and is entered into 12 October 2017 (the “
Effective Date
”), between Patheon UK Limited, a corporation existing under the laws of England, having a principal place of business at
[***]
(“
Patheon
”) and Keryx BioPharmaceuticals, Inc., a corporation existing under the laws of Delaware, having a principal place of business at One Marina Park Drive, 12
th
Floor, Boston, MA 02210 (“
Client
”).
The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement. All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.
The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.
|
|
5.
|
Product List and Specifications
(See Schedule A attached hereto)
|
|
|
6.
|
Minimum Order Quantity, Annual Volume, and Price
(See Schedule B attached hereto)
|
|
|
3.
|
Annual Stability Testing and Validation Activities (if applicable)
(See Schedule C attached hereto)
|
|
|
4.
|
Active Materials, Active Materials Credit Value, and Maximum Credit Value
(See Schedule D attached hereto)
|
|
|
5.
|
Client Supply Chain Inventory Documentation Requirements
(See Schedule E attached hereto)
|
|
|
6.
|
Yearly Forecasted Volume:
Not applicable
|
7. Territory
: EU and USA
|
|
8.
|
Manufacturing Site
:
[***]
|
|
|
9
.
|
Governing Law
: New York per the Master Agreement
|
|
|
10
.
|
Inflation Index:
Per Section
4.2(a) of the Master Agreement
|
|
|
12
.
|
Initial Set Exchange Rate
: Not applicable
|
13
.
Initial Product
Term:
From the Effective Date until December 31, 2021.
14
.
Notices
:
[***]
15.
Other Modifications to the Master Agreement
: (if applicable under Section 1.2 of the Master Agreement)
The first sentence of Section 2.1(f) of the Master Agreement will be modified for purposes of this Product Agreement only as follows until such time as the API full testing is not required, following which time the first sentence of such section shall govern again.
“
[***]
, Client will deliver the Active Materials and any Client-Supplied Components to the Manufacturing Site DDP (Incoterms 2010), at no cost to Patheon, in sufficient quantity to enable Patheon to manufacture the desired quantities of Product and to ship Product on the Delivery Date.”
________________________________________
IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Product Agreement as of the Effective Date set forth above.
PATHEON UK LIMITED
By: /s/
[***]
Name:
[***]
Title: Sr. Dir. GCS
KERYX BIOPHARMACEUTICALS, INC.
By: /s/ Greg Madison
Name: Greg Madison
Title: President & CEO
SCHEDULE A
PRODUCT LIST AND SPECIFICATIONS
Product List
Ferric Citrate IR Tablets,
[***]
Specifications
[***]
SCHEDULE B
MINIMUM ORDER QUANTITY, ANNUAL VOLUME, AND PRICE
[***]
SCHEDULE C
ANNUAL STABILITY TESTING
Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products. This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing.
[***]
SCHEDULE D
ACTIVE MATERIALS
|
|
|
Active Materials
|
Supplier
|
Auryxia, Fexeric
|
[***]
|
ACTIVE MATERIALS CREDIT VALUE
The Active Materials Credit Value will be as follows:
|
|
|
|
PRODUCT
|
ACTIVE MATERIALS
|
ACTIVE MATERIALS
CREDIT VALUE
|
Auryxia, Fexeric
|
Ferric Citrate
|
[***]
|
MAXIMUM CREDIT VALUE
Patheon's liability for Active Materials calculated in accordance with Section 2.2 of the Master Agreement
[for any Product]
in a Year will not exceed, in the aggregate, the maximum credit value set forth below:
|
|
|
PRODUCT
|
MAXIMUM CREDIT VALUE
|
Auryxia, Fexeric
|
[***]
per Year to Patheon under this Product Agreement
.
|
YIELD TOLERANCE
[***]
SCHEDULE E
Client Supply Chain Inventory Documentation Requirements
[***]
ONE MARINA PARK DRIVE
OFFICE LEASE
THIS LEASE (this “Lease”), made as of April 29, 2015, by and between
FALLON CORNERSTONE ONE MPD LLC
, a Delaware limited liability company (“Landlord”), and
KERYX BIOPHARMACEUTICALS, INC.
, a Delaware corporation (“Tenant”).
INDEX
Article Title
|
|
2.
|
Premises, Term and Commencement Date
|
|
|
4.
|
Taxes and Operating Expenses
|
|
|
5.
|
Delivery of Premises, Tenant’s Work, Alterations and Additions
|
|
|
6.
|
Tenant’s Use, Restrictions and Compliance with Laws
|
|
|
12.
|
Repair and Maintenance
|
|
|
13.
|
Inspection of Premises
|
|
|
14.
|
Surrender of Premises
|
|
|
16.
|
Subletting and Assignment
|
|
|
17.
|
Subordination, Non-Disturbance, Attornment and Mortgagee Protection; Lease Subject to Project Documents
|
|
|
22.
|
Accord and Satisfaction
|
|
|
28.
|
Additional Rights Reserved by Landlord
|
30. Miscellaneous Provisions
31. Right of First Offer
EXHIBITS
|
|
Exhibit A
|
Space/Floor Plan Showing Premises
|
|
|
Exhibit B
|
Tenant’s Work Exhibit
|
|
|
Exhibit B-1
|
Tenant’s Conceptual Space Plan
|
|
|
Exhibit C
|
Form of Sublease Consent
|
|
|
Exhibit D
|
Building’s Rules and Regulations and Janitorial Specifications
|
|
|
Exhibit E
|
Description of Base Building Condition
|
|
|
Exhibit F
|
Option to Extend Term
|
|
|
Exhibit H
|
Pro Forma Budget of FPOC Expenses
|
|
|
Exhibit I
|
Memorandum Outlining Landlord’s Sustainable Design Strategies
|
|
|
Exhibit K
|
Form of Commencement Date Confirmation
|
ARTICLE 1.
BASIC PROVISIONS
|
|
|
A. Tenant’s Trade Name:
|
Keryx Biopharmaceuticals, Inc. (or such other trade name as Tenant may select from time to time, provided that Tenant shall promptly provide Landlord with written notice of any such trade name change)
|
B. Tenant’s Address:
|
Prior to Tenant’s occupancy of the Premises:
One Marina Park Drive, 10
th
Floor
Boston, Massachusetts 02210
Attention: General Counsel
On and after Tenant’s occupancy of the Premises:
One Marina Park Drive, Suite 1200
Boston, Massachusetts 02210
Attention: General Counsel
|
C. Building Name and Address:
|
One Marina Park Drive
Boston, Massachusetts 02210
|
D. Premises:
|
Suite 1200, comprising the entire (12
th
) floor of the Building and consisting of 27,323 rentable square feet, as shown on the space plan attached hereto as Exhibit A.
|
E. Landlord:
|
Fallon Cornerstone One MPD LLC
|
F. Landlord’s Address:
|
c/o Cornerstone Real Estate Advisers LLC
180 Glastonbury Boulevard, Suite 200
Glastonbury, Connecticut 06033
Attention: Linda C. Houston, Senior Vice President
|
G. Building Manager Name and Address:
|
CB Richard Ellis – N.E. Partners LP
One Marina Park Drive
Boston, Massachusetts 02210
|
|
|
|
|
H. Commencement Date:
|
The later of (i) the date of full execution of this Lease, and (ii) the date on which possession of the Premises is delivered to Tenant in the Delivery Condition (as defined in Article 5.A. of this Lease).
|
I. Rent Commencement Date:
|
March 1, 2016
|
J. Expiration Date:
|
February 28, 2023, unless the Term (as hereinafter defined) is sooner terminated or further extended as provided in this Lease.
|
K. Security Deposit:
|
$788,951.64, to be held by Landlord subject to periodic reduction and other terms and conditions set forth in Article 23 of this Lease.
|
L. Monthly Base Rent:
|
Time Period
|
Monthly Base Rent
|
Lease Year 1
(March 1, 2016 through February 28, 2017)
|
$131,491.94
|
Lease Year 2
(March 1, 2017 through February 28, 2018)
|
$133,768.85
|
Lease Year 3
(March 1, 2018 through February 28, 2019)
|
$136,045.77
|
Lease Year 4
(March 1, 2019 through February 29, 2020)
|
$138,322.69
|
Lease Year 5
(March 1, 2020 through February 28, 2021)
|
$140,599.60
|
|
|
|
|
|
Lease Year 6
(March 1, 2021 through February 28, 2022)
|
$142,876.52
|
Lease Year 7
(March 1, 2022 through February 28, 2023)
|
$145,153.44
|
M. Tenant’s Pro Rata Share:
|
5.80% (based on 27,323 rentable square feet/470,949 rentable square feet, which is the rentable square footage of the Office Component as provided in Article 29.M. of this Lease)
|
N. Normal Business Hours of Building:
|
Monday through Friday: 8:00 a.m. to 6:00 p.m.
Saturday: 8:00 a.m. to 1:00 p.m. (upon written request by Tenant only, but at no additional cost)
Sunday: None
(Excepting local and national holidays)
|
O. Permitted Use:
|
General office use, and for no other purpose.
|
P. Broker(s):
|
CB Richard Ellis – N.E. Partners L.P., representing Landlord, and Transwestern RBJ, representing Tenant.
|
Q. Parking Access Rights:
|
Nine (9) parking access devices for unreserved parking spaces in the Parking Garage (as hereinafter defined), subject to the terms and conditions of Article 26 of this Lease.
|
R. Base Year:
|
Calendar year 2016 for Operating Expenses (as hereinafter defined), and fiscal year 2016 for Taxes (as hereinafter defined).
|
|
|
|
S. Allowance:
|
$70.00 per rentable square feet of the Premises, subject to the terms and conditions of Exhibit B attached hereto.
|
The foregoing provisions shall be interpreted and applied in accordance with the other provisions of this Lease set forth below. The capitalized terms, and the terms defined in Article 29, shall have the meanings set forth herein or therein (unless otherwise modified in the Lease) when used as capitalized terms in other provisions of the Lease.
Landlord and Tenant hereby agree that the Premises contain the number of rentable square feet specified in Article 1 above.
ARTICLE 2.
PREMISES, TERM AND COMMENCEMENT DATE
Subject to the terms and conditions set forth herein, Landlord hereby leases and demises to Tenant and Tenant hereby leases from Landlord the Premises identified in Article 1 above for a term (“Term”) commencing on the Commencement Date and ending on the Expiration Date set forth in Article 1, unless sooner terminated as provided herein. Such date shall be confirmed by execution of the Commencement Date Confirmation in the form as set forth in Exhibit K, which Tenant shall execute and return to Landlord within fifteen (15) days after receipt thereof. Tenant shall be permitted to extend the original Term hereof in accordance with the provisions of Exhibit F attached hereto.
ARTICLE 3.
RENT
A.
Monthly Base Rent
. Commencing on the Rent Commencement Date, Tenant shall pay Monthly Base Rent in advance on or before the first (1
st
) day of each month of the Term without demand, setoff or deduction except as otherwise expressly set forth in this Lease. If the Term shall end on a day other than the first (1
st
) day of a month, the Monthly Base Rent for the last partial month of the Term shall be prorated on a per diem basis.
B.
Additional Rent
. All costs and expenses, other than Monthly Base Rent, which Tenant assumes or agrees to pay and any other sum payable by Tenant pursuant to this Lease, including, without limitation, its Pro Rata Share of Taxes and Operating Expenses (both as hereinafter defined), shall be deemed Additional Rent.
C.
Rent
. Monthly Base Rent, Additional Rent, and any other amounts of every nature which Tenant is or becomes obligated to pay Landlord under this Lease are herein referred to collectively as “Rent,” and all remedies applicable to the nonpayment of Rent shall be applicable thereto. Landlord may apply payments received from Tenant to any obligations of Tenant then accrued and due, without regard to such obligations as may be designated by Tenant.
D.
Place of Payment, Late Charge, Default Interest
. Rent and other charges required to be paid under this Lease, no matter how described, shall be paid by Tenant to Landlord without offset, deduction, credit or the like, at the Building Manager’s address listed in Article 1, or to such other person and/or address as Landlord may designate in writing. In the event Tenant fails to pay Rent due under this Lease within ten (10) business days of the due date of said Rent, Tenant shall pay to Landlord a late charge of three percent (3%) of the amount overdue; provided, however, that no such late charge will be charged for the first (1
st
) late payment in any rolling twelve (12) month period during the Term. Any Rent not paid within ten (10) business days of the due date of said Rent shall also bear interest at the Default Rate from and after the date due through the date on which Landlord receives payment. This provision shall in no way be construed to modify Tenant’s obligation to pay Rent on or before the first (1
st
) day of the month.
ARTICLE 4.
TAXES AND OPERATING EXPENSES
A.
Payment of Taxes and Operating Expenses
. Commencing upon the expiration of the Base Year (i.e., January 1, 2017 for Operating Expenses and July 1, 2016 for Taxes) and for each year, or portion thereof, thereafter during the Term (hereinafter each referred to as a “Comparison Year”), Tenant shall pay Landlord an amount equal to Tenant’s Pro Rata Share of increases in Operating Expenses and Taxes over the Operating Expenses and Taxes for the relevant Base Year (collectively, the “Escalation Increase”). Landlord shall have the right to change the Comparison Year from a calendar year to a fiscal year from time to time (or vice versa), provided that equitable adjustment is made so that Tenant shall not be charged more than once for the same period. Commencing with the first (1
st
) month of the first (1
st
) Comparison Year and on the first (1
st
) day of each month thereafter during the original Term or any extension thereof, Tenant shall pay Escalation Increases to Landlord, as Additional Rent due concurrently with Monthly Base Rent, in installments equal to one-twelfth (1/12) of Landlord’s commercially reasonable estimate of any projected Escalation Increase for the particular Comparison Year (the “Estimated Escalation Increase”). A final adjustment (“Escalation Reconciliation”) shall be made by Landlord and Tenant as soon as practicable (but in any event within one hundred twenty (120) days) following the end of each Comparison Year. In computing the Estimated Escalation Increase for any particular Comparison Year, Landlord shall take into account any prior increases in Tenant’s Pro Rata Share of Taxes and Operating Expenses. Landlord’s Estimated Escalation Increase for Taxes in any Comparison Year will not exceed the Taxes then reflected on Landlord’s real estate tax bill from the City of Boston. If any Estimated Escalation Increase is less than the Estimated Escalation Increase for the immediately preceding Comparison Year, the payments to be paid by Tenant for the new Comparison Year attributable to said Estimated Escalation Increase shall be decreased accordingly; provided, however, in no event will the Rent paid by Tenant hereunder ever be less than the Monthly Base Rent.
B.
Escalation Reconciliation
. Within one hundred twenty (120) days after the last day of such Comparison Year, Landlord shall submit to Tenant a statement setting forth the actual Escalation Increase for the Comparison Year which was just completed and the Estimated Escalation Increase for the current Comparison Year (the “Escalation Statement”). To the extent that the actual Escalation Increase exceeds the Estimated Escalation Increase paid by Tenant for the Comparison Year just completed, Tenant shall pay Landlord the difference, in cash within thirty (30) days following receipt by Tenant from Landlord of the Escalation Statement. If the actual Escalation Increase for the Comparison Year just completed is less than the Estimated Escalation Increase paid by Tenant for such year, then Tenant shall receive a credit on future Rent owing under this Lease (or cash, if there is no future Rent owing hereunder). Until Tenant receives the Escalation Statement, Tenant’s Estimated Escalation Increases for the new Comparison Year shall continue to be paid at the rate being paid for the particular Comparison Year just completed. Tenant shall commence payment to Landlord of the Estimated Escalation Increase for the then current Comparison Year, beginning on the first (1
st
) day of the month following the month in which Tenant receives the applicable Escalation Statement. Any amount described in this Article 4 that is not billed to Tenant within two (2) years after the end of the Comparison Year in question shall be deemed forever waived by Landlord, and Tenant shall have no further obligation therefor.
C.
Changes in Escalations During the Lease Year
. In addition to the above, if, during any particular Comparison Year, there is a change in the information upon which the then current Estimated Escalation Increase is based, Landlord shall be permitted (but in no event more than one time in any calendar year) to revise such Estimated Escalation Increase by notifying Tenant, and such adjustment shall be made in the payment of Estimated Escalation Increases, commencing on the first day of the month following the delivery of such notice to Tenant. When the Escalation Statement for the Comparison Year in which this Lease terminates is delivered to the Tenant, Tenant shall pay to Landlord within thirty (30) days after Landlord’s delivery of the same, any additional amounts due as calculated pursuant to this Article 4. Landlord’s and Tenant’s responsibilities with respect to Escalation Increases shall survive the expiration or early termination of this Lease.
If the Building is less than ninety-five percent (95%) occupied during the Base Year or any particular Comparison Year, Landlord shall adjust those particular components of Operating Expenses which are affected by Building occupancy for the Base Year or the particular Comparison Year, or portion thereof, as the case may be, to reflect an occupancy of not less than ninety-five percent (95%) of all such rentable area of the Building.
D.
Disputes Over Taxes or Operating Expenses
. If Tenant disputes the amount of an Estimated Escalation Increase or an actual Escalation Increase, Tenant shall give Landlord written notice of such dispute within one hundred fifty (150) days after Landlord delivers the applicable Escalation Statement. Tenant’s failure to give such notice shall waive its right to audit the amounts so determined. Tenant shall not be entitled to audit the foregoing amounts if an Event of Default by Tenant then exists and remains uncured. Said audit will be conducted at Tenant’s expense by a certified public accountant or by a qualified and reputable real estate professional, in either case paid on an hourly basis unrelated to actual savings identified. Tenant shall only be permitted to conduct such a review during regular business hours at Landlord’s office, after Tenant gives Landlord twenty (20) days prior written notice, and no more than once with respect to any one Comparison Year. If such review discloses that the charges actually incurred by Landlord are less than those used by Landlord in calculating Escalation Increases, then Landlord shall reimburse Tenant for the amount Tenant paid in excess of Tenant’s actual Escalation Increases. If any such review discloses that the charges for Operating Expenses or Taxes used by Landlord in calculating the Escalation Increases exceeds the actual charges for Operating Expenses and Taxes (the “Actual Expenses”) by five percent (5%) or more of the Actual Expenses for such Comparison Year, then Landlord shall pay the reasonable costs of such review. If Tenant does not review Landlord’s records within two hundred seventy (270) days after receipt of the Escalation Statement, Tenant shall have no further right to review Landlord’s records for the applicable period. No subtenant shall have the right to conduct an audit and no assignee shall conduct an audit for any period during which such assignee was not in possession of the Premises.
In the event Tenant elects to exercise its audit rights hereunder, Tenant shall nevertheless timely pay Landlord the amount of the prior year’s Escalation Reconciliation and continue to pay Estimated Escalation Increases (without prejudice to Tenant’s position) as set forth in the then applicable Escalation Statement until the parties have agreed as to the appropriate adjustment.
E.
Building as Part of Multi-Building Development
. Tenant acknowledges that the Building is part of the Project. As a result thereof, any Operating Expenses and Taxes attributable in part to the Building and in part to other portions of the Project, including, without limitation, the Building Common Areas (as hereinafter defined), shall be allocated to the Building and said other portions of the Project pursuant to the Declaration or any other applicable reciprocal easement agreement and otherwise on an equitable basis. In addition, any Operating Expenses and Taxes attributable in part to the Office Component and in part to the Retail Component shall be allocated to the Office Component or the Retail Component, as the case may be, on an equitable basis.
F.
Tenant’s Taxes
. Tenant shall pay, prior to delinquency, all taxes assessed against or levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant located in the Premises and any excise, sales or use taxes related to Tenant’s business. In the event any or all of Tenant’s trade fixtures, furnishings, equipment and other personal property shall be assessed and taxed with property of Landlord, or if the cost or value of any leasehold improvements in the Premises exceeds the cost or value of a standard build out for general office use and, as a result, real property taxes for the Building are increased, Tenant shall pay to Landlord its share of such taxes within thirty (30) days after delivery to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenant’s property or above-standard improvements. Tenant shall pay directly to the party or entity entitled thereto all business license fees, gross receipts taxes and similar taxes and impositions which may from time to time be assessed against or levied upon Tenant, as and when the same become due and before delinquency. Notwithstanding anything to the contrary contained herein, any sums payable by Tenant under this Article 4 shall not be included in the computation of “Taxes.”
ARTICLE 5.
DELIVERY OF PREMISES, TENANT’S WORK, ALTERATIONS AND ADDITIONS
A.
Delivery of Premises
. On the next business day following the execution and delivery of this Lease by Landlord and Tenant, Landlord shall deliver, and Tenant shall accept, the Premises in the “Delivery Condition,” which shall mean that the Premises will be delivered vacant and broom clean, free of construction debris, tools and other personal property, and free of any unlawful Hazardous Materials (as hereinafter defined), but otherwise in their current “as is,” “where is” condition. Landlord shall have no obligation to construct any improvements in and to the Premises or to perform any other work therein, the parties acknowledging and agreeing that Tenant shall be solely responsible for improving the Premises as provided in Article 5.B. below and Exhibit B attached hereto, provided that the foregoing shall in no event derogate from or diminish Landlord’s ongoing repair and maintenance obligations under this Lease. Notwithstanding anything contained herein to the contrary, Landlord hereby represents and warrants to Tenant that, as of the Commencement Date, the Common Areas of the Building and the Base Building Condition of the Premises comply with all applicable Laws, including, without limitation, the ADA (as hereinafter defined) and all other applicable laws and rules governing access to and use of facilities by people with disabilities, including the Massachusetts Architectural Access Board regulations. The “Base Building Condition” is as described on Exhibit E attached hereto.
B.
Tenant’s Work
. On and after the Commencement Date, Tenant shall be entitled to construct certain initial improvements in and to the Premises and prepare same for occupancy in accordance with the terms and conditions of the work exhibit attached hereto as Exhibit B (collectively, “Tenant’s Work”).
C.
Alterations
. Except as otherwise provided in Article 5.B. above and Exhibit B attached hereto, Tenant shall make no alterations or additions to the Premises (“Alterations”) without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole discretion as to Alterations which adversely affect or impair the structural integrity of or the efficient and proper operation of the operating systems of the Building, and which consent shall not be unreasonably withheld, delayed or conditioned as to all other Alterations. Any Alterations shall only be performed by contractors or mechanics approved by Landlord in writing (which approval shall not be unreasonably withheld, conditioned or delayed), and only upon the approval by Landlord in writing of fully detailed and dimensioned plans and specifications pertaining to the Alterations in question (to the extent such plans and/or specifications would customarily be prepared for work of such nature), to be prepared and submitted by Tenant, at its sole cost and expense, which approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall, at its sole cost and expense, obtain all necessary approvals and permits pertaining to any Alterations approved by Landlord. Tenant hereby indemnifies, defends and agrees to hold Landlord free and harmless from all liens and claims of lien, and all other liability, claims and demands arising out of any work done or material supplied to the Premises by or at the request of Tenant in connection with any Alterations. If permitted Alterations are made by, on behalf of, or at the request of, Tenant, they shall be made at Tenant’s sole cost and expense and shall be and become the property of Landlord, except that Landlord may, by written notice to Tenant given at the time of approval of such Alterations, require Tenant, at Tenant’s expense, to remove all partitions, counters, railings and other Alterations installed by Tenant, and to repair any damages to the Premises caused by such removal. Unless Landlord notifies Tenant in writing of such removal obligation at the time of Landlord’s approval of the plans and specifications therefor in accordance with the terms and conditions of Exhibit B attached hereto, Tenant shall not be required to remove any alterations or improvements made to prepare the Premises for Tenant’s initial occupancy; provided, however, that Landlord agrees that Tenant shall not be obligated to remove any of the improvements conceptually shown on the space plan hereto as Exhibit B-1, subject to the terms and conditions of Exhibit B attached hereto. Any and all costs attributable to or related to the applicable building codes of the City of Boston (or any other authority having jurisdiction over the Building) arising from Tenant’s plans, specifications, improvements, Alterations or otherwise shall be paid by Tenant at its sole cost and expense. With regard to repairs, Alterations or any other work arising from or related to this Article 5, Landlord shall be entitled to receive a commercially reasonable administrative/supervision fee, not to exceed three percent (3%) of the so-called “hard” costs of any such work, to compensate Landlord for costs and expenses arising from Landlord’s review and approval processes.
D.
Liens
. Tenant will not cause or permit any mechanic’s, materialman’s or similar liens or encumbrances to be filed or exist against the Premises or the Building or Tenant’s interest in this Lease in connection with work done under this Article 5 or in connection with any other work, and Tenant agrees to defend, indemnify and hold harmless Landlord from and against any such lien or claim or action thereon, together with costs of suit and reasonable attorneys’ fees incurred by Landlord in connection with any such claim or action. Tenant shall remove any such lien or encumbrance by bond or otherwise within twenty (20) days from the date of receipt of notice of its existence. If Tenant fails to do so, Landlord may, without being responsible to investigate the validity or lawfulness of the lien, pay the amount or take such other action as Landlord deems necessary to remove any such lien or encumbrance or require that Tenant deposit with Landlord in cash and lawful money of the United States, one hundred ten percent (110%) of the amount of such claim, which sum may be retained by Landlord until such claim shall have been removed of record or until judgment shall have been rendered on such claim and such judgment shall have become final, at which time Landlord shall have the right to apply such deposit in discharge of the judgment on said claim and any costs, including attorneys’ fees incurred by Landlord, and shall remit the balance thereof to Tenant. The amounts so paid and costs incurred by Landlord shall be deemed Additional Rent under this Lease and payable in full upon demand, but shall be applied only to the lien or judgment in question, and any excess will be refunded to Tenant.
E.
Compliance with ADA
. Landlord represents and warrants to Tenant that, as of the Commencement Date hereof, the Building and the Premises are in compliance with ADA (as defined below). Landlord and Tenant agree that responsibility for compliance with the Americans With Disabilities Act of 1990, as amended (the “ADA”) shall be allocated as follows: (i) Landlord shall be responsible for compliance with the provisions of Title III of the ADA for all Building Common Areas, including exterior and interior areas of the Building not included within the Premises or the premises of other tenants; (ii) Landlord shall be responsible for compliance with the provisions of Title III of the ADA for any construction, renovations, alterations and repairs made within the Premises if such construction, renovations, alterations or repairs are made by Landlord for the purpose of improving the Building generally; and (iii) Tenant shall be responsible for compliance with the provisions of Title III of the ADA for any construction, renovations, Alterations and repairs made within the Premises if such construction, renovations, Alterations and repairs are made by Tenant, its employees, agents or contractors, at the direction of Tenant or done pursuant to final construction plans and specifications prepared or provided by Tenant or Tenant’s architect or space planner.
F.
Labor Covenant
. As a condition precedent to any proposed construction work or Alteration, Tenant shall deliver to Landlord evidence satisfactory to Landlord that Tenant shall cause such construction, alteration or service contract work to be performed solely by contractors whose employees are represented by unions and such employment will conform to the traditional craft jurisdictions in the area (the “Labor Covenant”). Tenant shall include the Labor Covenant in each of its contracts for such construction or alteration work and in each of its service contracts for any maintenance, repair and services relating to, or to be performed for the benefit of, the Premises. Tenant shall also provide such evidence as Landlord may reasonably require, from time to time during the course of such construction or alteration work or the performance of such services, that the Labor Covenant is being fully and faithfully observed and Tenant shall include the obligation to provide such evidence in each contract entered into by Tenant for such construction or alteration work or service being provided to the Premises. Tenant further agrees that it shall incorporate the foregoing requirements in any sublease of the Premises. Tenant improvement or Alteration work requiring specialized skills that are not available through unionized contractors may be exempted from the Labor Covenant, subject to prior approval by Landlord.
G.
Building Sustainability Strategies
. Landlord has received LEED-Core and Shell Gold Certification, a rating established by the U.S. Green Building Council. A memorandum outlining Landlord’s “Sustainable Design Strategies” is attached hereto as Exhibit I.
ARTICLE 6.
TENANT’S USE, RESTRICTIONS AND COMPLIANCE WITH LAWS
A.
Tenant’s Use
. Tenant shall use the Premises for the Permitted Use as provided in Article 1 above, and for no other purpose whatsoever, subject to and in compliance with all other provisions of this Lease, including without limitation the Building’s Rules and Regulations attached as Exhibit D hereto. Tenant and its invitees shall also have the non-exclusive right, along with other tenants of the Building, others authorized by Landlord, and others having the right to the use thereof, to use the Building Common Areas subject to the Project Documents and such rules and regulations as Landlord may impose from time to time in its sole discretion provided the same are enforced in a non-discriminatory manner. Landlord makes no representation that the Premises are suitable for Tenant’s purposes.
B.
Tenant’s Restrictions
. Tenant shall not at any time use or occupy, or suffer or permit anyone to use or occupy, the Premises or do or permit anything to be done in the Premises which: (a) causes or is liable to cause injury to persons, to the Building or its equipment, facilities or systems; (b) impairs the character, reputation or appearance of the Building as a first class office building; (c) impairs the proper and economic maintenance, operation and repair of the Building or its equipment, facilities or systems; or (d) would invalidate or increase the cost of any fire and extended coverage insurance policy covering the Building and/or the property located therein. Tenant shall comply with all rules, orders, regulations and requirements of any organization which sets out standards and requirements commonly referred to by major fire insurance underwriters. Landlord shall notify Tenant if Landlord reasonably believes that Tenant’s use of the Premises is in violation of any such standard or requirement. Tenant shall promptly, upon demand, reimburse Landlord for any additional premium charges for any such insurance policy assessed or increased by reason of Tenant’s failure to comply with the provisions of this Article 6.
C.
Tenant’s Compliance with Laws
. Tenant shall, at Tenant’s sole cost and expense, keep and maintain the Premises, its use thereof and its business in compliance with all Laws now in force or which may hereafter be in force or effect. Tenant shall comply with all Laws relating to the Premises and Tenant’s use or occupancy thereof, including without limitation Laws in connection with the health, safety and building codes, and any permit or license requirements. Tenant shall not be required to make any alterations to the Premises in order to comply with laws or codes that are applicable to the operation and maintenance generally of a commercial rental property such as the Project, as opposed to Tenant’s specific use of the Premises or any Alterations or other work by Tenant.
ARTICLE 7.
SERVICES
A.
Climate Control
. Landlord shall furnish heat or air conditioning to the Premises during Normal Business Hours of the Building as set forth in Article 1, as required in Landlord’s reasonable judgment for the comfortable use and occupancy of the Premises and otherwise in accordance with the standards attached hereto as Exhibit J (such standards being referred to herein as “OTIS” or “OTIS standards”). If Tenant requires heat or air conditioning at any other time (“After Hours Services”), Landlord shall use reasonable efforts to furnish such After Hours Services upon at least twenty-four (24) hours advance notice by Tenant, and Tenant shall pay Landlord, as Additional Rent, the then current rate for such After Hours Services that is applicable to office tenants of the Building generally. The current estimated rate for After Hours Services is Fifty Dollars ($50.00) per hour, which rate is subject to change from time to time in Landlord’s sole, but reasonable discretion.
The performance by Landlord of its obligations under this Article 7 is subject to Tenant’s compliance with the terms of this Lease regarding any connected electrical load reasonably established by Landlord, and Landlord shall promptly notify Tenant of any respect in which Landlord reasonably believes Tenant is not so complying. Tenant shall not use the Premises or any part thereof in a manner exceeding the heating, ventilating or air-conditioning (“HVAC”) design conditions (including any occupancy or connected electrical load conditions) set forth in OTIS, including the rearrangement of partitioning which may interfere with the normal operation of the HVAC equipment, or the use of computer or data processing machines or other machines or equipment in excess of the capacities (if any) and standards set forth in OTIS. If any such use of the Premises by Tenant requires changes in the HVAC or plumbing systems or controls servicing the Premises or portions thereof in order to provide comfortable occupancy in accordance with OTIS standards, such changes may be made by Landlord at Tenant’s expense, and Tenant agrees to promptly pay any such amount to Landlord as Additional Rent.
If Tenant shall install supplemental HVAC equipment in the Premises to serve its needs, chilled water/condenser water shall be made available to Tenant in accordance with OTIS standards.
B.
Elevator Service
. Landlord, during Normal Business Hours of the Building, shall furnish passenger and freight elevator service to Tenant to be used in common with others. At least one (1) passenger elevator shall remain in service during all other hours. Landlord may designate a specific elevator for use as a service elevator.
C.
Janitorial Services
. Landlord shall provide janitorial and cleaning services to the Premises, substantially as described in Exhibit D attached hereto. Tenant shall pay to Landlord within thirty (30) days after receipt of an invoice therefor the actual and reasonable costs incurred by Landlord for (i) any cleaning of the Premises in excess of the specifications in Exhibit D for any reason, including, without limitation, cleaning required because of (A) unreasonable misuse or neglect on the part of Tenant or Tenant’s agents, contractors, invitees, employees and customers, (B) the use of portions of the Premises for special purposes requiring greater or more difficult cleaning work than office areas, (C) unusual quantities of interior glass partitions or interior glass surfaces, and (D) non-building standard materials or finishes installed by Tenant or at its request; and (ii) removal from the Premises of any refuse and rubbish of Tenant in excess of that ordinarily accumulated in general office occupancy or at times other than Landlord’s standard cleaning times as reflected on such Exhibit D.
D.
Water and Electricity
. Landlord shall make available domestic water in reasonable quantities to the Building Common Areas and cause electric service sufficient for lighting the Premises and for the operation of Ordinary Office Equipment. “Ordinary Office Equipment” shall mean equipment not exceeding the standards and capacities set forth in OTIS. Landlord shall have the exclusive right to make any replacement of lamps, fluorescent tubes and lamp ballasts in the Premises (provided, however, that replacements of specialty lighting shall be at Tenant’s sole cost and expense). Landlord may adopt a system of re-lamping and ballast replacement periodically on a group basis in accordance with good management practice. Tenant’s use of electric energy or water in the Premises shall not at any time exceed the capacity of any of the risers, piping, electrical conductors and other equipment in or serving the Premises. In order to insure that such capacity is not exceeded and to avert any possible adverse effect upon the Building’s electric system, Tenant shall not, without Landlord’s prior written consent in each instance, connect appliances or heavy duty equipment, other than Ordinary Office Equipment, to the Building’s electric system or make any alteration or addition to the Building’s electric system. Should Landlord grant its consent in writing, which Landlord may withhold in its sole discretion, all additional risers, piping and electrical conductors or other equipment therefor shall be provided by Landlord and the cost thereof shall be paid by Tenant within thirty (30) days of Landlord’s demand therefor. As a condition to granting such consent, Landlord may require Tenant to agree to a reasonable increase in Monthly Base Rent to offset the expected cost to Landlord of such additional service, that is, the cost of the additional electric energy to be made available to Tenant based upon the estimated additional capacity of such additional risers, piping and electrical conductors or other equipment. If Landlord and Tenant cannot agree thereon, such cost shall be determined by an independent electrical engineer, to be selected by Landlord and reasonably approved by Tenant and paid equally by both parties.
E.
Separate Meters
. As part of Tenant’s Work, by no later than the thirtieth (30
th
) day following the Commencement Date, Tenant shall cause the Premises to be separately metered for lights, plugs and power and the electricity to power the VAV boxes in the Premises, and Tenant shall pay a monthly electricity charge to the applicable electricity provider, based on Tenant’s separately metered use and consumption of such electricity in the Premises. If a direct metering arrangement is not reasonably feasible, then Tenant shall install a so-called submeter for electricity and Tenant shall pay a monthly electricity charge to Landlord, as Additional Rent, based on usage as indicated by such submeter and calculated at Landlord’s actual rate(s) for such electricity (without add-on or mark-up). If the Premises are separately metered for any other utility, Tenant shall pay a utility charge directly to the utility company (or, if such arrangement is not reasonably feasible, to Landlord, as Additional Rent) based upon Tenant’s actual consumption as measured by the meter. Landlord also reserves the right (at its expense) to install separate meters for the Premises to register the usage of all or any one of the utilities, and, in such event, Landlord shall pay the cost of installation and Tenant shall pay for the cost of utility usage as metered to the Premises. As to the separate metering of any service or utility, the cost of which was previously included in the Monthly Base Rent and/or Base Year for Operating Expenses or Taxes, there shall be a reasonable and equitable adjustment to Monthly Base Rent and Operating Expenses (for the Base Year and each subsequent year) following such separate metering to reflect that Tenant will thereafter be paying the cost of such service or utility directly. The term “utility” for purposes hereof may refer to but is not limited to gas, water, sewer, steam, fire protection system, telephone or other communication or alarm service, as well as HVAC, and all taxes or other charges thereon.
F.
Interruptions
. Landlord does not represent or warrant that any of the services referred to above, or any other services which Landlord may supply, will be free from interruption and Tenant acknowledges that any one or more of such services may be suspended by reason of accident, repairs, inspections, alterations or improvements necessary to be made, or by Force Majeure. Any interruption, reduction or discontinuance of service shall not be deemed an eviction or disturbance of Tenant’s use and possession of the Premises, or any part thereof, nor, except as otherwise set forth herein, render Landlord liable to Tenant for damages, nor relieve Tenant from performance of Tenant’s obligations under this Lease. Landlord shall however, exercise reasonable diligence to restore any service so interrupted.
Notwithstanding the foregoing, if any essential services to be supplied by Landlord under this Lease are interrupted, and such interruption has resulted from an act or omission of Landlord and as a result of such cessation of service, the Premises, or a material portion thereof, is rendered untenantable (meaning that Tenant is unable to use and gain reasonable access to the Premises, or such material portion thereof, in the normal course of its business) and Tenant provides written notice of such interruption to Landlord, Tenant shall be entitled to an abatement of a proportionate share of the Monthly Base Rent and all Additional Rent and charges, allocable to the affected material portion of the Premises commencing on the third (3
rd
) consecutive business day of the interruption following the date on which Tenant notifies Landlord of the cessation of such service, and ending on the date such essential services and Tenant’s access and use of the Premises are restored. If any such interruption continues for fifteen (15) business days after the date of such notice, then for each day thereafter that the interruption continues, Tenant shall be granted a credit of one and one-half (1.5) days’ Monthly Base Rent and Additional Rent, to be applied following the resumption of such services. If such interruption continues for twenty-five (25) business days after the date of such notice, then for each day thereafter that the interruption continues, Tenant shall be granted a credit of two (2) days’ Monthly Base Rent and Additional Rent, instead of the prior one and one-half (1.5) day rent credit, to be applied following the resumption of such services.
G.
Additional Utilities Provided by Tenant
. Tenant shall make application in Tenant’s own name for all utilities not provided herein by Landlord and shall: (i) comply with all utility company regulations for such utilities, including requirements for the installation of meters, and (ii) obtain such utilities directly from, and pay for the same when due directly to, the applicable utility companies. The term “utilities” for purposes hereof shall include but not be limited to telephone and other communication and alarm services, and all taxes or other charges thereon. Tenant shall install and connect all equipment and lines required to supply such additional utilities to the extent not already available at or serving the Premises, or at Landlord’s option shall repair, alter or replace any such existing items. Tenant shall maintain, repair and replace all such items, operate the same, and keep the same in good working order and condition. Tenant shall not install any equipment or fixtures, or use the same, so as to exceed the safe and lawful capacity of any utility equipment or lines serving the same. The installation, alteration, replacement or connection of any utility equipment and lines shall be subject to the requirements for Alterations of the Premises set forth in Article 5, and Tenant will have the right to use, in common with other tenants and occupants of the Building, common ducts, chases, conduits, and pipes in order to make necessary connections with the Premises. Tenant shall ensure that all of Tenant’s HVAC equipment that is installed by, on behalf of, or at the request of, Tenant is installed and operated at all times in a manner to prevent roof leaks, damage, or noise due to vibrations or improper installation, maintenance or operation. Except as specifically provided in this Article 7, Tenant agrees to pay for all utilities and other services utilized by Tenant and additional services furnished to Tenant not uniformly furnished to all tenants of the Office Component at the rate actually paid by Landlord to the utility provider.
H.
Additional Installations
. If any lights, machines or equipment (including but not limited to computers) used by Tenant in the Premises materially and adversely affect the temperature otherwise maintained by the air conditioning system, or generate substantially more heat in the Premises than would be generated by the building standard lights and Ordinary Office Equipment, and if such adverse effect continues for more than ten (10) business days after notice thereof from Landlord, Landlord shall have the right to install any machinery and equipment which Landlord reasonably deems necessary to restore temperature balance, including but not limited to modifications to the standard air conditioning equipment, and the cost thereof, including the cost of installation and any additional cost of operation and maintenance occasioned thereby, shall be paid by Tenant to Landlord upon demand by Landlord. Landlord shall not be liable under any circumstances for loss of or injury to property, however occurring, through or in connection with or incidental to failure to furnish any of the foregoing.
I.
Access to Building Common Areas
. Tenant shall have access to the Building Common Areas twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year. Upon initial occupancy, Tenant will be entitled to one (1) access card or other access device per employee for use at the Building turnstiles and elevators. Thereafter, additional access cards or devices may be obtained at the rate of Twenty-Five and 00/100 Dollars ($25.00) per additional card or device, which rate is subject to change from time to time in Landlord’s sole but reasonable discretion.
ARTICLE 8.
INSURANCE
A.
Required Insurance
. Tenant shall, at all times during the Term of this Lease, and at its own cost and expense, maintain insurance policies, with responsible companies licensed to do business in the Commonwealth of Massachusetts and reasonably satisfactory to Landlord, naming Landlord, the Building Manager, Cornerstone Real Estate Advisers LLC, Tenant and any Mortgagee of Landlord, as their respective interests may appear, including: (i) a policy of standard fire, extended coverage and special extended coverage property insurance which shall be primary on the lease improvements referenced in Article 5 and Tenant’s property, including its goods, equipment and inventory, in an amount adequate to cover their insurable replacement cost, including a vandalism and malicious mischief endorsement, and sprinkler leakage coverage; (ii) business interruption insurance, loss of income and extra expense insurance covering the failure of Tenant’s telecommunications equipment and all other perils, failures or interruptions; (iii) commercial general liability insurance on an occurrence basis with limits of liability in an amount not less than Two Million Dollars ($2,000,000) combined single limit for each occurrence, and Three Million Dollars ($3,000,000) in the annual aggregate; and (iv) Worker’s Compensation Coverage as required by law. The commercial general liability policy shall include contractual liability, provided that contractual liability coverage shall not provide coverage for losses arising from the negligence or willful misconduct of an additional insured.
On or before the Commencement Date, Tenant shall furnish to Landlord and the Building Manager, certificates of insurance evidencing the insurance coverage set forth above, including naming Landlord, Cornerstone Real Estate Advisers LLC and the Building Manager as additional insureds. Renewal certificates must be furnished to Landlord at least ten (10) days prior to the renewal or replacement of such insurance policies showing the above coverage to be in full force and effect.
The foregoing policy sets forth minimum limits of liability and Tenant’s procurement and maintenance thereof shall in no event limit the liability of Tenant under this Lease. All such general liability insurance policies carried by Tenant shall be with companies having a rating of not less than A-VIII in Best’s Insurance Guide. All such policies shall be endorsed to agree that Tenant’s policy is primary and that any insurance covered by Landlord is excess and not contributing with any Tenant insurance requirement hereunder. Tenant agrees that if Tenant does not take out and maintain such insurance or furnish Landlord with renewals or binders, Landlord may (but shall not be required to) procure said insurance on Tenant’s behalf and charge Tenant the cost thereof, which amount shall be payable by Tenant upon demand with interest from the date such sums are extended. Tenant agrees that no policy required hereunder will be canceled except upon thirty (30) days prior written notice (except ten (10) days in the case of non-payment of premium) from Tenant or its insurance agent or consultant. Tenant shall comply with all reasonable and generally applicable rules and directives of any insurance board, company or agency determining rates of hazard coverage for the Premises, including but not limited to the installation of any equipment and/or the correction of any condition necessary to prevent any increase in such rates such as may result from a violation by Tenant.
B.
Landlord’s Insurance
. During the Term of this Lease, Landlord shall maintain ”Special Form” property and commercial general liability insurance covering the Building. The Special Form property insurance policy shall cover all structures and improvements for full replacement value, with replacement cost endorsement, above foundation walls. Landlord’s Commercial General Liability Insurance shall be written on an occurrence basis with minimum limits of liability in an amount of not less than $5,000,000.00, combined single limit, for bodily injury or death including personal injury, and with respect to damage to the property of others, including legal liability arising out of any one occurrence, which insurance shall contain contractual liability insurance coverage. The commercial general liability insurance shall insure against claims for bodily injury and property damage occurring in or about the Building. Such insurance may be included in blanket policies carried by Landlord so long as such blanket policies do not reduce the amount of insurance available to pay any claim with respect to the Building.
C.
Waiver of Subrogation
. Landlord and Tenant each agree that neither Landlord nor Tenant will have any claim against the other for any loss, damage or injury which is covered by insurance carried by either party and for which recovery from such insurer is made, notwithstanding the negligence of either party in causing the loss, and each agree to have their respective insurers issuing the insurance described in this Article 8 waive any rights of subrogation that such companies may have against the other party. Each party agrees to use commercially reasonable efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation.
D.
Waiver of Claims
. Except for claims arising from Landlord’s willful misconduct or negligence that are not covered by Tenant’s insurance required hereunder, Tenant waives all claims against Landlord for injury or death to persons, damage to property or to any other interest of Tenant sustained by Tenant or any party claiming, through Tenant resulting from: (i) any occurrence in or upon the Premises; (ii) leaking of roofs, bursting, stoppage or leaking of water, gas, sewer or steam pipes or equipment, including sprinklers; (iii) wind, rain, snow, ice, flooding, freezing, fire, explosion, earthquake, excessive heat or cold, or other casualty; (iv) the Building, Premises, or the operating and mechanical systems or equipment of the Building, being defective, or failing; and (v) vandalism, malicious mischief, theft or other acts or omissions of any other parties including, without limitation, other tenants, contractors and invitees at the Building. In no event will Landlord or Tenant be responsible for any consequential damages incurred by the other party, including but not limited to, lost profits or interruption of business as a result of any alleged default hereunder; provided, however, that no remedies or damages expressly provided in this Lease shall be considered indirect or consequential, and that the provisions of this Article 8.D. shall not apply to Articles 15 and 27 of this Lease.
ARTICLE 9.
INDEMNIFICATION
A.
Tenant Indemnity of Landlord
. Except to the extent resulting from the willful misconduct or negligence of Landlord or its agents, employees or contractors, and subject to Article 8.C., Tenant shall defend, indemnify and hold harmless Landlord and its agents, successors and assigns, including the Building Manager, from and against any and all injury, loss, costs, expenses, liabilities, claims or damage (including attorneys’ fees and disbursements) to any person or property (i) arising from, related to, or in connection with any use or occupancy of the Premises by Tenant, or (ii) arising from, related to, or in connection with any negligent or willful and wrongful act or omission (including, without limitation, construction and repair of the Premises arising out of any Alterations) of Tenant, its agents, contractors, employees, customers, and invitees, or (iii) or arising from any uncured default by Tenant under this Lease. This indemnification shall survive the expiration or termination of the Lease Term.
B.
Landlord Indemnity of Tenant
. Landlord shall defend, indemnify and hold Tenant harmless from and against all claims, causes of action, liabilities, losses, costs and expenses arising from or in connection with (i) any injury or other damage to any person or property resulting from any act or omission of Landlord, or (ii) any uncured default by Landlord under this Lease. This indemnification shall survive the expiration or termination of the Lease Term.
C.
Indemnity Limitations
. The indemnity obligations set forth in Sections A. and B. above shall not apply (i) to any costs or expenses not reasonably incurred by the indemnitee, or (ii) to any claims, causes of action, liabilities, losses, costs and expenses resulting from a default by the indemnitee hereunder.
D.
Indemnitees; Acceptable Attorneys
. Whenever, in this Article 9 and throughout this Lease, Landlord or Tenant is required to defend, indemnify and hold the other harmless, such obligations shall extend to the successors, assigns, officers, partners, members, managers, directors, employees and other agents of the indemnitee. In any instance where this Lease requires either party to defend the other, such defense shall involve an attorney or attorneys reasonably acceptable to the indemnitee.
E.
Limitation on Liability
. Landlord shall not be liable to Tenant for any damage by or from any act or negligence of any tenant or other occupant of the Building, or by any owner or occupants (other than Landlord or its affiliated entities) of adjoining or contiguous property. Landlord shall not be liable for any injury or damage to persons or property resulting in whole or in part from the criminal activities or willful misconduct of others. Subject to Article 8.C. above, Tenant agrees to pay for all damage to the Building, as well as all damage to persons or property of other tenants or occupants thereof, caused by the negligence, fraud or willful misconduct of Tenant or any of its agents, contractors, employees, customers (while located in the Premises) and invitees (while located in the Premises). Nothing contained herein shall be construed to relieve Landlord from liability for any personal injury resulting from its negligence, fraud or willful misconduct and that of its agents, employees or contractors.
F.
Surveillance
. Tenant acknowledges that Landlord’s election to provide mechanical surveillance or to post security personnel in the Building is subject to Landlord’s sole discretion. Except to the extent resulting from the willful misconduct or negligence of Landlord or its agents, employees or contractors, and then subject to Article 8.C. above, Landlord shall have no liability in connection with the decision whether or not to provide such services and Tenant hereby waives all claims based thereon. Landlord shall not be liable for losses due to theft, vandalism, or like causes.
ARTICLE 10.
CASUALTY DAMAGE
Tenant shall promptly notify Landlord or the Building Manager of any fire or other casualty to the Premises, or, to the extent it knows of damage, to the Building. In the event the Premises or any substantial part of the Building is wholly or partially damaged or destroyed by fire or other casualty which is covered by the insurance that Landlord is required to carry hereunder, Landlord will proceed to restore the same to substantially the same condition existing immediately prior to such damage or destruction unless Landlord notifies Tenant (the “Casualty Notice”) that (i) such damage or destruction is incapable of repair or restoration within three hundred sixty-five (365) days from commencement thereof as reasonably determined by Landlord’s architect; or (ii) the insurance proceeds recovered by reason of the damage or destruction (together with the amount of any deductible) are, in Landlord’s commercially reasonable judgment, inadequate to complete the restoration of the Building; or (iii) Landlord elects not to repair or restore the Building; in any of which events Landlord or Tenant may, by written notice given to the other party within twenty (20) days of Tenant’s receipt of the Casualty Notice, declare this Lease terminated as of the happening of such damage or destruction. Any Casualty Notice must be delivered within forty-five (45) days after the date of such damage. To the extent after fire or other casualty that Tenant shall be deprived of the use and occupancy of the Premises or any portion thereof as a result of any such damage, destruction or the repair thereof, providing Tenant did not intentionally cause the fire or other casualty, then Tenant shall be relieved of the same ratable portion of the Monthly Base Rent and all additional rent due under this Lease as the amount of damaged or useless space in the Premises bears to the rentable square footage of the Premises until such time as the Premises may be restored. Landlord shall reasonably determine the amount of damaged or useless space and the square footage of the Premises referenced in the prior sentence and whether or not its insurance covers the payment of Rent. Tenant may elect to terminate this Lease: (a) if the Casualty Notice states that it will take greater than three hundred sixty-five (365) days to complete the restoration or repair from the time that such restoration or repair commences, provided that Tenant gives such notice within thirty (30) days after delivery of the Casualty Notice; or (b) if the restoration or repair is not completed within three hundred sixty-five (365) days (or such longer period as is specified in the Casualty Notice, plus an additional contingency period equal to twenty percent (20%) of such scheduled period) of the casualty, plus an additional period of up to sixty (60) days on account of Force Majeure; provided however, that if such restoration or repair is completed within thirty (30) days following receipt of Tenant’s notice of termination, then such notice of termination shall be deemed null and void and of no further force or effect.
ARTICLE 11.
CONDEMNATION
In the event of a condemnation or taking of the entire Premises by a public or quasi-public authority, this Lease shall terminate as of the date title vests in the public or quasi-public authority. In the event of (i) a taking or condemnation of fifteen percent (15%) or more (but less than the whole) of the Building and without regard to whether the Premises are part of such taking or condemnation; (ii) a taking or condemnation which results in Landlord electing not to restore the Building; or (iii) a taking or condemnation which results in Landlord electing to change the use of the land upon which the Building is located, Landlord may elect to terminate this Lease by giving notice to Tenant within sixty (60) days of Landlord receiving notice of such condemnation. In the event of a partial taking as described in this Article 11, or a sale, transfer or conveyance in lieu thereof, which does not result in the termination of this Lease, Rent shall be apportioned according to the ratio that the part of the Premises remaining usable by Tenant bears to the total area of the Premises. All compensation awarded for any condemnation shall be the property of Landlord, whether such damages shall be awarded as a compensation for diminution in the value of the leasehold or to the fee of the Premises, and Tenant hereby assigns to Landlord all of Tenant’s right, title and interest in and to any and all such compensation; provided, however that in the event this Lease is terminated, Tenant shall be entitled to make a separate claim for the taking of Tenant’s personal property (including fixtures paid for by Tenant), and for costs of moving, provided that any such award to Tenant is payable separately and does not diminish the award available to Landlord or any Lender of Landlord. Any additional portion of such award shall belong to Landlord. Tenant hereby waives any and all rights, imposed by law, statute, ordinance, governmental regulation or requirement of the United States, the Commonwealth of Massachusetts or any local government authority or agency or any political subdivision thereof, now or hereafter in effect, it might otherwise have to petition a court to terminate the Lease. In the event that any portion of the Premises shall be the subject to condemnation or a taking and Tenant determines that the remainder, even after restoration, would not be reasonably suitable for Tenant’s continued use, then this Lease may be terminated at the election of Tenant, which election shall be made by giving of notice by Tenant to Landlord within thirty (30) days after the date of the condemnation or taking.
ARTICLE 12.
REPAIR AND MAINTENANCE
A.
Tenant’s Obligations
. Tenant shall keep the Premises in good working order, repair (and in compliance with all Laws now or hereafter adopted) and condition (which condition shall be neat, clean and sanitary) and shall make all necessary non-structural repairs thereto and any repairs to non-Building standard mechanical, HVAC, electrical and plumbing systems or components located in and exclusively serving the Premises. Tenant’s obligations hereunder shall include, but not be limited to, Tenant’s trade fixtures and equipment, security systems, signs, interior decorations, floor-coverings, wall-coverings, entry and interior doors, interior glass, light fixtures and bulbs, keys and locks, and Alterations to the Premises whether installed by Tenant or Landlord. Landlord may make any repairs which are not promptly made by Tenant after Tenant’s receipt of written notice and the reasonable opportunity of Tenant to make said repair within five thirty (30) days from receipt of said written notice, and charge Tenant for the cost thereof, which cost shall be paid by Tenant within thirty (30) days from invoice therefor from Landlord. Tenant waives all rights to make repairs at the expense of Landlord, or to deduct the cost thereof from Rent.
B.
Landlord’s Obligations
. Landlord shall maintain, in a condition similar to other first-class office buildings in the Boston market and in material compliance with all applicable Laws (other than those Laws applicable to a tenant’s unique use and occupancy of its premises or to any alterations or other work performed by, on behalf of, or at the request of, such tenant), (i) the foundations, roof, perimeter walls and exterior windows and all structural aspects of the Building, and (ii) all nonstructural aspects of the Building which relate to the Building Common Areas or to more than one tenant’s premises, or which no tenant of the Building is required to maintain and repair, including all systems and facilities necessary for the operation of the Building and the provision of services and utilities as required herein (except to the extent that any of the foregoing items are installed by or on behalf of, or are the property of, Tenant). Landlord shall also make all necessary structural repairs to the Building and any necessary repairs to the Building standard mechanical, HVAC, electrical, and plumbing systems in or servicing the Premises (the cost of which shall be included in Operating Expenses to the extent permitted under Article 4), excluding repairs required to be made by Tenant pursuant to this Article 12. Landlord shall have no responsibility to make any repairs unless and until Landlord receives written notice of the need for such repair or otherwise becomes aware. Landlord shall not be liable for damages arising from any failure to make repairs or to perform any maintenance unless such failure shall persist for an unreasonable period of time after written notice of the need for such repairs or maintenance is received by Landlord from Tenant or after Landlord otherwise becomes aware. Landlord shall make every reasonable effort to perform all such repairs or maintenance in such a manner (in its judgment) so as to cause minimum interference with Tenant and the Premises but Landlord shall not be liable to Tenant (except as may otherwise be expressly provided in this Lease) for any interruption or loss of business pertaining to such activities. Landlord shall have the right to require (subject to Article 8.C.) that any damage caused by the willful misconduct of Tenant or any of Tenant’s agents, contractors or employees, be paid for and performed by the Tenant (without limiting Landlord’s other remedies herein).
C.
General Obligations
. Alterations to the Premises required from time to time to comply with applicable Laws, requirements of any board of property insurance underwriters or similar entity, or reasonable requirements of Landlord’s or Tenant’s insurers shall be made by the party to this Lease responsible for maintaining and repairing the applicable aspect of the Premises hereunder, provided that Landlord shall be responsible for any such alteration that is not required solely on account of Tenant’s particular use (other than general business offices) of the Premises or Alterations to the Premises. Landlord warrants to Tenant that, as of the Commencement Date, all aspects of the Premises comprising the Base Building Condition shall comply with all applicable Laws, with the requirements of Landlord’s insurers, and with the requirements of all boards of property insurance underwriters and similar entities.
D.
Signs and Obstructions
. Tenant shall not obstruct or permit the obstruction of lights, halls, Building Common Areas, roofs, parapets, stairways or entrances to the Building or the Premises and will not affix, paint, erect or inscribe any sign, projection, awning, signal or advertisement of any kind to any part of the Building outside of the Premises, including the inside or outside of the windows or doors, or within the Premises if same can be seen from outside of the Premises, without the written consent of Landlord. If such work is done by Tenant through any person, firm or corporation not approved by Landlord, or without the express written consent of Landlord, Landlord shall have the right to remove such signs, projections, awnings, signals or advertisements without being liable to the Tenant by reason thereof and to charge the cost of such removal to Tenant as Additional Rent, payable within ten (10) days of Landlord’s demand therefor. Tenant shall be entitled to Building-standard lobby directory signage, in common with other tenants of the Building, at no additional cost.
E.
Outside Services
. Tenant shall not permit, except by Landlord or a person or company reasonably satisfactory to and approved by Landlord: (i) the servicing of Tenant’s supplemental heating, ventilating and air conditioning equipment in the Premises and (ii) window cleaning, janitorial services or similar work in or about the Premises.
F.
Condition of Premises
. Except as otherwise provided herein to the contrary (including without limitation Landlord’s ongoing repair and maintenance obligations), Tenant hereby agrees that the Premises shall be taken “as is,” “with all faults,” and “without any representations or warranties,” and Tenant hereby acknowledges and agrees that it has investigated and inspected the condition of the Premises and the suitability of same for Tenant’s purposes, and except for matters or conditions that could not reasonably be detected by a reasonably careful inspection, Tenant does hereby waive and disclaim any objection to, cause of action based upon, or claim that its obligations hereunder should be reduced or limited because of the condition of the Premises or the Building or the suitability of same for Tenant’s purposes. Tenant acknowledges that neither Landlord nor any agent nor any employee of Landlord has made any representation or warranty with respect to the suitability of the Premises or the Building for the conduct of Tenant’s business and Tenant expressly represents and warrants that Tenant has relied solely on its own investigation and inspection of the Premises and the Building in its decision to enter into this Lease and let the Premises in an “As Is” condition. The Premises shall be initially improved by Tenant as provided in, and subject to, the terms and conditions of Exhibit B attached hereto and made a part hereof. The Tenant Improvements (as defined in Exhibit B), together with any subsequent Alterations during the Term of this Lease, may be collectively referred to herein as the “Premises Improvements.” The taking of possession of the Premises by Tenant shall conclusively establish that the Premises and the Building were at such time in satisfactory condition.
Landlord reserves the right from time to time, but subject to payment by and/or reimbursement from Tenant as otherwise provided herein: (i) to install, use, maintain, repair, replace and relocate for service to the Premises and/or other parts of the Building pipes, ducts, conduits, wires, appurtenant fixtures, and mechanical systems, wherever located in the Premises or the Building, (ii) to alter, close or relocate any facility in the Premises or the Building Common Areas or otherwise conduct any of the above activities for the purpose of complying with a general plan for fire/life safety for the Building or otherwise and (iii) to comply with any Law with respect thereto or the regulation thereof not currently in effect. Landlord shall attempt to perform any such work with the least inconvenience to Tenant as possible, but, except as otherwise expressly provided herein, so long as the activities by Landlord set forth in (i) and (ii) do not unreasonably interfere with Tenant’s operations in the Premises, Tenant shall not be permitted to withhold or reduce Rent or other charges due hereunder as a result of same or otherwise make claim against Landlord for interruption or interference with Tenant’s business and/or operations.
ARTICLE 13.
INSPECTION OF PREMISES
Tenant shall permit the Landlord, the Building Manager and its authorized representatives to enter the Premises upon at least twenty-four (24) hours’ advance notice to show the Premises during Normal Business Hours of the Building (provided, however, that Landlord’s right to show the Premises to prospective tenants shall be limited to the last twelve (12) months of the Term) and at other reasonable times to inspect the Premises, to clean the Premises, to serve or post notices as provided by law or which Landlord reasonably deems necessary for the protection of Landlord or Landlord’s property, and to make such repairs, improvements, alterations or additions in the Premises or in the Building of which they are a part as Landlord may deem necessary or appropriate and at any time in the event of an emergency. If Tenant shall not be personally present to open and permit an entry into the Premises at any time when such an entry is necessary or permitted hereunder, Landlord may enter by means of a master key or may enter forcibly, only in the case of an emergency, without liability to Tenant and without affecting this Lease. Landlord shall (except in cases of emergency) use commercially reasonable efforts to avoid unnecessary interruption of Tenant’s use of the Premises in any entry authorized hereby.
Except in cases of emergency, Landlord will cooperate with Tenant to schedule such entry in a manner so as to minimize interference with Tenant’s operations, and, if Tenant requests and pays for any incremental premium cost actually incurred by Landlord as a result of such request, Landlord will enter after hours.
ARTICLE 14.
SURRENDER OF PREMISES
Upon the expiration of the Term, or sooner termination of the Lease, Tenant shall quit and surrender to Landlord the Premises, broom clean, in good order and condition, normal wear and tear and damage by fire and other casualty which are Landlord’s obligation excepted. All Premises Improvements and other fixtures, such as light fixtures and HVAC equipment, wall coverings, carpeting and drapes, in or serving the Premises, whether installed by Tenant or Landlord, shall be Landlord’s property and shall remain, all without compensation, allowance or credit to Tenant; provided that Tenant shall, at its expense, remove any Alterations made by tenant after completion of the Tenant Improvements and that were required to be so removed by Landlord in any notice given to Tenant at the time of approval of such Alterations in accordance with Article 5.C. above and/or Exhibit B attached hereto, and repair any damages to the Premises caused by such removal, all at Tenant’s sole cost and expense. Unless Landlord has otherwise directed Tenant to do so in writing under Exhibit B attached hereto at the time of Landlord’s approval, Tenant shall not be required to remove any of the Tenant Improvements. Upon the expiration or earlier termination of this Lease, Tenant shall remove from the Premises all of Tenant’s furniture, trade fixtures, furnishings, equipment and other personal property and repair any damage caused by such removal, at Tenant’s sole cost and expense. Any property not removed shall be deemed to have been abandoned by Tenant and may be retained or disposed of by Landlord at Tenant’s expense free of any and all claims of Tenant, as Landlord shall desire. All property not removed from the Premises by Tenant may be handled or stored by Landlord at Tenant’s expense and Landlord shall not be liable for the value, preservation or safekeeping thereof. At Landlord’s option all or part of such property may be conclusively deemed to have been conveyed by Tenant to Landlord as if by bill of sale without payment by Landlord. Tenant hereby waives, to the maximum extent allowable, the benefit of all Laws now or hereafter in force in the Commonwealth of Massachusetts or elsewhere exempting property from liability for rent or for debt.
ARTICLE 15.
HOLDING OVER
Should Tenant, without Landlord’s written consent, hold over after termination of this Lease, Tenant shall become a tenant at sufferance and any such holding over shall not constitute an extension of this Lease. Tenant shall pay Landlord, monthly and in advance, one hundred fifty percent (150%) of the annual Rent that was payable immediately preceding the Expiration Date (without regard to any abatement or reduction of Rent or other alternative rent actually in effect at such time), prorated on a per diem basis, for each day Tenant shall retain possession of the Premises or any part thereof after expiration or earlier termination of this Lease, which percentage shall increase to two hundred percent (200%) after the first (1
st
) thirty (30) days of such holdover, together with all damages sustained by Landlord on account thereof and all other payments required to be made by Tenant hereunder. The foregoing provisions shall not serve as permission for Tenant to hold-over, nor serve to extend the Term (although Tenant shall remain bound to comply with all provisions of this Lease until Tenant vacates the Premises) and Landlord shall have the right at any time thereafter to enter and possess the Premises and remove all property and persons therefrom or to require Tenant to surrender possession of the Premises as provided in this Lease upon the expiration or earlier termination of the Term. If Tenant fails to surrender the Premises upon the expiration or termination of this Lease, Tenant agrees to indemnify, defend and hold harmless Landlord from all costs, loss, expense or liability, including without limitation, claims made by any succeeding tenant and real estate brokers’ claims and attorneys’ fees, provided that Tenant shall not be required to indemnify Landlord from losses or damages suffered as a result of or in connection with the loss of (or delay in occupancy or rent payment by, or other increased financial exposure or liability to) a replacement or successor tenant until the sooner of (i) thirty (30) days beyond the expiration or earlier termination of this Lease, or (ii) ten (10) business days after Landlord has given Tenant written notice of such replacement or successor tenant. No acceptance by Landlord of any Rent during or for any period following the expiration or termination of the Lease shall operate or be construed as an extension or renewal of the Lease. Should Tenant remain in the Premises on a month-to-month basis with Landlord’s prior and express written approval, such month-to-month tenancy may be cancelled by either party with thirty (30) days’ prior written notice or such lesser time period as may be permitted by Law.
ARTICLE 16.
SUBLETTING AND ASSIGNMENT
A.
Landlord’s Consent
. Except as provided herein, Tenant shall not assign its interests hereunder, sublease all or any portion of the Premises (for purposes of this Lease, a license shall be deemed to be a sublease), or list the Premises or any part thereof as available for assignment or sublease with any broker or agent or otherwise advertise, post, communicate or solicit prospective assignees or subtenants through any direct or indirect means, or allow any other person to use or occupy any portion of the Premises, without the prior written consent of Landlord, which shall not be unreasonably withheld, delayed or conditioned, except that Landlord shall not, under any circumstances, be obligated to consent to any assignment or subletting by Tenant (i) to any other tenant of the Building, so long as Landlord then has or will (as of the effective date of Tenant’s proposed assignment or subletting) have additional comparable space available in the Building to lease to such other tenant, (ii) by operation of Law (subject to Article 16.B. below) or (iii) to any person who fails to meet any of the other reasonable criteria of Landlord that Tenant was required to meet prior to the execution of this Lease. Without limiting the generality of the foregoing, it shall be reasonable for Landlord to deny consent if:
(1) The financial strength of the proposed assignee, both in terms of net worth and in terms of reasonably anticipated cash flow over the Lease Term, is not reasonably acceptable to Landlord, taking into account the fact that Tenant would still be liable under the terms of this Lease (unless Tenant is released by Landlord as provided herein).
(2) The proposed assignee or subtenant will burden the Premises and/or Building Common Areas to an extent substantially in excess of that of typical office tenants of the Building, whether through disproportionate demand for landlord services or utilities, disproportionate bearing weights on floor areas, disproportionate parking requirements, deterioration of floors or other elements of the Building, or otherwise.
(3) The proposed assignee or subtenant intends to make substantial alterations to the Premises which would, in Landlord’s reasonable judgment, result in a material net decrease in the value of the Premises as improved.
(4) The proposed assignee’s or subtenant’s use of the Premises will not, in Landlord’s commercially reasonable judgment, be compatible with the uses of the other tenants in the Building or will be appropriate for a Class A office building.
(5) The use to be made of the Premises by the proposed assignee or subtenant is for other than general or professional business offices and is (A) not generally consistent with the character and nature of all other tenancies in the Office Component, or (B) a use which conflicts with any so-called “exclusive” then in favor of, or for any use which is the same as that stated in any percentage rent lease to, another tenant of the Building, or (C) a use which would be prohibited by any other portion of this Lease (including, but not limited to, any rules and regulations then in effect).
(6) The proposed assignee or subtenant is either a governmental agency or instrumentality thereof.
(7) Either the proposed assignee or subtenant or any person or entity which controls, is controlled by or is under common control with the proposed assignee or subtenant (A) occupies space in the Building at the time of the request for consent, and Landlord then has or will (as of the effective date of Tenant’s proposed assignment or subletting) have additional comparable space available in the Building to lease to such proposed assignee or subtenant, or (B) is negotiating with Landlord or has negotiated with Landlord during the six (6) month period immediately preceding the date of the proposed transfer, to lease space in the Building. For purposes hereof, “control” requires both (a) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person and (b) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person.
(8) The proposed assignee or subtenant
(A) has an anticipated use of the Premises involving the generation, storage, use, treatment, or disposal of Hazardous Material in a way or to an extent that is greater than general business office use; or (B) has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with Hazardous Material contaminating a property if the contamination resulted from such transferee’s actions or use of the property in question.
With respect to any proposed assignment or subleasing requiring Landlord’s consent, Tenant shall submit to Landlord in writing, at least thirty (30) days prior to the effective date of the assignment or sublease, (a) a notice of application to assign or sublease, setting forth the proposed effective date, which shall be not less than thirty (30) or more than one hundred twenty (120) days after the delivery of such notice; (b) the name of the proposed assignee or subtenant; (c) the nature of the proposed assignee’s or subtenant’s business to be carried on in the Premises; (d) the terms of the proposed sublease or assignment; and (e) a current financial statement of the proposed assignee or subtenant. Tenant shall not submit any such application to Landlord until Tenant has received a bona fide offer from the proposed assignee or subtenant, and Tenant shall furnish Landlord, in addition to the foregoing, with all other information reasonably required by Landlord with respect to such assignment or sublease, assignee or subtenant. Unless the stock in Tenant is publicly traded on a regulated securities exchange, any transfer (or sequence of transfers resulting, in the aggregate, in the transfer) of fifty percent (50%) or more of the beneficial ownership of Tenant shall constitute an assignment for purposes of this Article 16.
B.
Transfers Not Requiring Consent
. Notwithstanding the foregoing, Landlord’s consent shall not be required with respect to any assignment or sublease to (1) an entity which controls Tenant or which controls the entity which controls Tenant (in either case, a “Parent”), or (2) an entity which is controlled by Tenant or a Parent, or (3) an entity which is controlled by an entity which is controlled by Tenant or a Parent, or (4) any entity resulting from a merger or consolidation involving Tenant, or (5) any entity which acquires all or substantially all of Tenant’s assets, including, without limitation, Tenant’s leasehold interest in and to this Lease (each, a “Permitted Transfer”). For purposes hereof, “control” requires both (a) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person and (b) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. With respect to any Permitted Transfer, the following provisions shall apply:
(a) Tenant shall give Landlord written notice of the assignment or subletting no less than thirty (30) days prior to the effective date thereof (unless restricted from doing so by legal or contractual requirement, in which case such notice shall be given promptly after such transfer),, which notice shall set forth the identity of the proposed assignee or subtenant, the reason(s) why Landlord’s consent is not required, and the nature of the proposed assignee’s or subtenant’s business to be carried on in the Premises.
(b) Except as aforesaid, Tenant shall furnish Landlord (i) no less than thirty (30) days prior to the effective date of the assignment or subletting, with a current financial statement of the proposed assignee or subtenant reasonably acceptable to Landlord, and (ii) within three (3) days following Landlord’s demand, with all other information reasonably requested by Landlord with respect to such assignee or subtenant.
Any assignment or subletting to which Landlord’s consent is not required and with respect to which the provisions of this Article 16.B. are not complied with shall, at Landlord’s option, be void.
C.
Procedure
. Except for Permitted Transfers, Landlord shall notify Tenant within thirty (30) days from the submission of the aforesaid information as to Landlord’s choice, at Landlord’s sole discretion, of the following options:
(1) That Landlord consents to a subleasing of the Premises or assignment of the Lease to such replacement tenant provided that Tenant shall remain fully liable for all of its obligations and liabilities under this Lease; or
(2) That upon such replacement tenant’s entering into a mutually satisfactory new lease for the Premises with Landlord, then Tenant shall be released from all further obligations and liabilities under this Lease (excepting only any unpaid rentals or any unperformed covenants then past due under this Lease or any guarantee by Tenant of replacement tenant’s obligations); or
(3) That Landlord reasonably declines to consent to such sublease or assignment due to insufficient or unsatisfactory documentation furnished to Landlord to establish Tenant’s reputation, financial strength and proposed use of and operations upon Premises; or
(4) That Landlord elects to cancel the Lease and recapture the Premises (in the case of an assignment) or (as to any proposed sublease that either covers all or substantially all of the Premises or covers any portion of the Premises for substantially all of the remaining Term) that Landlord elects to cancel the Lease as to the portion thereof that Tenant had wished to sublease, provided, however, that in either such case, Tenant shall have the right to withdraw its request for Landlord consent to the proposed assignment or sublease in question upon written notice to Landlord delivered within five (5) business days following Tenant’s receipt of Landlord’s recapture notice, in which case Landlord’s recapture notice shall be void. In either such event, and provided that Tenant has not withdrawn its request for consent as provided above, Tenant shall surrender possession of the Premises, or the portion thereof which is the subject of Tenant’s request on the date set forth in a notice from Landlord in accordance with the provisions of this Lease relating to the surrender of the Premises. If this Lease shall be canceled as to a portion of the Premises only, the Rent payable by Tenant hereunder shall be abated proportionately according to the ratio that the area of the portion of the Premises surrendered (as computed by Landlord) bears to the area of the Premises immediately prior to such surrender. If Landlord shall cancel this Lease, Landlord may re-let the Premises, or the applicable portion of the Premises, to any other party (including, without limitation, the proposed assignee or subtenant of Tenant), without any liability to Tenant.
D.
Net Revenues
.
(1)
Sublease Revenues
. Except in the case of a Permitted Transfer, in the event that Tenant subleases all or any portion of the Premises and the total of all amounts payable to Tenant for any month under any such sublease exceeds the total of all amounts payable to Landlord hereunder for such month for the same space, Tenant shall pay to Landlord one-half (½) of the “Net Revenue,” which shall mean such excess actually received by Tenant, but only after Tenant has fully recovered from such excess payments all of Tenant’s costs and expenses incurred in connection with such sublease, including without limitation brokerage commissions and legal fees and costs, advertising or marketing costs and the costs of any improvements or alterations (or allowances for improvements or alterations), and any such Net Revenue actually received by Tenant for any month shall be paid to Landlord within five (5) business days thereafter.
(2)
Assignment Revenues
. Except in the case of a Permitted Transfer, in the event that Tenant assigns this Lease with respect to all or any portion of the Premises (the “assigned premises”), Tenant shall pay to Landlord the Net Revenue actually received by Tenant in connection with such assignment.
E.
Continuing Liability; Voidable Transfers
. No assignment of this Lease (other than an assignment to Landlord resulting from Landlord’s right of recapture), and no subletting of all or any portion of the Premises, shall release Tenant or any guarantor with respect to any post-transfer obligations, unless Landlord agrees otherwise in writing in its absolute discretion and any such assignment or sublease shall, at Landlord’s option, be void in the event that Tenant and each such guarantor, if any, does not expressly acknowledge and affirm its continuing liability in form and substance reasonably satisfactory to Landlord. The continuing liability of the assigning Tenant shall be primary, and Landlord shall be entitled to exercise its rights and remedies against any such assignor with respect to any Tenant Default without exhausting its rights and remedies against any successor of such assignor. In the event that it is ever held, notwithstanding the contrary intention of the parties hereto, that any such assignor’s continuing liability is that of a guarantor (rather than primary), Tenant hereby waives any and all suretyship rights and defenses to which it would otherwise be entitled in connection with such continuing liability. Notwithstanding the foregoing, in the event that, following any assignment (other than an assignment described in Article 16.B. above), Landlord and such assignee modify this Lease in such a way as to increase Tenant’s total obligations hereunder, neither the assigning Tenant nor any guarantor whose guaranty pre-dated such assignment shall be liable for the incremental portion of Tenant’s obligations corresponding to such increase. The acceptance of any assignment by an assignee shall automatically constitute the assumption by such assignee of all obligations of Tenant with respect to the assigned premises that accrue following the assignment; provided, however, that any assignment of this Lease shall, at Landlord’s option, be void in the event that the assignee does not expressly acknowledge and affirm the effectiveness of the foregoing assumption in form and substance reasonably satisfactory to Landlord. Any assignment or subletting by Tenant to which Landlord’s consent is required but not obtained shall, at Landlord’s option, be void.
F.
Other Provisions Applicable to Transfers
. No assignment or subletting shall be deemed to modify any provision of this Lease, with respect to permitted or restricted uses of the Premises or otherwise, unless Landlord then agrees otherwise in writing in its absolute discretion. Tenant shall promptly furnish Landlord with a copy of each executed assignment or sublease, and with copies of any supplements or modifications thereto which may be executed from time to time.
G. [INTENTIONALLY OMITTED]
H.
Transfers by Subtenants
. The provisions of this Article 16 shall also apply to assignments and subleases by subtenants, sub-subtenants and so on.
I.
Assignment of Options
. Without limiting the generality of any provision of this Lease which states that any option or other right of Tenant is personal to the original Tenant hereunder or may only be assigned under certain conditions, no option or similar right of Tenant hereunder, including without limitation any option to extend or renew, option to expand, first offer or first refusal right, or first right to lease, may be assigned (except in event of a transfer contemplated by Article 16.B. herein), and any attempt to assign such right shall be null and void.
J.
Encumbrance
. Tenant shall not assign its interests hereunder as security for any obligation without Landlord’s prior written consent, which may be withheld in Landlord’s absolute discretion, and any such assignment without such consent shall, at Landlord’s option, be void.
K.
Transfer Fee
. Whether or not Landlord consents to any such transfer, and except with respect to any assignment or sublease described in Article 16.B above, Tenant shall pay to Landlord Landlord’s reasonable attorneys’ fees incurred in connection with the proposed assignment or sublease.
L.
Form of Sublease Consent
. Any consent to a sublease by Landlord in accordance with the provisions of this Article 16 shall be provided in the form attached hereto as Exhibit C.
ARTICLE 17.
SUBORDINATION, NON-DISTURBANCE, ATTORNMENT AND
MORTGAGEE PROTECTION; LEASE SUBJECT TO PROJECT DOCUMENTS
A.
Subordination, Non-Disturbance, Attornment and Mortgagee Protection
. This Lease is subject and subordinate to (i) the priority of the lien of any Mortgage now or hereafter placed upon the Building and (ii) all other encumbrances and matters now or hereafter of public record applicable to the Building, including without limitation, any reciprocal easement or operating agreements, ground or underlying leases, covenants, conditions and restrictions, and Tenant shall not act or permit the Premises to be operated in violation thereof (so long as the same do not impair or restrict the use of the Premises for the Permitted Uses contemplated by this Lease).. Landlord shall have the right to cause this Lease to be and become and remain subject and subordinate to any and all ground or underlying leases or Mortgages which may hereafter be executed covering the Premises, the Building or the property or any renewals, modifications, consolidations, replacements or extensions thereof, for the full amount of all advances made or to be made thereunder and without regard to the time or character of such advances, together with interest thereon and subject to all the terms and provisions thereof; provided, however, that as a condition to any such subordination with respect to the Mortgage encumbering the Building as of the date of this Lease, Landlord shall obtain from any Lender or other party in question a written undertaking in favor of Tenant to the effect that such Lender or other party will not disturb Tenant’s right of possession or other rights under this Lease if no event of default then exists and otherwise substantially the form attached hereto as Exhibit G, which SNDA Tenant agrees, within ten (10) business days after Tenant’s receipt of Landlord’s written request therefor, to execute, acknowledge and deliver upon request. With respect to any future Mortgage, Landlord agrees to use commercially reasonable efforts to obtain an SNDA in favor of Tenant, provided, however, that same shall not be a condition to the effectiveness of the subordination of this Lease to such future Mortgage. To the extent not expressly prohibited by Law, Tenant waives the provisions of any Law now or hereafter adopted which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease or Tenant’s obligations hereunder if such foreclosure or power of sale proceedings are initiated, prosecuted or completed.
B.
Lease Subject to Project Documents
.
(1) This Lease, and Tenant’s rights hereunder, are subject and subordinate to any all documents governing the maintenance, operation and use of the Project or the Building, including, without limitation, (i) the Declaration (as defined in Article 29.C.), and any rules or regulations promulgated by or on behalf of the “Developer” or “FPOC” under the Declaration, whether recorded or unrecorded, (ii) Chapter 91 License No. 11904 issued by the Massachusetts Department of Environmental Protection (“DEP”) for the Building, recorded with the Suffolk Registry of Deed in Book 42568, Page 73, and Chapter 91 License No. 11907 issued by DEP for all of the public realm areas of the Project, recorded with the Suffolk Registry of Deed in Book 42568, Page 89; (iii) Development Plan for the Fan Pier Development, Planned Development Area #54 approved by the Boston Redevelopment Authority (“BRA”) on November 14, 2001, and adopted by the Boston Zoning Commission on February 27, 2002, effective February 28, 2001, as amended by First Amendment to the Development Plan for the Fan Pier Development, Planned Development Area #54 approved by the Boston Redevelopment Authority on December 20, 2007, and adopted by the Boston Zoning Commission on January 30, 2008, effective January 30, 2008, and all agreements with the BRA or the City of Boston relating to the Building or the Project (collectively, and as may be amended or supplemented from time to time, the “Project Documents,” and each individually a “Project Document”).
(2) [Intentionally Omitted]
(3) [Intentionally Omitted]
(4) The parties acknowledge and agree that all maintenance, repair, replacement, operation and administration of the “Common Areas and Facilities” (as defined in the Project Documents) are under the control of the Developer or FPOC. Further the Developer’s or FPOC’s election to provide mechanical surveillance or to post security personnel in the Common Areas and Facilities is subject to the Developer’s or FPOC’s sole discretion. Therefore, and notwithstanding anything to the contrary contained in this Lease, Landlord’s sole responsibility with respect to the maintenance, repair, replacement, operation, administration or the provision of surveillance or security in the Common Areas and Facilities, shall be to use commercially reasonable efforts to enforce the obligations of the Developer or FPOC under the Declaration. Tenant hereby releases Landlord from any claim concerning the failure by Developer or FPOC to maintain any portion of the Common Areas and Facilities, other than a failure of Landlord to use commercially reasonable efforts to enforce the Developer or FPOC’s obligations under the Project Documents.
ARTICLE 18.
ESTOPPEL CERTIFICATE
Either party shall from time to time, upon written request by the other, execute, acknowledge and deliver to the requesting party (or the lender of the requesting party, as the case may be), within ten (10) business days after receipt of such request, a statement in writing certifying, without limitation: (i) that this Lease is unmodified and in full force and effect (or if there have been modifications, identifying such modifications and certifying that the Lease, as modified, is in full force and effect); (ii) the dates to which Rent and any other charges have been paid; (iii) that to the best knowledge of Tenant, the requesting party is not in default under any provision of this Lease (or if the requesting party is in default, specifying each such default) and that no events or conditions exist which, with the passage of time or notice or both, would constitute a default on the part of the requesting party hereunder; (iv) the address to which notices to the non-requesting party shall be sent; (v) the amount of Tenant’s security deposit; and (vi) such other factual matters as the requesting party may reasonably request; it being understood that any such statement so delivered may be relied upon in connection with any lease, mortgage or transfer. No such certificate shall have the effect of amending this Lease, and in the event of any conflict between the terms of this Lease and any such certificate, this Lease shall control.
ARTICLE 19.
DEFAULTS
A.
Tenant Defaults
: The occurrence of any of the following shall constitute a “default” or “event of default” by Tenant hereunder:
(a) Tenant fails to pay when due any installment or other payment of Rent or any other amount owing to Landlord, and such failure continues for five (5) business days after notice thereof given by or on behalf of Landlord provided, however, that notice relating to Tenant’s failure to pay Monthly Base Rent shall only be required two (2) times per any twelve (12) month period and thereafter (during the remainder of such 12-month period) no notice shall be required in connection therewith prior to the same constituting a default; or
(b) Tenant fails to keep in effect any insurance required to be maintained hereunder, and such failure continues for thirty (30) days after notice thereof given by or on behalf of Landlord; or
(c) Tenant or any guarantor hereunder becomes insolvent, makes an assignment for the benefit of creditors, files a voluntary petition in bankruptcy or an involuntary petition in bankruptcy is filed against Tenant which petition is not dismissed within sixty (60) days of its filing; or
(d) Tenant fails to cause to be released any mechanic’s liens filed against the Premises, the Building or the Project or any portion thereof within twenty (20) days after the date the same shall have been filed or recorded; or
(e) Tenant fails to observe or perform according to the provisions of Article 17 or 18 within the time periods specified in such Articles; or
(f) A receiver is appointed for Tenant’s business or assets and the appointment of such receiver is not vacated within sixty (60) days after such appointment; or
(g) Tenant fails to perform or observe any of the other covenants, conditions or agreements contained herein on Tenant’s part to be kept or performed or breaches a representation made hereunder, and such failure shall continue for thirty (30) days after notice thereof from Landlord, or if such default is curable but cure cannot reasonably be effected within such thirty (30) day period, such default shall not be a default hereunder so long as Tenant promptly commences cure within ten (10) days after receipt of such notice and thereafter diligently prosecutes such cure to completion; or
(h) Except for assignments or subleases under Article 16, if the interest of Tenant or any guarantor hereunder shall be offered for sale or sold under execution or other legal process if Tenant makes any transfer, assignment, conveyance, sale, pledge, disposition of all or a substantial portion of Tenant’s property.
All notices required to be given under this Article 19.A. shall be in lieu of, and not in addition to any notice requirements imposed by Law now or hereafter in effect.
If Tenant or any guarantor hereunder files a voluntary petition pursuant to the United States Bankruptcy Reform Act of 1978, as the same may be from time to time be amended (the “Bankruptcy Code”), or take the benefit of any insolvency act or be dissolved, or if an involuntary petition or proceeding for dissolution or liquidation is filed against Tenant pursuant to the Bankruptcy Code and said petition is not dismissed within sixty (60) days after such filing, or if a proceeding for the appointment of a trustee or a receiver is commenced for Tenant’s business or all or a portion of its assets and the appointment of such receiver is not vacated within sixty (60) days after such appointment, or if it shall make an assignment for the benefit of its creditors, then Landlord shall have all of the rights provided for in the event of nonpayment of the Rent. Tenant hereby stipulates to the lifting of the automatic stay in effect and relief from such stay in the event Tenant files a petition under the Bankruptcy Code, for the purpose of Landlord pursuing its rights and remedies against Tenant and/or a guarantor under this Lease.
If any alleged default on the part of the Landlord hereunder occurs, Tenant shall give written notice to Landlord in the manner herein set forth and shall afford Landlord a reasonable opportunity to cure any such default. In addition, Tenant shall send notice of such default by certified or registered mail, postage prepaid, to the holder of any Mortgage whose address Tenant has been provided in writing, and shall afford such Mortgage holder a reasonable opportunity to cure any alleged default on Landlord’s behalf.
Any notice from Landlord to Tenant that claims or alleges a breach or default under this Lease shall state in prominent bold-face type “THIS IS A NOTICE OF DEFAULT UNDER A LEASE OF REAL PROPERTY, AND IMMEDIATE ACTION IS REQUIRED.”
ARTICLE 20.
REMEDIES
A.
Landlord Remedies
. The remedies provided Landlord under this Lease are cumulative. Upon the occurrence of any default by Tenant, and in addition to any and all other rights provided a landlord under law or equity for breach of a lease or tenancy by a tenant, Landlord shall have the right to pursue one or more of the following remedies:
(a) Landlord may serve notice on Tenant that the Term and the estate hereby vested in Tenant and any and all other rights of Tenant hereunder shall cease on the date specified in such notice and on the specified date this Lease shall cease and expire as fully and with the effect as if the Term had expired for passage of time.
(b) Without terminating this Lease in case of a default or if this Lease shall be terminated for default as provided herein, Landlord may re-enter the Premises, remove Tenant, or cause Tenant to be removed from the Premises in such manner as Landlord may deem advisable, with legal process. In the event of re-entry without terminating this Lease, Tenant shall continue to be liable for all Rents and other charges accruing or coming due under this Lease which Rent shall automatically accelerate and become immediately due and payable.
(c) If Landlord, without terminating this Lease, shall re-enter the Premises or if this Lease shall be terminated as provided in Article 20.A.(a) above, then, in either such event:
(i) All Rent due from Tenant to Landlord shall thereupon become due and shall be paid up to the time of re-entry, dispossession or expiration, together with reasonable costs and expenses (including, without limitation, attorneys’ fees) of Landlord and without benefit of valuation and appraisement laws which Tenant hereby waives;
(ii) Notwithstanding the foregoing, Landlord shall use commercially reasonable efforts to re-let the Premises after Tenant vacates the Premises after this Lease is terminated on account of a default by Tenant as further provided in Article 20.C. below.
(iii) If Landlord shall have terminated this Lease, Tenant shall also be liable to Landlord for all damages provided for at law and under this Lease resulting from Tenant’s breach, including, without limitation, a lump sum equal to the then net present value of the excess (if any) of the aggregate Rents reserved under the terms of this Lease for the balance of the Term together with all other sums payable hereunder as Rent for the balance of the Term, over the fair rental value of the Premises for that period determined as of the date of such termination. For purposes of this Article 20.A.(c)(iii), Tenant shall be deemed to include any guarantor or surety of the Lease.
(d) Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations.
(e) Whether or not Landlord terminates this Lease, Landlord shall have the right, as Landlord chooses in its absolute discretion, (i) to terminate any or all subleases, licenses, concessions and other agreements entered into by Tenant in connection with its occupancy of the Premises and/or (ii) to maintain any or all such agreements in effect and succeed to Tenant’s interests in connection therewith (in which event Tenant shall cease to have any interest in any such agreement).
(f)
Attorneys’ Fees
.
(i) In any action to enforce the terms of this Lease, including any suit by Landlord for the recovery of Rent or possession of the Premises, the losing party shall reimburse the successful party for its reasonable attorneys’ fees incurred in such suit and such attorneys’ fees shall be deemed to have accrued prior to the commencement of such action and shall be paid whether or not such action is prosecuted to judgment.
(ii) Should Landlord, without fault on Landlord’s part, be made a party to any litigation instituted by Tenant or by any third party against Tenant, or by or against any person holding under or using the Premises by license of Tenant, or for the foreclosure of any lien for labor or material furnished to or for Tenant or any such other person or otherwise arising out of or resulting from any act or transaction of Tenant or of any such other person, Tenant covenants to save and hold Landlord harmless from and against any judgment rendered against Landlord or the Premises or any part thereof and from and against all actual and reasonable costs and expenses, including reasonable attorneys’ fees, incurred by Landlord in connection with such litigation.
(iii) When legal services are rendered by an attorney at law who is an employee of a party, attorneys’ fees incurred by that party shall be deemed to include an amount based upon the number of hours spent by such employee on such matters multiplied by an appropriate billing rate determined by taking into consideration the same factors, including but not limited by, the importance of the matter, time applied, difficulty and results, as are considered when an attorney not in the employ of a party is engaged to render such service.
(g) In addition to the above, Landlord shall have any and all other rights provided a landlord at law or in equity, including, but not limited to, those remedies provided for by Laws now or hereafter in effect, for breach of a lease or tenancy by a tenant.
(h) TO THE EXTENT PERMITTED BY LAW, EACH OF LANDLORD AND TENANT HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION PROCEEDING OR COUNTERCLAIM BY EITHER LANDLORD OR TENANT AGAINST THE OTHER OR ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, AND/OR TENANT’S USE OR OCCUPANCY OR THE PREMISES.
B.
Tenant Remedies
. Upon the occurrence of any default by Landlord, Tenant shall, except as otherwise expressly provided herein, have all rights and remedies provided hereunder and by law from time to time; provided, however, that Tenant shall in no event have the right to terminate this Lease except as expressly provided herein or as provided by law.
C.
Mitigation of Damages
. Landlord and Tenant will each exercise commercially reasonable efforts to mitigate the damages caused by the other party’s breach of this Lease. Efforts to mitigate damages will not be construed as a waiver of the non-breaching party’s right to recover damages. For the purposes of this Article 20.C., marketing of the Premises in a manner similar to the way Landlord markets its other premises shall be deemed to satisfy Landlord’s obligation to use such “commercially reasonable efforts.” In no event shall Landlord be required (i) to solicit or entertain negotiations with any other prospective tenants for the Premises until Landlord obtains full and complete possession of the Premises including, without limitation, the undisputed right to re-let the Premises free of any claim of Tenant, (ii) to lease the Premises to a tenant whose proposed use, in Landlord’s bona fide judgment, would violate any restrictions by which Landlord is bound, (iii) to re-let the Premises before leasing other comparable vacant space in the Building (unless the prospective tenant is directly obtained and presented to Landlord as a result of Tenant’s marketing efforts and otherwise satisfies all other requirements of prospective tenants contained in this Lease), (iv) to lease the Premises for a rental less than the current fair market rental then prevailing for similar office space in the Building, or (v) to enter into a lease with any proposed tenant that does not have, in Landlord’s reasonable opinion, sufficient financial resources to satisfy a typical office tenant’s obligations under an office lease. In no event, however, shall Tenant’s liability hereunder be diminished or reduced if or to the extent such reasonable efforts of Landlord to re-let are not successful.
ARTICLE 21.
QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that so long as there exists no uncured default (i.e. beyond notice and cure periods) by Tenant, Tenant may peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and conditions of this Lease, and Tenant’s possession will not be disturbed by anyone claiming by, through, or under Landlord.
ARTICLE 22.
ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of an amount less than full payment of Rent then due and payable shall be deemed to be other than on account of Rent then due and payable, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided for in this Lease or available at law or in equity. No payment by Landlord or receipt by Tenant of an amount less than the full amount then due and payable shall be deemed to be other than on account of the amount then due and payable, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and Tenant may accept such check or payment without prejudice to Tenant’s right to recover the balance of such amount.
ARTICLE 23.
SECURITY DEPOSIT
To secure the full and faithful performance by Tenant of all of the covenants, conditions and agreements set forth in this Lease to be performed by it, including, without limitation, the foregoing such covenants, conditions and agreements in this Lease which become applicable upon its termination by re-entry or otherwise, Tenant has deposited with Landlord the sum shown in Article 1 as a “Security Deposit.” The Security Deposit shall be subject to the following terms and conditions:
(a) The Security Deposit or any portion thereof may be applied to the curing of any default that may exist and continue beyond the expiration of applicable notice and cure periods, including but not limited to a breach for failure to pay Rent, without prejudice to any other remedy or remedies which Landlord may have on account thereof, and upon such application Tenant shall pay Landlord on demand the amount so applied which shall be added to the Security Deposit so the same will be restored to its original amount.
(b) Should the Premises be conveyed by Landlord, the Security Deposit or any balance thereof shall be turned over to the Landlord’s grantee, and when the Security Deposit is actually turned over to such grantee, Tenant hereby releases Landlord from any and all liability with respect to the Security Deposit and its application or return, and Tenant agrees to look solely to such grantee for such application or return.
(c) Unless the Security Deposit is in the form of a Letter of Credit, Landlord may commingle the Security Deposit with other funds, shall not be required to keep the Security Deposit in trust, and shall not be obligated to pay Tenant any interest.
(d) The Security Deposit shall not be considered an advance payment of Rent or a measure of damages for any default by Tenant, nor shall it be a bar or defense to any actions by Landlord against Tenant.
(e) If Tenant shall faithfully perform all of the covenants and agreements contained in this Lease on the part of the Tenant to be performed, and provided there exists no default by Tenant hereunder, the Security Deposit or any then remaining balance thereof, shall be returned to Tenant, without interest, within thirty (30) days after the expiration of the Term, provided that subsequent to the expiration of this Lease, Landlord may retain from the Security Deposit (i) an amount reasonably estimated by Landlord to cover potential Operating Expense reconciliation payments due with respect to the calendar year in which this Lease terminates or expires (such amount so retained shall not, in any event, exceed five percent (5%) of estimated Operating Expense payments due from Tenant for such calendar year through the date of expiration or earlier termination of this Lease and any amounts so retained and not applied to such reconciliation shall be returned to Tenant no later than ninety (90) days after the end of the calendar year in which such termination or expiration occurs (or if sooner, the date on which Landlord delivers such reconciliation), and (ii) any and all amounts permitted by law or this Article 23 (collectively hereinafter referred to as the “Contingent Amount”). In the event Tenant has posted a Letter of Credit (as hereinafter defined) instead of cash, Tenant, at its option, may substitute cash at the expiration of the Term in an amount sufficient to satisfy the Contingent Amount, which amount shall be determined by Landlord, in its reasonable discretion as provided above.
Tenant hereby waives any and all provisions of Laws that limit the types of defaults for which a landlord may claim sums from a security deposit, it being agreed that Landlord, in addition, may claim those sums specified in this Article 23 above and/or those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by a default by Tenant under this Lease. Tenant further covenants that it will not assign or encumber the money deposited herein as a Security Deposit and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.
(f) The Security Deposit shall be in the form of a letter of credit, which Tenant shall deliver to Landlord (as beneficiary), and a copy to Landlord’s attorney, a standby letter of credit (“Letter of Credit”), in form and content reasonably satisfactory to Landlord, simultaneously with Tenant’s execution and delivery of this Lease to Landlord. The Letter of Credit shall be, among other things:
|
|
(1)
|
subject to International Standby Practices 1998, International Chamber of Commerce Publication No. 590;
|
|
|
(2)
|
irrevocable and unconditional, subject to (1) above;
|
|
|
(3)
|
in the amount of the required Security Deposit;
|
|
|
(4)
|
conditioned for payment solely upon presentation of the Letter of Credit and a sight draft certifying to the issuer of the Letter of Credit the existence of such grounds or circumstances upon which Landlord is permitted to make such draw, and
|
|
|
(5)
|
transferable one or more times by Landlord without the consent of Tenant.
|
Tenant acknowledges and agrees that it shall pay upon Landlord’s demand, as Additional Rent, any and all costs or fees charged in connection with the Letter of Credit that arise due to: (i) Landlord’s sale or transfer of all or a portion of the Property on one (1) occasion only, or (ii) the addition, deletion, or modification of any beneficiaries under the Letter of Credit. The Letter of Credit shall be issued by a member of the New York Clearing House Association or a commercial bank or trust company satisfactory to Landlord, having banking offices at which the Letter of Credit may be drawn upon in Boston, Massachusetts or Hartford, Connecticut and a net worth reasonably acceptable to Landlord. Landlord hereby approves TD Bank as an issuing bank. The Letter of Credit shall expire not earlier than twelve (12) months after the date of delivery thereof to Landlord and shall provide that same shall be automatically renewed for successive twelve (12) month periods through a date which is not earlier than sixty (60) days after the expiration date, or any renewal or extension thereof, unless written notice of non-renewal has been given by the issuing bank to Landlord by registered or certified mail, return receipt requested (or by reputable overnight delivery), not less than sixty (60) days prior to the expiration of the current period. If the issuing bank does not renew the Letter of Credit, and if Tenant does not deliver a substitute Letter of Credit or cash in lieu thereof at least thirty (30) days prior to the expiration of the current period, then Landlord shall have the right to draw on the existing Letter of Credit and maintain such funds as a cash security deposit. With respect to draws on the Letter of Credit:
|
|
(x)
|
Landlord may use, apply, or retain the proceeds of the Letter of Credit to the same extent that Landlord may use, apply, or retain the cash Security Deposit, as set forth above in this Article 23 or elsewhere in this Lease;
|
|
|
(y)
|
Landlord may draw on the Letter of Credit, in whole or in part, from time to time, at Landlord’s election, to the same extent that Landlord may draw on the cash Security Deposit, as set forth above in this Article 23 or elsewhere in this Lease; and
|
|
|
(z)
|
If Landlord partially draws down the Letter of Credit, Tenant shall within ten (10) days after Landlord gives Tenant notice thereof, restore all amounts drawn by Landlord, or substitute cash security instead.
|
Notwithstanding any of the foregoing to the contrary, provided that, at each such time, there then exists no default of Tenant and this Lease is then in full force and effect, then Tenant shall be entitled to reduce the face amount of a cash Security Deposit (or the Letter of Credit, as the case may be) to: (i) $525,967.76 on the fourth (4
th
) anniversary of the Rent Commencement Date, and (ii) $394,475.82 on the fifth (5
th
) anniversary of the Rent Commencement Date, and Landlord shall accept a substitute Letter of Credit for such reduced amounts or an endorsement to the existing Letter of Credit. Tenant hereby agrees to cooperate, at its expense with Landlord to promptly execute and deliver to Landlord any and all modifications, amendments and replacements of the Letter of Credit, as Landlord may reasonably request to carry out the terms and conditions of this Article 23.
In the event the issuer of any Letter of Credit held by Landlord hereunder is insolvent or is placed into receivership or conservatorship by the Federal Deposit Insurance Corporation, or any successor or similar entity, or if a trustee, receiver or liquidator is appointed for the issuer, or if Landlord is unable to effectuate a transfer of the Letter of Credit with the issuer of such letter of credit, then, effective as of the date of such occurrence, said Letter of Credit shall be deemed to not meet the requirements of this Article 23 and Tenant shall, within five (5) business days after receipt of written notice from Landlord, deliver to Landlord a replacement Letter of Credit which otherwise meets the requirements of this Article 23 (and Tenant’s failure to do so shall, notwithstanding anything in this Lease to the contrary, constitute an event of default for which there shall be no notice or grace or cure periods being applicable thereto other than the aforesaid five-day period); or, alternatively, Tenant shall, within such five (5)-day period deliver cash to Landlord in the amount required by this Article 23.
ARTICLE 24.
BROKERAGE COMMISSION
Landlord and Tenant represent and warrant to each other that neither has dealt with any broker, finder or agent except for the Broker(s) identified in Article 1. Tenant represents and warrants to Landlord that (except with respect to the Broker(s) identified in Article 1 and with whom Landlord has entered into a separate brokerage agreement) no broker, agent, commission salesperson, or other person has represented Tenant in the negotiations for and procurement of this Lease and of the Premises and that no commissions, fees, or compensation of any kind are due and payable in connection herewith to any broker, agent commission salesperson, or other person. Tenant agrees to indemnify and hold harmless Landlord from and against any and all loss, liabilities, claims, suits, or judgments (including, without limitation, reasonable attorneys’ fees and court costs incurred in connection with any such claims, suits, or judgments, or in connection with the enforcement of this indemnity) for any fees, commissions, or compensation of any kind which arise out of or are in any way connected with any claimed agency relationship not referenced in Article 1. Landlord agrees to indemnify and hold harmless Tenant from and against any and all loss, liabilities, claims, suits, or judgments (including, without limitation, reasonable attorneys’ fees and court costs incurred in connection with any such claims, suits, or judgments, or in connection with the enforcement of this indemnity) for any fees, commissions, or compensation of any kind which arise out of or are in any way connected with any claimed agency relationship with Landlord.
ARTICLE 25.
FORCE MAJEURE
Landlord shall be excused for the period of any delay in the performance of any obligation hereunder, except for any delay in the payment of money or any delay in the cure of any default which may be cured by the payment of money, when prevented from so doing by a cause or causes beyond its control, including all labor disputes, civil commotion, war, war-like operations, invasion, rebellion, hostilities, military or usurped power, sabotage, governmental regulations or controls, fire or other casualty, inability to obtain any material, services or financing, or through acts of God (collectively, “Force Majeure”). Tenant shall similarly be excused for delay in the performance of any obligation hereunder; provided:
(a) nothing contained in this Article 25 or elsewhere in this Lease shall be deemed to excuse or permit any delay in the payment of Rent, or any delay in the cure of any default which may be cured by the payment of money; and
(b) no reliance by Tenant upon this Article 25 shall limit or restrict in any way Landlord’s right of self-help as provided in this Lease.
ARTICLE 26.
PARKING
(a) Tenant shall be entitled to obtain, and pay for, contracts with the Parking Garage operator for the number of parking access devices set forth in Article 1 permitted use of such number of unreserved parking spaces in the Parking Garage, in areas, if any, as may be designated by Landlord or the Parking Garage operator for occupants of the Building, notwithstanding the number of Tenant’s employees, customers or invitees. The parking contracts shall be for unassigned spaces and the monthly rate to be paid by Tenant and its employees shall be the prevailing monthly parking rate charged by the Parking Garage operator, which parking rate may change at any time and from time to time, as determined by such Parking Garage operator. In the event Tenant fails to make any payment of the monthly parking charge within thirty (30) days after receipt of notice from Landlord that the same was not paid when due, then Landlord may revoke those parking contracts as to which payment was not made, and Landlord shall be under no obligation to obtain replacement parking contracts. Tenant shall be responsible for the full amount of any taxes imposed by any governmental authority in connection with the use of the Parking Garage by Tenant. Failure to pay any monthly parking charge shall in no event be grounds for any claim of a default by Tenant under this Lease.
(b) If requested by Landlord, Tenant shall notify Landlord of the license plate number, year, make and model of the automobiles entitled to use the Parking Garage under such contracts and if requested by Landlord, such automobiles shall be identified by electronic or other identification devices provided by Landlord or the Parking Garage operator, and only such designated automobiles shall be permitted to use access control devices provided to monthly contract holders in the Parking Garage. The Parking Garage will be operated in whole or in part as a public parking garage, and at Landlord’s sole election, Landlord may make validation stickers available to Tenant for the use of public parking spaces, provided, however, if Landlord makes validation stickers available to any other office tenant in the Building, Landlord shall make such validation stickers available to Tenant. If Landlord has instituted a vehicle identification system or other parking procedure and Tenant’s employees, customers or invitees do not comply with any such procedure, then in any of such events, Landlord shall be entitled to, without any liability to Tenant, its employees, customers or invitees, remove any vehicles not complying with Landlord’s procedures. Tenant acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without any abatement of Rent under this Lease, from time to time, close-off or restrict access to the Parking Garage for purposes of permitting or facilitating construction, alteration or improvement. Landlord may delegate its responsibilities hereunder to a parking operator or a lessee of the Parking Garage in which case such parking operator or lessee shall have all the rights of control attributed hereby to the Landlord.
(c) Tenant may not assign, transfer, sublease or otherwise alienate its right to use of the Parking Garage, except in connection with a sublease of the Premises or an assignment of this Lease, without Landlord’s prior written consent. Tenant’s continued right to use the Parking Garage is conditioned upon Tenant abiding by the terms of any parking contracts, and all rules and regulations which are prescribed from time to time for the orderly operation and use of the Parking Garage, Tenant’s cooperation in seeing that Tenant’s employees and visitors also comply with such rules and regulations, and Tenant not being in default under this Lease.
(d) Tenant acknowledges that the Parking Garage is subject to the provisions of the South Boston Parking Freeze Regulations and to one or more Parking Freeze Permits issued thereunder by the City of Boston Air Pollution Control Commission, which regulations and permits require that twenty percent (20%) of the total parking supply in the Parking Garage be set aside for Off-Peak use, and not be available weekdays between 7:30 a.m. and 9:30 a.m. Tenant acknowledges that the administration of such requirement may from time to time limit the ability of certain of the monthly parkers to enter the Parking Garage between 7:30 a.m. and 9:30 a.m.
ARTICLE 27.
HAZARDOUS MATERIALS
A.
Definition of Hazardous Materials
. The term “Hazardous Materials” for purposes hereof shall mean any chemical, substance, materials or waste or component thereof which is at the time in question listed, defined or regulated as a hazardous or toxic chemical, substance, materials or waste or component thereof by any federal, state or local governing or regulatory body having jurisdiction, or which would trigger any employee or community “right-to-know” requirements adopted by any such body, or for which any such body has adopted any requirements for the preparation or distribution of a materials safety data sheet (“MSDS”). The term “Hazardous Material” includes, without limitation, any material, waste or substance which is (i) included within the definitions of “hazardous substances,” “hazardous materials,” “toxic substances” or “solid waste” in or pursuant to any environmental Law, or subject to regulation under any environmental Law, (ii) listed in the United States Department of Transportation Optional Hazardous Material Table, 49 C.F.R. § 172.101, as to date or hereafter amended, or in the United States Environmental Protection Agency List of Hazardous Substances and Reportable Quantities, 40 C.F.R. Part 302, as to date or hereafter amended, (iii) an explosive, radioactive, asbestos, polychlorinated biphenyl, oil or petroleum product, (iv) designated as a “Hazardous Substance” pursuant to Section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1317), (v) defined as a “Hazardous Waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (vi) defined as a “Hazardous Substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601), or (vii) any substance deemed to be a “Hazardous Material” by any present or future federal, state or local Law, statute, regulation ordinance, or any judicial or administrative order or judgment thereunder, because it effects the health, industrial hygiene or the environmental or ecological conditions on, under or about the Premises or the Building.
B.
No Hazardous Materials
. Tenant shall not transport, use, store, maintain, generate, manufacture, handle, dispose, release or discharge any Hazardous Materials. However, the foregoing provisions shall not prohibit the transportation to and from, and use, storage, maintenance and handling within the Premises of Hazardous Materials customarily used in the business or activity expressly permitted to be undertaken in the Premises under Article 6, provided: (a) such Hazardous Materials shall be used and maintained only in such quantities as are reasonably necessary for the Permitted Use of the Premises and the ordinary course of Tenant’s business therein, in accordance with applicable Law; (b) such Hazardous Materials shall not be disposed of, released or discharged in the Building, and shall be transported to and from the Premises in compliance with all applicable Laws, and as Landlord shall reasonably require; (c) if any applicable Law or Landlord’s trash removal contractor requires that any such Hazardous Materials be disposed of separately from ordinary trash, Tenant shall make arrangements, at Tenant’s expense, for such disposal directly with a qualified and licensed disposal company at a lawful disposal site (subject to scheduling and approval by Landlord); and (d) any remaining such Hazardous Materials shall be completely, properly and lawfully removed from the Building upon expiration or earlier termination of this Lease. Any clean up, remediation and removal work shall be subject to Landlord’s prior written approval (except in emergencies), and shall include, without limitation, any testing, investigation, and the preparation and implementation of any remedial action plan required by any governmental body having jurisdiction or reasonably required by Landlord. If Landlord or any Lender or governmental body arranges for any tests or studies showing that this Article 27 has been violated by Tenant, Tenant shall pay for the costs of such tests.
C.
Notices To Landlord
. Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or other regulatory action taken or threatened in writing by any governmental or regulatory authority against Tenant with respect to the presence of any Hazardous Materials on the Premises or the migration thereof from the Premises to other property; (ii) any demands or claims made or threatened in writing by any party against Tenant relating to any loss or injury resulting from any Hazardous Materials on the Premises; (iii) any release, discharge or non-routine, improper or unlawful disposal or transportation of any Hazardous Materials on or from the Premises or in violation of this Article 27 of which Tenant obtains knowledge; and (iv) any matters where Tenant is required by Law to give a notice to any governmental or regulatory authority respecting any Hazardous Materials on the Premises. Landlord shall have the right (but not the obligation) to join and participate, at its expense, as a party, in any legal proceedings or actions affecting the Premises initiated in connection with any environmental, health or safety Law. At such times as Landlord may reasonably request, if Tenant is using the Premises for other than business or professional offices, Tenant shall provide Landlord with a written list, certified to be true and complete, identifying any Hazardous Materials then used, stored or maintained upon the Premises, the use and approximate quantity of each such material, a copy of any MSDS issued by the manufacturer therefor and such other information as Landlord may reasonably require or as may be required by Law. The foregoing requirement shall not apply to certain Hazardous Materials customarily found in offices in first-class office buildings in the Boston market and otherwise permitted by applicable Law, such as, by way of example and not limitation, toner for copiers, ink for printers and customary cleaning products.
D.
Indemnification
. If any Hazardous Materials are released, discharged or disposed of by Tenant or any other occupant of the Premises, or their employees, agents, invitees or contractors, on or about the Building in violation of the foregoing provisions, Tenant shall immediately, properly and in compliance with applicable Laws clean up, remediate and remove the Hazardous Materials from the Building and any other affected property and clean or replace any affected personal property (whether or not owned by Landlord), at Tenant’s expense (without limiting Landlord’s other remedies therefor). Tenant shall further be required to indemnify, hold harmless and defend (by counsel reasonably acceptable to Landlord) Landlord, and it attorneys and agents from and against any and all claims, demands, liabilities, losses, damages, penalties, forfeitures, judgments or expenses (including attorneys’ fees) or death or injury to any person or damage to any property whatsoever, arising directly or indirectly arising out of or attributable to: (i) a violation of the provisions of this Article 27 by Tenant, Tenant’s occupants, employees, contractors or agents; (ii) the presence in, on, under or about the Premises or discharge in or from the Premises of any Hazardous Materials placed in, under or about the Premises by Tenant or at Tenant’s direction, excluding any tenant improvement work done by Landlord; (iii) Tenant’s use, analysis, storage, transportation, disposal, release, threatened release, discharge or generation of Hazardous Materials to, in, on, under, about or from the Premises; or (iv) Tenant’s failure to comply with any Hazardous Materials Law applicable hereunder to Tenant. Any clean up, remediation and removal work shall be subject to Landlord’s prior written approval (except in emergencies), and shall include, without limitation, any testing, investigation, and the preparation and implementation of any remedial action plan required by any governmental body having jurisdiction or reasonably required by Landlord. Notwithstanding any provision of this Lease to the contrary, Tenant shall in no event have any liability (by way of indemnification or otherwise) for removal or remediation of any Hazardous Materials from the Premises or the Property to the extent that such Hazardous Materials (A) existed in, on or under the Premises or the Property, as the case may be, on the Commencement Date, or (B) were placed or released in, on or under the Premises other than by the act or omission of Tenant or its agents, employees, or contractors or anyone claiming by, through or under Tenant.
Landlord represents and warrants to Tenant that, as of the Commencement Date, the Premises will be free of unlawful levels or concentrations of any Hazardous Materials. Landlord will indemnify, defend (by counsel reasonably acceptable to Tenant), protect, and hold Tenant and each of Tenant’s employees, agents, attorneys, successors and assigns, free and harmless from and against any and all claims, liabilities, penalties, forfeitures, losses or expenses (including attorney’s fees) or death of or injury to any person or damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly, by:
(a) the presence in, on, under or about the Premises or the Building or discharge in or from the Premises or the Building of any Hazardous Materials placed, in, on, under or about the Premises or the Building by Landlord or at Landlord’s direction; or
(b) Landlord’s use, analysis, storage, transportation, disposal, release, threatened release, discharge or generation of Hazardous Materials to, in, on, under, about or from the Premises or the Building; or
(c) Landlord’s failure to comply with any Hazardous Materials Law.
The obligations of each party pursuant to this Article 27 include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup or detoxification or decontamination of the Premises or the Building, and the preparation and implementation of any closure, remedial action or other required plans in connection therewith, and survives the expiration or earlier termination of the term of the Lease.
ARTICLE 28.
ADDITIONAL RIGHTS RESERVED BY LANDLORD
In addition to any other rights provided for herein, Landlord reserves the following rights, exercisable without liability to Tenant for damage or injury to property, person or business and without effecting an eviction, constructive or actual, or disturbance of Tenant’s use or possession or giving rise to any claim:
(a) To name the Building and to change the name or street address of the Building;
(b) To install and maintain all signs and exterior lighting on the exterior and interior of the Building and Project;
(c) To designate all sources furnishing sign painting or lettering for use in the Building;
(d) [Intentionally Omitted];
(e) To have pass keys to the Premises and all doors therein, excluding Tenant’s vaults and safes;
(f) On reasonable prior notice to Tenant, and at reasonable times, to exhibit the Premises to any prospective purchaser, Lender, mortgagee, or assignee of any mortgage on the Building or the land on which the Building is located and to others having an interest therein at any time during the Term, and to prospective tenants during the last twelve (12) months of the Term;
(g) To take any and all measures, including entering the Premises for the purpose of making inspections, repairs, alterations, additions and improvements to the Premises or to the Building (including for the purpose of checking, calibrating, adjusting and balancing controls and other parts of the Building Systems), as may be necessary or desirable for the operation, improvement, safety, protection or preservation of the Premises, the Building or the Project including, but not limited to, the temporary closure of roads or sidewalks, or in order to comply with all Laws, or as may otherwise be permitted or required by this Lease; provided, however, that during the progress of any work on the Premises or at the Building, Landlord will attempt not to inconvenience Tenant, but shall not be liable for inconvenience, annoyance, disturbance, loss of business, or other damage to Tenant by reason of performing any work or by bringing materials, supplies, tools or equipment in the Building or Premises during the performance of any work, and so long as Tenant continues to have reasonable use of the Premises, the obligations of Tenant under this Lease shall not thereby be affected in any manner whatsoever;
(h) To relocate various facilities within the Building and/or the Building Common Areas if Landlord shall determine such relocation to be in the best interest of the development and operation of the Building, provided that such relocation shall not materially restrict the reasonable and safe access to or use of the Premises. In the course of any such action, Landlord shall use all reasonable efforts not to interfere with Tenant’s business operations in the Premises or its access to the Premises and other areas that Tenant is entitled to use; and
(i) To install vending machines of all kinds in common areas of the Building and to receive all of the revenue derived therefrom.
ARTICLE 29.
DEFINED TERMS
A. “Building” shall collectively refer to (i) the office and retail Building named in Article 1 of which the Premises are a part (including all modifications, additions and alterations made to the Building during the Term of this Lease), (ii) the real property on which the same is located (which real property constitutes Parcel “F” of the Project), and (iii) all plazas, Building Common Areas and any other areas located on said real property and designated by Landlord for use by all tenants in the Building.
B. “Building Common Areas” shall mean and include all areas, facilities, equipment, directories and signs of the Building (exclusive of the Premises and areas leased to other tenants) made available and designated by Landlord for the common and joint use and benefit of Landlord, Tenant and other tenants and occupants of the Building including, but not limited to, lobbies, public washrooms, hallways, sidewalks, parking areas, landscaped areas and service entrances. Building Common Areas may further include such areas in the Project or in adjoining properties under reciprocal easement agreements, operating agreements or other such agreements now or hereafter in effect and which are available to Landlord, Tenant and Tenant’s employees and invitees. Landlord reserves the right in its sole discretion and from time to time, to construct, maintain, operate, repair, close, limit, take out of service, alter, change, and modify all or any part of the Building Common Areas. “Building Systems” shall mean all systems serving the Building, including, without limitation, the mechanical, electrical, HVAC and plumbing systems of the Building.
C. “Declaration” shall mean that certain Declaration of Covenants, Easements and Restrictions by and between Fan Pier Development LLC, a Delaware limited liability company, and Fan Pier Owners Corporation, a Massachusetts corporation, dated January 31, 2008 and recorded on February 4, 2008 in Book 43059 at Page 1 of the Suffolk County Registry of Deeds, as the same may be amended from time to time.
D. “Default Rate” shall mean twelve percent (12%) per annum, or the highest rate permitted by applicable law, whichever shall be less. If the application of the Default Rate causes any provision of this Lease to be usurious or unenforceable, the Default Rate shall automatically be reduced to the highest rate allowed by law so as to prevent such result.
E. “FPOC Expenses” shall mean Landlord’s “Percentage Share” of “CAM Charges” (as those terms defined in the Declaration), and shall include, without limitation, the categories of costs and expenses set forth in the pro forma budget of FPOC Expenses attached hereto as Exhibit H. Tenant hereby acknowledges that it has reviewed and approved the categories of FPOC Expenses set forth on said Exhibit H.
F. “Hazardous Materials” shall have the meaning set forth in Article 27.
G. “Landlord” and “Tenant” shall be applicable to one (1) or more parties as the case may be, and the singular shall include the plural, and the neuter shall include the masculine and feminine; and if there is more than one (1), the obligations thereof shall be joint and several. For purposes of any provisions indemnifying or limiting the liability of either party, the term “Landlord” or “Tenant,” as the case may be, shall include the indemnitee’s then partners, beneficiaries, trustees, officers, directors, employees, shareholders, principals, successors and assigns.
H. “Law” or “Laws” (or, sometimes, “law” or “laws”) shall mean all federal, state, county and local governmental and municipal laws, statutes, ordinances, rules, regulations, codes, decrees, orders and other such requirements, applicable equitable remedies and decisions by courts in cases where such decisions are binding precedents in the Commonwealth of Massachusetts, and decisions of federal courts applying the Laws of the Commonwealth of Massachusetts.
I. “Lease” shall mean this lease executed between Tenant and Landlord, including any extensions, amendments or modifications and any Exhibits attached hereto.
J. “Lease Year” shall mean each consecutive twelve (12) month period thereof during the Term, with the first (1
st
) Lease Year commencing on the Rent Commencement Date; provided, however, that (a) if the Rent Commencement Date falls on a day other than the first (1
st
) day of a calendar month, the first (1
st
) Lease Year shall end on the last day of the calendar month within which the first (1
st
) anniversary of the Rent Commencement Date falls, and the second (2
nd
) and each succeeding Lease Year shall commence on the first (1
st
) day of the next calendar month, and (b) the last Lease Year shall end on the Expiration Date. Each full month during a Lease Year shall be referred to herein as a “Lease Month.” In the event that the Commencement Date falls on a day other than the first (1
st
) day of a calendar month, the first (1
st
) Lease Month shall be deemed to end on the last day of the first (1
st
) full calendar month following the calendar month within which the Commencement Date falls.
K. “Lender” shall mean the holder of a Mortgage at the time in question, and where such Mortgage is a ground lease, such term shall refer to the ground lessee.
L. “Mortgage” shall mean all mortgages, deeds of trust, ground leases and other such encumbrances now or hereafter placed upon the Building or any part thereof with the written consent of Landlord, and all renewals, modifications, consolidations, replacements or extensions thereof, and all indebtedness now or hereafter secured thereby and all interest thereon.
M. “Office Component” shall collectively refer to the office space located on the second (2
nd
) through eighteenth (18
th
) above-ground levels of the Building, measuring approximately 470,949 rentable square feet, of which the Premises are a part. Landlord reserves the right, in its sole discretion, to add all or any part of the second (2
nd
) floor premises of the Building to the Retail Component (and, thereafter, to re-add said premises back to the Office Component) at any time and from time to time. In any such event, the square footage of the Office Component shall be revised to reflect the reallocation of premises.
N. “Operating Expenses” shall mean all operating expenses of any kind or nature which are necessary, ordinary or customarily incurred in connection with the operation, maintenance, ownership or repair of the Building, all as determined by Landlord, as well as Landlord’s “Percentage Share” of “CAM Charges” (as defined in the Declaration), FPOC Expenses, and any periodic assessments, both regular and special, for which Landlord is or becomes responsible under the Project Documents.
Operating Expenses shall include, but not be limited to:
1.1 costs of supplies, including, but not limited to, the cost of relamping all standard lighting as the same may be required from time to time;
1.2 costs incurred in connection with obtaining and providing energy for the Building, including, but not limited to, costs of propane, butane, natural gas, steam, electricity, solar energy and fuel oils, coal or any other energy sources, including any taxes thereon;
1.3 costs of water and sanitary and storm drainage services;
1.4 costs of janitorial and security services;
1.5 costs of general maintenance and repairs, including costs under HVAC, the intrabuilding network cable and other mechanical maintenance contracts and maintenance, repairs and replacement of equipment and tools;
1.6 costs of maintenance and replacement of landscaping;
1.7 insurance premiums, including fire and all-risk coverage, together with loss of rent endorsements, the part of any claim required to be paid under the commercially reasonable deductible portion of any insurance policies carried by Landlord (where Landlord is unable to obtain insurance without such deductible from a major insurance carrier at reasonable rates), public liability insurance and any other insurance carried by Landlord (all such insurance shall be in such amounts as may be set forth in this Lease or, if greater, required by any holder of a Mortgage or (if greater) as Landlord may reasonably determine);
1.8 labor costs, including wages and other payments, costs to Landlord of worker’s compensation and disability insurance, payroll taxes, employment taxes, general welfare benefits, pension payments, medical and surgical benefits, fringe benefits up to the level of Building Manager, and all legal fees and other costs or expenses incurred in resolving any labor dispute;
1.9 commercially reasonable professional property management fees, not to exceed three percent (3%) of the gross receipts of the Building;
1.10 legal, accounting, inspection, and other consultation fees (including, without limitation, fees charged by consultants retained by Landlord for services that are designed to produce a reduction in Operating Expenses or to reasonably improve the operation, maintenance or state of repair of the Building) incurred in the ordinary course or in connection with making the computations required hereunder or in any audit of operations; and
1.11 the costs of capital improvements or structural repairs or replacements in each case to the extent necessary to conform to changes first having effect subsequent to the date of this Lease, in any applicable Laws, ordinances, rules, regulations or orders of any governmental or quasi-governmental authority having jurisdiction over the Building (herein “Required Capital Improvements”) or the costs incurred by Landlord to install a new or replacement capital item for the purpose of reducing Operating Expenses (herein “Cost Savings Improvements”) provided that Landlord reasonably and in good faith concludes that a savings will result. The expenditures for Required Capital Improvements and Cost Savings Improvements shall be amortized over the useful life of such capital improvement or structural repair or replacement (as determined by Landlord). All costs so amortized shall bear interest on the amortized balance at the rate of nine percent (9%) per annum or such higher rate as may have actually been paid by Landlord on funds borrowed for the purpose of constructing these capital improvements.
In making any computations contemplated hereby, Landlord shall also be permitted to make such adjustments and modifications to the provisions of this paragraph and Article 4 as shall be reasonable and necessary to achieve the intention of the parties hereto.
The following items shall be excluded from Operating Expenses, provided that such exclusions shall not apply to items of cost and expense included within FPOC Expenses: (aa) interest on and amortization of debts (other than expressly provided in Section 1.11 above); (bb) brokerage commissions (whether for sale, leasing or financing), and advertising expenses for procuring new tenants; (cc) financing and refinancing costs; (dd) Taxes; (ee) leasehold improvements made exclusively for one or more particular tenant(s) (which do not benefit or are not made available to the Tenant); (ff) the cost of any item included in Operating Expenses under this Article 29.N. to the extent that Landlord is actually reimbursed by a warranty, guaranty, service contract, an insurance company, a condemnor, or a tenant (except as a reimbursement of Operating Expenses) or any other party; (gg) ground rent, or any other rent payments under any superior lease; (hh) expenses incurred in the sale, refinancing, syndication, transfer, or other disposition of any portion of the Building, or any interest therein; (ii) legal fees and court costs relating to acquisition, financing, refinancing, syndication or sale of the Building, or any interest therein, or related to disputes with other tenants or other occupants of the Building, or associated with the preparation, negotiation or enforcement of any leases; (jj) administrative salaries, benefits and other compensation of Landlord’s or its agents’ employees above the grade of Building Manager; (kk) costs of additional or extra services furnished to other tenants for which Landlord is actually separately reimbursed; (ll) depreciation and amortization of Landlord’s acquisition and development cost of the Building and the Project; and (mm) the cost of any work performed or service provided to the extent the fees charged or other compensation received would result in a duplicative recovery by the Landlord; (nn) wages, salaries or other compensation paid for clerks or attendant in concessions, kiosks, information centers or stores or establishments operated by Landlord or any affiliate of Landlord; and (oo) any costs representing an amount paid to an entity related to Landlord which is in excess of the amount which would have been paid absent such relationship.
O. “Parking Garage” shall collectively mean (i) the three (3) level subterranean parking garage located below the Building and (ii) such other parking garages or parking areas as may be constructed from time to time in connection with the development of the Project and subsequently made available to Landlord and Tenant under reciprocal easement agreements, operating agreements or other such agreements now or hereafter in effect.
P. “Project” shall mean the entire mixed-use development known as “Fan Pier,” of which the Building is a part. The Project shall initially consist of nine (9) lettered parcels of land (“A” through “F” and “H” through “J”), the buildings and other improvements now or hereafter constructed thereon, and any and all common areas and facilities, accessory parking areas, access roadways, sidewalks, landscaped open areas, and maritime facilities now or hereafter constructed in connection with the development of the aforesaid parcels.
Q. “Rent” shall have the meaning specified therefor in Article 3.
R. “Retail Component” shall collectively mean the retail space located on the first (1
st
) above-ground level of the Building, measuring approximately 18,588 of gross leasable area. Landlord reserves the right, in its sole discretion, to add all or any part of the second (2
nd
) floor premises of the Building to the Retail Component (and, thereafter, to re-add said premises back to the Office Component) at any time and from time to time. In any such event, the square footage of the Retail Component shall be revised to reflect the reallocation of premises.
S. “Tax” or “Taxes” shall mean:
1.1 all real property taxes and assessments levied against the Building by any governmental or quasi-governmental authority. To the extent not included in Operating Expenses, the foregoing shall include all federal, state, county, or local governmental, special district, improvement district, municipal or other political subdivision taxes, fees, levies, assessments, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary, respecting the Building, including without limitation, real estate taxes, general and special assessments, interest on any special assessments paid in installments, transit taxes, taxes based upon the receipt of rent, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, appurtenances, furniture and other personal property owned by Landlord and used in connection with the Building which Landlord shall pay during any calendar year, any portion of which occurs during the Term (without regard to any different fiscal year used by such government or municipal authority except as provided below), provided, however, that any taxes which shall be levied on the rentals of the Building shall be determined as if the Building were Landlord’s only property, and provided further that in no event shall the term “taxes or assessment,” as used herein, include any net federal or state income taxes levied or assessed on Landlord, unless such taxes are a specific substitute for real property taxes, or any corporate or franchise taxes, inheritance, gift or transfer taxes. Such term shall, however, include gross taxes on rentals. Expenses incurred by Landlord for tax consultants and in contesting the amount or validity of any such taxes or assessments shall be included in such computations.
1.2 to the extent the same are not included in Operating Expenses, all “assessments,” including so-called special assessments, license tax, business license tax, levy, charge, penalty or tax imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, water, drainage, or other improvement or special district thereof, against the Premises or the Building or any legal or equitable interest of Landlord therein. For the purposes of this Lease, any special assessments shall be deemed payable in such number of installments as is permitted by law, whether or not actually so paid. If the Building is not fully built-out for occupancy by tenants or is otherwise not leased or assessed at full market value during the Base Year for Taxes or during any particular Comparison Year, then the Taxes for the Base Year or the particular Comparison Year will be adjusted to reflect the undiscounted fair market value of the Building as shown on the City of Boston Tax Assessor’s field card for the Building as of the Rent Commencement Date. If the method of taxation of real estate prevailing to the time of execution hereof shall be, or has been altered, so as to cause the whole or any part of the taxes now, hereafter or theretofore levied, assessed or imposed on real estate to be levied, assessed or imposed on Landlord, wholly or partially, as a capital levy or otherwise, or on or measured by the rents received therefrom, then such new or altered taxes attributable to the Building shall be included within the term real estate taxes, except that the same shall not include any enhancement of said tax attributable to other income of Landlord. All of the items set forth in the preceding clauses S.1.1 and S.1.2 are collectively referred to as the “Tax” or “Taxes”.
All other capitalized terms shall have the definition set forth in the Lease.
ARTICLE 30.
MISCELLANEOUS PROVISIONS
A.
RULES AND REGULATIONS
.
Tenant shall comply with all of the rules and regulations promulgated by Landlord from time to time for the Building. A copy of the current rules and regulations is attached hereto as Exhibit D. Landlord shall not be liable to Tenant for violation of any such rules and regulations, or for the breach of any covenant or condition in any lease by any other tenant in the Building. A waiver by Landlord of any rule or regulation for any other tenant shall not constitute nor be deemed a waiver of that rule or regulation for Tenant. Landlord shall not apply and enforce any Rules or Regulations in a discriminatory manner. In the case of any conflict between this Lease and any rule or regulation, this Lease shall control.
B.
EXECUTION OF LEASE
.
If Tenant or Landlord is a corporation, partnership or limited liability company, each individual executing this Lease on behalf of said entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said entity in accordance with: (i) if such party is a corporation, a duly adopted resolution of the Board of Directors of said corporation or in accordance with the by-laws of said corporation; (ii) if such party is a partnership, the terms of the partnership agreement; and (iii) if such party is a limited liability company, the terms of its operating agreement, and that this Lease is binding upon said entity in accordance with its terms.
C.
NOTICES
.
All notices under this Lease shall be in writing and will be deemed sufficiently given for all purposes if, to Tenant, by delivery to Tenant at the Premises during the hours the Building is open for business or by certified mail, return receipt requested or by overnight delivery service (with one acknowledged receipt), to Tenant at the address set forth below, and if to Landlord, by certified mail, return receipt requested or by overnight delivery service (with one acknowledged receipt), at the addresses set forth below, or at such other address from time to time established by Landlord. Any notice from Landlord to Tenant that claims or alleges a breach or default under this Lease shall state in prominent bold-face type “THIS IS A NOTICE OF DEFAULT UNDER A LEASE OF REAL PROPERTY, AND IMMEDIATE ACTION IS REQUIRED.”
Landlord: at the address set forth in Article 1
|
|
with a copy to:
|
the Building Manager at the address set forth in Article 1
|
and a copy to: c/o The Fallon Company, LLC
One Marina Park Drive
Boston, Massachusetts 02210
Tenant: at the address set forth in Article 1
with a copy to: Langer & McLaughlin, LLP
535 Boylston Street
Boston, Massachusetts 02116
Attn: Stephen T. Langer
D.
TRANSFERS
.
The term “Landlord” appearing herein shall mean only the owner of the Building from time to time and, upon a sale or transfer of its interest in the Building, the then landlord and transferring party shall have no further obligations or liabilities for matters accruing after the date of transfer of that interest, provided (and only to the extent) that the transferee or successor to Landlord has assumed such liabilities and obligations. Tenant, upon receipt of written notice of such sale or transfer, agrees to attorn to the transferee and shall look solely to the successor owner and transferee of the Building, as the lessor under this Lease, for performance of Landlord’s obligations arising hereunder to the extent so assumed. Tenant shall, within ten (10) business days after request, execute such further instruments or assurances (in form and substance reasonably acceptable to Tenant and such transferee) as such transferee may reasonably deem necessary to evidence or confirm such attornment.
E.
[INTENTIONALLY OMITTED]
.
F.
TENANT FINANCIAL STATEMENTS
.
Upon the written request of Landlord, and to the extent that the same are not otherwise publicly available, Tenant shall submit financial statements for its most recent financial reporting period and for the prior Lease Year. Landlord shall make such request no more than twice during any Lease Year, unless such request is in connection with an uncured event of default hereunder or any prospective sale, financing or refinancing of the Building, in which event there shall be no such limitation. All such financial statements shall be certified as true and correct in all material respects by the responsible officer or partner of Tenant and if Tenant is then in default hereunder (beyond all applicable notice and grace periods), the financial statements shall be certified by an independent certified public accountant.
G.
RELATIONSHIP OF THE PARTIES
.
Nothing contained in this Lease shall be construed by the parties hereto, or by any third party, as constituting the parties as principal and agent, partners or joint venturers, nor shall anything herein render either party (other than a guarantor) liable for the debts and obligations of any other party, it being understood and agreed that the only relationship between Landlord and Tenant is that of Landlord and Tenant.
H.
ENTIRE AGREEMENT; MERGER; SEVERABILITY
.
This Lease and any Exhibits or Addenda hereto, embody the entire agreement and understanding between the parties respecting the Lease and the Premises and supersedes all prior negotiations, agreements and understandings between the parties, all of which are merged herein. No provision of this Lease may be modified, waived or discharged except by an instrument in writing signed by the party against which enforcement of such modification, waiver or discharge is sought. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impact, impair or invalidate any other provision hereof and such other provisions shall remain in full force and effect.
I.
NO REPRESENTATION BY LANDLORD
.
Neither Landlord nor any agent of Landlord has made any representations, warranties, or promises with respect to the Premises or the Building except as expressly set forth herein.
J.
LIMITATION OF LIABILITY
.
Notwithstanding anything in this Lease to the contrary, any remedy of Tenant for the collection of a judgment (or other judicial process) requiring the payment of money by Landlord in the event of any default by Landlord hereunder or any claim, cause of action or obligation, contractual, statutory or otherwise by Tenant against Landlord concerning, arising out of or relating to any matter relating to this Lease and all of the covenants and conditions or any obligations, contractual, statutory, or otherwise set forth herein, shall be limited solely and exclusively to an amount which is equal to the interest of Landlord in and to the Building. Any judgments rendered against Landlord shall be satisfied solely out of the rents, issues and profits of the Building and the proceeds of sale of Landlord’s interest in the Building. No other property or assets of Landlord, or any member, officer, director, shareholder, partner, trustee, agent, servant or employee of Landlord (the “Representatives”) shall be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies under or with respect to this Lease, Landlord’s obligations to Tenant, whether contractual, statutory or otherwise, the relationship of Landlord and Tenant hereunder, or Tenant’s use or occupancy of the Building. Tenant further understands that any liability, duty or obligation of Landlord to Tenant, shall automatically cease and terminate as of the date that Landlord or any of Landlord’s Representatives no longer have any right, title or interest in or to the Building, to the extent that the successor to Landlord has assumed the obligations of Landlord under this Lease as provided above.. The provisions hereof shall inure to Landlord’s successors and assigns including any Lender. The foregoing provisions are not intended to relieve Landlord from the performance of any of Landlord’s obligations under this Lease, but only to limit the personal liability of Landlord in case of recovery of a judgment against Landlord; nor shall the foregoing be deemed to limit Tenant’s rights to obtain injunctive relief or specific performance or other remedy which may be accorded Tenant by law or under this Lease. If Tenant claims or asserts that Landlord has violated or failed to perform a covenant under the Lease, then except as may otherwise be expressly provided in this Lease, Tenant’s sole remedy shall be an action for specific performance, declaratory judgment or injunction and in no event shall Tenant be entitled to any money damages in any action or by way of set off, defense or counterclaim and Tenant hereby specifically waives the right to any money damages or other remedies for any such violation or failure. Neither Tenant’s officers, directors, trustees, shareholders, agents or employees, nor their respective partners, heirs, successors and assigns, shall ever have any personal liability for the obligations of Tenant hereunder, and Landlord hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Landlord.
K.
NOTICE OF LEASE
.
Tenant agrees that it will not record this Lease; however, each party hereto agrees, concurrently with the execution of this Lease, to execute a so-called notice of lease in recordable form and complying with applicable Law and reasonably satisfactory to Landlord’s and Tenant’s respective attorneys. In no event shall such document set forth the rent or other charges payable by Tenant under this Lease; and any such document shall expressly state that it is executed pursuant to the provisions contained in this Lease, and is not intended to vary the terms and conditions of this Lease.
L.
NO WAIVERS
.
Failure of Landlord or Tenant to insist upon strict compliance by the other party of any condition or provision of this Lease shall not be deemed a waiver by the first party of that condition. No waiver by Landlord or Tenant of any provision of this Lease shall be deemed to be a waiver of any other provision hereof or of any subsequent breach by the other party of the same or any other provision. No provision of this Lease may be waived by Landlord or Tenant, except by an instrument in writing executed by Landlord or Tenant, as applicable, and except as otherwise expressly provided in this Lease. Landlord’s or Tenant’s consent to or approval of any act by the other party requiring the first party’s consent or approval shall not be deemed to render unnecessary the obtaining of such first party’s consent to or approval of any subsequent act of the other party, whether or not similar to the act so consented to or approved. No act or thing done by Landlord or a Landlord agent during the Term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender shall be valid unless in writing and signed by Landlord. Similarly, this Lease cannot be amended except by a writing signed by Landlord and Tenant. Any payment by one party to another hereunder or receipt by a party of an amount less than the total amount then due hereunder shall be deemed to be in partial payment only thereof and not a waiver of the balance due or an accord and satisfaction, notwithstanding any statement or endorsement to the contrary on any check or any other instrument delivered concurrently therewith or in reference thereto. Accordingly, a party may accept any such amount and negotiate any such check without prejudice to such party’s right to recover all balances due and owing and to pursue its other rights against the other party under this Lease, regardless of whether the first party makes any notation on such instrument of payment or otherwise notifies the other party that such acceptance or negotiation is without prejudice to the first party’s rights.
M.
SUCCESSORS AND ASSIGNS
.
The conditions, covenants and agreements contained herein shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns.
|
|
N.
|
GOVERNING LAW; INDEPENDENT COVENANTS; WAIVER
.
|
This Lease shall be governed by the law of the Commonwealth of Massachusetts. No conflicts of law rules of any state or country (including, without limitation, the conflicts of law rules of the Commonwealth of Massachusetts) shall be applied to result in the application of any substantive or procedural laws of any state or country other than the Commonwealth of Massachusetts. All controversies, claims, actions or causes of action arising between the parties hereto and/or their respective successors and assigns, shall be brought, heard and adjudicated by the courts of the Commonwealth of Massachusetts, with venue in the County of Suffolk. Each of the parties hereto hereby consents to personal jurisdiction by the courts of the Commonwealth of Massachusetts in connection with any such controversy, claim, action or cause of action, and each of the parties hereto consents to service of process by any means authorized by the law of the Commonwealth of Massachusetts and consent to the enforcement of any judgment so obtained in the courts of the Commonwealth of Massachusetts on the same terms and conditions as if such controversy, claim, action or cause of action had been originally heard and adjudicated to a final judgment in such courts. Each of the parties hereto further acknowledges that the laws and courts of the Commonwealth of Massachusetts were freely and voluntarily chosen to govern this Lease and to adjudicate any claims or disputes hereunder.
Tenant waives all rights (i) to any abatement, suspension, deferment, reduction or deduction of or from Rent, and (ii) to quit, terminate or surrender this Lease or the Premises or any part thereof, except, in either case, as expressly provided in this Lease. Tenant hereby acknowledges and agrees that the obligations of Tenant hereunder shall be separate and independent covenants and agreements, that Rent shall continue to be payable in all events and that the obligations of Tenant hereunder shall continue unaffected, unless the requirement to pay or perform the same shall have been terminated pursuant to an express provision of this Lease. Landlord and Tenant each acknowledges and agrees that the independent nature of the obligations of Tenant hereunder represents fair, reasonable and accepted commercial practice with respect to the type of property subject to this Lease, and that this agreement is the product of free and informed negotiation during which both Landlord and Tenant were represented by counsel skilled in negotiating and drafting commercial leases in Massachusetts, and that the acknowledgements and agreements contained herein are made with full knowledge of the holding in
Wesson v. Leone Enterprises, Inc.
, 437 Mass. 708 (2002). Such acknowledgements, agreements and waivers by Tenant are a material inducement to Landlord entering into this Lease.
O.
EXHIBITS
.
All exhibits attached to this Lease are a part hereof and are incorporated herein by reference and all provisions of such exhibits shall constitute agreements, promises and covenants of this Lease.
P.
CAPTIONS
.
The captions and headings used in this Lease are for convenience only and in no way define or limit the scope, interpretation or content of this Lease.
Q.
COUNTERPARTS
.
This Lease may be executed in one (1) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
R.
TIME OF ESSENCE
.
Each covenant herein is a condition and time is of the essence with respect to the performance of every provision of this Lease.
S.
SURVIVAL OF OBLIGATIONS
.
Any obligations of Tenant occurring prior to the expiration or earlier termination of this Lease shall survive such expiration or earlier termination.
T.
CONFIDENTIALITY
.
Tenant acknowledges that the material financial terms of this Lease and any related documents are confidential information. Tenant shall use commercially reasonable efforts to keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Tenant’s financial, legal and space planning consultants and any proposed subtenants or assignees.
U.
NO OPTION
.
THE SUBMISSION OF THIS LEASE BY LANDLORD, ITS AGENT OR REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE AN OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS CONTAINED HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT BEING INTENDED HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY LANDLORD AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.
V.
USE OF BUILDING NAME; IMPROVEMENTS
.
Tenant shall not be allowed to use the name, picture or representation of the Building, or words to that effect, or any logo or trademark associated with the Project, in connection with any business carried on in the Premises or otherwise (except that Tenant may use the name of the Building as Tenant’s address) without the prior written consent of Landlord. In the event that Landlord undertakes any additional improvements on the property on which the Building is located including, but not limited to, new construction or renovation or additions to the existing improvements, Landlord shall not be liable to Tenant for any noise, dust, vibration or interference with access to the Premises or disruption in Tenant’s business caused thereby.
W.
RIGHT OF LANDLORD TO PERFORM
.
All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any abatement of Rent. If Tenant shall fail to pay any sum of money, other than Rent, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder, and such failure shall continue beyond any applicable notice and cure period set forth in this Lease, Landlord may, but shall not be obligated to, without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such other act on Tenant’s part to be made or performed as is in this Lease provided. All sums so paid by Landlord and all reasonable incidental costs, together with interest thereon at the Default Rate from the date of such payment by Landlord, shall be payable to Landlord on demand and Tenant covenants to pay any such sums, and Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and remedies in the event of the nonpayment thereof by Tenant as in the case of default by Tenant in the payment of the Rent.
X.
ACCESS, CHANGES IN BUILDING, FACILITIES, NAME
.
(i) Every part of the Building except the inside surfaces of all walls, windows and doors bounding the Premises (including exterior building walls, core corridor walls and doors and any core corridor entrance), and any space in or adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other utilities, sinks or other building facilities, and the use thereof, as well as access thereto through the Premises for the purposes of operation, maintenance, decoration and repair, are reserved to Landlord, provided that Tenant shall have reasonable, non-exclusive access through the risers, shafts and conduits serving the Premises to other portions of the Building (including the roof and mechanical floors) serving the Premises, and to utility connections at common connection points for the installation, repair and maintenance, of electronic, fiber, phone and data cabling, connections, and equipment for such cabling, conduits, transmitters, receivers, and other office, computer, communications and word and data processing cable, equipment and facilities, subject to Landlord’s right to require any vendor, contractor or service provider of Tenant to execute Landlord’s then commercially reasonable form of license agreement or access agreement permitting such vendor, contractor or service provider access to such portions of the Building for purposes of installing the applicable cabling, wiring and/or equipment.
(ii) Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within the walls, columns and ceilings of the Premises, provided that the same shall not interfere with Tenant’s then-existing installations, interfere with Tenant’s use and operation of the Premises for the Permitted Use or create any violation of the conditions of Tenant’s operating licenses, or reduce the usable floor area by more than a de minimis amount or change the interior configuration of the Premises by more than a de minimis amount.
(iii) Landlord reserves the right, without incurring any liability to Tenant therefor, to make such changes in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, elevators, stairways and other improvements thereof, as it may deem necessary or desirable.
(iv) Landlord may adopt any name for the Building and Landlord reserves the right to change the name or address of the Building at any time.
Y.
IDENTIFICATION OF TENANT
.
(1) If Tenant constitutes more than one person or entity, (A) each of them shall be jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions and provisions of this Lease to be kept, observed and performed by Tenant, (B) the term “Tenant” as used in this Lease shall mean and include each of them jointly and severally, and (C) the act of or notice from, or notice or refund to, or the signature of, any one or more of them, with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension, expiration, termination or modification, of this Lease, shall be binding upon each and all of the persons or entities executing this Lease as Tenant with the same force and effect as if each and all of them had so acted or so given or received such notice or refund or so signed.
(2) If Tenant is a general partnership (or is comprised of two or more persons, individually and as co-partners of a general partnership) or if Tenant’s interest in this Lease shall be assigned to a general partnership (or to two or more persons, individually and as co-partners of a general partnership) pursuant to Article 16 hereof (any such partnership and such persons hereinafter referred to in this Article 30.Y. as “Partnership Tenant”), the following provisions of this Lease shall apply to such Partnership Tenant:
(A) The liability of each of the parties comprising Partnership Tenant shall be joint and several.
(B) Each of the parties comprising Partnership Tenant hereby consents in advance to, and agrees to be bound by, any written instrument which may hereafter be executed, changing, modifying or discharging this Lease, in whole or in part, or surrendering all or any part of the Premises to the Landlord, and by notices, demands, requests or other communication which may hereafter be given, by the individual or individuals authorized to execute this Lease on behalf of Partnership Tenant under Article 30.B. above.
(C) Any bills, statements, notices, demands, requests or other communications given or rendered to Partnership Tenant or to any of the parties comprising Partnership Tenant shall be deemed given or rendered to Partnership Tenant and to all such parties and shall be binding upon Partnership Tenant and all such parties.
(D) If Partnership Tenant admits new partners, all of such new partners shall, by their admission to Partnership Tenant, be deemed to have assumed performance of all of the terms, covenants and conditions of this Lease on Tenant’s part to be observed and performed.
(E) Partnership Tenant shall give prompt notice to Landlord of the admission of any such new partners, and, upon demand of Landlord, shall cause each such new partner to execute and deliver to Landlord an agreement in form satisfactory to Landlord, wherein each such new partner shall assume performance of all of the terms, covenants and conditions of this Lease on Partnership Tenant’s part to be observed and performed (but neither Landlord’s failure to request any such agreement nor the failure of any such new partner to execute or deliver any such agreement to Landlord shall terminate the provisions of clause (d) of this Article 30.Y.(2) or relieve any such new partner of its obligations thereunder).
Z.
ANTI-TERRORISM REPRESENTATION
. MAKE MUTUAL
(1)
Each party certifies to the other that:
(a) It is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, nation, or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and
(b) It is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity, or nation.
(2)
Each party hereby agrees to defend, indemnify, and hold harmless the other from and against any and all claims, damages, losses, risks, liabilities, and expenses (including attorney’s fees and costs) arising from or related to any breach of the foregoing certification by the first party.
AA.
ERISA/UBIT.
(1) Tenant will not use the assets of an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and covered under Title I, Part 4 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended, in the performance, discharge or satisfaction of any of its obligations under this Lease such that it would constitute a “prohibited transaction” under ERISA. Notwithstanding any provision of the Lease to the contrary, Tenant shall not assign the Lease or sublease all or any portion of the Premises unless (i) such assignee or subtenant delivers to Landlord a certification (in form and content satisfactory to Landlord) with respect to the status of such assignee or subtenant (and any guarantor of such assignee’s or subtenant’s obligations) as a party in interest and a disqualified person, as provided above; and (ii) such assignee or subtenant undertakes not to take any action that would cause the Lease to constitute a non-exempt prohibited transaction under ERISA.
(2) Notwithstanding any provision of the Lease to the contrary, Tenant shall not (i) sublease all or any portion of the premises under a sublease in which the rent is based upon the net income or net profits of any person or (ii) enter into any other transaction with respect to the Lease or the Premises such that the revenues to be received by Landlord from time to time in connection with the Lease would, as a result of such transaction, be subject to Unrelated Business Income Tax under Section 511 through 514 of the Internal Revenue Code of 1986, as amended.
(3) Tenant agrees that it shall incorporate these requirements in any sublease of the Premises.
ARTICLE 31.
RIGHT OF FIRST OFFER
A. Provided that this Lease is in full force and effect and that no default (continuing uncured beyond the expiration of applicable notice and cure periods) shall exist under this Lease both at the time of Tenant’s exercise of the ROFO (as hereinafter defined) and on the date of entry into the agreement incorporating the Offered Space (as hereinafter defined), Tenant shall have a one (1)-time right (except as otherwise provided in Article 31.C. below) (the “ROFO”), at the expiration of the term of the first lease entered into with a bona fide third party tenant in respect of the ROFO Space (as hereinafter defined) (the parties acknowledging and agreeing that, as of the date of this Lease, the ROFO space is not leased to any other tenant and thus is not yet “available” to Tenant under this Article 31), to lease all or any portion of the thirteenth (13
th
) floor of the Building (the “ROFO Space”) on the first (1
st
) occasion that such ROFO Space “becomes available.” For purposes of this Article 31, the ROFO Space shall be deemed to “become available” if and only if Landlord, following the date of this Lease, has first leased the ROFO Space to a bona fide third party tenant and such third party’s lease or other occupancy agreement with respect to the ROFO Space subsequently expires or is otherwise terminated.
B. Notwithstanding anything set forth in this Article 31 to the contrary, the ROFO Space shall not be deemed to “become available” if the ROFO Space is:
(i) Assigned or subleased by the then current tenant of the ROFO Space (following Landlord’s initial leasing of the ROFO Space as provided above) as to which Tenant was afforded notice as provided herein; or
(ii) Re-leased by such then current tenant of the ROFO Space by renewal, extension, or renegotiation (whether or not an express renewal option is afforded to such tenant under the terms of its lease); or
(iii) Not leased to a tenant as of the date of this Lease (until that space is leased, and then subsequently “becomes available,” as provided above); or
(iv) Subject to an existing (as of the date of this Lease) right of first offer, right of first refusal or other expansion right of another tenant in the Building, the parties acknowledging and agreeing that, as of the date of this Lease, only Fish & Richardson P.C. has a superior right of first offer with respect to the ROFO Space; or
(v) Subject to a holdover by the then current tenant of the ROFO Space.
C. Subject to the foregoing, the first time during the Term that Landlord proposes to offer for lease all or any portion of the ROFO Space which Landlord anticipates will “become available,” Landlord shall furnish to Tenant a notice (the “First Offer Proposal”) containing the material terms of the proposed lease in respect of the applicable portions of the available ROFO Space (the “Offered Space”), including (i) a floor plan of the Offered Space, (ii) annual base rent for the Offered Space, (iii) the proposed effective date of the lease for the Offered Space, and (iv) any other material terms which Landlord shall deem appropriate. Tenant shall have the option, exercisable by notice delivered to Landlord within ten (10) days after Tenant’s receipt or refusal of receipt of Landlord’s First Offer Proposal, TIME BEING OF THE ESSENCE, to lease the Offered Space upon such terms and conditions as are contained in the First Offer Proposal. If Tenant timely delivers to Landlord written notice of Tenant’s exercise of the ROFO for the Offered Space, then, within ten (10) business days thereafter, the parties shall enter into a commercially reasonable amendment to this Lease incorporating the Offered Space as part of the Premises on the terms and conditions contained in the First Offer Proposal and for the then remaining term of this Lease (provided, however, that at least three (3) full years would remain on the Term following the effective date of Tenant’s lease of the Offered Space, whether in the ordinary course or a result of Tenant’s exercise of a then available extension option in accordance with the terms and conditions of this Lease). If Tenant declines or fails to timely exercise the ROFO with respect to the Offered Space, Landlord shall thereafter be free, for a period of one hundred eighty (180) days after the expiration of the ten (10) day ROFO exercise period referenced above, to lease the Offered Space (and any other portion of the ROFO Space, if applicable) without regard to the restrictions contained in this Article 31 and on such terms and conditions as Landlord may decide in its sole discretion, so long as each material term (as hereinafter defined) of such third party lease is no more than ten percent (10%) more favorable to such third party tenant than each corresponding material term set forth in the applicable First Offer Proposal (on a line item basis). The following shall constitute “material terms” under this paragraph: (1) base rent, (2) term (including extension, renewal, expansion and early termination rights), (3) free rent (inside the term), (4) operating expenses and (5) tenant improvement allowance. If no such third party lease for the Offered Space shall be concluded within said one hundred eighty (180) day period, then the provisions of this paragraph shall again be applicable to the Offered Space.
D. The ROFO is personal to Tenant and shall become null and void upon the occurrence of an assignment of the Lease or subletting of all or any portion of the Premises in accordance with the terms of this Lease, except in connection with a Permitted Transfer.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have duly executed this Lease with the Exhibits attached hereto, as of the day and year first written above.
LANDLORD:
FALLON CORNERSTONE ONE MPD LLC
,
a Delaware limited liability company
|
|
By:
|
MASSACUSETTS MUTUAL LIFE INSURANCE COMPANY,
|
a Massachusetts corporation,
its Member
|
|
By:
|
CORNERSTONE REAL ESTATE ADVISERS LLC,
|
a Delaware limited liability company,
its Authorized Agent
By:
/s/ Linda C. Houston____
Name: Linda C. Houston
Title: Senior Vice President
TENANT:
KERYX BIOPHARMACEUTICALS, INC.
,
a Delaware corporation
By:
/s/ Gregory P. Madison______________
Name:
Gregory P. Madison_________________
Title:
President & COO____________________
Exhibit A
Space/Floor Plan Showing Premises
Exhibit B
Tenant’s Work Exhibit
1. (a) Tenant shall, at Tenant’s expense, submit to Landlord final and complete dimensioned and detailed plans and drawings of partition layouts (including openings), ceiling and lighting layouts, colors, mechanical and electrical circuitry plans and any and all other information as may be reasonably necessary to complete the construction of the Premises in accordance with this Exhibit B (such plans are collectively referred to herein as “Tenant’s Plans”). The partition layout, and ceiling and lighting layout plans shall be 1'0” = 1/8” scale. Tenant shall submit Tenant’s Plans and any other plans required by this Exhibit B to Landlord in form, quality and quantity acceptable for the purposes of filing for a building permit with the Inspectional Services Department of the City of Boston (“ISD”), and such plans shall be signed and sealed by an architect licensed in the Commonwealth of Massachusetts.
(b) Landlord shall not unreasonably withhold, delay or condition its approval of Tenant’s Plans. Landlord shall approve Tenant’s Plans as soon as reasonably possible or designate by notice to Tenant the specific changes required to be made to Tenant’s Plans, which Tenant shall make within three (3) business days of receipt. This procedure shall be repeated until Tenant’s Plans are finally approved by Landlord.
(c) Any architect or designer acting for or on behalf of Tenant shall be deemed an agent of and authorized to bind Tenant in all respects.
(d) All plans, drawings and specifications with respect to the Premises required to be submitted by Tenant to Landlord shall comply with and conform to the Building plans filed with the ISD, Building standard specifications (the receipt of which Tenant hereby acknowledges) and with all the rules, regulations and/or other requirements of any governmental department having jurisdiction over the construction of the Building and/or Premises. Tenant shall prepare drawings in accordance with pre-existing conditions and field measurements.
(e) Landlord’s review of Tenant’s Plans is solely to protect the interests of Landlord in the Building and the Premises, and Landlord shall be neither the guarantor of, nor responsible for, the correctness or accuracy of Tenant’s Plans, or the compliance of Tenant’s Plans with applicable requirements of any governmental authority. Landlord’s review and approval of any submissions shall not be deemed to be an approval of the adequacy for any particular purpose or system capacity or the cost of the Tenant Improvements.
(f) Tenant shall reimburse Landlord for all actual, out-of-pocket costs incurred by Landlord in connection with having third parties review all submissions, plans and specifications submitted to Landlord for its review and approval pursuant to this Exhibit B, subject to the Allowance; provided that Tenant shall in no event be required to reimburse Landlord more than $2,500 on account of such review costs (and no costs reimbursed hereunder shall be duplicative of costs reimbursed under the Lease).
2. (a) Tenant shall, at its expense (except for the Allowance), in accordance with the terms and conditions of this Exhibit B, be responsible for the construction of all improvements and alterations necessary to prepare the Premises to conform with Tenant’s Plans (the “Tenant Improvements”). The term “Substantial Completion” shall mean when Tenant has obtained a temporary or final certificate of occupancy from ISD with respect to the Premises as improved in accordance with the terms and conditions of this Exhibit B. After completion of Tenant’s Plans, Tenant shall submit Tenant’s Plans to the appropriate governmental body for plan checking and a building permit. Tenant shall deliver a copy of the building permit to Landlord prior to the commencement of construction of the Tenant Improvements. Tenant shall not make any material changes to Tenant’s Plans once finally approved by Landlord without Landlord’s consent.
(b) Tenant shall select a contractor (the “Contractor”), subject to the approval of Landlord, which approval will not be unreasonably withheld and shall be granted or denied within 15 calendar days of request for such approval. With its request for approval of the Contractor, Tenant shall furnish to Landlord such information concerning the proposed Contractor’s background and experience as Landlord may reasonably require. A price for a construction contract based on Tenant’s Plans shall be mutually agreed upon by Tenant and the Contractor. Tenant shall enter into an agreement with the Contractor to build the Tenant Improvements, at Tenant’s sole cost, except for the Allowance.
The construction contract will provide for progress payments, no more frequently than once per calendar month, in minimum increments of $25,000.00, and each progress payment will be funded as follows: Landlord will fund the percentage of each progress payment equal to a fraction expressed as a percentage, the numerator of which is the Allowance and the denominator of which is the total cost of the Tenant Improvements; and Tenant will fund the remainder. Ten percent (10%) of each progress payment shall be retained by Landlord until Tenant delivers, or causes to be delivered, to Landlord a certificate of occupancy or certificate of completion, in form and substance reasonably satisfactory to Landlord, with respect to the Premises together with final and unconditional waivers of mechanic’s liens concerning the work for all labor and services performed and all material furnished in connection with the work, signed by the Contractor and all subcontractors, suppliers, and laborers involved in the work. Notwithstanding anything contained herein or in the Lease to the contrary, Landlord shall have no obligation to disburse any portion of the Allowance during any period of time that Tenant is in default of its obligations under the Lease (continuing uncured following receipt of notice thereof from Landlord) or upon or following termination of the Lease.
(c) If the cost of the design and construction of the Tenant Improvements is less than the Allowance, the difference shall be retained by Landlord. In the event that Tenant requests any changes to Tenant’s Plans, Landlord shall not unreasonably withhold, delay or condition its consent to any such changes, provided the changes do not adversely affect the Building’s structure, systems, equipment or appearance.
(d) The Allowance will be applied to the design and construction of the Tenant Improvements and for no other purpose. The “Allowance” shall be an amount equal to the product of (i) the area of the Premises in rentable square feet and (ii) $70.00. All costs attributable to the Tenant Improvements in excess of the Allowance shall be paid for by Tenant.
3. (a) Before beginning the Tenant Improvements, Tenant shall pay for and deliver to Landlord satisfactory evidence of the insurance coverage(s) required to be maintained by Tenant under Article 8 of the Lease. Landlord and the Contractor shall be named as additional insureds in such liability policies or certificates of insurance and the same shall remain in effect during the period of the performance of the Tenant Improvements.
(b) All the Tenant Improvements shall be in accordance with the Project Documents and the rules and regulations of any governmental department or bureau having jurisdiction thereover and shall not conflict with, or be in violation or cause any violation of, Landlord’s basic Building plans and/or the construction of the Building, and all the Tenant Improvements shall be completed free of all liens and encumbrances. All permits which may be required by Tenant for the Tenant Improvements shall be procured and paid for by Tenant or, if Landlord shall deem the same advisable, Landlord may procure such permits and Tenant shall pay for the same. No plans and/or specifications required to be filed by Tenant pursuant to any work contemplated to be performed by it within the Premises shall be filed or submitted to any governmental authority having jurisdiction thereover without first having obtained Landlord’s approval of same.
(c) Upon completion of the Tenant Improvements, Tenant will remove all debris and excess materials from the Building and the Premises.
(d) Without limiting the applicability of Article 5.E. of the Lease, the labor employed by Tenant or the Contractor shall always be harmonious and compatible with the labor employed by Landlord or any contractors or sub-contractors of Landlord. Should such labor be incompatible with such Landlord’s labor as shall be determined by the sole judgment of Landlord, to be exercised in good faith, Landlord may require Tenant to withdraw from the Premises until the completion of the Building and/or Premises by Landlord.
(e) In the event Tenant or the Contractor shall enter upon the Premises or any other part of the Building, as may be permitted by Landlord, Tenant shall indemnify and save Landlord free and harmless from and against any and all claims arising from or out of any entry thereon or the performance of the Tenant Improvements and from and against any and all claims arising from or claimed to arise from any act or neglect of Tenant or Tenant’s representatives or from any failure to act, or for any other reason whatsoever arising out of said entry or such work.
(f) Tenant Improvements which Landlord reasonably determines are specialized to Tenant’s use and occupancy of the Premises, including, without limitation, wiring and cabling, shall, at the election of Landlord (which election shall be made in writing at the time of Landlord’s approval of Tenant’s Plan hereunder), either (1) be removed by Tenant at its expense before the expiration or earlier termination of the term of the Lease or (2) remain upon the Premises and be surrendered therewith without disturbance, molestation or injury upon the expiration or earlier termination of the Lease. If Landlord requires the removal of all or part of the specialized Tenant Improvements, Tenant, at its expense, shall repair any damage to the Premises or the Building caused by such removal. If Tenant fails to remove any specialized Tenant Improvements upon Landlord’s request, then Landlord may (but shall not be obligated to) remove the same and the cost of such removal and repair of any damage caused by the same, together with any and all damages which Landlord may suffer and sustain by reason of the failure of Tenant to remove the same, shall be charged to Tenant and paid upon demand.
4. In no event shall Tenant be eligible to receive or entitled to any credit for any portion of the Allowance not used by Tenant by July 31, 2016. Tenant shall be responsible for the maintenance, repair and replacement of all Tenant Improvements unless the same is necessitated by the negligent acts of Landlord.
5. Tenant hereby authorizes Timothy Betjemann as Tenant’s representative to act on its behalf and represent its interests with respect to all matters which pertain to the construction of Tenant Improvements, and to make decisions binding upon Tenant with respect to such matters. Landlord hereby authorizes Richard Martini to be Landlord’s representative in connection with construction of the Tenant Improvements. Tenant hereby expressly recognizes and agrees that no other person claiming to act on behalf of the Landlord is authorized to do so, and any costs, expenses liabilities or obligations incurred or paid by Tenant in reliance on the discretion of any such other person shall be Tenant’s sole responsibility.
6. In the event of a conflict between the terms and provisions of the Lease and the terms and provisions of this Exhibit B, the terms and provisions of this Exhibit B shall control.
Exhibit B-1
Tenant’s Conceptual Space Plan
Exhibit C
Form of Sublease Consent
Pursuant to Article 16 of that certain Office Lease dated as of ___________, 2015 (as amended, the “Lease”), by and between
FALLON CORNERSTONE ONE MPD LLC
, a Delaware limited liability company, as “Landlord,” and
KERYX BIOPHARMACEUTICALS, INC.
, a Delaware corporation, as “Tenant,” demising certain office space in the building located at One Marina Park Drive, Boston, Massachusetts 02210, Landlord hereby consents to that certain Sublease by and between Tenant, as sublessor, and _______________, a _______________, as sublessee (the “Sublease”), a copy of which Sublease is attached hereto as Exhibit A, provided that, notwithstanding anything contained in the Sublease to the contrary, this consent shall in no way be deemed to (i) modify or amend any of the terms of the Lease, (ii) expand or alter in any way Landlord’s obligations or Tenant’s rights thereunder, (iii) serve as a consent of Landlord to any request other than the consent set forth above, (iv) waive any rights or remedies Landlord may have under the Lease or (v) constitute a release of Tenant of any of its obligations under the Lease. Without limiting the generality of the foregoing, Landlord shall not be bound by any of the terms or provisions contained in the Sublease and any provision in the Sublease that purports to impose any obligation upon Landlord that is greater than its obligation under the Lease or reduce the obligation of Tenant shall be of no force or effect as to Landlord.
FALLON CORNERSTONE ONE MPD LLC
,
a Delaware limited liability company
By: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts corporation,
its Member
By: CORNERSTONE REAL ESTATE ADVISERS LLC,
a Delaware limited liability company,
its Authorized Agent
By: _______________________________________
Name: Linda C. Houston
Title: Senior Vice President
Exhibit D
Building’s Rules and Regulations
and Janitorial Specifications
The following rules and regulations shall apply, where applicable, to the Premises, the Building, the property on which the Project is located, the Parking Garage and the appurtenances.
|
|
1.
|
Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas. At no time shall Tenant permit Tenant’s employees to loiter in Building Common Areas or elsewhere about the Building or the property on which the Project is located.
|
|
|
2.
|
Plumbing fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances. Damage resulting to fixtures or appliances by Tenant, its agents, employees or invitees, shall be paid for by Tenant, and Landlord shall not be responsible for the damage.
|
|
|
3.
|
Landlord shall designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance. Tenant shall not place objects against glass partitions, doors or windows which would be unsightly from the Building corridor or from the exterior of the Building. Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.
|
|
|
4.
|
No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenant’s cost and expense, using the standard graphics for the Building. Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel.
|
|
|
5.
|
Landlord will provide and maintain in the main lobby of the Building an alphabetical directory board and/or other directory device listing tenants, and no other directory shall be permitted unless previously consented to by Landlord in writing.
|
|
|
6.
|
Tenant shall not place any additional or different lock(s) on any door in the Premises or Building without Landlord’s prior written consent and Landlord shall have the right to retain at all times and to use keys to all locks within and into the Premises. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant’s cost, and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or early termination of this Lease.
|
|
|
7.
|
All contractors, contractor’s representatives and installation technicians performing work in the Building shall be subject to Landlord’s prior approval and shall be required to comply with Landlord’s standard rules, regulations, policies and procedures, which may be revised from time to time.
|
|
|
8.
|
Tenant shall not use the Premises so as to cause any increase above normal insurance premiums on the Building.
|
|
|
9.
|
No space in the Building shall be used for manufacturing, or for the sale of merchandise of any kind at auction, or for storage thereof preliminary to such sale.
|
|
|
10.
|
Landlord may from time to time adopt appropriate systems and procedures for the security or safety of the Building, any persons occupying, using, or entering the Building, or any equipment, finishings, or contents of the Building, and Tenant will comply with Landlord’s reasonable requirements relative to such systems and procedures. Notwithstanding anything to the contrary contained in the Lease, Tenant is solely responsible for the security of the Premises.
|
|
|
11.
|
Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours designated by Landlord. Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its premises or of the Building Common Areas, any pedestrian use, or any use which is inconsistent with good business practice. Tenant shall obtain Landlord’s prior approval by providing a detailed listing of the activity. If approved by Landlord, the activity shall be under the supervision of Landlord and expense of tenant must be performed in the manner required by Landlord. Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage or loss. Landlord reserves the right to inspect all freight to be brought into the building and exclude from the building all freight which violates any of the rules or regulations or provisions of Tenant’s lease.
|
|
|
12.
|
The elevator designated for freight by Landlord will be available for use by all tenants in the Building during the hours and pursuant to such procedures as Landlord may determine from time to time. The persons employed to move Tenant’s equipment, material, furniture, or other property in or out of the Building must be acceptable to Landlord and a certificate of insurance must be provided to Landlord naming Landlord and Landlord’s Property Manager as additional insured. All moving operations will be conducted at such times and in such a manner as Landlord will direct, and all moving will take place during non-Business Hours unless Landlord agrees in writing otherwise.
|
|
|
13.
|
Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises. Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant’s Property shall be repaired at Tenant’s sole expense.
|
|
|
14.
|
All floor slab and beam penetrations must be reviewed and approved by Landlord’s structural engineer prior to construction and will be performed by Landlord at Tenant’s expense. All openings through structurally-supported concrete slabs will be corebored, sleeved, grouted, sealed and made waterproof. Sleeves, except for water closets, will extend at least two inches (2”) above the finished floor.
|
|
|
15.
|
Tenant shall not commit or permit any act or practice which may tend to injure the Building nor permit its equipment to be a nuisance to other tenants, nor keep merchandise on or obstruct the common areas, sidewalks or other areas outside the Premises, nor conduct or permit any fire, bankruptcy, auction or going out of business sales, nor erect, retain or display any sign, light, lettering, inscription, symbol or mark which is not approved by Landlord, nor install any antennae, fixture, or improvement outside the Premises, nor permit any loudspeaker, radio, television broadcast to be heard outside the Premises, nor sell or display merchandise outside the Premises.
|
|
|
16.
|
Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond its capacity for proper, efficient and safe operation as determined solely by Landlord. Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electronic or gas heating devices, without Landlord’s prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.
|
|
|
17.
|
Tenant shall not waste electricity or water in the Building premises and shall cooperate fully with Landlord to assure the most effective operation of the Building heating and air conditioning systems.
|
|
|
18.
|
Corridor doors, when not in use, shall be kept closed.
|
|
|
19.
|
No cooking will be done or permitted by Tenant within the Premises.
|
|
|
20.
|
Tenant shall not: (1) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise interfere in any way with other tenants or persons having business with them; (2) solicit business or distribute, or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (3) conduct or permit other activities in the Building that might, in Landlord’s sole opinion, constitute a nuisance.
|
|
|
21.
|
No flammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the property on which the Building is located. Tenant shall not, without Landlord’s prior written consent, use, store, install, spill, remove, release or dispose of, within or about the Premises or any other portion of the property on which the Building is located, any asbestos-containing materials or any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law which may now or later be in effect. Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant, and shall remain solely liable for the costs of abatement and removal. Tenant shall cooperate with Landlord in minimizing loss and risk thereof from fire and associated perils. No live or artificial holiday trees or wreaths are permitted. Artificial trees and wreaths may be permitted by Landlord if any lighting thereon is approved by landlord and turned off at the end of the day.
|
|
|
22.
|
Tenant shall not use or occupy the Premises in any manner or for any purpose, which might injure the reputation or impair the present or future value of the Premises or the Building. Tenant shall not use, or permit any part of the Premises to be used, for lodging, sleeping or for any illegal purpose.
|
|
|
23.
|
Tenant shall not take any action which would violate Landlord’s labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute, or interfere with Landlord’s or any other tenant’s or occupant’s business or with the rights and privileges of any person lawfully in the Building (“Labor Disruption”). Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties, nor shall the Commencement Date of the Term be extended as a result of the above actions.
|
|
|
24.
|
Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant’s employees, and then only if the operation does not violate the lease of any other tenant in the Building.
|
|
|
25.
|
No bicycles, vehicles, or animals (except guide dogs for the disabled) of any kind shall be brought into or kept in the Premises. Interior and exterior bicycle racks provided by the Landlord are for non-motorized vehicles only.
|
|
|
26.
|
Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord’s sole opinion may impair the reputation of the Building or its desirability. Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.
|
|
|
27.
|
Tenant shall not canvass, solicit or peddle in or about the Building or the property on which the Building is located.
|
|
|
28.
|
The Landlord has designated the Building as a non-smoking building. Tenant acknowledges that the Building has been designated a non-smoking building. At no time shall Tenant permit its agents, employees, contractors, guests or invitees to smoke in the Building or directly outside the Building.
|
|
|
29.
|
The work of cleaning personnel shall not be hindered by Tenant after 5:30 p.m., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.
|
|
|
30.
|
Other Tenants; Changes in Use. Landlord reserves the absolute right to effect other tenancies in the Building as Landlord shall determine in the exercise of its sole business judgment. Tenant does not rely on the fact, nor does Landlord represent: (1) that as of or after the Commencement Date any specific tenant, or occupant, or the number of tenants, or occupants, shall occupy any space in the Building, (2) hours or days that such other tenants shall or may be open for business, or gross sales which may be achieved by Tenant or any other tenants in the Building, or (3) that any portion or portions of the Building shall be used for any specific purpose. A vacation or abandonment of premises or cessation of operations by any other tenant(s) in the Building or any change in the use of any portion or portions of the Building shall not in any way release Tenant from its obligations under this Lease.
|
|
|
31.
|
Tenant shall not engage or pay any employees of the building without approval from the Landlord.
|
|
|
32.
|
Landlord reserves the right at any time to rescind, alter or waive any rule or regulation at any time prescribed for the Building and to impose additional reasonable rules and regulations when in its judgment deems it necessary, desirable or proper for its best interest and for the best interest of the tenants and no alteration or waiver of any rule or regulation in favor of one tenant shall operate as an alteration or waiver in favor of any other tenant, provided such rules and regulations do not diminish Tenant’s rights under the Lease, and provided that Landlord shall not discriminate in the enforcement of the Rules and Regulations. Landlord shall not be responsible to any tenant for the nonobservance or violation by any other tenant however resulting of any rules or regulations at any time prescribed for the Building.
|
|
|
33.
|
No smoking is permitted in the building by tenant, employees, its agents, contractors, guests or invitees.
|
JANITORIAL SPECIFICATIONS
I. Interior Tenant Areas
Nightly Monday through Friday, excluding holidays
|
|
1.
|
Dust mop all stone, ceramic tile, terrazzo and other type of un-waxed flooring.
|
|
|
2.
|
Dust mop all vinyl, asphalt, rubber and similar types of flooring. Remove gum and other substances, spot mop if necessary.
|
|
|
3.
|
Vacuum all carpeted areas.
|
|
|
4.
|
Dust mop all private and public stairways and vacuum if carpeted.
|
|
|
5.
|
Hand dust and wipe clean all horizontal surfaces including furniture, file cabinets, fixtures, and windowsills, using chemically treated dust cloth.
|
|
|
6.
|
Remove fingerprints from all painted surfaces near light switches, entrance doors, drinking fountains, etc.
|
|
|
7.
|
Remove all gum and foreign matter on sight.
|
|
|
8.
|
Empty and clean all waste receptacles and remove waste materials to compactors. Replace liners as necessary.
|
|
|
9.
|
Damp wash interiors of all waste disposal receptacles and wash as necessary.
|
|
|
10.
|
Clean and sanitize all water fountains, and water coolers with a disinfectant solution. Wash all sinks and the floors adjacent to them on a nightly basis.
|
|
|
11.
|
Spot mop floors for spills, etc.
|
|
|
12.
|
Clean all low ledges, shelves, bookcases, chair rails, trim, pictures, charts etc. within reach.
|
|
|
13.
|
Clean mirrors, metal work, glass tabletops.
|
|
|
14.
|
Upon completion of work, all slop sinks are to be thoroughly cleaned and all cleaning equipment and supplies stored neatly in locations designated by the Management of the building.
|
|
|
15.
|
All cleaning operations shall be scheduled so that a minimum of lights are to be left on at any time. Upon completion of cleaning all lights are to be turned off. All entrance doors are to be kept locked during the cleaning operation.
|
|
|
16.
|
Spot clean both sides of tenant entry glass doors.
|
|
|
17.
|
Spot clean desk tops and counter tops.
|
|
|
18.
|
Pick up all recyclable material and take to appropriate place.
|
Weekly
|
|
1.
|
Hand dust all door louvers and other ventilating louvers within reach.
|
|
|
3.
|
In high traffic areas, damp mop if necessary and apply spray-buffing solution in a fine mist and buff with a synthetic pad.
|
|
|
4.
|
Damp mop all non-carpeted and public stairways.
|
|
|
5.
|
Wipe clean all bright work.
|
|
|
7.
|
Dust walls up to normal reach.
|
Monthly
|
|
1.
|
Hose vacuum underneath all furniture.
|
|
|
2.
|
Dust all vertical surfaces such as walls, furniture, partitions and surfaces not reached in nightly cleaning.
|
|
|
3.
|
Dust exterior of lighting fixtures.
|
Quarterly
|
|
1.
|
Dust all exterior window blinds
|
|
|
2.
|
Dust and/or clean all diffusers
|
Other
|
|
1.
|
Cleaning of computer rooms will be responsibility of individual tenants.
|
|
|
2.
|
Coffee stations and dishware are responsibility of the tenant.
|
II. Public Corridors, Stairwells (Emergency Egress), Service Areas
Nightly
|
|
1.
|
Vacuum and spot clean carpeting.
|
|
|
2.
|
Sweep and mop public concrete floors.
|
|
|
3.
|
Sweep and mop public stairwells and landings.
|
|
|
4.
|
Clean baseboards of scuffs and marks.
|
|
|
5.
|
Clean all directories, signage kiosks, wall signage and electric kiosks.
|
|
|
6.
|
Clean corridor glass and metal work.
|
|
|
7.
|
Spot clean walls, ceilings, lights, etc.
|
|
|
8.
|
Clean telephones and telephone booth areas.
|
|
|
10.
|
Dust to hand height all horizontal surfaces of equipment ledge, sill, shelves, radiators, frames, partitions, handrails, etc.
|
|
|
11.
|
Clean exterior surfaces of all trash containers and planters.
|
|
|
12.
|
Keep slop sinks, closets, supply rooms and other janitorial areas in a clean orderly condition.
|
|
|
13.
|
Keep electrical and telephone closets clean and free of storage.
|
Weekly
|
|
2.
|
Dust all vertical surfaces within reach.
|
|
|
3.
|
Sweep emergency egress stairs and landings.
|
Monthly
|
|
1.
|
Wash all corridor glass and metal completely including atriums.
|
|
|
2.
|
Shampoo heavily traveled carpeted areas.
|
Quarterly
|
|
1.
|
Clean handrails, wall mounted equipment casings, landings, walls, kick plates in emergency egresses.
|
|
|
2.
|
Shampoo and extract all carpeting.
|
|
|
3.
|
Damp clean inside reflectors of high hat lighting fixtures.
|
III. Restrooms
Building Operating Hours
Day porters and matrons will be assigned to perform the following:
|
|
1.
|
Empty trash containers and insert new liners.
|
|
|
2.
|
Sweep and spot wash floors as necessary.
|
|
|
3.
|
Spot clean sinks and mirrors. Clean and spot polish shelves and metal dispensers. Check for Graffiti and spot clean if necessary.
|
|
|
4.
|
Ensure cleanliness of urinals and toilets.
|
|
|
5.
|
Refill all dispenser units as needed.
|
Non-Operating Hours
|
|
1.
|
Damp wash, sanitize (using disinfectant solution) and polish all fixtures including toilet bowls, urinals and wash basins.
|
|
|
2.
|
Sweep and wash floors with approved germicidal solution.
|
|
|
3.
|
Wash and polish mirrors, powder shelves, dispensers, hand dryers, bright work including flushometers, piping and toilet seat hinges.
|
|
|
4.
|
Clean and sanitize
both
sides of toilet seats.
|
|
|
5.
|
Empty all containers and disposal units and insert new liners.
|
|
|
6.
|
Wash and sanitize interiors and exteriors of all containers prior to inserting new liners.
|
|
|
7.
|
Empty, clean and sanitize all sanitary napkin disposal units.
|
|
|
8.
|
Dust and spot wash where necessary partitions, tile walls, dispensers, ceiling lights, switches and receptacles.
|
|
|
9.
|
Refill all dispensers to normal limits including sanitary supplies, soap, tissue, towels, etc.
|
|
|
10.
|
Remove all rubbish and transport to compactor.
|
|
|
11.
|
Dust ceiling door vents and doorframes.
|
Periodic
Monthly
|
|
1.
|
Machine scrub all tile floors, hand brush corners and hand brush toilet edges with approved germicidal detergent solution.
|
|
|
2.
|
Wash completely all partitions, tile walls and enamel surfaces.
|
IV. Window Cleaning
Periodic
1. Windows will be washed and cleaned a minimum of two times per year.
Exhibit E
Description of Base Building Condition
Exhibit F
Option to Extend Term
(a) Tenant shall have and is hereby granted the option to extend the Term of the Lease of the entire Premises (the “Extension Option”) for one (1) additional period of five (5) years (the “Extension Period”), provided that: (i) Tenant gives written notice to Landlord of Tenant’s election of interest to exercise the Extension Option no later than fifteen (15) months prior to the Expiration Date (“Tenant’s Notice to Extend”); and (ii) no event of default exists and is continuing uncured (following notice to Tenant) at the time of the exercise of the Extension Option, or arises subsequent thereto and is not cured prior to what otherwise would have been the commencement of the Extension Period.
(b) All terms and conditions of this Lease, including without limitation all provisions governing the payment of Additional Rent, shall remain in full force and effect during the Extension Period, except that the Base Rent payable during the Extension Period shall be the then-current fair market rental rate for comparable office space in Boston at the time of the exercise of the option granted herein, taking into consideration all relevant factors (the “Current Market Rental Rate”), but in no event less than the fully-escalated Base Rent and Escalation Increases in effect for the last Lease Year of the Term, and the Base Year shall be the calendar year in which the Extension Period commences.
(c) Landlord shall notify Tenant of Landlord’s proposed Base Rent for the Extension Period within thirty (30) days after Landlord’s receipt of Tenant’s Notice to Extend. Promptly after Landlord gives Tenant Landlord’s proposal for Current Market Rental Rate with respect to the Extension Period, Landlord and Tenant shall commence negotiations to agree upon the Current Market Rental Rate. If Landlord and Tenant are unable to reach agreement on the Current Market Rental Rate within thirty (30) days after the date on which Landlord gives Tenant Landlord’s proposal for Current Market Rental Rate, then the Current Market Rental Rate shall be determined as provided below.
(d) If Landlord and Tenant are unable to agree on the Current Market Rental Rate within said thirty (30) day period, then within five (5) days thereafter, Landlord and Tenant shall each simultaneously submit to the other in a sealed envelope its good faith estimate of the Current Market Rental Rate. If the higher of such estimates is not more than one hundred five percent (105%) of the lower of such estimates, then the Current Market Rental Rate shall be the average of the two (2) estimates. If the matter is not resolved by the exchange of estimates or averaging, then Current Market Rental Rate shall be determined as hereinafter provided.
(e) Within seven (7) days after the exchange of estimates, the parties shall select, as an arbitrator, a mutually acceptable commercial real estate broker licensed in the Commonwealth of Massachusetts as a real estate broker specializing in the field of commercial office leasing in the downtown Boston rental market, having no less than ten (10) years’ experience in such field (an “Approved Broker”). If the parties cannot agree on such person, then within a second (2
nd
) period of seven (7) days, each shall select an Approved Broker and within a third (3
rd
) period of seven (7) days, the two (2) appointed persons shall select a third (3
rd
) Approved Broker and the third (3
rd
) person shall be the arbitrator. If one (1) party shall fail to make such appointment within said second seven (7) day period, then the person chosen by the other party shall be the sole arbitrator. Once the arbitrator has been selected as provided for above, then, as soon thereafter as practicable, but in any case within fourteen (14) days after his or her appointment, the arbitrator shall determine the Current Market Rental Rate by selecting either the Landlord’s estimate of Current Market Rental Rate or the Tenant’s estimate of Current Market Rental Rate. There shall be no discovery or similar proceedings and the arbitrator shall have no power or authority to make any independent determination. The arbitrator’s decision as to which estimate of Current Market Rental Rate shall be the Current Market Rental Rate for the Extension Period shall be rendered in writing to both Landlord and Tenant and shall be final and binding upon them and shall be the Base Rent for the Extension Period.
The costs of the arbitrator will be equally divided between Landlord and Tenant. Any fees of any counsel engaged by Landlord or Tenant, however, shall be borne by the party that retained such counsel.
(f) The parties shall execute an amendment modifying this Lease to set forth the Base Rent for the Premises during the Extension Period within ten (10) business days following the parties’ agreement or, in the alternative, within ten (10) business days following the arbitrator’s determination, of the Base Rent for the Extension Period, but the failure to do so shall have no effect on Tenant’s otherwise valid and timely exercise of the Extension Option.
Exhibit G
Form of SNDA
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “
Agreement
”) is made by and between TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation with offices at 730 Third Avenue, New York, New York 10017 (“
Lender
”) and _______________, a [an] [individual]
name of state
[corporation] [limited liability company] [general partnership] [limited partnership] [d/b/a/ _________] with its principal place of business at ________________ (“
Tenant
”).
RECITALS
:
A. Lender has made or is about to make a loan (together with all advances and increases, the “
Loan
”) to FALLON CORNERSTONE ONE MPD LLC, a Delaware limited liability company (“
Borrower
”).
B. Borrower, as landlord, and Tenant have entered into a lease dated ______________ as amended by amendments dated __________________ (the “
Lease
”) which leased to Tenant Suite No. ______________ (the “Leased Space”), consisting of __________________ rentable square feet on the ________________ (______) floor of the office building located on the Property (defined below).
C. The Loan is or will be secured by the [Open-End] Mortgage, Assignment of Leases and Rents, Fixture Filing Statement and Security Agreement recorded or to be recorded in the official records of the County of Suffolk, Commonwealth of Massachusetts (together with all advances, increases, amendments or consolidations, the “
Mortgage
”) and the Assignment of Leases and Rents recorded or to be recorded in such official records (together with all amendments or consolidations, the “
Assignment
”), assigning to Lender the Lease and all rent, additional rent and other sums payable by Tenant under the Lease (the “
Rent
”).
D. The Mortgage encumbers the real property, improvements and fixtures located at One Marina Park Drive in the City of Boston, County of Suffolk, Commonwealth of Massachusetts, commonly known as Fan Pier, and described on
Exhibit “A”
(the “
Property
”).
IN CONSIDERATION of the mutual agreements contained in this Agreement, Lender and Tenant agree as follows:
1. The Lease and all of Tenant’s rights under the Lease are and will remain subject and subordinate to the lien of the Mortgage and all of Lender’s rights under the Mortgage and Tenant will not subordinate the Lease to any other lien against the Property without Lender’s prior consent.
2. This Agreement constitutes notice to Tenant of the Mortgage and the Assignment and, upon receipt of notice from Lender, Tenant will pay the Rent as and when due under the Lease to Lender and the payments will be credited against the Rent due under the Lease. Tenant shall have no obligation to inquire as to the propriety of any such notice from Lender, or to see to the application of any payment made by Tenant to or at the direction of Lender.
3. Tenant does not have any right or option to purchase any portion of or interest in the Property.
4. Tenant and Lender agree that if Lender exercises its remedies under the Mortgage or the Assignment and if Tenant is not then in default beyond any applicable grace and cure periods under the Lease:
(a) Lender will not name Tenant as a party to any judicial or non-judicial foreclosure or other proceeding to enforce the Mortgage unless joinder is required under applicable law but in such case Lender will not seek affirmative relief against Tenant, the Lease will not be terminated and Tenant’s possession of the Leased Space will not be disturbed;
(b) If Lender or any other entity (a “
Successor Landlord
”) acquires the Property through foreclosure, by other proceeding to enforce the Mortgage or by deed-in-lieu of foreclosure (a “
Foreclosure
”), Tenant’s possession of the Leased Space will not be disturbed and the Lease will continue in full force and effect between Successor Landlord and Tenant; and
(c) If, notwithstanding the foregoing, the Lease is terminated as a result of a Foreclosure, a lease between Successor Landlord and Tenant will be deemed created, with no further instrument required, on the same terms as the Lease except that the term of the replacement lease will be the then unexpired term of the Lease. Successor Landlord and Tenant will execute a replacement lease at the request of either.
5. Upon Foreclosure, Tenant will recognize and attorn to Successor Landlord as the landlord under the Lease for the balance of the term. Tenant’s attornment will be self-operative with no further instrument required to effectuate the attornment except that at Successor Landlord’s request, Tenant will execute instruments reasonably satisfactory to Successor Landlord confirming the attornment.
6. Successor Landlord will not be:
(a) liable for any act or omission of any prior landlord under the Lease occurring before the date of the Foreclosure except for obligations of a continuing nature imposed on the landlord under the Lease;
(b) required to credit Tenant with any Rent paid more than one month in advance or for any security deposit unless such Rent or security deposit has been received by Successor Landlord;
(c) bound by any amendment, renewal or extension of the Lease that is inconsistent with the terms of the Lease or is not in writing and signed both by Tenant and landlord;
(d) bound by any reduction of the Rent unless the reduction is pursuant to the terms of the Lease or is in connection with an extension or renewal of the Lease at prevailing market terms or was made with Lender’s prior consent;
(e) bound by any reduction of the term of the Lease or any termination, cancellation or surrender of the Lease unless the reduction, termination, cancellation or surrender is pursuant to the terms of the Lease or occurred during the last six (6) months of the term or was made with Lender’s prior consent;
(f) bound by any amendment, renewal or extension of the Lease entered into without Lender’s prior consent if the Leased Space represents fifty percent (50%) or more of the net rentable area of the building in which the Leased Space is located;
(g) INTENTIONALLY OMITTED;
(h) subject to any credits, offsets, claims, counterclaims or defenses that Tenant may have that arose prior to the date of the Foreclosure or liable for any damages Tenant may suffer as a result of any misrepresentation, breach of warranty or any act of or failure to act by any party other than Successor Landlord;
(i) bound by any obligation to make improvements to the Property, including the Leased Space, to make any payment or give any credit or allowance to Tenant provided for in the Lease or to pay any leasing commissions arising in connection with the execution of the Lease, except that Successor Landlord will be bound to comply with the maintenance and repair and casualty and condemnation restoration provisions included in the Lease; or
(j) liable for obligations under the Lease with respect to any off-site property or facilities for the use of Tenant (such as off-site leased space or parking) unless Successor Landlord acquires in the Foreclosure the right, title or interest to the off-site property.
7. Lender will have the right, but not the obligation, to cure any default by Borrower, as landlord, under the Lease. Tenant will notify Lender of any default that would entitle Tenant to terminate the Lease or abate the Rent and any notice of termination or abatement will not be effective unless Tenant has so notified Lender of the default and Lender has had a thirty (30)-day cure period (or such longer period as may be necessary if the default is not susceptible to cure despite diligent efforts within thirty (30) days) commencing on the latest to occur of the date on which (i) the cure period under the Lease expires; (ii) Lender receives the notice required by this paragraph; and (iii) Successor Landlord obtains possession of the Property if the default is not susceptible to cure without possession.
8. All notices, requests or consents required or permitted to be given under this Agreement must be in writing and sent by certified mail, return receipt requested or by nationally recognized overnight delivery service providing evidence of the date of delivery, with all charges prepaid, addressed to the appropriate party at the address set forth above.
9. Any claim by Tenant against Successor Landlord under the Lease or this Agreement will be satisfied solely out of Successor Landlord’s interest in the Property and Tenant will not seek recovery against or out of any other assets of Successor Landlord. Successor Landlord will have no liability or responsibility for any obligations under the Lease that arise subsequent to any transfer of the Property by Successor Landlord.
10. This Agreement is governed by and will be construed in accordance with the laws of the state or commonwealth in which the Property is located.
11. Lender and Tenant waive trial by jury in any proceeding brought by, or counterclaim asserted by, Lender or Tenant relating to this Agreement.
12. If there is a conflict between the terms of the Lease and this Agreement, the terms of this Agreement will prevail as between Successor Landlord and Tenant.
13. This Agreement binds and inures to the benefit of Lender and Tenant and their respective successors, assigns, heirs, administrators, executors, agents and representatives.
14. This Agreement contains the entire agreement between Lender and Tenant with respect to the subject matter of this Agreement, may be executed in counterparts that together constitute a single document and may be amended only by a writing signed by Lender and Tenant.
IN WITNESS WHEREOF, Lender and Tenant have executed and delivered this Agreement as of ____________, 20___.
LENDER:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA,
a New York corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
TENANT:
_______________________________________,
a ________________________________________
By: _________________________________
Name: _________________________________
Title: _________________________________
ACKNOWLEDGMENT
State of ___________
County of ___________
On this the ____ day of ____________, 20__ before me, the undersigned officer, personally appeared _______________________ who acknowledged himself to be the _______________________I of _________________________________, a corporation, and that he, as such ________________________ being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as __________________________.
In witness whereof I hereunto set my hand and official seal.
___________________________
___________________________
Title of Officer
ACKNOWLEDGMENT
State of ___________
County of ___________
On this the ____ day of ____________, 20__ before me, the undersigned officer, personally appeared _______________________ who acknowledged himself to be the _______________________I of _________________________________, a corporation, and that he, as such ________________________ being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as __________________________.
In witness whereof I hereunto set my hand and official seal.
___________________________
___________________________
Title of Officer
EXHIBIT A
Property Description
Exhibit H
Pro Forma Budget of FPOC Expenses
Exhibit I
Memorandum Outlining Landlord’s Sustainable Design Strategies
Exhibit J
OTIS
Exhibit K
Form of Commencement Date Confirmation
COMMENCEMENT DATE CONFIRMATION
Attached to and made a part of the Lease dated the 29th day of April, 2015 (the “Lease”), by and between
FALLON CORNERSTONE ONE MPD LLC
, a Delaware limited liability company, as “LANDLORD,” and
KERYX BIOPHARMACEUTICALS, INC.
, a Delaware corporation, as “TENANT.”
LANDLORD AND TENANT do hereby declare that possession of the Premises was accepted by TENANT on the 30th day of April, 2015, which date is agreed to be the Commencement Date. The Lease is now in full force and effect, and as of the date The Rent Commencement Date is hereby established as March 1, 2016. The Term of this Lease shall expire on February 28, 2023, unless sooner terminated or further extended as provided in the Lease.
LANDLORD:
FALLON CORNERSTONE ONE MPD LLC
,
a Delaware limited liability company
By: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts corporation,
its Member
By: CORNERSTONE REAL ESTATE ADVISERS LLC,
a Delaware limited liability company,
its Authorized Agent
By:
/s/Linda C. Houston
Name: Linda C. Houston
Title: Senior Vice President
TENANT:
KERYX BIOPHARMACEUTICALS, INC.
,
a Delaware corporation
By:
/s/ Brian Adams
Name:
Brian Adams
Title:
General Counsel