Exhibit 10.4


 


FIRST
AMENDMENT TO LEASE


 


THIS FIRST  AMENDMENT TO LEASE (this “Amendment”)
is entered into as of this 12th day of January, 2009, by and
between BMR-200 SIDNEY STREET LLC, a Delaware limited liability company (“Landlord,”
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 (“Original Landlord”)), and VERTEX
PHARMACEUTICALS INCORPORATED (“Tenant”).


 


RECITALS


 


A.            WHEREAS, Original Landlord
and Tenant entered into that certain undated Lease (and as the same may have
been amended, supplemented or modified from time to time, the “Lease”),
whereby Tenant leases certain premises from Landlord at 200 Sidney 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
and four (4) months, until December 31, 2015.  The period from September 1, 2010,
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 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
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 


 


2

















 


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 Lease dated as of March 3, 1995, by and between
BMR-40 Erie Street LLC (as successor-in-interest to Fort Washington Limited
Partnership) 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, pro rated for any portion of a
year:


 


	
  Months

  	
   

  	
  r.s.f.

  	
   

  	
  Per r.s.f.

  	
   

  	
  Total Monthly

  	
   

  	
  Total Annually

  	
   

  
	
  1-4

  	
   

  	
  191,904

  	
   

  	
  $

  	
  35.50
  annually

  	
   

  	
  $

  	
  567,716

  	
   

  	
  $

  	
  6,812,592

  	
   

  
	
  5-16

  	
   

  	
  191,904

  	
   

  	
  $

  	
  45.50
  annually

  	
   

  	
  $

  	
  727,636

  	
   

  	
  $

  	
  8,731,632

  	
   

  
	
  17-28

  	
   

  	
  191,904

  	
   

  	
  $

  	
  47.50
  annually

  	
   

  	
  $

  	
  759,620

  	
   

  	
  $

  	
  9,115,440

  	
   

  
	
  29-40

  	
   

  	
  191,904

  	
   

  	
  $

  	
  49.50
  annually

  	
   

  	
  $

  	
  791,604

  	
   

  	
  $

  	
  9,499,248

  	
   

  
	
  41-52

  	
   

  	
  191,904

  	
   

  	
  $

  	
  51.50
  annually

  	
   

  	
  $

  	
  823,588

  	
   

  	
  $

  	
  9,883,056

  	
   

  
	
  53-64

  	
   

  	
  191,904

  	
   

  	
  $

  	
  53.50
  annually

  	
   

  	
  $

  	
  855,572

  	
   

  	
  $

  	
  10,266,864

  	
   

  



 


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
claiming to have been employed or engaged by it.  Broker is entitled to a leasing commission in



 


3

















 


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.


 


[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
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-200 SIDNEY 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