Document:

Exhibit 10.10

 

Execution Version

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

COLLABORATION AND LICENSE AGREEMENT

 

This COLLABORATION AND LICENSE AGREEMENT (“Agreement”) is entered into as of June 18, 2014 (“Effective Date”) by and between Dimension Therapeutics, Inc., a corporation organized under the laws of the State of Delaware, with offices at 1 Main Street, 13th Floor, Cambridge, MA 02142 (“Dimension”), and Bayer HealthCare LLC, a limited liability company organized under the laws of the State of Delaware, with offices at 455 Mission Bay Blvd South, San Francisco, CA 94158 (“Bayer”).  Dimension and Bayer are hereinafter referred to individually as a “Party” and collectively as the “Parties.”

 

WHEREAS, Dimension has been granted exclusive rights by its licensor, ReGenX Biosciences, LLC (“ReGenX”) under certain patents and know-how which have been licensed to ReGenX from its upstream licensors, Glaxo SmithKline (as successor in interest to SmithKline Beecham Corporation, “GSK”) and the Trustees of the University of Pennsylvania (“UPenn”), pertaining to various recombinant adeno-associated virus vectors and their use in gene therapy treatments for hemophilia;

 

WHEREAS, Dimension has expertise in the research, identification and early stage development of gene therapy treatments in humans;

 

WHEREAS, Bayer is a leading pharmaceutical company that has technology and expertise in developing and commercializing therapies for human genetic diseases, including hemophilia; and WHEREAS, the Parties desire to enter into a collaboration for the purpose of researching, developing and commercializing adeno-associated virus based gene therapy products for treatment of hemophilia A;

 

NOW, THEREFORE, in consideration of the promises and covenants contained in this Agreement, and intending to be legally bound, the Parties hereby agree as follows:

 

ARTICLE 1
  
 DEFINITIONS

 

1.1                               “[...***...] Expense Report” has the meaning set forth in Section 2.5.1.

 

1.2                               “Affiliate” means any legal entity directly or indirectly controlling, controlled by, or under common control with another entity.  For purposes of this Agreement, an entity shall be deemed to “control” another entity if it owns or controls, directly or indirectly, more than 50% of the outstanding voting securities of such other entity, or has the right to receive more than 50% of the profits or earnings of such other entity, or has the right to control the policy decisions of such other entity.

 

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1.3                               “Antihemophilic Factor” means the MAA-approved exogenous recombinant antihemophilic factor (i.e., rFVIII) labeled for use in the Field and administered by or on behalf of Bayer, its Affiliates or Sublicensees to a patient for prophylactic and non-interventional purposes.

 

1.4                               “Biosimilar Treatment” means on a country-by-country basis, a treatment that is introduced in the applicable country in the Territory by an entity other than Bayer or a Sublicensee or their respective Affiliates, which (a) contains or incorporates a therapeutic or prophylactic agent that is the same or equivalent (by FDA, EMA or other applicable Regulatory Authority standards, on a country-by-country basis) to the Licensed GT Product; and (b) has been granted Regulatory Approval by an abridged procedure in reliance in whole or in part on (i) the prior Regulatory Approval in such country of the Licensed GT Product and Licensed Treatment, or (ii) the safety and efficacy data generated for the prior Regulatory Approval for such Licensed Treatment or Licensed GT Product.

 

1.5                               “Business Day” means a day other than a Saturday, Sunday or any day on which commercial banks located in California, New Jersey, and Massachusetts are authorized or obligated by law to be closed.

 

1.6                               “Calendar Quarter” means each three-month period or any portion thereof, beginning on January 1, April 1, July 1, and October 1.

 

1.7                               “Change of Control” means, with respect to a Party (the “Acquired Entity”):

 

(a)                                 any sale, exchange, transfer, or issuance to or acquisition in one transaction or a series of related transactions by one or more Third Parties of shares representing more than fifty percent (50%) of the aggregate ordinary voting power entitled to vote for the election of directors represented by the issued and outstanding stock of the Acquired Entity or any Affiliate that directly or indirectly controls the Acquired Entity, whether such sale, exchange, transfer, issuance or acquisition is made directly or indirectly, by merger or otherwise, or beneficially or of record;

 

(b)                                 a merger, consolidation, reorganization, business organization, joint venture or similar transaction under applicable Law of the Acquired Entity with a Third Party in which the shareholders of the Acquired Entity or any Affiliate that directly or indirectly controls the Acquired Entity immediately prior to such transaction do not continue to hold immediately following the closing of such transaction at least fifty percent (50%) of the aggregate ordinary voting power entitled to vote for the election of directors represented by the issued and outstanding stock of the entity surviving or resulting from such transaction; or

 

(c)                                  a sale or other disposition of all or substantially all of the assets of the Acquired Entity to one or more Third Parties in one transaction or a series of related transactions.

 

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For purposes of clarity, the term “Change of Control,” with respect to a Party, is not intended to include:  (i) an underwritten public offering of Dimension’s common stock pursuant to a Registration Statement on Form S-1 under the 1933 Act, as amended; or (ii) any sale of shares of capital stock of a Party, in a single transaction or series of related transactions, principally for bona fide equity financing purposes in which such Party issues new securities solely to institutional investors for cash or the cancellation or conversion of indebtedness of such Party or a combination thereof for the purpose of financing the operations and business of such Party.

 

1.8                               “Commercialization” or “Commercialize” means any and all activities directed to the marketing, promotion, offering for sale and sale of a pharmaceutical or therapeutic product, both, to the extent permitted by law, before Regulatory Approval has been obtained, and after, and all commercial manufacturing activities, as well as any post-Regulatory Approval clinical trials.  When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization and “Commercialized” has a corresponding meaning.

 

1.9                               “Commercially Reasonable Efforts” means:  (a) with respect to Dimension’s obligation under this Agreement to research and develop GT Products in the Field, the level of efforts normally used by a similarly situated biopharmaceutical company in meeting the objective(s) set forth in the Research Plan; and (b) with respect to Bayer’s obligation under this Agreement to Commercialize a Licensed GT Product and Licensed Treatments, the level of efforts and resources normally used by Bayer for a similar product owned or controlled by it of similar market potential at a similar stage in the development or life of such product, taking into account issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, profitability of the product and other relevant commercial factors.

 

1.10                        “Compound/Vector” means any gene transfer agent that contains a gene that expresses either (a) the Factor VIII protein, or (b) any variant of the Factor VIII protein (e.g., [...***...]).

 

1.11                        “Confidential Information” means and includes all technical information, inventions, developments, discoveries, software, Know-How, methods, techniques, formulae, animate and inanimate materials, data, processes, finances, business operations or affairs, and other proprietary ideas, whether or not patentable or copyrightable, of either Party that are (a) marked or otherwise identified by the Disclosing Party as confidential or proprietary at the time of disclosure in writing; or (b) if disclosed orally, visually, or in another non-written form, identified by the Disclosing Party as confidential at the time of disclosure; or (c) if not marked as provided in clause (a) or otherwise identified as provided in clause (b), would reasonably be understood by a Third Party receiving such information as being confidential or proprietary in nature.  The Parties acknowledge that (i) the terms and conditions of this Agreement and (ii) the records and reports referred to in Section 6.5 will be deemed the Confidential Information of both Parties, regardless of whether such information is marked or identified as confidential.  In addition, information provided to Bayer pursuant to the provisions of Section 10.2 will be deemed the Confidential Information of Dimension, regardless of whether such information is marked or identified as confidential.  Notwithstanding the foregoing, Confidential Information

 

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will not include the following, in each case, to the extent evidenced by competent written proof of the Receiving Party:

 

1.11.1              information that was already known to the Receiving Party other than under an obligation of confidentiality at the time of disclosure by the Disclosing Party;

 

1.11.2              information that was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

 

1.11.3              information that became generally available to the public or otherwise part of the public domain after its disclosure, other than through any act or omission of the Receiving Party in breach of this Agreement;

 

1.11.4              information that is independently discovered or developed by the Receiving Party without the use of Confidential Information of the Disclosing Party; or

 

1.11.5              information that was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others.

 

1.12                        “Control” or “Controlled” means with respect to any Know-How, Patent Rights or other intellectual property right, that a Party has a license (other than a license granted to such Party under this Agreement) to such Know-How, Patent Rights or other intellectual property right and, in each case, has the ability to grant to the other Party access, a license, or a sublicense (as applicable) to the foregoing on the terms and conditions set forth in this Agreement without violating the terms of any agreement or other legally enforceable arrangement with any Third Party.

 

1.13                        “Controlled Affiliate” means, as to any Party, an Affiliate under the direct or indirect control of such Party, within the meaning of Section 1.2.

 

1.14                        “Controlling Affiliate” means, as to any Party, an Affiliate that directly or indirectly controls such Party within the meaning of Section 1.2.

 

1.15                        “Cost Overrun” has the meaning set forth in Section 2.5.3.

 

1.16                        “Demonstration of Clinical POC” means that the criteria set forth in Exhibit E have been met, as determined by the Parties in accordance with Section 2.11.4.

 

1.17                        “Dimension Know-How” means any Know-How that (a) is Controlled by Dimension or any of its Controlled Affiliates as of the Effective Date or comes into the Control of Dimension or any of its Controlled Affiliates after the Effective Date and at any time during the term of this Agreement (other than through the grant of a license by Bayer hereunder), (b) is reasonably necessary or useful for the development, manufacture or Commercialization of Licensed GT Products, Licensed Treatments, or for Bayer to perform its obligations under this Agreement, and (c) is neither (i) Sublicensed Know-How, nor (ii) any Manufacturing Technology which is other than [...***...] Know-How, and that comes into the Control of

 

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Dimension under the ReGenX Agreement or another agreement with ReGenX.  “Dimension Know-How” includes but is not limited to all biological, chemical, structure-activity relationship, pharmacological, toxicological, manufacturing, preclinical and clinical information relating to Licensed GT Products or the Compound/Vector used in such product.  For the avoidance of doubt, Dimension Know-How includes Dimension’s interest in the Joint Inventions, but does not include any Patent Rights.  It is expressly understood that, in the event of a Change of Control of Dimension, the Dimension Know-How shall not include any Know-How that is owned or controlled by a Controlling Affiliate and (i) existing prior to the closing of such Change of Control, or (ii) developed by or on behalf of such Controlling Affiliate after such Change of Control without the use of the Dimension Know-How in existence prior to the closing of such Change of Control, or (iii) developed by or on behalf of such Controlling Affiliate after such Change of Control and not directly related to any Licensed GT Product or any Compound/Vector used therein.  It is understood that the burden shall be on Dimension to establish that the foregoing exclusions apply, and such exclusions shall apply only if the Controlling Affiliate remains a separate legal entity to Dimension.

 

1.18                        “Dimension Manufacturing Patents” means all Patent Rights that (a) are not Sublicensed Patents, (b) come into the ownership or Control of Dimension or its Controlled Affiliates after the Effective Date and during the term of this Agreement (other than through the grant of a license by Bayer hereunder), and (c) claim inventions relating to the process of manufacture of any Licensed GT Product, Licensed Treatment or any Compound/Vector, which inventions were not generated in the conduct of the manufacturing development set forth in the Research Plan, but were generated by or on behalf of Dimension prior to Bayer’s submission of the first MAA for a Licensed GT Product.  It is expressly understood that in the event of a Change of Control of Dimension, the Dimension Manufacturing Patents shall not include any Patent Rights owned or controlled by a Controlling Affiliate and (i) existing prior to the closing of such Change of Control of Dimension, (ii) existing after the closing of such Change of Control and claiming inventions made by or on behalf of such Controlling Affiliate prior to the closing of such Change of Control, (iii) claiming only inventions made after such Change of Control without the use of the Dimension Know-How in existence prior to the closing of such Change of Control, or (iv) claiming only inventions made after such Change of Control and not directly related to the Licensed Treatment, Licensed GT Product or the Compound/Vector used therein.  It is understood that the burden shall be on Dimension to establish that the foregoing exclusions apply, and such exclusions shall apply only if the Controlling Affiliate remains a separate legal entity to Dimension.

 

1.19                        “Dimension Patents” means all Patent Rights that (a) are not Sublicensed Patents, (b) are not Dimension Manufacturing Patents, (c) are owned or Controlled by Dimension or its Controlled Affiliates as of the Effective Date or that come into the ownership or Control of Dimension or its Controlled Affiliates after the Effective Date and during the term of this Agreement (other than through the grant of a license by Bayer hereunder), and (d) cover (i) the development, use or Commercialization of any Licensed GT Product, Licensed Treatment or any Compound/Vector used therein or (ii) the manufacture of any Licensed GT Product, Licensed Treatment or any Compound/Vector used therein to the extent such Patent Rights cover inventions that were generated in the conduct of the manufacturing development as set forth in the Research Plan.  For the avoidance of doubt, Dimension Patents include Dimension’s interest

 

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in the Joint Patents.  Dimension Patents as of the Effective Date are listed in Exhibit A.  It is expressly understood that in the event of a Change of Control of Dimension, the Dimension Patents shall not include any Patent Rights owned or controlled by a Controlling Affiliate and (i) existing prior to the closing of such Change of Control of Dimension, (ii) existing after the closing of such Change of Control and claiming inventions made by or on behalf of such Controlling Affiliate prior to the closing of such Change of Control, (iii) claiming only inventions made after such Change of Control without the use of the Dimension Know-How in existence prior to the closing of such Change of Control, or (iv) claiming only inventions made after such Change of Control and not directly related to the Licensed Treatment, Licensed GT Product or the Compound/Vector used therein.  It is understood that the burden shall be on Dimension to establish that the foregoing exclusions apply, and such exclusions shall apply only if the Controlling Affiliate remains a separate legal entity to Dimension.

 

1.20                        “Disclosing Party” has the meaning set forth in Section 8.1.

 

1.21                        “Estimated Quarterly Payment” has the meaning set forth in Section 2.5.1.

 

1.22                        “Existing Licenses” means the GSK Agreement and Penn Agreement.

 

1.23                        “FDA” means the United States Food and Drug Administration, or a successor agency in the United States with responsibilities comparable to those of the United States Food and Drug Administration.

 

1.24                        “Field” means any and all human therapeutic uses to treat and diagnose hemophilia A (and expressly not hemophilia B or any other form of hemophilia other than hemophilia A).

 

1.25                        “First Commercial Sale” means, on a country-by-country basis (a) the first commercial sale of a Licensed Treatment by Bayer, its Sublicensees or their respective Affiliates to a person or entity who is not Bayer, its Sublicensees or their respective Affiliates in such country after grant of Regulatory Approval in the applicable country or jurisdiction, provided that where such a first commercial sale has occurred in a country for which pricing approval is necessary for widespread sale, then such sale shall not be deemed a First Commercial Sale until such pricing approval has been obtained; or (b) any compassionate use or named patient basis sale in such country, following the date upon which cumulative Net Sales (across all countries in the Territory) received from any compassionate use or named patient program by Bayer, its Affiliate or Sublicensees equals [...***...], provided the Licensed Treatment Administration Sales and Licensed Treatment Monitoring Sales with respect to the Licensed GT Products administered pursuant to such programs is greater than the fully loaded costs of such Licensed GT Products.  For the avoidance of doubt, supply of Licensed GT Product as samples or to patients for clinical trials or other similar purposes shall not be considered a First Commercial Sale.

 

1.26                        “GSK Agreement” means that certain License Agreement entered into between ReGenX and GSK, effective on March 6, 2009, as amended by that certain Amendment to License Agreement dated April 15, 2009, and as amended from time to time.

 

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1.27                        “GT Product” means:

 

(a)                                 a pharmaceutical product or medical therapy for repairing, modulating the expression of, or inserting a functional version of, the Factor VIII protein but not any other target or locus, which product or therapy (1) contains or employs at least one Compound/Vector and (2) does not contain or employ any other gene or variant of such gene that is other than the Factor VIII protein or a variant of the Factor VIII protein; or

 

(b)                                 a pharmaceutical product or medical therapy that contains or employs a human cell or tissue made using a product or therapy described in (a).

 

1.28                        “IND” means (a) an Investigational New Drug Application as defined in the U.S.  Federal Food, Drug, and Cosmetic Act, as amended, and regulations promulgated thereunder or any successor application or procedure required to initiate clinical testing of a GT Product in humans in the United States; (b) a counterpart of an Investigational New Drug Application that is required in any other country or regulatory jurisdiction other than the United States before beginning clinical testing of the GT Product in humans in such country or regulatory jurisdiction; and (c) all supplements and amendments to any of the foregoing.

 

1.29                        “Joint Inventions” has the meaning set forth in Section 10.1.

 

1.30                        “Joint Patents” has the meaning set forth in Section 10.1.

 

1.31                        “Joint Project Team” or “JPT” has the meaning set forth in Section 4.3.

 

1.32                        “Joint Research and Development Committee” or “JRDC” means the research and development oversight committee comprised of representatives of Dimension and Bayer, as further described in Section 4.2.

 

1.33                        “Joint Steering Committee” or “JSC” means the oversight committee comprised of two (2) representatives each of Dimension and Bayer, as further described in Section 4.1.

 

1.34                        “Know-How” means any and all ideas, information, know-how, data, research results, writings, inventions, discoveries, and other technology (including any proprietary materials), whether or not patentable or copyrightable.

 

1.35                        “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, domestic or foreign.

 

1.36                        “Licensed Back Improvements” means any patentable modifications or improvements developed by Bayer, any of its Affiliates, or any Sublicensees to any vector that is the subject of a claim within the Licensed Patents.

 

1.37                        “Licensed GT Product” has the meaning set forth in Section 2.11.

 

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1.38                        “Licensed Know-How” means the Dimension Know-How and the Sublicensed Know-How.

 

1.39                        “Licensed Patents” means the Dimension Patents and the Sublicensed Patents.

 

1.40                        “Licensed Technology” means, collectively, the Licensed Patents and the Licensed Know-How.

 

1.41                        “Licensed Treatment” means any (a) Licensed GT Product in any and all modes of administration, presentations, formulations and dosages, that either (i) the manufacture, use, sale, offer for sale, or import of which is covered by, or which, in the absence of the licenses granted pursuant to this Agreement, would infringe, at least one Valid Claim of a Sublicensed Patent or Dimension Patent, in the country of manufacture, use, sale, offer for sale, or import; or (ii) is generated through the use of Sublicensed Know-How or Dimension Know-How; and/or (b) service with respect to the administration to patients of any Licensed GT Product described in clause (a)(i) or (a)(ii) above in this Section 1.41; and/or (c) service with respect to the monitoring as to the effectiveness or safety in patients of any Licensed GT Product described in clause (a)(i) or (a)(ii) above in this Section 1.41.

 

1.42                        “Licensed Treatment Administration Sales” means, with respect to a given patient in the Field to whom a Licensed Treatment is administered, the gross amount invoiced by Bayer, its Affiliate or Sublicensee to Third Parties, and recognized in their respective accounting books as income, for the initial administration of such Licensed Treatment to such patient.

 

1.43                        “Licensed Treatment Monitoring Sales” means, with respect to a given patient in the Field to whom a Licensed Treatment has been administered, the gross amounts invoiced to Third Parties by Bayer, its Affiliates or Sublicensees on or after receipt of the Licensed Treatment Administration Sale, and recognized in their respective accounting books as income, for either services rendered in the monitoring of such patient, and/or the continuing effectiveness of the Licensed GT Product with respect to such patient.

 

1.44                        “Licensed Treatment Sales” means with respect to a given period, all Licensed Treatment Administration Sales and all Licensed Treatment Monitoring Sales during such period, [...***...].  For illustrative purposes only, Exhibit B sets forth examples for calculating Licensed Treatment Sales based on Licensed Treatment Administration Sales, Licensed Treatment Monitoring Sales, and any Post-Administration Antihemophilic Factor administered.

 

1.45                        “MAA” means either a New Drug Application filed with the FDA as described in 21 C.F.R.  § 314, a Biological License Application (BLA) pursuant to 21 C.F.R.  § 601.2, or any equivalent or any corresponding application in any country or regulatory jurisdiction other than the United States.

 

1.46                        “Major Market Country” means [...***...].

 

1.47                        “Manufacturing Technology” means any and all Patent Rights, Know-How, and all intellectual property rights associated therewith, and including all tangible embodiments thereof, that are necessary or useful for the manufacture of any Licensed GT Product or

 

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Compound/Vector used therein, or research or commercial reagents related thereto, including manufacturing processes, technical information relating to the methods of manufacture, protocols, standard operating procedures, batch records, assays, formulations, quality control data, specifications, scale up, any and all improvements, modifications, and changes thereto, and any and all activities associated with such manufacture.  Any and all chemistry, manufacturing, and controls (CMC), drug master files (DMFs), or similar materials provided to regulatory authorities and the information contained therein are deemed Manufacturing Technology.

 

1.48                        “Net Sales” means, with respect to a given period, the Licensed Treatment Sales made during such period less the following deductions that are directly attributable to Licensed Treatment Administration Sales or, to the extent applicable, any Licensed Treatment Monitoring Sales:

 

1.48.1              [...***...];

 

1.48.2              [...***...] upon the sale of a Licensed GT Product and [...***...];

 

1.48.3              [...***...] in connection with the Licensed Treatment Administration Sales;

 

1.48.4              [...***...] of a Licensed GT Product; and

 

1.48.5              [...***...] in connection with Licensed Treatment Administration Sales.

 

Sales between and among Bayer and its Affiliates or Sublicensees of Licensed GT Products shall be excluded from the computation of Net Sales, except where [...***...], but Net Sales shall include [...***...].

 

For the purpose of calculating Net Sales, the Parties recognize that:  (a) [...***...]; and (b) in such cases, [...***...].

 

In the event the Licensed GT Product is sold [...***...], Net Sales for such [...***...].  If, on a country-by-country basis, [...***...], then Net Sales will be [...***...].  If, on a country-by-country basis, [...***...].

 

[...***...] shall not be considered in determining Net Sales; provided, however, that [...***...].

 

All amounts used to calculate Licensed Treatment Sales shall be applied in accordance with IFRS, [...***...].

 

1.49                        “Operating Plan” has the meaning assigned to it in Section 2.3.1.

 

1.50                        “Patent Rights” means issued patents and pending patent applications in any country or region, including all provisional, non-provisionals, substitutions, continuations, continuations-in-part, divisionals, renewals and all patents granted thereon, and all reissues,

 

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reexaminations, extensions, confirmations, revalidations, registrations and patents of addition thereof, including supplementary protection certificates.

 

1.51                        “Penn Agreement” means that certain License Agreement entered into between ReGenX and UPenn, effective on February 24, 2009, as amended by that letter agreement dated March 6, 2009, and as amended from time to time.

 

1.52                        “Phase II/III Trial” means a human clinical trial of a Licensed GT Product according to 21 C.F.R.  312.21(b) and (c) (or their successor regulations or any equivalent regulation with respect to jurisdictions outside of the United States);

 

1.53                        “Pivotal Clinical Trial” [...***...].

 

1.54                        “Post-Administration Antihemophilic Factor” [...***...].

 

1.55                        “Proof of Concept Trial” or “POC Trial” means the Phase I human proof of concept trial in patients for a GT Product as set forth in, and conducted pursuant to, the Research Plan.

 

1.56                        “Prosecute” means preparation, filing, and prosecuting patent applications and maintaining patents, including any reexaminations, reissues, inter party’s reviews, post-grant reviews, oppositions, and interferences.

 

1.57                        “Receiving Party” has the meaning set forth in Section 8.1.

 

1.58                        “ReGenX Agreement” means that certain License Agreement entered into between Dimension and ReGenX, effective on October 31, 2013, as amended from time to time.

 

1.59                        “ReGenX Improvements” means any patent or patent application that meets all of the following criteria:

 

(a)                                 is directed to any of:  the composition of recombinant adeno-associated virus vectors, methods of use of such vectors, or methods of developing such vectors, but, in each case, only to the extent of such claims; and

 

(b)                                 is reasonably necessary for any of:  the use, sale, offer for sale, or import of Licensed Products in the Field (as such capitalized terms are defined in the ReGenX Agreement);

 

provided that “ReGenX Improvements” will not include any Manufacturing Technology.

 

1.60                        “Regulatory Approval” means, with respect to particular country or territory, the approval of the MAA or similar approval required to sell a Licensed GT Product and/or Licensed Treatment in such country or territory, including, where required by applicable Law, pricing and reimbursement approval.

 

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1.61                        “Regulatory Authority” means any country, federal, supranational, state or local regulatory agency, department, bureau or other governmental or regulatory authority having the administrative authority to regulate the development or marketing of pharmaceutical products in any country or other jurisdiction, and includes the FDA in the US and the European Medicines Agency in the EU.

 

1.62                        “Research Budget” means the budget attached to this Agreement as Exhibit D-3, as may be amended from time to time as provided for in this Agreement, and covering [...***...].

 

1.63                        “Research Plan” means the research plan addressing the activities to be performed by Dimension during the Research Term through completion of the POC Trial, as set forth in Section 2.3, and as such research plan may be amended from time to time.  The Research Plan shall contain (a) a description of the process for identifying the criteria for selecting GT Products as potential clinical candidates, [...***...], (b) a description of the specific activities to be performed by Dimension, including the pre-clinical and regulatory work necessary to commence the POC Trial and clinical work necessary for the completion of the POC Trial, (c) the primary and secondary endpoints of the POC Trial, (d) manufacturing / CMC development, and (e) projected timelines for completion of the described activities.

 

1.64                        “Research Program” means the research collaboration between the Parties, under the direction and oversight of the JRDC, aimed at the discovery of one or more suitable Licensed GT Products for hemophilia A and moving such Licensed GT Products forward to completion of a POC Trial, pursuant to the Research Plan during the Research Term.

 

1.65                        “Research Term” means the period following the Effective Date for Dimension to conduct and complete the Research Plan, unless earlier terminated as provided under Section 2.2 of this Agreement.

 

1.66                        “Retained Rights” has the meaning set forth in Section 5.3.

 

1.67                        “Royalty Term” has the meaning set forth in Section 6.4.2.

 

1.68                        “Sublicensed Know-How” means any Know-How that (a) is Controlled by Dimension as of the Effective Date or that comes into the Control of Dimension after the Effective Date and during the term of this Agreement, (b) is licensed to Dimension under the ReGenX Agreement, and (c) is reasonably necessary for the use, sale, offer for sale, or import of Licensed GT Products in the Field; provided that “Sublicensed Know-How” will not include any Manufacturing Technology, other than [...***...] Know-How, that comes into the Control of Dimension under the ReGenX Agreement and which otherwise meets the foregoing criteria; and provided further that “Sublicensed Know-How” does not include any Patent Rights.

 

1.69                        “Sublicensed Patents” means (a) the Patent Rights listed in Exhibit A, and (b) all other Patent Rights that cover or claim any Licensed GT Product or Licensed Treatment or component thereof, or use thereof in the Field, and that (i) are Controlled by Dimension as of the Effective Date or that come into the Control of Dimension after the Effective Date and during the

 

* The specific required criteria known as [...***...].

 

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term of this Agreement, and (ii) are licensed to Dimension under the ReGenX Agreement, provided that “Sublicensed Patents” will not include any claim of a patent or patent application owned or controlled by ReGenX covering any Manufacturing Technology.

 

1.70                        “Sublicensed Technology” means, collectively, the Sublicensed Patents and Sublicensed Know-How.

 

1.71                        “Sublicensee” means any Third Party or Affiliate to whom Bayer grants a sublicense of some or all of the rights granted to Bayer under this Agreement as permitted by this Agreement.

 

1.72                        “Territory” means [...***...].

 

1.73                        “Third Party” means any person or entity other than a Party to this Agreement or Affiliates of a Party to this Agreement.

 

1.74                        “[...***...] Know-How” means unpatented Know-How that, as of October 30, 2013, (a) is Controlled by ReGenX pursuant to the Existing Licenses or pursuant to ReGenX’s ownership thereof, and (b) is directed [...***...]; provided that, notwithstanding the scope of the license grant in Section 5.1(a), any rights granted to Bayer under this Agreement with respect to the [...***...] Know-How will be limited to use of such Know-How in the Field.

 

1.75                        “Valid Claim” means a claim of an issued and unexpired patent (including any patent claim the term of which is extended by any extension, supplementary protection certificate, patent term restoration, or the like) included within the Sublicensed Patents or Dimension Patents or a claim of a pending patent application included within the Sublicensed Patents or Dimension Patents, which has not lapsed, been abandoned, been held revoked, or been deemed unenforceable or invalid by a non-appealable decision or an appealable decision from which no appeal was taken within the time allowed for such appeal of a court or other governmental agency of competent jurisdiction and, in the case of a pending application, that has been pending for less than [...***...] years from the priority date of the claim.

 

ARTICLE 2
   
 RESEARCH AND DEVELOPMENT PROGRAM

 

2.1                               Collaboration Overview.  Dimension and Bayer shall collaborate for the purpose of researching and developing, until conclusion of a POC Trial to be conducted by Dimension of at least one GT Product for use in the Field based initially on the [...***...] vector, which Bayer shall, post POC Trial, have the exclusive right to further develop, seek Regulatory Approval for, and if successful, Commercialize in the Territory.  To that end, under the oversight of the JSC and JRDC, Dimension will be responsible for performing those research and development activities set forth in the Research Plan, and subject to any limitations set forth in Section 2.5, Bayer shall fund Dimension’s efforts under the Research Plan in accordance with the Research Budget.  Following completion of the POC Trial, Bayer will be solely responsible, at its own

 

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cost, for performing all further development and Commercialization activities for each Licensed GT Product in the Field and in the Territory.

 

2.2                               Responsibilities of the Parties during the Research Term.

 

2.2.1                     During the Research Term and subject to the oversight of the JRDC, Dimension shall be solely responsible for carrying out the tasks, until completion of and including the conduct of the POC Trial, as set forth in the Research Plan.  Dimension shall use Commercially Reasonable Efforts in the performance of its obligations under the Research Plan during the Research Term.  Upon request by Dimension, Bayer shall provide reasonable consulting and technical support in order to assist Dimension in carrying out its Research Program obligations.  Bayer shall pay the costs and expenses described in the Research Budget as provided in Section 2.5.

 

2.2.2                     Notwithstanding the foregoing, (a) to the extent the data from any studies conducted prior to the conduct of the POC Trial, or the requirements of any Regulatory Authority, result in the Parties mutually agreeing, through the JSC, to terminate early the Research Plan (and not to proceed under Section 2.11.2), or (b) where Dimension, as the holder of the IND, is required by Regulatory Authorities in the U.S.  or E.U.  to terminate the further clinical development of all Licensed GT Products (provided that Dimension has exerted Commercially Reasonable Efforts to modify the Research Plan (consistent with Section 2.3.2) to comply with the requirements of Regulatory Authorities), the Parties shall not proceed under Section 2.11.2, and the Research Term will terminate early and the Parties will agree to wind up the conduct of the activities under the Research Plan in an orderly fashion.

 

2.3                               Research Plan, Research Budget, and Operating Plans.

 

2.3.1                     Plans.  The overall Research Plan is set forth in Exhibit D-1 and the Research Budget is set forth in Exhibit D-3.  Within [...***...] after the Effective Date, or longer as agreed by the Parties, the Parties shall develop and finalize a detailed operating plan for carrying out the activities set forth in the Research Plan over the ensuing [...***...], which such operating plan shall contain the description, time-line and portion of the Research Budget covering such activities (the “Operating Plan”).  Such Operating Plan shall be consistent with the terms of this Agreement, the Research Plan and the Research Budget and shall be attached hereto as Exhibit D-2 and form a part of this Agreement.  In the event of an inconsistency between the Research Plan, Operating Plan and this Agreement, the terms of this Agreement will prevail and in the event of an inconsistency between the Research Plan and an Operating Plan, the terms of the Research Plan will prevail, unless otherwise agreed in writing by the Parties.

 

2.3.2                     Amendments and Revisions to Operating Plan and Research Plan.  During the Research Term, (a) Dimension shall provide the JRDC with [...***...] written reports describing the progress made against the goals set forth in the Operating Plan, and (b) the JRDC shall on a [...***...] basis review and update the Operating Plan, and make necessary amendments (including any increase in the Research Budget) for the Research Plan activities to be covered in the upcoming [...***...], consistent with Sections 2.3.3, 2.3.4, and 2.3.5.  On [...***...] basis, the JRDC shall review and update as needed the then-current Research Plan.

 

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Any amendments or modifications to the Research Plan and any Operating Plan shall require the approval of the JRDC (and the JSC, as applicable) and shall be subject to the applicable terms of this Agreement, and the JRDC shall be required to formally document updates to the Research Plan and Operating Plan as part of the agreed upon and accepted minutes of the [...***...] meetings of the JRDC.

 

2.3.3                     Minor Amendments to the Research Budget.  In the course of its [...***...] review of the Operating Plan, either Party may propose to the JRDC amendments to the then-current annual Research Budget associated with such Operating Plan, to reflect actual costs or minor changes to the Research Plan, and the terms of Section 4.1.4 shall apply to any final decision related to such amendment; provided, however, that if any such proposed amendment to the Research Budget causes the then-current annual Research Budget to increase by more than [...***...], such amendment to the Research Budget shall require the unanimous approval of the JSC in accordance with Section 2.3.4.

 

2.3.4                     Major Amendments to the Research Budget.  The Parties agree and acknowledge that (a) the Research Budget as of the Effective Date represents the good faith estimate of the Parties as to the costs of the activities set forth in the Research Plan, and the extent of activities to be included within the Research Plan itself, (b) subject to Section 2.3.5, such Research Budget is based upon certain assumptions, including but not limited to regulatory requirements, pre-clinical testing, manufacturing requirements, and clinical development activities, as such assumptions are further set forth in Exhibit D-3; and (c) changes to the Research Plan likely will be required where any material changes to such assumptions and/or the activities to be conducted under the Research Plan are agreed upon by the Parties.  Accordingly, the Parties agree that any increase to the Research Budget of more than [...***...], shall require the unanimous approval of the JSC, and that unless and until such approval is obtained (i) [...***...] shall not be obligated to fund any amount over the expense caps set forth in the then-current agreed upon Research Budget; and (ii) [...***...] shall not be required to undertake any activities that are not funded fully by the then-current agreed upon Research Budget due to a change in assumptions underlying such activities and their associated costs, or due to any expansion of the scope or nature of any such activity.

 

2.3.5                     Assumptions in the Research Budget.  In addition to any amendments to the Research Budget permitted under Section 2.3.3 or 2.3.4, on [...***...] basis through the JRDC, the Parties shall in good faith review the assumptions in the then-current Research Budget and make any appropriate adjustments to such assumptions.  Such adjustments by the Parties will at a minimum take into account:  any changes in regulatory requirements that may impact clinical development activities, including but not limited to, the number of patients and duration of treatment of the clinical studies set forth in the Research Plan, or the cost per patient; and any unanticipated issues in manufacturing process development.  The JRDC shall formally document any such updates to the assumptions in the Research Budget as part of the agreed upon and accepted minutes of the [...***...] meetings of the JRDC, and shall prepare and approve a revised Research Budget reflecting such agreed upon revised assumptions.

 

2.3.6                     Uncertainty Regarding Certain Costs.  The Parties recognize that, notwithstanding Sections 2.3.4 and 2.3.5, significant uncertainty exists as of the Effective Date

 

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with respect to the good faith estimate and assumptions in the Research Budget regarding (a) costs associated with clinical process transfer and manufacturing of clinical supplies by Dimension’s contract manufacturer, and (b) costs for the conduct of the POC Trial, and the Parties agree to use good faith efforts to manage and provide for such costs including prompt adjustments to the Research Budget as necessary once greater clarity regarding such costs is obtained.  The provisions of Section 2.3.4 shall apply if such adjustments result in the Research Budget increasing by more than [...***...].

 

2.4                               Subcontractors.  Dimension may engage any consultant, subcontractor, or other vendor conducting Dimension’s obligations under the Research Plan (each, a “Subcontractor”) to perform any work under the Research Program; provided that all such engagements and any contracts related to such engagements are subject to prior approval by the JRDC, to the extent not already approved as part of and named within the Research Plan or any Operating Plan.  Such contracts shall include provisions, including intellectual property provisions, adequate for Bayer to enjoy the licenses granted hereunder as though Dimension had performed the contracted work.  To facilitate approval by the JRDC, Dimension shall identify each Subcontractor, the activities proposed to be performed by such Subcontractor and the budget for such activities.  The JRDC in its discretion may request a copy of the proposed contract with the Subcontractor prior to approving such contract.  Dimension shall be solely responsible for the management of its permitted Subcontractors.  Any agreement with a permitted Subcontractor pertaining to the Research Program shall be consistent with the provisions of this Agreement.  Dimension shall ensure that no consultant, subcontractor or other vendor it instructs in connection with the Research Plan is or has been debarred by the FDA (or other Regulatory Authority outside the US) pursuant to its authority under Sections 306(a) and (b) of the U.S.  Food, Drug, and Cosmetic Act (21 U.S.C.  §335(a) and (b)) (or analogous provisions outside the US), or is the subject of any investigation or proceeding which may result in such debarment by the FDA (or other Regulatory Authority in countries outside the US).

 

2.5                               Funding of Research.

 

2.5.1                     Payment to Dimension.  [...***...] Dimension will estimate the total costs and expenses expected to be incurred during such [...***...] in performing the activities under the Research Plan, which estimate will be consistent with the applicable Operating Plan and Research Budget.  Dimension will then provide an invoice to Bayer [...***...], which invoice shall be for [...***...] costs and expenses expected to be incurred for such [...***...].  Bayer will pay such invoice (an “Estimated [...***...] Payment”) within [...***...] of receipt.  Within [...***...] following the end of each [...***...], Dimension will provide Bayer with a report containing an account of tasks actually performed and the costs and expenses actually incurred during such [...***...] (the “[...***...] Expense Report”).  Such report will specify in reasonable detail all costs and expenses incurred during such [...***...] and an invoice for such costs and expenses shall accompany the [...***...] Expense Report.  Bayer shall pay such invoices within [...***...] of their receipt by Bayer.  The foregoing mechanism will be used, with appropriate adjustments, in respect of calendar year 2014, with the initial estimated total costs and expenses expected to be incurred during the remainder of 2014, together with invoice, submitted by Dimension within [...***...] of the Effective Date.

 

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Invoices will be sent to Bayer at the following address:

 

Bayer HealthCare
 Pharma West Coast
 Attn:  Frederick Roepke
 PO Box 416
 Pittsburgh PA 15230 USA .

 

2.5.2                     Annual True-Up.  Within [...***...] of the end of the applicable [...***...] the Parties will reconcile the costs and expenses set forth in [...***...] Expense Reports presented by Dimension in respect of the applicable [...***...] (“Total Actual Expenses”) with the sum of the costs and expenses paid by Bayer in respect of the first [...***...] Expense Reports plus the Estimated [...***...] Payment (“Actual Plus Estimated Expenses”).  If the Parties determine that the Actual Plus Estimated Expenses exceed Total Actual Expenses, then the amount of such excess will be credited against the amount due by Bayer in respect of the first [...***...] of the following [...***...] (or, if no such payment is anticipated, refunded by Dimension to Bayer within [...***...] of such determination).  If the Parties determine that Total Actual Expenses exceed Actual Plus Estimated Expenses, but that such actual costs and expenses are nonetheless within [...***...] of the then-current Research Budget for the applicable [...***...], then Bayer will include the excess amount owed to Dimension with the amount due by Bayer in respect of the first [...***...] of the next [...***...] (or, if no such payment is anticipated, paid by Bayer to Dimension upon receipt of an invoice under the following payment timing terms:  if the invoice is received by Bayer at the above address prior to [...***...], then payment shall be made by the [...***...] in which the invoice was received.  If the invoice is received by Bayer at the above address after the [...***...], then the payment shall be made by the [...***...] in which the invoice was received).

 

2.5.3                     Cost Overruns.  If the Parties determine that Total Actual Expenses exceed Actual Plus Estimated Expenses, and such Total Actual Expenses are greater than [...***...] of the then-current Research Budget for the applicable [...***...] (such excess over such percentage, a “Cost Overrun”), then Bayer shall have no obligation to pay the Cost Overrun unless Dimension obtains Bayer’s consent.  If consent is provided, Bayer will pay the excess amount to Dimension; provided, however, if at the conclusion of the Research Plan, the actual amount expended by Bayer, including the Cost Overruns, is greater than the overall cap set forth in the then-current Research Budget, Dimension shall reimburse Bayer the amount of such Cost Overruns in excess of such cap within [...***...] of receipt by Dimension of the next Milestone Payment stated in Section 6.2, if such Milestone Event is achieved.  In addition, Dimension agrees that where it anticipates during a given [...***...] that its actual costs and expenses will likely result in a Cost Overrun for such [...***...], Dimension will give notice promptly to Bayer of such anticipated Cost Overrun.  [...***...].

 

2.5.4                     Expense Records.  Dimension shall maintain complete and accurate books, records and accounts used for the determination of all costs and expenses incurred in connection with the performance of its obligations under the Research Plan and in accordance with the Research Budget, in sufficient detail to confirm the accuracy of any payments required under this Agreement, which books, records and accounts will be retained by Dimension for

 

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[...***...] after creation thereof, or longer as is required by applicable Law.  Such books, records and accounts shall be kept in accordance with Dimension’s then-current accounting procedures.  Bayer shall have the right, during normal business hours and upon reasonable advance notice, to review and copy all such records maintained by Dimension.

 

2.5.5                     Currency.  All payments made under this Section 2.5 will be payable in US Dollars.

 

2.6                               Bayer’s Expenses.  Bayer shall be solely responsible for its own costs and expenses incurred in conducting any activities under the Research Plan or otherwise in support of the Research Program.

 

2.7                               Pre-Clinical and Clinical Supplies.  As part of the Research Plan, Dimension shall be responsible for manufacturing or having manufactured sufficient supplies of GT Products and any Compounds/Vectors needed in the conduct of its activities under the Research Plan.

 

2.8                               Regulatory Matters.  Dimension shall be responsible for, and shall compile, submit and have ownership of, all INDs for any GT Product or component thereof, necessary in order to conduct its activities under the Research Plan, including the POC Trial.  Dimension shall provide to Bayer a copy of all written substantive communications from and with any Regulatory Authority involving a regulatory submission for a GT Product or any Compound/Vector or any other component thereof sufficiently in advance, where feasible, to enable Bayer to have a meaningful opportunity to provide input on the content of such submission and, if requested by Bayer, to participate in scientific advice meetings with the Regulatory Authority related to the GT Product.  Following the conduct of the POC Trial and a GT Product becoming a Licensed GT Product, Dimension shall assign and transfer to Bayer, at Bayer’s expense, any and all such INDs.  Any orphan designation for the Licensed GT Product and/or the Field for which Dimension has filed or intends to file an IND will be in the name of Bayer or one of its Affiliates.

 

2.9                               Materials.  To facilitate the conduct of the Research Plan activities, either Party may provide to the other Party, free of charge, certain biological materials or chemical compounds owned by or licensed to the supplying Party for use by the other Party (such materials or compounds and any progeny and derivatives thereof, collectively, “Materials”).  All such Materials shall remain the sole property of the supplying Party, shall be used only in the fulfillment of obligations or exercise of rights under this Agreement and solely under the control of the receiving Party, shall not be used or delivered to or for the benefit of any Third Party without the prior written consent of the supplying Party, and shall not be used in research or testing involving human subjects, unless expressly agreed.

 

2.10                        Research Records and Reports.  Dimension shall maintain complete, current and accurate records and laboratory notebooks of all activities it conducts under the Research Program, and all data and other information resulting from such activities.  Such records shall reflect all work done and results achieved in the performance of the Research Program in good scientific manner (including in accordance with applicable GLP, GMP and GCP, where appropriate in conformance with the Research Plan) as appropriate for regulatory and patent

 

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purposes.  Bayer shall have the right, during normal business hours and upon reasonable advance notice, to review and copy all such records maintained by Dimension and to obtain access to the originals to the extent necessary or useful for regulatory and patent purposes.

 

2.11                        Licensed GT Products; Demonstration of Clinical POC.

 

2.11.1              Designation.  The Parties intend that during the Research Term and under the Research Plan, Dimension will discover and develop [...***...] GT Produc[...***...] and complete a POC Trial for [...***...] GT Product, which [...***...] GT Product, upon completion (successful or not) of such POC Trial, shall be deemed a “Licensed GT Product” after which point, Bayer’s licenses set forth in Section 5.1 shall apply, and Bayer shall have sole responsibility for further development, manufacture and Commercialization of such Licensed GT Product.

 

2.11.2              Failure to Achieve POC.  In the event [...***...] Licensed GT Product is the subject of a POC Trial, but fails to achieve Demonstration of Clinical POC (as determined pursuant to Section 2.11.4), at Bayer’s discretion and request, the Parties shall amend the Research Plan and Research Budget to add activities to identify and develop [...***...] GT Product and conduct a POC Trial for such [...***...] GT Product (the “Backup Product”) and as needed, extend the then-current Research Term to conduct such activities.  Such Backup Product, upon completion of its POC Trial, shall also become a Licensed GT Product, subject to the license grants set forth in Section 5.1, and the Parties shall determine if such Backup Product achieves Demonstration of Clinical POC pursuant to Section 2.11.4.

 

2.11.3              Follow On Products.  If notwithstanding Demonstration of Clinical POC for [...***...] Licensed GT Product or [...***...] Backup Product, Bayer requests, at any time prior to Bayer’s submission of the first MAA for a Licensed GT Product, that an additional GT Product also be identified and made the subject of an additional POC Trial, the Parties shall discuss in good faith such request, and if mutually agreed, shall either modify the then-current Research Plan and Research Budget to include such activities or (if no Research Plain remains in place) agree a new Research Plan and Research Budget, and [...***...], and as necessary the Parties shall extend the Research Term reinstate a Research Term to accommodate such activities, and any such additional GT Product as to which such an additional POC Trial is conducted would be deemed also a Licensed GT Product and subject to Bayer’s license grants set forth in Section 5.1.

 

2.11.4              Determination of Demonstration of Clinical POC.  The process for determining achievement of Demonstration of Clinical POC for a Licensed GT Product shall be as set forth in this Section 2.11.4.  Following completion of the POC Trial for the Licensed GT Product (or, if applicable, the Backup Product), Dimension will present the results of such trial, and all other relevant data, to the JSC and the JSC will act in good faith to apply the criteria set forth in Exhibit E to such data and results and determine if such criteria for Demonstration of Clinical POC have been met.  If the JSC determines that such criteria have been met, then Demonstration of Clinical POC will be deemed to have been achieved and Dimension will invoice Bayer for the applicable milestone payment as set forth and in accordance with Section 6.2.  If the JSC determines that such criteria in Exhibit E have not been met with respect to the

 

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initial Licensed GT Product then the Parties may proceed in accordance with Section 2.11.2.  In the event of any disagreement within the JSC on the application of the criteria set forth in Exhibit E, and/or whether Demonstration of Clinical POC has been achieved, the Parties shall within [...***...] of the meeting of the JSC in which it was unable to so determine such achievement, identify and appoint a mutually agreed upon independent industry expert (the “Expert”).  In such case, each Party shall provide the Expert with the relevant data as well as a briefing document setting forth specific detailed reasons underlying such Party’s position, and the Expert shall within an additional [...***...] following his appointment, apply the criteria and make the determination, in a writing stating his reasons for such position, of whether Demonstration of Clinical POC has been achieved, which determination shall be final and binding on the Parties.  All costs associated with identifying and utilizing such Expert shall be borne equally by the Parties.  Following a positive determination by the Expert that Demonstration of Clinical POC has been achieved, Dimension will invoice Bayer for the applicable milestone payment as set forth and in accordance with Section 6.2.  For the avoidance of doubt, in determining the achievement of Demonstration of Clinical POC hereunder, either by the JSC or the Expert, the criteria stated in Exhibit E shall be strictly applied and shall not be modified in any way.  No opinion as to materiality or relevance of any of the results or data (including their applicability to any particular patient) shall replace or modify the specific figures and other criteria expressly stated in Exhibit E.  Furthermore, the Expert shall make his decision based on the data and briefing documents submitted to him.  If he is unable to make a decision without additional information or data, Demonstration of Clinical POC will be deemed not to have been achieved.

 

2.12                        Transfer of Technology.  Promptly after completion of the POC Trial, Dimension shall, [...***...], conduct all necessary technology transfer (including Materials) to Bayer as reasonably necessary for Bayer to practice the licenses granted under Section 5.1 with respect to such Licensed GT Product.

 

2.13                        Completion of the POC Trial.  Wherever used in this Agreement the expression “completion of the POC Trial” shall occur when data base is locked per protocol, which means that all CRFs have been entered and audit has cleared all those entries.

 

ARTICLE 3
  
 LATER STAGE DEVELOPMENT AND COMMERCIALIZATION

 

3.1                               General Responsibilities.  Following completion of the POC Trial with respect to a Licensed GT Product, Bayer shall be solely responsible for (i) the planning and conduct of all later development of such Licensed GT Product in the Field in the Territory, (ii) all regulatory submissions and approvals (including all INDs and MAAs) for such Licensed GT Product and interactions with regulatory authorities, (iii) the selection of the countries in the Territory in which Bayer will pursue and maintain Regulatory Approvals, including at a minimum the U.S.  and at least [...***...] Major Market Countr[...***...]; and (iv) Commercialization of such Licensed GT Product in the Territory, all at its sole expense.

 

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3.2                               Development Activities.

 

3.2.1                     Bayer’s Efforts.  Following completion of the POC Trial with respect to a Licensed GT Product, Bayer, itself or through one or more Affiliates or Sublicensees, shall use Commercially Reasonable Efforts to conduct a Pivotal Trial and such other clinical development activities as are required to obtain Regulatory Approval in the U.S.  and at least [...***...] Major Market Countr[...***...] in the Territory for the Licensed GT Product.  Bayer shall ensure that no consultant, subcontractor or other vendor it instructs in connection with such development is or has been debarred by the FDA (or other Regulatory Authority outside the U.S.) pursuant to its authority under Sections 306(a) and (b) of the U.S.  Food, Drug, and Cosmetic Act (21 U.S.C.  §335(a) and (b)) (or analogous provisions outside the U.S.), or is the subject of any investigation or proceeding which may result in such debarment by the FDA (or other Regulatory Authority in countries outside the U.S.).

 

3.2.2                     Regulatory Submissions and Approvals.  Bayer shall be solely responsible for filing for and shall own all Regulatory Approvals and submissions therefor.  To the extent permitted by applicable Laws, Bayer shall permit Dimension to attend in an observatory capacity only all meetings with Regulatory Authorities in the U.S., to the extent related to a Licensed GT Product, including, but not limited to, all in-person meetings and all telephone conferences.

 

3.2.3                     Updates.  Bayer shall update the JSC on its progress in obtaining Regulatory Approval of the Licensed GT Product, including providing to the JSC in advance of its meeting a written summary (which may be in presentation style) that includes sufficient detail for Dimension’s representatives to understand the activities planned by Bayer and Bayer’s anticipated timelines for performing such activities, and any material interactions with Regulatory Authorities.  In addition, each Party shall immediately notify the other of any information it receives regarding any threatened or pending action, inspection or communication by or from any Third Party, including a Regulatory Authority, that may materially affect the development, manufacturing, Commercialization or regulatory status of a Licensed GT Product.

 

3.2.4                     PV Agreement.  If requested by Bayer the Parties will enter into an Agreement setting forth the specific procedures to be used by the Parties to coordinate the investigation and exchange of reports of adverse drug experiences and product complaints with respect to Licensed GT Products to ensure timely communication to Regulatory Authorities and compliance with Laws.

 

3.3                               Commercialization.

 

3.3.1                     Responsibilities.  Bayer will have the exclusive right to conduct, and be solely responsible for, all aspects of the Commercialization of Licensed GT Products in the Field in the Territory, including:  (a) developing and executing a commercial launch and pre-launch plan, (b) negotiating with applicable governmental authorities regarding the price and reimbursement status of Licensed GT Products; (c) marketing and promotion; (d) booking sales and distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection, inventory and receivables; and (f) providing customer support, including handling medical queries, and performing other related functions.  As between the Parties, Bayer shall bear all of its costs and expenses incurred in connection with such Commercialization activities.

 

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3.3.2                     Compliance.  Bayer shall be responsible for conforming its practices and procedures to applicable Laws relating to the marketing, detailing and promotion of Licensed GT Products and/or Licensed Treatments in the Territory.

 

3.4                               Manufacturing Assistance.  From and after completion of the POC Trial, Bayer shall be responsible for the manufacture of the Licensed GT Products for clinical or commercial use, including any process development and scale up.  Notwithstanding the foregoing, in sufficient advance of any Phase II/III Trial by Bayer (including prior to completion of the POC Trial), Dimension and Bayer shall meet and discuss and, if Bayer considers it appropriate, engage ReGenX and any other necessary Third Parties for purposes of developing processes necessary to enable Bayer’s commercial manufacturing of the Licensed GT Product for use in the Field.

 

ARTICLE 4

 

GOVERNANCE

 

4.1                               Joint Steering Committee.

 

4.1.1                     Formation and Dissolution.  The JSC shall be formed as soon as possible, but no later than [...***...] following the Effective Date of this Agreement and, unless otherwise agreed by the Parties, shall dissolve at the time of initial Regulatory Approval in the U.S., or earlier should Dimension elect to discontinue the JSC following Demonstration of Clinical POC.  The JSC shall be comprised of [...***...] representatives from each Party.  If mutually agreed by the JSC members on a case-by-case basis, the JSC may invite other non-members to participate in the discussions and meetings of the JSC, provided that such participants shall have no voting authority at the JSC.  Each Party may substitute its representative from time-to-time effective only upon the consent of the other Party, not to be unreasonably withheld.  The JSC shall have no permanent chairman.

 

4.1.2                     Responsibilities.  The JSC shall be responsible for overseeing the overall collaboration established under this Agreement, and to that end, for (i) creating and maintaining a collaborative work environment within and among the Parties, and (ii) addressing any disputes as they may arise in the JRDC and (iii) determining whether Demonstration of Clinical POC has been achieved, and (iv) unless otherwise specified, serving as the initial point of contact to resolve any disputes between the Parties.  The JSC will have solely the powers assigned to it in this Article 4 and elsewhere expressly in this Agreement, and will not have any power to amend, modify, or waive compliance with this Agreement.

 

4.1.3                     Meetings.  The JSC shall meet in person or by teleconference not less than [...***...] during the Research Term, and thereafter, once [...***...] until dissolution.  Meetings of the JSC shall be alternately hosted by the Parties on such dates and at such times, places and format (i.e.  whether the meeting will be in person or by teleconference) as agreed to by the members of the JSC; provided, that at least one meeting in each calendar year during the Research Term shall be in person.  Dimension shall host the first meeting of the JSC at a mutually agreeable time and place no later than [...***...] from the Effective Date of this

 

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Agreement.  Each Party shall be responsible for all its own expenses relating to attendance at or participation in JSC meetings.  The representatives shall alternate acting as chairman of each meeting, and in that capacity shall be responsible for sending out in advance the agenda for any such meeting and minuting the results of such meeting for review and approval within [...***...] after each JSC meeting.  Such minutes shall be deemed approved unless one or more members of the JSC objects to the accuracy of such minutes within [...***...] of receipt.  For the avoidance of doubt, the chairman shall have no casting vote.  Meetings of the JSC shall be effective only if at least one (1) representative of each Party is present or participating in such meeting.

 

4.1.4                     Decision-Making.  The JSC will strive to reach consensus in all decisions before it.  The representative from each Party will have one (1) vote on behalf of that Party.  The representatives serving on the JSC shall use good faith efforts to seek consensus in the JSC’s decision making process and to make decisions that are consistent with the then existing Operating Plan and Research Plan.  In the event such consensus is not obtained within [...***...] of the JSC reviewing and discussing an issue, (a) until completion of the POC Trial Dimension’s representative shall have final say with respect to any decision involving any amendment to, or the conduct of any activities under, the Research Plan, Research Budget, or any Operating Plan; provided that Dimension’s representatives shall not have the right in the exercise of such final say to amend, revise or extend the Research Plan or Research Budget in a manner that (i) changes the primary and secondary endpoints of the POC Trial; (ii) imposes any material additional obligations on Bayer or (iii) results in any Cost Overrun or increases the overall Research Budget by more than [...***...] of the then-current Research Budget; and (b) [...***...] representative shall have the final say with respect to any decision involving development activities as outlined in Section 3.2, or Commercialization as outlined in Section 3.3, or any manufacture of Licensed GT Products following completion of the POC Trial.  For clarity, the determination of whether Demonstration of Clinical POC has been achieved for a Licensed GT Product will be in accordance with Section 2.11.4.  Following Demonstration of Clinical POC the JSC will function primarily as an information exchange forum and the existence of the JSC and Bayer’s participation therein does not affect any decision-making discretion or right that Bayer otherwise possesses under this Agreement,

 

4.2                               Joint Research and Development Committee.

 

4.2.1                     Formation.  The Parties shall form a Joint Research and Development Committee as soon as possible after the Effective Date, but no later than [...***...] following the Effective Date of this Agreement.  The JRDC shall be comprised of an equal number of representatives from each Party.  If mutually agreed by all JRDC members, the JRDC may invite non-members (including ReGenX personnel) to participate in the discussions and meetings of the JRDC, provided that such participants shall have no voting authority at the JRDC.  Each Party shall notify the other Party in writing of its initial representatives to the JRDC within [...***...] after the Effective Date, and may substitute one or more representatives from time-to-time effective upon written notice to the other Party, provided that such representatives are suitably qualified and experienced for the tasks and responsibilities to be fulfilled.  A designated representative of Dimension will be the chairman of the JRDC, and in such capacity, he/she shall be responsible for setting the agenda for meetings of the JRDC, with input from the other

 

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members, and for conducting the meetings of the JRDC.  Except as stated above the chairman will have no casting vote.

 

4.2.2                     Responsibilities.  The JRDC shall be responsible for oversight of the conduct of research and development under the Research Plan during the Research Term.  In addition to the foregoing general responsibilities, the JRDC shall in particular:

 

(a)                                 Review, discuss and approve any proposed Operating Plan or the Research Budget and timelines in the Research Plan and under each Operating Plan, or amendments thereto,

 

(b)                                 manage the overall strategy for the research and development of potential Licensed GT Products under the Research Plan

 

(c)                                  prioritize GT Products for further research and development under the Research Plan,

 

(d)                                 determine criteria to be set forth in the Research Plan for selection of a development candidate with respect to a GT Product, and whether such criteria have been met,

 

(e)                                  make decisions on whether and how to continue activities under the Research Plan at each decision point set forth in such Research Plan, based on the then-available data and results and consistent with the criteria set forth in such Research Plan,

 

(f)                                   oversee Dimension’s efforts to obtain any and all requisite INDs with respect to any development candidate GT Products,

 

(g)                                  perform such other functions as appropriate to further the purposes of the Research Program, as expressly set forth in this Agreement or as determined by the Parties in writing,

 

(h)                                 be responsible for ensuring the submission of clinical trial information by Dimension, as sponsor, to relevant public databases (e.g.  ClinicalTrials.gov) when legally required and ensuring consistency between all postings.  In addition (and at a minimum), the JRDC will ensure compliance with the requirements of the latest version of “Joint Position on the Disclosure of Clinical Trial Information via Clinical Trial Registries and Databases” as defined by IPFMA, PhRMA, EFPIA, and JAMA will be followed for all trials globally; and

 

(i)                                     agree on a publication strategy based on the Parties’ normal practices and policies.

 

The JRDC will have solely the powers assigned to it in this Article 4 and elsewhere expressly in this Agreement, and will not have any power to amend, modify, or waive compliance with this Agreement.

 

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4.2.3                     Meetings.  The JRDC shall meet at least [...***...] per Calendar Quarter, unless the Parties mutually agree in writing to a different frequency for such meetings.  Either Party may also call a special meeting of the JRDC (by videoconference or teleconference) by at least [...***...] prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next regularly scheduled meeting, and such Party shall provide the JRDC, no later than [...***...] prior to the special meeting, with materials reasonably adequate to enable an informed decision.  No later than [...***...] prior to any meeting of the JRDC, the chairperson of the JRDC shall prepare and circulate an agenda for such meeting; provided, however, that either Party may propose additional topics to be included on such agenda, either prior to or in the course of such meeting.  The JRDC may meet in person, by videoconference or by teleconference, provided, however, at least [...***...] shall be in person unless the Parties mutually agree in writing to waive such requirement in lieu of a videoconference or teleconference.  In-person JRDC meetings shall be held at locations alternately selected by Dimension and by Bayer.  Each Party shall bear the expense of its respective JRDC members’ participation in JRDC meetings.  Meetings of the JRDC shall be effective only if at least one (1) representative of each Party is present or participating in such meeting.  The chairperson of the JRDC shall be responsible for preparing reasonably detailed written minutes of all JRDC meetings that reflect, without limitation, all material decisions made at such meetings.  The JRDC chairperson shall send draft meeting minutes to each member of the JRDC for review and approval within [...***...] after each JRDC meeting.  Such minutes shall be deemed approved unless one or more members of the JRDC objects to the accuracy of such minutes within [...***...] of receipt.

 

4.2.4                     Decision-Making.  The JRDC will strive to reach consensus in all decisions before it.  The representatives from each Party will have, collectively, one (1) vote on behalf of that Party.  The representatives serving on the JRDC shall use good faith efforts to seek consensus in the JRDC’s decision making process.  In the event such consensus is not obtained within [...***...] of the JRDC reviewing and discussing an issue, the matter may be referred by either Party to the JSC for resolution, in which forum Dimension’s representatives shall have the final say with respect to such decision or dispute; provided that Dimension’s representatives shall not have the right in the exercise of such final say to amend, revise or extend the Research Plan in a manner that (i) imposes any material additional obligations on [...***...] or (ii) results in any Cost Overrun.

 

4.2.5                     Discontinuation of the JRDC.  The JRDC shall continue to exist until the first to occur of (a) expiration of the Research Term, or (b) the Parties mutually agreeing to disband the JRDC.  After the JRDC is disbanded, any decisions previously within its purview shall be decisions between the Parties, but governed by the decision making rules set forth in Section 4.2.4 as they apply to a Party’s representatives on the JRDC.

 

4.3                               Joint Project Team.  Within [...***...] following dissolution of the JSC, the Parties agree to form a joint project team (the “Joint Project Team” or “JPT”).  The JPT’s purpose will be to facilitate the exchange of information with respect to (a) the commercialization, including reimbursement strategies, regarding the Licensed GT Product and Licensed Treatment and Dimension’s gene therapy products, in particular, in the field of Hemophilia B, and (b) the continued clinical development of the Licensed GT Product post

 

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Regulatory Approval.  The JPT shall meet at least every [...***...] either telephonically or in person, unless the Parties mutually agree in writing to a different frequency for such meetings.  For clarity, the JPT functions primarily as an information exchange forum and does not affect any decision-making discretion or right that Bayer otherwise possesses under this Agreement.

 

4.4                               Alliance Manager.  Each of Dimension and Bayer shall appoint a representative who possesses a general understanding of clinical, regulatory, manufacturing and marketing issues to act as its Alliance Manager (“Alliance Manager”).  Each Alliance Manager will be responsible for:

 

(a)                                 coordinating the various functional activities of Dimension and Bayer, as described in this Agreement;

 

(b)                                 providing single-point communication for seeking consensus both within the respective Party’s organization and with the other Party’s organization regarding key issues, as appropriate, including facilitating review of external corporate communications; and

 

(c)                                  identifying and raising cross-Party and/or cross-functional disputes to the appropriate committee or management in a timely manner.

 

ARTICLE 5

 

LICENSE GRANT; EXCLUSIVITY; NEGOTIATION RIGHTS

 

5.1                               License Grant.  Subject to the terms and conditions of this Agreement, including the Retained Rights, Dimension hereby grants to Bayer (a) an exclusive (even as to Dimension), sublicensable (as provided in Section 5.6 only), non-transferable (except as provided in Section 13.2), royalty-bearing license, under the Licensed Technology to make, have made, use, administer, monitor, import, sell, and offer for sale Licensed GT Products and Licensed Treatments, solely in the Field; and (b) a non-exclusive, sublicensable, non-transferable (except as provided in Section 13.2), [...***...] license under Dimension Manufacturing Patents to manufacture or have manufactured Licensed GT Product, Licensed Treatment or any Compound/Vector used therein, solely in the Field.

 

5.2                               Upstream Retained Rights for Hemophilia A.  Notwithstanding the licenses granted in Section 5.1, Bayer acknowledges and agrees that, ReGenX’s direct and indirect licensors retain the following rights:  to the extent any Sublicensed Technology pertains to recombinant adeno-associated virus serotype 8, an exclusive, sublicensable right to make, have made, use, sell, offer for sale, and import products for the treatment of hemophilia A.

 

5.3                               Other Retained Rights.  Except for the rights and licenses specified in Section 5.1, no license or other rights are granted to Bayer under any intellectual property of Dimension or ReGenX, whether by implication, estoppel, or otherwise, whether, in the case of ReGenX, any such intellectual property dominates or is dominated by the Licensed Technology.  Notwithstanding anything to the contrary in this Agreement, Dimension may use and permit

 

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others to use the Licensed Technology for any research, development, commercial, or other purposes, outside of the Field.  Dimension shall use reasonable efforts and impose conditions on any of its licensees to whom it grants rights outside the Field to prevent use (intentional or unintentional) of the Licensed Technology inside the Field.  Without limiting the foregoing, and notwithstanding anything in this Agreement to the contrary, Bayer acknowledges and understands that ReGenX and its direct and indirect licensors retain the rights under the Sublicensed Technology set forth in Exhibit C (individually and collectively, the “Retained Rights”).

 

5.4                               Regained Rights.  The Parties acknowledge that the Retained Rights with respect to hemophilia A set forth in Section 5.2 are excluded from this Agreement because of currently existing rights granted by ReGenX to other licensees or Third Parties.  If ReGenX (and subsequently Dimension, pursuant to the ReGenX Agreement) regains the rights described in Section 5.2, following Dimension’s receipt of notification from ReGenX of such event, Dimension will notify Bayer of same, together with a description of the rights granted or regained, in which case, such rights will no longer be considered Retained Rights, and the license granted to Bayer under Section 5.1(a) with respect to Sublicensed Technology will no longer be subject to such Retained Rights.

 

5.5                               Government Rights.  Bayer acknowledges that, pursuant to Title 35 of the United States Code, Sections 200-204, the United States government may retain certain rights in intellectual property contained within the Sublicensed Technology if it has been funded in whole or part under any contract, grant, or similar agreement with a federal agency.  The license grant hereunder is expressly subject to any applicable United States government rights, including any applicable requirement that products resulting from such intellectual property sold in the United States must be substantially manufactured in the United States absent, with respect to such manufacturing requirement, a waiver of such requirement obtained from the applicable governmental agency.  At Bayer’s request Dimension will assist Bayer and provide necessary documentation and support in order to obtain such a waiver.

 

5.6                               Sublicensing.

 

5.6.1                     Right to Sublicense.  The licenses granted pursuant to Section 5.1 are sublicensable (a) by Bayer to any Affiliates without prior consent by Dimension, or (b) by Bayer to any Third Parties upon Dimension’s prior written consent (such consent not to be unreasonably withheld); provided that any such sublicense (to an Affiliate or to a Third Party) must comply with the provisions of this Section 5.6 (including Section 5.6.2).  The use, marketing and sale of Licensed Treatment by Bayer’s Affiliates shall be deemed to be use, marketing and sale by Bayer and shall not require a sublicense.

 

5.6.2                     Conditions.  The right to sublicense granted to Bayer under this Agreement is subject to the following conditions as they relate to sublicenses of the Sublicensed Technology:

 

(a)                                 Bayer may only grant sublicenses to Third Parties through multiple tiers pursuant to a written sublicense agreement with the Sublicensee.

 

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Dimension must receive written notice as soon as practicable following execution of any such sublicenses with Third Parties.

 

(b)                                 In each sublicense agreement, the Sublicensee must be required to comply with the terms and conditions of this Agreement to the same extent as Bayer has agreed and, in each sublicense agreement with a Third Party, must acknowledge that ReGenX is an express third party beneficiary of such terms and conditions under such sublicense agreement; provided that nothing shall prevent Bayer from granting sublicenses of more limited scope than Bayer’s rights, e.g., in a more limited territory, field of use, or

 

(c)                                  The official language of any sublicense agreement with a Third Party shall be English.

 

(d)                                 Within [...***...] after entering into a sublicense with a Third Party, Dimension must receive a copy of the sublicense written in the English language for Dimension’s records and to share with ReGenX and its licensors under the Existing Licenses.  The copy of the sublicense may be redacted to exclude confidential information of the applicable Sublicensee or of Bayer to the extent not relevant to Dimension or ReGenX, but such copy shall not be redacted to the extent that it impairs Dimension’s (or ReGenX’s or any of its licensors’) ability to ensure compliance with this Agreement.

 

(e)                                  With respect to sublicense agreements with Affiliates, Bayer shall notify /Dimension of the identity of all such Affiliates to which a sublicense is granted, and upon any request of ReGenX, shall provide to ReGenX a copy of such sublicense, in English, within [...***...], for ReGenX to send GSK and UPenn.

 

(f)                                   Notwithstanding subsections (d) and (e) above, Bayer acknowledges and agrees that in the event any of ReGenX’s licensors under the Existing Licenses have a contractual right to require, and do require, a complete, unredacted copy of Bayer’s sublicense agreement granted under this Section 5.6, then Bayer will provide such complete, unredacted copy.

 

5.6.3                     Bayer’s execution of a sublicense agreement will not relieve Bayer of any of its obligations under this Agreement.  Bayer is and shall remain primarily liable to Dimension for all of Bayer’s duties and obligations contained in this Agreement and for any act or omission of an Affiliate or Sublicensee that would be a breach of this Agreement if performed or omitted by Bayer, and Bayer will be deemed to be in breach of this Agreement as a result of such act or omission.

 

5.7                               Bayer’s Improvements.

 

5.7.1                     Grant Back.  Bayer hereby grants to Dimension a non-exclusive, worldwide, [...***...], transferable, sublicensable, irrevocable, perpetual license:

 

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(a)                                 to use any Licensed Back Improvements (and any intellectual property rights with respect thereto) consummate in scope to the Retained Rights; and

 

(b)                                 to practice the Licensed Back Improvements (and any intellectual property rights with respect thereto) in connection with any recombinant adeno-associated virus vectors, including the right to research, develop, make, have made, use, offer for sale, and sell products and services; provided that, during the term of this Agreement, Dimension and its sublicensees shall have no right under the license in this Section 5.7.1(b) to practice the Licensed Back Improvements in the Field except as necessary to carry out Dimension’s obligations hereunder..

 

5.7.2                     Notice.  Bayer agrees to provide prompt notice to Dimension upon the filing of any patent application covering any Licensed Back Improvement, together with a reasonably detailed description of or access to such Licensed Back Improvement to permit the practice of any such invention or improvement.

 

5.8                               ReGenX Improvements.  Dimension agrees to provide notice to Bayer promptly following receipt of notice from ReGenX of the filing of any patent application covering any ReGenX Improvement, together with such description of or access to such ReGenX Improvement as is received by Dimension from ReGenX to permit the practice of any such improvement.  Upon Dimension’s receipt of notice from ReGenX of the filing of any patent application covering any ReGenX Improvement, Sublicensed Patents in Exhibit A attached hereto will be modified to add such patent application.

 

5.9                               Covenants Related to ReGenX Agreement.  During the term of this Agreement, without the prior written consent of Bayer Dimension agrees not to exercise its right to terminate and will not amend the ReGenX Agreement if such termination or amendment would materially or adversely alter the rights of Bayer under this Agreement.  In addition, Dimension agrees that it shall not agree to any exercise by ReGenX of its right to terminate the Existing Licenses without first consulting with and obtaining the consent of, Bayer, except to the extent any such termination is in part and relates only to Sublicensed Technology uses outside the Field [...***...].

 

5.10                        Third Party Beneficiary.  Bayer agrees and acknowledges that ReGenX is an express third party beneficiary of the terms and conditions of this Agreement as they relate to the terms and conditions of the ReGenX Agreement.

 

5.11                        Exclusivity.

 

5.11.1              Dimension.  Dimension hereby covenants that Dimension shall not, alone or in collaboration with a Third Party, (a) during the Research Term conduct clinical development of, and (b) during the term of this Agreement Commercialize, [...***...], other than the Compounds/Vectors, GT Products and Licensed GT Products in accordance with the provisions of this Agreement.

 

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5.11.2              Bayer.  Bayer hereby covenants that (a) during the term of this Agreement, and (b) for a period of [...***...] after termination of this Agreement if terminated by Bayer for convenience pursuant to Section 9.2, Bayer and its Affiliates, either on their own or in collaboration with a Third Party, shall not conduct clinical development of or Commercialize [...***...], other than the Licensed GT Products or any Compound/Vector used therein under this

 

5.12                        Hemophilia B Program.

 

5.12.1              Dimension’s Rights.  Bayer acknowledges and understands that Dimension intends to develop and, if successful, Commercialize one or more gene therapy treatments for hemophilia B utilizing the Sublicensed Technology (the “Hemophilia B Program”).  Subject to Dimension’s obligations under Sections 5.12.2 and 5.12.3, as between the Parties, Dimension shall have all rights, and be solely responsible for [...***...], to (i) pursue any such development or Commercialization activities with respect to such Hemophilia B Program and any products arising therefrom, (ii) enter into any licensing, asset sale, distribution, collaboration or other similar arrangements with any Third Party with respect to such Hemophilia B Program, or (iii) elect to terminate and not pursue any such Hemophilia B Program and revert such rights, as and to the extent required, to ReGenX pursuant to the ReGenX Agreement.

 

5.12.2              Right of First Notice.  If, during the period commencing on [...***...] and ending on [...***...] (“Notice Period”), Dimension elects for the first time to enter into discussions with a Third Party for rights to develop and Commercialize (or just to Commercialize) products arising out of its Hemophilia B Program in any country of the Territory, Dimension shall provide Bayer with [...***...], and Bayer will have a period of [...***...] in which to inform Dimension of its potential interest in negotiating for such rights (the “Expression of Interest Notice”).  Dimension shall review any such Expression of Interest Notice [...***...], and [...***...].  Nothing in this Section 5.12.2 shall obligate Dimension or Bayer to enter into any license or other arrangement with respect to the Hemophilia B Program.  For clarity, Dimension’s obligation to provide written notice to Bayer under this Section 5.12.2 shall only apply [...***...].

 

5.12.3              Rights Post POC Trial.  If, after [...***...], Bayer desires to enter into negotiations with Dimension with respect to obtaining rights to develop and Commercialize products arising out of its Hemophilia B Program in any country of the Territory, it shall have the one-time right to so notify Dimension in writing, and upon receipt of such notice Dimension shall, within [...***...], notify Bayer in writing whether and to what extent Dimension still retains such rights to the Hemophilia B Program in the Territory (the “Availability Notice”), and upon receipt of such Availability Notice, Bayer may elect to deliver to Dimension, within [...***...], a notice of its interest in entering into negotiations with Dimension for a license to such then-remaining rights held by Dimension (the “Negotiation Notice”).  Upon receipt of such Negotiation Notice, Dimension and Bayer shall negotiate in good faith the terms of such a potential license agreement for such then-remaining rights, for a period of [...***...] (or longer or fewer, to the extent the Parties agree to extend or terminate such discussions mutually) a term sheet or letter of intent with the level of detail similar to that of the term sheet exchanged between the Parties with respect to this Agreement and the Licensed GT Products, and

 

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Dimension shall not enter into any license or other arrangement with a Third Party for such rights until the lapse of such [...***...] period.  Nothing in this Section 5.12.3 shall obligate Dimension or Bayer to enter into any license or other arrangement with respect to the Hemophilia B Program.

 

5.12.4              Consultation.  Without limiting Sections 5.12.2 and 5.12.3, the Parties agree to consult with one another within the JSC and the JPT, and to the extent they determine, each in its sole discretion and to the extent allowed by applicable Law, that coordinating and communicating to one another with respect to their development, regulatory and Commercialization activities in the Field and in the field of hemophilia B gene therapy treatments, would be likely to have a positive impact on the advancement of the regulatory pathway and Commercialization of gene therapy treatments for hemophilia generally.

 

ARTICLE 6

 

CONSIDERATION

 

6.1                               License Fee.  In consideration of the licenses granted to Bayer under Section 5.1, Bayer shall pay to Dimension a non-refundable, non-creditable license fee of Twenty Million Dollars ($20,000,000) within [...***...] of receipt of an invoice therefor, which such invoice may be delivered to Bayer on or after the Effective Date.

 

6.2                               Development and Commercial Milestone Payments.  Bayer shall make the following one-time development milestone payments to Dimension in connection with the first achievement by Bayer or its Affiliates or Sublicensees of the following development and commercial events.  Bayer shall pay to Dimension the applicable amount within [...***...] of receipt of an invoice issued no earlier than the date of such achievement.  Dimension shall provide written notice to Bayer of the occurrence of any of the [...***...] milestones set forth below, and Bayer shall provide written notice to Dimension of the occurrence of any of the [...***...] milestones, in each case no later than [...***...] following the occurrence of the relevant milestone.  The [...***...] milestone, “[...***...],” shall be determined as set forth in Section 2.11.4.

 

	
No.
    	
 
    	
Development Milestone Event
    	
 
    	
Milestone Payment
    	
 
    
	
1
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
2
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
3
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
4
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
5
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
6
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
7
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
8
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
[...***...]
    	
 
    

 

†       The specific required criteria known as “D4” are, as of the Effective Date, set forth in that certain email communication from Bayer to Dimension dated April 30, 2014.

 

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Each milestone payment is payable [...***...], regardless of the number of times the corresponding event is achieved by a Licensed GT Product and/or Licensed Treatment and regardless of the number of Licensed GT Products and/or Licensed Treatments to achieve such event.  Under no circumstances shall Bayer be obligated to pay Dimension more than [...***...] pursuant to this Section 6.2.

 

For the avoidance of doubt, the Parties acknowledge and agree that, (a) with respect to Milestone [...***...] above, in the event that some but not all of the criteria for [...***...] are met for a Licensed Product and/or Licensed Treatment, such that there is no current achievement of [...***...] as defined, then to the extent the subsequent milestone event (i.e., Milestone [...***...]) is achieved at a later date for such Licensed Product and/or Licensed Treatment, [...***...] shall be deemed to have occurred at such later date and the corresponding milestone payments for both Milestone [...***...] and Milestone [...***...] shall be paid together; and (b) if the [...***...], then all development milestone events relating to [...***...] shall be deemed to have been met.  To that end, if for any reason, any such related milestone payments have not been made, such milestone payments shall be due and owing upon [...***...].  For example:  if [...***...] and any of Milestone Events [...***...] or [...***...] have not been paid for any reason, all such unpaid milestones shall be paid together with the payment of the milestone payment for the achievement of development Milestone Event [...***...].

 

6.3                               Sales Milestones.  Bayer shall make the following one-time sales milestone payments to Dimension when the aggregate annual Net Sales of all Licensed Treatments in all countries in the Territory by Bayer and its Affiliates and Sublicensees in a calendar year first reach the amount specified below.  Bayer shall pay to Dimension such amount within [...***...] following receipt of an invoice issued no earlier than the date of Bayer’s notice of such achievement.  Bayer shall provide written notice to Dimension within [...***...] in which such event is achieved for the first time.

 

	
Sales Milestone Event
    	
 
    	
Milestone Payment
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    
	
Total
    	
 
    	
[...***...]
    	
 
    

 

Under no circumstances shall Bayer be obligated to pay Dimension more than [...***...] pursuant to this Section 6.3.  For the avoidance of doubt, more than one of the foregoing milestones with respect to the relevant aggregate Net Sales may occur in any given calendar year.  For illustrative purposes only, [...***...].

 

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6.4                               Royalties.

 

6.4.1                     Royalty Rates.  Bayer shall pay to Dimension during the Royalty Term royalties on aggregate annual Net Sales of all Licensed Treatments in the Field in the Territory, as calculated by multiplying the applicable royalty rate below by the corresponding amount of incremental Net Sales of all such Licensed Treatments in the Territory in each calendar year:

 

	
Aggregate Annual Net Sales
    	
 
    	
Royalty Percentage
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
%
    
	
[...***...]
    	
 
    	
[...***...]
    	
%
    
	
[...***...]
    	
 
    	
[...***...]
    	
%
    

 

6.4.2                     Royalty Term.  Bayer’s obligation hereunder for payment of a royalty under this Section 6.4 on the Net Sales of Licensed Treatments in a given country will commence on the First Commercial Sale of such Licensed Treatment, and end on a Licensed Treatment-by-Licensed Treatment and country-by-country basis upon the later to occur of:  (a) the date when [...***...] (b) [...***...] from the date of First Commercial Sale of the Licensed Treatment (the “Royalty Term”).

 

6.4.3                     Biosimilar Treatment.  Upon entry of one or more Biosimilar Treatments in a country in the Territory, and where the total number of patients in such country receiving Biosimilar Treatments as their initial treatment reaches, in [...***...], a market share of [...***...] or greater of the total number of patients in such country receiving as their initial treatment, either Licensed Treatment or a Biosimilar Treatment (the “Biosimilar Market Trigger Event”), the Net Sales of Licensed Treatments in such country shall be reduced [...***...] before including same into total Net Sales in all countries in the Territory for the purpose of calculating the applicable royalty rates set forth in this Section 6.4.  It is expressly understood and agreed, however, that (a) no such deduction to Net Sales shall apply to a Licensed Treatment (or its associated Licensed Treatment Monitoring Sales) to the extent the Licensed Treatment Administration Sale of such Licensed Treatment in such country occurred [...***...], and (b) such reduction shall cease in the event the foregoing [...***...] or greater market share condition is no longer satisfied in such country.  All such determinations of patients shall be based upon a mutually acceptable calculation method using market share data provided by a reputable and mutually agreed upon provider, such as IMS Health, or similar data provider in countries where IMS Health is not operating.

 

6.4.4                     Royalty Stacking.  If Bayer reasonably determines in good faith that it is necessary to obtain either (i) a license from one or more Third Parties to make, have made, use, sell, offer to sell and/or import Licensed GT Products in the Field in one or more countries in the Territory, which such license is for a patent reasonably believed by Bayer to dominate one or more claims of Licensed Patents in existence as of the Effective Date and covering the Licensed GT Product, or (ii) a license under one or more process patents to make or have made the Licensed GT Product, and where, but for such license, Bayer would not be lawfully able to manufacture the Licensed GT Product, then in either or both cases, the amount of Bayer’s royalty payments under Section 6.4 with respect to Net Sales for such Licensed GT Product for a given period shall be reduced by [...***...] of the amount of the payments paid under such other license(s) for that same period; provided that such Third Party payments are attributable to sales made by Bayer or its Affiliates or Sublicensees that are used in the calculation of Net Sales on

 

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which Bayer’s royalty payment obligation to Dimension is based.  Notwithstanding the foregoing, the adjustment of royalties under this Section 6.4.4 will in no event reduce the royalty rate to less than [...***...] of the applicable rate set forth in Section 6.4.1.

 

6.4.5                     ReGenX Obligations.  [...***...] shall be responsible for any and all payments owed to ReGenX pursuant to the ReGenX Agreement.

 

6.5                               Reports and Records.

 

6.5.1                     Bayer must deliver to Dimension within [...***...] after the end of each [...***...] after the First Commercial Sale of a Licensed Treatment a report setting forth the calculation of the royalties due to Dimension for such [...***...], including:

 

(a)                                 Number of Licensed Treatments included within Net Sales, listed by

 

(b)                                 Licensed Treatment Sales and Net Sales of Licensed Treatments listed by country;

 

(c)                                  Royalties owed to Dimension, listed by category.

 

6.5.2                     Upon receipt of an invoice, Bayer shall pay the royalties due under Section 6.4.  If invoices are received by Bayer at the below address by [...***...], then payments shall be made by the [...***...].  If invoices are received by Bayer at the below address after [...***...], then payments shall be made by [...***...].

 

6.5.3                     Bayer shall maintain and require its Affiliates and all Sublicensees to maintain, complete and accurate books and records that enable the royalties, fees, and payments payable under this Agreement to be verified.  The records must be maintained for (a) [...***...] with respect to Bayer and its Sublicensees, and (b) [...***...] with respect to Bayer’s Affiliates, in each case after the submission of each report under Article 6.  No more frequently than once during each calendar year during the term of this Agreement and the [...***...]  period thereafter, Bayer will permit Dimension’s (or as applicable, ReGenX’s or its licensors under the Existing Licenses) auditors from any auditing firm to which Bayer has no reasonable objection, and with at least [...***...] advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of Bayer and its Affiliates and reports submitted to Bayer and its Affiliates from Sublicensees, for the sole purpose of verifying the accuracy of the calculation of payments to Dimension pursuant to this Section 6.5.  The accounts, records and reports related to any particular period of time may only be audited one time under this Section 6.5.  Dimension will cause its auditors not to provide Dimension with any copies of such accounts, records or reports and not to disclose to Dimension any information other than information relating solely to the accuracy of the accounting and payments made by Bayer pursuant to this Section.  Dimension will cause its auditors to promptly provide a copy of their report to Bayer.  If such audit determines that payments are due to Dimension, Bayer will, following receipt of an invoice, pay to Dimension any such additional amounts within [...***...] after the date on which such

 

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auditor’s written report is delivered to Bayer and Dimension, unless such audit report is disputed by Bayer, in which case the dispute will be resolved in accordance with Section 13.6.  If such audit determines that Bayer has overpaid any amounts to Dimension, Dimension will refund any such overpaid amounts to Bayer within [...***...] after the date on which such auditor’s written report is delivered to Bayer and Dimension.  Any such inspection of records will be at Dimension’s expense unless such audit discloses a deficiency in the payments made by Bayer (whether for itself or on behalf of its Affiliates) of more than [...***...] of the aggregate amount payable for the relevant period, in which case Bayer will bear the cost of such audit.  Notwithstanding anything to the contrary in and without limiting the foregoing, Bayer acknowledges and agrees that it may also be subject to the separate access or audit rights of ReGenX’s licensors in accordance with the terms of the Existing Licenses, and if such a licensor exercises such access or audit rights, the provisions of Section 3.5.4 of the ReGenX Agreement will govern, unless such licensor otherwise consents to applying the provisions of this Section 6.5.3.  Dimension acknowledges the disruption and effort required to provide information to be disclosed during an audit, and Dimension shall endeavor to avoid multiple audits covering the same audit period.  Without prejudice to the foregoing, Dimension shall not conduct an audit of any period for which ReGenX or any of the licensors under the Existing Licenses have already conducted an audit or have given notice that they intend to conduct such an audit.  In addition, Dimension shall enforce any rights it has under the ReGenX Agreement to limit the scope of any audit that might be demanded pursuant to the ReGenX Agreement.

 

6.6                               Payment Currency, Interest.

 

6.6.1                     Payment Address.  All invoices shall be sent to the following address:

 

Bayer HealthCare 
 Pharma West Coast 
 Attn:  [...***...] 
 PO Box 416 
 Pittsburgh PA 15230 
 USA

 

6.6.2                     Payments made by Wire Transfer.  All payments made to Dimension under the Agreement shall be made by wire transfer to the following bank account, or such other bank account as notified by Dimension to Bayer from time to time:

 

Domestic Wire Transfer (originating in the U.S.):
 [...***...]

[...***...]

[...***...]

[...***...]

[...***...]

 

International Wire Transfer:
 [...***...]

[...***...]

 

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[...***...]

[...***...]

[...***...]

[...***...]

 

6.6.3                     All dollar amounts referred to in this Agreement are expressed in United States dollars.  All payments to Dimension under this Agreement must be made in United States dollars.

 

6.6.4                     Net Sales made in currencies other than USD will be converted into USD using the average exchange rate for the applicable [...***...] as for Bayer’s internal accounting and reporting process consistently applied, which in any event shall comply with 1FRS.

 

6.6.5                     Any payments due under the Agreement shall be due on such date as specified in the Agreement.  Any failure by Bayer to make a payment by the date when due shall obligate Bayer to pay interest on the due payment to Dimension.  The interest period shall commence on the due date (inclusive) and end on the payment date (exclusive).  Interest shall be calculated based on the actual number of days in the interest period divided by 360.  The interest rate shall be equal to [...***...], plus a premium of one percentage point, or shall be equal to an interest rate according to local legal provisions, whatever is lower.

 

6.6.6                     All payments by Bayer to Dimension for funding of the Research Program are as set forth in and will be in accordance with Section 2.5.

 

6.7                               Withholding Tax.  The Parties agree to cooperate with one another and use reasonable efforts to reduce or eliminate tax withholding or similar obligations in respect of royalties, milestone payments, and other payments made by Bayer to Dimension under this Agreement.  Any Party required to make a payment under this Agreement shall be entitled to deduct and withhold from the amount payable the tax for which the paying Party is liable under any provision of applicable tax law.  No deduction shall be made or a reduced amount shall be deducted if the paying Party is timely furnished by payee with all documents required for the application of a zero or reduced rate according to the respective Double Taxation Treaty.  Any withheld tax shall be treated as having been paid by paying Party to payee for all purposes of this Agreement, provided that each Party shall provide the other with reasonable assistance to enable the recovery, as permitted by applicable Laws, of such withholding taxes, such recovery to be for the benefit of the Party bearing such withholding tax.  Paying Party shall timely forward the tax receipts certifying the payments of withholding tax on behalf of payee.  Any assignment of this Agreement by paying Party which causes a higher withholding tax rate than would be applicable without the assignment shall be borne by paying Party.  If paying Party failed to deduct withholding tax but is still required by applicable tax law to pay withholding tax on account of payee to the tax authorities, payee shall assist paying Party with regard to all procedures required in order to obtain reimbursement by tax authorities or, in case tax authorities will not reimburse withholding tax to paying Party, payee will immediately refund the tax amount.

 

6.8                               Value Added Tax.  All agreed consideration is exclusive of Value Added Tax (“VAT”).  VAT applies and shall be invoiced additionally according to the applicable VAT law

 

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and shall be paid to Dimension, if payable by Dimension to the respective tax authority and after receipt of a correct invoice in accordance with the applicable VAT law.

 

ARTICLE 7
  
 DILIGENCE

 

7.1                               Diligence Obligations.  Bayer will use Commercially Reasonable Efforts to develop, Commercialize, market, promote, and sell at least one Licensed GT Product or Licensed Treatment in the Field in the US and the Major Market Countries.

 

7.2                               Development Plans.  The Parties acknowledge that pursuant to the ReGenX Agreement, Dimension is required to provide ReGenX with a development plan and budget covering the [...***...] of development activities with respect to the Licensed GT Product and Licensed Treatment, and to provide [...***...] updates to such development plan and budget.  Bayer agrees to cooperate with Dimension in the provision of information in meeting Dimension’s obligation under the ReGenX Agreement, and such cooperation may include sharing a copy of the Research Plan (or portions thereof) with ReGenX, answering follow up questions ReGenX may have, or providing certain information regarding the later stage clinical development and regulatory activities by Bayer and its Affiliates and Sublicensees following the POC Trial.

 

7.3                               Development Reporting.  Within [...***...] of [...***...] during the term of this Agreement, Bayer shall provide Dimension with written progress reports through the JSC and JPT, setting forth in reasonable detail the progress of the development, evaluation, testing, and commercialization of each Licensed GT Product and Licensed Treatment.  Bayer will also notify Dimension within [...***...] of the First Commercial Sale by Bayer, its Affiliates, or any Sublicensees of each Licensed Treatment.  Such a report (“Development Progress Report”), setting forth the current stage of development of Licensed GT Products, shall include:

 

7.3.1                     Date of Development Progress Report and time covered by such report;

 

7.3.2                     Major activities and accomplishments completed by Bayer, its Affiliates, and any Sublicensees relating directly to the Licensed GT Product since the last Development Progress Report;

 

7.3.3                     Significant research and development projects relating directly to the Licensed GT Product currently being performed by Bayer, its Affiliates, and any Sublicensees and projected dates of completion;

 

7.3.4                     Development activities anticipated for the next [...***...];

 

7.3.5                     Projected total development remaining before product launch of each Licensed Treatment; and

 

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7.3.6                     Summary of significant development efforts using the Sublicensed Technology being performed by Third Parties, including the nature of the relationship between Bayer and such Third Parties.

 

7.4                               Confidential Information.  The Parties agree that Development Progress Reports shall be deemed Bayer’s Confidential Information; provided that Dimension may share a copy of such reports with ReGenX and with ReGenX’s licensors under the Existing Licenses, subject to obligations of confidentiality.

 

7.5                               Improvements.  Simultaneously with the Development Progress Report, Bayer shall deliver a detailed description of any Licensed Back Improvements, if not previously provided.

 

ARTICLE 8
  
 CONFIDENTIALITY

 

8.1                               Treatment of Confidential Information.  Each Party, as a receiving party (a “Receiving Party”), agrees that it will (a) treat Confidential Information of the other Party (the “Disclosing Party”) as strictly confidential; (b) not disclose such Confidential Information to Third Parties without the prior written consent of the Disclosing Party, except as may be permitted in this Agreement; provided that any disclosure permitted hereunder be under confidentiality agreements with provisions at least as stringent as those contained in this Agreement; and (c) not use such Confidential Information for purposes other than those authorized expressly in this Agreement.  The Receiving Party agrees to ensure that its employees who have access to Confidential Information of the other Party are obligated in writing to abide by confidentiality obligations at least as stringent as those contained under this Agreement.  Dimension shall also maintain Licensed Know-How as confidential to the extent that it relates solely to the Field, subject to the provisions of this Article 8.

 

8.2                               Public Announcements.

 

8.2.1                     The Parties agree they will each issue a press release in a form as outlined in Exhibit F and at such time as is agreed upon by the Parties.  Except as provided in Section 8.2.3, Section 8.3 and Section 8.4, any other press releases by either Party with respect to the other Party or any other public disclosures concerning the existence of or terms of this Agreement shall be subject to review and approval by the other Party.

 

8.2.2                     After release of such agreed upon press release, if either Party desires to make a public announcement concerning the material terms of this Agreement or any activities hereunder, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval (except as otherwise provided herein), which approval shall not be unreasonably withheld or delayed, except that in the case of a press release or governmental filing determined by such Party, based on advice of counsel, to be required by law, the disclosing Party shall provide the other Party with such advance notice as it reasonably can and shall not be required to obtain approval therefor.  Neither Party shall be

 

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required to seek the permission of the other Party to repeat any information that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Section 8.2, provided such information remains accurate as of such time.

 

8.2.3                     The Parties acknowledge that either or both Parties may be obligated to file under applicable Laws a copy of this Agreement with the U.S.  Securities and Exchange Commission or other governmental authorities both in the US and elsewhere.  Each Party shall be entitled to make such a required filing, provided that it requests confidential treatment of the confidential commercial terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available to such Party.  In the event of any such filing, each Party will provide the other Party with a copy of this Agreement marked to show provisions for which such Party intends to seek confidential treatment and shall reasonably consider and incorporate the other Party’s reasonable comments thereon to the extent consistent with the legal requirements, with respect to the filing Party, governing disclosure of material agreements and material information that must be publicly filed.

 

8.3                               Authorized Disclosure.  Notwithstanding the provisions of Section 8.1 or 8.2, either Party may disclose Confidential Information of the other Party, or make such a disclosure of the existence of and/or terms of this Agreement:

 

8.3.1                     to any Affiliates, legal advisors, accountants, and, in each case whether actual or bona fide potential, to collaboration partners (such as CMOs, CROs and other vendors providing services relating to the subject matter of the Agreement), licensees, acquirers, investors, lenders, and other potential financing sources; provided that, in each case, such recipient of Confidential Information is obligated to keep such information confidential on terms no less stringent than those set forth in this Agreement.

 

8.3.2                     if such disclosure is reasonably necessary (i) for filing or prosecuting Patent Rights as contemplated by this Agreement; (ii) to comply with the requirements of regulatory authorities with respect to obtaining and maintaining Regulatory Approval of a Licensed GT Product or Licensed Treatment; or (iii) for prosecuting or defending litigation;

 

8.3.3                     such disclosure is reasonably necessary or desirable to comply with applicable Laws, including regulations promulgated by applicable security exchanges, court order, administrative subpoena or order;

 

8.3.4                     in connection with Bayer’s development, manufacture or Commercialization of the Licensed GT Products or Licensed Treatment in the Field in the Territory, including, without limitation, to existing or potential distributors, service providers, Sublicensees, Affiliates, or collaboration partners, contractors or investigators, under substantially the same confidentiality obligations as are set forth herein, except that the confidentiality obligations shall have a term of at least [...***...]; or

 

8.3.5                     such disclosure is to ReGenX and its licensors solely as required under the terms of, and subject to, the ReGenX Agreement, and under the condition that ReGenX does not

 

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disclose Confidential Information to others (except as may be required under the Existing Licenses).

 

8.4                               Compelled Disclosure.  In the event that the Receiving Party receives service of legal process that purports to compel disclosure of the Disclosing Party’s Confidential Information or becomes obligated by Law to disclose the Confidential Information of the Disclosing Party or the existence of or terms of this Agreement to any governmental authority, the Receiving Party shall promptly notify the Disclosing Party, so that the Disclosing Party may seek an appropriate protective order or other remedy with respect to narrowing the scope of such requirement and/or waive compliance by the Receiving Party with the provisions of this Agreement.  The Receiving Party will provide the Disclosing Party with reasonable assistance in obtaining such protective order or other remedy.  If, in the absence of such protective order or other remedy, the Receiving Party is nonetheless required by Law to disclose the existence of or terms of this Agreement or other Confidential Information of the Disclosing Party, the Receiving Party may disclose such Confidential Information without liability hereunder; provided that the Receiving Party shall furnish only such portion of the Confidential Information that is legally required to be disclosed and only to the extent required by Law.

 

8.5                               Term of Confidentiality.  The obligations of this Article 8 shall continue for a period of [...***...] following the expiration or termination of this Agreement.

 

ARTICLE 9
  
 TERM AND TERMINATION

 

9.1                               Term of Agreement.  This Agreement, unless sooner terminated as provided in this Agreement, expires upon the expiration of the Royalty Term.  Upon expiration of this Agreement (but not early termination), (a) Bayer’s license to Licensed Know-How under Section 5.1 will become non-exclusive, perpetual, irrevocable, [...***...] with respect to the Dimension Know-How and Sublicensed Know-How, provided that with respect to Sublicensed Know-How such license will remain limited to the Field and subject to the Retained Rights, and (b) Bayer’s license to Dimension Manufacturing Patents under Section 5.1(b) will become perpetual.

 

9.2                               Bayer’s Right to Terminate for Convenience.  At any time Bayer may, upon [...***...] prior written notice to Dimension, terminate this Agreement for any reason.  In exercising such termination right, Bayer may terminate the Agreement in its entirety or, if desired, Bayer may specify in the written notice that this Agreement is terminating only with respect to one or more country within the Territory; provided, however, that, should Bayer terminate with respect to both the U.S.  and all Major Market Countries, this Agreement will terminate in its entirely unless otherwise agreed by the Parties.

 

9.3                               Bayer’s Right to Terminate for Safety.  In the event that, following the POC Trial, Bayer makes a good faith determination in accordance with its standard practices and procedures for such determinations that there is a material safety issue with respect to the Licensed GT Product in the Field in the Territory Bayer may terminate this Agreement upon [...***...] notice.

 

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9.4                               Bayer’s Right to Terminate for Failure to achieve Demonstration of Clinical POC.  If the initial Licensed GT Product or the Backup Product fails to achieve Demonstration of Clinical POC Bayer may, within [...***...] of being notified of such failure, upon [...***...] notice, terminate this Agreement.

 

9.5                               Termination for Breach.  Dimension may terminate this Agreement if Bayer is late in paying to Dimension any milestones or royalties, fees or any other monies due under this Agreement, and Bayer does not pay Dimension in full within [...***...] upon written demand from Dimension, which termination shall be effective immediately upon the expiration of such [...***...] cure period, provided that no demand will be issued prior to expiration of the due date for payment, and provided further that Bayer is not disputing on a bona fide basis that a payment is due.  Either Party may terminate this Agreement, if the other Party materially breaches (other than nonpayment) this Agreement and does not cure such material breach within [...***...] after written notice of the breach, which termination shall be effective immediately upon the expiration of such [...***...] cure period.  Notwithstanding the foregoing, if the default is not reasonably capable of being cured within the [...***...] cure period by the defaulting Party and such defaulting Party is making a good faith effort to cure such default, the cure period shall be extended by no more than [...***...].  Bayer acknowledges and understands that:  (a) in the event the nature of a breach by Bayer causes Dimension (as a sublicensor hereunder) to be in breach of the ReGenX Agreement, the applicable cure periods as set forth in the ReGenX Agreement are shorter than those set forth in this Section 9.5; and further, (b) with respect to such breach by Bayer described in (a), Dimension shall not be responsible for any termination by ReGenX through exercise of ReGenX’s termination right under the ReGenX Agreement, where such termination occurs prior to the [...***...] cure period given to Bayer above.  For the avoidance of doubt, Bayer shall not be liable or otherwise responsible to Dimension for any loss, costs, expenses, damages or liability of any kind arising from a breach or termination of the ReGenX Agreement attributable to Bayer’s exercise of its rights under this Agreement.  The right of either Party to terminate this Agreement as herein above provided shall not be affected in any way by its waiver of, or failure to take action with respect to, any previous default.

 

9.6                               Patent Challenge.  Dimension may terminate this Agreement if Bayer or any of its Affiliates institutes a Patent Challenge.  Such termination will be effective [...***...] after written notice from Dimension to Bayer unless within such [...***...] Bayer or its Affiliates causes such Patent Challenge to terminate.  “Patent Challenge” means [...***...].

 

9.7                               Termination for Insolvency.

 

9.7.1                     Dimension may terminate this Agreement, effective immediately upon written notice to Bayer, if Bayer or any of its Controlling Affiliates experiences any Trigger Event.

 

9.7.2                     Bayer shall include in each sublicense agreement entered into with a Sublicensee a right of Bayer to terminate such sublicense agreement if such Sublicensee experiences any event corresponding to a Trigger Event; and Bayer shall terminate the sublicense agreement, effective immediately upon written notice to the Sublicensee, if the Sublicensee experiences any such event.

 

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9.7.3                     For purposes of this Section 9.7, “Trigger Event” means any of the following (provided they are not for purposes of reorganization):  (a) if Bayer (i) becomes insolvent, becomes bankrupt, or generally fails to pay its debts as such debts become due, (ii) is adjudicated insolvent or bankrupt, (iii) admits in writing its inability to pay its debts, (iv) suffers the appointment of a custodian, receiver, or trustee for it or its property and, if appointed without its consent, is not discharged within [...***...], (v) makes an assignment for the benefit of creditors, or (vi) suffers proceedings being instituted against it under any law related to bankruptcy, insolvency, liquidation, or the reorganization, readjustment, or release of debtors and, if contested by it, not dismissed or stayed within [...***...]; or (b) the calling by Bayer of a meeting of its creditors with a view to arranging a composition or adjustment of its debts.  Bayer acknowledges and understands that:  (1) the timing periods in (iv) and (vi) above differ from those set forth in the definition of “Trigger Event” in Section 6.4.3 of the ReGenX Agreement, which are [...***...] and [...***...], respectively, and (2) in the event such difference causes Dimension (as a sublicensor hereunder) to be in breach of the ReGenX Agreement, Dimension shall not be responsible for any termination by ReGenX through exercise of ReGenX’s termination right under the ReGenX Agreement, where the termination is due to such difference.  Bayer shall not be liable or otherwise responsible to Dimension for any loss, costs, expenses, damages or liability of any kind arising from a breach or termination of the ReGenX Agreement due to such difference or otherwise attributable to Bayer’s exercise of its rights under this Agreement.

 

9.8                               Applicability of Section 365(n) of the Bankruptcy Code.  In the event either Party becomes a debtor under Title 11 of the U.S.  Code, this Agreement shall be deemed to be, for purposes of Section 365(n) of Title 11, a license to “Intellectual Property” as defined therein and the other Party and its Affiliates, and each of their successors and assigns as licensees shall have the rights and elections as specified in Section 365(n) of Title 11 of the U.S.  Code.  Without limiting the foregoing, upon termination of this Agreement by a trustee or executor of either Party which has rejected this Agreement pursuant to any non-contractual rights afforded to it by applicable bankruptcy law and/or a U.S.  or foreign bankruptcy court or other tribunal of competent jurisdiction, all rights and licenses herein granted to the other Party shall nonetheless continue in full force and effect in accordance with the terms of this Agreement.

 

9.9                               Effects of Termination.  The effect of termination by Bayer pursuant to Sections 9.2, 9.3, or 9.4 and by either Party, as applicable, under Sections 9.5 or 9.7, or by Dimension pursuant to Section 9.6 shall be as follows:

 

9.9.1                     The licenses and sublicenses granted by Dimension hereunder shall terminate, and Bayer, its Affiliates, and (unless the sublicense agreement is assigned pursuant to Section 9.9.2) all Sublicensees shall cease to make, have made, use, import, sell, and offer for sale all Licensed GT Products and shall cease to otherwise practice the Licensed Technology; provided that Bayer, its Affiliates, and Sublicensees, shall have the right to continue to sell their existing inventories of Licensed GT Products for a period not to exceed [...***...] after the effective date of such termination, and provided also that Bayer, its Affiliates and Sublicensees shall have the right to continue to supply Licensed GT Products or support any Licensed Treatment to the extent required by any Regulatory Authority, but in each case subject to any payment obligations to Dimension under Article 6;

 

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9.9.2                     Bayer shall have the right to assign to Dimension any or all sublicenses granted to Third Parties to the extent of the rights licensed to Bayer hereunder and sublicensed to the Sublicensee; provided that (i) prior to such assignment, Bayer shall advise Dimension whether such Sublicensee is then in full compliance with all terms and conditions of its sublicense and continues to perform thereunder, and, if such Sublicensee is not in full compliance or is not continuing to perform, Dimension may elect not to have such sublicense assigned; and (ii) such assignment shall be subject to Dimension not being liable to such Sublicensee with respect to any obligations of Bayer to the Sublicensee that are not consistent with, or not required by, Dimension’s obligations to Bayer under this Agreement; and all sublicenses not requested to be assigned to Dimension shall terminate;

 

9.9.3                     If termination is by Bayer pursuant to Section 9.2, 9.3 or 9.4, or by Dimension pursuant to Section 9.5, 9.6, or 9.7:

 

(a)                                 if, at the time of such termination, there are any ongoing clinical trials with respect to Licensed GT Products in the Field, the Parties shall, at Dimension’s option, negotiate in good faith and adopt a plan to wind-down such trial activities in an orderly fashion or, at Dimension’s election, promptly transition such development activities to Dimension or its designee, with due regard for patient safety and the rights of any subjects that are participants in any clinical trials of the Licensed GT Products and take any actions Dimension deems reasonably necessary or appropriate to avoid any human health or safety problems and in compliance with all applicable Laws; and

 

(b)                                 Bayer shall grant, and hereby grants (effective only upon any such termination of this Agreement), to Dimension a non-exclusive, perpetual, irrevocable, worldwide, [...***...], transferable, sublicensable license to any Licensed Back Improvements, for use by Dimension and ReGenX for the research, development, and commercialization of products in any therapeutic indication.

 

9.9.4                     If termination is by Bayer pursuant to Section 9.2:

 

(a)                                 Bayer shall grant, and hereby grants (effective only upon any such termination of this Agreement), to Dimension an exclusive (even as to Bayer), worldwide, [...***...], transferable, perpetual, irrevocable license, with the right to grant sublicenses, under the Bayer Technology to make, have made, use, import, sell, and offer for sale the Licensed GT Products or any Licensed Treatments as they were being developed or Commercialized at the time of termination, solely in the Field.  For this purpose, the “Bayer Technology” means Bayer’s patents, Know-How, and other intellectual property that are improvements or modifications to or that are based on or derived in whole or in part from or that otherwise relate to any Licensed Technology to the extent such patents, Know-How (including all data and regulatory submissions), or other intellectual property pertains to the Licensed GT Products or Licensed Treatments that were being developed or Commercialized by Bayer at the time of

 

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termination.  To effectuate such license, upon any such termination of this Agreement, Bayer will promptly disclose to Dimension all Bayer Technology not already known to Dimension;

 

(b)                                 Bayer will transfer to Dimension ownership of any Regulatory Approvals then in Bayer’s, its Affiliates’, or any Sublicensee’s (to the extent a sublicense is terminated and not assigned) name related to the Licensed GT Products as then being developed or Commercialized containing any expression construct provided by Dimension to Bayer as part of the Licensed Technology and notify the appropriate regulatory authorities and take any other action reasonably necessary to effect such transfer of ownership; and

 

(c)                                  At Dimension’s request Bayer shall transfer any biological materials or compounds that Bayer has manufactured or had manufactured relating to the Licensed GT Product or Licensed Treatment and that is in Bayer’s possession as at the date of termination.  Dimension shall pay for such materials and compounds at cost, without any markup.

 

9.9.5                     The Parties acknowledge and agree that, if the GSK Agreement is terminated as described in Section 6.5 of the GSK Agreement, then, as provided in Section 6.5.2 thereof, ReGenX will assign the ReGenX Agreement to the licensor of the GSK Agreement to the extent the ReGenX Agreement is related solely to the rights and products licensed to ReGenX under the GSK Agreement.

 

9.9.6                     Each Receiving Party shall, at the other Party’s request, return all Confidential Information and any remaining Materials of the Disclosing Party.  Notwithstanding the foregoing, one copy of such Confidential Information may be kept by either Party for a record of that Party’s obligations.

 

If termination is only with respect to a particular country or region within the Territory, but not all countries, then the provisions of this Section 9.9 shall only apply with respect to the terminated country(ies), and this Agreement shall continue with respect to the non-terminated countries.

 

9.10                        Survival.  Bayer’s obligation to pay all monies due and owed to Dimension under this Agreement which have matured as of the effective date of termination or expiration shall survive the termination or expiration of this Agreement.  In addition, the provisions of Sections 5.11.2 (Exclusivity:  Bayer), 9.1 (Term of Agreement), 9.8 (Applicability of Section 365(n) of the Bankruptcy Code), 9.9 (Effects of Termination), 9.10 (Survival), 10.1 (Ownership of Inventions), 11.4 (Disclaimer of Warranties, Damages), and 11.5 (Indemnification), and Articles 1 (Definitions), 6 (Consideration)(but only in respect of payments that have accrued and become payable prior to the effective date of termination), 8 (Confidentiality), 12 (Use of Name) and 13 (Additional Provisions) shall survive such termination or expiration of this Agreement in accordance with their respective terms.

 

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ARTICLE 10
  
 PATENT MAINTENANCE; PATENT INFRINGEMENT

 

10.1                        Ownership of Inventions.  Each Party shall own all Know-How generated solely by it and its Affiliates and their respective employees, agents and independent contractors in the course of conducting such Party’s activities under this Agreement (“Sole Inventions”) and any Patent Rights arising therefrom (the “Bayer Patents” in the case of Bayer’s Sole Inventions).  All Know-How generated jointly by employees, Affiliates, agents, or independent contractors of each Party in the course of performing activities under this Agreement (collectively, “Joint Inventions”), and all Patent Rights contained within such Joint Inventions (collectively, “Joint Patents”), shall be owned jointly by the Parties in accordance with joint ownership interests of co-inventors under U.S.  patent laws (that is, each Party shall have full rights to license, assign and exploit such Joint Inventions (and any patents arising therefrom) anywhere in the world, without any requirement of gaining the consent of, or accounting to, the other Party), subject to the covenants and licenses granted herein and subject to any other intellectual property held by such other Party.  For purposes of determining whether Inventorship shall be a Sole Invention or a Joint Invention under this Agreement, inventorship shall be determined in accordance with U.S.  patent laws.

 

10.2                        Disclosure of Inventions.  Dimension shall promptly disclose to Bayer all Sole Inventions, and each Party shall promptly disclose to the other Party any Joint Inventions, including any invention disclosures or similar documents submitted to it by its employees, agents or independent contractors describing such inventions, and all other information relating to such inventions to the extent necessary or useful for the preparation, filing and maintenance of any Patent Rights with respect to such inventions.

 

10.3                        Prosecution of Dimension Patents.  As between Dimension and Bayer, the Parties agree as follows:

 

10.3.1              Dimension shall have the sole right to Prosecute patent applications and issued patents within Dimension Patents in Dimension’s sole discretion and at its own expense.  Dimension shall provide Bayer with a reasonable opportunity to review and provide comments in connection with the Prosecution of the Dimension Patents; and Dimension shall keep Bayer reasonably informed as to all material developments with respect to such Dimension Patents and shall supply to Bayer copies of material communications received and filed in connection with the Prosecution of such Dimension Patents.

 

10.3.2              Dimension agrees to Prosecute any patent applications or issued patents within the Dimension Patents in good faith.  If Dimension decides not to file, to abandon or not to maintain any of such Dimension Patents, in each case where a claim may cover a Licensed GT Product or GT Product, then Dimension shall provide Bayer with [...***...] prior written notice of such decision (or such other longer period of time reasonably necessary to allow Bayer to assume such responsibilities, at the sole discretion of Dimension).  In such event, Bayer shall have the right, at its option, to the extent Dimension is permitted by obligations owed to Third Parties, to have assigned to it the said Dimension Patents.  If assignment is not possible, Bayer

 

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shall have a non-exclusive, perpetual, irrevocable, royalty-free license with respect to those Dimension Patents.  In either case (assignment or non-exclusive license) the Patent Rights will cease to be Dimension Patents.

 

10.4                        Prosecution of Joint Patents.  As between Dimension and Bayer, the Parties agree as follows:

 

10.4.1              Dimension shall have the sole right to Prosecute patent applications and issued patents within Joint Patents in Dimension’s discretion and at its own expense.  Dimension shall provide Bayer with a reasonable opportunity to review and provide comments in connection with the Prosecution of the Joint Patents; and Dimension shall keep Bayer reasonably informed as to all material developments with respect to such Joint Patents and shall supply to Bayer copies of material communications received and filed in connection with the Prosecution of such Joint Patents.

 

10.4.2              Dimension agrees to Prosecute any patent applications or issued patents within the Joint Patents in good faith.  If Dimension decides not to file, to abandon or not to maintain any of such Joint Patents, then Dimension shall provide Bayer with [...***...] prior written notice of such decision (or such other longer period of time reasonably necessary to allow Bayer to assume such responsibilities, at the sole discretion of Dimension).  In such event, Bayer shall have the right, at its option, to have assigned to it Dimension’s interest in such Joint Patents, and such Patent Rights shall cease to be Dimension Patents.

 

10.5                        Prosecution of Bayer Patents.  As between Dimension and Bayer, the Parties agree as follows:

 

10.5.1              Bayer shall have the sole right to Prosecute patent applications and issued patents within Bayer Patents in Bayer’s sole discretion and at its own expense.  Bayer shall provide Dimension with a reasonable opportunity to review and provide comments in connection with the Prosecution of the Bayer Patents; and Bayer shall keep Dimension reasonably informed as to all material developments with respect to such Bayer Patents and shall supply to Dimension copies of material communications received and filed in connection with the Prosecution of such Bayer Patents.

 

10.5.2              Bayer agrees to Prosecute any patent applications or issued patents within the Bayer Patents in good faith.  If Bayer decides not to file, to abandon or not to maintain any of such Bayer Patents that claim only a Licensed GT Product or GT Product and no other product or component thereof, then Bayer shall provide Bayer with [...***...] prior written notice of such decision (or such other longer period of time reasonably necessary to allow Dimension to assume such responsibilities, at the sole discretion of Bayer).  In such event, Dimension shall have the right, at its option, to control the filing, prosecution and/or maintenance of any such Bayer Patents, at its own expense, and the Parties shall have the rights with respect to such Bayer Patents as set forth in Section 10.5.1 (with the Parties’ roles reversed).

 

10.6                        Prosecution of Sublicensed Patents.  Bayer acknowledges and agrees that, in accordance with the terms of the ReGenX Agreement:

 

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10.6.1              ReGenX retains the sole right to Prosecute patent applications and issued patents within the Sublicensed Patents, in ReGenX’s sole discretion.  Subject to Section 10.6.3, and subject to ReGenX providing Dimension with a reasonable opportunity to review and provide comments in connection with the Prosecution of the Sublicensed Patents, Dimension shall provide Bayer with same, to the extent such Sublicensed Patents cover or claim the Licensed GT Products in the Field; and Dimension shall keep Bayer reasonably informed as to all material developments with respect to such Sublicensed Patents and shall supply to Bayer copies of material communications received from ReGenX and filed in connection with the Prosecution of such Sublicensed Patents.

 

10.6.2              Bayer acknowledges that [...***...] has no obligation to undertake any inter-party proceedings, such as oppositions or interferences, or to undertake any re-examination or re-issue proceedings, in either case, with respect to the Sublicensed Patents.

 

10.6.3              Bayer acknowledges that the University of Pennsylvania controls Prosecution of the Sublicensed Patents under the Penn Agreement, with ReGenX having certain rights to review.

 

10.7                        Product Infringement Actions Against Third Parties.

 

10.7.1              Notification.  If either Party becomes aware of any existing or threatened infringement of any Dimension Patent, Bayer Patent or Sublicensed Patent by the manufacture, use or sale of a gene therapy product for use in the Field (a “Product Infringement”), it shall promptly notify the other Party in writing to that effect, and the Parties will consult with each other regarding any actions to be taken with respect to such Product Infringement.

 

10.7.2              Dimension Patents (including Joint Patents).  As between Dimension and Bayer, the Parties agree as follows:

 

10.7.2.1                            [...***...] shall have the first right, but not the obligation, to prosecute any Product Infringement of those Dimension Patents (including Joint Patents) in each case that claim [...***...] (the “[...***...] Patents”) at its own expense.  In any action to enforce any of such [...***...] Patents, [...***...], at the request and [...***...], shall [...***...], including in the event that, [...***...].

 

10.7.2.2                            If [...***...] elects not to pursue any infringement of a [...***...] Patent, [...***...] shall have the second right, but not obligation, to prosecute such Product Infringement of such [...***...] Patents, at [...***...].  In any such action to enforce any of the [...***...] Patents, [...***...], at the request and [...***...], shall [...***...].  In prosecuting any such Product Infringement, [...***...].

 

10.7.2.3                            [...***...] shall have the right, but not the obligation, to prosecute any infringement of those Dimension Patents (including Joint Patents) that are not [...***...] Patents (the “[...***...] Patents”) in its sole discretion.  If [...***...] elects not to pursue any infringement of a [...***...] Patent in a country in the Territory, provided that such [...***...] Patent is [...***...],[...***...] shall have the second right, but not the obligation, to prosecute a

 

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Product Infringement of such [...***...] Patent, at [...***...] expense, in such country.  If any Third Parties also have licenses under such [...***...] Patents, [...***...] shall take account of such Third Party rights in exercising its rights hereunder, and shall take [...***...].  In any such action by [...***...] to enforce any of the [...***...] Patents, [...***...], at the request and expense of [...***...], shall [...***...], including in the event that, [...***...].

 

10.7.2.4                            Any recovery of damages by Bayer or Dimension for any Product Infringement pursuant to this Section 10.7.2 shall be applied, as between Dimension and Bayer, first to reimburse each such Party for costs and expenses (including reasonable attorneys’ fees and costs) incurred by such Party in connection with such suit, second, compensatory damages will be [...***...], and the balance remaining, if any, from any such recovery shall be [...***...].

 

10.7.3              Enforcement of Joint Patents in [...***...].  As between Dimension and Bayer, the Parties agree as follows:

 

10.7.3.1                            [...***...] shall have the first right, but not obligation, to prosecute any infringement of Joint Patents that is [...***...], at [...***...] expense.  In any action to enforce any of such Joint Patents, [...***...], at the request and [...***...], shall [...***...].

 

10.7.3.2                            If [...***...] elects not to pursue any such infringement of a Joint Patent, then [...***...] shall have the second right, but not obligation, to prosecute such infringement of the Joint Patent, at [...***...].  In any such action to enforce any of the Joint Patents, [...***...], at the request [...***...], shall [...***...], including in the event that, [...***...].

 

10.7.3.3                            Any recovery of damages by the Party undertaking enforcement or defense of a suit for infringement of a Joint Patent under this Section 10.7.3 shall be applied, as between Bayer and Bayer, first to reimburse each such Party for costs and expenses (including reasonable attorneys’ fees and costs) incurred by such Party in connection with such suit, second, compensatory damages will be [...***...], and the balance remaining, if any, from any such recovery shall be [...***...].

 

10.7.4              Sublicensed Patents.  Bayer acknowledges and agrees that, in accordance with the ReGenX Agreement:

 

10.7.4.1                            Bayer understands and acknowledges that pursuant to the ReGenX Agreement, [...***...] has the first right, but not the obligation, to prosecute any infringement of Sublicensed Patents at [...***...].  In any action to enforce any of the Sublicensed Patents, [...***...], at the request and expense of [...***...], shall [...***...], including in the event that, [...***...].

 

10.7.4.2                            If [...***...] elects not to pursue any infringement of a Sublicensed Patent and such Sublicensed Patent is being infringed by [...***...], then as between [...***...] shall have the first right [...***...], but not obligation, to prosecute such

 

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[...***...] with respect to such [...***...], at [...***...] expense.  In any such action to enforce any of the Sublicensed Patents, [...***...], at the request [...***...], shall [...***...], including in the event that [...***...].  In prosecuting any such [...***...].

 

10.7.4.3                            Any recovery of damages by [...***...] for any infringement other than a [...***...] shall be retained [...***...].  Any recovery of damages by the Party undertaking enforcement or defense of a suit for [...***...] shall be applied, as between [...***...], first to reimburse each such Party for costs and expenses (including reasonable attorneys’ fees and costs) incurred by such Party in connection with such suit, and the balance remaining, if any, from any such recovery shall be, [...***...].

 

10.7.4.4                            Bayer acknowledges and agrees that [...***...] obligations under the ReGenX Agreement to enforce any Sublicensed Patents [...***...], and that [...***...] retain the [...***...] right to [...***...], all as set forth in the ReGenX Agreement and the Existing Licenses.  Dimension will [...***...] under the ReGenX Agreement if reasonably requested by Bayer.

 

10.8                        Defense of Infringement Claims.

 

10.8.1              In the event Bayer or Dimension becomes aware that Bayer’s or any of its Affiliates’ or any Sublicensees’ practice of any invention claimed in the Sublicensed Patents or Dimension Patents is the subject of a claim of infringement of any patent owned by a Third Party, that Party shall promptly notify the other, but Bayer shall have exclusive right to take action to defend or abate any such claim brought against Bayer or any of its Affiliates or Sublicensees, and shall do so at its own expense and subject to Section 10.8.2.

 

10.8.2              Without Dimension’s prior written permission, Bayer must not settle or compromise any such suit in a manner that imposes any material obligations or restrictions on ReGenX or any of its direct or indirect licensors under the Existing Licenses or grants any rights to the Sublicensed Patents or Dimension Patents other than rights that Bayer has the right to grant under this Agreement.

 

ARTICLE 11
  
 WARRANTIES; INDEMNIFICATION

 

11.1                        Mutual Representations and Warranties.  Each Party hereby represents and warrants to the other Party as follows:

 

11.1.1              Corporate Existence.  As of the Effective Date, it is a company or corporation duly organized, validly existing, and in good standing under the Laws of the jurisdiction in which it is incorporated.

 

11.1.2              Corporate Power, Authority and Binding Agreement.  As of the Effective Date, (i) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its

 

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obligations hereunder; and (iii) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms.

 

11.2                        Additional Representations and Warranties of Dimension.  Dimension represents and warrants as of the Effective Date and, as applicable, covenants to Bayer as follows:

 

11.2.1              Title; Control; Encumbrances.  Dimension has not granted any Third Party any rights under any Licensed Patents in existence as of the Effective Date, and to Dimension’s knowledge, all Licensed Know-How in existence as of the Effective Date is free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind (subject to the rights retained by ReGenX in the ReGenX Agreement).  Dimension has the full and legal rights and authority to license to Bayer the Licensed Technology in the manner set forth in this Agreement;

 

11.2.2              Inventorship.  To Dimension’s knowledge, the inventorship of each Licensed Patent is properly identified on each such patent;

 

11.2.3              Good Standing.  To Dimension’s knowledge, all official fees, maintenance fees and annuities for the Licensed Patents have been paid and all administrative procedures with Governmental Authorities have been completed for the Licensed Patents such that the Licensed Patents are subsisting and in good standing;

 

11.2.4              Duty of Disclosure.  Dimension has complied with and, to Dimension’s knowledge ReGenX has complied with, the U.S.  PTO duty of disclosure respecting the prosecution of all of Dimension Patents and, in the case of ReGenX, the Sublicensed Patents;

 

11.2.5              Notice of Infringement/Misappropriate.  Dimension has not received any written notice from any Third Party asserting or alleging, nor does Dimension have any knowledge of any basis for any assertion or allegation, that any research, manufacture or development of GT Products by Dimension prior to the Effective Date infringed or misappropriated the intellectual property rights of such Third Party;

 

11.2.6              No Conflicts.  Dimension has not entered, and shall not enter, into any agreement with any Third Party that is in conflict with the rights granted to Bayer under this Agreement, and has not taken any action that would in any way prevent it from granting the rights granted to Bayer under this Agreement, or that would otherwise materially conflict with or adversely affect Bayer’s rights under this Agreement;

 

11.2.7              Third Party Technology.  To Dimension’s knowledge, (i) the manufacture, development and Commercialization of Licensed GT Products, as contemplated by Dimension as of the Effective Date, will not infringe or misappropriate any intellectual property rights of a Third Party, and (ii) there are no pending Third Party patent applications that, if issued with the published or currently pending claims, would be infringed by the manufacture, development or Licensed GT Products or any components thereof, as contemplated by Dimension as of the Effective Date; provided, however, that Dimension makes no representation in this Section

 

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11.2.7 with respect to any formulation or delivery system that may be used for a Licensed Treatment;

 

11.2.8              Third Party Infringement.  To Dimension’s knowledge, no Third Party is infringing or has infringed any Licensed Patents or has misappropriated any Licensed Know-How;

 

11.2.9              No Proceeding.  There are no pending, or, to Dimension’s knowledge, no threatened, adverse actions, suits or proceedings (including interferences, reissues, re-examinations, cancellations or oppositions) against Dimension involving the Licensed Patents;

 

11.2.10                   ReGenX Agreement.

 

11.2.10.1                     Dimension represents and warrants to Bayer that it has provided to Bayer a true, correct and complete copy thereof, but for redaction of (a) the royalty rates, (b) any other payment amounts, (c) certain terms not essential in determining the extent of the grant of rights to Bayer hereunder or that Bayer, as a prudent pharmaceutical company, might reasonably consider relevant in determining whether to enter into this Agreement on the terms and conditions contained herein, as such agreement is in effect as of the Effective Date.

 

11.2.10.2                     Dimension represents and warrants to Bayer that, as of the Effective Date the ReGenX Agreement is in full force and effect, and that Dimension is not in breach of, nor do any circumstances exist upon which ReGenX might claim that Dimension is in breach of, the ReGenX Agreement; provided, however, despite Dimension’s material compliance with the ReGenX Agreement, certain provisions under this Agreement, including without limitation the timing provisions in Sections 6.5 and 9.5 and the definition in Section 9.7.3, are different from and not technically in compliance with the terms of the ReGenX Agreement, and accordingly, Bayer acknowledges and understands that any breach by Dimension, or termination by ReGenX, of the ReGenX Agreement resulting from such differences shall not constitute a breach of this Section 11.2.10.2 and of Section 11.2.10.3.  For the avoidance of doubt, Dimension is not relieved of its obligations under this Agreement because compliance with or fulfillment of such obligations may give rise to a breach of the ReGenX Agreement.

 

11.2.10.3                     Dimension further covenants and agrees that (a) it will take all steps necessary to maintain in full force and effect, the ReGenX Agreement for the term thereof (b) it will not assign (except to an Affiliate or an assignment to a Third Party to which this Agreement has been assigned as permitted under Section 13.2, amend, restate, terminate in whole or in part, or otherwise modify the ReGenX Agreement in any way that adversely affects Bayer’s rights under this Agreement without the prior written consent of Bayer; (c) it will provide Bayer with prompt notice of any claim of a breach under the ReGenX Agreement or notice of termination of the ReGenX Agreement made by either Dimension or ReGenX (or any party acting on behalf of such counterparty); (d) it will promptly send to Bayer copies of all other material correspondence to or from the counterparty to such ReGenX Agreement; and (e) it will enforce its rights under the ReGenX to the extent necessary to maintain Bayer’s rights hereunder.

 

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11.3                        Mutual Covenants.

 

11.3.1              No Debarment.  In the course of the development of Licensed GT Products and Licensed Treatments, neither Party shall use any employee or consultant who has been debarred by any regulatory authority or, to such Party’s knowledge, is the subject of debarment proceedings by a regulatory authority.  Each Party shall notify the other Party promptly upon becoming aware that any of its employees or consultants who are involved with the development of Licensed GT Products and Licensed Treatments hereunder has been debarred or is the subject of debarment proceedings by any regulatory authority.

 

11.3.2              Compliance.  Each Party and its Affiliates shall comply in all material respects with all applicable Laws in the development and Commercialization of GT Products, Licensed GT Products and Licensed Treatments and performance of its obligations under this Agreement, including, to the extent applicable to such Party and its activities hereunder, the statutes, regulations and written directives of the FDA, the EMA and any regulatory authority having jurisdiction in the Territory, the FD&C Act, the Prescription Drug Marketing Act, the Federal Health Care Programs Anti-Kickback Law, 42 U.S.C.  1320a-7b(b), the statutes, regulations and written directives of Medicare, Medicaid and all other health care programs, as defined in 42 U.S.C.  § 1320a-7b(f), and the Foreign Corrupt Practices Act of 1977, each as may be amended from time to time.

 

11.4                        Disclaimer of Warranties, Damages.  EXCEPT AS SET FORTH IN SECTIONS 11.1 AND 11.2, THE LICENSED TECHNOLOGY, LICENSED GT PRODUCTS, LICENSED TREATMENTS, AND ALL RIGHTS LICENSED BY EITHER PARTY TO THE OTHER UNDER THIS AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS, AND NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO.  BY WAY OF EXAMPLE BUT NOT OF LIMITATION, EXCEPT AS SET FORTH IN SECTIONS 11.1 AND 11.2, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, AND HEREBY DISCLAIMS ALL EXPRESS AND IMPLIED REPRESENTATIONS AND WARRANTIES, (i) OF COMMERCIAL UTILITY, ACCURACY, COMPLETENESS, PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OR ENFORCEABILITY OF ANY RIGHTS LICENSED BY EITHER PARTY TO THE OTHER, AND PROFITABILITY; OR (ii) THAT THE USE OF ANY RIGHTS GRANTED BY EITHER PARTY TO THE OTHER, INCLUDING ANY PRODUCTS RESULTING THEREFROM, WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS OF THIRD PARTIES.  EXCEPT AS SET FORTH IN THIS AGREEMENT, NEITHER PARTY OR ANY OF SUCH PARTY’S DIRECT OR INDIRECT LICENSORS SHALL BE LIABLE TO THE OTHER PARTY, ITS SUCCESSORS OR ASSIGNS, OR ANY SUBLICENSEES OF EITHER PARTY, OR ANY THIRD PARTY WITH RESPECT TO:  (a) ANY CLAIM ARISING FROM USE OF ANY OR ALL RIGHTS LICENSED UNDER THIS AGREEMENT OR FROM THE DEVELOPMENT, TESTING, MANUFACTURE, USE, OR SALE OF PRODUCTS ARISING THEREFROM; OR (b) ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ANY ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT OR THE EXERCISE OF RIGHTS

 

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HEREUNDER, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  NOTHING IN THIS SECTION 11.4 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 11.5 OR TO LIMIT A PARTY’S LIABILITY FOR BREACHES OF ITS OBLIGATION REGARDING CONFIDENTIALITY UNDER ARTICLE 8.

 

11.5                        Indemnification.

 

11.5.1              By Bayer.  Bayer shall defend, indemnify, and hold harmless Dimension, its Affiliates, ReGenX and the licensors under the Existing Licenses, and their respective shareholders, members, partners, officers, trustees, faculty, students, contractors, agents, and employees (individually, a “Dimension Indemnified Party” and, collectively, the “Dimension Indemnified Parties”) from and against any and all Third Party liability, loss, damage, action, claim, fee, cost, or expense (including attorneys’ fees) (individually, a “Third Party Liability” and, collectively, the “Third Party Liabilities”) suffered or incurred by the Dimension Indemnified Parties from claims of such Third Parties that result from or arise out of:  (i) the research, development, testing, use, manufacture, promotion, sale, or other disposition of any Licensed Technology or Licensed GT Products by Bayer, its Affiliates, any Sublicensees, their respective assignees, or vendors acting on behalf of any of the foregoing; (ii) any breach by Bayer (or its Affiliates or any Sublicensees) of its representations, warranties, or obligations of this Agreement; and (iii) Bayer’s gross negligence or intentional misconduct or that of Bayer’s Affiliates or Sublicensees; provided, however, that Bayer shall not be liable for claims based on any breach by Dimension of its representations, warranties, or obligations of this Agreement or the gross negligence or intentional misconduct of any of the Dimension Indemnified Parties.  Without limiting the foregoing, but subject to the proviso contained in the preceding sentence, Bayer must defend, indemnify, and hold harmless the Dimension Indemnified Parties from and against any Third Party Liabilities resulting from:

 

(a)                                 any product liability or other claim of any kind related to the use by a Third Party of a Licensed GT Product that was manufactured, sold, or otherwise disposed of by Bayer, its Affiliates, any Sublicensees, their respective assignees, or vendors;

 

(b)                                 any claim by a Third Party that the practice of the Licensed Technology, or the design, composition, manufacture, use, sale, or other disposition of any Licensed Treatment infringes or violates any patent, copyright, trade secret, trademark, or other intellectual property right of such Third Party; and

 

(c)                                  clinical trials or studies conducted by or on behalf of Bayer, its Affiliates, any Sublicensees, their respective assignees, or vendors relating to the Licensed Treatment or Licensed GT Products, including any claim by or on behalf of [...***...] of any such clinical trial or study.

 

For the avoidance of doubt, the indemnities granted by Bayer shall not apply in respect of any activities conducted following the exercise by Dimension of its rights under Section

 

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11.5.2              By Dimension.  Dimension shall defend, indemnify, and hold harmless Bayer, its Affiliates and Sublicensees and their respective shareholders, members, partners, officers, trustees, contractors, agents, and employees (individually, a “Bayer Indemnified Party” and, collectively, the “Bayer Indemnified Parties”) from and against any and all Third Party Liabilities suffered or incurred by the Bayer Indemnified Parties from claims of such Third Parties that result from or arise out of:  (i) the research, development, testing, use, manufacture, promotion, sale, or other disposition of any GT Product, Compound/Vector or any product outside the Field or within the scope of the Retained Rights by Dimension, ReGenX or its Affiliates and their respective licensees or sublicensees, assignees, or vendors acting on behalf of any of the foregoing; (ii) any breach by Dimension (or its Affiliates) of its representations, warranties, or obligations of this Agreement; and (iii) Dimension’s gross negligence or intentional misconduct or that of ReGenX or Dimension’s or ReGenX’s respective Affiliates, licensees and sublicensees; provided, however, that Dimension shall not be liable for claims based on any breach by Bayer of its representations, warranties, or obligations of this Agreement or the gross negligence or intentional misconduct of any of the Bayer Indemnified Parties.

 

11.5.3              Indemnification Procedure.  Each Party, as an indemnifying party (an “Indemnifying Party”), shall not be permitted to settle or compromise any claim or action giving rise to Third Party Liabilities in a manner (i) that imposes any restrictions or obligations on the indemnified party (an “Indemnified Party”) or, if Bayer is the Indemnifying Party, on ReGenX or its licensors under the Existing Licenses, without the other Party’s prior written consent, (ii) if Bayer is the Indemnifying Party, that grants any rights to the Licensed Technology or Licensed GT Products other than those Bayer has the right to grant under this Agreement without Dimension’s prior written consent, or (iii) if Dimension is the Indemnifying Party, that grants any rights that are inconsistent with those granted to Bayer under this Agreement without Bayer’s prior written consent.  The Indemnified Party shall notify the Indemnifying Party within [...***...] of becoming aware of any claim or claims asserted or threatened against the Indemnified Party that could give rise to a right of indemnification under this Agreement, provided however that the failure to give such notice shall not relieve the Indemnifying Party of its indemnity obligation hereunder except to the extent that such failure materially prejudices its rights hereunder.  The Indemnifying Party shall be permitted to control any litigation or potential litigation involving the defense of any claim subject to indemnification pursuant to this Section 11.5, including the selection of counsel.  The Indemnified Party shall keep the Indemnifying Party apprised of all material developments with respect to the claim and promptly provide the Indemnifying Party with copies of all correspondence and documents exchanged by the Indemnified Party and the opposing party(ies) to such litigation.  The Indemnified Party may not compromise or settle such litigation without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld or delayed.  The indemnification rights of a Indemnified Party contained in this Agreement are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise.  The Indemnifying Party will pay directly all Third Party Liabilities incurred for defense or negotiation of any claim hereunder or will reimburse the Indemnified Party for all documented Third Party Liabilities incident to the defense or negotiation of any such claim within [...***...] after the Indemnifying Party’s receipt of invoices for such fees, expenses, and charges.

 

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11.6                        Insurance.  Within [...***...] of the Effective Date, each Party will procure and maintain product liability insurance policies during the term of the Agreement for claims related to bodily injury or death caused by the Licensed GT Products.  In lieu of insurance coverage described in the preceding sentence, Bayer shall have the right to undertake a program of self-insurance to cover the obligations hereunder, with financial protection comparable to that arranged by it for its own protection with regard to other products in its portfolio.  Prior to [...***...], and thereafter for a period required by applicable Law in order to continue to monitor the participants in the clinical trial, clinical trials coverage will be arranged in amounts that are reasonable and customary in the location where the clinical trial is being conducted.  Such insurance coverage will be arranged by Dimension if it is the sponsor of the applicable clinical trial and shall be arranged by Bayer if it is the sponsor of the applicable clinical trial.

 

ARTICLE 12
  
 USE OF NAME

 

Except as permitted by this Agreement, Bayer, its Affiliates, any Sublicensees, and all of its and their employees and agents must not use ReGenX’s and, to the extent relating to the subject matter of this Agreement, the University of Pennsylvania’s and SmithKline Beecham Corporation’s, name, seal, logo, trademark, or service mark (or any adaptation thereof) or the name, seal, logo, trademark, or service mark (or any adaptation thereof) of any of such entities’ representative, school, organization, employee, or student in any way without the prior written consent of Dimension or such entity, as applicable; provided, however that Bayer may acknowledge the existence and general nature of this Agreement.  The foregoing limitations shall apply mutatis mutandis, to Dimension’s use of Bayer’s or its Affiliates or Sublicensees name, logo, seal, trademark or service marks.

 

ARTICLE 13
  
 ADDITIONAL PROVISIONS

 

13.1                        Relationship.  Nothing in this Agreement shall be deemed to establish a relationship of principal and agent between Bayer and Dimension, nor any of their agents or employees for any purpose whatsoever, nor shall this Agreement be construed as creating any other form of legal association or arrangement which would impose liability upon one Party for the act or failure to act of the other Party.

 

13.2                        Assignment.  Subject to Sections 13.2.1 through 13.2.6 below, this Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, each of which such successors and permitted assigns will be deemed to be a Party hereto for all purposes hereof.

 

13.2.1              Subject to Section 13.2.2 and 13.2.3, no Party may assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party.

 

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13.2.2              Notwithstanding Section 13.2.1 each Party, upon providing the other Party written notice, may without the consent of the other Party, (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, (ii) designate one or more of its Affiliates to perform its obligations hereunder, in each case, so long as the assigning Party is not relieved of any liability hereunder and so long as any such Affiliate remains such Party’s Affiliate; provided, however, that such Affiliate assignee(s) provide the other Party with written acknowledgement of and agreement to the assigning Party’s obligations under the Agreement that were assigned to it.

 

13.2.3              Notwithstanding Section 13.2.1 each Party (or its permitted successive assignees or transferees hereunder), upon providing the other Party prior written notice (at least [...***...] prior to the effectiveness of such assignment), may without the consent of the other Party, assign or transfer this Agreement as a whole to an entity that succeeds to all or substantially all of the business or assets of such Party related to the subject matter of this Agreement, so long as the assigning Party is not relieved of any liability hereunder and such assignment is a Qualified Assignment.

 

13.2.4              For the purposes of this Agreement, a “Qualified Assignment” means any transaction that:

 

(a)                                 is made in compliance with Law, including securities, tax and corporation laws;

 

(b)                                 includes the assignee’s written acknowledgement (to the assigning Party) of and agreement to assume all of the assigning Party’s obligations under the Agreement;

 

(c)                                  is made to an assignee that is, and will be after giving effect to the relevant assignment, Solvent;

 

(d)                                 is made to an assignee that is not subject at the time of such assignment to any order, decree or petition providing for (i) the winding-up or liquidation of such person, (ii) the appointment of a receiver over the whole or part of the assets of such person or (iii) the bankruptcy or administration of such person;

 

(e)                                  is not a voidable fraudulent conveyance;

 

(f)                                   is made to an assignee that is at the time of such assignment not debarred under 21 U.S.C.  §30 or under investigation or threatened to be debarred under 21 U.S.C.  §30; and

 

(g)                                  will not cause a material increase in taxes, costs or expenses to the non-assigning Party (unless the assigning Party or the assignee has agreed to compensate the non-assigning Party for the same).

 

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13.2.5              Notwithstanding Sections 13.2.1 through 13.2.4 above, (i) each Party may at any time assign its rights, interests and obligations provided for hereunder to any person by merger or in the course of a Change of Control; or (ii) with the prior written consent of the other Party.

 

13.2.6              For purposes of this Section 13.2, “Solvent” means, with respect to any entity as on any date of determination, that as of such date, (i) the value of the assets of such entity is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such entity, (ii) such entity is able to pay all liabilities of such entity as such liabilities mature and (iii) such entity does not have unreasonably small capital (taking into account such entity’s obligations hereunder).  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represent the amount that can reasonably be expected to become an actual or matured liability.  In computing the value of the assets of an entity, the value shall be determined in the context of current facts and circumstances affecting such entity.

 

13.3                        Waiver.  A waiver by either Party of a breach of any provision of this Agreement will not constitute a waiver of any subsequent breach of that provision or a waiver of any breach of any other provision of this Agreement.

 

13.4                        Notices.  Notices, payments, statements, reports, and other communications under this Agreement shall be in writing and shall be deemed to have been received as of the date received if sent by public courier (e.g., Federal Express), by Express Mail, receipt requested, or by facsimile (with a copy of such facsimile also sent by one of the other methods of delivery) and addressed as follows:

 

	
If for Dimension:
    	
 
    	
with a copy (which shall not constitute notice) to:
    
	
 
    	
 
    	
 
    
	
Dimension Therapeutics, Inc.
    	
 
    	
Cooley LLP
    
	
1 Main Street, 13th Floor
    	
 
    	
3175 Hanover Street
    
	
Cambridge, MA 02142
    	
 
    	
Palo Alto, CA 94304
    
	
USA
    	
 
    	
USA
    
	
Attn: President and CEO
    	
 
    	
Attn: Barbara A. Kosacz, Esq.
    
	
Facsimile: [...***...]
    	
 
    	
Facsimile: [...***...]
    
	
 
    	
 
    	
 
    
	
If for Bayer:
    	
 
    	
with a copy to:
    
	
 
    	
 
    	
 
    
	
Bayer HealthCare LLC
    	
 
    	
Bayer HealthCare LLC
    
	
455 Mission Bay Boulevard South
    	
 
    	
800 DwightWay
    
	
San Francisco, CA 94158
    	
 
    	
Berkeley 94710
    
	
Attn: Alliance Manager
    	
 
    	
Attn: Law & Patents
    
	
Facsimile: [...***...]
    	
 
    	
 
    

 

Either Party may change its official address upon written notice to the other Party.

 

*** Confidential Treatment Requested ***

 

56

 

13.5                        Applicable Law.  This Agreement shall be construed and governed in accordance with the laws of the State of New York, without giving effect to conflict of law provisions that may require the application of the laws of another jurisdiction.  Subject to Section 13.6, the Parties hereby submit to the exclusive jurisdiction of and venue in the federal courts located in the State of New York with respect to any and all disputes concerning the subject of this Agreement.

 

13.6                        Dispute Resolution.  In the event of any controversy or claim arising out of or relating to this Agreement, the Parties shall first attempt to resolve such controversy or claim through good faith negotiations between senior executives of each Party with authority to resolve the dispute for a period of not less than [...***...] following notification of such controversy or claim to the other Party.  If such controversy or claim cannot be resolved by means of such negotiations during such period, then such controversy or claim shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) in accordance with the Commercial Arbitration Rules of the AAA (including the ICDR Rules relating to discovery) in effect on the date of commencement of the arbitration, subject to the provisions of this Section 13.6.  The arbitration shall be conducted as follows:

 

13.6.1              The arbitration shall be conducted by three arbitrators, each of whom by training, education, or experience has knowledge of the research, development, and commercialization of biological therapeutic products in the United States.  The arbitration shall be conducted in English and held in New York, New York.

 

13.6.2              In its demand for arbitration, the Party initiating the arbitration shall provide a statement setting forth the nature of the dispute, the names and addresses of all other parties, an estimate of the amount involved (if any), the remedy sought, otherwise specifying the issue to be resolved, and appointing one neutral arbitrator.  In an answering statement to be filed by the responding Party within [...***...] after confirmation of the notice of filing of the demand is sent by the AAA, the responding Party shall appoint one neutral arbitrator.  Within [...***...] from the date on which the responding Party appoints its neutral arbitrator, the first two arbitrators shall appoint a chairperson.

 

13.6.3              If a Party fails to make the appointment of an arbitrator as provided in Section 13.6.2, the AAA shall make the appointment.  If the appointed arbitrators fail to appoint a chairperson within the time specified in Section 13.6.2 and there is no agreed extension of time, the AAA shall appoint the chairperson.

 

13.6.4              The arbitrators will render their award in writing and, unless all Parties agree otherwise, will include an explanation in reasonable detail of the reasons for their award.  Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof, including in the courts described in Section 13.5.  The arbitrators will have the authority to grant injunctive relief and other specific performance; provided that the arbitrators will have no authority to award damages in contravention of this Agreement, and each Party irrevocably waives any claim to such damages in contravention of this Agreement.  The arbitrators will, in rendering their decision, apply the substantive law of the State of New York, without giving effect to conflict of law provisions that may require the application of the laws of

 

*** Confidential Treatment Requested ***

 

57

 

another jurisdiction.  The decision and award rendered by the arbitrators will be final and non-appealable (except for an alleged act of corruption or fraud on the part of the arbitrator).

 

13.6.5              The Parties shall use their reasonable efforts to conduct all dispute resolution procedures under this Agreement as expeditiously, efficiently, and cost-effectively as possible.

 

13.6.6              All expenses and fees of the arbitrators and expenses for hearing facilities and other expenses of the arbitration will be borne equally by the Parties unless the Parties agree otherwise or unless the arbitrators in the award assess such expenses against one of the Parties or allocate such expenses other than equally between the Parties.  Each of the Parties will bear its own counsel fees and the expenses of its witnesses except to the extent otherwise provided in this Agreement or by applicable Law.

 

13.6.7              Compliance with this Section 13.6 is a condition precedent to seeking relief in any court or tribunal in respect of a dispute, but nothing in this Section 13.6 will prevent a Party from seeking equitable or other interlocutory relief in the courts of appropriate jurisdiction, pending the arbitrators’ determination of the merits of the controversy, if applicable to protect the confidential information, property, or other rights of that Party or to otherwise prevent irreparable harm that may be caused by the other Party’s actual or threatened breach of this Agreement.

 

13.7                        No Discrimination.  Both Parties and their respective Affiliates, and any Sublicensees, agents, contractors and licensees, in their respective activities under this Agreement, shall not discriminate against any employee or applicant for employment because of race, color, sex, sexual, or affectional preference, age, religion, national, or ethnic origin, handicap, or because he or she is a disabled veteran or a veteran (including a veteran of the Vietnam Era).

 

13.8                        Compliance with Law.  Both Parties (and their respective Affiliates and any Sublicensees, agents, contractors and licensees) must comply with all prevailing laws, rules, and regulations that apply to its activities or obligations under this Agreement.  Without limiting the foregoing, it is understood that this Agreement may be subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities, articles, and information, including the Arms Export Control Act as amended in the Export Administration Act of 1979 and that Bayer’s obligations are contingent upon compliance with applicable United States export laws and regulations.  The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by Bayer that Bayer shall not export data or commodities to certain foreign countries without prior approval of such agency.  Dimension neither represents that a license is not required nor that, if required, it will issue.

 

13.9                        Entire Agreement.  This Agreement embodies the entire understanding between the Parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral.  All “Confidential Information” disclosed by Dimension to [...***...] will be deemed “Confidential Information” under this Agreement (unless and until it

 

*** Confidential Treatment Requested ***

 

58

 

falls within one of the exclusions set forth in Section 1.11).  This Agreement may not be varied except by a written document signed by duly authorized representatives of both Parties.

 

13.10                 Marking.  Bayer, its Affiliates, and any Sublicensees shall mark any Licensed GT Product (or their containers or labels) made, sold, or otherwise distributed by it or them with any notice of patent rights necessary or desirable under applicable Law to enable the Sublicensed Patents and Dimension Patents to be enforced to their full extent in any country where Licensed GT Products are made, used, sold, offered for sale, or imported.

 

13.11                 Severability and Reformation.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such invalid or unenforceable provision will be automatically revised to be a valid or enforceable provision that comes as close as permitted by law to the Parties’ original intent; provided that, if the Parties cannot agree upon such valid or enforceable provision, the remaining provisions of this Agreement will remain in full force and effect, unless the invalid or unenforceable provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the Parties would not have entered into this Agreement without the invalid or unenforceable provisions.

 

13.12                 Further Assurances.  Each Party hereto agrees to execute, acknowledge, and deliver such further instruments, and to do all other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

13.13                 Interpretation; Construction.  The captions to the several Articles and Sections of this Agreement are included only for convenience of reference and shall not in any way affect the construction of, or be taken into consideration in interpreting, this Agreement.  In this Agreement, unless the context requires otherwise, (a) the word “including” shall be deemed to be followed by the phrase “without limitation” or like expression; (b) references to the singular shall include the plural and vice versa; (c) references to masculine, feminine, and neuter pronouns and expressions shall be interchangeable; (d) the words “herein” or “hereunder” relate to this Agreement; (e) “or” is disjunctive but not necessarily exclusive; (f) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (g) all references to “dollars” or “$” herein shall mean U.S.  Dollars; (h) unless otherwise provided, all reference to Sections and exhibits in this Agreement are to Sections and exhibits of and in this Agreement; and (i) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless business days are specified.  Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions.

 

13.14                 Cumulative Rights and Remedies.  The rights and remedies provided in this Agreement and all other rights and remedies available to either Party at law or in equity are, to the extent permitted by law, cumulative and not exclusive of any other right or remedy now or hereafter available at law or in equity.  Neither asserting a right nor employing a remedy shall preclude the concurrent assertion of any other right or employment of any other remedy, nor shall the failure to assert any right or remedy constitute a waiver of that right or remedy.

 

*** Confidential Treatment Requested ***

 

59

 

13.15                 Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

*** Confidential Treatment Requested ***

 

60

 

IN WITNESS WHEREOF, the Parties, intending to be legally bound, have caused this Collaboration and License Agreement to be executed by their duly authorized representatives.

 

	
DIMENSION   THERAPEUTICS, INC
    	
 
    	
BAYER   HEATHCARE, LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Thomas R. Beck
    	
 
    	
By:
    	
/s/   Habib Dable
    
	
Name:
    	
Thomas   R. Beck
    	
 
    	
Name:
    	
Habib   Dable
    
	
Title:
    	
President   and CEO
    	
 
    	
Title:
    	
EVP,   Global Head, Specialty Medicine
    

 

*** Confidential Treatment Requested ***

 

 

Exhibit A
 Sublicensed Patents & Dimension Patents

 

Sublicensed Patents:

 

	
App #
    	
 
    	
Title
    	
 
    	
Inventors
    	
 
    	
Nos.
    	
 
    	
Penn Docket #
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
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[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
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[...***...]
    
	
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[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    

 

Dimension Patents:  [...***...]

 

*** Confidential Treatment Requested ***

 

 

Exhibit B
 Licensed Treatment Sales

 

The following are examples (not intended to be exhaustive) of the calculation of Licensed Treatment Sales.  In principle the Parties have agreed upon two payment mechanisms for the commercialization of Licensed Treatments; these are:

 

1.                                      Annuity Payment Scheme (the figures mentioned below are hypothetical and do not reflect actual or anticipated prices):

 

·                  [...***...]

·                  [...***...]

·                  [...***...]

·                  [...***...]

·                  [...***...]

 

Table 1:  [...***...] (which rolls up into the definition of Net Sales) for purposes of determining royalty payments to Dimension in relation to the amount of [...***...] figures picked at random (and represent an example only):

 

	
Retail price of [...***...] (as a % of
   Licensed Treatment Monitoring
   Sales for such patient)
    	
 
    	
% of [...***...] Licensed
   Treatment Monitoring Sales to
   be included in Licensed
   Treatment Sales/Net Sales for
   royalty purposes
    
	
[...***...]
    	
 
    	
[...***...]
    
	
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[...***...]
    
	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
[...***...]
    
	
[...***...]
    	
 
    	
[...***...]
    

 

2.                                      One-time (lump sum) Payment Scheme:

 

·                  [...***...]

·                  [...***...]

·                  [...***...]

·                  [...***...]

 

*** Confidential Treatment Requested ***

 

 

Exhibit C
 Sublicensed Technology Retained Rights

 

Bayer acknowledges and understands that ReGenX and its direct and indirect licensors under the Existing Licenses retain certain rights under the Sublicensed Technology, whether inside or outside the Field, as further set forth below:

 

1.                                      Retained Rights.  ReGenX’s direct and indirect licensors retain the following rights with respect to the Sublicensed Technology:

 

(a)                                 A non-exclusive, sublicensable right under the Sublicensed Technology to make, have made, use, sell, offer to sell, and import products that deliver RNA interference and antisense drugs using an adeno-associated vector; and

 

(b)                                 A non-exclusive right for ReGenX’s direct and indirect licensors (which right is sublicensable by such licensors) to use the Sublicensed Technology for non-commercial research purposes and to use the Sublicensed Technology for such licensors’ discovery research efforts with non-profit organizations and collaborators.

 

2.                                      Domain Antibodies.  The rights and licenses granted in Section 5.1 shall not include any right (and Dimension’s direct and indirect licensors retain the exclusive (even as to Dimension and Bayer), fully sublicensable right) under the Sublicensed Technology to make, have made, use, sell, offer to sell, and import Domain Antibodies (as defined in the ReGenX Agreement) that are expressed by an adeno-associated vector.

 

3.                                      Hemophilia B.

 

a.                                      The rights and licenses granted in Section 5.1 shall not include any right (and ReGenX’s direct and indirect licensors retain the exclusive (even as to Dimension and Bayer), fully sublicensable right) under the Sublicensed Technology that covers the rAAV serotype 8, to make, have made, use, sell, offer for sale, and import products for the treatment of all forms of hemophilia B (notwithstanding Bayer’s rights under Section 5.10).

 

b.                                      ReGenX’s direct and indirect licensors retain the following rights (even as to Dimension) with respect to the Sublicensed Technology:  a non-exclusive, sublicensable right to make, have made, use, sell, offer for sale, and import all of the various serotypes of any adeno-associated vector that is the subject of at least one claim in the Sublicensed Patents solely for non-commercial research in the area of hemophilia B (notwithstanding Bayer’s rights under Section 5.12).

 

4.                                      Hemophilia A.  ReGenX’s direct and indirect licensors retain the following rights with respect to the Sublicensed Technology:  to the extent Sublicensed Technology pertains to recombinant adeno-associated virus serotype 8, an exclusive, sublicensable right to make, have made, use, sell, offer for sale, and import products for the treatment of hemophilia A.

 

*** Confidential Treatment Requested ***

 

 

5.                                      Service Businesses.  The rights and licenses granted in Section 5.1 shall not include any right (and ReGenX’s direct and indirect licensors retain the exclusive (even as to Dimension and Bayer), fully sublicensable right) under the Sublicensed Technology:

 

(a)                                 to conduct commercial reagent and services businesses, which includes the right to make, have made, use, sell, offer to sell, and import research reagents, including any viral vector construct; provided that, for clarity, such rights retained by ReGenX’s direct and indirect licensors shall not include the right to conduct clinical trials in humans in the Field; or

 

(b)                                 to use the Sublicensed Technology to provide services to any Third Parties; provided that, for clarity, Bayer’s license under Section 5.1 does include the right to administer Licensed GT Products to patients.

 

6.                                      Research Rights.  ReGenX’s direct and indirect licensors retain the fully sublicensable right under the Sublicensed Technology to grant non-exclusive research and development licenses to their Affiliates and Third Parties; provided that such development rights granted by ReGenX’s direct and indirect licensors shall not include the right to conduct clinical trials in humans in the Field or any rights to sell products in the Field.

 

7.                                      Non-Commercial Entities.  The University of Pennsylvania may use and permit other non-profit organizations or other non-commercial entities to use the Sublicensed Technology solely for educational, research, and other non-commercial purposes.

 

*** Confidential Treatment Requested ***

 

 

Exhibit D-1 
 Research Plan

 

[see attached]

 

*** Confidential Treatment Requested ***

 

 

Hem A tasts & timeline

 

	
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*** Confidential Treatment Requested ***

 

 

	
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*** Confidential Treatment Requested ***

 

 

	
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*** Confidential Treatment Requested ***

 

 

Exhibit D-2 
 Operating Plan

 

[to be finalized and attached within [...***...] after the Effective Date]

 

*** Confidential Treatment Requested ***

 

 

Exhibit D-3 
 Research Budget

 

[see attached]

 

*** Confidential Treatment Requested ***

 

 

Overall Hem A Project Budget

 

	
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Budget Estimates with greatest uncertainty include:

 

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Not Included at this time:

 

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*** Confidential Treatment Requested ***

 

 

2014 — 2015 Budget

 

	
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2014 — 2015 Activities included are the following:

 

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*** Confidential Treatment Requested ***

 

 

Exhibit E 
 Demonstration of Clinical POC

 

The Clinical Proof of Concept will be considered having been achieved when all of the following criteria are met:

 

·                  Efficacy and Safety

 

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·                  Pre-existing antibodies against [...***...]

 

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·                  Feasibility of highest dose level tested

 

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*** Confidential Treatment Requested ***

 

 

Exhibit F

 

Press Releases

 

[see attached]

 

*** Confidential Treatment Requested ***

 

 

	

    	

    
	
 
    	
 
    
	
Press   release

Not   intended for US or UK media
    	
Bayer   HealthCare AG

Communications

51368   Leverkusen

Germany

Phone:  +49 214 30-1

www.bayerhealthcare.com
    

 

Bayer HealthCare Press release Not intended for US or UK media Bayer HealthCare and Dimension Therapeutics to Develop Novel Gene Therapy for Hemophilia A

 

Leverkusen, June 23, 2014 - Bayer HealthCare (Bayer) and Dimension Therapeutics, a company focused on developing novel adeno-associated virus (AAV) gene therapy treatments for rare diseases, have entered into a collaboration for the development and commercialization of a novel gene therapy for the treatment of hemophilia A.

 

“Bayer is a worldwide leader in the treatment of hemophilia and we are highly committed to advancing innovative treatment options for patients with hemophilia A,” said Prof.  Dr.  Andreas Busch, Member of the Bayer HealthCare Executive Committee and Head of Global Drug Discovery.  “We are excited to partner with Dimension to jointly harness the power of gene therapy to drive the development of new long-term options in treating this disease.”

 

“Currently available replacement therapies for hemophilia A are often administered intravenously multiple times a week and may be required for life, depending on the severity of a patient’s disease,” said Thomas R.  Beck, M.D., chief executive officer of Dimension Therapeutics.  “Gene therapy offers the potential to transform the treatment of hemophilia by inserting a correct version of the faulty gene responsible for the disease.  We are proud to partner with Bayer, a leader in the treatment of hemophilia A, to develop a therapy with the potential to significantly change the treatment landscape and improve quality of life for patients.”

 

Under the terms of the agreement, Dimension will receive an upfront payment of $20 million and will be eligible for development and commercialization milestone payments of up to $232 million.  Dimension will be responsible for all pre-clinical development activities and the Phase I/IIa clinical trial, with funding from Bayer.  Depending on the results of the Phase I/IIa clinical trial, Bayer will conduct the confirmatory Phase III trial, make all regulatory submissions, and will have worldwide rights to commercialize the potential future product for the treatment of hemophilia A.  Dimension is eligible to receive tiered royalties based on product sales.

 

Dimension’s AAV vector technology allows for systemic intravenous administration of the clotting factor gene in vivo, which has been shown in preclinical studies to target the liver

 

*** Confidential Treatment Requested ***

 

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resulting in long lasting expression of FVIII protein at therapeutic levels.  Dimension’s vectors are enabled by REGENX Biosciences’ proprietary NAV® technology.

 

About Hemophilia A

 

Hemophilia A, also known as factor VIII deficiency or classic hemophilia, is a largely inherited bleeding disorder in which one of the proteins needed to form blood clots in the body is missing or reduced.  Hemophilia A, the most common type of hemophilia, is caused by a deficient or defective blood coagulation protein, known as factor VIII.  Hemophilia A is characterized by prolonged or spontaneous bleeding, especially into the muscles, joints, or internal organs.

 

About Hematology at Bayer

 

Bayer is committed to delivering science for a better life by advancing a portfolio of innovative treatments.  Bayer Hematology includes an approved treatment for hemophilia A and compounds in development for hemophilia A, sickle cell anemia, and other blood and bleeding disorders.  Together, these compounds reflect the company’s commitment to research and development in these disease states.

 

About Dimension Therapeutics

 

Dimension Therapeutics is a gene therapy company focused on developing novel therapies to treat rare diseases.  Formed in 2013, the Dimension team comprises biotech industry veterans and renowned thought leaders in gene therapy and rare diseases.  The company is focused on building its adeno-associated virus (AAV) therapeutic discovery platform and advancing multiple gene therapy programs in rare diseases, and is advancing a wholly-owned hemophilia B program towards clinical development.  Dimension’s partnerships with REGENX Biosciences and the University of Pennsylvania provide Dimension with exclusive gene therapy intellectual property and preferred access to multiple best-in-class AAV vector systems.  Dimension has been funded by Fidelity Biosciences and OrbiMed Advisors.  For more information, please visit www.dimensiontx.com.

 

About Bayer HealthCare

 

The Bayer Group is a global enterprise with core competencies in the fields of health care, agriculture and high-tech materials.  Bayer HealthCare, a subgroup of Bayer AG with annual sales of EUR 18.9 billion (2013), is one of the world’s leading, innovative companies in the healthcare and medical products industry and is based in Leverkusen, Germany.  The company combines the global activities of the Animal Health, Consumer Care, Medical Care and Pharmaceuticals divisions.  Bayer Healthcare’s aim is to discover, develop, manufacture and market products that will improve human and animal health worldwide.  Bayer HealthCare has a global workforce of 56,000 employees (Dec.  31, 2013) and is represented in more than 100 countries.  More information is available at http://www.healthcare.bayer.com.

 

Our online press service is just a click away:  press.healthcare.bayer.com

 

Contact:

 

Diana Scholz, Tel.  +49 30 468 193183

E-Mail:  diana.scholz@bayer.com

 

*** Confidential Treatment Requested ***

 

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Folgen Sie uns auf Facebook:  http://www.facebook.com./healthcare.bayer

 

ds                                    (2014-0267E)

 

Forward-Looking Statements

 

This release may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or subgroup management.  Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here.  These factors include those discussed in Bayer’s public reports which are available on the Bayer website at www.bayer.com.  The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.

 

News Release Tweet

 

Text (max.  110 characters incl.  spaces):
 Bayer HealthCare and Dimension Therapeutics to Develop Novel Gene Therapy for Hemophilia A
 BHC NEWS:  >> more information about XY

 

*** Confidential Treatment Requested ***

 

3Exhibit 10.12

 

INDENTURE OF LEASE

 

by and between

 

RIVERTECH ASSOCIATES II, LLC

 

(“LESSOR”)

 

and

 

DIMENSION THERAPEUTICS, INC.

 

(“LESSEE”)

 

RIVERSIDE TECHNOLOGY CENTER

 

840 Memorial Drive
 Cambridge, Massachusetts

 

 

RIVERSIDE TECHNOLOGY CENTER

 

COMMERCIAL LEASE

 

BETWEEN

 

RIVERTECH ASSOCIATES II, LLC

 

AND

 

DIMENSION THERAPEUTICS, INC.

 

Agreement entered into this 11th day of March, 2014 in consideration of the covenants and other benefits herein contained the receipt and sufficiency of said consideration being hereby acknowledged.

 

Rivertech Associates II, LLC, a Massachusetts limited liability corporation, c/o The Abbey Group, 575 Boylston Street, Boston, MA 02116 (herein “LESSOR”), does hereby lease to LESSEE, and Dimension Therapeutics, Inc. a Delaware corporation duly qualified to conduct business in Massachusetts, having a principal place of business at 850 Winter Street, Gunderson Dettner Waltham, MA 02451 (herein “LESSEE”), does hereby lease from said LESSOR, certain space located at 840 Memorial Drive, Cambridge, Massachusetts (herein “Building”) being that portion of the fourth (4th) floor of the Building consisting of approximately 8,060 rentable square feet of space as shown on Exhibit A-1 (the “Lease Plan”) attached hereto, and an additional approximately 50 rentable square feet of space serving as an “acid neutralization room on the third (3rd) floor of the Building as shown on the Lease Plan, totaling approximately 8,110 rentable square feet of space (herein, collectively the “Leased Premises” or “Premises”); with the right in common with others in the Building to use such common areas of the Building and the property on which the Building is located as are designated by the LESSOR, from time to time including but not limited to the fourth floor common lavatories; shared loading dock; shared passenger and freight elevators; and common stairways, corridors, walkways, driveways and lobbies.

 

1.                                      Bluebird Bio, Inc. Sublease Term, and Direct Lease Term.

 

(a)                                 Bluebird Bio, Inc. Lease.  Bluebird Bio, Inc., is the current tenant under a certain lease for space in the Building as follows:  Rivertech Associates, LLC and Genetix Pharmaceuticals, Inc. entered into a certain lease agreement dated February 18, 2000 (the “Original Lease”); which was amended by a certain Amended and Restated Lease Agreement dated May 18, 2007 (the “First Amended Lease Agreement”); which was further amended by a certain Lease Extension and Modification Agreement dated November 24, 2009 (the “First Lease Extension Agreement”); which was further amended by a certain Second Amended and Restated Lease Agreement dated October 19, 2010 (the “Second Amended Lease Agreement”); and which was most recently further amended by a Second Lease Extension Agreement dated September     ,2012 (the “Second Lease Extension Agreement”); all now collectively referred to herein as the “Bluebird Lease.”

 

 

Under the Bluebird Lease, Bluebird Bio., Inc. currently leases and currently occupies approximately 8,060 rentable square feet of space located on the fourth (4th) floor of the Building, in addition to approximately fifty (50) rentable square feet of space on the third (3rd) floor of the Building, for a total of approximately 8,110 rentable square feet of space in the Building, being the same space as is identified herein alternatively as the “Bluebird / Dimensions Subleased Space, and also as the “Leased Premises” under this Lease, as the context so permits.  Additionally, under the Bluebird Lease, Bluebird Bio, Inc. also currently leases and currently occupies approximately 9,488 rentable square feet of space located on the fourth (4th) floor of the Building, in addition to approximately fifty (50) rentable square feet of space on the third (3rd) floor of the Building, for a total of approximately 9,538 rentable square feet in the Building, which Bluebird has subleased as of the date hereof to another tenant (KEW Group, Inc.) which additional space is herein identified as the “Bluebird / KEW Space”.  LESSOR hereunder has also entered into a separate lease agreement with KEW Group, Inc. dated February 20, 2014 (the “KEW Group Lease”), governing KEW Group Inc.’s occupancy and certain other rights upon expiration of a certain sublease between Bluebird and KEW Group, Inc., dated as of February 6, 2014 (the “KEW Group Sublease”) as of the Bluebird Lease Termination Date (as defined below).

 

The Bluebird Lease terminates, and all space leased to Bluebird Bio, Inc. thereunder (i.e. the Bluebird / Dimensions Subleased Space and the Bluebird / KEW Space) is to be surrendered and vacated by March 31, 2015 (the “Bluebird Lease Termination Date”).

 

(b)                                 Sublease from Bluebird Bio, Inc. - Initial Occupancy - LESSOR Approval.  The LESSEE, contemporaneously with the execution of this Lease, has entered into a certain sublease agreement with Bluebird Bio, Inc., a copy of which is attached hereto as Exhibit A - 2, to sublease the Bluebird / Dimensions Subleased Space (i.e. the Leased Premises as defined herein) from Bluebird Bio, Inc., commencing on March 11, 2014, and ending on March 31, 2015 (the “Bluebird / Dimensions Sublease”).  Consequently, LESSEE will commence its use and occupancy of the Leased Premises under the Bluebird Dimensions Sublease, and will continue its use and occupancy of the Leased Premises on that basis up to the Bluebird Lease Termination Date.

 

The LESSOR hereby approves LESSEE’s use and occupancy of the Leased Premises under the terms and conditions of the Bluebird Dimensions Sublease.  LESSOR’s approval is expressly conditioned upon the following:  (i) LESSEE’s acknowledgment, hereby given by its execution of this Lease, that it accepts the Leased Premises in an AS/IS condition as of the date hereof, subject only to the provisions of Section 32 hereof, and without LESSOR’s representation or warranty of any kind or nature; (ii) the LESSEE’s actual use and occupancy of the Leased Premises and the conduct of its operations therein, is to be consistent in all respects with the terms and conditions of this separate Lease, during the term of the Bluebird / Dimensions Sublease, notwithstanding any contrary provisions of the Bluebird / Dimensions Sublease; (iii) the LESSEE shall adhere to the terms and conditions of the Bluebird / Dimensions Sublease (to the extent not inconsistent with this Lease, provided however that all of Lessee’s rental obligations shall be governed by the Bluebird / Dimensions Sublease until the Bluebird Lease Termination Date); and, (iv) the LESSEE hereby agrees, effective upon execution of this Lease, that upon the occurrence of any material default by Bluebird Bio, Inc., under the Bluebird Lease, LESSEE shall directly attorn to LESSOR hereunder and continue its use and occupancy

 

2

 

of the Leased Premises under the terms and conditions of the Bluebird/Dimensions Sublease, paying all rent and other payments dues under said Bluebird/ Dimensions Sublease to the LESSOR hereunder upon the receipt of a written notice from LESSOR (the “Bluebird Default Notice”) advising of the Bluebird default and directing such payments to itself (notwithstanding any proceedings against Bluebird Bio, Inc. as may be brought by LESSOR against it under the terms and conditions of the Bluebird Lease and/or any termination of said Bluebird Lease on account of said default and/or proceedings).  Upon delivery of the Bluebird Default Notice to LESSEE, the Bluebird/ Dimensions Sublease shall convert to a direct lease arrangement as between LESSOR and LESSEE up to and through March 31, 2015; and from after the delivery of the Bluebird Default Notice, but only if required under the Bluebird / Dimensions Sublease, LESSEE shall additionally be required to pay to LESSOR its Allocable Percentage for (x) Additional Operating Expense Rent per Section 3 hereof (y) Additional Real Estate Tax Rent per Section 4 hereof, and (z) Utilities per Section 7 hereof, and for Lessee’s use of any shared equipment then under the Bluebird Lease from and after such conversion date; Bluebird Bio, Inc. relinquishing and waiving any and all claims for rent or other sums under the Bluebird/ Dimensions Sublease as of the date of its default under the Bluebird Lease.  Notwithstanding the foregoing, LESSOR shall not be liable to LESSEE on account of any claims LESSEE may have against Bluebird Bio, Inc. arising from any breach by Bluebird Bio, Inc. under the Bluebird/ Dimensions Sublease, LESSEE hereby waiving any and all such claims, directly as against LESSOR, or as grounds for LESSEE’s non-performance thereunder or any defense or offset to LESSEE’s performance hereunder; however, LESSOR shall be entitled to enforce the Bluebird/ Dimensions Sublease directly as against LESSEE for any claims against LESSEE arising from any breach by LESSEE under the Bluebird/ Dimensions Sublease, from and after any conversion of said Bluebird Dimensions Sublease to a direct lease relationship as contemplated above.  LESSOR reserves for itself any and all rights and remedies it may have as against Bluebird Bio, Inc., on account of any default under the Bluebird Lease, including claims for any incremental sums owed by Bluebird Bio, Inc., under the Bluebird Lease representing the differential in the rent paid by LESSEE to LESSOR as contemplated above under the terms of the Bluebird Dimensions Sublease, and the sums owed to LESSOR as Annual Base Rent and Additional Rent under the Bluebird Lease.  LESSEE shall have no liability to LESSOR for any default or amounts owed by Bluebird under the Bluebird Lease.

 

(c)                                  Direct Lease Term.  As of the Commencement Date as defined below, LESSEE will already be in possession of the Leased Premises under its prior occupancy under the Bluebird Dimensions Sublease.  Consequently, there is no actual delivery date for the Leased Premises, and the “Commencement Date” of the LESSEE’s tenancy under this direct Lease shall be April 1, 2015, the date immediately following expiration of the Bluebird Lease.  LESSEE leases the Leased Premises for an original Term commencing as of the Commencement Date, and thereafter running twenty four (24) consecutive calendar months (herein, “Lease Term” or “Term”).  Therefore, the Term of this direct Lease shall end on March 31, 2017 (the “Termination Date”).

 

2.                                      Annual Base Rent and Additional Rent.

 

Subject to the provisions hereof, commencing on the Commencement Date, LESSEE shall pay to LESSOR an Annual Base Rent pursuant to the schedule below during each Lease Year (or portion thereof as the case may be) of the Term hereof, (herein, “Annual Base Rent”).

 

3

 

Annual Base Rent shall be payable in advance, in equal monthly installments, due on the first day of each calendar month, pursuant to the schedule below.

 

LESSEE’s first payment of Annual Base Rent for the first month of the first Lease Year shall be due on the Commencement Date.

 

All payments of Annual Base Rent (and any Additional Rent or other sums due LESSOR) shall be made to LESSOR at 575 Boylston Street, Boston, Massachusetts 02116 or to such other agent or at such other place as LESSOR may designate in writing.  The covenants to pay all Annual Base Rent and all Additional Rent hereunder (collectively, “Rent”) shall be independent from any and all other covenants of LESSOR to LESSEE hereunder; and all Rent shall be promptly paid when due stated hereunder.

 

LESSEE shall pay interest from the date due, at annual rate of fourteen (14%) percent of any installments of Annual Base Rent, or Additional Rent or other payments which are not received by LESSOR within ten days after written notice from LESSOR that any such Rent was not received.

 

	
SCHEDULE OF ANNUAL BASE RENT
    	
 
    
	
Lease Year
    	
 
    	
Annual Base Rent
    	
 
    	
Monthly Installment
    	
 
    
	
First Lease Year
    	
 
    	
$
    	
369,005.00
    	
 
    	
$
    	
30,750.42
    	
 
    
	
Second Lease Year
    	
 
    	
$
    	
381,170.00
    	
 
    	
$
    	
31,764.17
    	
 
    

 

This Lease is intended to be a triple net lease, and as such LESSEE shall also be responsible for payment of its pro rata share of Operating Expenses (see Section 3 herein), real estate taxes (see Section 4 herein) and utilities (see Section 7 herein), all in accordance with the terms and conditions herein.  All payments due to LESSOR hereunder in addition to those under Section 2 shall be deemed to be “Additional Rent”.  All LESSEE’s obligations to pay any Annual Base Rent or Additional Rent hereunder shall be independent covenants from any other obligations under this Lease.

 

LESSEE’s allocable pro rata share is 6.26 % (the LESSEE’s “Allocable Percentage”) as that concept is applicable and used herein.

 

3.                                      Additional Rent (Operating Expenses).

 

LESSEE, in addition to the sums payable to LESSOR as Annual Base Rent as determined in Section 2 hereof shall pay to LESSOR for each year (or portion thereof, as applicable) of the Lease Term, as Additional Rent, LESSEE’s Allocable Percentage of any and all Operating Expenses attributable to the Building for said year of the Lease Term (herein, “Additional Operating Expense Rent”).  Operating Expenses as set forth in Exhibit B hereto (provided for illustration) are the unaudited expenses for calendar year 2012.  Actual Operating Expenses will be subject to change based on actual costs and expenses incurred for each of the categorized Exhibit B costs and expenses actually incurred in 2015 and for each subsequent calendar year during the Lease Term, and through the Extended Term (if any).

 

4

 

“Operating Expenses” means the costs incurred by the LESSOR in connection with the operation, management and maintenance of the Building.  “Operating Expenses” shall not include the following:  the costs of LESSEE’s or any other tenant’s improvements and services for which LESSEE or any tenant directly reimburses LESSOR, or pays third persons at LESSOR’s directions; Taxes and any income, excise, transfer or franchise taxes of the LESSOR; the costs incurred in any rehabilitation, reconstruction or other work occasioned by any insured casualty (i.e. as to which LESSOR is required to carry insurance hereunder), or by the exercise of the right of eminent domain (except to the extent of any so-called “deductible” amount under policies of insurance or any costs actually incurred for which any insurance company does not reimburse or compensate LESSOR or Owner); depreciation or interest payments on the Building; general corporate overhead of the LESSOR entity (including salaries of executives and owners not directly employed in the management/operation of the Building, and any penalties or damages that LESSOR may pay to LESSEE or any other tenant of the Building under their respective leases); expenses incurred in any direct dispute with any particular tenant (other than those incurred which are of benefit to or protect the rights of other tenants in the Building, generally); costs of renovations to vacant or other tenants’ spaces; costs of capital improvements to the Building its systems and appurtenances (but not including maintenance, repairs or replacements), and any rental payments for equipment which, if purchased, would be excluded as a capital improvement under generally accepted accounting standards in LESSOR’s reasonable judgment; brokerage and advertising costs in seeking or leasing to new tenants; and penalties incurred due to LESSOR’s violation or any violation of any government order; any ground or underlying lease rental; bad debt expenses and interest, principal, points and fees on debts or amortization on any mortgage or other debt instrument encumbering the Building or the property; costs arising from LESSOR’s charitable or political contributions; costs of selling, syndicating, financing, mortgaging or hypothecating any of LESSOR’s interest in the Building; management fees paid or charged by LESSOR in connection with the management of the Building other than a management fee based on five (5%) percent of income which is the management fee uniformly and customarily charged to other tenants in the Building by LESSOR; costs and expenses (including taxes) to operate the parking garage, valet and other parking services for the Building, costs for sculptures, paintings, fountains or other objects of art or the display of such item, and any replacement garages or parking facilities and any shuttle services as may be placed in service, including any capital improvements to the parking areas; and remediation of hazardous materials in the Building or on the land parcels on which it is located.

 

LESSEE shall pay its Allocable Percentage of Additional Operating Expense Rent to LESSOR based on a prospective annual schedule prepared by the LESSOR, in monthly increments based on said schedule, with each monthly payment of Annual Base Rent due hereunder.  LESSOR, at its discretion, may assess LESSEE for any extraordinary item of cost or expense which may actually occur as a direct result of LESSEE’s own distinct uses or activities which shall be itemized, invoiced separately, and paid by LESSEE within thirty (30) days of its receipt of the invoice.  Within one hundred twenty (120) days of the close of each calendar year, LESSOR shall adjust the prior year’s schedule of Additional Operating Expense Rent to account for actual and properly accrued costs, expenses, and liabilities, and shall issue LESSEE a refund or deficiency statement for that year, as appropriate (the “Operating Statement”).  LESSEE shall pay any deficiency shown thereon within thirty (30) days of its receipt of said Operating Statement.  Any rebates due LESSEE (not contested by LESSOR) shall, in LESSOR’s

 

5

 

reasonable discretion, be credited toward current monthly Additional Operating Expense Rent or paid to LESSEE within thirty (30) days.

 

LESSEE shall have the right to audit the applicable records of LESSOR to confirm that the charges billed to LESSEE under Sections 3 and 4 herein are proper and conform to the provisions of such Sections.  Such right shall be exercisable by LESSEE within six (6) months after LESSEE’s receipt of LESSOR’s Operating Statement for the subject Lease Year.  LESSOR shall cooperate with LESSEE in providing LESSEE reasonable access to LESSOR’s books and records during normal business hours to enable LESSEE to audit LESSOR’s books and records as they relate to any costs or expenses passed through to LESSEE pursuant to any provisions of this Lease.  If the audit discloses any overpayment on the part of LESSEE, then LESSEE shall be entitled to a credit on the next succeeding installment of Rent for an amount equal to the overcharge plus interest on the amount of such overcharge from the date on which same was paid by LESSEE until the date refunded by LESSOR at the prime rate then published in The Wall Street Journal, and such credit shall be extended to succeeding installments of Rent in the event such overcharge exceeds the amount of the next succeeding such installment and, in the event the term of this Lease has expired or been earlier terminated, then LESSEE shall be entitled to a refund of such excess from LESSOR within thirty (30) days after such date or expiration or earlier termination.  If the audit discloses any undercharge or underpayment on the part of LESSEE, then LESSOR shall be entitled payment of that difference, to be paid with the next succeeding installment of Rent, in the amount equal to the undercharge or underpayment.  If the audit discloses any overpayment on the part of the Lessee, then subject to the LESSOR’s rights to arbitration of the disputed issues as set forth below (in which case payment shall be tolled to the end of such proceedings), the LESSOR shall reimburse LESSEE for the actual third party costs of such audit, but in no event shall such cost reimbursement exceed a sum equal to the overpayment amount due to LESSEE.

 

If there are disputes regarding the results of the audit, the parties will attempt to resolve such disputes in good faith.  Any unresolved dispute may be referred for final and binding arbitration before JAMS Inc., (the alternative dispute resolution company located in Boston, Mass.) on terms and conditions to be established by the arbitrator, the hearings thereon not to proceed longer than one (1) day.  The arbitrator will be an individual selected by agreement of the parties consistent with the procedures and practices of JAMS, Inc., with knowledge of commercial real estate in the greater Boston area, and who is a “disinterested person” with respect to the LESSOR and LESSEE.  All costs of arbitration shall be shared equally by LESSOR and LESSEE.

 

4.                                      Additional Rent (Real Estate Taxes).

 

LESSEE, in addition to the sums payable to LESSOR as Annual Base Rent as determined in Section 2 hereof, shall pay to LESSOR for each year (or portion thereof, as applicable) of the Lease Term, as Additional Rent, LESSEE’s Allocable Percentage of all sums attributable to the municipal real estate taxes on the Building and land on which it is situated (“Taxes”) allocable to said year) (herein the “Additional Real Estate Tax Rent”).

 

Notwithstanding the foregoing, LESSOR shall be under no obligation to file for any abatement of taxes for FY 2014 or any other fiscal year, and LESSEE shall pay all amounts as

 

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invoiced by LESSOR, receiving a rebate based on its Allocable Percentage only if an abatement is sought and received by LESSOR.

 

LESSEE shall pay its Allocable Percentage of Additional Real Estate Tax Rent to LESSOR based on a prospective annual schedule prepared by the LESSOR, in monthly increments based on said schedule, with each monthly payment of Annual Base Rent due hereunder.  Within one hundred twenty (120) days of the close of each tax year, LESSOR shall adjust the prior year’s schedule of Additional Real Estate Tax Rent to account for actual and properly accrued costs, expenses, and liabilities, and shall issue LESSEE a refund or deficiency statement for that year, as appropriate.  LESSEE shall pay any deficiency shown thereon within thirty (30) days of its receipt of said Operating Statement.  Any rebates due LESSEE (not contested by LESSOR) shall, in LESSOR’s reasonable discretion, be credited toward current monthly Additional Real Estate Tax Rent or paid to LESSEE within thirty (30) days.

 

LESSOR shall keep complete books and records regarding Operating Expenses and Taxes at LESSOR’s principal offices, as to which LESSEE shall be given access as contemplated below during LESSOR’s normal business hours for the purpose of reviewing and copying (at LESSEE’s expense except as otherwise set forth herein).  LESSOR shall retain all records of Operating Expenses and Taxes for at least three (3) years.

 

5.                                      Security Deposit.

 

No later than Commencement Date, LESSEE shall post with LESSOR (and maintain at all times during the Original and Extended Term, if any), a Security Deposit in the amount of Ninety Two Thousand Two Hundred Fifty One and 26/100 ($92,251.26) Dollars (the “Security Deposit Amount”) as described below; which shall be held as security for LESSEE’s performance as herein provided, to be returned to LESSEE at the end of this Lease Term (as may be earlier terminated or extended), unless applied by LESSOR prior thereto in the event of any uncured default by LESSEE hereunder beyond applicable notice and cure periods.  The Security Deposit shall be delivered to Landlord in two installments:  (i) the sum of Sixty One Thousand Five Hundred 67/100 ($ 61,500.67) Dollars to be tendered by LESSEE upon execution of this Lease; and (ii) an additional sum of Thirty Thousand Seven Hundred Fifty 33/100 ($ 30,750.33) Dollars to be tendered by LESSEE on the Commencement Date (i.e.  on or before April 1, 2015) hereunder.  Failure to deliver the Security Deposit within five (5) days after written notice by LESSOR shall result in breach of this Lease and at Landlord’s election, termination of this Lease, time being of the essence.

 

The Security Deposit Amount shall be delivered to LESSOR, as set forth above, either by:

 

(a)                                 bank check (which sum, plus any interest thereon, LESSOR shall be entitled to commingle and use with LESSOR’s own funds); or

 

(b)                                 irrevocable stand-by Letter of Credit, substantially in the form attached hereto as Exhibit C from a commercial bank in Massachusetts reasonably acceptable to LESSOR.

 

If available to LESSEE, the Letter of Credit shall be the full term of this Lease.  However, the Letter of Credit may be written on an annual basis with a provision that it may be

 

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drawn upon if LESSEE fails to provide a renewal or replacement therefor forty-five (45) days prior to the expiration of the then existing Letter of Credit.

 

The Letter of Credit shall:  (i) name LESSOR as beneficiary; (ii) be cancelable only with a minimum 30 days prior notice to LESSOR; and (iii) be substantially in the form attached hereto as Exhibit C and in all respects in form and substance reasonably satisfactory to LESSOR

 

LESSOR reserves the right, at any time at which the LESSOR has reasonable grounds to question the economic viability of the bank issuing the then existing Letter of Credit to require that the original Letter of Credit be replaced by another Letter of Credit issued by another commercial bank reasonably acceptable to LESSOR.  LESSEE shall be required to make its substitution within fifteen (15) days from receipt of LESSOR’s notice.  Failure to provide said replacement Letter of Credit shall entitle LESSOR to draw on the existing Letter of Credit and hold the cash proceeds thereof as the Security Deposit hereunder.

 

LESSOR agrees that it shall not draw on the Security Deposit Amount hereunder except to the extent necessary to cure a default beyond applicable notice and cure periods of LESSEE hereunder, or upon failure to LESSEE to tender a replacement or renewal Letter of Credit as contemplated above.  LESSOR agrees that it shall deliver the Security Deposit to any successor in interest to LESSOR’s rights hereunder.  Provided that LESSEE is not then in default under this Lease, the Security Deposit shall be refunded to LESSEE (or the original Letter of Credit returned) within thirty (30) days after the end of the Lease Term.

 

6.                                      Use of Leased Premises.

 

LESSEE shall use the leased premises for general office, research and development and laboratory use, and any other use ancillary thereto only (the “Permitted Uses”), which uses LESSOR warrants and represents are currently allowed under local zoning regulations (subject to compliance with federal, state and municipal safety, healthy, building, and sanitary codes), and any encumbrance and restrictive instruments and agreements affecting the Building The LESSEE will use the Leased Premises in a safe manner and will not do or permit any act or thing which is contrary to any legal or insurance requirement referred to in Section 17 hereof or which constitutes a risk to the safety, health or well-being of other lessees in the Building, or the community, or creates a public or private nuisance or waste.

 

Except for the Permitted Items (as defined hereafter), LESSEE shall not be entitled, for research or testing purposes, to bring any animals (including without limitation laboratory mice, rats or other mammals or primates, reptiles or aquatic life); micro-organisms; or bacteriological, biological, or pathological agents; (collectively, “Biological Items”) into the Building or the Leased Premises without prior written notice to LESSOR and LESSOR’s express written consent; which consent shall not be unreasonably withheld, conditioned or delayed.  LESSEE, at its sole cost and expense, shall comply with all applicable local, state and federal governmental statutes, regulations, rulings and orders applicable thereto (including procuring any required permits or authorizations) as to any of the foregoing Biological Items allowed under this Section 6.  LESSOR may condition its consent to the presence of such animals based on quantity, type, arrangements for storage, sanitation, transportation, and other physical and logistical considerations as LESSOR may reasonably determine in each instance and from time

 

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to time as circumstances may require.  Notwithstanding any provision to the contrary herein, LESSOR hereby consents and agrees that LESSEE may keep the “Permitted Items” described on Exhibit D hereto at the Leased Premises and utilize them for the Permitted Uses hereunder, provided however, such consent by LESSOR does not relieve LESSEE from identifying, procuring in advance, and maintaining any and all municipal, state and federal permits or authorizations therefor (including without limitation the transport, storage and handling thereof), which shall be LESSEE’s sole responsibility and the absence of which shall not in manner abrogate this Lease or reduce any of LESSEE’s obligations to pay all Rent due hereunder or otherwise perform hereunder.  Any material additions or changes to the Permitted Items shown on Exhibit D shall require LESSOR’s further consent per the standards set forth above in this Section 6 and upon the giving of such further consent Exhibit D shall be deemed to be amended accordingly.  LESSEE hereby indemnifies and holds harmless LESSOR from and against any and all damages, liabilities, claims, demands, actions or other losses arising from LESSEE’s noncompliance with this clause, except to the extent the same results or arises from the negligence or willful misconduct of LESSOR.  Other than for research and testing purposes as conditioned and set forth above, LESSEE shall not permit any other animals on the Leased Premises (with exception only for bona fide “service animals” subject to advance prior approval by LESSEE on a case by case basis).

 

LESSEE shall have access to the Leased Premises for LESSEE’s use seven days per week and twenty four hours per day for each day of the Term, subject to the provisions of Section 7 hereof relative to overtime heat and air-conditioning.  LESSEE shall keep the Leased Premises and adjacent areas in a clean and good condition equivalent to the standards reasonably set by LESSOR for the Building, reasonable wear and tear and casualty excepted.  LESSEE shall be solely responsible to provide its own cleaning and janitorial services to the Leased Premises, at its sole cost and expense.

 

LESSEE shall be responsible for the prompt and proper disposal of all garbage, refuse, debris and other waste as mandated by reasonable and uniform Building regulations.  LESSOR shall provide and maintain a trash dumpster and/or compactor at the Building loading dock, for the non-exclusive use of all tenants for disposal of non-hazardous/non controlled materials and substances.  LESSEE may, but shall not be obligated to implement a recycling program, but its implementation, maintenance, or operation shall be without any cost or expense to LESSOR or any other tenants of the Building.  LESSOR is not obligated to coordinate any such program in any respect.

 

7.                                      Utilities.

 

LESSOR shall provide to the Leased Premises and also to the common areas and facilities which LESSEE enjoys the right to use in accordance with standards reasonably determined by LESSOR for the Building and set forth herein, the following services:  (1) hot and cold running water from points of supply to the water faucets or taps in the Leased Premises for use by LESSEE, the cost of which shall be paid by LESSEE per the readings of the submeter(s) for the Leased Premises; (2) heat and air conditioning (as applicable) during Normal Business Hours (and at such other times requested by LESSEE in accordance with the provisions of this Section 7 set forth below); which heating and air conditioning systems (i) LESSEE controls (as to temperature settings in LESSEE’s laboratory space above the base system settings); (ii)

 

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LESSOR controls (as to temperature settings for the base system serving LESSEE’s office space); and (iii) LESSOR shall repair and maintain (with direct separate charges passed on to the LESSEE) with respect to the supplemental laboratory systems); (3) ventilation and exhaust, and electricity (payable by LESSEE), sufficient for the Permitted Uses as they are generally stated; (4) maintenance and repair of the Building, Premises and Common Areas as set forth in Section 11 below; and (5) elevator service; (items (1) through (5) above are collectively referred to herein as “Services”).  “Normal Business Hours” shall mean 8 AM to 6 PM Monday through Friday, except for the following holidays, only:  Thanksgiving Day, Christmas Day, New Year’s Day, Memorial Day, Fourth of July, and Labor Day.

 

Notwithstanding the foregoing, LESSEE shall pay all charges for electricity used on the Leased Premises per the existing submeter(s) for the Leased Premises (or alternatively, any submeters that need to be installed, which shall be installed at LESSOR’s sole cost and expense), and as set forth below.  LESSOR shall provide monthly estimates of use that are based upon actual use for the prior year (i.e. the estimates to be reset annually), to be confirmed by periodic check meter readings for the Leased Premises itself.  LESSEE shall pay for such electrical charges upon receipt of its monthly invoice from LESSOR, to be rendered and paid based on those estimates within thirty (30) days of LESSEE’s receipt of the invoice.  Within one hundred twenty (120) days of the close of each calendar year, LESSOR shall adjust the LESSEE’s prior year’s electrical payments to account for the actual and properly accrued charges reflective of the actual check meter readings for such year, and shall issue LESSEE a refund or deficiency statement for that year, as appropriate.  LESSEE shall pay any deficiency shown thereon within thirty (30) days of its receipt of said invoice.  Any rebates due LESSEE (not contested by LESSOR) shall be credited toward then current monthly electrical charge invoices or paid to LESSEE within thirty (30) days

 

LESSOR shall maintain (a) an average temperature in the useable common areas of the Building generally between 65 degrees Fahrenheit and 75 degrees Fahrenheit at all times, and (b) an average temperature in the office portions of the Leased Premises generally between 65 degrees Fahrenheit and 75 degree Fahrenheit during Normal Business Hours (the “HVAC Criteria”).  LESSEE hereby acknowledges that LESSEE controls the temperature in its own laboratory spaces; there shall be no requirement for LESSOR to maintain the foregoing standards with respect thereto; and LESSOR shall not be responsible for coordination of the relative temperatures within the Leased Premises, given LESSEE’s control over such systems (however LESSOR shall be responsible for the balancing of the HVAC systems servicing the Leased Premises as of the beginning of LESSEE’s occupancy under its Bluebird / Dimensions Sublease, with no obligation to do so thereafter) provided, however, that LESSOR shall be responsible for providing electricity and water to the HVAC equipment serving the laboratory spaces 24-hours per day, 7 days per week, such usual and customary electrical capacity and water volume to be in same quantities as are sufficient for the average office/laboratory tenant in the building without regard to any special requirements or specialized equipment (it being LESSEE’s responsibility to make separate arrangements with LESSOR, at LESSEE’s cost and expense, for any greater or more intense requirements).  At any time, upon no less than thirty two (32) hours prior notice by LESSEE, LESSOR shall make available overtime heat and air-conditioning to LESSEE at the Premises in accordance with clause (b) of the HVAC criteria, and LESSEE shall pay as additional rent, overtime heat and air-conditioning for the office portions of the Leased Premises as may be requested by LESSEE for the Leased Premises on the basis of $150.00 per zone per

 

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hour (subject to increase by the same percentage amount by which the standard electric rates are increased), as billed by LESSOR.  LESSEE shall give LESSOR thirty two (32) hours prior notice of any requirements for specialized overtime heating and air-conditioning.  LESSOR shall not be liable to LESSEE for any interruption, interference, damage or loss to LESSEE’s research or experimentation occasioned as a result of any failure in the heating, ventilation, air conditioning, or electrical services or other utilities servicing the Building or the Leased Premises.  No plumbing or electrical work of any type shall be done without LESSOR’s approval which approval shall not be unreasonably withheld or delayed, and, if applicable, the appropriate municipal permit and/or inspector’s approval.  Water for domestic type sanitary purposes (only) shall be supplied at LESSOR’s expense.  There shall be separately metered and separately paid for by LESSEE, non-potable laboratory water and water for other particularized uses in the Leased Premises.

 

An “Abatement Event” shall be defined as an event or circumstance (other than those addressed in Section 18, or subject to Section 27 herein) caused by any of (i) LESSOR’s negligence; (ii) LESSOR’s willful misconduct; or (iii) any act or failure to act that is solely within LESSOR’s control; that prevents LESSEE from accessing or using the Premises or any substantial portion thereof (other than temporary interruptions necessitated by LESSOR’s performance of its obligations for maintenance and repairs as contemplated in Section 10 hereof).  LESSEE shall give LESSOR notice (“Abatement Notice”) of any such Abatement Event, and if such Abatement Event continues beyond the “Eligibility Period” (as that term is defined below), then the Annual Base Rent and LESSEE’s other monetary obligations to LESSOR hereunder shall be abated entirely or reduced, as the case may be, after expiration of the Eligibility Period for such time that LESSEE continues to be so prevented from using the affected portion of the Premises in the proportion that the affected area of the Premises bears to the total rentable area of the entire Premises.  The term “Eligibility Period” shall mean a period of five (5) consecutive business days after LESSOR’s receipt of any Abatement Notice(s).  In addition, but subject to the provisions of Section 18 hereof (which take precedence), if an Abatement Event continues for ninety (90) consecutive days after any Abatement Notice, LESSEE may terminate this Lease by written notice to LESSOR at any time prior to the date such Abatement Event is cured by LESSOR.

 

8.                                      Compliance with Laws.

 

LESSEE acknowledges that no trade, occupation, or activity shall be conducted in the Leased Premises or use made thereof which will be unlawful, improper, noisy, offensive, or contrary to any federal or state law or administrative regulations, or any municipal ordinance or regulations in force at any time in Cambridge.  LESSEE shall keep all employees working in the Leased Premises covered with Worker’s Compensation Insurance, as applicable.  Specifically, LESSEE shall be responsible for causing the Premises and any work conducted therein to be in full compliance with the Occupational Safety and Health Act of 1970 and any amendments thereto.  LESSEE shall strictly adhere to any and all federal, state, and municipal laws, ordinances, and regulations governing the use of LESSEE’s laboratory scientific experimentation.  LESSEE shall be solely responsible for procuring and complying at all times with any and all necessary permits directly relating or incident to:  the conduct of its office and research activities on the Premises; its scientific experimentation on the Premises; any transportation; storage; handling; use and disposal of any low level radioactive or bacteriological

 

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or pathological substances or organisms or other hazardous wastes or environmentally dangerous substances or materials.  LESSEE shall immediately give notice to LESSOR of any written warnings or violations relative to the above received from any federal, state, or municipal agency or by any Court of Law, and shall immediately take steps to cure the conditions causing any such violations; and LESSOR shall permit LESSEE to cure said harm or hazard prior to any active intervention by LESSOR (except where such intervention is necessitated by the emergency nature of the harm or hazard; or where the harm or hazard impairs the value of the Building, (directly or as collateral on any debt); interests with any other tenant’s rights; or is required by any governmental agency or authority.

 

LESSEE shall fully indemnify and hold harmless in all respects LESSOR from any and all claims, demands, losses, liabilities, and damages (including all necessary and reasonable expenses for contractors, consultants, environmental engineers, attorneys, and other professionals utilized by LESSOR to evaluate and remediate any hazard or harm caused by LESSEE and which LESSEE has failed to cure; and further including any and all fines or fees assessed by any governmental agency relative to any hazard or harm), directly arising from the conduct of its research on the Leased Premises (especially relating to research involving hazardous substances), or LESSEE’s obligations and responsibilities as set forth above and herein, and excepting liability for any claims and damages resulting from the acts or negligence of LESSOR or its agents or employees.

 

Notwithstanding the foregoing or any other provision of this Lease, however, LESSEE shall not be responsible for compliance with any such laws, regulations, or the like requiring (i) structural repairs or modifications or (ii) repairs or modifications to the base Building utilities running to the Leased Premises or (iii) installation of new Building service equipment, such as fire detection or suppression equipment, unless such repairs, modifications, or installations shall be due to LESSEE’s particular manner or intensity of use of the Leased Premises (in contrast to the general office/laboratory use allowed under the Permitted Uses), or LESSEE’s negligence or willful misconduct or that of its employees, agents or independent contractors.

 

9.                                      Fire and General Insurance Requirements.

 

LESSEE shall not permit any use of the Leased Premises which will make voidable, increase any premium, or decrease any insurance on the Building and property of which the Leased Premises are a part, or on the contents of said Building, or which shall be contrary to any law, regulation, or order from time to time to established or issued by the local Fire Department, or any similar body, or any restriction contained in any of LESSOR’s insurance policies as to the Building and property provided, however that LESSOR hereby represents and warrants that the Permitted Uses contemplated hereunder shall not violate any of the foregoing regulations or restrictions as of the Delivery Date.  LESSEE shall, within ten (10) days of demand, reimburse LESSOR all extra insurance premiums caused by LESSEE’s particular use of the Leased Premises (as opposed to Permitted Uses generally).  After prior notice to LESSEE and an opportunity to cure, LESSEE shall pay LESSOR if LESSOR incurs any extraordinary costs or expenses to maintain the Leased Premises or any Building equipment servicing the same incurred as a direct result of LESSEE’s vacating the Leased Premises or allowing the same to remain unoccupied for any extended periods of time during the Lease Term.

 

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10.                               Maintenance of Leased Premises.

 

LESSOR shall be responsible for all exterior and structural maintenance of the Leased Premises (including without limitation exterior plate glass), the maintenance and repair of the Building, including without limitation the roof and foundation of the Building of which the Leased Premises are a part, and for the maintenance, repair and replacement of all common areas serving the Premises, and LESSOR’s heating and cooling equipment, doors, locks, plumbing, and electrical wiring, and other Building systems serving the Premises and common areas of the Building; except for damage caused by the malicious, willful, or negligent acts of LESSEE, and chemical, water or corrosion damage from any source within the control of LESSEE (subject to the last paragraph of Section 17).  Additionally, LESSOR warrants to repair or replace (in LESSOR’s discretion in each instance) major components of the “Premises Specific Mechanical Equipment”, which consists of:  (i) the make-up air units in the laboratory area of the Leased Premises, and (ii) the exclusive supplemental HVAC units in the laboratory and office areas; from the Commencement Date forward (provided the same remain in good working order and condition during and at the end of the Bluebird / Dimensions Sublease; responsibility for which to be as determined under the Bluebird Lease up to the Commencement Date).  In the discharge of LESSOR’s responsibility for the Premises Specific Mechanical Equipment, LESSOR shall have the option to contract with a reputable service provider for a comprehensive preventative maintenance service plan, the cost and expense of which (as relates to the Leased Premises) shall be borne by LESSEE and promptly paid upon separate invoicing by LESSOR.  Consequently, LESSOR’s only warranty as to the Premises Specific Mechanical Equipment shall be for extraordinary major component failure and repair, and not for usual and ordinary maintenance and repairs.

 

LESSEE agrees to maintain at its expense all other elements and components of the Leased Premises in the same condition as they are at the Delivery Date, normal wear and tear and damage by fire or casualty only excepted, and whenever necessary, to replace light bulbs, interior plate glass and other glass therein, acknowledging that the Leased Premises upon delivery under the Bluebird / Dimensions Sublease, the Leased Premises) are in good order and repair and the light bulbs and glass whole.  LESSOR shall be responsible for the periodic inspection, maintenance and repair of all Premises Specific Mechanical Equipment in the Leased Premises throughout the Lease Term (with direct separate charges passed on to the LESSEE), and LESSOR may retain the services of an outside third party maintenance contractor toward this end.  LESSEE will properly control or vent all solvents, degreasers, and the like and shall not cause the area surrounding the Leased Premises to be in anything other than a neat and clean condition, depositing all waste in appropriate receptacles.  LESSEE shall not permit the Leased Premises to be overloaded, damaged, stripped or defaced, suffer any waste of the Leased Premises.  Any maintenance which is the responsibility of LESSOR and which is necessitated by some specific aspect of LESSEE’s negligent or reckless use of the Leased Premises shall be at LESSEE’s expense (subject to the last paragraph of Section 17).

 

All maintenance provided by LESSOR shall be performed as reasonably required at LESSOR’s discretion and except for emergencies, during LESSOR’s normal business hours.  LESSEE shall be solely responsible for maintenance and operation of any and all of its systems installed by the LESSEE and shall waive any and all claims against LESSOR for any damage, impairment, or loss relative to these systems unless such damage is caused by the acts or

 

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negligent or reckless acts of LESSOR.  Specifically, LESSEE shall maintain, at its sole expense, and pay all charges for electrical service and use of all LESSEE’s equipment associated with its operation.

 

LESSOR shall provide:  (a) for maintenance, repair and upkeep for the landscaping on the property; (b) janitorial services in the common areas; (c) hot and cold water for lavatories, restrooms, kitchenettes and potable water; and (d) its standard security system into the Building, with LESSEE to be responsible for the installation, monitoring, maintenance and repair of its own security system into the Leased Premises from the adjacent common areas, and to coordinate the means of emergency access/egress to and from the Leased Premises with LESSOR, and with LESSOR to reasonably cooperate with LESSEE to the extent practicable (without any additional cost to LESSOR).

 

11.                               Delivery of Leased Premises to LESSEE - LESSEE’s Alterations to Leased Premises - LESSEE’s Rights to Certain Systems and Equipment.

 

(a)                                 Initial Delivery, Possession and Occupancy of the Leased Premises.  The Leased Premises are to be delivered to LESSEE initially under the Bluebird Dimensions Sublease as contemplated in Section 1 hereof.  Consequently, LESSEE will be in possession and occupation thereof as of the Commencement Date of this Lease.  LESSOR shall not have any obligations to make any improvements to the Leased Premises as of the Commencement Date hereof.

 

(b)                                 LESSEE Improvements to the Leased Premises.  LESSEE, whether during the time it is in possession and occupation of the Leased Premises under the Bluebird / Dimensions Sublease or after the Commencement Date, shall not make any structural alterations or additions of any kind to the Leased Premises, but may make nonstructural alterations provided LESSOR consents thereto in writing, said consent not to be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, LESSEE may make alterations within the Leased Premises which are solely cosmetic in nature without LESSOR’s consent.  Plans and specifications for any of LESSEE’s potential improvements requiring LESSOR’s consent shall be submitted by LESSEE to LESSOR in each instance, in advance of any proposed work, in sufficient detail and scope to enable LESSOR to make a reasonable determination thereon.  All such allowed alterations (“LESSEE’s Improvements”) shall be at LESSEE’s expense and shall be in quality at least equal to the present construction.  If LESSOR performs any services for LESSEE in connection with such alterations or otherwise, LESSEE shall reimburse LESSOR for LESSOR’s actual and reasonable out-of-pocket costs for such services and any invoice therefor will be promptly paid.  LESSEE shall be responsible to use such contractors as will ensure harmonious labor relations in the Building and on the site; and to prevent strikes, work stoppages, picketing and other labor actions.  LESSEE shall submit a list of its contractors to LESSOR in advance.  LESSEE shall provide LESSOR with acceptable general liability and builder’s risk insurance certificates naming LESSOR and its lender as additional named insureds prior to the commencement of any work by LESSEE.  LESSEE shall not permit any mechanics liens, or similar liens, to remain upon the Leased Premises in connection with work of any character performed or claimed to have been performed at the direction of LESSEE and shall cause any such lien to be released, removed or bonded forthwith without cost to LESSOR.  Any alterations completed by LESSEE, including, without limitation, window blinds or other window treatment, shall be building standard unless LESSOR expressly agrees otherwise.  Any and all

 

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installations by LESSEE shall become a part of the Leased Premises and LESSEE shall not remove the same either during the Term or at the expiration or earlier termination of this Lease, unless directed to do so by LESSOR at the time such Alterations are approved; except that LESSEE shall have the right to remove any hardwired or hard-plumbed equipment purchased, paid for and installed by LESSEE itself, such as chemical fume hoods, as long as LESSEE restores the Leased Premises to the condition that it was in prior to the installation of such equipment.  Notwithstanding the foregoing or any provision to the contrary contained herein LESSEE shall retain title to and be entitled to remove any movable office furniture, equipment, trade fixtures, and other personal property at the Premises, provided the Leased Premises and any common areas impacted thereby are restored to their original condition prior to such installations.  LESSOR shall have the right at any time to change the arrangement of parking areas, stairs, walkways or other common areas of the Building of which the Leased Premises are a part, provided such changes do not interfere with LESSEE’s use of the Leased Premises or access to such areas and facilities (including, without limitation, the Building and the Premises), or any other right of LESSEE hereunder.

 

(c)                                  Shared Use of Certain Laboratory Support Systems.  LESSEE shall have the right to share in the use of certain existing laboratory support systems (owned by LESSOR), including the compressed air/vacuum, during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and during the Lease Term, as they are currently servicing, shared, and used by other tenant(s) on the fourth and fifth floors of the Building.  If LESSEE elects to use said systems:  (i) LESSEE shall be responsible to share in the costs and expenses of repairs, maintenance, servicing and operation thereof, pro rata with other actual users; (ii) LESSOR shall replace capital components of such laboratory support systems so provided (duly depreciated by LESSOR over the useful life of said equipment, with the annual depreciation to be passed on to the users thereof during that year and allocated pro rata to them, payable separately to LESSOR upon invoice) and (iii) LESSEE shall enter into LESSOR’s standard side agreement with respect thereto (attached hereto as Exhibit E).  LESSOR shall ensure that said shared laboratory systems remain available to LESSEE for its shared use during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and throughout the Lease Term.  LESSOR does not provide any representations or warranties relative to LESSEE’s election to use or not use any of the shared laboratory support systems above, nor shall LESSOR be responsible, directly or indirectly, for any consequences arising from LESSEE’s actual use of said systems or the suitability or performance of any of the equipment comprising said systems or related thereto, LESSEE to be solely responsible therefor at its sole risk.

 

(d)                                 LESSEE’s Option to Locate, Install and Use Certain Equipment and Systems.  During the Lease Term LESSEE shall have the option to procure and install, at its sole cost and expense in all instances, additional HVAC equipment, antennas, satellite dishes and related accessory equipment and connections on the roof of the Building, in locations that LESSOR deems acceptable in its discretion, and to tie-in said equipment to the Leased Premises through areas of the Building that LESSOR deems acceptable in its discretion.  LESSOR does not provide any representations or warranties relative to LESSEE’s determination as to the foregoing, nor shall LESSOR be responsible, directly or indirectly, for any consequences arising from LESSEE’s selection, placement, use or operation of the same, or the suitability or performance of any of such equipment or installations; LESSEE to be solely responsible therefor at its own risk.

 

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(e)                                  LESSEE’s Shared Use of Emergency Generator.  LESSEE shall have the right to share in the use of the existing gas fired emergency generator and controller currently installed and covering the Leased Premises, with other users on the fourth and fifth floors of the Building, during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and during the Lease Term.  If LESSEE elects to use said emergency generator:  (i) LESSEE shall be responsible to share in the costs and expenses of repairs, maintenance, servicing and operation thereof, pro rata with other actual users; (ii) LESSOR shall replace capital components of said emergency generator so provided (duly depreciated by LESSOR over the useful life of said equipment, with the annual depreciation to be passed on to the users thereof during that year and allocated pro rata to them, payable separately to LESSOR upon invoice) and (iii) LESSEE shall enter into LESSOR’s standard side agreement with respect thereto (attached hereto as Exhibit E-l).  LESSOR does not provide any representations or warranties relative to the foregoing, nor shall LESSOR be responsible, directly or indirectly, for any consequences arising from LESSEE’s actual use of said emergency generator or the suitability or performance of said emergency generator; LESSEE to be solely responsible therefor at its sole risk, and LESSEE confirming that it has inspected the emergency generator to its satisfaction prior to the execution of this Lease and accepts the same in its current operating condition.  LESSEE shall be solely responsible for the maintenance and operation of the emergency generator (on the shared basis stated above) during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and during the Lease Term.  Alternatively, upon written request from LESSEE, LESSOR shall designate a location, to be mutually agreeable to LESSOR and LESSEE, for LESSEE to install, maintain, repair and operate its own separate emergency generator at LESSEE’s sole cost and expense.

 

(f)                                   LESSEE’s Exclusive Use of Acid Neutralization System.  LESSEE shall have the exclusive right to the use of the acid neutralization system currently installed for the Leased Premises, during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and during the Lease Term.  LESSOR does not provide any representations or warranties relative to the foregoing, nor shall LESSOR be responsible, directly or indirectly, for any consequences arising from LESSEE’s actual use of said acid neutralization system, or the suitability or performance of said acid neutralization system; LESSEE to be solely responsible therefor at its sole risk, and LESSEE confirming that it has inspected the acid neutralization system to its satisfaction prior to the execution of this Lease and accepts the same in its current operating condition.  LESSEE shall be solely responsible for the maintenance and operation of the acid neutralization system during LESSEE’s occupancy under the Bluebird / Dimensions Sublease and during the Lease Term.

 

(g)                                  LESSEE’s Responsibility for Permits.  During the Lease Term LESSEE shall be solely responsible to apply for and procure and maintain any and all permits and government authorizations for its installation, operation and use of any of the equipment and systems set forth above in this Section 11 (e.g. MWRA permit for the acid neutralization system, etc.); and shall indemnify the LESSOR for any and all damages arising from its failure to do so.

 

12.                               Assignment and Subletting.

 

LESSEE covenants and agrees that neither this Lease nor the Term and estate hereby granted, nor any interest therein will be assigned, mortgaged, pledged, encumbered or otherwise transferred, and that neither the Leased Premises, nor any part thereof, will be encumbered in any

 

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manner by reason or by act or omission of LESSEE, or used or occupied, or permitted to be used or occupied, by anyone other than LESSEE, its servants, agents, contractors and employees, or for any use or purpose other than as above stated, or be sublet, without in each case LESSOR’s prior written consent, which shall not be unreasonably withheld or delayed.  Notwithstanding the foregoing, LESSOR’s prior written consent shall not be required for any assignment or sublet to a wholly or majority owned affiliate or subsidiary of the LESSEE, or any entity succeeding to LESSEE as a direct result of a merger or consolidation, acquisition, asset or stock transfer, or issuance of stock by LESSEE (“Permitted Transfer”).

 

The grounds upon which LESSOR may reasonably withhold its consent are as follows:

 

(i)                                     The prospective assignee’s or sub-lessee’s intended use of the Premises does not conform to the permitted uses set forth in the Lease; or,

 

(ii)                                  The nature, character, class and standards of the prospective assignee’s or sublessee’s business will not be consistent with those of other lessees in the Building or will not conform to the mix of other lessees in the Building at that time; or,

 

(iii)                               The financial strength and reliability of the prospective assignee or sublessee, excluding any additional personal or corporate guarantees, is not sufficient, in LESSOR’s reasonable business judgment, to meet all of such prospective assignee’s or sublessee’s obligations to be performed as of and from the date of said assignment or sub-letting.  The prospective assignee or sub-lessee must produce to LESSOR’s accountants a verified and current audited financial statement, (or if none has been prepared by said prospective assignee within the past three years, a CPA certified current financial statement), and such other documentation as is material in making such determination; which shall be kept confidential by them; or,

 

(iv)                              The operations of the prospective assignee or sub-lessee will violate any exclusive or other rights given any other lessees in the Building; or

 

(v)                                 The failure of LESSOR’s mortgage lender(s) to consent, if such consent is required under LESSOR’s financing documents.

 

Except in the case of a Permitted Transfer, LESSOR, in addition to Annual Base Rent and all Additional Rent hereunder, shall be entitled to fifty (50%) percent of the full amount of any and all sums actually collected by LESSEE, in whatever form, attributable to or arising from the permitted subletting or assignment, after deduction for LESSEE’s reasonable costs incurred in connection with the subletting or assignment, including alterations or improvements, marketing costs and reasonable brokerage commissions and/or reasonable legal costs actually incurred, (herein, “Rent Mark-Up”).

 

Notwithstanding LESSOR’s consent to the assignment or subletting, as contemplated above, LESSEE shall remain primarily liable to LESSOR for the payment of all Rent and for the full performance of the covenants and conditions of this Lease; and, upon a default by LESSEE hereunder, LESSOR may collect all sums due as Rent directly from the assignee/subtenant.

 

Notwithstanding the foregoing, in the event that LESSEE desires to sublet the Leased Premises, other than in connection with a Permitted Transfer, it shall in each instance notify the

 

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LESSOR in writing, stating the intended effective date of the proposed sublet (which shall not be less than 60 days from the date of said notice to LESSOR).  Subject to the preceding sentence, if the proposed sublease itself (or cumulatively with other approved subleases) accounts for the sublease of greater than fifty (50%) percent of the area of the Leased Premises, then LESSOR shall have a period of fifteen (15) days from the date it receives such notice to exercise an election to take back the Leased Premises being offered for sublease, in LESSOR’s sole discretion and without any obligation to so elect, whatsoever, notwithstanding the circumstances, and without prejudice to or waiver of any of LESSOR’s rights or LESSEE’s continuing obligations hereunder.  LESSEE shall provide LESSOR with all reasonably material information relative to LESSOR making an informed decision concerning said sublet, immediately upon LESSOR’s request.  If LESSOR elects to take back the Leased Premises so offered for sublease, it shall send written notice thereof to LESSEE within such fifteen (15) day period; and LESSEE shall be irrevocably bound to surrender and vacate the Leased Premises as if the Term of the Lease had expired on the date LESSEE had set to vacate as appears in the LESSEE’s initial notice to LESSOR; and provided LESSEE vacates and surrenders on said date, without being in default (of which LESSEE has been provided written notice) of any provision hereof as of said date, this Lease shall be null and void and without recourse to either party hereto with respect to the Leased Premises (but for terms and conditions contemplated herein to survive termination of this Lease).  LESSEE shall not be entitled to any payments, commissions, credits, offsets, or any kind or nature arising from said sublet, nor shall any individual or entity acting by, through, or under LESSEE be so entitled.  Once an election is made by LESSOR, LESSEE shall be subject to the penalties for holding over set forth in this Lease, if it fails to vacate and surrender the leased Premises by the date LESSEE had set to vacate as appears said notice, or if it fails to discharge (or cause its lenders or others with which LESSEE has dealt to discharge) any and all recorded liens or other encumbrances, notices, or restrictions on its leasehold or contractual interest in and to the affected portion of the Premises as of said date.  Nothing in this paragraph shall require LESSOR to make an election to take back the Leased Premises and nothing in the aforesaid process shall relieve LESSEE of its liability under this Lease should LESSOR elect not to take back the Leased Premises.

 

13.                               Subordination.

 

This Lease shall be subject and subordinate to any and all mortgages and related documents placed on the Building, Leased Premises or the real property in existence as of the date hereof or coming into existence at any time hereafter, without necessity for any confirming documentation.  LESSOR shall use commercially reasonable efforts (which shall not be deemed to include the payment or expenditure of any sums whatsoever) to obtain a Subordination, Non-Disturbance and Attornment Agreement from its present and future mortgagees, in form and substance as typically issued by each such mortgage lender(s); but LESSOR shall not be liable to LESSEE in any manner (nor shall any of LESSEE’s full and timely performance under this Lease be conditioned, waived, excused or altered in any manner whatsoever) if no SNDA is forthcoming, or if any of the terms and conditions of the same are not deemed acceptable.

 

14.                               LESSOR’s Access to Leased Premises.

 

LESSOR or agents of LESSOR may at reasonable times and upon reasonable notice (except in case of emergency) enter to view the Leased Premises and may remove any signs not

 

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approved and affixed as herein provided, and may make repairs and alterations as LESSOR is permitted to perform under this Lease and repairs which LESSEE is required but has failed to do (but only after notice and an opportunity to repair being provided to LESSEE), and may show the Leased Premises to prospective mortgagees and appraisers, and during the last nine (9) months of the Term to brokers, and others and to prospective tenants.  Additionally, to the extent necessary to service other portions of the Premises or the common areas or other tenant spaces in the building; LESSOR may add, relocate, or maintain a chase, pipes, conduits, or ducts, within the Premises provided the aforesaid do not materially interfere with LESSEE’s use of the Premises or its aesthetics.  If any such addition or relocation reduces the space available for use by LESSEE, the amount of Annual Base Rent and LESSEE’s Allocable Percentage for Operating Expenses and Taxes shall be reduced accordingly.  Any entry by LESSOR onto the Premises for this purpose shall be done in such manner as to minimally interfere with the business conducted thereon by LESSEE, and undertaken with reasonable steps to protect LESSEE’s property.  Notwithstanding anything contained herein to the contrary, except in cases of emergency, LESSOR or any of its agents or employees shall not enter the laboratory portion of the premises unless accompanied by an authorized representative of LESSEE (except LESSOR may enter at reasonable times during the last nine (9) months of the tenancy to show the Leased Premises to prospective tenants, and may enter at reasonable times throughout the Term of this Lease to show the premises to prospective lenders or purchasers; and in each case LESSEE shall reasonably accommodate such requests).  LESSEE shall comply with all security and safety measures enacted by LESSEE in connection with the laboratory space.

 

15.                               Snow Removal.

 

LESSOR will be responsible for the removal or other treatment of snow and ice on walkways, sidewalks, entryways and parking areas.  Notwithstanding the foregoing however, LESSEE shall hold LESSOR harmless from and against claims by LESSEE’s agents, representatives, employees or business invitees for damage or personal injury resulting in any way from snow or ice on any area serving the Building, provided LESSOR has performed this obligation absent LESSOR’s negligence or willful misconduct.

 

16.                               Access and Parking.

 

LESSEE shall be granted the right, at current market rates (which may be increased from time to time to reflect market increases), to park up to twelve (12) motor vehicles in the Building’s on-site indoor parking lot or facility on an unassigned and unreserved basis, in single or tandem spaces, or on a valet basis, which LESSOR in its sole discretion shall designate from time to time.  LESSEE may, by providing thirty (30) days prior written notice (which must be effective as of the first calendar day of the next successive month after notice is given), increase or decrease the number of spaces it uses (up to the maximum of twelve (12) from time to time.  The initial parking rate therefor shall be $ 225 per month, per car, which monthly rate may be changed by LESSOR in its discretion subject to and reflective of periodic market changes in accordance with this paragraph.  All payments for these parking rights shall be considered to be Additional Rent under this Lease.  The Building garage, plus any stairs, walkways or other means of ingress or egress controlled by the LESSOR shall not in any case be considered extensions of the Leased Premises.  LESSEE will not obstruct in any manner any portion of the Building or the walkways or approaches to the Building, and will conform to all reasonable and

 

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nondiscriminatory rules now or hereafter made by LESSOR for parking, and for the access and egress, security, care, use, or alteration of the Building, its facilities and approaches in connection with such parking, provided the same do not decrease LESSEE’s parking rights hereunder.  LESSEE further agrees that LESSEE will use reasonable efforts to not permit any employee or visitor to violate this or any other covenant or obligation to LESSEE.  No vehicles shall be stored or left in any parking area for more than three nights without LESSOR’s written approval.  Unregistered or disabled vehicles, or storage trailers of any type, may not be parked overnight at any time.  LESSEE agrees to assume all expense and risk for the towing of any misparked vehicle belonging to LESSEE or LESSEE’s agents, employees, business invitees, or callers, at any time.  For the purpose of this section the term “space” shall mean general access for one motor vehicle.  All vehicles shall be parked and left on the premises at their owners’ sole risk and LESSOR shall not be liable for any damages caused to said vehicles while they are parked or left on the premises, unless caused by its negligence or willful misconduct.

 

17.                               Liability Insurance.

 

Except to the extent caused by or arising as a result of the negligence or willful misconduct of Lessor or its agents, contractors or employees, LESSEE shall be solely responsible as between LESSOR and LESSEE for deaths or personal injuries to all persons whomsoever occurring in or on the Leased Premises from whatever cause arising, and damage to property to whomsoever belonging arising out of the use, control, condition or occupation of the Leased Premises by LESSEE; and LESSEE agrees to indemnify and save harmless LESSOR from any and all liability, reasonable expenses, damage, causes of action, suits, claims or judgments caused by or in any way growing out of any matters aforesaid.  LESSOR shall be solely responsible as between LESSOR and LESSEE for deaths or personal injuries to all persons whomsoever occurring in or on the Leased Premises, Building, or the property on which the Building is located resulting or arising from any negligent act or omission by LESSOR, and damage to property to whomsoever belonging arising out of any negligent act or omission by LESSOR; and LESSOR agrees to indemnify and save harmless LESSEE from any and all liability, reasonable expenses, damage, causes of action, suits, claims or judgments caused by or in any way growing out of any matters aforesaid.  LESSEE will secure and carry at its own expense a commercial general liability policy insuring LESSEE, LESSOR (and its lenders and any other entity reasonably requested in writing by LESSOR) against any claims based on bodily injury (including death) arising out of the condition of the Leased Premises or their use by LESSEE, such policy to insure LESSEE, LESSOR and said other entities against any claim up to Two Million ($2,000,000.00) Dollars per occurrence for personal injury or damage to property.  LESSOR and its lenders shall be included in such policy as additional insureds.  LESSEE will promptly file with LESSOR certificates showing that such insurance is in force, and thereafter will file renewal certificates prior to the expiration of any such policies.  All such insurance certificates shall provide that such policies shall not be canceled without at least thirty (30) days prior written notice, except in the event of cancellation for non payment of premium, whereby ten (10) days’ prior notice will be provided to each insured named therein.

 

LESSOR shall maintain in full force from the date upon which LESSEE first enters the Premises for any reason, throughout the Term, a policy of insurance upon the Building insuring against all risks of physical loss or damage under an All Risk coverage endorsement in an amount at least equal to the full replacement value of the Building insured, with an Agreed

 

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Amount endorsement to satisfy co-insurance requirements, as well as insurance against breakdown of boilers and other machinery as customarily insured against.  LESSOR shall supply to LESSEE from time to time upon request of LESSEE certificates of all such insurance issued by or on behalf of the insurers named therein by a duly authorized agent.

 

LESSOR and LESSEE waive all rights of recovery against the other and its respective officers, partners, members, managers, agents, representatives, and employees for loss or damage to its real and personal property kept in the Building which is required to be insured by such party hereunder.  Each party shall notify the insurance carrier that the foregoing waiver is contained in this Lease and shall obtain an appropriate waiver of subrogation provision in the policies.

 

18.                               Fire, Casualty, Eminent Domain.

 

Should a substantial portion of the Leased Premises, or of the property of which they are a part, be substantially damaged by fire or other casualty, or be taken by eminent domain (in either case such that restoration of the Premises within six (6) months after such event is not practicable), LESSOR or LESSEE may elect to terminate this Lease by written notice.  When such fire, casualty, or taking renders the Leased Premises substantially unsuitable for their intended use and no termination has been elected, a just and proportionate abatement of rent shall be made, and LESSEE may elect to terminate this Lease if: (a) LESSOR fails to give written notice within ninety (90) days of intention to restore Leased Premises, or (b) LESSOR fails to restore the Leased Premises to a condition substantially suitable for their intended use within one hundred eighty (180) days of said fire, casualty or taking.  LESSOR reserves all rights for all damages or injury to the Leased Premises for any taking by eminent domain; except for damage to LESSEE’s moveable fixtures, property or equipment, or moving expenses, which are specifically allocated to LESSEE by the taking authority or arbitrators.

 

19.                               Brokerage.

 

LESSEE and LESSOR each warrants and represents to the other that they have dealt with no broker or third person with respect to this Lease or the Leased Premises or Building entitled to a commission as a result of this Lease, other than Transwestern RBJ as LESSEE’s representatives, whose fees shall be paid by LESSOR pursuant to a separate written agreement with LESSOR; and LESSOR and LESSEE each agree to indemnify and hold harmless the other from any fees, expenses, or damages arising from breach of the above warranty.

 

20.                               Signage.

 

LESSEE shall have the right to have its name included at LESSOR’s expense in any central directory maintained by LESSOR listing the Building’s other tenants.  LESSOR authorizes LESSEE, if desired, to display one sign on LESSEE’s office entrance door (at LESSEE’s expense) consistent with similar signs of other tenants, and one sign at a mutually determined and agreed location off the elevator on the fourth (4th) floor consistent with similar signs in the Building.

 

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21.                               Default.

 

In the event that: (a) LESSEE shall default in the payment of the Security Deposit Amount or any installment of Annual Base Rent or any Additional Rent, and such default shall continue for five (5) days after written notice thereof; or (b) LESSEE shall default in the observance or performance of any other of LESSEE’s covenants, agreements, or obligations hereunder and such default shall not be corrected within thirty (30) days after written notice thereof; provided, however, that if such failure cannot reasonably be cured within such 30-day period, then LESSEE shall not be in default if, and so long as, LESSEE commences such cure within such 30-day period and thereafter diligently pursues such cure to completion (provided there is no material interference with the operations of the Building or any tenant therein during such protracted cure period); (c) LESSEE shall be declared bankrupt or insolvent according to law, or if any voluntary or involuntary petition for bankruptcy is filed against LESSEE and not discharged within ninety (90) days from filing; or if any assignment shall be made of LESSEE’s property for the benefit of creditors; then, while such default continues, and without demand or further notice (other than as may be required by law), LESSOR shall have the right to reenter and take complete possession of the Leased Premises, to declare the term of this Lease ended, and to remove LESSEE’s effects, without being guilty of any manner of trespass and without prejudice to any remedies which might be otherwise used for arrears of rent and other default of breach of covenant.  LESSEE shall indemnify LESSOR against all loss of Rent and other payments, which LESSOR may incur by reason of such termination during the remainder of the term, it being expressly understood that LESSOR shall use reasonable efforts to relet the Leased Premises and collect all rents from such reletting.  If LESSEE shall default, after reasonable notice thereof, in the observance or performance of any conditions or covenants on LESSEE’s part to be observed or performed under or by virtue of any one of the provisions in any section of this Lease, LESSOR, without being under any obligation to do so and without thereby waiving such default, may after the expiration of any applicable cure period, remedy same for the account and at the expense of LESSEE, (including but not limited to application of any or all of the Security Deposit held by LESSOR).  If LESSOR pays or incurs any obligations for the payment of money in connection therewith, including but not limited to reasonable attorney’s fees in instituting, prosecuting or defending any action or proceeding, such sums paid or obligations incurred, with interest at the rate of eight (8%) percent per annum and costs, shall be paid to LESSOR by LESSEE as additional rent.  Upon default of this Lease by LESSEE (after the expiration of any applicable grace or cure period), and because the payment of Rent in Monthly installments is for the sole convenience of LESSEE, the entire balance of Rent which would accrue hereunder shall, at the option of the LESSOR, become immediately due and payable; subject however to LESSOR’s obligation to use reasonable efforts to mitigate its damages occasioned by said default.  LESSEE shall be responsible to pay reasonable attorneys fees incurred by LESSOR in any successful action by LESSOR for delinquent Rent or in the case of liquidated damages as aforesaid; and otherwise both LESSOR and LESSEE shall be entitled to such reasonable attorneys fees as a court of competent jurisdiction may award as part of its final judgment in the event of any dispute involving damages, injunctive relief or specific performance by either.

 

Notwithstanding any provision to the contrary contained herein, (i) in no event shall LESSEE be responsible for punitive or consequential damages incurred by LESSOR as a result of any act (or failure to act) by LESSEE, and (ii) in no event shall LESSOR be responsible for

 

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punitive or consequential damages incurred by LESSEE as a result of any act (or failure to act) by LESSOR.

 

22.                               Notices.

 

Any notice from LESSOR to LESSEE relating to the Leased Premises or to the occupancy thereof shall be deemed duly served if sent to the Leased Premises by either certified mail, return receipt requested, postage prepaid, or by recognized overnight commercial delivery service (e.g. FedEx), addressed to LESSEE at the Leased Premises.  Any notice from LESSEE to LESSOR relating to the Leased Premises or to the occupancy thereof shall be deemed duly served if delivered to LESSOR by certified mail, return receipt requested, postage prepaid, or by recognized overnight commercial delivery service (e.g. FedEx), addressed to: Rivertech Associates II, LLC (Attn: Dan Garvey, CFO) c/o The Abbey Group 575 Boylston Street, Boston, Massachusetts 02116, with a copy to Christopher C. Tsouros, Esq., Posternak Blankstein & Lund LLP Prudential Tower 800 Boylston Street Boston, Mass. 02199.  Notices shall be deemed given at the earlier of the date of actual delivery, or if by certified mail, three (3) business days after posting with the U.S. Postal Service.  Time is of the essence in delivery of any notice, and the performance of any obligations relating thereto.  Either party may designate a different address to which notice is to be sent by providing a notice of address change to the other in accordance with this Section 22.  Prior to the Delivery Date, LESSEE’s notice address shall be LESSEE’s address set forth at the beginning of this Lease.

 

23.                               Lessee’s Occupancy.

 

In the event that LESSEE remains in any part of the Leased Premises after the agreed termination date of this Lease without the written permission of LESSOR, then all other terms of this Lease shall continue to apply during such holdover, except that LESSEE shall be liable to LESSOR for any loss, damages or expenses incurred by LESSOR, and all Annual Base Rent shall be due in monthly installments at a rate if two hundred (200%) percent of that which would otherwise be due under this Lease, it being understood between the parties that such extended occupancy as a tenant at sufferance.

 

24.                               Rules and Regulations.

 

LESSEE and LESSEE’s servants, employees, agents, invitees and licensees shall observe faithfully and comply strictly with such reasonable and non-discriminatory rules and regulations governing the use of the Building and site and all common areas as LESSOR may from time to time, adopt, provided that a copy of such rules and regulations has been delivered to LESSEE.

 

25.                               Outside Area Limitations.

 

No goods or things of any type or description shall be held or stored outside the Leased Premises at any time without the express written approval of LESSOR, except bicycles which shall be stored only in the bicycle rack to be provided by LESSOR.

 

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26.                               Environmental Compliance.

 

LESSEE will so conduct and operate the Leased Premises as not to interfere in any way with the use and enjoyment of other portions of the same or neighboring buildings by others, by reason of offensive odors, smells, noise, accumulation of garbage or trash, vermin or other pests or otherwise and will, at its expense, employ a professional pest control service if necessary as a result of LESSEE’s operations.  LESSEE agrees to maintain efficient and effective device for preventing damage to heating equipment from harmful solvents, degreasers, cutting oils, and the like, which may be used within the premises.  Except in accordance with applicable laws and except as otherwise provided herein, no hazardous wastes, radioactive materials or chemical or harmful biological agents or materials of any sort shall be stored or allowed to remain within the Leased Premises at any time, without LESSOR’s prior notice and consent, which consent shall not be unreasonably withheld or delayed.

 

Prior to vacating the Leased Premises at the end of the Term (or any applicable extension), or sooner in the event of a default hereunder, LESSEE at its sole cost and expense shall provide LESSOR and Owner with an environmental audit by qualified environmental engineering firm reasonably satisfactory to LESSOR (the “Exit Study”), showing the then existing environmental condition of the Leased Premises to be free from any harmful hazardous materials or contaminants, for which LESSEE is responsible (predicated upon LESSOR’s and LESSEE’s receipt of an acceptable exit study from Bluebird Bio, Inc. with the date of Bluebird Bio Inc.’s report marking the start of LESSEE’s responsibilities.

 

27.                               Responsibility.

 

Neither LESSOR nor LESSEE shall be held liable to anyone for loss or damage caused in any way by the use, leakage or escape of water or, except as otherwise provided herein, for cessation of any service rendered customarily to said Leased Premises or buildings or agreed to by the terms of this Lease, due to labor difficulties, weather conditions, or mechanical breakdowns, to trouble or scarcity in obtaining fuel, electricity, service or supplies from the sources from which they are usually obtained for said Building, or to any cause beyond such party’s reasonable control.

 

28.                               Surrender.

 

Subject to and without limiting Section 11 above, LESSEE shall at the expiration or other termination of this Lease remove all of LESSEE’s goods and effects from the Leased Premises.  Subject to and without limiting Section 11 above, LESSEE shall deliver to LESSOR the Leased Premises and all keys, locks, thereto, and other fixtures and equipment connected therewith, and all alterations, additions and improvements made to or upon the Leased Premises, including but not limited to any offices, partitions, cold room, plumbing and plumbing fixtures, air conditioning equipment and ductwork of any type, exhaust fans or heaters, burglar alarms, telephone wiring, wooden or metal shelving which has been bolted, welded or otherwise attached to any concrete or steel member of the Building, compressors, air or gas distribution piping, cabinetry, overhead cranes, hoists, trolleys or conveyors, counters or signs attached to walls or floors, and all electrical work, including but not limited to lighting fixtures of any type, wiring, conduit, EMT, distribution panels, bus ducts, raceways, outlets and disconnects, and excluding

 

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the compressors, and any built-in component work stations that LESSEE may install during the term, but excluding any Alterations designated under Section 11 at the time of their approval to be removed by LESSEE and further excluding any hard-wired or hard-plumbed equipment purchased, paid for and installed by LESSEE, such as chemical fume hoods, as long as LESSEE restores the Leased Premises to the condition that it was in prior to the installation of such equipment.  LESSEE shall deliver the Leased Premises reasonable wear and tear and damage by fire or other casualty only excepted.  In the event of LESSEE’s failure to remove any of LESSEE’s property from the premises, LESSOR is hereby authorized, without liability to LESSEE for loss or damage thereto and at the sole risk of LESSEE to remove and store any such property at LESSEE’s expense, or to retain same under LESSOR’s control or to sell at public or private sale, without notice, any or all of the property not so removed and to apply the net proceeds of such sale to the payment of any sum due hereunder, or to destroy such property which shall be conclusively deemed to have been abandoned.

 

29.          Quiet Enjoyment.

 

So long as this Lease is in full force and effect, LESSEE shall quietly enjoy the Leased Premises without hindrance or molestation by LESSOR or any party claiming by, through or under LESSOR or any party claiming a superior interest to the LESSOR.

 

30.          Miscellaneous Provisions.

 

The invalidity or unenforceability of any provision of this Lease shall not affect or render invalid or unenforceable any other provision hereof.  The obligations of this Lease shall run with the land, and this Lease shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that LESSOR shall be liable only for obligations occurring while LESSOR is landlord hereunder.  The obligations of LESSOR and LESSEE hereunder shall not be binding upon any director, officer, shareholder, partner, Trustee or beneficiary of such party.  Notwithstanding the definition herein of “Commencement Date”, “Termination Date”, or “Term”, or LESSOR’s obligations to deliver the Premises, this Lease shall be binding and enforceable as against the parties hereto as of the date of its execution.

 

31.          Waivers and Legal Limitations.

 

No consent or waiver, express or implied, by LESSOR or LESSEE, to or of any other breach of the other party of any covenant, condition or duty of that party shall be construed as a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.  If LESSEE is several persons or a partnership, LESSEE’s obligations are joint or partnership and also several.  “LESSOR” and “LESSEE” mean the person or persons, natural or corporate, named above as LESSOR and as LESSEE respectively, and their respective heirs, executors, administrators, successors and assigns.  In any case where either party is required to do any act other than the payment of Rent, delays caused by or resulting from acts of god, war, civil commotion, acts of terrorism, fire, flood or other casualty, labor strikes or picketing, shortages of labor, materials or equipment, unusual or onerous government regulations, unusually severe weather or other causes beyond such party’s reasonable control shall not be counted in determining the time during which such act shall be completed, whether such time be designated

 

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as a fixed date, a fixed time, or a “reasonable time” and such time shall be deemed to be extended by the period of such delay.

 

32.          LESSEE’s Acceptance of the Lease Premises, LESSEE’s Initial Improvements, and LESSOR’s Payment of a Tenant Allowance for LESSEE’s Initial Improvements

 

LESSEE is accepting the Leased Premises as of the date hereof under the Bluebird / Dimensions Sublease, and consequently LESSEE accepts the Leased Premises in its “AS/IS” condition in all respects and without representations or warranties of any kind or nature both now and as of the Commencement Date; except (i) LESSOR represents the Leased Premises currently, as of the execution of this Lease, conforms to LESSOR’s standard Building specifications and complies with applicable laws, codes and ordinances, including without limitation the Americans with Disabilities Act; (ii) all systems serving the Premises, including all shared equipment and systems, to the best of LESSOR’s knowledge are in good working condition as of the execution of this Lease and (iii) there shall be code compliant demising walls and common area corridors appurtenant to the Leased Premises (which are to be completed under the terms of the Bluebird / Kew Sublease), for which Bluebird shall be solely responsible to LESSEE.

 

Prior to taking occupancy of the Bluebird Dimensions Sublease Space, LESSEE shall deliver to LESSOR, Bluebird’s environmental exit report (as is required under the Bluebird Lease) showing that the Bluebird Dimensions Sublease Space is not in violation of any environmental laws or regulations and is free of any hazardous contaminants.

 

LESSEE shall have the right, at any time and from time to time during the period of the Bluebird Dimensions Sublease and up to the Commencement Date hereunder, to commence the design, construction and installation of certain initial improvements to the Leased Premises (“LESSEE’s Initial Improvements”), pursuant to the provisions and procedures governing LESSEE’s Improvements as set forth in Section 11 of this Lease.

 

Should LESSEE elect to perform any LESSEE’s Initial Improvements, it will notify LESSOR and follow the procedures for approval under Section 11 of this Lease.  Additionally, as to any such LESSEE’s Initial Improvements, LESSEE shall be entitled to an allowance of up to Twenty Four Thousand Three Hundred Thirty ($24,330.00) Dollars (the “Tenant Improvement Allowance”), provided LESSEE submits a budget for LESSEE’s Initial Improvements in reasonable detail and acceptable to the LESSOR as of the LESSOR’s approval of LESSEE’s plans under Section 11 hereof (“LESSEE’s Budget”).

 

When LESSEE has incurred actual third party costs for the LESSEE’s Initial Improvements (inclusive of reasonable third party design, architectural, engineering and construction costs), LESSEE shall submit to LESSOR from time to time (but not more frequently than monthly, and not later than six (6) months after the Commencement Date, referred to herein as the “TI Requisition Period”) copies of all third party requisitions for payment received by LESSEE for which LESSEE seeks reimbursement (in each instance, the “Requisitioned Work”), together with a partial lien waiver executed by LESSEE’s general contractor (as applicable).  LESSOR, within thirty (30) days following its receipt thereof, absent dispute, shall pay to LESSEE, from the Tenant Improvement Allowance an amount (the “Tenant

 

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Allowance Payment”) attributable to the ratio that the Requisitioned Work bears to the total LESSEE’s Budget.  For example, if the amount of the Requisitioned Work is twenty (20%) percent of the LESSEE’s Budget, then the Tenant Allowance Payment on the Requisitioned Work shall represent twenty (20%) percent of the Tenant Improvement Allowance.  This process shall repeat as LESSEE submits for Requisitioned Work up to the total amount of the Tenant Improvement Allowance, but LESSOR shall incur no liability to LESSEE (or any other party) for any sums above the Tenant Improvement Allowance (as defined above).  If any lien is filed arising out of or in connection with LESSEE’s Initial Improvements and such lien or encumbrance is not discharged, insured or bonded over or otherwise disposed of to LESSOR’s reasonable satisfaction within ten (10) days after LESSEE shall have actual knowledge of the filing or establishment thereof, then LESSOR shall have no further obligation to disburse any funds from the Tenant Improvement Allowance to LESSEE unless and until the same is so discharged or otherwise disposed, in addition to and not in lieu of LESSORS rights and remedies and LESSEE’s obligations on account thereof.  LESSEE shall not be entitled to any unused portion of the Tenant Improvement Allowance that is not properly requisitioned or obligated to be paid as contemplated above.

 

33.          Estoppel Certificates.

 

Upon not less than fifteen days prior written request by either party, the other party shall execute, acknowledge and deliver to the requesting party a statement in writing certifying that this Lease is unmodified and in full force and effect and that LESSEE has at the time of such statement no defenses, offsets or counterclaims against its obligations to pay Annual Base Rent and Additional Rent and any other charges (in the case of any such certificate to be delivered by LESSEE) and to perform its other covenants under this Lease (or, if there have been any modifications that the same is in full force and effect as modified and stating the modifications and, if there are any defenses, offsets or counterclaims, setting them forth in reasonable detail), and the dates to which the Annual Base Rent and Additional Rent and other charges have been paid.  Any such statement delivered pursuant to this Section may be relied upon by any prospective purchase or mortgagee of the Premises, or any prospective assignee of any such mortgagee or, as applicable the LESSOR or LESSEE.

 

34.          Governing Law.

 

This Lease constitutes the full and complete agreement between the parties shall be construed under and according to the laws of the Commonwealth of Massachusetts.  Any provision of this Lease which is deemed void or unenforceable shall not invalidate or render void or unenforceable the entire Lease.

 

35.          LESSEE’s Extension Option.

 

LESSEE, provided there is then no outstanding default under this Lease beyond applicable notice and cure periods (nor have there been any such defaults (even if cured) more than two (2) times within any twelve (12) month period), shall have the option to extend the Term of this Lease as to the Leased Premises, on the terms and conditions herein, for one (1) additional period of twenty four (24) months (herein, the “Extended Term”) at the then current “Market Rent” (including annual escalations thereon for each year of the extended term based on

 

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increases in the Consumer Price Index or fixed increases, as the case may be, as determined by then prevailing market forces), but no less than an amount equal to the Annual Base Rent per rentable square foot of Leased Premises space as of the end of the second Lease Year under this direct Lease (the “Extension Rent Floor”).  Said Extended Term shall commence, subject to proper exercise of LESSEE’s option hereunder, on the Termination Date of the original Term (i.e. twenty four (24) full months from the Commencement Date), and shall terminate on that date which is twenty four (24) consecutive months after the original Termination Date.  LESSEE shall exercise its option by delivering to LESSOR its written notice not later than nine (9) full months prior to the original Termination Date, time being of the essence (the “Extension Notice”).  Once delivered, written notice to extend is irrevocable.

 

“Market Rent” as used herein shall be that rent charged for comparable first class research laboratory and office space in the mid-Cambridge submarket as of the end of the original Term.  If, after good faith attempts prior to the expiration of the original Term, the LESSOR and LESSEE cannot agree on a figure representing Market Rent within thirty (30) days after LESSEE has delivered the Extension Notice, either party, upon written notice to the other, may request appraisal and arbitration of the issue as provided in this section.  Within fourteen (14) days of the request for arbitration, each party shall submit to the other the name of one unrelated individual or entity with proven expertise in the leasing of commercial real estate in greater Boston/Cambridge to serve as that party’s appraiser.  Each appraiser shall be paid by the party selecting him or it.  The two appraisers shall each submit their final reports to the parties within thirty (30) days of their selection making their determination as to Market Rent (subject however, to the Extension Rent Floor).  The two appraisers shall meet within the next fourteen (14) days to reconcile their reports and collaboratively determine the Market Rent.  They shall each make their determination in writing (subject however, to the Extension Rent Floor), including a statement if such is the case, that they are at an impasse.  Such a statement of impasse shall be submitted to the parties along with the Market Rent figure which each appraiser has selected and his reasons and substantiation therefor.  The appraisers, in case of an impasse, shall also agree on one unrelated individual or entity with expertise in commercial real estate in greater Boston, who shall evaluate the reports of the two original appraisers and within fourteen (14) days of submission of the issue to him, make his own determination as to a figure representing Market Rent (subject however, to the Extension Rent Floor).  The determination of this individual or entity (i.e. arbitrator) absent, fraud, bias or undue prejudice shall be binding upon the parties.

 

Annual Base Rent and Additional Rent during any Extended Term shall be payable in advance, in equal monthly installments on the first day of each calendar month.

 

LESSEE in addition to the sums payable annually to LESSOR as Annual Base Rent, shall pay to LESSOR for each year of any Extended Term, as Additional Rent, LESSEE’s Allocable Percentage (as determined by the approximate total rentable space leased) for Operating Expenses, Real Estate Taxes and Utilities as contemplated in Sections 3, 4 and 7 hereof.

 

36.          Right of First Offer as to Contiguous Fourth Floor Space.

 

LESSEE, provided it is not then in default after notice and the expiration of any applicable cure period (and provided there have not been any such defaults (even if cured) more

 

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than two (2) times within any twelve (12) month period), is hereby entitled to receive advance written notice from LESSOR during the Term of this Lease (as it may be extended) that certain contiguous space on the fourth (4th) floor of the Building (the “Expansion Space”) will be offered to third parties for leasing (the “ROFO Notice”), which ROFO Notice shall set forth the “Expansion Space Market Rent” and other economic terms at which such space will be so offered.

 

LESSEE shall be entitled to receive a ROFO Notice and to exercise its ROFO Rights as set forth below, which exercise by LESSEE shall be pre-empted and superseded only by: (x) the exercise of any existing ROFO or expansion rights as to the Expansion Space (including rights to renew or extend its lease) that have been given to other tenants in the Building; or (y) LESSOR’s right (hereby reserved to LESSOR) to lease said Expansion Space to any third parties in conjunction with the leasing of any other space in the Building.

 

LESSEE shall have the right, within thirty (30) days from the delivery of LESSOR’s ROFO Notice, to elect to lease the Expansion Space, at the Expansion Space Market Rent and other economic terms specified in LESSOR’s notice, and otherwise on the terms of this Lease for a lease term coterminous with the Term governing the Leased Premises (but not less than thirty six (36) months) , or to negotiate with LESSOR and to execute a binding letter of intent to lease said space at a Rent and on other terms and conditions mutually agreeable to LESSOR and LESSEE (the LESSEE’s “ROFO Rights”).  If LESSEE shall not elect to lease such space or if no binding letter of intent with alternate Rent and terms is executed by LESSOR and LESSEE during that thirty (30) day period, for whatever reason, then LESSOR shall be free to market and lease the space offered by the ROFO Notice to any third party, in its sole discretion and without any continuing obligation to LESSEE under this Section 36 except as set forth below.

 

If LESSEE shall fail to elect to lease the Expansion Space offered by the ROFO Notice as aforesaid, then notwithstanding anything to the contrary contained in the preceding paragraph LESSOR may thereafter lease such space to any third party at a rent of not less than 90% of the Expansion Space Market Rent proposed to LESSEE in the applicable ROFO Notice; but if the proposed lease to any third party is less than 90% of the Expansion Space Market Rent proposed in the applicable ROFO Notice, or if LESSOR does not enter into a third party lease within three hundred sixty (360) days from the delivery of the ROFO Notice, then LESSOR shall be required to re-offer the space to LESSEE pursuant to this section.

 

Time is of the essence in the exercise of LESSEE’s ROFO Rights as set forth above.

 

[Execution Pages Follow]

 

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IN WITNESS WHEREOF, LESSOR AND LESSEE have hereunto set their hands and seals and intend to be legally bound hereby as of the date first set forth above.

 

	
 
    	
LESSOR
    
	
 
    	
 
    
	
 
    	
RIVERTECH ASSOCIATES II, LLC
    
	
 
    	
By   Rivertech Associates II, Inc.,
    
	
 
    	
its   duly authorized Manager
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert Epstein, President
    
	
 
    	
 
    	
Robert   Epstein, President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LESSEE
    
	
 
    	
 
    
	
 
    	
DIMENSIONTHERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Beck
    
	
 
    	
 
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Treasurer
    

 

 

RIVERSIDE TECHNOLOGY CENTER

 

FIRST LEASE AMENDMENT

 

TO THE LEASE BETWEEN

 

RIVERTECH ASSOCIATES II LLC AND DIMENSION THERAPEUTICS, INC.

 

This First Lease Amendment entered into this 22nd day of October, 2014 (the “First Amendment”) by and between Rivertech Associates II LLC, a Massachusetts limited liability company with a principal address c/o The Abbey Group, 575 Boylston Street Boston, Massachusetts 02116, (the “Lessor”); and Dimension Therapeutics, Inc., with a business address at 840 Memorial Drive Cambridge, Massachusetts (the “Lessee”); relative to a certain Lease between Lessor and Lessee dated March 11, 2014,referred to herein as the “Existing Lease”), for certain research and development, laboratory and office space in the building at 840 Memorial Drive Cambridge, Massachusetts as identified in the Existing Lease (the “Leased Premises”). The Existing Lease, as modified by this First Amendment, hereafter shall be referred to herein as the “Lease” (as the context so permits).

 

WHEREAS, the Lessee desires to add certain additional space to the current Leased Premises which presently consists of approximately 8,110 rentable square feet consisting of approximately 8,060 rentable square feet located on the fourth (4th) floor of the Building, and approximately 50 rentable square feet located on the third (3rd) floor of the Building (herein, the “Existing Space”);

 

WHEREAS, the additional space to be added to the current Leased Premises is approximately 6,839 rentable square feet consisting of approximately 6,814 rentable square feet located on the second (2nd) floor of the Building as shown on Exhibit A attached hereto, and approximately 25 rentable square feet in a space suitable for an acid neutralization room to be exclusively used by Lessee in an area to be mutually agreed upon between the parties, on a lower floor in the Building (herein, the “Expansion Space”); and

 

WHEREAS, the Lessee desires to extend the current term of the Existing Lease, which is to expire on March 31, 2017, such that there is a single coterminous end of Term covering both the Existing Space and the Expansion Space under Lease as modified by this First Amendment.

 

THEREFORE, in consideration of One ($1.00) Dollar and the other good and valuable consideration recited herein, effective and irrevocable as of the date hereof, the Lessor and Lessee hereby agree as follows:

 

1.                                      Modification to Existing Lease / Extension of Lease Term

 

Lessee agrees to extend its lease and occupancy of the Leased Premises, commencing as of the end of the Term as stated under the Existing Lease, i.e. from April 1, 2017 (herein, the “First Extension Commencement Date”), which extended term as to the Leased Premises will expire thirty six full calendar (36) months from the Expansion Space Commencement Date as

 

 

determined in Section 3 below (the “First Extension Termination Date”). The period from the First Extension Commencement Date through the First Extension Termination Date is referred to as the “First Extended Term”.

 

Further, Lessee agrees to lease the Expansion Space (in addition to the Leased Premises), commencing on the Expansion Space Commencement Date (as defined herein below) through and to the First Extension Termination Date. As of the Expansion Space Commencement Date, the Expansion Space shall be considered to be included in the term “Lease Premises” as used in the Lease.

 

Notwithstanding the Expansion Space Commencement Date, this First Amendment is to be considered a valid and binding obligation of the parties effective as of the date of execution of this First Amendment by the parties, with the Existing Lease to continue to govern the Lessee’s use and occupancy of the Leased Premises hereunder up to the Expansion Space Commencement Date hereunder.

 

2.                                      Expansion Space Added to the Leased Premises

 

Lessor shall deliver the Expansion Space for lease by Lessee (to be added to the space currently leased by Lessee under the Existing Lease and, once so delivered, as of the Expansion Space Commencement Date, in the aggregate to constitute the Leased Premises), upon Substantial Completion of Lessor’s Work as defined herein below (which date of delivery shall be the “Expansion Space Commencement Date”); said space to be vacant and free of all personal property (consistent with Exhibits A, B and C hereto) and debris; with Lessor’s Work having been performed in a good and workmanlike manner with all necessary municipal approvals and Cambridge building department “sign-offs” consistent with Lessor’s certificate of occupancy; broom clean; and otherwise “AS/IS” in its current condition in all other respects. “Substantial Completion” shall mean that Landlord’s Work has been completed (other than punchlist items) such that Lessee may conduct its business in the Expansion Space.

 

The target date for Lessor’s delivery of the Expansion Space shall be approximately one hundred five (105) days from the full execution and delivery of this First Amendment; the actual date of delivery being referred to herein as the “Expansion Space Commencement Date”. Lessor shall not be liable for any delay in delivery beyond the target date for the Expansion Space Delivery Date, provided Lessor undertakes reasonable and diligent efforts to meet that target date. Notwithstanding the foregoing, in the event that Expansion Space Commencement Date shall not have occurred by that date which is one hundred thirty five (135) days from the date this Lease is fully executed and delivered by the parties (the “Expansion Space Commencement Date Deadline”) the Lessee shall be entitled to a waiver of Annual Base Rent and Additional Rent, on a day for day basis for each day of delay in the actual delivery of the Expansion Space beyond the Expansion Space Commencement Date Deadline, said waiver being Lessee’s sole and exclusive remedy for any such delays in actual delivery. The foregoing waiver shall not apply to any delays caused by any Force Majeure occurrences. As used in Section 3 below, the term “Interim Period” shall mean that period of time from the Expansion Space Commencement Date up to the end of the calendar month in which such Expansion Space Commencement Date occurs.

 

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All Lessee’s Rent payments and other Lease obligations relating to the Expansion Space shall commence as of the Expansion Space Commencement Date; however all Lessee’s Rent payments and other Lease obligations as to the Existing Space shall continue to run as per the Existing Lease. All terms and conditions of the Lease shall govern the Lessee’s use and occupancy of the Expansion Space commencing as of the Expansion Space Commencement Date.

 

Lessor’s delivery of the Expansion Space shall be evidenced by a written notice of delivery (“Lessor’s Delivery Notice”) given to Lessee on the actual date the Expansion Space is provided to Lessee. Lessee shall have five (5) business days to contest delivery if it does not conform with the foregoing paragraph by delivering its notice thereof in writing to Lessor; however, any listed items of a “punchlist” nature shall be agreed to by Lessor and Lessee and shall not be grounds to contest delivery, but nevertheless shall obligate Lessor to complete such punchlist items at the earliest practicable time under the circumstances, but completion shall not extend beyond thirty (30) days (subject to the availability of labor and materials).

 

The following conditions to the delivery of the Expansion Space to the Lessee by the Lessor shall be met by the Lessor, at its sole cost and expense, prior to the Expansion Space Commencement Date. The Lessor shall perform, at its sole cost and expense, such design and construction work as is necessary to deliver the Expansion Space to the Lessee in accord with: (i) the plan entitled “Revised Final Scope of Work — October 17, 2014” attached hereto as Exhibit A; (ii) the document entitled “Scope of Landlord’s Work” dated October 20, 2014 attached hereto as Exhibit B; and (iii) the document entitled “Additional Costs” attached hereto as Exhibit C(collectively, the “Lessor’s Work”), with demising walls and common area corridors to be compliant with state and municipal building codes; it being the intention of the parties that the Expansion Space be delivered in a “turnkey’ condition as per the parameters for Lessor’s Work. All utilities for the Expansion Space shall be in place and separately metered. The base building systems serving the Expansion Space shall be delivered in good operating condition and repair and suitable for office and laboratory use. The Building and the Expansion Space as delivered to the Lessee will be compliant with the Americans with Disabilities Act. Subject to the foregoing, Lessor shall not be responsible for any other design or construction work with respect to either the Leased Premises under the current Existing Lease, or the Expansion Space.

 

The work, equipment, fixtures and installations appearing on Exhibit C (the “Exhibit C Work”) is included in Lessor’s Work, and Lessee shall reimburse Lessor the sum of Twenty Thousand ($ 20,000) Dollars toward the costs of said Exhibit C Work. Said reimbursement for Exhibit C Work shall be paid to Lessor upon execution of this First Lease Amendment.

 

If and to the extent Lessee desires that Lessor perform any additional demolition, construction or installation beyond Lessor’s Work, then it shall so inform Lessor in sufficient time and with sufficient detail to enable Lessor to evaluate the impact of the same on its Lessor’s Work. Lessor shall be under no obligation to perform any such additional work beyond Lessor’s Work, unless paid for by Lessee and provided performance thereof will not cause extension of the Expansion Space Commencement Date. Further, if the performance of any such additional work by the Lessor as contemplated above causes the Lessor to deliver the Expansion Space later than the

 

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Expansion Space Commencement Date Deadline, there shall be no abatement of Annual Base Rent and Additional Rent as contemplated above, provided the Expansion Space is thereafter delivered in a reasonable time given the nature and scope of the additional work.

 

The Lessee shall be solely responsible, at its sole cost and expense, to perform such other specific design and construction work on the Expansion Space as it desires for its use and occupancy (“Lessee’s Work”). Lessee shall be provided with access to the Expansion Space commencing upon execution of this First Amendment, coordinated through the Lessor, for the purpose of performing Lessee’s Work and any preliminary work toward the installation of its equipment and wiring, provided such access, Lessee’s Work and preliminary work does not materially interfere with Lessor’s ability to perform and complete its Lessor’s Work, which shall take precedence in all respects. Lessee’s Work and all subsequent Lessee alterations to the Leased Premises that are performed by Lessee on or affecting the fire, life safety and/or sprinkler systems of the building shall be made in such a manner and under such conditions as to pose no adverse impact or interruption to such fire, life safety, and sprinkler systems, and so as not to delay, impair, or jeopardize the legal occupancy of other Lessees in the Building as determined by Lessor and municipal fire and building inspection officials.

 

3.                                      Annual Base Rent and Additional Rent 

  Base Rent during the Term shall be as set forth below:

 

A.                                    Existing Space - Annual Base Rent

 

As applied to the Existing Space, i.e. the current 8,110 rentable square feet) Annual Base Rent shall be as follows:

 

(i)                                     for the balance of the Term prior to the First Extension Commencement Date, Annual Base Rent shall remain unchanged and shall be $ 369,005.00 per annum payable in monthly installments of $ 30,750.42, from April 1, 2015 to March 31, 2016; and $ 381,170.00 per annum payable in monthly installments of $ 31,764.17, from April 1, 2016 to March 31, 2017 as stated in the Existing Lease; and,

 

(ii)                                  for the portion of the Term commencing on April 1, 2017, Annual Base Rent shall be $ 393,335.00 per annum, payable in monthly installments of $ 32,777.92 each calendar month up to the First Extension Termination Date.

 

B.                                    Expansion Space — Annual Base Rent

 

As applied to the Expansion Space i.e. the additional 6,839 rentable square feet) Annual Base Rent shall be as follows:

 

(i)                                     For the first twelve (12) full calendar month period from the Expansion Space Commencement Date (including pro rata for any partial month in the Interim

 

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Period), Annual Base Rent shall be $ 324,852.50 per annum, payable in monthly installments of $ 27,071.04 each calendar month; and,

 

(ii)                                  For the second twelve (12) full calendar month period, Annual Base Rent shall be $ 335,111.00 per annum, payable in monthly installments of $ 27,925.92; and,

 

(iii)                               For the third twelve (12) full calendar month period, Annual Base Rent shall be $ 345,369.50 per annum, payable in monthly installments of $ 28,780.79.

 

In all instances under A and B above, Annual Base Rent shall be payable in the corresponding monthly installments set forth above, due on the first of each month, in advance, and in all other respects shall be subject to the same provisions relating to Annual Base Rent as set forth under the Existing Lease.

 

C.                               Additional Rent

 

In addition to Annual Base Rent, Lessee shall continue to be responsible to pay all Additional Rent (Operating Expenses) under Section 3 of the Existing Lease, and all Additional Rent (Taxes) under Section 4 thereof, as applicable to both the Existing Space and, commencing on the Expansion Space Commencement Date, the Expansion Space, up to the First Extension Termination Date as invoiced by Lessor.

 

As the concept is used in the Lease to compute Additional Rent, Lessee’s allocable pro rata share (“Allocable Percentage”) shall be as follows:

 

(a)                                 Allocable Percentage for the Existing Space shall remain at 6.26%.

 

(b)                                 Allocable Percentage for the Expansion Space, starting on the Expansion Space Commencement Date shall be 5.28%.

 

To the extent that the Expansion Space Commencement Date does not fall on the first calendar day of a month, then the first month in which the Expansion Space Commencement Date occurs will have Additional Rent attributable to the Expansion Space prorated on a per diem basis for that Interim Period.

 

D.                               Rent and other Costs and Expenses

 

All Annual Base Rent, Additional Rent and other sums due as Rent shall be payable and in all other respects shall be governed during the remainder of the Term under the Existing Lease and the First Extended Term as contemplated under the Existing Lease, except to the extent modified above. All other costs and expenses for utilities and services and attendant to operation of the Leased Premises, as applicable to both the current Leased Premises and the Expansion Space, shall continue to be borne by the respective parties during the First Extended Term as set forth in the Existing Lease.

 

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E.                                    Security Deposit

 

The Security Deposit, from the date of this First Amendment, shall consist of the following amounts: (a) The Security Deposit currently held by the Lessor in the amount of Sixty One Thousand Five Hundred and 67/100 ($ 61,500.67) Dollars; (b) with an additional payment installment due by Lessee on April 1, 2015 of Thirty Thousand Seven Hundred Fifty and 33/100 ($ 30,750.33) Dollars, as (a) and (b) are stated in the Existing Lease; and (c) with an additional payment to Lessor upon execution of this First Amendment in the additional amount of Eighty One Thousand Two Hundred Thirteen ($ 81,213.00) Dollars ; all to be held as the Security Deposit under the Lease. The additional amounts due above may be deposited by Lessee by check or in the form of a letter of credit (for that additional amount or the total amount).

 

4.                                           Permitted Uses

 

The Permitted Uses in the Basic Data of the Existing Lease and all conditions attached thereto are hereby restated and affirmed and shall govern the use and occupancy of the entire Leased Premises from the Expansion Space Commencement Date through the First Extension Termination Date, as the same may be further extended in accordance with this First Amendment.

 

5.                                           Leased Premises in “AS/IS” Condition — No Defaults

 

Lessee hereby acknowledges it is currently in possession of the Existing Space and accordingly accepts the same for the First Extended Term in its current “AS/IS” condition, without representation or warranty of any kind or nature arising from the extension of the Lease by Lessor and Lessee.

 

Lessor and Lessee each acknowledge that to the best of each of their respective knowledge, there are no material defaults by either presently existing under the Lease.

 

6.                                           Brokers

 

The parties hereby agree there are no brokerage or other third party fees or costs involved in this transaction and each agrees to indemnify, defend and hold harmless the other from and against any claims for brokerage fees, commissions or other such payments arising from this transaction.

 

7.                                           Parking

 

LESSEE shall be granted, at current rates (which may be increased for all tenants of the Building from time to time to reflect market increases, except in the event of any separately bargained for parking provisions contained in any lease, in which case said increases need not be uniform), the right (but not the obligation) to park up to twenty two (22) cars in total in the Building’s on-site indoor parking lot or facility on an unassigned and unreserved basis, in single or tandem spaces

 

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or on a valet basis which LESSOR in its sole discretion shall designate from time to time. The initial parking rate therefor shall be $ 225 per month, per car, which monthly rate may be changed by LESSOR in its discretion subject to and reflective of periodic market changes. All payments for these parking rights shall be considered to be Additional Rent under this Lease. This provision supersedes any contrary provisions in Section 16 of the Existing Lease and the specific numeric rights set forth above supplant the numeric rights set forth in Section 16 of the Existing Lease as of the Expansion Space Commencement Date; Lessee retaining however all parking rights under said Section 16 from the date of execution of this First Lease Amendment up to the Expansion Space Commencement Date.

 

8.                                      Right of First Offer — Contiguous Second Floor Space

 

In addition to its ROFO Rights with respect to contiguous space on the fourth floor of the Building as set forth in Section 36 of the Lease (the “4th Floor ROFO Rights”), Lessee, provided it is not then in default after notice and the expiration of any applicable grace or cure periods, and further provided it shall not have defaulted beyond any applicable notice, grace and cure periods more than twice within any twelve (12) month period, is hereby entitled, fully subject and subordinate to any existing expansion rights held by other tenant’s in the Building, to receive advance written notice from LESSOR during the Term of this Lease (as it may be extended) that any contiguous space on the second (2nd) floor (only) of the Building (the “ROFO Space”) will be offered to third parties for leasing (the “ROFO Notice”). The Lessor’s ROFO Notice to Lessee shall set forth the Annual Base Rent and other economic terms at which such space will be so offered, which shall be at Market Rent (as defined below) and incorporating market concessions and market tenant improvement allowances) as determined by Lessor and stated in the ROFO Notice (subject to Lessee’s rights to appraisal and arbitration of Market Rent as set forth below).

 

Lessee shall have the right within thirty (30) days from the delivery of Lessor’s ROFO Notice (the “ROFO Acceptance Period”), to elect to lease the ROFO Space by providing Lessor with a written notice accepting the ROFO Space (the “ROFO Acceptance”) delivered prior to the expiration of said thirty (30) day period. If Lessee shall not elect to lease the ROFO Space, i.e. if no ROFO Acceptance notice electing to do so is delivered to Lessor during that thirty (30) day period, then Lessor shall be free to market and lease the space offered by the ROFO Notice to any third party, in its sole discretion and without any continuing obligation to Lessee under this Section 8; provided however that if Lessor does not enter into a lease with a thirty party within three hundred sixty (360) days from the delivery of the ROFO Notice (the “Reoffer Period”), or is not then engaged in any pending lease negotiations with a third party as of the expiration of said Reoffer Period, then Lessor shall be required to re-offer the space to Lessee pursuant to this Section 8. Once delivered to Lessor, Lessee’s election to accept the ROFO Space shall be irrevocable, notwithstanding the determination of Market Rent as contemplated below. Time is of the essence in the exercise of Lessee’s rights as set forth above.

 

If Lessee elects to exercise its rights to the ROFO Space (and/or for the 4th Floor ROFO Space), then the Term for such space will start as stated in the ROFO Notice, and shall be for a term coterminous with the Term (as it may have been extended) governing the Leased Premises but not less than three (3) years (including the Second Extension Term, if there is less than three

 

7

 

years left in the First Extended Term and Lessee agrees to exercise its option for the Second Extension Period, unless a longer term is requested by Lessee and agreed to by Lessor.

 

To the extent Lessee disagrees with the Lessor’s determination of Market Rent as set forth in the ROFO Notice, then within the ROFO Acceptance Period, Lessee may: (i) negotiate a Market Rent and other terms and conditions mutually agreeable to Lessor and Lessee, or failing to reach agreement with Lessor; (ii) elect to determine Market Rent by an appraisal and arbitration process as set forth in Section 9 of this First Amendment, communicated to the Lessor in the Lessee’s ROFO Acceptance (which, if not elected in said ROFO Acceptance, shall be deemed waived by Lessee). That process will be commenced by the selection of the contemplated appraiser by each party within fourteen (14) days of the delivery of the ROFO Acceptance notice, bypassing the requirement for good faith negotiations (which can occur but which are not required to occur). Additionally, the Extension Rent Floor concept shall not be applicable to the ROFO Space (except during the determinations of Annual Base Rent for the Second Extension Period), but instead Annual Base Rent for such ROFO Space during and up to the First Extension Termination Date shall not be less than Annual Base Rent per rentable square foot for the highest rent for other Leased Premises space under this Lease during such time.

 

9.                                      Lessee’s Option to Extend

 

Section 35 of the Lease is hereby deleted in its entirety and replaced with the following language:

 

Section 35. Lessee’s Option to Extend.

 

Lessee, provided it is not then in default after notice and the expiration of any applicable grace or cure periods, and further provided it shall not have defaulted beyond any applicable notice, grace and cure periods more than twice within any twelve (12) months period, shall have the option to further extend the Term of this Lease as to the Leased Premises (i.e. inclusive of the Expansion Space and any additional space taken on by Lessee under Section 36 and under Section 8 of this First Amendment, but only as to the entirety of said Leased Premises and additional space taken, which shall be deemed included in the definition of Leased Premises as and when taken) on the terms and conditions herein, for one additional period of twenty four (24) months (herein, the “Second Extension Period”), at the then current “Market Rent” (including annual escalations thereon for each year of the extended term based on increases in the Consumer Price Index or fixed increases, as the case may be, as determined by then prevailing market forces), but no less than an amount equal to the Annual Base Rent per rentable square foot of highest rent for Leased Premises space during the final Lease Year hereunder (the “Extension Rent Floor”). Said Second Extension Period shall commence, subject to proper exercise of Lessee’s option hereunder, at the end of the First Extension Termination Date and shall terminate on that date which is twenty four (24) consecutive months thereafter. Lessee shall exercise its option by delivering to Lessor its written notice not later than nine (9) full months (but not sooner than fifteen (15) full months, unless exercised earlier than said fifteen (15) months (in order to exercise its ROFO rights under the Lease) prior to the end of the First Extended Term. Once delivered, written notice to extend is irrevocable.

 

8

 

“Market Rent” as used herein, shall be that rent charged for comparable research laboratory and office space of similar age and condition in laboratory buildings in the mid-Cambridge submarket as of the end of the First Extended Term. If, after good faith attempts, the Lessor and Lessee cannot agree on a figure representing Market Rent within thirty (30) days after Lessee has delivered the Extension Notice, then either party, upon written notice to the other, may request appraisal and arbitration of the issue as provided in this section. Within fourteen (14) days of the request for arbitration, each party shall submit to the other the name of one unrelated individual or entity with proven expertise in the leasing of commercial real estate in greater Boston/Cambridge to serve as that party’s appraiser. Each appraiser shall be paid by the party selecting him or it. The two appraisers shall each submit their final reports to the parties within thirty (30) days of their selection making their determination as to Market Rent (subject however, to the Extension Rent Floor). The two appraisers shall meet within the next fourteen (14) days to reconcile their reports and collaboratively determine the Market Rent. They shall each make their determination in writing (subject however, to the Extension Rent Floor), including a statement if such is the case, that they are at an impasse. Such a statement of impasse shall be submitted to the parties along with the Market Rent figure which each appraiser has selected and his reasons and substantiation therefor. The appraisers, in case of an impasse, shall also agree on one unrelated individual or entity with expertise in commercial real estate in greater Boston, who shall evaluate the reports of the two original appraisers and within fourteen (14) days of submission of the issue to him, make his own determination as to a figure representing Market Rent (subject however, to the Extension Rent Floor). The determination of this individual or entity (i.e. arbitrator) absent, fraud, bias or undue prejudice shall be binding upon the parties.

 

Annual Base Rent and Additional Rent during any Extended Term shall be payable in advance, in equal monthly installments on the first day of each calendar month.

 

Lessee, in addition to the sums payable annually to Lessor as Annual Base Rent, shall pay to Lessor for each year of the Second Extension Period, as Additional Rent, Lessee’s Allocable Percentage (as determined by the approximate total rentable space leased) for Operating Expenses, Real Estate Taxes and utilities as contemplated in Section 4 hereof (and as may be impacted by Section 8 hereof).

 

10.                               Subordination

 

The Lease, as extended and modified by this First Amendment, shall be subject and subordinate to any and all mortgages and related documents placed on the Building, Leased Premises or the real property in existence as of the date hereof or coming into existence at any time hereafter, without necessity for any confirming documentation. Lessor shall use commercially reasonable efforts (which shall not be deemed to include the payment or expenditure of any sums whatsoever) to obtain a Subordination, Non-Disturbance and Attornment Agreement from its present and future mortgagees, in form and substance set forth as Exhibit D_hereto; but Lessor shall not be liable to Lessee in any manner (nor shall any of Lessee’s full and timely performance under this Lease be conditioned, waived, excused or altered in any manner whatsoever) if no SNDA is forthcoming, or if any of the terms and conditions of the same are not

 

9

 

deemed acceptable. This provision supersedes any contrary provisions in Section 13 of the Existing Lease.

 

11.                                    Shared Use of Laboratory Support Systems and Emergency Generator.

 

In addition to Lessee’s rights to use the shared laboratory support systems and emergency generator and controller with other users on the fourth and fifth floor, Lessee shall have the right, in connection with its lease of the Expansion Space, to use the shared laboratory support systems and emergency generator and controller with other users on the second floor of the Building. Lessee’s use of such shared systems shall be governed by the provisions of Section 11 (c) and (e).

 

12.                 Additional Signage

 

In addition to Lessee’s signage rights under Section 20 of the Lease, Lessee shall have the right to display one sign at the entrance of the Expansion Space and one sign at a mutually determined and agreed location off the elevator on the 2nd floor, consistent with similar signs in the Building.

 

13.                                    Integration of Documents; Supremacy

 

This First Amendment contains the full understanding and agreement between the parties. The parties hereto intend that this First Amendment operates to amend and modify the Existing Lease, and that those two documents shall be interpreted conjunctively; with any express conflict between the two to be resolved in favor of the stated terms of this First Amendment. Except as modified hereby, all other terms and conditions of the Existing Lease shall remain unchanged and enforceable in a manner consistent with this First Amendment, including Lessee’s right to assignment and subletting of the Expansion Space as set forth therein.

 

This Agreement shall be governed by the laws of the Commonwealth of Massachusetts. Any provisions deemed unenforceable shall be severable, and the remainder of this First Lease Amendment and the Existing Lease shall be enforceable in accordance with their terms.

 

[Signature Pages Follow]

 

10

 

LESSOR

 

RIVERTECH ASSOCIATES II, LLC

 

	
By:
    	
Rivertech Associates   II, Inc.,
    	
 
    
	
 
    	
its Manager
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Robert Epstein
    	
 
    
	
Name:
    	
Robert Epstein
    	
 
    
	
Title:
    	
President
    	
 
    

 

 

LESSEE

 

DIMENSION THERAPEUTICS, INC.

 

	
By:
    	
/s/ Annalisa Jenkins
    	
 
    

 

its duly authorized, Chief Executive Officer

Name: Annalisa Jenkins

Title: CEO

 

11

 

DIMENSION THERAPEUTICS, INC. FIRST LEASE AMENDMENT

 

EXHIBIT A

 

 

 

DIMENSION THERAPEUTICS, INC. FIRST LEASE AMENDMENT

 

EXHIBIT B

 

DIMENSION THERAPEUTICS 
 Floor Two

840 Memorial Drive

Cambridge, MA

October 20, 2014      Final changes in bold.

 

SCOPE OF LANDLORDS WORK FOR LAB AND OFFICES ON FLOOR TWO

 

Administrative Area

Partitions: Partitions for three new offices are to be added as indicated on the  plans. Walls of new offices shall be insulated and extend to approximately 6” above the existing suspended ceiling.

 

Existing office walls are comprised of gwb over steel studs and extend from floor to the underside of the suspended ceiling.

 

The walls demising the Administrative areas from adjacent tenancies and R&D areas extend to the underside of the deck above and are constructed to have a one hour fire rating.

 

All new walls will be finished with two coats water based paint. Existing walls shall be patched and repainted as necessary but maintain existing paint color.

 

A new partion will be constructed approximately 8’ from the existing main glass entry, extend 6” above the suspended ceiling, have three approximately 24”x24” clear glass vision panel insets and extend approximately 10’ from the existing demising wall.

 

Glass Panels: Where they exist, glass panels to remain.

 

Entry: Existing glass entry to remain.

 

Doors: All hardware are lever handles with brushed stainless finish. New doors in offices 111, 112, & 113 will be solid oak to match building standard. New office door hardware will consist of passage function latchsets with brushed stainless finish.

 

Floors: All carpeted areas in the administrative which are affected by  construction will be protected and reused. 4” vinyl cove base will be installed at intersection of new walls and carpet/vct in new offices. VCT will be installed in an area adjacent to the new kitchenette.

 

Ceilings: All existing ceiling tiles will remain or be replaced as necessary. Any damaged ceiling tiles will be replaced with matching ceiling tiles. Any damage to ceiling grid will be repaired.

 

Lighting: Existing fluorescent lights will remain and be relocated and supplemented as necessary to accommodate the new configuration. All existing fluorescent lights will be inspected to insure proper functioning and be repaired or replaced as necessary.

 

 

HVAC: The base building HVAC distribution system will be inspected and  adjusted as necessary to assure distribution, airflow, and proper operation of thermostats and variable air volume (VAV) boxes. There will be an adjustment of the system to accommodate the three new offices which shall be provided with a separate VAV and thermostat.

 

The premises will conform to the obligations with the Lease regarding temperatures within the office environment.

 

The existing supplemental ac unit feeding the conference room shall be inspected by the landlord and put in working order. The tenant will be responsible for maintaining and repairing all tenant specific supplemental mechanical equipment beyond a 6 month warranty period.

 

Kitchenette: A new kitchenette will be constructed as indicated in the drawings and consist of p.lam cabinets and counters, stainless steel sink and four (4) gfi 110v outlets on two 20amp circuits located above the counter. A copper water line will be provided for tenant to connect their coffee machine in a location on the counter tbd by tenant.

 

Electrical: Existing electrical outlets throughout the administration area and the office space in the R&D area in the form of existing and new 110v outlets to remain. All utilities servicing the tenant’s premises and equipment are separately metered and will be read monthly by the landlord for reimbursement by the tenant. New outlets will be installed to accommodate the new layout. Each new office will have a minimum of 3 120/20a 5-20R receptacles. All electrical circuits will be labeled via labels at the outlet, junction box, safety switch, or other corresponding electrical equipment and a corresponding label on the electrical panel indicating the appropriate circuit breaker.

 

Furnishings: No reception desk cubicles, work stations or furniture of any sort shall be provided by the landlord.

 

Fire Protection: Fire protection will be added as needed and required by Massachusetts Building code, NFPA and local Fire Code.

 

Work included in this scope will comply with the Massachusetts Building Code, ASHRAE and NFPA.

 

R&D AREA

 

Demolition: Existing doors and walls required to be removed to accommodate new plan  will be removed.

 

Partitions: Partitions enclosing laboratory from administrative & support spaces and laboratory from the three tissue culture suites shall consist of existing walls extending from floor to the underside of the deck and will be constructed to have a one hour fire rating. Walls and trim will be finished with two coats water based paint. Paint

 

 

finish in tissue culture rooms to be semi gloss.

 

Doors: New two piece oak doors of 4’ and 4’6” shall be installed as indicated on the plans. The existing metal door leading to tissue culture room #104 shall be relocated/ replaced as indicated in the plans.

 

Floors: Existing seamless vinyl in the lab areas shall remain and be repaired where the surface is compromised as reasonably requested by the tenant. In the rear of lab #101, the area where carpet has been removed shall be replaced by seamless vinyl in a style and color most compatible with the existing, being aware that the existing seamless vinyl is no longer manufactured.

 

The equipment room #103 shall be replaced with vct.

 

The cubicle area floor shall have carpet with vinyl base to match that in the administrative area of the premises.

 

Ceilings: Existing ceiling grid and act shall be removed and replaced along with solid  surface ceiling tiles in the support area room #103.

 

The cubicle area shall have existing grid where salvagable along with act.

New grid and washable ceiling tiles by Teknotile or equal shall be installed in  the main laboratory and tissue culture areas.

 

Lighting: Existing 2x4 and 2x2 fluorescent lights will be relamped and be solid surface  type.

 

New solid surface lens type fluorescent lights will be used in the main laboratory #101.

 

BENCHES: A new p.lam bench with p.lam counter shall be provided in the main lab #101near the glasswash/autoclave area as shown in the plan. The new lab sink will have protected hot and cold water and deck mounted emergency eyewash stations.

 

HVAC: The base building HVAC distribution system will be inspected and adjusted as necessary to assure good operating condition and repair, distribution, airflow, and proper operation of thermostats and variable air volume (VAV) boxes. One house system VAV system shall serve the cubicle area and the lab services room #103. Perimeter constant volume heating/cooling shall remain in the cubicle area. The laboratory mechanical system shall consist of a self contained electric/natural gas fired 10ton make-up air unit located on the second floor roof ducted to the laboratory. A wall mounted gas fired boiler shall be located in room #103 and shall provide hot water to 5 sets of heating coils comprising 5 zones within the lab (one each to #104, #105, #106 and two ((interior and perimeter)) to #101). This system shall provide make up air to the labs at a constant volume of 1.1cfm/sft (approximately 6 air changes/hour) at approximately 55°F and be reheated as requested by the thermostats. All air to the laboratories spaces shall be introduced via 95% HEPA filters.

 

 

If determined by engineer to be needed, a supplemental 3 Ton air conditioning unit shall be located in the main laboratory #101 to provide additional cooling should it be necessary during peak cooling load periods. Should such a unit be required, it shall be paid for by tenant and Lessor shall warrant that its presence shall assure the lab environment conforms to ASHRAE requirements.

 

The landlord’s engineer will perform load calculations to take into account insulation, square footage, occupancy and equipment heat loss to determine heating and cooling loads.

 

Expected equipment and occupant load shall be provided to the landlord’s engineer for analysis and design of the HVAC system. The space will be balanced according to these calculations. All balancing will be conducted by a NEBB certified balancing technician.

 

All tenant specific mechanical systems shall be warranted for proper operation for a period of six months provided tenant enters into an appropriate preventive maintenance agreement for this equipment. Tenant specific mechanical equipment will be delivered in good operating condition.

 

All Tenant-specific mechanical equipment shall be put on a preventive  maintenance agreement by the tenant and at Tenant’s expense for the duration of the Lease. The tenant will be responsible for maintaining and repairing all tenant specific supplemental mechanical equipment beyond the 6 month warranty period.

 

Room #104 shall be negative to room #101 while room #105 shall be negative to room #104. Room #106 negative to room #101

 

Plumbing and Waste: The main cold water supply to the lab will be located in the “Lab support” room #103 which will also contain a hot water heater/storage tank, a water check meter and required backflow prevention devices. All lab waste will be contained in polyethylene piping and will lead to an acid waste system consisting of a 55 gallon tank with limestone chips located in an accessible location on the first floor directly below the premises.

 

The laboratory wastewater system will be maintained by the tenant who shall also be responsible for required municipal discharge permits, sampling and testing.

 

Safety showers will be added in rooms #104, #105 & #106. Requirements for safety showers and eyewash stations throughout the lab space will be made to comply with requirements of the City of Cambridge Plumbing Inspector. Showers and eye wash will be from the existing  circulating protected tempered water line servicing the first and second floor of the building.

 

Autoclave, ice and glass-wash: The landlord will provide an area in lab #101 in which this equipment will be located. Water and drain will be provided. The actual equipment will be provided by the tenant as will the responsibility of final installation. The  existing laboratory sink with protected hot and cold water and eyewash shall remain.

 

 

Electrical: Power to various locations within the laboratory exists or will be installed in the form of existing 110v and 208v outlets as required in the latest equipment matrix. Four (4) additional 208v15A outlets shall be provided as indicated in the plans.

 

A 100A 208v 3wire service panel from the existing back up generator located in the lower level of the garage shall be provided. In addition, the motor driving the roof mounted exhaust fan shall be placed on emergency backup.

 

Tenant shall share the cost of maintenance and repairs of the back up generator with any other tenants who are also connected to it.

 

All electrical power, natural gas and water to the tenant’s premises and equipment will be separately metered and read monthly by the landlord for reimbursement by the tenant. All electrical circuits will be labeled via labels at the outlet, junction box, safety switch, or other corresponding electrical equipment and a corresponding label on the electrical panel indicating the appropriate circuit breaker.

 

CO2 Piping: Piping for tenants CO2 shall be brought to the premises from tenant’s existing service located on the 4th floor. Gas regulators, if required, shall be provided by the tenant.

 

Existing vacuum air will be provided from the building system to existing turrets and three biosafety cabinets.

 

All new CO2 and vacuum piping shall consist of copper type ‘L’ with braised connections.

 

Fire Protection: Fire protection will be added as needed and required by Massachusetts Building Code, NFPA and local Fire Officials.

 

Dimension Therapeutics or their designee will have access to the space during  renovation to inspect the progress and that the work being done conforms to this scope.

 

Work included in this scope will comply with both the Massachusetts Building Code and  NFPA.

 

Drawings included in this scope of work are diagrammatic in nature. All pre-existing construction and new construction will be reviewed by the landlord’s architect and engineer to insure indicated changes are made in accordance with Massachusetts Building Code and the NFPA. Stamped architectural and engineering drawings will be provided along with a “one line” electrical diagram indicating the power feed from the street into the tenant space.

 

All components of Lessor’s Work will be completed in accordance with all applicable laws, rules and regulations, including but not limited to the latest requirements of NFPA, ANSI Standards, ASHRAE Standards, National Electrical Code, Massachusetts State Building Code, and regulations of the City of Cambridge. Lessor shall deliver the Expansion Space with the base Building systems serving the same and with Lessee’s specific mechanical, electrical and plumbing systems as required in Lessor’s Scope of Work (i.e. Exhibit A hereto), in good operating condition and repair, and suitable for their intended uses. All utilities for the Expansion Space shall be in place and separately metered. The

 

 

Building and the Expansion Space as delivered to the Lessee will be compliant with the Americans with Disabilities Act; NFPA compliant pursuant to the Massachusetts State Building Code; and with code compliant demising walls and common area corridors. Lessor shall provide Lessee with the environmental close-out report prepared by the former tenant for the Expansion Space, and said report shall not disclose any conditions as would materially impair Lessee’s use of the Expansion Space. Subject to the foregoing, Lessor shall not be responsible for any other design or construction work with respect to either the Existing Premises under the Existing Lease, or the Expansion Space.

 

 

DIMENSION THERAPEUTICS, INC.

FIRST LEASE AMENDMENT

 

EXHIBIT C

 

	
Dimension Added Costs
    	
10/17/14
    

 

 

DIMENSION THERAPEUTICS

FLOOR 2

Additional Costs

 

	
Additional HEPA filters 8@ $350
    	
 
    	
$
    	
2,800
    	
 
    	
 
    	
 
    
	
Additional sink, eyewash & plumbing   for autoclave area
    	
 
    	
$
    	
7,500
    	
 
    	
 
    	
 
    
	
Additional cabinetry for autoclave area
    	
 
    	
$
    	
2,500
    	
 
    	
 
    	
 
    
	
Additional water line and floor drain for   autoclave/ice machine
    	
 
    	
$
    	
3,500
    	
 
    	
 
    	
 
    
	
Additional hw heater for lab sinks w/electric
    	
 
    	
$
    	
3,000
    	
 
    	
 
    	
 
    
	
Additional 3ton supplemental ac unit to   provide ac not provided by house perimeter system designed by bldg engineer   on original plan
    	
 
    	
$
    	
15,000
    	
 
    	
 
    	
 
    
	
Relocate door into BL2 lab #104
    	
 
    	
$
    	
750
    	
 
    	
 
    	
 
    
	
Place exhaust fan on backup power
    	
 
    	
$
    	
2,500
    	
 
    	
 
    	
 
    
	
Increase chip tank from 35 (code required) to   55 gallon plus 6 additional bags of limestone chips
    	
 
    	
$
    	
375
    	
 
    	
 
    	
 
    
	
Added engineering cost to redesign mech   systems
    	
 
    	
$
    	
1,000
    	
 
    	
 
    	
 
    
	
Additional wall with 3 glass panels at entry   to administrative area
    	
 
    	
$
    	
3,000
    	
 
    	
 
    	
 
    
	
Add 4 208v outlets in labs
    	
 
    	
$
    	
2,000
    	
 
    	
 
    	
 
    
	
Add copper water line in kitchenette
    	
 
    	
$
    	
500
    	
 
    	
 
    	
 
    
	
Add approx. 150sft vinyl floor at kitchenette
    	
 
    	
$
    	
500
    	
 
    	
 
    	
 
    
	
EXTRA COSTS
    	
 
    	
$
    	
44,925
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Credit for not building 5 offices (resusing   doors, glass & hardware)
    	
 
    	
($17,500
    	
)
    	
 
    	
 
    
	
ADDITIONAL COST
    	
 
    	
 
    	
 
    	
$
    	
27,425
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AGREED UPON DUE FROM   TENANT
    	
 
    	
 
    	
 
    	
$
    	
20,000
    	
 
    

 

 

DIMENSION THERAPEUTICS, INC.

FIRST LEASE AMENDMENT

 

EXHIBIT D

 

NON-DISTURBANCE, ATTORNMENT AND SUBORDINATION AGREEMENT

 

THIS NON-DISTURBANCE, ATTORNMENT AND SUBORDINATION AGREEMENT (this “Agreement”) is made and entered into as of this        day of        , 2014, by and among SANTANDER BANK, N.A. (hereinafter called the “Agent”), as administrative agent on behalf of itself and certain lenders (collectively, the “Lenders”), having an address at 75 State Street, Boston, Massachusetts 02109,                   a                   corporation (hereinafter called the “Tenant”), having an address at 840 Memorial Drive, Cambridge, MA 02139, and RIVERTECH ASSOCIATES II, LLC, a Massachusetts limited liability company (hereinafter called the “Landlord”), having an address at 575 Boylston Street, c/o The Abbey Group, Boston, Massachusetts 02116.

 

W I T N E S S E T H:

 

WHEREAS, Landlord owns certain real property commonly known as Riverside Technology Center located at 840 Memorial Drive, Cambridge, Massachusetts and more particularly described in Exhibit A attached hereto and made a part hereof (said property being hereinafter called the “Property”); and

 

WHEREAS, Landlord (or Landlord’s predecessor interest) made and entered into that certain Lease. dated the 10th day of June, 2011, with respect to certain premises constituting a portion of the Property therein described (said Lease, as the same may be amended, restated or otherwise modified from time to time, hereinafter called the “Lease”. and said premises hereinafter called the “Leased Premises”); and

 

WHEREAS, Landlord has entered into and delivered that certain Mortgage and Security Agreement in favor of Agent on behalf of Lenders and recorded, or to be recorded, with the Middlesex County Registry of Deeds (said Mortgage and Security Agreement, as the same may be amended, restated or otherwise modified from time to time, being hereinafter called the “Mortgage”), to secure the payment of a certain loan made by Lenders to Landlord (the “Loan”); and

 

WHEREAS, Landlord has entered into and delivered that certain Assignment of Leases and Rents in favor of Agent on behalf of Lenders and recorded, or to be recorded, with the Middlesex County Registry of Deeds (said Assignment of Leases and Rents, as the same may be amended, restated or otherwise modified from time to time, being hereinafter called the “Assignment of Rents”), assigning all of Landlord’s right, title and interest as lessor under the Lease to further secure the Loan; and

 

WHEREAS, the parties hereto desire to enter into this Agreement;

 

NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Tenant, and Landlord each hereby covenants and agrees as follows:

 

 

1.                                 Estoppel. Tenant hereby certifies to Agent that (i) the Lease, as described above, is the true, correct and complete Lease, and has not been modified or amended and constitutes the entire agreement between Landlord and Tenant, and (ii) as far as is known to Tenant, there are no defaults of Landlord under the Lease and there are no existing circumstances which with the passage of time, or giving of notice, or both, would give rise to a default under the Lease and/or allow Tenant to terminate the Lease.

 

2.                                 Non-Disturbance. So long as no default exists, nor any event has occurred which has continued to exist for such period of time (after notice, if any, required by the Lease) as would entitle the lessor under the Lease to terminate the Lease or would cause, without any further action on the part of such lessor, the termination of the Lease or would entitle such lessor to dispossess the lessee thereunder, the Lease shall not be terminated, nor shall such lessee’s use, possession or enjoyment of the Leased Premises or rights under the Lease be interfered with in any foreclosure or other action or proceeding in the nature of foreclosure instituted under or in connection with the Mortgage or in the event that Agent takes possession of the Property pursuant to any provisions of the Mortgage or the Assignment of Rents, unless the lessor under the Lease would have had such right if the Mortgage or the Assignment of Rents had not been made, except that neither the person or entity acquiring the interest of the lessor under the Lease as a result of any such action or proceeding or deed in lieu of any such action or proceeding (hereinafter called the “Purchaser”) nor Agent if Agent takes possession of the Property shall be (a) liable for any act or omission of any prior landlord (including the Landlord); or (b) liable for or incur any obligation with respect to the construction of the Property or any improvements of the Leased Premises or the Property, including, without limitation, the payment of any construction allowance pursuant to the Lease; or (c) subject to any offsets or defenses which Tenant might have against any prior landlord (including the Landlord); or (d) bound by any rent or additional rent which Tenant might have paid for more than the then current rental period to any prior landlord (including the Landlord); or (e) bound by any amendment or modification of the Lease, made without Agent’s prior written consent; (f) except any assignment or sublet permitted under the Lease as to which Landlord’s consent is not required, bound by any assignment or sublet, made without Agent’s prior written consent; (g) bound by or responsible for any security deposit not actually received by Agent; (h) liable for or incur any obligation with respect to any breach of warranties or representations of any nature under the Lease or otherwise including without limitation any warranties or representations respecting use, compliance with zoning, Landlord’s title, Landlord’s authority, habitability and/or fitness for any purpose, or possession; (i) liable for consequential damages; or (j) personally liable for any default under the Lease or any covenant or obligation on its part to be performed thereunder as lessor, it being acknowledged and agreed that Tenant’s sole remedy in the event of such default shall be to proceed against Purchaser’s or Agent’s interest in the Property. Notwithstanding anything contained herein to be contrary, Agent shall have absolutely no obligation to perform any of Landlord’s construction covenants under the Lease, provided that if Agent shall not perform such covenants in the event of foreclosure or deed in lieu thereof and within a reasonable time following taking of possession by Agent, then Tenant shall have

 

2

 

the right to terminate its obligations under the Lease and to pursue any and all legal remedies it may have against Landlord and any third parties other than Agent.

 

3.                                      Attornment. Unless the Lease is terminated in accordance with Paragraph 2, if the interests of the lessor under the Lease shall be transferred by reason of the exercise of the power of sale contained in the Mortgage (if applicable), or by any foreclosure or other proceeding for enforcement of the Mortgage, or by deed in lieu of foreclosure or such other proceeding, or if Agent takes possession of the Property pursuant to any provisions of the Mortgage or the Assignment of Rents, the lessee thereunder shall be bound to the Purchaser or Agent, as the case may be, under all of the terms, covenants and conditions of the Lease for the balance of the term thereof and any extensions or renewals thereof which may be effected in accordance with any option therefor in the Lease, with the same force and effect as if the Purchaser or Agent were the lessor under the Lease, and Tenant, as lessee under the Lease, does hereby attorn to the Purchaser and Agent if it takes possession of the Property, as its lessor under the Lease. Such attornment shall be effective and self-operative without the execution of any further instruments upon the succession by Purchaser to the interest of the lessor under the Lease or the taking of possession of the Property by Agent. Nevertheless, Tenant shall, from time to time, execute and deliver such instruments evidencing such attornment as Purchaser or Agent may require. The respective rights and obligations of Purchaser, Agent and of the lessee under the Lease upon such attornment, to the extent of the then remaining balance of the term of the Lease and any such extensions and renewals, shall be and are the same as now set forth in the Lease except as otherwise expressly provided in Paragraph 2.

 

4.                                      Subordination. Subject to the other terms of this Agreement, Tenant hereby subordinates all of its right, title and interest as lessee under the Lease to the right, title and interest of Agent under the Mortgage, and Tenant further agrees that the Lease now is and shall at all times continue to be subject and subordinate in each and every respect to the Mortgage and to any and all increases, renewals, modifications, extensions, substitutions, replacements and/or consolidations of the Mortgage.

 

5.                                      Assignment of Rents. Tenant hereby acknowledges that all of Landlord’s right, title and interest as lessor under the Lease is being duly assigned to Agent pursuant to the terms of the Mortgage and the Assignment of Rents, and that pursuant to the terms thereof all rental payments under the Lease shall continue to be paid to Landlord in accordance with the terms of the Lease unless and until Tenant is otherwise notified in writing by Agent. Upon receipt of any such written notice from Agent, Tenant covenants and agrees to make payment of all rental payments then due or to become due under the Lease directly to Agent or to Agent’s agent designated in such notice and to continue to do so until otherwise notified in writing by Agent. Landlord hereby irrevocably directs and authorizes Tenant to make rental payments directly to Agent following receipt of such notice, and Landlord covenants and agrees that Tenant shall have the right to rely on such notice without any obligation to inquire as to whether any default exists under the Mortgage or the Assignment of Rents or the indebtedness secured thereby, and notwithstanding any notice or claim of Landlord to the contrary, and that Landlord shall

 

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have no right or claim against Tenant for or by reason of any rental payments made by Tenant to Agent following receipt of such notice. Tenant further acknowledges and agrees: (a) that under the provisions of the Mortgage and/or the Assignment of Rents, the Lease cannot be terminated (nor can Landlord accept any surrender of the Lease) or modified in any of its terms, or consent be given to the waiver or release of Tenant from the performance or observance of any obligation under the Lease, without the prior written consent of Agent, and without such consent no rent may be collected or accepted by Landlord more than one month in advance; and (b) that the interest of Landlord as lessor under the Lease has been assigned to Agent for the purposes specified in the Mortgage and the Assignment of Rents, and Agent assumes no duty, liability or obligation under the Lease, except only under the circumstances, terms and conditions specifically set forth in the Mortgage and/or the Assignment of Rents.

 

6.                                      Notice of Default by Lessor. Tenant, as lessee under the Lease, hereby covenants and agrees to give Agent written notice properly specifying wherein the lessor under the Lease has failed to perform any of the covenants or obligations of the lessor under the Lease, simultaneously with the giving of any notice of such default to the lessor under the provisions of the Lease, Tenant agrees that Agent shall have the right, but not the obligation, within thirty (30) days after receipt by Agent of such notice (or within such additional time as is reasonably required to correct any such default) to correct or remedy, or cause to be corrected or remedied, each such default before the lessee under the Lease may take any action under the Lease by reason of such default. Such notices to Agent shall be delivered in duplicate to:

 

SANTANDER BANK, N.A.

75 State Street

Mail Code: MA1 SST 0412

Boston, Massachusetts 02109

Attention:                               John Everly

Telephone:                         617-346-7297

 

With a copy to:

 

RIEMER & BRAUNSTEIN LLP

Three Center Plaza

Boston, MA 02108

Attention: Kevin J. Lyons, Esq.

Telephone:                         617-880-3433

 

or to such other address as the Agent shall have designated to Tenant by giving written notice to Tenant at 840 Memorial Drive, Cambridge, MA 02139, Attention: Patrick Beattie, or to such other address as may be designated by written notice from Tenant to Agent.

 

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7.                                      No Further Subordination. Except as expressly provided to the contrary in Paragraph 4 hereof, Landlord and Tenant covenant and agree with Agent that there shall be no further subordination of the interest of lessee under the Lease to any lender or to any other party without first obtaining the prior written consent of Agent. Any attempt to effect a further subordination of lessee’s interest under the Lease without first obtaining the prior written consent of Agent shall be null and void.

 

8.                                      As to Landlord and Tenant. As between Landlord and Tenant, Landlord and Tenant covenant and agree that nothing contained herein nor anything done pursuant to the provisions hereof shall be deemed or construed to modify the Lease.

 

9.                                      As to Landlord and Agent. As between Landlord and Agent, Landlord and Agent covenant and agree that nothing contained herein nor anything done pursuant to the provisions hereof shall be deemed or construed to modify the Mortgage or the Assignment of Rents.

 

10.                               Title of Paragraphs. The titles of the paragraphs of this Agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement.

 

11.                               Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

 

12.                               Provisions Binding. The terms and provisions hereof shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, successors and permitted assigns, respectively, of Agent, Tenant and Landlord. The reference contained to successors and assigns of Tenant is not intended to constitute and does not constitute consent by Landlord or Agent to an assignment by Tenant, but has reference only to those instances in which the lessor under the Lease and Agent shall have given written consent to a particular assignment by Tenant thereunder.

 

[Signature page to follow]

 

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IN WITNESS WHEREOF, the parties have hereunto set their respective hands and seals as of the day, month and year first above written.

 

	
 
    	
 
    	
AGENT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SANTANDER BANK, N.A.,   as Agent on behalf of Lenders
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
John Everly
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
STATE OF
    	
 
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
) ss.:
    	
 
    	
 
    
	
COUNTY OF
    	
 
    	
)
    	
 
    	
 
    

 

On the             day of                            in the year 2014, before me, the undersigned, a notary public in and for said state, personally appeared John Everly, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
 
    	
 
    

 

[SIGNATURE PAGE TO SNDA]

 

 

	
 
    	
 
    	
TENANT:
    

 

 

STATE OF 

 

COUNTY OF

 

On the                  day of                                   in the year 2014, before me, the undersigned, a notary public in and for said state, personally appeared                                                                personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
 
    	
 
    

 

[SIGNATURE PAGE TO SNDA]

 

 

	
 
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
RIVERTECH ASSOCIATES   II, LLC, a Massachusetts limited liability company
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
STATE OF
    	
 
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
) ss.:
    	
 
    	
 
    
	
COUNTY OF
    	
 
    	
)
    	
 
    	
 
    

 

On the                  day of                                   in the year 2014, before me, the undersigned, a notary public in and for said state, personally appeared                                   , personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
My Commission Expires:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

[SIGNATURE PAGE TO SNDA]

 

 

EXHIBIT A

 

Property Legal Description

 

The land and the buildings thereon known as 840 Memorial Drive (a/k/a 18 Blackstone Street) situated in Cambridge, Middlesex County, Massachusetts, more particularly described as follows:

 

WESTERLY:                                               by the Easterly line of Memorial Drive (formerly Charles River Road) twenty six and 21/100 feet;

 

NORTHERLY:                                     by the Southerly line of said Road, three and 96/100 feet;

 

WESTERLY:                                               by the Easterly line of said Road, one hundred twenty six and 59/100 feet;

 

NORTHERLY:                                     by the Southerly line of Albro Street, three hundred thirty two and 31/100 feet;

 

EASTERLY:                                                  by the Westerly line of Blackstone Street, one hundred and fifty three feet; and

 

SOUTHERLY:                                       by lot 2 as shown on plan hereinafter mentioned, three hundred fifty one and 45/100 feet.

 

Said parcel is shown as Lot 1 on the plan filed as Plan No. 8817C, with Certificate 154579 in Book 903, Page 29 of the Middlesex South Registry District of the Land Court.

 

Containing an area of 52,062 square feet.

 

The above described land is subject to and has the benefit of the provisions of an indenture dated September 20, 1922, recorded in Book 4564, Page 561, affected by Releases, filed as Document Nos. 598776 and 598777.

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