Exhibit 10.1

 

FIFTH AMENDMENT TO LEASE

This FIFTH AMENDMENT TO LEASE (this “Amendment”) is entered into as of April 9,
2018 (the “Effective Date”), by and between CLPF-CAMBRIDGE SCIENCE CENTER, LLC,
a Delaware limited liability company (“Landlord”), and AKEBIA THERAPEUTICS,
INC., a Delaware corporation (“Tenant”).

RECITALS

A.MA-Riverview/245 First Street, L.L.C. (the “Original Landlord”) and Tenant
entered into that certain Office Lease Agreement dated as of December 3, 2013
(the “Original Lease”), as amended by that certain First Amendment to Lease
dated December 15, 2014, that certain Second Amendment to Lease dated November
23, 2015, that certain Third Amendment to Lease dated July 25, 2016, and that
certain Fourth Amendment to Lease, dated May 1, 2017 (collectively, the
“Lease”), respecting certain premises consisting of approximately 39,411
rentable square feet on the 11th and 14th floors of the office building located
at 245 First Street, Cambridge, Massachusetts (the “Building”) and approximately
5,951 rentable square feet on the 1st floor of the adjacent lab building
(collectively, the “Existing Premises”), which buildings together comprise the
Cambridge Science Center.

B.Landlord is the successor in interest to the Original Landlord.

C.Landlord and Tenant wish to enter into this Amendment to (i) expand the
Existing Premises to include 19,805 rentable square feet on the 12th floor of
the Building in the location shown on Exhibit A attached hereto (the “Additional
Premises”), and (ii) amend certain other terms and conditions of the Lease.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant agree to amend the Lease as
follows:

1.Recitals; Capitalized Terms.  All of the foregoing recitals are true and
correct.  Unless otherwise defined herein, all capitalized terms used in this
Amendment shall have the meaning ascribed to them in the Lease, and all
references to the Lease or “this Lease” or “herein” or “hereunder” or similar
terms or to any sections thereof shall mean the Lease, or such section thereof,
as amended by this Amendment.

2.Remeasurement.  The parties hereby agree that the square footage of the Office
Building and the Science Building have been recalculated based on a
remeasurement of such Buildings, and, therefore, effective as of January 1, 2017
the following measurements shall be applicable for all purposes:

Science Building: 135,490 rentable square feet

Office Building: 171,514 rentable square feet

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Landlord hereby agrees that, although Tenant’s Building Pro Rata Shares have
been amended as provided in Section 5 below, Landlord shall not remeasure the
Existing Premises or the Additional Premises for the remainder of the Term and
the Extension Term (as defined in Section 11 of the Second Amendment) unless the
physical boundaries thereof are changed by mutual agreement of the parties, nor
shall Tenant’s Building Pro Rata Shares increase during the remainder of the
Term and the Extension Term notwithstanding any further measurement of the
Existing Premises or Additional Premises unless the physical boundaries thereof
are changed by mutual agreement of the parties.

3.Demise of Additional Premises.  Landlord does hereby demise and lease to
Tenant, and Tenant hereby leases from Landlord, the Additional Premises,
commencing on the date that Landlord delivers the Additional Premises to Tenant
in vacant, broom clean condition and free from tenants, occupants, equipment and
other personal property, with the Base Building systems, including HVAC,
electrical, life safety and plumbing systems, in good working order, condition,
and repair and separately metered for electricity (the “Additional Premises
Commencement Date”), and shall continue through the current Termination Date of
September 11, 2026, unless the Lease is earlier terminated or extended in
accordance with its terms.  Landlord estimates that the Additional Premises
Commencement Date will occur on September 1, 2018 (the “Estimated Additional
Premises Commencement Date”). Landlord shall use all commercially reasonable
efforts to deliver the Additional Premises to Tenant on or before the Estimated
Additional Premises Commencement Date in the condition required hereunder.  In
the event Landlord does not deliver the Additional Premises to Tenant by the
Estimated Additional Premises Commencement Date due to the failure of the
existing tenant of the Additional Premises (the “Existing Additional Premises
Tenant”) to vacate and deliver the Additional Premises to Landlord on or before
the Estimated Additional Premises Commencement Date, Landlord shall use
commercially reasonable efforts to recover the Additional Premises from the
Existing Additional Premises Tenant, including without limitation, commencing
summary proceedings against the Existing Additional Premises Tenant. In the
event Landlord does not deliver the Additional Premises to Tenant on or before
October 1, 2018 (such date, as it shall be extended due to Force Majeure or any
delay arising as a result of the act or omission of Tenant, the “Outside
Delivery Date”), then Tenant shall be entitled to a credit (to be applied
following the Additional Premises Rent Commencement Date (as such term is
defined below)) in an amount equal to the product of: (i) $4,449.34 multiplied
by (ii) the number of days after the Outside Delivery Date until the date the
Landlord delivers the Additional Premises to Tenant (the “Delivery
Delay”).  Tenant’s lease of the Additional Premises shall be on all of the terms
and conditions of the Lease as amended herein.   

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4.Base Rent.  Commencing on the date that is five (5) months after the
Additional Premises Commencement Date (the “Additional Premises Rent
Commencement Date”), in addition to Base Rent payable for the Existing Premises,
Tenant shall pay Base Rent to Landlord with respect to the Additional Premises
in the amount and on the schedule outlined in the following table:

 

RENTAL PERIOD

MINIMUM ANNUAL RENT

MONTHLY PAYMENT

Additional Premises Rent Commencement Date- August 31, 2019

$1,624,010.00

$135,334.17

September 1, 2019-August 31, 2020

$1,643,815.00

$136,984.58

September 1, 2020-August 31, 2021

$1,663,620.00

$138,635.00

September 1, 2021-August 31, 2022

$1,683,425.00

$140,285.42

September 1, 2022-August 31, 2023

$1,703,230.00

$141,935.83

September 1, 2023-August 31, 2024

$1,723,035.00

$143,586.25

September 1, 2024-August 31, 2025

$1,742,840.00

$145,236.67

September 1, 2025-September 11, 2026

$1,762,645.00

$146,887.08

 

5.Taxes and Expenses.  

(a)The parties hereby confirm that the following amendments to the Lease were
agreed upon and effective as of January 1, 2017:

(i)The defined terms for Tenant’s Common Area Pro Rata Share, Common Area
Expense Excess, Tenant’s First Floor Premises Common Area Pro Rata Share, and
Base Year for Common Area Expenses are hereby deleted and of no further force or
effect, and the relevant provisions of the Lease in which such terms are used
shall be interpreted to exclude the foregoing defined terms.

(ii)Exhibit B to the Lease is hereby deleted in its entirety and replaced with
Exhibit B attached hereto, and Exhibit B, Third Amendment attached to the Third
Amendment to Lease regarding the First Floor Premises is hereby deleted in its
entirety and replaced with Exhibit C attached hereto.

(iii)Wherever used in the Lease with respect to the Existing Premises, the
following terms shall have the following meanings:

Tenant’s Building Pro Rata Share: 22.98% with respect to the portion of the
Existing Premises in the Office Building.

Tenant’s First Floor Premises Building Pro Rata Share: 4.39% with respect to the
First Floor Premises located in the Science Building.

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(b)Commencing on the Additional Premises Rent Commencement Date, the following
terms whenever they appear in the Lease, as amended by this Amendment, shall
have the following meanings solely with respect to the Additional Premises:

Base Year for Taxes:  Tax fiscal year ending June 30, 2019

Base Year for Expenses:  Calendar Year 2019

Tenant’s Building Pro Rata Share: 11.55% with respect to the Additional Premises

6.Tenant’s Work.

a.Preparation of Plans. Tenant is currently preparing, at its sole cost and
expense, plans and specifications for the improvements Tenant desires to make in
connection with Tenant’s occupancy of the Additional Premises (the “Plans”). The
Plans shall be submitted to Landlord for Landlord’s approval (such approval not
to be unreasonably withheld or delayed) and Landlord shall approve or disapprove
of the Plans within ten (10) Business Days after receiving them.  Any
disapproval by Landlord of the Plans shall be accompanied by a reasonably
specific statement of reasons therefor.  Tenant shall cause the Plans to be
revised in a manner sufficient to remedy Landlord's objections and/or respond to
Landlord's concerns and shall resubmit the revised the Plans to Landlord, and
Landlord shall either approve or disapprove of the revised Plans within five (5)
Business Days following the date of resubmission.  If Landlord shall again
disapprove of the Plans, Tenant shall again revise such plans and resubmit them
to Landlord pursuant to the foregoing procedures until the Plans have been
approved by Landlord. The Plans shall be stamped by a Massachusetts-registered
architect or engineer, such architect or engineer being subject to Landlord's
approval in Landlord’s reasonable discretion, and shall comply with all
applicable laws, ordinances and regulations (including, without limitation, the
applicable requirements of the Americans with Disabilities Act of 1990 and the
Massachusetts Architectural Access Board, as amended from time to time, and the
regulations promulgated thereunder) and the requirements of the Lease regarding
Alterations, and shall be in a form satisfactory to appropriate governmental
authorities responsible for issuing permits, approvals and licenses required for
construction; provided, however, that Tenant shall have no obligation to make
any changes to the Building (other than the Additional Premises) related to
Tenant’s Work.  Landlord reserves the right to require Tenant to use Landlord’s
engineer to prepare engineering plans and drawings solely for any portion of
Tenant’s Work that impacts the Base Building.  Tenant acknowledges and agrees
that any review or approval by Landlord of any plans and/or specifications with
respect to Tenant’s Work is solely for Landlord’s benefit, and without any
representation or warranty whatsoever to Tenant with respect to the adequacy,
correctness or efficiency thereof or otherwise.

 

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b.Performance of Tenant’s Work.  After the Additional Premises Commencement
Date, Landlord’s approval of the Plans (the “Approved Plans”) and receipt by
Tenant of all required permits and approvals, Tenant may commence and exercise
all reasonable efforts to complete the work specified therein (“Tenant’s
Work”).  All of Tenant’s Work shall be completed in accordance with the Approved
Plans and the requirements for Alterations set forth in this Lease and in the
Building rules and regulations. Notwithstanding the foregoing, Tenant may make
any changes in Tenant’s Work from the Approved Plans, the necessity or
desirability of which becomes apparent following approval of the Approved Plans,
upon prior written notice to Landlord for non-substantial changes (which
approval shall not be unreasonably withheld, conditioned or delayed) and with
the approval of Landlord for substantial changes (which approval shall be in
Landlord’s reasonable discretion). Tenant's Work shall be performed by a general
contractor approved by Landlord, which approval shall not be unreasonably
withheld or delayed, under a written construction contract.  The approval by
Landlord of Tenant's general contractor shall not impose upon Landlord any
responsibility or liability whatsoever to Tenant as a result of, or arising out
of, the defaults or other acts or omissions of the general contractor.  In
addition, Landlord may monitor the progress of Tenant's Work, including, without
limitation, attend any weekly or other periodic job meetings.  Any review and
monitoring of Tenant’s Work by Landlord shall not impose upon Landlord any
responsibility or liability whatsoever to Tenant as a result of, or arising out
of, Tenant’s Work.  Within forty‑five (45) days after completion of any Tenant's
Work, Tenant shall provide to Landlord "as-built" plans of the Tenant's
Work.  Tenant shall provide Landlord with copies of the certificate of occupancy
for any Tenant's Work that requires a certificate of occupancy reasonably
promptly after completion of such Tenant's Work.  Nothing herein shall be
construed as permitting Tenant to occupy all or any portion of the Additional
Premises for which Tenant has not obtained a temporary or permanent certificate
of occupancy or its functional equivalent from the City of Cambridge
Inspectional Services Department or otherwise failed to comply with applicable
legal requirements.

 

c.Landlord’s Contribution.  Landlord shall reimburse Tenant for the hard costs
incurred by Tenant with respect to the performance of Tenant’s Work (the “Cost
of Tenant’s Work”) up to $990,250.00 (“Landlord’s Contribution”), provided that
a requisition is submitted by Tenant in accordance with the provisions of this
Amendment on or before the one year anniversary of the Additional Premises
Commencement Date (“Outside Requisition Date”).  The Costs of Tenant’s Work
include Landlord’s construction management fee payable by Tenant equal to 1.25%
of Landlord’s Contribution.  Notwithstanding anything to the contrary, Tenant
may apply up to fifteen percent (15%) of Landlord’s Contribution to Tenant’s
design costs for architects and engineers (“Soft Costs”).  The Costs of Tenant’s
Work shall not include costs arising from a Default or from any facts or
circumstances that could become a Default, such as legal fees or bonding costs
arising in connection with a mechanic’s lien placed on the Additional Premises
or Tenant’s interest therein.  Landlord’s Contribution shall be payable by
Landlord to Tenant (or, at Landlord’s election, directly to Tenant’s contractor)
upon written requisition to Landlord in monthly installments, as provided below,
according to reasonable construction disbursement procedures and as Tenant’s
Work

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progresses.  In any case, prior to payment of any such installment Tenant shall
deliver to Landlord a written request, which request shall be given no more
frequently than once every thirty (30) days, for such disbursement, which shall
be accompanied by:  (i) invoices for Tenant’s Work covered by such requisition;
(ii) copies of partial lien waivers or final lien waivers (in the case of a
final installment); (iii) a certificate signed by the Tenant’s architect
certifying that Tenant’s Work represented by the aforementioned invoices has
been completed substantially in accordance with  the Approved Plans; and (iv) a
certificate of substantial completion and as-built plans for Tenant’s Work (in
the case of a final installment).  Provided that Tenant is not then in default
beyond applicable notice and cure periods, Landlord shall pay each required
installment within thirty (30) days of receiving the materials enumerated in the
previous sentence.  Each installment by Landlord will be in the amount of
Landlord’s pro-rata share based on the ratio of Landlord’s Contribution to the
total Cost of Tenant’s Work less the amount of any previously disbursed Soft
Costs (as evidenced by reasonably detailed documentation delivered to Landlord
with the requisition first submitted by Tenant), less a retainage equal to the
greater of the retainage set forth in the construction contract or five percent
(5%) of amount due under the construction contract, but in no event shall
Landlord be required to pay more than Landlord’s Contribution. Landlord shall
not be obligated to disburse funds for materials stored off-site. If Landlord
fails to timely pay any portion of Landlord’s Contribution when properly due to
Tenant in accordance with the requirements of this Section 6, and if Landlord
fails to cure such failure or indicate the manner in which Tenant has failed to
comply with the requirements of this Section 6 within ten (10) business days
after a second notice from Tenant, Tenant shall have the right to offset such
past due amount from the next installment(s) of Base Rent due under the Lease
with respect to the Additional Premises. In addition to Landlord’s Contribution,
Landlord shall reimburse Tenant for the documented out of pocket cost to prepare
initial test fit plans, up to $1,980.50, within thirty (30) days of receipt of
paid invoices from Tenant.

 

7.Heat Pump Replacement. Tenant shall, at Tenant’s cost, remove thirteen (13) of
the existing heat pumps located on the twelfth (12th) floor of the Building and
install new heat pumps and controls (collectively, “Additional Premises Heat
Pump Work”).  Tenant’s Additional Premises Heat Pump Work shall be performed
subject to and in accordance with the terms and provisions of Section 10 of the
Second Amendment, incorporated herein by reference and made a part hereof, and
the provisions applicable to the Approved Plans and Tenant’s Work set forth
above.  For purposes of the incorporation by reference of Section 10 of the
Second Amendment, “Landlord’s Heat Pump Allowance” shall mean and refer to an
allowance of up to $8,000 per heat pump (i.e., $104,000.00) and up to an
additional $25,000.00 to be used for controls of the heat pumps, and “Tenant’s
Heat Pump Work” shall mean and refer to the Additional Premises Heat Pump Work
set forth in this paragraph.

8.Electricity.  Landlord shall provide electricity for lights and plugs in the
Additional Premises, which electricity shall be direct metered to the applicable
utility.  Tenant shall pay all charges for electricity usage in the Additional
Premises directly to the utility provider prior to the date due.

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9.Extension Option. Tenant shall continue to have the right to further extend
the Term of the Lease with respect to the portions of the Premises, including
the Additional Premises, other than the first floor of the Science Building
pursuant to the provisions of Section 11 of the Second Amendment.

10.Parking.  Notwithstanding anything to the contrary set forth in the Lease,
effective as of the Additional Premises Commencement Date, Tenant shall have the
right to use eighteen (18) additional parking spaces (at the ratio of 0.9
parking spaces per 1,000 rentable square feet of the Additional
Premises).  Tenant’s use of the additional parking spaces shall be on a first
come, first served basis at the then prevailing monthly parking rate, as
adjusted from time to time in accordance with the published rates applicable to
the Building and not at rates adjusted solely for Tenant. As of the Execution
Date of this Amendment, the current monthly rate is $300.00 per unreserved
parking space per month.

11.Security Deposit.  Reference is made to the fact that Landlord is presently
holding a Security Deposit in the amount of $1,280,857.00 (the “Existing
Security Deposit”) in the form of a letter of credit.  At the time that Tenant
executes and delivers this Amendment to Landlord, Tenant shall deliver to
Landlord an additional security deposit in the amount of $541,336.68 (the “Fifth
Amendment Security Deposit”), thereby increasing the Security Deposit to
$1,822,193.68 (the “Total Security Deposit”).  Subject to the terms and
conditions of Section 14 of the Second Amendment to Lease, the Total Security
Deposit shall reduce to $1,566,022.68 on May 1, 2018. Such adjustments to the
Existing Security Deposit and the Total Security Deposit shall be effected
either by a new letter of credit satisfying the requirements of the Lease, or an
amendment to the existing letter of credit, at Tenant’s election. The Total
Security Deposit shall secure Tenant’s obligations under the Lease, as hereby
amended, and shall be held by Landlord in accordance with said Section 6 of the
Lease, as previously amended, and as amended herein.

12.Stairwells.  After the Additional Premises Commencement Date, Tenant shall
have the non-exclusive right to use the Base Building stairwells connecting the
Additional Premises to the Existing Premises in the Building (the “Stairwells”).
Tenant shall not store any furniture, personal property, equipment or any other
items in the Stairwells, nor shall Tenant make any alterations or installations
in or to the Stairwells, except that Tenant may make cosmetic alterations
subject to Landlord’s prior review and approval, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant may install a key card
locking system on all doors between the Additional Premises, the Existing
Premises and such Stairwells, subject to Landlord’s prior review and approval,
which shall not be unreasonably withheld, conditioned or delayed, provided that
such key card system complies with all applicable legal requirements and
integrates fully with the Building life-safety system. The Stairwells shall be
used solely for travel between floors of the Premises and emergency use, and
Tenant shall not permit any of its employees to congregate in such Stairwells.

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13.Insurance Notices. Clause (iii) of Section 14.04 of the Original Lease is
hereby deleted and replaced with the following: “(iii) provide that it shall not
be canceled without 30 days' prior notice to Landlord, except that 10 days'
prior notice may be given in the case of nonpayment of premiums.”  The second to
last sentence of Section 14.04 of the Original Lease is also hereby deleted and
replaced with the following: “Attached to the ACORD 25-S (or equivalent) there
shall be an endorsement naming the Additional Insured Parties as additional
insureds which shall be binding on Tenant’s insurance company and shall
expressly require the insurance company to notify each Additional Insured Party
in writing at least 30 days before any termination of the policies, except that
10 days’ prior notice may be given in the case on nonpayment of premiums.”
Section 14.04 is hereby further amended to provide that Tenant shall give
Landlord at least 30 days’ prior written notice of any material change in the
insurance policies required to be carried by Tenant under the Lease.

14.Brokerage.  Each party represents to the other that it has not dealt with any
broker in connection with this Amendment other than Transwestern Consulting
Group. Tenant shall indemnify and hold Landlord harmless from and against any
claim or claims for brokerage or other commissions relating to this Amendment
asserted by any broker, agent or finder engaged by Tenant or with whom Tenant
has dealt other than Transwestern Consulting Group.  Landlord shall indemnify
and hold Tenant harmless from and against any claim or claims for brokerage or
other commissions relating to this Amendment asserted by any broker, agent or
finder engaged by Landlord or with whom Landlord has dealt other than
Transwestern Consulting Group.  Any commission due in connection with this
Amendment shall be paid by Landlord pursuant to a separate agreement between
Landlord and Transwestern Consulting Group.

15.Ratification.  Except as expressly modified by this Amendment, the Lease
shall remain in full force and effect, and as further modified by this
Amendment, is expressly ratified and confirmed by the parties hereto.  This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, subject to the provisions of the
Lease regarding assignment and subletting.

16.Governing Law; Interpretation and Partial Invalidity.  This Amendment shall
be governed and construed in accordance with the laws of the Commonwealth of
Massachusetts.  If any term of this Amendment, or the application thereof to any
person or circumstances, shall to any extent be invalid or unenforceable, the
remainder of this Amendment, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term of this Amendment shall be valid and
enforceable to the fullest extent permitted by law.  The titles for the
paragraphs are for convenience only and are not to be considered in construing
this Amendment.  This Amendment contains all of the agreements of the parties
with respect to the subject matter hereof, and supersedes all prior dealings
between them with respect to such subject matter.  No delay or omission on the
part of either party to this Amendment in requiring performance by the other
party or exercising any right hereunder shall operate as a waiver of any
provision hereof or any rights hereunder, and no waiver, omission or delay in
requiring performance or exercising any right hereunder on any one occasion
shall be construed as a bar to or waiver of such performance or right on any
future occasion.

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17.Successors.  This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

18.Counterparts and Authority.  This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document. Landlord and Tenant each
warrant to the other that the person or persons executing this Amendment on its
behalf has or have authority to do so and that such execution has fully
obligated and bound such party to all terms and provisions of this Amendment.

 

[Signature Pages Follow]

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the
day and year first above written.

LANDLORD:

 

CLPF-CAMBRIDGE SCIENCE CENTER, LLC,

a Delaware limited liability company

 

By:

 

Clarion Lion Properties Fund Holdings, L.P.,

 

 

a Delaware limited partnership,

 

 

its Sole Member

 

 

By:

 

CLPF-Holdings, LLC,

 

 

 

a Delaware limited liability company,

 

 

 

its General Partner

 

 

By:

 

Clarion Lion Properties Fund Holdings REIT, LLC,

 

 

 

a Delaware limited liability company,

 

 

 

its Sole Member

 

 

By:

 

Clarion Lion Properties Fund, LP,

 

 

 

a Delaware limited partnership,

 

 

 

its Managing Member

 

 

By:

 

Clarion Partners LPF GP, LLC,

 

 

 

a Delaware limited liability company,

 

 

 

its General Partner

 

 

By:

 

Clarion Partners, LLC,

 

 

 

a New York limited liability company,

 

 

 

its Sole Member

 

 

By:

 

/s/ Brian Collins

 

Name:

 

Brian Collins

 

Title:

 

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

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TENANT:

 

AKEBIA THERAPEUTICS, INC.,

a Delaware corporation

 

 

 

By:

 

/s/ John P. Butler

Name:

 

John P. Butler

Title:

 

President and Chief Executive Officer

 

 

 

 

 

 

By:

 

/s/ Jason A. Amello

Name:

 

Jason A. Amello

Title:

 

Chief Financial Officer

 

 

 

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EXHIBIT A

ADDITIONAL SPACE

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EXHIBIT B

REPLACEMENT EXHIBIT B TO LEASE

 

EXPENSES AND TAXES

1.

Payments.

1.01

Tenant shall pay (i) Tenant’s Building Pro Rata Share of the amount, if any, by
which Expenses (defined below) for each calendar year during the Term exceed
Expenses for the Base Year (the “Expense Excess”), and (ii) Tenant’s Building
Pro Rata Share of the amount, if any, by which Taxes (defined below) for each
calendar year during the Term exceed Taxes for the Base Year (the “Tax Excess”).
If Expenses or Taxes in any calendar year decrease below the amount of Expenses
or Taxes for the Base Year, Tenant’s Building Pro Rata Share of Expenses and
Taxes, as the case may be, for that calendar year shall be $0. Landlord shall
provide Tenant with a good faith estimate of the Expense Excess and Tax Excess
for each calendar year during the Term. On or before the first day of each
month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth
of Tenant’s Building Pro Rata Share of Landlord’s estimate of the Expense Excess
and one­ twelfth of Tenant’s Building Pro Rata Share of Landlord’s estimate of
the Tax Excess. If Landlord determines that its good faith estimate of the
Expense Excess and the Tax Excess was incorrect by a material amount, Landlord
may provide Tenant with a revised estimate, provided that Landlord shall not
provide a revised estimate more than twice per calendar year. After its receipt
of the revised estimate, Tenant’s monthly payments shall be based upon the
revised estimate. If Landlord does not provide Tenant with an estimate of the
Expense Excess or the Tax Excess by January 1st of a calendar year, Tenant shall
continue to pay monthly installments based on the previous year’s estimate(s)
until Landlord provides Tenant with the new estimate. Upon delivery of the new
estimate, an adjustment shall be made for any month for which Tenant paid
monthly installments based on the previous year’s estimate, Tenant shall pay
Landlord the amount of any underpayment within 30 days after receipt of the new
estimate. Any overpayment shall be refunded to Tenant within 30 days or credited
against the next due future installment(s) of Additional Rent.

1.02

As soon as is practical following the end of each calendar year, Landlord shall
furnish Tenant with a statement of the actual Expenses and Expense Excess and
the actual Taxes and Tax Excess for the prior calendar year. Landlord shall use
reasonable efforts to furnish the statement of actual Expenses on or before June
1 of the calendar year immediately following the calendar year to which the
statement applies. If the estimated Expense Excess or the estimated Tax Excess
for the prior calendar year is more than the actual Expense Excess or actual Tax
Excess, as the case may be, for the prior calendar year, Landlord shall either
provide Tenant with a refund or apply any overpayment by Tenant against
Additional Rent due or next becoming due, provided if the Term expires before
the determination of the overpayment, Landlord shall refund any overpayment to
Tenant after first deducting the amount of Rent due. If the estimated Expense
Excess or estimated Tax Excess for the prior calendar year is less than the
actual Expense Excess or actual Tax Excess, as the case may be, for such prior
year, Tenant shall pay Landlord, within 30 days after its receipt of the
statement of Expenses or Taxes, any underpayment for the prior calendar year.

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2.

Expenses.

2.01

“Expenses” means all costs and expenses incurred in each calendar year in
connection with operating, maintaining, repairing, and managing the Office
Building, the Common Areas located within the Office Building and the portion of
the Common Area Expenses set forth in Section 2.02 below equitably prorated and
apportioned by Landlord to the Office Building. Landlord agrees to act in a
commercially reasonable manner in incurring Expenses, taking into consideration
the class and quality of the Office Building and Common Areas. “Expenses” shall
include, but not be limited to: (a) all labor and labor related costs, including
wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement
plans; pension plans and other employee benefits; (b) management fees in an
amount equal to 3% of the gross revenues from the Office Building and the
Property; (c) the cost of equipping, staffing and operating an on-site and/or
off-site management office for the Office Building, provided if the management
office services one or more other buildings or properties; the shared costs and
expenses of equipping, staffing and operating such management office(s) shall be
equitably prorated and apportioned between the Office Building and the other
buildings or properties; (d) accounting costs for the Office Building; (e) the
cost of services; (f) rental and purchase cost of parts, supplies, tools and
equipment; (g) insurance premiums and deductibles; (h) electricity, gas and
other utility costs attributable to the Office Building; (i) expenses of
periodic routine testing to assure that the Premises and surrounding land are
free of hazardous materials, agents or substances; and to assure compliance with
codes, regulations and Laws and (j) the amortized cost of capital improvements
(as distinguished from replacement parts or components installed in the ordinary
course of business) made subsequent to the Base Year which are: (1) intended to
effect economies in the operation or maintenance of the Property, reduce current
or future Expenses, enhance the safety or security of the Property or its
occupants, or enhance the environmental sustainability of the Property’s
operations, (2) replacements or modifications of nonstructural items located in
the Base Building or Common Areas located within the Office Building that are
required to keep the Base Building or Common Areas located within the Office
Building in good condition, or (3) required under any Law that is enacted, or
first interpreted to apply to the Property, after the date of the Lease. The
cost of capital improvements shall be amortized by Landlord over the lesser of
the Payback Period (defined below) or the useful life of the capital improvement
as reasonably determined by Landlord. The amortized cost of capital improvements
may, at Landlord’s option, include. actual or imputed interest at the rate that
Landlord would reasonably be required to pay to finance the cost of the capital
improvement.  “Payback Period’’ means the reasonably estimated period of time
that it takes for the cost savings resulting from a capital improvement to equal
the total cost of the capital improvement. Landlord, by itself or through an
affiliate, shall have the right to directly perform, provide and be compensated
for any services under the Lease. If Landlord incurs Expenses for the Buildings
or Property together with one or more other buildings or properties, whether
pursuant to a reciprocal easement agreement, common area agreement or otherwise,
the shared costs and expenses shall be equitably prorated and apportioned
between the Buildings and Property and the other buildings or properties.

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2.02

“Common Area Expenses” means all costs and expenses incurred in each calendar
year in connection with operating, maintaining, repairing and managing the
shared Common Areas of the Buildings and the Property. Landlord agrees to act in
commercially reasonable manner in incurring Common Area Expenses, taking into
consideration the class and quality of the Common Areas of the Buildings and the
Property. Common Area Expenses include, without limitation:  (a) security for
the shared Common Areas of the Buildings; (b) electricity, gas and other utility
costs with respect to the shared Common Areas of the Buildings; (c) repairs to
the shared Common Areas of the Buildings; and (d) the amortized cost of capital
improvements (as distinguished from replacement parts or components installed in
the ordinary course of business) made subsequent to the Commencement Date which
are:  (1) intended to effect economies in the operation or maintenance of the
Property, reduce current or future Common Area Expenses, enhance the safety or
security of the Property or its occupants, or enhance the environmental
sustainability of the Property’s operations, (2) replacements or modifications
of nonstructural items located in the Base Building or Common Areas of the
Buildings that are required to keep the Base Building or Common Areas of the
Buildings in good condition, or (3) required under any Law that is enacted, or
first interpreted to apply to the Property, after the date of the Lease. The
cost of capital improvements shall be amortized by Landlord over the lesser of
the Payback Period (defined in Section 2.01 above) or the useful life of the
capital improvement as reasonably determined by Landlord. Common Area Expenses
shall not include any costs and expenses incurred with respect to the Common
Areas located in the Office Building and the Common Areas located in the Science
Building.

2.03

Expenses and Common Area Expenses shall not include: the cost of capital
improvements (except as set forth above); depreciation; principal payments of
mortgage and other non-operating debts of Landlord; the cost of repairs or other
work to the extent Landlord is reimbursed by insurance or condemnation proceeds;
costs in connection with leasing space in the Buildings, including brokerage
commissions, lease concessions, including rental abatements and construction
allowances granted to specific tenants; costs incurred in connection with the
sale, financing or refinancing of the Buildings; fines, interest and penalties
incurred due to the late payment of Taxes, Expenses or Common Area Expenses;
organizational expenses associated with the creation and operation of the entity
which constitutes Landlord; ground lease rental; wages, salaries, fees, and
fringe benefits (“Labor Costs”) paid to executive personnel or officers or
partners of Landlord, except that if such individuals provide services directly
related to the operation, maintenance or ownership of the Buildings which, if
provided directly by a general manager/property manager or its general support
staff, would normally be chargeable as an operating expense of a comparable
office Building, then an appropriate pro rata share of the Labor Costs of such
individuals that is reflective of the extent to which such individuals are
providing such services to the Building may be included in Expenses; costs
incurred by Landlord in connection with the correction of defects in design and
original construction of the Building or Property; the cost or expense of any
services or benefits provided generally to other tenants in the Building and not
provided or available to Tenant; sums (other than management fees, it being
agreed that the management fees included in Expenses are as described in Section
2.01 above) paid to subsidiaries or other affiliates of Landlord for services on
or to the Property, Building and/or Premises, but only to the extent that the
costs of such services exceed the competitive cost for such services rendered by
persons or entities of similar skill, competence and experience; any general
administrative expenses, which costs would not be chargeable to operating
expenses of the Building in accordance with generally accepted accounting
principles, consistently applied; or any penalties or damages that Landlord pays
to Tenant under this Lease or to other tenants in the Buildings under their
respective leases.

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2.04

If at any time during a calendar year the Office Building is not at least 95%
occupied (or a service provided by Landlord to tenants of the Office Building
generally is not provided by Landlord to a tenant that provides such service
itself, or any tenant of the Office Building is entitled to free rent, rent
abatement or the like), Expenses and Common Area Expenses (but not Taxes) shall,
at Landlord’s option, be determined as if the Office Building had been 95%
occupied (and all services provided by Landlord to tenants of the Office
Building generally had been provided by Landlord to all tenants, and no tenant
of the Office Building had been entitled to free rent; rent abatement or the
like) during that calendar year.  If Expenses and Common Area Expenses for a
calendar year are determined as provided in the prior sentence, Expenses and
Common Area Expenses for the Base Year shall also be determined in such manner.
Notwithstanding the foregoing, Landlord may calculate the extrapolation of
Expenses and Common Area Expenses under this Section based on 100% occupancy and
service so long as such percentage is used consistently for each year of the
Term. The extrapolation of Expenses and Common Area Expenses under this Section
shall be performed in accordance with the methodology specified by the Building
Owners and Managers Association.

3.

“Taxes” shall mean the following items, as equitably prorated and apportioned by
Landlord between the Buildings: (a) all real property taxes and other
assessments on the Office Building, the Science Building and/or Property,
including, but not limited to, gross receipts taxes, assessments for special
improvement districts and building improvement districts, governmental charges,
fees and assessments for police, fire, traffic mitigation or other governmental
service of purported benefit to the Property, taxes and assessments levied in
substitution or supplementation in whole or in part of any such taxes and
assessments and the Property’s share of any real estate taxes and assessments
under any reciprocal easement agreement , common area agreement or similar
agreement as to the Property; (b) all personal property taxes for property that
is owned by Landlord and used in connection with the operation, maintenance and
repair of the Property; and (c) all commercially reasonable costs and fees
incurred in connection with seeking reductions in any tax liabilities described
in (a) and (b), including, without limitation, any such costs incurred by
Landlord for compliance, review and appeal of tax liabilities. Without
limitation, Taxes shall be determined without regard to any “green building”
credit and shall not include any income, capital levy, transfer, capital stock,
gift, estate or inheritance tax or any interest or penalties incurred due to the
late payment of Taxes. If a change in Taxes is obtained for any year of the Term
during which Tenant paid Tenant’s Building Pro Rata Share of any Tax Excess,
then Taxes for that year will be retroactively adjusted and Landlord shall
provide Tenant with a credit, if any, based on the adjustment. Likewise, if a
change is obtained for Taxes for the Base Year, Taxes for the Base Year shall be
restated and the Tax Excess for all subsequent years shall be recomputed. Tenant
shall pay Landlord the amount of Tenant’s Building Pro Rata Share of any such
increase in the Tax Excess within 30 days after Tenant’s receipt of a statement
from Landlord. For the purpose of determining Taxes for any given calendar year,
the amount to be included in Taxes for such year shall be as follows: (1) with
respect to any special assessment that is payable in installments, Taxes for
such year shall include the amount of the installment (and any interest paid or
payable by Landlord) due and payable during such calendar year; and (2) with
respect to all other real estate taxes, Taxes for such year shall, at Landlord’s
election, include either the amount accrued, assessed or otherwise imposed for
such calendar year, provided that Landlord’s election shall be applied
consistently throughout the Term of the Lease.

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4.

Audit Rights.  Within 60 days after receiving Landlord’s statement of Expenses
(or, with respect to the Base Year Expenses, within 60 days after receiving
Landlord’s initial statement of Expenses for the applicable Base Year) (each
such period is referred to as the “Review Notice Period”), Tenant may give
Landlord written notice (“Review Notice”) that Tenant intends to review
Landlord’s records of the Expenses for the calendar year (or Base Year, as
applicable) to which the statement applies, and within 60 days after sending the
Review Notice to Landlord (such period is referred to as the “Request for
Information Period”), Tenant shall send Landlord a written request identifying,
with a reasonable degree of specificity, the information that Tenant desires to
review (the “Request for Information”). Within a reasonable time after
Landlord’s receipt of a timely Request for Information and executed Audit
Confidentiality Agreement (referenced below), Landlord, as determined by
Landlord, shall forward to Tenant, or make available for inspection on site at
such location deemed reasonably appropriate by Landlord, such records (or copies
thereof) for the applicable calendar year (or Base Year, as applicable) that are
reasonably necessary for Tenant to conduct its review of the information
appropriately identified in the Request for Information. Within 60 days after
any particular records are made available to Tenant (such period is referred to
as the “Objection Period”), Tenant shall have the right to give Landlord written
notice (an “Objection Notice”) stating in reasonable detail any objection to
Landlord’s statement of Expenses for that year which relates to the records that
have been made available to Tenant. If Tenant provides Landlord with a timely
Objection Notice, Landlord and Tenant shall work together in good faith to
resolve any issues raised in Tenant’s Objection Notice. If Landlord and Tenant
determine that Expenses for the calendar year are less than reported, Landlord
shall provide Tenant with a credit against the next installment of Rent in the
amount of the overpayment by Tenant. Likewise, if Landlord and Tenant determine
that Expenses for the calendar year are greater than reported, Tenant shall pay
Landlord the amount of any underpayment within 30 days. If Tenant fails to give
Landlord an Objection Notice with respect to any records that have been made
available to Tenant prior to expiration of the Objection Period applicable to
the records which have been provided to Tenant, Tenant shall be deemed to have
approved Landlord’s statement of Expenses with respect to the matters reflected
in such records and shall be barred from raising any claims regarding the
Expenses relating to such records for that year. If Tenant fails to provide
Landlord with a Review Notice prior to expiration of the Review Notice Period or
fails to provide Landlord with a Request for Information prior to expiration of
the Request for Information Period described above, Tenant shall be deemed to
have approved Landlord’s statement of Expenses and shall be barred from raising
any claims regarding the Expenses for that year.

If Tenant retains an agent to review Landlord’s records, the agent must be with
a CPA firm licensed to do business in the state or commonwealth where the
Property is located. Tenant shall be solely responsible for all costs, expenses
and fees incurred for the audit, and the fees charged cannot be based in whole
or in part on a contingency basis. The records and related information obtained
by Tenant shall be treated as confidential, and applicable only to the Office
Building, by Tenant and its auditors, consultants and other parties reviewing
such records on behalf of Tenant (collectively, “Tenant’s Auditors”), and, prior
to making any records available to Tenant or Tenant’s Auditors, Landlord may
require Tenant and Tenant’s Auditors to each execute a reasonable
confidentiality agreement (“Audit Confidentiality Agreement”) in accordance with
the foregoing. In no event shall Tenant be permitted to examine Landlord’s
records or to dispute any statement of Expenses unless Tenant has paid and
continues to pay all Rent when due, subject to any applicable notice, grace and
cure periods.

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EXHIBIT B

REPLACEMENT EXHIBIT B, THIRD AMENDMENT

 

EXHIBIT B, THIRD AMENDMENT

EXPENSES AND TAXES

 

With respect to this Exhibit B, Third Amendment, all references herein to (i)
“Building” shall be deemed to mean the “Science Building”, and (ii) “Term” shall
be deemed to mean “First Floor Premises Term”.

A.Expenses.

(i)Expenses.  “Expenses” means all costs and expenses incurred in each calendar
year in connection with operating, maintaining, repairing, and managing the
Building, the Common Areas located within the Building and the portion of the
Common Area Expenses set forth in Section 2.02 of Exhibit B of the Lease
equitably prorated and apportioned by Landlord to the Building.  Landlord shall
act in a commercially reasonable manner in incurring Expenses.  Expenses
include, without limitation: (a) all labor and labor related costs, including
wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement
plans, pension plans and other employee benefits; (b) management fees in an
amount equal to 3% of the gross revenues from the Building and the Property; (c)
the cost of equipping, staffing and operating an on-site and/or off-site
management  office for the Building, provided if the management office services
one or more other buildings or properties, the shared costs and expenses of
equipping, staffing and operating such management office(s) shall be equitably
prorated and apportioned between the Building and the other buildings or
properties; (d) accounting costs for the Building; (e) the cost of services; (f)
rental and purchase cost of parts, supplies, tools and equipment; (g) insurance
premiums and deductibles; (h) electricity, gas and other utility costs
attributable to the Building; (i) expenses of periodic routine testing to assure
that the Premises and surrounding land are free of hazardous materials, agents
or substances, and to assure compliance with codes, regulations and Laws; and
(j) the amortized cost of capital improvements (as distinguished from
replacement parts or components installed in the ordinary course of business)
made subsequent to the First Floor Premises Commencement Date which are: (1)
reasonably projected by Landlord to reduce current or future Expenses or (2)
required under any Law that first becomes applicable to the Property after the
Execution Date.  The cost of capital improvements shall be amortized by Landlord
over the lesser of the Payback Period (defined below) or the useful life of the
capital improvement as reasonably determined by Landlord.  The amortized cost of
capital improvements may, at Landlord’s option, include actual or imputed
interest at the rate that Landlord would reasonably be required to pay to
finance the cost of the capital improvement. “Payback Period” means the
reasonably estimated period of time that it takes for the cost savings resulting
from a capital improvement to equal the total cost of the capital improvement.
Landlord, by itself or through an affiliate, shall have the right to directly
perform, provide and be compensated for any services under the Lease.  If
Landlord incurs Expenses for the Building or Property together with one or more
other buildings or properties, whether pursuant to a reciprocal easement
agreement, common area agreement or otherwise, the shared costs and expenses
shall be equitably prorated and apportioned between the Building and Property
and the other buildings or properties.  Expenses shall not include Excluded
Costs (hereinafter defined).

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(ii)Common Area Expenses.  “Common Area Expenses” means all costs and expenses
as set forth in Section 2.02 of Exhibit B to the Lease.

(iii)Excluded Costs.  “Excluded Costs” shall be defined as (i) any mortgage
charges (including interest, principal, points and fees); (ii) brokerage
commissions; (iii) salaries of executives and owners not directly employed in
the management/operation of the Property; (iv) the cost of work done by Landlord
for a particular tenant; (v) the cost of items which, by generally accepted
accounting principles, would be capitalized on the books of Landlord or are
otherwise not properly chargeable against income, except to the extent permitted
pursuant to Section A (i) or (ii) above; (vi) the costs of Landlord’s Work and
any contributions made by Landlord to any tenant of the Property in connection
with the build-out of its premises; (vii) franchise or income taxes imposed on
Landlord; (viii) costs paid directly by individual tenants to suppliers,
including tenant electricity, telephone and other utility costs; (ix) increases
in premiums for insurance when such increase is caused by the use of the
Building by Landlord or any other tenant of the Building; (x) maintenance and
repair of capital items not a part of the Building or the Property; (xi)
depreciation of the Building; (xii) costs relating to maintaining Landlord’s
existence as a corporation, partnership or other entity; (xiii) advertising and
other fees and costs incurred in procuring tenants; (xiv) the cost of any items
for which Landlord is reimbursed by insurance, condemnation awards, refund,
rebate or otherwise, and any expenses for repairs or maintenance to the extent
covered by warranties, guaranties and service contracts; (xv) costs incurred in
connection with any disputes between Landlord and its employees, between
Landlord and Building management, or between Landlord and other tenants or
occupants; and (xvi) costs incurred in connection with the clean-up, response
action or remediation of Hazardous Materials at the Property; (xvii) costs
incurred for the replacement of (i.e., as opposed to the maintenance and repair
of) the Acid Neutralization Tank; (xviii) costs in connection with the leasing
of space in the Building, including lease concessions, rental abatement and
construction allowances granted to specific tenants; (xix) costs incurred with
the sale, financing or refinancing of the Building, fines, interest and
penalties incurred due to the late payment of taxes or expenses; (xx) costs
incurred by Landlord in connection with the correction of defects in design and
original construction of the Building or Property; the costs or expenses  of any
services or benefits provided generally to the other tenants in the Building and
not provided or available to Tenant; sums (other than management fees, it being
agreed that the management fees included in Building Operating Costs are as
described above) paid to subsidiaries or other affiliates of Landlord for
services on or to the Property, Building or the First Floor Premises, but only
to the extent that the costs of such services exceed the competitive cost for
such services rendered by persons or entities of similar skill, competence and
experience; any general administrative expenses, which costs would not be
chargeable to operating expenses of the Building in accordance with generally
accepted accounting principles, consistently applied; or any penalties or
damages that Landlord pays to Tenant under this Lease or to other tenants in the
Building under their respective leases.

(iv)Payment of Expenses, Common Area Expenses, and Taxes.  Tenant shall pay to
Landlord, as Additional Rent, (x) Tenant’s First Floor Premises Building Pro
Rata Share of Expenses, and (y) Tenant’s First Floor Premises Common Area Pro
Rata Share of Taxes, as provided in Section 1.01 of Exhibit B of the Lease,
except that Landlord and Tenant hereby agree and acknowledge that with respect
to the First Floor Premises (i) there is no Base Year for Expenses and Taxes,
and (ii) only with respect to the First Floor Premises, all references in
Exhibit B of the Lease to “Base Year”, “Expense Excess”, and “Tax Excess” shall
be deleted in their entirety and are of no further force and effect.

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(v)Annual Reconciliation.  Landlord shall reconcile Expenses as provided in
Section 1.02 of Exhibit B to the Lease.

(vi)Part Years.  If the First Floor Premises Rent Commencement Date or the
Termination Date occurs in the middle of a fiscal year, Tenant shall be liable
for only that portion of the Expenses with respect to such calendar year within
the Term.

(vii)Gross-Up.  “Gross up” of Tenant’s First Floor Premises Building Pro Rata
Share of Expenses shall be in accordance with Section 2.04 of Exhibit B to the
Lease.

(viii)Audit Right.  Tenant’s audit right of Expenses shall be as provided in
Section 4 of Exhibit B of the Lease.

B.Taxes.

(i)Taxes.  “Taxes” shall be as defined in Section 3 of Exhibit B to the Lease.

(ii)Payment of Taxes.  Tenant shall pay to Landlord, as Additional Rent,
Tenant’s First Floor Premises Common Area Pro Rata Share of Taxes for each
calendar year during the Term, as set forth in Sections 1 and 3 of Exhibit B to
the Lease, as modified herein.

(iii)Effect of Abatements.  Appropriate credit against Taxes shall be given for
any refund obtained by reason of a reduction in any Taxes by the assessors or
the administrative, judicial or other governmental agency responsible therefor
after deduction of Landlord’s expenditures for reasonable legal fees and for
other reasonable expenses incurred in obtaining the Tax refund.

(iv)Part Years.  If the First Floor Premises Rent Commencement Date or the
Termination Date occurs in the middle of a Tax Period, Tenant shall be liable
for only that portion of the Taxes, as the case may be, with respect to such Tax
Period within the Term.

 

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