Exhibit 10.5


 


EIGHTH AMENDMENT TO LEASE


 


THIS EIGHTH  AMENDMENT TO LEASE (this “Amendment”)
is entered into as of this 12th day of January, 2009, by and
between BMR-40 ERIE STREET LLC, a Delaware limited liability company (“Landlord,”
as successor-in-interest to Fort Washington Limited Partnership (“Original
Landlord”)), and VERTEX PHARMACEUTICALS INCORPORATED (“Tenant”).


 


RECITALS


 


A.            WHEREAS, Original Landlord
and Tenant entered into that certain Lease dated as of March 3, 1995, as
amended by that certain First Amendment to Lease dated as of December     ,
1995, that certain Second Amendment to Lease dated as of June 13, 1997,
that certain Third Amendment to Lease dated as of October 1, 1998 (the “Third
Amendment”), that certain Fourth Amendment to Lease dated as of February 2,
2000, that certain Fifth Amendment to Lease dated as of May 1, 1999 (the “Fifth
Amendment”), that certain Sixth Amendment to Lease dated as of April 6,
2005, and that certain Seventh Amendment to Lease dated as of October 15,
2007  (collectively, and as the same may
have been further amended, supplemented or modified from time to time, the “Lease”),
whereby Tenant leases certain premises from Landlord at 40 Erie Street in
Cambridge, Massachusetts (the “Building”);


 


B.            WHEREAS, Landlord and Tenant
desire to extend the term of the Lease; and


 


C.            WHEREAS, Landlord and Tenant
desire to modify and amend the Lease only in the respects and on the conditions
hereinafter stated.


 


AGREEMENT


 


NOW, THEREFORE, Landlord and Tenant, in
consideration of the mutual promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, agree as follows:


 


1.             Definitions.  For purposes of this Amendment,
capitalized terms shall have the meanings ascribed to them in the Lease unless
otherwise defined herein.


 


2.             Extension of Term.  The Term is hereby extended for five (5) years,
until December 31, 2015.  The period
from January 1, 2011, through December 31, 2015, is referred to
herein as the “Extension Term.”


 


3.             Extension
Options.


 


a.             Tenant shall have two (2) options
to further extend the Term (the “Options to Extend”) for successive
periods of five (5) years each (the “Extension Periods”), subject
to and on the terms set forth herein. 
The Options to Extend are in lieu of, and not in addition to, any
extension options in the Lease.  Tenant
may only exercise the Options to Extend with respect to the entire
Premises.  If Tenant shall desire to
exercise any Option to Extend, it shall give Landlord a notice (the “Inquiry
Notice”) of such desire not later than fifteen (15) months prior to the
expiration of the then-current Term. 
Thereafter, the Fair Market Rent (as defined in Section 3(c) below)
for the applicable 


 

















 


Extension
Period shall be determined in accordance with Section 3(d) below.  After the applicable Fair Market Rent has
been so determined, Tenant shall exercise each Option to Extend by giving
Landlord notice (the “Exercise Notice”) of its election to do so not
later than twelve (12) months prior to the expiration of the then-current
Term.  If Tenant fails to timely give
either the Inquiry Notice or the Exercise Notice to Landlord with respect to
any Option to Extend, Tenant shall be conclusively deemed to have waived such
Option to Extend hereunder.


 


b.             Notwithstanding any contrary
provision of the Lease as amended hereby, each Option to Extend and any
exercise by Tenant thereof shall be void and of no force or effect unless on
the dates Tenant gives Landlord its Inquiry Notice and Exercise Notice for each
Option to Extend and on the date of commencement of the each Extension Period, (i) the
Lease as amended hereby is in full force and effect, (ii) there is no
Event of Default of Tenant under the Lease as amended hereby and (iii) Tenant
has not assigned or subleased (or agreed to assign or sublease) more than fifty
percent (50%) of the rentable floor area of the Premises.


 


c.             All of the terms,
provisions, covenants and conditions of the Lease as amended hereby shall
continue to apply during each Extension Period, except that the Annual Fixed
Rent Rate during each Extension Period (the “Extension Rent”) shall be
equal to the fair market rent for the Premises determined as of the date twelve
(12) months prior to expiration of the then-current Term in accordance with the
procedure set forth in Section 3(d) below (the “Fair Market
Rent”).


 


d.             The Fair Market Rent for
each Extension Period shall be determined as follows:  within five (5) days after Tenant gives Landlord
its Inquiry Notice with respect to any Option to Extend, Landlord shall give
Tenant notice of Landlord’s determination of the Fair Market Rent for the
applicable Extension Period.  Within ten (10) days
after Tenant receives such notice, Tenant shall notify Landlord of its
agreement with or objection to Landlord’s determination of the Fair Market
Rent, whereupon, if Tenant objects, the Fair Market Rent shall be determined by
arbitration conducted in the manner set forth below.  If Tenant does not notify Landlord of Tenant’s
agreement with or objection to Landlord’s determination of the Fair Market Rent
within such ten (10) day period, then the Fair Market Rent for the
applicable Extension Period shall be deemed to be Landlord’s determination of
the Fair Market Rent as set forth in the notice from Landlord described in this
Section.


 


e.             If Tenant notifies Landlord
of Tenant’s objection to Landlord’s determination of Fair Market Rent under the
preceding subsection, such notice shall also set forth a request for
arbitration and Tenant’s appointment of a commercial real estate broker having
at least ten (10) years experience in the commercial leasing market in
Cambridge, Massachusetts (an “Arbitrator”).  Within five (5) days thereafter,
Landlord shall by notice to Tenant appoint a second Arbitrator.  Each Arbitrator shall be advised to determine
the Fair Market Rent for the applicable Extension Period within thirty (30)
days after Landlord’s appointment of the second Arbitrator.  On or before the expiration of such thirty
(30) day period, the two Arbitrators shall confer to compare their respective
determinations of the Fair Market Rent. 
If the difference between the amounts so determined by the two
Arbitrators is less than or equal to ten percent (10%) of the lower of said
amounts, then the final determination of the Fair Market Rent shall be equal to
the average of said amounts.  If such


 


2

















 


difference
between said amounts is greater than ten percent (10%), then the two
arbitrators shall have ten (10) days thereafter to appoint a third
Arbitrator (the “Third Arbitrator”), who shall be instructed to
determine the Fair Market Rent for the applicable Extension Period within ten (10) days
after its appointment by selecting one of the amounts determined by the other
two Arbitrators.  Each party shall bear
the cost of the Arbitrator selected by such party.  The cost for the Third Arbitrator, if any,
shall be shared equally by Landlord and Tenant.


 


4.             Early Termination Option.  Notwithstanding anything in the Lease or this
Amendment to the contrary, Tenant shall have the right to terminate the Lease
as of December 31, 2013; provided that Tenant (a) notifies
Landlord of such termination no later than December 31, 2012, (b) simultaneously
terminates that certain undated Lease by and between BMR-Sidney Street LLC (as
successor-in-interest to David E. Clem and David M. Roby, Trustees of Fort
Washington Realty Trust u/d/t dated June 19, 1995, recorded with the
Middlesex (South) District Registry of Deeds in Book 25422, Page 360 and
filed with the Middlesex (South) Registry District of the Land Court as
Document No. 976230) and Tenant in accordance with the terms thereof, as
the same may have been amended, supplemented or otherwise modified from time to
time, and (c) pays to Landlord no later than January 15, 2013, a
termination payment in the amount of Fifteen Million Dollars
($15,000,000).  Time is of the essence
with respect to this Section.


 


5.             Annual Fixed Rent.  Notwithstanding anything in the Lease to the
contrary, Tenant shall pay to Landlord as Annual Fixed Rent for the Premises
during the Extension Term the following amounts:


 


	
  Months

  	
   

  	
  r.s.f.

  	
   

  	
  Per r.s.f.

  	
   

  	
  Total Monthly

  	
   

  	
  Total Annually

  	
   

  
	
  1-12

  	
   

  	
  100,854

  	
   

  	
  $

  	
  45.50
  annually

  	
   

  	
  $

  	
  382,404.75

  	
   

  	
  $

  	
  4,588,857.00

  	
   

  
	
  13-24

  	
   

  	
  100,854

  	
   

  	
  $

  	
  47.50
  annually

  	
   

  	
  $

  	
  399,213.75

  	
   

  	
  $

  	
  4,790,565.00

  	
   

  
	
  25-36

  	
   

  	
  100,854

  	
   

  	
  $

  	
  49.50
  annually

  	
   

  	
  $

  	
  416,022.75

  	
   

  	
  $

  	
  4,992,273.00

  	
   

  
	
  37-48

  	
   

  	
  100,854

  	
   

  	
  $

  	
  51.50
  annually

  	
   

  	
  $

  	
  432,831.75

  	
   

  	
  $

  	
  5,193,981.00

  	
   

  
	
  49-60

  	
   

  	
  100,854

  	
   

  	
  $

  	
  53.50
  annually

  	
   

  	
  $

  	
  449,640.75

  	
   

  	
  $

  	
  5,395,689.00

  	
   

  



 


6.             Condition of Premises. 
Tenant acknowledges that it is in possession of and is fully familiar
with the condition of the Premises and agrees to take the same in its condition
“as is” as of the first day of the Extension Term.  Landlord shall continue to have its repair
and maintenance requirements as set forth in the Lease.


 


7.             Broker. Tenant represents and warrants that it has not dealt with any broker
or agent in the negotiation for or the obtaining of this Amendment, other than
CB Richard Ellis (“Broker”), and agrees to indemnify, defend and hold
Landlord harmless from any and all cost or liability for compensation claimed
by any such broker or agent, other than Broker, employed or engaged by it or


 


3

















 


claiming to have been employed or engaged by
it.  Broker is entitled to a leasing
commission in connection with the making of this Amendment, and Landlord shall
pay such commission to Broker pursuant to a separate agreement between Landlord
and Broker.


 


8.             Effect
of Amendment.  Except as modified by this Amendment, the
Lease and all the covenants, agreements, terms, provisions and conditions
thereof shall remain in full force and effect and are hereby ratified and
affirmed.  The covenants, agreements,
terms, provisions and conditions contained in this Amendment shall bind and
inure to the benefit of the parties hereto and their respective successors and,
except as otherwise provided in the Lease, their respective assigns.  In the event of any conflict between the terms
contained in this Amendment and the Lease, the terms herein contained shall
supersede and control the obligations and liabilities of the parties.  From and after the date hereof, the term “Lease”
as used in the Lease shall mean the Lease, as modified by this Amendment.


 


9.             Miscellaneous.  This Amendment becomes
effective only upon execution and delivery hereof by Landlord and Tenant. The
captions of the paragraphs and subparagraphs in this Amendment are inserted and
included solely for convenience and shall not be considered or given any effect
in construing the provisions hereof.  All
exhibits hereto are incorporated herein by reference.


 


10.           Counterparts.  This Amendment may be executed
in one or more counterparts that, when taken together, shall constitute one
original.


 


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BLANK]


 


4

















 


IN WITNESS WHEREOF, Landlord and Tenant have
hereunto set their hands as of the date and year first above written, and
acknowledge that they possess the requisite authority to enter into this
transaction and to execute this Amendment.


 


LANDLORD:


 


BMR-40 ERIE STREET LLC,


a Delaware
limited liability company


 


 


	
  By:

  	
  /s/ Kevin M. Simonsen

  	
   

  
	
  Name:

  	
  Kevin M. Simonsen

  	
   

  
	
  Title:

  	
  VP, Real Estate Counsel

  	
   

  



 


 


TENANT:


 


VERTEX PHARMACEUTICALS INCORPORATED


 


 


	
  By:

  	
  /s/ Kenneth S. Boger

  	
   

  
	
  Name:

  	
  Kenneth S. Boger

  	
   

  
	
  Title:

  	
  Senior Vice President and
  General Counsel