Document:

exv4w12

 

EXHIBIT 4.12

SUBLEASE

Dated as of December 21, 2001

Between

BAXTER CAPITAL CORPORATION,

as the Sublessor,

and

ACAMBIS, INC.

as the Sublessee.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 
	ARTICLE I DEFINITIONS AND INTERPRETATION
	 	 	I	 
	 	SECTION 1.1. Definitions
	 	 	I	 
	ARTICLE II SUBLEASE
	 	 	12	 
	 	SECTION 2.1. Acceptance and Sublease of the Property and the Equipment
	 	 	12	 
	 	SECTION 2.2. Basic Term
	 	 	13	 
	 	SECTION 2.3. Title
	 	 	13	 
	 	SECTION 2.4. Subordination to Prime Lease
	 	 	13	 
	ARTICLE III PAYMENT OF RENT
	 	 	13	 
	 	SECTION 3.1. Rent
	 	 	13	 
	 	SECTION 3.2. Payment of Rent
	 	 	14	 
	 	SECTION 3.3. Supplemental Rent
	 	 	14	 
	 	SECTION 3.4. Method of Payment
	 	 	15	 
	 	SECTION 3.5. Basic Rent Statement
	 	 	15	 
	 	SECTION 3.6. Maximum Rate of Interest
	 	 	15	 
	ARTICLE IV QUIET ENJOYMENT; RIGHT TO INSPECT
	 	 	15	 
	 	SECTION 4.1. Quiet Enjoyment
	 	 	15	 
	 	SECTION 4.2. Right to Inspect
	 	 	16	 
	ARTICLE V NET SUBLEASE, ETC
	 	 	16	 
	 	SECTION 5.1 Net Sublease
	 	 	16	 
	 	SECTION 5.2. No Termination or Abatement
	 	 	17	 
	ARTICLE VI ASSIGNMENT AND SUBLEASING BY SUBLESSEE
	 	 	17	 
	 	SECTION 6.1 General
	 	 	17	 
	 	SECTION 6.2. Permitted Transfers
	 	 	17	 
	 	SECTION 6.3. Deemed Consent
	 	 	18	 
	ARTICLE VII SUBLESSEE ACKNOWLEDGMENTS
	 	 	18	 
	 	SECTION 7.1. Condition of the Property and the Equipment
	 	 	18	 
	 	SECTION 7.2. Risk of Loss
	 	 	19	 
	 	SECTION 7.3. No Obligation of Sublessor to Repair, etc
	 	 	19	 
	 	SECTION 7.4. No Liability of Sublessor
	 	 	19	 
	ARTICLE VIII UTILITY CHARGES, TAXES, POSSESSION AND USE OF THE
PROPERTY OR EQUIPMENT, ETC
	 	 	19	 
	 	SECTION 8.1. Utility Charges
	 	 	19	 
	 	SECTION 8.2. Taxes
	 	 	20	 
	 	SECTION 8.3. Possession, Use and Operation of the Property and the
Equipment
	 	 	20	 
	 	SECTION 8.4. Compliance with Applicable Laws and Insurance
Requirements; Necessary Permits, etc
	 	 	20	 
	 	SECTION 8.5. Sublessee’s Right to Enforce Warranties
	 	 	20	 

 

 

	 	 	 	 	 	 
	ARTICLE IX MAINTENANCE AND REPAIR; REPLACEMENT OF PARTS
	 	 	21	 
	 	SECTION 9.1. Maintenance and Repair
	 	 	21	 
	ARTICLE X MODIFICATIONS, ETC
	 	 	22	 
	 	SECTION 10.1. Modifications, Substitutions and Replacements
	 	 	22	 
	ARTICLE XI DISCHARGE OF LIENS; CONDITION UPON RETURN
	 	 	23	 
	 	SECTION 11.1 Sublessee’s Obligation to Discharge Liens
	 	 	23	 
	 	SECTION 11.2. Condition upon Return to Sublessor
	 	 	23	 
	ARTICLE XII PERMITTED CONTESTS; WARRANTY OF TITLE
	 	 	23	 
	 	SECTION 12.1. Permitted Contests in Respect of Applicable Law Other Than
Taxes
	 	 	23	 
	 	SECTION 12.2. Easements
	 	 	24	 
	 	SECTION 12.3. Warranty of Title
	 	 	25	 
	ARTICLE XIII INSURANCE
	 	 	26	 
	 	SECTION 13.1. Required Insurance
	 	 	26	 
	 	SECTION 13.2. Deductibles; Insurance Providers; Coverage and
Endorsements; Confirmation of Insurance, etc
	 	 	27	 
	ARTICLE XIV CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
	 	 	28	 
	 	SECTION 14.1. Casualty and Condemnation
	 	 	28	 
	 	SECTION 14.2. Environmental Matters
	 	 	30	 
	 	SECTION 14.3. Notice of Environmental Matters
	 	 	31	 
	ARTICLE XV TERMINATION OF SUBLEASE
	 	 		 
	 	SECTION 15.1. Mandatory Termination upon Certain Events
	 	 	31	 
	 	SECTION 15.2. Termination Procedures
	 	 	31	 
	ARTICLE XVI SUBLEASE EVENTS OF DEFAULT
	 	 	32	 
	 	SECTION 16.1. Sublease Events of Default
	 	 	32	 
	 	SECTION 16.2. Remedies
	 	 	34	 
	 	SECTION 16.3. Waiver of Certain Rights
	 	 	36	 
	ARTICLE XVII SUBLESSOR’S RIGHT TO CURE
	 	 	36	 
	 	SECTION 17.1. The Sublessor’s Right to Cure the Sublessee’s Sublease
Defaults
	 	 	36	 
	ARTICLE XVIII PURCHASE PROVISIONS
	 	 	37	 
	 	SECTION 18.1. Purchase of the Property and the Equipment
	 	 	37	 
	 	SECTION 18.2. Make Whole Premium
	 	 	38	 
	 	SECTION 18.3. Prime Lease Purchase Option
	 	 	38	 
	ARTICLE XIX ACQUISITION AND SUBLEASING OF EQUIPMENT
	 	 	38	 
	 	SECTION 19.1. Acquisition of Equipment
	 	 	38	 

 

 

	 	 	 	 	 	 
	 	SECTION 19.2. Conditions to Purchase of Equipment
	 	 	39	 
	 	SECTION 19.3. Sublessor’s Election to Own Equipment
	 	 	40	 
	ARTICLE XX EQUIPMENT
	 	 	40	 
	 	SECTION 20.1. Replacement of Equipment
	 	 	40	 
	 	SECTION 20.2. Identification of Equipment; Location of Equipment; Personal
Property
	 	 	42	 
	 	SECTION 20.3. Insurance Proceeds
	 	 	42	 
	 	SECTION 20.4. Return of Equipment
	 	 	43	 
	ARTICLE XXI PROCEDURES RELATING TO PURCHASE
	 	 	43	 
	 	SECTION 21.1 Provisions Relating to the Exercise of Purchase Option
	 	 	43	 
	ARTICLE XXII ESTOPPEL CERTIFICATES; ACCEPTANCE OF SURRENDER; NO
MERGER OF TITLE
	 	 	44	 
	 	SECTION 22.1. Estoppel Certificates
	 	 	44	 
	 	SECTION 22.2. Acceptance of Surrender
	 	 	44	 
	 	SECTION 22.3. No Merger of Title
	 	 	 	 
	ARTICLE XXIII DEFAULTS UNDER PRIME LEASE DOCUMENTS
	 	 	45	 
	 	SECTION 23.1. Notices of Default
	 	 	45	 
	 	SECTION 23.2. Purchase Option
	 	 	45	 
	ARTICLE XXIV REPRESENTATIONS AND WARRANTIES
	 	 	45	 
	 	SECTION 24.1. Binding Obligations
	 	 	45	 
	 	SECTION 24.2. No Violation
	 	 	45	 
	 	SECTION 24.3. Compliance with Laws
	 	 	46	 
	 	SECTION 24.4. Financial Condition
	 	 	46	 
	 	SECTION 24.5. No Material Adverse Change
	 	 	46	 
	ARTICLE XXV [RESERVED]
	 	 	46	 
	ARTICLE XXVI MISCELLANEOUS
	 	 	46	 
	 	SECTION 26.1. Survival; Severability; Etc
	 	 	46	 
	 	SECTION 26.2. Amendments and Modifications
	 	 	47	 
	 	SECTION 26.3. No Waiver
	 	 	47	 
	 	SECTION 26.4. Notices
	 	 	47	 
	 	SECTION 26.5. Successors and Assigns
	 	 	47	 
	 	SECTION 26.6. Headings and Table of Contents
	 	 	47	 
	 	SECTION 26.7. Counterparts
	 	 	47	 
	 	SECTION 26.8. GOVERNING LAW
	 	 	47	 
	 	SECTION 26.9. Liability Limited
	 	 	48	 
	 	SECTION 26.10. Naming and Signage of the Property
	 	 	48	 
	 	SECTION 26.11. Expenses
	 	 	48	 
	 	SECTION 26.12. Sublessor Representations
	 	 	48	 
	 	SECTION 26.13. Notice of Sublease
	 	 	49	 
	 	SECTION 26.14. Sublessor’s Indemnification
	 	 	49	 

 

 

	 	 	 	 	 	 
	 	SECTION 26.15. Sublessee Indemnification
	 	 	49	 
	 	SECTION 26.16. Other Agreements
	 	 	50	 
	 	SECTION 26.17. Brokers
	 	 	50	 
	 	SECTION 26.18. Further Assumces
	 	 	50	 

 

 

SUBLEASE

     THIS SUBLEASE (as hereafter supplemented by any Equipment Schedule or
otherwise amended, the “Sublease”) dated as of December 21, 2001, between
BAXTER CAPITAL CORPORATION, a Delaware corporation, as sublessor (together with
its permitted. successors and assigns, the “Sublessor”), and ACAMBIS, INC, a
Delaware corporation, as sublessee (in such capacity, the “Sublessee”).

W I T N E S S E T H:

     WHEREAS, contemporaneously with the execution and delivery of this
Sublease, SMBC Leasing and Finance, Inc. (“Prime Lessor”) has acquired the
Property, the Initial Leasehold Improvements and Initial Equipment identified
in Equipment Schedule No 1 and other. Equipment identified in Equipment
Schedule No. 2; and

     WHEREAS, the Sublessor is the lessee of the Property and Equipment (or,
subject to the provisions of Section 19.3, will be the lessee of Equipment
acquired after the date hereof) pursuant to that certain Lease (the “Prime
Lease”) dated as of December 21, 2001, between the Sublessor and the Prime
Lessor;

     WHEREAS, the Sublessor desires to Sublease to the Sublessee, and the
Sublessee desires to sublease from the Sublessor, the Property and the
Equipment, subject to the terms of this Sublease;

     WHEREAS, the description of the items of Equipment and the Acquisition
Date and Acquisition Cost for each item of Equipment shall be contained in the
Equipment Schedules from time to time executed and delivered by the Sublessor
and the Sublessee in accordance with the terms of this Sublease; and

     WHEREAS, the Sublessee acknowledges that the Sublessor’s rights and
interest in the Property, and Equipment are subject to the rights and interests
of the Prime Lessor, as the fee owner, and the other Senior Interest Holders
(as hereinafter defined);

     NOW, THEREFORE, in consideration of the foregoing, and of other good and.
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

     SECTION 1. 1. Definitions. The following capitalized terms shall have the
meanings
ascribed below whenever such terms are used in this Sublease.

     “Accrued Building Rent ” is defined in paragraph (a) of the definition of
“Building Rent.”

 

 

[Sublease]

     “Accrued Equipment Rent” is defined in paragraph (a) of the definition of
“Equipment Rent.”

     “Acquisition Cost” means with respect to any Equipment subleased
hereunder, the “Acquisition Cost” thereof designated in the applicable
Equipment Schedule. The Acquisition Cost shall consist of the cost of the
Equipment, plus other customary costs included in the vendor’s invoice
therefor, including without limitation, taxes, delivery charges and
installation charges.

     “Acquisition Date” is defined in Section 2.1(a) hereof.

     “Affiliate” means, with respect to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
ownership or control with such Person. For purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract, trust arrangement or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

     “Amortizable Building Balance” means the amount (if any) by which the
Building Balance as of the first day of the Third Rental Period exceeds the
Building Acquisition Cost.

     “Amortizable Equipment Balance” means an amount equal to eighty-eight
percent (88%) of the Equipment Balance as determined as of the first day of the
Third Rental Period.

     “Applicable Law” means all existing applicable laws, rules, regulations
(including Environmental Laws), statutes, treaties, codes, ordinances, permits,
certificates, orders and licenses of and interpretations by, any Governmental
Authority, and applicable judgments, decrees, injunctions, writs, orders or
like action of any court, administrative, judicial or quasi-judicial tribunal
or agency of competent jurisdiction (including those pertaining to health,
safety or the environment (including, without limitation, wetlands) and those
pertaining to the construction, use or occupancy of the Property or the use of
the Equipment).

     “Appraisal” means an appraisal of each of the Property and the Equipment,
respectively, by each Appraiser, in form and substance satisfactory to the
Sublessor and Prime Lessor, which complies in all material respect with the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto, and
all other Applicable Law. The Appraisal, with respect to the Property will
appraise: (i) the Fair Market Sales Value of the Land as of the Commencement
Date, (ii) the Fair Market Sales Value of the Improvements on such Land as of
the Commencement Date, (iii) the economic useful life of the Property, (iv) the
Fair Market Sales Value of the Land and Improvements as o the Expiration Date,
and (v) such other matters as the Sublessor may reasonably specify. The
Appraisal, with respect to the Equipment, will appraise the Fair Market Sales
Value of the Equipment as of the appropriate Acquisition Date and as of the
Expiration Date.

     “Authorized Officer” means the president, any vice president or the chief
financial officer of the Sublessee, and any other officer of the Sublessee
designated as an “Authorised Office”

2

 

[Sublease]

under this Sublease by resolution of the board of directors of the Sublessee, a
certified copy of which resolution is furnished to the Sublessor.

     “Base Rate” means the Prime Rate, plus three percent (31%) per annum. The
Base Rate applicable to any calendar quarter shall be the Base Rate determined
as of the first Business Day of such calendar quarter, and the same shall
remain in effect until the first Business Day of the next succeeding calendar
quarter.

     “Basic Rent” means the sum of the Building Rent and the Equipment Rent.

     “Basic
Rent Payment Date” means the last business day of each calendar
quarter and the Expiration Date or such earlier date on which this Sublease
shall terminate or be terminated in accordance with the terms hereof

     “Basic Term” is defined in Section 2.2 hereof

     “Building Acquisition Cost” means the acquisition cost of the Land and
Building Shell, which the parties acknowledge and agree is $2,250,000.

     “Building Balance” means, at any time, the sum of (a) the Building
Acquisition Cost plus (b) all Accrued Building Rent that is added to the
Building Balance pursuant to paragraph (a) of the definition of “Building
Rent,” less (c) amounts paid by the Sublessee as Building Rent pursuant to
paragraph (c)(i) of the definition of “Building Rent” (but not any other
payments of Rent).

     “Building
Rent” means the rent payable hereunder with respect to the Land
and Building Shell in the amounts determined and payable as follows:

		
	 	     (a) First Rental Period. Building Rent for the First Rental Period
shall be in an amount equal to interest at the Base Rate on the Building
Balance from time to time outstanding. Except as otherwise provided in
Section 3. 1(c), no Building Rent shall be payable during the First Rental
Period (but the Sublessee may elect to pay Building Rent during the First
Rental Period as provided, in Section 3. 1 (b) hereof). On each Basic Rent
Payment Date during the First Rental Period, all Building Rent accrued as
of such date and not paid (“Accrued Building Rent” ) shall be added to the
Building Balance.
	 
	 	     (b) Second Rental Period. Building Rent for the Second Rental Period
shall be in an amount equal to interest at the Base Rate on the Building
Balance from time to time outstanding.
	 
	 	     (c) Third Rental Period. During the Third Rental Period the Building
Rent payable on each Basic Rent Payment Date shall be the sum of (i) an
amount equal, to one twelfth (1/12) of the Amortizable Building Balance
(if any), which payment shall be applied to the reduction of the Building
Balance, plus (ii) an amount equal to interest at the Base Rate on the
Building Balance from time to time outstanding. It is the intent of the
parties hereto that, if there is an Amortizable Building Balance, then if
all installments of the Building Rent are paid in full when due in
accordance herewith until the Expiration Date, the Amortizable Building
Balance shall be paid in full by the Expiration Date and,, at the
Expiration Date, the Building Balance shall equal the Building Acquisition
Cost.

     “Building Shell” means the building located on the Land on the date
hereof, together with all improvements and appurtenances thereto, specifically
excluding therefrom the Initial Leasehold Improvements and Initial Equipment.

3

 

     “Business Day” means a day other than a Saturday, Sunday or other day on
which
commercial banks in New York, New York or Boston, Massachusetts are authorized
or required
by law to close.

     “Casualty” means any, damage or, destruction of all or any portion of the
Property or the Equipment as a result of a fire, flood, earthquake or other
casualty or catastrophe.

     “Claims” means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims,, demands, settlements, costs and
expenses (including,, without limitation, reasonable legal fees and expenses)
of any nature whatsoever.

     “Commencement Date” is defined in Section 2.2 hereof.

     “Condemnation” means, with respect to the Property or Equipment, any
condemnation, requisition, confiscation, seizure or other taking or sale of the
use, access, occupancy, easement rights or title to the Property or Equipment
or any part thereof, wholly or partially (temporarily or permanently), by or on
account of any actual or threatened eminent domain proceeding or other taking
of action by any Person having the power of eminent domain,, including an
action by a Governmental Authority to change the grade of, or widen the streets
adjacent to, the Property or alter the pedestrian or vehicular traffic flow to
the Property so as to result in change in access to the Property (such that
there is a material adverse effect on the operation of the Property), or by or
on account of an eviction by paramount title or any transfer made in lieu of
any such proceeding or action. A “Condemnation” shall be deemed to have
occurred on the earliest of the dates that use, occupancy or title vests in the
condemning authority.

     “Environmental Laws” means all applicable federal, state, or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders directed to the Sublessee or any of its
Affiliates) relating to or imposing liabilities or standards of conduct
concerning protection of health or the use, handling, storage, recycling,
disposal, discharge, transport, treatment or generation of Hazardous Materials
and in effect in any and all jurisdictions in which the Sublessee or any of its
affiliates.

     “Environmental Violation” means, with respect to the Property, any
activity, occurrence or condition that violates or results in non-compliance
with any Environmental Law.

     “Equipment” means (a) the Initial Leasehold Improvements and Initial
Equipment and (b) all other equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever now or hereafter
subleased by the Sublessor to the Sublessee under this Sublease as identified
in each Equipment Schedule executed and delivered after the date hereof.

4

 

[Sublease]

     “Equipment Balance” means, at any time, the sum of (a) the Acquisition
Costs of all. Equipment, plus (b) all Accrued Equipment Rent that has been
added to the Equipment Balance pursuant to paragraph (a) of the definition of
“Equipment Rent,” less (c) any amounts paid by he Sublessee as Equipment Rent
pursuant to paragraph (c)(i) of the definition of “Equipment Rent” (but not any
other payments of Rent).

     “Equipment Purchase Notice” is defined in Section 19.1 hereof

     “Equipment Rent” means the rent payable hereunder with respect to the
Equipment in the amounts determined and payable as follows:

		
	 	     (a) First Rental Period. Equipment Rent for the First Rental
Period shall be an amount equal to interest at the Base Rate on the
Equipment Balance from time to time outstanding. Except as otherwise
provided in Section 3.l(c), no Equipment Rent shall be payable during
the First Rental Period (but the Sublessee may elect to pay Equipment
Rent during the First Rental Period as provided in Section 3. 1(b)
hereof). On each Acquisition Date and on each Basic Rent Payment
Date during the First Rental Period, all Equipment Rent accrued as of
such date and not paid (“Accrued Equipment Rent”) shall be added to
the Equipment Balance.

		
	 	     (b) Second Rental Period. Equipment Rent for the Second Rental
Period shall be an amount equal to interest at the Base Rate on the
Equipment Balance from time to time outstanding.

		
	 	     (c) Third Rental Period. During the Third Rental Period the
Equipment Rent payable on each Basic Rent Payment Date shall be the
sum of (i) an amount equal to one-twelfth (1/12) of the Amortizable
Equipment Balance, which payment shall be applied to the reduction of
the Equipment Balance, and (ii) an amount equal to interest at the
Base Rate on the Equipment Balance from time to time outstanding. It
is the intent of the parties hereto that, if all installments of the
Equipment Rent are paid in full when due in accordance herewith until
the Expiration Date, the Amortizable Equipment Balance shall be paid
in full by the Expiration Date and, at the Expiration Date, the
Equipment Balance shall equal twelve percent (12%) of the aggregate
Acquisition Cost of the Equipment.

     “Equipment Schedule” is defined in Section 2.1(a) hereof

     “Event of Loss” means any of the following:

		
	 	     (i) a Condemnation that: (i) involves a taking of the Prime Lessor’s
entire interest in the Land or Equipment or (ii) in the reasonable
judgment of the Prime Lessor, has adversely effected the aggregate Fair
Market Sales Value as set forth in the Appraisals, delivered to Sublessor
and Sublessee on the Commencement Date. (or the Acquisition Date with
respect to the Equipment) by more than $2,000,000 or reduced the useful
life or residual value of the Property by more than 5%,

5

 

[Sublease]

		
	 	     (ii) a Casualty that, in the reasonable judgment of the Prime Lessor,
has: adversely effected the Fair Market Sales Value as set forth in each
Appraisal delivered to Sublessor and Sublessee on the Commencement Date
(or the Acquisition Date with respect to the Equipment) by more than
$2,000,000, or reduced the useful life or residual value of the Property
or Equipment by more than 5% (unless the insurance proceeds received in
connection with such event are sufficient to repair and restore the
Property and Equipment to an acceptable condition (as determined within
the discretion of Prime Lessor) and, in the reasonable judgment of the
Prime Lessor, such repair and restoration could reasonably be expected to
be completed prior to the Expiration Date), or
	 
	 	     (iii) the revocation of any permits or regulatory approvals from
Governmental Authorities or third parties, which permits or approvals are
necessary for the use of the Property and Equipment and such revocation or
termination has not been cured within ninety (90) days, or such longer
period as may be agreed by the Prime Lessor and the Sublessor if the
Sublessee is diligently pursuing a cure.

     “Excess Casualty/Condemnation Proceeds” means. (i), in the event of a
Casualty or Condemnation that is an Event of Loss. where the Property or the
Equipment is not repaired or. restored, at any time the excess, if any, of (x)
the aggregate of all awards, compensation or insurance proceeds paid in
connection with a Casualty or Condemnation minus (y) the sum of all accrued and
unpaid Basic Rent and Supplemental Rent and (ii) in the event of a Casualty or
Condemnation where the Property or the Equipment is repaired or restored, the
excess, if any, of all awards, compensation or insurance proceeds paid in
connection with the Casualty or Condemnation minus the actual cost of such
repairs and restoration.

     “Expiration Date” is defined in Section 2.2 hereof

     “Fair Market Sales Value” means, with respect to the Property and the
Equipment, the amount, which in any event shall not be less than zero, that
would be paid in cash in an arm’s length transaction between an informed and
willing purchaser and an informed and willing seller, neither of whom is under
any compulsion to purchase or sell, respectively, for the ownership of the
Property and the Equipment. For purposes of each Appraisal delivered in
connection with this Sublease, the Fair Market Sales Value of the Property and
the Equipment shall be determined based on the assumption that the Property and
the Equipment are in the condition and, state of repair required under Section
9.1 of this Sublease.

     “First Rental Period” means the period commencing on the Commencement Date
and ending on December 31, 2002.

     “Governmental Authority” means the United States government or any agency
thereof, any state or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and having jurisdiction over the Property or
Equipment.

     “Guarantor” means Acambis plc, a public limited company incorporated under
the laws of England and Wales.

6

 

[Sublease]

     “Guaranty” means that certain Guaranty of even date herewith executed by
the Guarantor and guarantying the Sublessee’s obligations hereunder.

     “Hazardous Activity” means any activity, process, procedure or undertaking
that (a) directly or indirectly (i) produces, generates or creates any
Hazardous Material; (ii) causes or results in the Release of any Hazardous
Material into the environment (including air, water vapor, surface water,
groundwater, drinking water, land (including surface or subsurface), plant,.
aquatic and animal life); or (iii) involves the containment or storage of any
Hazardous Material, and (b) is regulated as hazardous waste treatment, storage
or disposal within the meaning of any Environmental Law.

     “Hazardous Material” means (a) any “hazardous substance,” as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and (b) any “hazardous waste,” as defined by the Resource
Conservation and Recovery Act, as amended and (c) any pollutant or contaminant
or hazardous, dangerous or toxic chemical material waste or substance within
the meaning of any applicable Environmental Law, all as amended or hereafter
amended.

     “Improvements” means all buildings, structures, fixtures and other
improvements of every kind existing at any time and from time to time and
constructed or installed or otherwise purchased on or under the Land, together
with any and all appurtenances to such buildings, structures or improvements,
including, without limitation, sidewalks, utility pipes, conduits and lines,
drainage facilities, parking areas and roadways, and including all
Modifications and other additions to or changes in the Improvements at any
time, but excluding the Equipment and Sublessee’s Equipment and Personalty.

     “Initial Leasehold Improvements and Initial Equipment” means the leasehold
improvements and certain equipment, apparatus, furnishings, fittings and
personal property located on or under the Land or within or appurtenant to the
Building Shell on the date hereof described in Equipment Schedule No. I to this
Sublease. The Acquisition Cost of the Initial Leasehold Improvements and
Initial Equipment is $10,000,000, comprised of (i) $6,418,808 allocated to the
leasehold improvements referred to in Equipment Schedule No. 1 and (ii)
$3,581,192 allocated to the other Equipment identified in Equipment Schedule
No. 1.

     “Insurance Requirements” means all terms and conditions of any insurance
policy either required by this Sublease to be maintained by the Sublessee, or
arranged on behalf of the Sublessee and all requirements of the issuer of any
such policy.

     “Land” means the land described in Exhibit A attached hereto and by this
reference made a part hereof, together with any and all easements, rights and
privileges appurtenant to such land.

     “Lien” means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, security interest, encumbrance or preference,
priority or other security agreement or any interest in property to secure
payment of a debt or performance of an obligation (including, without
limitation, the interest of a vendor or lessor under any conditional sale,
capitalized lease or other title retention agreement).

     “Make Whole Period” is defined in Section 18.2 hereof.

7

 

[Sublease]

     “Make Whole Premium” is defined in Section 18.2 hereof

     “Modifications” means any and all alterations,. renovations, improvements.
and additions to the Property or any part thereof or any Equipment and
substitutions and replacements thereof (but only to the extent located on the
Land).

     “Necessary Permits” means, collectively, all licenses, permits, orders,
approvals, consents and other authorizations from any Governmental Authority
then required for the. construction, use and maintenance of the Property and
Equipment.

     “Overdue Rate” means, the Base Rate, plus two percent (2%), or the highest
rate permitted by Applicable Law (if any), whichever is less. In the event that
the Overdue Rate collected by Sublessor is in violation of any usury or similar
law, then the Overdue Rate shall be reduced to the extent necessary to cause
the Overdue Rate to comply with any usury or similar law.

     “Permitted Encumbrances” means the easements, rights of way, reservations,
servitudes and rights of others against the Property which are listed on
Exhibit E attached hereto.

     “Permitted Liens” means any of the following:

		
	 	     (i) Permitted Sublessor Liens;
	 
	 	     (ii) Liens for Taxes that either are not yet due or are being
contested in
accordance with the provisions of Section 12. 1 (h) hereof;
	 
	 	     (iii) Liens arising by operation of law, materialmen’s, mechanics’,
workers’, repairmen’s, employees’, carriers’, warehousemen’s and other
like Liens relating to the construction of the Improvements or in
connection with any Modifications or arising in the ordinary course of
business for amounts that either are not more than 30 days past due or are
being diligently contested in good faith by appropriate proceedings, so
long as such proceedings satisfy the conditions for the continuation of
proceedings set forth in Section 12.1 hereof;
	 
	 	     (iv) Liens of any of the types referred to in clause (iii) above that
have been
bonded for not less than the full amount in dispute (or as to which other
I security
arrangements satisfactory to the Sublessor and the Prime Lessor have been
made), which
bonding (or arrangements) shall comply with Applicable Law, and has
effectively stayed
any execution or enforcement of such Liens;
	 
	 	     (v) easements, rights of way and other encumbrances on title to real
property permitted pursuant to Section 12.2 hereof;
	 
	 	     (vi) subleases that are permitted under Section 6.2 hereof;
	 
	 	     (vii) Liens created with the consent of the Sublessor, and
	 
	 	     (viii) the Permitted Encumbrances.

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[Sublease]

     “Permitted Sublessor Liens” means any Lien, true lease or sublease,
disposition of title or other encumbrance with respect to the Property or
Equipment arising as a result of (i) any claim against the Sublessor or the
Senior Interest Holders (ii) any act or omission of the Sublessor or. Senior
Interest Holders or (iii) any transfer by the Sublessor of all or any portion
of the Sublessor’s interest in the Property or Equipment not prohibited by this
Sublease.

     “Permitted Transfer” is defined in Section 6.2 hereof

     “Permitted Transferee” is defined in Section 6.2 hereof

     “Person” means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, limited liability company, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof

     “Prime Lease Documents” means the Prime Lease and any other documents
heretofore, now or hereafter entered into by the Sublessor in connection with
the Prime Lease or the Prime Lessor’s financing of the Property or Equipment.

     “Prime
Rate” means the prime rate of interest announced from time to time
by Bank One, NA, having its principal office in Chicago, Illinois.

     “Property” means the Land, the Building Shell and all the Improvements
located on such Land.

     “Purchase Closing Date” is defined in Section 18.l(a) hereof

     “Purchase Order” means a purchase order, invoice or other similar document
providing for the purchase of one or more items of Equipment.

     “Purchase Price” means an amount, determined as of the Purchase Closing
Date, equal to the sum of (a) the then Sublease Balance, plus (b) the then
amount of any accrued and unpaid Rent (but without duplication of amounts
provided for in clause (a)) , plus (c) if the Purchase Closing Date is a date
prior to the Expiration Date, the Make Whole Premium.

     “Qualified Equipment” means equipment located in the Improvements on the
Property that is necessary or desirable for the operation of the Property and
Equipment as a biopharmaceutical research, development and manufacturing
facility and uses ancillary or incidental thereto.

     “Release” means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Material.

     “Rent” shall mean the aggregate of all Basic Rent, Supplemental Rent, and
any other amounts due and payable by Sublessee under this Sublease.

     “Replacement Item” is defined in Section 20.1 (a) hereof

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[sublease]

     “Required Modification” means any Modification required to be made
pursuant to Applicable Law or Insurance Requirements.

     “Second Rental Period” means the one-year period commencing on January
     , 2003 ending on December 31, 2003.

     “Senior Interest Holders” means the Prime Lessor and the holders of any
mortgages or deeds of trust of the Property executed by the Prime Lessor.

     “Significant Casualty” means a casualty that in the reasonable, good faith
judgment of the Prime Lessor (i) renders the Property or Equipment unsuitable
for continued use as intended in this Sublease, or (ii) is so substantial in
nature that restoration of the Property or Equipment to the condition required
under this Sublease on or prior to the end of the Basic Term would be
impracticable or impossible.

     “Significant Condemnation” means (i) a condemnation that involves a taking
of Prime Lessor’s entire title to all or substantially all the Property or
Equipment or (ii) a condemnation that in the reasonable, good faith judgment of
the Prime Lessor either (A) renders the Property or Equipment unsuitable for
continued use as intended by this Sublease or (B) is such that restoration of
the Property or Equipment to substantially its condition as existed immediately
prior to such condemnation would be impractical or impossible or would cost in
excess of $5,000,000.00.

     “Sublease Balance” means, at any time, the sum of (a) the Building Balance
and (b) the Equipment Balance.

     “Sublease Event of Default” means a “Sublease Event of Default” as defined
in Section 16.1 hereof.

     “Sublessee’s Equipment and Personalty” means all furniture, equipment and
personal property of Sublessee, which includes, without limitation, inventory,
racking, shelving, conveyor equipment, machinery, air compressor, communication
equipment, data cabinets, hoist equipment, lockers, plug-in light fixtures,
propane tanks, storage racks, trash compactors, desks, movable partitions,
vending machines, computer software and hardware, movable storage and utility
rooms and removable trade fixtures and equipment, even if bolted or otherwise
affixed to the floors, in each case, as now or may hereafter exist in or on any
of the Land or Improvements and any other personal property owned by Sublessee
or a sublessee of Sublessee or other occupant of the Property. In no case
shall Sublessee’s Equipment and Personalty include the Equipment or any
built-up heating, ventilating, air-conditioning, plumbing or electrical
equipment (including power panels) to be utilized in connection with the
operation of the Property or Equipment.

     “Sublessee’s Security Requirements” is defined in Section 4.2 hereof.

     “Substituted Item” is defined in Section 20.1(a) hereof.

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[Sublease]

     “Supplemental Rent” means all amounts, liabilities and obligations (other
than Basic Rent) which the Sublessee assumes or agrees to pay to the
Sublessor or any other Person under this Sublease.

     “Taxes” means any and all of the following taxes, levies, imposts, duties,
‘charges, assessments or withholdings of any nature whatsoever imposed by any
Governmental Authority(i) real and personal property taxes on the Property, any
Equipment or this Sublease, including personal property taxes on the Property
or Equipment that is classified by Governmental Authorities as personal
property, and real estate or ad valorem taxes in the nature of property taxes;
(ii) sales taxes, use taxes and other similar taxes (including rent taxes and
intangibles taxes) on the Property, any Equipment or this Sublease; (iii) any
excise taxes on the Property, any Equipment or this Sublease; (iv) real estate
transfer taxes, conveyance taxes, mortgage taxes, intangible taxes, stamp taxes
and documentary recording taxes and fees with respect to this Sublease or any
transfer of the Property or the Equipment contemplated hereunder, and (v)
assessments on the Property, including all assessments for public improvements
or, benefits (whether or not such improvements are commenced or completed
during the Basic Term), and in. each case all interest, additions to tax and
penalties thereon, which at any time may be levied, assessed or imposed by any
Governmental Authority upon or with respect to (a) the Property or the
Equipment or any part thereof or interest therein, or the Sublessee or any user
of the Property or the Equipment; (b) the demolition, construction,
substitution, subleasing, assignment, control, condition, occupancy, servicing,
maintenance, repair, ownership, possession, purchase, rental, lease, Sublessor
activity conducted on, delivery, insuring, use, operation, improvement,
transfer, return or other disposition of the Property or the Equipment or any
part thereof or interest therein; (c) the rentals, receipts or earnings arising
from the Property or the Equipment or any part thereof or interest therein; (d)
this Sublease or any payment made or accrued pursuant thereto; (e) any contract
relating to the construction, acquisition or delivery of the Improvements or
any part thereof or interest therein; or (1) otherwise in connection with the
transactions contemplated by this Sublease. Taxes for any given tax year shall
exclude assessment installments that are not due and payable during such tax
year.

     Notwithstanding anything in the first paragraph of this definition, the
term “Taxes” shall not mean or -include taxes (except for taxes that are, or
are in the nature of, sales, use, rental, transfer or property taxes) that are
imposed by any Governmental Authority and that are based upon or measured by or
with respect to the gross or net income or gross or net receipts or that are
minimum taxes, income or capital gains taxes, withholding taxes or taxes on,
measured by or with respect to or in the nature of capital, net worth, excess
profits, items of tax preference, capital stock, franchise, gift, succession,
estate, business privilege or doing business taxes or any similar taxes or
taxes in lieu thereof

     “Third Rental Period” means the period commencing January 1, 2004. and
ending on the Expiration Date.

     “Unavoidable
Delays” means delays caused by war, riot, civil commotion,
terrorism, strikes, labor action, acts of God, shortages of supplies or labor,
adverse weather conditions not reasonably anticipatable given the location of a
Property and the season of year, or any other cause not reasonably within the
control of the Sublessee but excluding the financial condition of the
Sublessee.

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[Sublease]

ARTICLE II

SUBLEASE

SECTION 2. 1. Acceptance and Sublease of the Property and the Equipment

     (a)  Subject to the terms and conditions contained in this Sublease, the
Sublessor agrees that it shall, commencing on the first day of the Basic Term,
demise and sublease to the Sublessee hereunder for the Basic Term the
Sublessor’s interest in the Property and the Equipment, and the Sublessee
hereby agrees, expressly for the direct benefit of the Sublessor, to sublease
from the Sublessor for the Basic Term the Sublessor’s interest in the.
Property and the Equipment as the case may be. Notwithstanding the foregoing,
the leasehold interest of certain items of Equipment may be ]eased or acquired
by the Sublessor and subleased to the Sublessee subsequent to the Commencement
Date in accordance with the provisions, of Article XIX hereof Each, item of
Equipment subject to this Sublease shall be described in a duly executed
schedule attached hereto which describes the date of acquisition (“Acquisition
Date) and the Acquisition Cost with respect to such Equipment (any such
schedule hereinafter referred to as an “Equipment Schedule), each of which
Equipment Schedules shall be executed by the Sublessor and Sublessee in
accordance with Article XIX hereof and designated by a unique number, and may
be attached to this Sublease. Each Equipment Schedule is hereby incorporated
into this Sublease and made an integral part hereof immediately upon full and
proper. execution of such Equipment Schedule by the Sublessor and Sublessee.
Effective upon the execution and delivery of each Equipment Schedule by the
Sublessor and the Sublessee in accordance with Article XIX hereof and advance
of the Acquisition Cost of the Equipment identified in the Equipment Supplement
as provided in Article XIX, the Equipment described in each Equipment Schedule
shall be subject to the terms and provisions of this Sublease. The terms and
provisions of this Sublease shall apply to each item of Equipment as of the
Acquisition Date of such item of Equipment. With respect to such. Equipment,
the Sublessor agrees that it shall, subject to and in accordance with Article
XIX hereof, on the applicable Acquisition Date, (i) subject to the provisions
of Section 19.3 cause the Prime Lessor to acquire the Equipment and lease the
same to the Sublessor and (ii) demise and sublease to the Sublessee hereunder
for the Basic Term the Sublessor’s interest ‘in such Equipment, and the
Sublessee hereby agrees, expressly for the direct benefit of the Sublessor, to
sublease from the Sublessor for the Basic Term, the Sublessor’s interest in
such Equipment.

     (b)  Sublessee, may from time to time own or hold under lease or license
from Persons other than the Prime Lessor or the Sublessor furniture, equipment
and personal property, including Sublessee’s Equipment and Personalty, located
on or about the Property, which shall not be subject to this Sublease. The
Sublessor, from time to time, upon the reasonable request of the Sublessee, and
at the Sublessee’s cost, shall (and shall cause the Prime Lessor to) promptly
acknowledge in writing to the Sublessee or other Persons that the Sublessor (or
the Prime Lessor) does not own or (except as provided in Section 11.2 hereof)
have any other right or interest in or to such furniture, equipment

12

 

[Sublease]

and personal property, including the Sublessee’s Equipment and Personalty,
and the Sublessor hereby waives any such right, title or interest.

     SECTION 2.2. Basic Term. The Basic Term (the “Basic Term”) of this
Sublease with respect to the Property and the Initial Leasehold Improvements
and Initial Equipment shall begin on December 21, 2001 (the “Commencement Date)
and shall end on December 19, 2006 (the “Expiration Date). The Basic Term of
this Sublease with respect to all other Equipment shall begin on the applicable
Acquisition Date and shall end on the Expiration Date.

     SECTION 2.3. Title. The Prime Lessor’s and the Sublessor’s interests in
the Property and Equipment are and always shall be paramount to the interest of
the Sublessee and nothing contained in this, Sublease shall (i) empower the
Sublessee to do any act which would impair the Prime Lessor’s or the
Sublessor’s interest in the Property or Equipment or (ii) create within
Sublessee rights in. the Property or Equipment not held by Sublessor. The
Property and the Equipment are subleased to the Sublessee without any
representation or warranty, express or implied, by the Sublessor and subject to
the rights of parties in possession, the existing state of title (including,
without limitation, all Permitted Liens) and all Applicable Law., Except as
otherwise provided in this Sublease, the Sublessee shall in no event have any
recourse against the Sublessor for any defect in or exception to title to the
Property or the Equipment other than resulting from Liens or other encumbrances
arising subsequent to the Commencement Date (or the Acquisition Date with
respect to any Equipment) as a result of the acts of Sublessor or Prime Lessor.
Unless expressly provided otherwise in this Sublease, in the event of any
failure on the part of the Sublessee to pay and discharge any Supplemental Rent
as and when due, the Sublessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added under any agreement to
which Sublessee is a party or which is authorized in writing by the Sublessee
with a third party for nonpayment or I ate payment of such Supplemental Rent,
all of which shall also constitute Supplemental Rent.

     SECTION 2.4. Subordination to Prime Lease. This Sublease is expressly
subject and subordinate to the Prime Lease and to the rights of the Prime
Lessor thereunder. The Sublessee shall immediately surrender the Property and
the Equipment to the Prime Lessor after notice from the Prime Lessor of the
termination of the Prime Lease and the request for such surrender. This
Sublease shall automatically terminate on the earlier of (i) the Expiration
Date and (ii) the termination of the Prime Lease, unless in either case the
Sublessor shall have exercised its purchase option and purchased (or is in the
process of purchasing) the Property and Equipment pursuant to the Prime Lease
or the Sublessee shall have exercised its purchase option and purchased (or is
in the process of purchasing) the Property and Equipment pursuant to this
Sublease.

ARTICLE III

PAYMENT OF RENT

SECTION 3. L Rent.

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[Sublease]

		
	 	     (a) During the Basic Term, for the Property or the Equipment, the
Sublessee
shall pay Basic Rent for such Property or such Equipment to the Sublessor
on each Basic Rent Payment Date during the Basic Term (except, as
otherwise provided in Section 3. L(b) below) and on any date on which this
Sublease shall terminate with respect to such Property or such Equipment.
Basic Rent shall be paid in arrears for the calendar quarter or other
period ending on, and including, such Basic Rent Payment Date, pro vided,
however, I that if a Basic Rent Payment Date is not the last day of a
calendar quarter, the Basic Rent payable thereon shall also include Basic
Rent for the period from such Basic Rent Payment Date to, and including,
the last day of such calendar quarter.

		
	 	     (b) Notwithstanding anything to the contrary contained herein but
subject to the provisions of Section 3.1 (c) during the First Rental
Period the Sublessee shall not be required to pay Basic Rent but may elect
to pay all or any portion of the Building Rent on any Basic Rent Payment
Date or all or any portion of the Equipment Rent on any Acquisition Date
or Basic Rent Payment Date. Except as provided in this Section
3.1(b),Basic Rent shall be payable on each Basic Rent Payment Date.

		
	 	     (c) Notwithstanding anything to the contrary in Section 3.1(b) or in
the definition of “Building Rent” or “Equipment Rent,” the Sublessor shall
be obligated to pay Basic Rent on any Basic Rent Payment Date during the
First Rental Period to the extent that the non-payment thereof would
increase the Sublease Balance to an amount in excess of Forty Million
Dollars ($40,000,000).

		
	 	     (d) The Sublessee’s inability or failure to take possession of all or
any portion of the Property or the Equipment upon the Commencement Date
(or the Acquisition Date
with respect to any Equipment) shall not delay or otherwise affect the
Sublessee’s obligation to pay Rent for the Property or the Equipment in
accordance with the terms of this Sublease.

     SECTION 3.2. Payment of Rent. Rent shall be paid absolutely net to the
Sublessor or its designee, so that this Sublease shall yield to Sublessor the
full amount thereof, without setoff, deduction or reduction.

     SECTION 3.3. Supplemental Rent. The Sublessee shall pay to the Sublessor
or its designee any and all Supplemental Rent promptly as the same shall
become due and payable, and if the Sublessee fails to pay any Supplemental Rent
after applicable notice and/or grace or cure periods, the Sublessor shall have
all rights, powers and remedies provided for herein or by law or equity or
otherwise. The Sublessee shall pay to the Sublessor, as Supplemental Rent,
among other things, within ten (10) Business Days of written demand, to the
extent permitted by
Applicable Law, interest at the applicable Overdue Rate on any installment of
Basic Rent not paid when due for the period for which the same shall be overdue
(subject to the provisions of Section 3.5 and on any payment of Supplemental
Rent not paid within (30) days of r pt of an invoice therefor (but in no event
later than its due date) for the period from the due date, until the same shall
be paid. The expiration or other termination of the Sublessee’s obligations to
pay Basic Rent hereunder shall not limit or modify the obligations of the
Sublessee with respect to Supplemental Rent.

14

 

[Sublease]

     SECTION 3.4. Method of Payment. Each payment of Rent payable by the
Sublessee to the Sublessor under this Sublease shall be made by the Sublessee
to the Sublessor or to the account specified by the Sublessor (on at least ten
(10) days’ prior notice) in immediately. available funds, consisting of U.S.
currency on or before 2:00 p.m., New York City time, on the Basic Rent Payment
Date. Payments received on the Basic Rent Payment Date, but after*2:00 p.m.,
New York City time, on such date shall for the purpose of Section 16.1 hereof
be deemed received on such day; however, for purposes of the second sentence of
Section 3.3 hereof, such payments shall be deemed received on the following
Business Day and. shall be subject to interest at the Overdue Rate as provided
in such Section 3.3 hereof.

     SECTION 3.5. Basic Rent Statement. Not less than ten (10) days prior to
each Basic Rent Payment Date (beginning with the first Basic Rent Payment Date
in the year 2002), the Sublessor shall deliver to the Sublessee a statement
(the “Basic Rent Payment Statement”) setting forth the amount of the Basic Rent
payable (or that, but for the provisions of Section 3-11(b) hereof, would be
payable) on such Basic Rent Payment Date. In the event the Sublessor fails to
deliver the Basic Rent Payment Statement, the Sublessee shall not be relieved
of its obligation to pay Basic Rent on such Basic Rent Payment Date but in such
event the Sublessee shall not be obligated to pay interest on, such delinquent
Basic Rent under Section 3.3 hereof, provided such Basic Rent is paid on or
before the tenth (10’h) day after the Sublessor’s delivery of the Basic Rent
Payment Statement.

     SECTION 3.6. Maximum Rate of Interest. The Basic Rent hereunder is based,
in part, upon the Prime Rate, which is a fluctuating rate of interest. To the
extent that any payment hereunder by the Sublessee is construed to constitute
the payment of interest under any Applicable Law regulating the payment or
collection of interest, it is the intent of the parties hereto that the
Sublessee shall not be obligated to pay interest at a rate in excess of the
maximum nonusurious rate of interest permitted by Applicable Law (“Maximum
Lawful Rate”). If the Applicable Law is ever judicially interpreted so as to
render usurious any amount contracted for, charged, taken, reserved or received
pursuant to this Sublease, then it is the parties’ express intent that all
amounts charged in excess of the Maximum Lawful Rate shall be automatically
canceled, and all amounts in excess of the Maximum Lawful Rate theretofore
collected by the Sublessor shall be refunded to the Sublessee, and the
provisions of this Sublessee immediately shall be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any pew document, so as to comply with the
Applicable Law, but so as to permit the recovery. o I the fullest amount
otherwise called for hereunder and thereunder.

ARTICLE IV

QUIET ENJOYMENT; RIGHT TO INSPECT

     SECTION 4. 1. Quiet Enjoyment Provided no Sublease Event of Default has
occurred that is continuing, the Sublessee shall have the right to peaceably
and quietly have, hold and enjoy the Property and the Equipment for the Basic
Term.

15

 

Sublease]

     SECTION 4.2. Right to Inspect During the Basic Term, the Sublessee shall
upon reasonable notice from the Sublessor, permit the Sublessor and its
authorized representatives, agents and permitees (each an “Inspecting Party) to
inspect the Property and the Equipment dining normal business hours, provided
that such inspections (i) shall not unreasonably interfere with the Sublessee’s
business operations at the Property (ii) be subject to Sublessee’s reasonable
security and health and safety requirements and policies (collectively,
“Sublessee’s Security
Requirements”; (iii) be made at each Inspecting Party’s own expense, (iv) in
the company of a representative of the Sublessee (provided such representative
is present on the inspection date designated in Sublessor’s notice); and (v)
provided no Sublease Event of Default has occurred that is continuing, shall
occur not more frequently than once per year. Each Inspecting Party shall hold
in confidence all trade secrets of the Sublessee.

ARTICLE V

NET SUBLEASE, ETC.

     SECTION 5. 1. Net Sublease. This Sublease shall constitute a net sublease.
Any present or future law to the contrary notwithstanding, this Sublease shall
not terminate, nor shall the Sublessee be entitled to any abatement,
suspension, deferment, reduction, setoff, counterclaim, or defense with respect
to the Rent, nor shall the obligations of the Sublessee hereunder be affected
(except as expressly herein permitted and by performance of the obligations in
connection therewith) by reason of. (i) any defect in the condition
merchantability, design, construction, quality or fitness for use of the
Property or the Equipment or any part thereof, or the failure of the Property
or the Equipment to comply with all Applicable Law, including any inability to
occupy or use the Property or the Equipment or any part thereof by reason of
such non-compliance; (ii) any damage to ‘ removal, abandonment, salvage, loss,
contamination of or Release from, scrapping or destruction of or any
requisition or taking of the Property or the Equipment or any part thereof,
(iii) any restriction, prevention or curtailment of or interference with the
construction on or any use of the Property or the Equipment or any part thereof
including eviction; (iv) any defect in title to or rights to the Property or
the Equipment or any Lien on such title or rights or on the Property or the
Equipment; (v) any change, waiver, extension, indulgence or other action or
omission or breach in respect of any obligation or liability of or by the
Sublessee; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to the
Sublessee or any action taken with respect to this Sublease by any trustee or
receiver of Sublessee, or by any court, in any such proceeding; (vii) any claim
that the Sublessee has or might have against any Person, including without
limitation any vendor, manufacturer, contractor of or for the Property or the
Equipment; (viii) any failure on the part of the Sublessor to perform or comply
with any of the terms of this Sublease (other than performance by the Sublessor
of its obligations set forth in Section 2.1 hereof, Section 19. 1. hereof or
any other provisions hereof with which the Sublessor must comply to effect the
purchase of the Property and Equipment by the Sublessee upon the Sublessee’s
exercise of its option to purchase the Property and Equipment); (ix) any
invalidity or unenforceability or illegality or disaffirmance of this Sublease
against or by the Sublessee or any provision hereof-, (x) the impossibility or
illegality of performance by the Sublessee, the Sublessor or both; (xi) any
action by any court, administrative agency or other Governmental Authority; or
(xii) any other cause or circumstances whether similar or dissimilar to the

16

 

[Sublease]

foregoing and whether or not the Sublessee shall have notice or knowledge of
any of the foregoing; and any provisions of Applicable Law which are contrary
to the foregoing are hereby waived to the fullest extent permitted by law. The
parties intend that the obligations of the Sublessee here-under shall be
covenants and agreements that are separate and independent from any obligations
of the Sublessor hereunder and the obligations of the Sublessee shall continue
unaffected unless such obligations shall have been modified or terminated in
accordance with an express provision of this Sublease.

     SECTION 5.2. No Termination or Abatement. The Sublessee shall — remain
obligated under this Sublease in accordance. with its terms and shall not take
any action to terminate, rescind or avoid this Sublease (except as provided
herein), notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting the Sublessor, or any
action with respect to this Sublease which may be taken by any trustee,
receiver or liquidation of the Sublessor or by any court with respect to the
Sublessor. The Sublessee hereby waives all right to terminate or surrender this
Sublease (except as provided herein) or to avail itself of any abatement,
suspension, deferment, reduction, setoff, counterclaim or defense with respect
to the Basic Rent or any other payments due under this Sublease. The Sublessee
shall remain obligated under this Sublease in accordance with its terms and the
Sublessee hereby waives to the fullest extent permitted by law any and all
rights now. or hereafter
conferred by statute or otherwise to modify or to avoid strict compliance with
its obligations under this Sublease. Notwithstanding any such statute or
otherwise, the Sublessee shall be bound by all of the terms and conditions
contained in this Sublease.

ARTICLE VI

ASSIGNMENT AND SUBLEASING BY SUBLESSEE

     SECTION 6. 1. General. THE SUBLESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE SUBLESSOR, TRANSFER, ASSIGN OR ENCUMBER THIS SUBLEASE OR ANY OF
ITS RIGHTS OR OBLIGATIONS HEREUNDER OR SUBLEASE THE PROPERTY, THE EQUIPMENT OR
ANY. PART THEREOF, AND ANY SUCH TRANSFER, ASSIGNMENT, ENCUMBRANCE OR SUBLEASE
THAT IS NOT CONSENTED TO BY SUBLESSOR, IN ITS SOLE DISCRETION, OR DEEMED
CONSENTED TO UNDER SECTION 6.3 HEREOF SHALL BE NULL AND VOID.

     SECTION 6.2. Permitted Transfers. Notwithstanding the provisions of
Section 6.1 hereof, the Sublessee may, without the necessity of obtaining the
consent of the Sublessor, (i) assign this Sublease or sublease the Property or
the Equipment (or a part thereof) to Affiliate of the Sublessee, (ii) sublet
from time to time portions of the Improvements, provided that at no time shall
the aggregate rentable areas of the Improvements so subleased exceed fifty
percent (50%) of the total rentable area of the Improvements, or (iii) assign
this Sublease by operation of law or otherwise to a Person with. which the
Sublessee merges or consolidates or to a Person that acquires all or
substantially all of the assets of the Sublessee (each of (i), (ii) and (iii)
being, a “Permitted Transfer” and each sublessee or assignee in a Permitted
Transfer being a “Permitted Transferee”); provided in each case that the
following conditions are met: (a) there shall not have occurred and be
continuing a Sublease Event of Default at the time of the proposed

17

 

[Sublease]

Permitted Transfer, (b) the Guarantor shall expressly confirm in writing its
obligations under the Guaranty, in form and substance satisfactory to the
Sublessor, (c) if the proposed Permitted Transfer is by assignment, the
Permitted Transferee shall furnish to the Sublessor prior to the effective date
of the assignment a written instrument reasonably satisfactory to the Sublessor
mi
which assignee agrees to assume and be bound by all the conditions,,
obligations and agreements of the Sublessee contained in this Sublease; (d) if
the Permitted Transfer is a sublease, it shall be expressly subject and
subordinate to this Sublease; and (e) the use or uses of the Permitted
Transferee shall be such that they do not impair the value or utility of the
Property or the Equipment. The Sublessee shall notify the Sublessor promptly,
and in any event- not less than ten (10) Business Days prior to the date of any
such proposed Permitted Transfer, and shall provide the Sublessor with the
terms. of or the documents evidencing such Permitted Transfer upon written
request therefor.

     SECTION 6.3. Deemed Consent. Whenever the consent. of the Sublessor to any
sublease or assignment is required hereunder, such consent shall be deemed
given by the Sublessor if (a) the Sublessee delivers to the Sublessor notice,
in accordance with the terms of this Sublease, requesting such consent, which
notice expressly states that a failure of the Sublessor to respond thereto
shall be deemed to be consent thereto hereunder and (b) the Sublessor fails to
deliver to the Sublessee, within 30 days of such notice, a notice responding to
the Sublessee’s request.

ARTICLE VII

SUBLESSEE ACKNOWLEDGMENTS

     SECTION 7. 1. Condition of the Property and the Equipment THE SUBLESSEE
ACKNOWLEDGES AND AGREES THAT IT IS SUBLEASING THE PROPERTY AND THE EQUIPMENT
THEREON “AS IS” WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY THE SUBLESSOR AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE (SUBJECT TO THE PROVISIONS OF SECTIONS 4.1 AND 26.14 HEREOF), (B) THE
RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN
ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, AND (D) VIOLATIONS OF
APPLICABLE LAW WHICH MAY EXIST ON THE DATE HEREOF OR ON THE COMMENCEMENT DATE.
     . SUBLESSEE FURTHER ACKNOWLEDGES THAT PRIOR TO THE COMMENCEMENT DATE IT HAS
BEEN IN ACTUAL POSSESSION OF THE PROPERTY AND ANY EQUIPMENT LOCATED THEREON.
SUBLESSOR HAS NOT MADE NOR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION,
WARRANTY OR COVENANT (EXPRESS OR IMPLIED) NOR SHALL BE DEEMED TO HAVE ANY
LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION,
DESIGN, OPERATION, OR FITNESS FOR USE OF THE PROPERTY OR THE EQUIPMENT (OR ANY
PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT (EXCEPT
SECTION 4.1 HEREOF) WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PROPERTY OR THE EQUIPMENT (OR ANY PART THEREOF) AND THE SUBLESSOR SHALL NOT BE
LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE
PROPERTY OR THE EQUIPMENT, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE
LAW.

18

 

[Sublease]

     SECTION 7.2. Risk of Loss. Subject to the terms of Section 14.1 and
Section 26.14 of this Sublease, during the Basic Term the risk of loss of or
decrease in the enjoyment and beneficial use of the Property or the Equipment
as a result of the damage or destruction thereof by fire, the elements,
casualties,, thefts, riots, wars or otherwise is assumed by the Sublessee, and
except for loss or damages arising from the gross negligence or willful
misconduct of, or breach of Us Sublease by, the Sublessor or its respective
agents, employees ox. contractors, the Sublessor shall not be answerable or
accountable to Sublessee therefor.

     SECTION 7.3. No, Obligation of Sublessor to Repair, etc. The Sublessor
shall -under no circumstances be required to build any Improvements on the
Property, make any repairs, replacements, alterations or renewals of any nature
or description to the Property or the Equipment, make any expenditure
whatsoever in connection with this Sublease or maintain the Property or the
Equipment in any way. The Sublessee waives any right to (i) require the
Sublessor to maintain, repair, or rebuild all or any part of the Property or
the Equipment or (ii) make repairs at the expense of the Sublessor pursuant to
any Applicable Law, Insurance Requirement, contract, agreement, or covenant,
condition or restriction in effect at any time during the Basic Term.

     SECTION 7.4. No Liability of Sublessor. Nothing contained in this Sublease
shall be construed as constituting the consent or request of the Sublessor,
expressed or implied, to or for the performance by any contractor, mechanic,
laborer, materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Property or the Equipment or any part thereof
SUBJECT TO THE PROVISIONS OF SECTIONS 4.1 AND 26.14 HEREOF, NOTICE IS HEREBY
GIVEN THAT NEITHER THE SUBLESSOR NOR THE PRIME LESSOR IS OR SHALL BE LIABLE FOR
ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE SUBLESSEE
OR TO ANYONE HOLDING ANY INTEREST IN THE PROPERTY OR EQUIPMENT OR ANY PART
THEREOF THROUGH OR UNDER THE SUBLESSEE AND THAT NO MECHANIC’S OR OTHER LIENS
FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE
INTEREST OF THE SUBLESSOR OR THE PRIME LESSOR IN AND TO THE PROPERTY OR
EQUIPMENT (EXCEPT FOR PERMITTED LIENS).

ARTICLE VIII

UTILITY CHARGES, TAXES, POSSESSION AND USE OF THE PROPERTY OR

EQUIPMENT, ETC.

     SECTION 8.1. Utility Charges The Sublessee shall pay or cause to be paid
all charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Property during the
Basic Tenn. The Sublessee shall be entitled to receive any credit or refund
with respect to any utility charge paid by the Sublessee and the amount of any
credit or refund received by the Sublessor on account of any utility charges
paid

19

 

[Sublease]

by the Sublessee, net of the costs and expenses reasonably incurred by the
Sublessor in obtaining
such credit or refund, shall be promptly paid over to the Sublessee.

     SECTION 8.2. Taxes. (a) Subject to the provisions of Section 12.1(b)
hereof, the, Sublessee covenants and agrees to pay, before any fine, penalty,
interest or cost may be added thereto for the nonpayment thereof, all Taxes
which at any time during the Basic Term may have been or may be assessed,
levied, confirmed, imposed upon, become due or payable with respect to, or
become a lien on, the Property or Equipment or any portion thereof or this
Sublease.

     (b)  The Sublessee agrees to furnish to the Sublessor promptly upon request
copies of official receipts of the appropriate taxing authority, or other
appropriate evidence reasonably satisfactory to the Sublessor, evidencing the
payment of Taxes then due. The, Sublessor may rely on duplicate tax bills or
invoices provided by any Governmental Authority and on books and records of
such Governmental Authority in determining whether any Taxes are due and unpaid
and, if the Sublessor so elects, in making payment of any such Taxes.

     SECTION 8.3. Possession, Use and Operation of the Property and the
Equipment. The Property and the Equipment shall be used, operated and
maintained in a manner consistent with this Sublease and the standards applied
by the Sublessor for similar facilities and equipment similar to the Property
and the Equipment owned, leased or subleased by the Sublessor. The Sublessee
shall pay, or cause to be paid, all charges and costs required in connection
with the use of the Property and the Equipment as contemplated by this
Sublease. The Sublessee shall not commit or permit any waste or abandonment of
the Property or the Equipment or any part thereof

     SECTION 8.4. Compliance with Applicable Laws and Insurance Requirements.
Necessary Permits, etc. Subject to the terms of Article XII relating to
permitted contests, the Sublessee, at its sole cost and expense, shall:

		
	 	     (a) comply with: (i) all Applicable Law (including all Environmental
Laws) and (ii) all applicable Insurance Requirements relating to the
Property or the Equipment, including the use, construction, operation,
maintenance, repair and restoration thereof, whether or not compliance
therewith shall require structural or extraordinary changes in. the
Property or the Equipment or interfere with the use and enjoyment of the
Property or the Equipment, and

		
	 	     (b) procure, maintain and comply with all Necessary I Permits and
notify the Sublessor within five (5) Business Days of Sublessee’s having
received written notice or actual knowledge of any actual or pending
termination or revocation of any Necessary Permit.

SECTION 8.5. Sublessee’s Right to Enforce Warranties

		
	 	     (a) Unless a Sublease Event of Default has occurred that is
continuing (unless the enforcement of any such warranty or claim is
necessary to cure, in whole or in part, any such Sublease Event of
Default), the Sublessor agrees, and agrees to cause the Prime Lessor, to
authorize the Sublessee (directly or through agents) at-the Sublessee’s
expense to assert during the Basic Term, all of the Prime Lessor’s or the
Sublessor’s rights (if 20

20

 

[Sublease]

any) under any applicable warranty and any other claim that the Prime Lessor,
the Sublessor or the Sublessee may have against any dealer, vendor,
manufacturer, contractor or subcontractor with respect to the Property or any
portion thereof or any Equipment.

     (b)  Unless a Sublease Event of Default has occurred that is continuing
(unless the enforcement of any such warranty or claim is necessary to cure, in
whole or in part, any such Sublease Event of Default), the Sublessor agrees,
and agrees to cause the Prime Lessor, at the Sublessee’s expense, to cooperate
with the Sublessee and take all other action necessary as specifically
requested by the Sublessee to enable-the Sublessee to enforce all of
Sublessee’s rights (if any) under this Section 8.5 such rights of enforcement
to be exclusive to the Sublessee. During the Basic Term (except during the
continuance of a Sublease Event of Default), the Sublessor will not, and will
cause Prime Lessor not to, amend, modify or waive, or take any action under,
any applicable warranty and any other claim that the Sublessee may have under
this Section. 8.5 without the Sublessee’s prior written consent. The Sublessee.
agrees at its expense to diligently assert all of its rights under such
warranties and any other claims that the Sublessee may have against such
vendor, manufacture, contractor or subcontractor with respect to the Property
or any portion thereof or. any Equipment.

ARTICLE IX

MAINTENANCE AND REPAIR; REPLACEMENT OF PARTS

SECTION 9.1 Maintenance and Repair.

     (a)  Subject to the provisions of Article X the Sublessee, at its sole cost
and expense, shall maintain the Property and the Equipment in good condition
(ordinary wear and tear excepted) and make all necessary repairs thereto, of
every kind and nature whatsoever, whether interior or exterior, ordinary or
extraordinary, structural or nonstructural or foreseen or unforeseen, in each
case as required by all Applicable Law and Insurance Requirements and in no
event less than the standards applied by Sublessor in the operation and
maintenance of facilities and equipment similar to the Property and the
Equipment owned or ]eased by Sublessor.

     (b)  The Sublessor shall under no circumstances be require Id to build any
improvements on the Property, make any repairs, replacements, alterations or
renewals of any nature or description to the Property or the Equipment, make
any expenditure whatsoever in connection with the maintenance of the Property
or the Equipment in any way. The Sublessee waives any right to (i) require the
Sublessor to maintain, repair, or rebuild all or any part of the Property or
the Equipment or (ii) make repairs at the expense of the Sublessor pursuant to
any Requirement of Law, Insurance Requirement, contract, agreement, or
covenant, condition or restriction in effect at any time during the Basic Term.

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[Sublease]

ARTICLE X

MODIFICATIONS, ETC.

     SECTION 10.1. Modifications, Substitutions and Replacements. During the
Basic Term, the Sublessee, at its sole cost and expense, may at any time and
from time to time, make (i) non-structural Modifications to the Property, (ii)
structural Modifications to the Property costing less than 5% of the
replacement cost of the Improvements, (iii) Modifications of the Equipment,
(iv) the improvements described in Exhibit F attached hereto and (v) with the
prior written consent of Sublessor (not to be unreasonably withheld, delayed or
conditioned) structural Modifications to the Property costing an amount equal
to or exceeding 5% of the replacement costs of the Improvements; provided,
however, that:

		
	 	     (a) except for any Required Modification, no Modification shall
adversely affect the Fair Market Sales. Value, utility or remaining useful
life of the Property or the Equipment or impair the originally intended
use or function of any Equipment;

		
	 	     (b) the Modification shall be done in a good and workmanlike manner
and in accordance with plans and specifications therefor;

		
	 	     (c) the Sublessee shall comply in all material respects with all
Applicable Law (including all Environmental Laws) and Insurance
Requirements applicable to the Modification, including the obtaining of
all permits and certificates of occupancy; and

		
	 	     (d) subject to the terms of Article XII relating to permitted
contests, the Sublessee shall pay all costs and expenses and shall
discharge (or cause to be insured or bonded over) within thirty (30) days
after the same shall be filed (or otherwise become effective) any Liens
(other than Permitted Liens) arising with respect to the Modification.

     Notwithstanding the foregoing to the contrary, Sublessee may, in good
faith, make any structural repairs required by virtue of an emergency, without
obtaining Sublessor’s consent (if required), provided Sublessee notifies
Sublessor of any such repair (to the extent required) as promptly as is
reasonably practical after the emergency and any such repairs are otherwise
made in accordance with the applicable provisions of this Sublease.

     All Modifications shall remain part of the Property or Equipment, as
applicable~ and any rights or title of the Sublessee thereto shall be derived
solely through this Sublease; provided, however, that Modifications that (x)
are not Required Modifications, (y) were paid for by the Sublessee and not
acquired by the Sublessor or the Prime Lessor and (z) can be removed. without
causing (A) damage to the either the Property or the Equipment, as applicable,
in excess of three percent (3*/o) of the Fair Market Sales Value as set forth
in the as-completed Appraisal, or (B) any diminution to. the remaining useful
life of the either the Property or the Equipment, as applicable, shall be the
property of the Sublessee and may be removed by the Sublessee during the Basic
Term or at the expiration or earlier termination thereof (provided Sublessee
repairs any damage in connection with any such removal) and shall not be
subject to this Sublease. The Sublessee may place upon either the Property or
the Equipment, as applicable, any trade fixtures, machinery, equipment,
inventory or other property belonging to the Sublessee or third parties

22

 

[Sublease]

and may remove the same so long as such trade fixtures, machinery, equipment,
inventory or other property may be removed without any diminution in the Fair
Market Sales Value as set forth in the as-completed Appraisal or the remaining
useful life of the either the Property or the Equipment, as applicable;
provided, further, however, that the Sublessee shall keep and maintain at the
Property or the Equipment and shall not remove from the Property or Equipment
any equipment or parts not paid for by the Sublessee, provided such amounts
paid by Sublessee were . not from amounts financed by Sublessor or Prime
Lessor.

ARTICLE XI

DISCHARGE OF LIENS; CONDITION UPON RETURN

     SECTION 11. 1. Sublessee’s Obligation to Discharge Liens. The Sublessee
agrees that except as otherwise provided herein and subject to the terms of
Article XII relating to permitted contests, the Sublessee shall not directly or
indirectly create or allow to remain, and shall discharge at its sole cost and
expense within thirty (30) days of the filing thereof (by payment or bonding),
any Lien (other than any Permitted Lien), defect, attachment, levy, title
retention agreement or claim upon the Property or Equipment or any Lien,
attachment, levy or claim with respect to the Rent, other than Permitted Liens.

     SECTION 11.2. Condition upon Return to Sublessor. The Sublessee shall,
upon the expiration or earlier termination of this Sublease (other than as a
result of the. Sublessee’s, purchase of the Property as provided herein),
vacate and surrender the Property to the Sublessor in its then-current, “AS IS”
condition,. without any express or implied warranty -subject to the Sublessee’s
obligations under Section 8.4, Article IX and Sections 10. 1, 11. 1, 14, 1, and
14.2 hereof Title to all improvements, furnishings, furniture, fixtures and
personal property of the Sublessee which were (i) paid for by the. Sublessee,
(ii) not acquired by the Prime Lessor or the Sublessor and (iii) located on or
about the Property whether or not affixed to the realty (including, without
limitation, Sublessee’s Equipment. and Personalty, shall, subject to the
following sentence, be and remain the property of the Sublessee throughout the
Basic Term, and at any time during the Basic Term may be removed by the
Sublessee or, at the Sublessee’s election surrendered with the Property, in
which event title to such surrendered property shall, if the Sublessor so
elects, be deemed transferred to the Sublessor. Notwithstanding the foregoing,
Sublessee shall not remove any fixture constituting part of the Property which
is required by Applicable Law or which cannot be removed without causing (y)
damage to the Property in excess of three percent (3%) of the Fair Market Sales
Value as set forth in the as-completed Appraisal or (z) any diminution to the
remaining useful life of the Property.

ARTICLE XII

PERMITTED CONTESTS;

WARRANTY OF TITLE

     SECTION 12.1. Permitted Contests in Respect of Applicable Law Other Than
Taxes. Except in the case of Taxes (to which Section 12. 1 (b) hereof shall
apply), if, to the extent and for

23

 

[Sublease]

so long as (a) a test, challenge, appeal or proceeding for review of any
Applicable Law r elating to the Property or the Equipment shall be prosecuted
diligently. and in good faith in appropriate proceedings by the Sublessee or
(b) compliance with such Applicable Law shall have been excused or exempted by
a valid nonconforming use, variance permit, waiver, extension or forbearance,
the Sublessee shall not be required to comply with such Applicable Law but only
if and so long as any such test, challenge, appeal, proceeding, waiver,
extension, forbearance or noncompliance shall not, in the reasonable opinion of
the Prime Lessor and Sublessor involve (A) any risk of criminal liability being
imposed on the Prime Lessor or Sublessor or (B) any risk of (1) foreclosure,
forfeiture or loss of either the Property or the Equipment, or a diminution of
the Fair Market Sales Value of either the Property or the Equipment or (2) the
nonpayment of Rent or (C) any risk of (1) the sale of, or the creation of any
Lien (other than a Permitted Lien) on, any part of either the Property or the
Equipment by more than three percent (3%) of such Fair Market Sales Value, (2)
civil liability being imposed on the Sublessor, Prime Lessor, or either the
Property or the Equipment (other than civil liability for payment of the
amounts so contested), or (3) enjoinment of, or interference with, the use,
possession or disposition of either the Property or the Equipment in any manner
which would cause a diminution in the Fair Market Sales Value of either the
Property or the Equipment by more than three percent (3%) of such Fair Market
Sales Value. Upon the Sublessee’s request, the Sublessor, at the Sublessee’s
sole cost and expense, shall execute and deliver, and shall cause the Prime
Lessor to execute and deliver, to the Sublessee such authorizations and other
documents as may reasonably be required in connection with any such permitted
contest. The Sublessee shall pay all expenses. and indemnities of the Sublessor
and the Prime Lessor with respect to such permitted contest.

     (b)  The Sublessee shall have the right at its own expense to contest the
amount or validity, in whole or in part, of any Taxes by appropriate
proceedings diligently conducted in good faith, but only after either (i)
payment of such Taxes or (ii) so long as (x) no Sublease Event of Default has
occurred that is continuing and (y) neither the Property nor Equipment nor any
rights therein nor any portion thereof could, by reason of postponed or
deferred payment, be in danger of being forfeited or lost by proceedings for
delinquent Taxes, the posting of such bond, cash collateral or similar security
for the payment of such Taxes as shall be acceptable to the Prime Lessor and
the Sublessor. On the termination of any such proceedings whether before or
after the termination of this Sublease, the Sublessee shall pay (to the extent
that the payment thereof is the obligation of the Sublessee under Section 8.2
hereof) the amount of such Taxes or any part thereof, if any, as finally
determined in such proceedings, the payment of which may have been deferred
during the prosecution of such proceedings, together with any costs, fees,
including attorney’s fees, interest, penalties, fines and other liabilities in
connection therewith. The Sublessee shall be entitled to the refund of any
Taxes and penalty, fine and interest thereon received by the Sublessor which
have been paid by the Sublessee or of which. have been paid by the Sublessor by
for which the Sublessor has been previously reimbursed in full by the
Sublessee.

     SECTION 12.2. Easements. Provided that no Sublease Event of Default has
occurred that is continuing and subject to the provisions of Articles VI, IX
and X and Section 8.4 hereof, the Sublessor hereby consents in each instance to
the following actions by the Sublessee from time to time during the Basic Term,
but at the Sublessee’s sole cost and expense: (a) the granting of easements,
licenses, rights-of-way and other rights and privileges in the nature of
easements reasonably necessary or desirable for the use, repair, or maintenance
of the Property or

24

 

[Sublease]

Equipment as herein provided or that do not adversely affect the Fair Market
Sales Value of the Property or Equipment; (b) the release of existing easements
or other rights in the nature of easements which are for the benefit of the
Property or Equipment; (c) the dedication or transfer of unimproved portions of
the Property for road, highway or other public or common purposes; (d) the
execution of amendments to any existing covenants,, restrictions, easements,
licenses, rights-of-way and other rights and privileges in the nature of
easements; (e) the filing and processing of any and all permit applications,
authorizations, entitlements, agreements with any government or regulatory
agency or amendments thereof, or other documents. reasonably required or
beneficial for construction or Modification of the Property or Equipment
(including without limitation the Modifications described in Exhibit F) or
amendments to Permitted Liens (other than Permitted Sublessor Liens) or
governmental permits or approvals affecting the Property; and (t) the
execution, processing and filing of tract or parcel maps subdividing the Land
into lots or parcels or reconfiguring existing lots or parcels; provided,
however, that in each case (i) such grant, release, dedication, transfer or
amendment does not adversely affect the Fair Market Sales Value of the
Property, (ii) such grant, release, dedication, transfer or amendment that in
the Sublessee’s judgment is reasonably necessary or beneficial in connection
with the use, maintenance, alteration or improvement of the Property, (iii)
such grant, release, dedication, transfer or amendment will not cause the
Property or any portion thereof to fail to comply with the provisions of this
Sublease or any Applicable Law (including, without limitation, all applicable
zoning, planning, building and subdivision ordinances, all applicable
restrictive covenants and all applicable architectural approval requirements);
(iv) any and all governmental consents or approvals required prior to such
grant, release, dedication, transfer, annexation or amendment have been
obtained, and any and all filings required prior to such action have been made;
(v) the Sublessee shall remain obligated under this Sublease as though such
grant, release, dedication, transfer or amendment had not been effected; and
(vi) the Sublessee shall pay and perform during the Basic Term any obligations
of the Prime Lessor and Sublessor under such grant, release, dedication,
transfer or amendment. Provided that no Sublease Event of Default has occurred
that is continuing, from time to time -upon request of the Sublessee and
subject to the Sublessee’s prompt reimbursement of the Sublessor’s and the
Prime Lessor’s costs and expenses, the Sublessor shall, and shall cause the
Prime Lessor to, execute such documents reasonably satisfactory in form (which
have been prepared at Sublessee’s expense) to effect any of the actions set
forth in clauses (a), (b), (c), (d), (e) and (f) of the preceding sentence, if
in the Sublessee’s reasonable and good faith opinion such action. by the
Sublessor or the Prime Lessor is necessary or appropriate to effect such
intended actions. The Sublessor further acknowledges the Sublessee’s right to
finance and to secure under the Uniform Commercial Code, the Sublessor’s
Equipment and Personalty located at the Property, and the Sublessor agrees to
execute, and to cause the Prime Lessor to execute, landlord waiver forms in
favor of any purchase money seller, lessor or lender which has financed or may
finance in the future such items. Without limiting the effectiveness of the
foregoing, provided that no Sublease Event of Default has occurred that is
continuing, the Sublessor shall, upon the request of the Sublessee, and at the
Sublessee’s sole cost and expense, execute and deliver, and shall cause the
Prime Lessor to execute and deliver, any instruments necessary or appropriate
to confirm any such grant, release, dedication, transfer, annexation or
amendment permitted under this Section 12.2 including landlord waivers with
respect to any of the foregoing.

     SECTION 12.3. Warranty of Title. The Sublessee agrees that except as
otherwise provided herein and subject to the terms of Section 12.1 and
Section 12.2 hereof, the Sublessee

25

 

[Sublease]

shall not directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien (other than any Permitted
Lien), defect, attachment, levy, title retention agreement or claim upon the
Property or the Equipment or any Lien, attachment, levy or claim with respect
to the Rent, other than Permitted Liens and Liens on machinery, equipment,
inventory, accounts (as defined in the Uniform Commercial Code), general
intangibles and other personal property financed by the Sublessee.

ARTICLE XIII

INSURANCE

     SECTION 13. 1. Required Insurance. During the Basic Term, the Sublessee
shall, at its own expense, maintain insurance as set forth herein.

		
	 	     (a) Commercial Liability Insurance. During the Basic Term the
Sublessee shall procure and carry or cause to be procured and carried, at
the Sublessee’s sole cost and expense, commercial general liability
insurance for injuries or death sustained by persons or damage to property
while on the Property or with respect to the Equipment and such other
public liability coverage as are ordinarily procured by the Sublessee and
its Affiliates with respect to similar facilities and equipment. The terms
and amounts of such liability insurance shall be consistent with normal
industry practice, but in any event not less than the scope and amount of
coverage as are ordinarily procured by the Sublessee and its Affiliates
with respect to properties and equipment similar to the Property and the
Equipment, respectively, provided, however, that such coverage shall be in
an amount of at least $2,000,000 combined single limit per occurrence and
in the aggregate, as applicable, and, if written under a policy covering
more than the Property and the Equipment, such limit shall apply solely
with respect to claims occurring with respect to, either the Property or
the Equipment. In the event the coverage described in this clause (a) is
provided on claims-made coverage forms, or in the event that any
replacement policy is issued, the Sublessee shall maintain any retroactive
date as prior to the Commencement Date (or the Acquisition Date with
respect to the Equipment).

		
	 	     (b) Hazard and Other Insurance. During the Basic Term, the Sublessee
shall obtain from an insurance provider reasonably acceptable to the
Sublessor, and keep in force, a policy or policies of property insurance
with respect to the each of the Property and the Equipment insuring the
Sublessor’s interest in each of the Property and the Equipment including
collapse coverage and coverage for fire, earthquakes and floods with
extended coverage, in an amount equal to the lesser of (i) the Acquisition
Cost and (ii) the full replacement cost of the Property and the Equipment.
All such policies shall be in form and substance reasonably satisfactory
to the Sublessor.

		
	 	     (c) Worker’s Compensation and Employers’ Liability Insurance. During
the Basic Term, the Sublessee shall maintain or cause to be maintained (i)
workers’ compensation insurance as required by the respective States where
the Property and the Equipment are located and (ii) employer’s liability
insurance with a $ 1,000,000 minimum limit per accident and a $ 1,000,000
minimum limit for excess liability.

26

 

[Sublease]

     SECTION 13.2. Deductibles, Insurance Providers, Coverage and Endorsements
Confirmation of Insurance, etc.

		
	 	     (a) Deductibles. The insurance required to be obtained by the
Sublessee under this Article XIII may be subject to such reasonable
deductible amounts as is consistent with the Sublessee and its Affiliates
practice for other properties and equipment similar to the Property and
Equipment owned or subleased by Affiliates of the Sublessee, and may be
carried under blanket policies maintained by or on behalf of the Sublessee
so long as such policies otherwise comply with the provisions of this
Article XIII provided, however, that no deductible under any policy
required hereunder shall, without the consent of the Sublessor, exceed
$25,000.00.

		
	 	     (b) Insurance Providers. All insurance required to be carried
pursuant to the requirements of Article XIII shall be written by reputable
insurance companies authorized to do business in the Commonwealth of
Massachusetts that are financially sound and solvent and otherwise
reasonably appropriate considering the amount -and type of insurance being
provided by such companies. Any insurance company selected by the
Sublessee to provide any type of liability insurance which is rated in
Best’s Insurance Guide or any successor thereto (or if there be none, an
organization having a similar national reputation) shall have a general
policyholder rating of “9” and a financial rating of at least “A.”

		
	 	     (c) Coverage and Endorsements. All insurance required to be carried
or arranged for by the Sublessee pursuant to the requirements of Section
13.1 hereof shall provide in the policy or by special endorsement that:

		
	 	     (i) in the case of insurance required by Section 13.1 (a) hereof, the
Sublessor and the Senior Interest Holders are included as an additional
insureds;

		
	 	     (ii) in the case of insurance required by Section 13.1 (a) hereof,
with respect to the Property, the Sublessor, or at Sublessor’s
direction, the Senior Interest Holders are named as loss payee, and
such insurance shall include a standard form mortgagee endorsement in
favor of the Senior Interest Holders;

		
	 	     (iii) the insurer thereunder waives all rights of subrogation against
the Sublessor and the . Senior Interest Holders and waives any right of
set-off and counterclaim and any other right to deduction whether by
attachment or otherwise;

		
	 	     (iv) such insurance shall be primary and shall apply to any loss or
claim before any contribution of any other insurance carried by or on
behalf of the Sublessor or the Senior Interest Holders;

		
	 	     (v) in the case of the insurance required by Section 13.1(b) hereof,
notwithstanding the above, liability under this insurance which attaches
pursuant to the above clause which results from: (1) acts, errors or
omissions by insurance or reinsurance brokers or agents; or (2) any
willful, malicious, or fraudulent act or omission by any insured, the
Sublessor, the Senior Interest Holders, or any other party, is hereby
excluded;

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[Sublease]

     (vi)  if the insurers cancel such insurance for any reason whatsoever or
any materially adverse change is made in policy terms or conditions, such
cancellation or change shall not be effective as to the Sublessor or the Senior
Interest Holders for thirty (30) days after receipt by the Sublessor or the
Senior Interest Holders of written notice from such insurers of such
cancellation or change; and if such insurance is allowed to lapse for
nonpayment of premium, such lapse shall not be effective as to the Sublessor or
Prime Lessor for ten (10) days after receipt by the Sublessor and the Prime
Lessor of written notice from such insurers of such lapse; and

     (vii)  with respect to all liability insurance, in as much as the policies
are written to cover more than . one insured, all terms, conditions, insuring
agreements and endorsements, with the exception of the limits of liability,
shall operate in the same manner as if there were a separate policy covering
each insured, and such policies shall be endorsed to provide a severability of
interest or cross liability clause.

     (d)  Additional Insurance. Any additional insurance obtained by the
Sublessee or the Sublessor shall provide that it shall not limit the insurance
described in Section 13.1 hereof or increase the amount of any premium payable
with respect to any such insurance. The proceeds of any additional insurance
will be for the account of the party maintaining such additional insurance.

     (e)  Payment of Premiums. The Sublessee shall pay or cause to be paid all
premiums for the insurance required hereunder. The Sublessee shall renew or
replace, or cause to be renewed or replaced, each insurance policy required
hereunder prior to the expiration date thereof.

     (f)  Confirmation of Insurance. On the Commencement Date and annually
thereafter the Sublessee shall provide the Sublessor an insurance. certificate
certifying compliance with the insurance then required to be maintained by the
Sublessee pursuant to this Article XIII In addition, the Sublessee shall
provide the Sublessor with written. notice thirty (30) days prior to the
expiration of any insurance policy required to be maintained pursuant to the
terms of this Sublease.

ARTICLE XIV

CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS

SECTION 14. 1. Casualty and Condemnation.

     (a)  Subject to the provisions of this Article XIV if all or a portion of
the Property is damaged or destroyed in whole or in part by a Casualty or if
the use, access, occupancy, easement rights or title to the Property or any
part thereof, is the subject of a Condemnation, then

     (i)  in the case of a Casualty affecting the Property that is not an Event
of Loss, any insurance proceeds payable with respect to such Casualty shall be
paid to the Sublessee, for the sole purpose of reconstruction, refurbishment
and repair of the

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[Sublease]

Property; provided, however, that in the event that such reconstruction,
refurbishment or repair, cannot be completed prior to the end of the Basic
Term, then the Sublessor may terminate this Sublease as provided in Article XV
hereof and all such insurance proceeds, payable with respect to such Casualty
shall be retained by the Sublessor (subject to
Sublessee’s right to purchase the Property and Equipment and retain the
insurance proceeds as provided in Article XVIII hereof);

     (ii)  in the case of a Condemnation of any part of the Property that is not
an Event of Loss, any award or compensation relating thereto shall be paid to
the Sublessee, for the sole purpose of restoration of the Property; provided,
however, that if such restoration cannot be completed prior to the end of the
Basic Term, then the Sublessor may terminate this Sublease as provided in
Article XV hereof and such Condemnation award or compensation shall be retained
by the Sublessor (subject to Sublessee’s right to purchase the Property and
Equipment and retain the Condemnation, award and compensation as provided in
Article XVIII hereof); and

     (iii)  in the case of any Casualty or Condemnation that is an Event of
Loss, Sublessor shall upon thirty (30) days written notice to Sublessee elect
to (1) make any insurance proceeds payable with respect to such Casualty, or
any award or compensation relating to a Condemnation available to Sublessee,
which proceeds or award shall be paid directly to the Sublessor and made
available by Sublessor to Sublessee on such conditions as the Sublessor may
reasonably impose, for the sole purpose of reconstruction, refurbishment and
repair or restoration of the Property; or (ii) terminate this Sublease as
provided in Article XV hereof (subject to Sublessee’s right to purchase the
Property and Equipment and retain the insurance proceeds and Condemnation award
and compensation as provided in Article XVIII hereof);

provided, however, that, in each case, if a Sublease Event of Default shall
have occurred and be continuing, such award, compensation or insurance proceeds
shall be paid directly to the Sublessor or, if received by the Sublessee, shall
be held in trust for the Sublessor. All amounts held by the Sublessor when a
Sublease Event of Default exists hereunder on account of any award,
compensation or insurance proceeds either paid directly to the Sublessor or
turned over to the Sublessor may, at the option of the Sublessor, he paid to
the Sublessee for the repair of damage caused by such Casualty or Condemnation
in accordance with clause (d) of this Section 14. 1, but the Sublessee shall
not be obligated to repair such damage unless the Sublessor makes such award,
compensation or insurance proceeds available for such purpose.

     (b)  The Sublessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or insurance
payment on account of any such Casualty or Condemnation and shall pay all
expenses thereof At the Sublessee’s reasonable request, and at the Sublessee’s
sole cost and expense, the Sublessor shall participate, and shall cause the
Prime Lessor to participate, in any such proceeding, action, negotiation,
prosecution or adjustment. The Sublessor and the Sublessee agree that this
Sublease shall control the rights of the Sublessor and the Sublessee in and to
any such award, compensation or insurance payment.

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[Sublease]

		
	 	     (c) If the Sublessor or the Sublessee shall receive notice of a
Casualty or of an actual, pending or threatened Condemnation of the
Property or any interest therein, the Sublessor or the Sublessee, as the
case may be, shall give, notice thereof to the other promptly after the
receipt of such notice.

		
	 	     (d) If pursuant to this Section 14.1 and Section 15.1 hereof, this
Sublease shall continue in full force and effect following a Casualty or
Condemnation with respect to the Property, the Sublessee shall (subject to
the last sentence of Section 14.1(a)(iii) above), at its sole cost and
expense (and, without limitation, if any award, compensation or insurance
payment is released to the Sublessee to restore the Property and is not
sufficient to restore the Property in accordance with this clause (d), the
Sublessee shall pay the shortfall), promptly and diligently repair any
damage to the Property caused by such Casualty or Condemnation in
conformity with the requirements of Sections 8.4 and 9.1 hereof, to
restore the Property to at least the same condition, operative value and
useful life as existed immediately., prior to such Casualty or
Condemnation. Upon completion of such restoration, the Sublessee shall
furnish to the Sublessor an architect’s certificate of substantial
completion and an Authorized Officer’s Certificate confirming that such
restoration has been completed pursuant to this Sublease.

		
	 	     (e) In no event shall a Casualty or Condemnation affect the
Sublessee’s obligations to pay Rent pursuant to Section 3.1 or to perform
its obligations and pay any amounts due on the Expiration Date or pursuant
to Articles XVIII and XXI.

		
	 	     (f) Any Excess Casualty/Condemnation Proceeds received by the
Sublessor or Sublessee which does not result in the termination of this
Sublease in accordance with this Article XIV or Article XV hereof (i) as a
result of a Casualty shall be retained by the Sublessee, provided the
Property is restored as herein provided and the costs of restoration are
paid in full, or (ii) as a result of Condemnation, shall be retained by
the Sublessor.

     SECTION 14.2. Environmental Matters. Promptly upon Sublessee obtaining
actual knowledge of the existence of an Environmental Violation with respect to
the Property, the Sublessee shall notify the Sublessor in writing of such
Environmental Violation. The Sublessee shall, without* cost or expense to
Sublessor, promptly and diligently commence or cause to be commenced any
response, clean up, remedial or other action to the extent required by
Applicable Law to remove, clean up or remediate each Environmental Violation in
accordance with the terms of Section 8.4 hereof The Sublessee shall, -upon
completion of remedial action by the Sublessee for Environmental Violations
described in the second sentence of this Section 14.2,, cause to be prepared by
an environmental consultant reasonably acceptable to the Sublessor a report
describing such Environmental Violation and the actions taken by the Sublessee
(or its agents) in response to such Environmental Violation, and a statement by
the consultant that such Environmental Violation has been remedied in
compliance with, and to the extent required by all applicable Environmental
Laws. Each Environmental Violation shall be remedied prior to the Expiration
Date unless the Property has been purchased by the Sublessee in accordance with
Section 18.1 hereof.

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[Sublease].

     SECTION 14.3. Notice of Environmental Matters. Promptly, but in any event
within twenty (20) Business Days from the date the Sublessee obtains knowledge
thereof pursuant to written notice from any Governmental Authority, the
Sublessee shall provide to the Sublessor. written notice of any pending or
threatened claim, action or proceeding involving any Environmental Laws or any
Release on or in connection with the Property. All such notices shall describe
in reasonable detail the nature of the claim, action or proceeding and the
Sublessee’s proposed response thereto. In addition, the Sublessee shall provide
to the Sublessor, within twenty (20) Business Days of receipt or delivery,
copies of all written communications with any Governmental Authority relating
to any such Environmental Violation in connection with the Property. The
Sublessee shall also promptly provide such detailed reports of any such
environmental claims. In the event that the Sublessor receives written notice
of any pending or threatened claim, action or proceeding involving any
Environmental Laws or any Release on or in connection with the Property, the
Sublessor shall promptly give notice thereof to the Sublessee. For purposes of
this Article XIV, “actual knowledge” (or other words and phrases of like
import) of the Sublessee shall mean the actual conscious (not constructive or
imputed) knowledge of the Sublessee’s senior officer responsible for day to day
operations of the Property-

ARTICLE XV

TERMINATION OF SUBLEASE

     SECTION 15.I Mandatory Termination upon Certain Events. If any of the
following events occurs with respect to the Property or the Equipment:

		
	 	     (i) a Significant Condemnation or a Condemnation that, pursuant to
Section 14.1(a) or Section 20.3 hereof, provides the Sublessor with
the right to terminate this Sublease; or

		
	 	     (ii) a Significant Casualty or a Casualty that, pursuant to Section
14.1(a) or Section 20.3 hereof, provides the Sublessor with the
right to terminate this Sublease; or

		
	 	     (iii) an Environmental Violation occurs or is discovered, the cost
of remediation of which would exceed $2,500,000;

and the Sublessor shall have given written notice (a “Termination Notice”) to
the Sublessee that, as a consequence of the occurrence of such an event, this
Sublease is to be terminated, then this Sublease shall terminate thirty (30)
days after Sublessee’s receipt of such notice (subject to Sublessee’s. right to
purchase and acquire the Property and Equipment and retain any Casualty
insurance proceeds or Condemnation award or compensation as provided in Article
XVIII hereof).

     SECTION 15.2. Termination Procedures. If this Sublease is terminated
pursuant to the terms in Section 15.1 above or pursuant to the exercise of the
Sublessor’s remedies under Section 16.2 or otherwise, then, upon the date of
such termination, Sublessee shall surrender possession of the Property and
Equipment to Sublessor and any and all rights of Sublessee in the Property and
Equipment shall cease as of such date of termination and shall automatically
revert to the

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[Sublease]

Sublessor. If Sublessee shall fail to surrender the Property or Equipment at
the date of termination, Rent continue, equitably prorated or a daily basis, at
150% of the applicable rate immediately prior to the date of termination.
Sublessee’s obligations with respect to this Section 15.2 shall survive
termination of this Sublease.

ARTICLE XVI

SUBLEASE EVENTS OF DEFAULT

     SECTION 16. 1. Sublease Events of Default. The occurrence of any one or
more of the following events (whether such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body) shall constitute
a “Sublease Event of Default”:

		
	 	     (a). the Sublessee shall fail to make payment of any Basic Rent due
and payable within five (5) days after receipt of written notice thereof;
or

		
	 	     (b) the Sublessee shall fail to make payment of any Supplemental Rent
due and payable within thirty (30) days after receipt of written notice
thereof; or

		
	 	     (c) any insurance required to be maintained pursuant to Article XIII
of this Sublease shall fail to be in full force and effect, and such
failure shall remain uncured for a period of fifteen (15) days ; or

		
	 	     (d) the Sublessee shall fail to observe or perform any covenant
applicable to it under this Sublease, and, in each such case, such failure
shall remain unremedied for ten (10) days after written notice thereof,
provided that no Sublease Event of Default shall be deemed to occur if
such failure is capable of cure but cannot reasonably be cured within such
period, so long as the Sublessee shall have promptly commenced the cure
thereof and continues to act with diligence to cure such failure or breach
and completes such cure within one hundred eighty (180) days after such
notice; or

		
	 	     (e) the Guarantor shall fail to observe or perform any covenant of
the Guarantor under the Guaranty and such failure shall continue for a
period of thirty (30) days after receipt of written notice thereof,
provided that no Sublease Event of Default shall be deemed to occur. if
such failure is capable of cure but cannot reasonably be cured within such
period, so long as the Guarantor shall have promptly commenced the cure
thereof and continues to act with diligence to cure such failure or breach
and completes such cure within one hundred eighty (180) days after such
notice; or

		
	 	     (f) any representation or warranty made or deemed made by the
Sublessee herein or by the Guarantor in the Guaranty or which is contained
in any certificate, document or financial or other statement furnished at
any time under or in connection with this Sublease shall prove to have
been incorrect, false or misleading in any material respect on or as of
the date made or deemed made and is not cured in all material respects
within thirty (30) days of Sublessee’s or Guarantor’s becoming aware
thereof, provided

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[Sublease]

that no Sublease Event of Default shall be . deemed to occur if such failure is
capable of cure but cannot reasonably be cured within such period, so long as
the Sublessee or the Guarantor (as applicable) shall have promptly commenced
the cure thereof and continues to act with diligence to cure such failure or
breach and completes such cure within one hundred eighty (180) days; or

     (g)  (i) the Sublessee or the Guarantor shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or the
Sublessee or the Guarantor shall make a general, assignment for the benefit of
its creditors; or (ii) there shall be commenced against the Sublessee any case,
proceeding or other action of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period
of ninety (90) days; or (iii) there shall be commenced against the Sublessee or
the Guarantor any case, proceeding other action, seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within ninety (90) days from the entry thereof; or (iv) any
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Sublessee or the Guarantor shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

     (h)  the termination of any Necessary Permit or any other license or permit
which termination affects the Sublessee’s ability to meet its financial or
performance obligations under this Sublease and such Necessary Permit or other
license or permit is not reinstated within 30 days of its termination or such
longer period as may be reasonably required to reinstate such Necessary Permit,
provided the Sublessee is diligently pursuing the reinstatement thereof; or

     (i)  any final judgments or orders for the payment of money in the
aggregate in excess of $25,000,000 shall be rendered against the Sublessee or
the Guarantor and. either such judgment is not discharged within ten (10) days
following the rendering thereof (thereby causing the amount of any such
judgments to be less than $25,000,000 in the aggregate) or there shall be any
period during which a stay of enforcement of such judgment or order, by reason
of an appeal or a bond pending appeal, shall not be in effect; or

     (j)  the Property, or the Equipment or any part thereof is destroyed or
suffers an actual or constructive loss or damage in connection with any
Casualty or Condemnation, and in any such case, the Property ceases to be
operational as a biopharmaceutical research, development and manufacturing
facility or the Equipment

33

 

[Sublease]

ceases to be operational for a period beyond the Expiration Date or beyond the
later of (i) one hundred sixty (160) days after the receipt of any insurance
awards or condemnation proceeds in connection with such Casualty or
Condemnation and (ii) two hundred seventy (270) days after the occurrence of
such Casualty or Condemnation, unless, in any such case, the Sublessee shall
have submitted to the Sublessor a plan of restoration or repair of the
Property, or the Equipment, as the case may be, and the Sublessor, in its sole
discretion, shall have consented to such plan of restoration or repair (subject
to the Sublessee’s right and option to acquire the Property and Equipment if
the Sublessor, does not consent to such plan, as provided in Section 18.1
(a)(iv) hereof); or

     (k)  there shall have occurred a material adverse change in the business,
operations or financial condition of Sublessee or Guarantor since the
Commencement Date.

SECTION 16.2. Remedies.

     (a)  Upon the occurrence of any Sublease Event of Default of the. type
described in clause (g) of Section 16.1 all accrued Rent (including, without
limitation, all Accrued Equipment Rent, all Accrued Building Rent, all accrued
Basic Rent and all accrued Supplement Rent) and all fees and other obligations
of the Sublessee accrued under this Sublease, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Sublessee. In addition, upon the
occurrence of any Sublease Event of Default and at any time thereafter so long
as such Sublease Event of Default is continuing, the Sublessor may do one or
more of the following as the Sublessor in its sole discretion shall determine,
without limiting any other right or remedy the Sublessor may have on account of
such Sublease Event of Default:

     (i)  The Sublessor may, by notice to the Sublessee, rescind or terminate
this Sublease as to all of the Property and the Equipment as of the date
specified in such notice; provided, however (A) no reletting, reentry or taking
of possession of the Property or Equipment (or any portion thereof) by the
Sublessor will he construed as an election on the Sublessor’s part to terminate
this Sublease unless a written notice of such intention is given. to the
Sublessee ‘ (B) notwithstanding any reletting, reentry or taking of possession,
the Sublessor may at any time thereafter elect to terminate this Sublease for a
continuing Sublease Event of Default and (C) no act or thing done by the
Sublessor or any of its agents, representatives or employees and no agreement
accepting a surrender of the Property or the Equipment shall be valid unless
the same be made in writing and executed by the Sublessor;

     (ii)  The Sublessor may (A) demand that the Sublessee, and the Sublessee
shall upon the written demand of the Sublessor, return the Property or the
Equipment promptly to the Sublessor in the manner and condition required by,
and otherwise in accordance with all of the provisions of, Articles VII and IX
hereof as if such Property or Equipment were being returned at the end of the
Basic Tern, and except as otherwise provided herein, the Sublessor shall not be
liable for the reimbursement of the Sublessee for any costs and expenses
incurred by the Sublessee in connection therewith and (B) without

34

 

[Sublease]

prejudice to any other remedy which the Sublessor may have for possession of
the Property or the Equipment, and to the extent and in the manner permitted by
Applicable Law, enter upon the Property or Equipment and take immediate
possession of (to the: exclusion of the Sublessee) the Property or the
Equipment or any part thereof and, expel or remove the Sublessee and any other
Person who may be occupying the Property or using the Equipment, by summary
proceedings or otherwise, all without service of process and without being
deemed guilty of trespass or becoming liable to the Sublessee. for any damage
which may be occasioned thereby, whether for the restoration of damage to
property caused by such taking or otherwise and, in addition to the Sublessor’s
other damages, the Sublessee shall be responsible for all reasonable costs and
expenses incurred by the Sublessor in connection with any reletting actually
incurred; including without limitation, reasonable brokers’ fees;

     (iii)  The Sublessor may exercise any one or more of its rights and
remedies under this Sublease, as the Sublessor may determine;

     (iv)  The Sublessor may, at its option, elect not to terminate Us Sublease
with respect to the Property or the Equipment and continue to collect all Basic
Rent, Supplemental Rent, and all other amounts due to the Sublessor (together
with all costs of collection) and enforce the Sublessee’s obligations under
this Sublease as and when the. same become due, or are to be performed, and at
the option of the Sublessor, upon any abandonment of the Property or the
Equipment by the Sublessee or re-entry of same by the Sublessor, the Sublessor
may enforce, by suit or otherwise, all other covenants and conditions hereof to
be performed or complied with by the Sublessee hereunder and to exercise all
other remedies permitted by Applicable Law;

     (v)  The , Sublessor may exercise any other right or remedy that may be
available to it under Applicable Law, or proceed by appropriate court action
(legal or equitable) to enforce the terms hereof or to recover damages for the
breach hereof. Separate suits may be brought to collect any such damages for
any period(s), and such suits shall not in any manner prejudice the Sublessor’s
right to collect any such damages for any subsequent period(s), or the
Sublessor may defer any such suit until after the expiration of the Basic Term,
in which event such suit shall be deemed not to have accrued until the
expiration of the Basic Term; and

     (vi)  The Sublessor, to the extent permitted by Applicable Law, as a matter
of right and with notice to the Sublessee, shall have the right to apply to any
court having jurisdiction to appoint a receiver or receivers of the Property or
the Equipment, and the Sublessee hereby irrevocably consents to any such
appointment. Any such receiver(s) shall have all of the usual powers and duties
of receivers in like or similar cases and all of the powers and duties of the
Sublessor in case of entry, and shall continue as such and exercise such powers
until the date of confirmation of the sale of the Property or the Equipment
unless such receivership is sooner terminated.

     (b)  To the maximum extent permitted by law, the Sublessee hereby waives
the benefit of any appraisement, valuation, stay, extension, reinstatement and
redemption

35

 

[Sublease]

		
	 	     laws now or hereafter in force and all rights of marshaling in the event
of any sale of the Property or the Equipment or any interest therein.

		
	 	     (c) The Sublessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations hereunder and to exercise
all rights and powers under this instrument or any laws now or hereafter
in force, notwithstanding some or all of the obligations secured hereby
may now or hereafter be otherwise secured, whether by mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance
of this instrument nor its enforcement, shall prejudice or in my manner
affect the Sublessor’s right to realize upon or enforce any other security
now or hereafter held by the Sublessor, it being agreed that the Sublessor
shall be entitled to enforce this instrument and any other security now or
hereafter held by the Sublessor in such order and manner as the Sublessor
may determine in its absolute discretion. No remedy herein conferred upon
or reserved to the Sublessor is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by this Sublease to the Sublessor or to which it may
otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by the
Sublessor.

     SECTION 16.3. Waiver of Certain Rights. Subject to the foregoing, if this
Sublease shall be terminated pursuant to Section 16.2 hereof, the Sublessee
waives, to the fullest extent permitted by law, (a) any notice of re-entry or
the institution of legal proceedings to obtain reentry or possession; (b) any
right of redemption, re-entry or repossession except as expressly provided
herein; (c) the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt or limiting the Sublessor with
respect to the election of remedies; and (d) any other rights which might
otherwise limit or modify any of the Sublessor’s rights or remedies under this
Article XVI.

ARTICLE XVII

SUBLESSOR’S RIGHT TO CURE

     SECTION 17. 1. The Sublessor’s Right to Cure the Sublessee’s Sublease
Defaults. The Sublessor, without waiving or releasing any obligation or
Sublease Event of Default, may (but shall be under no obligation to) remedy any
Sublease Event of Default for the account and at the sole cost and expense of
the Sublessee, including the failure by the Sublessee to maintain the insurance
required by Article XIII hereof, and may, to the fullest extent permitted by
law, and notwithstanding any right of quiet enjoyment in favor of the
Sublessee, enter upon the Property for such purpose and take all such action
thereon as may be reasonably necessary or appropriate therefor (subject to
Sublessor’s compliance with Sublessee’s Security Requirements). No such entry
shall be deemed an eviction of the Sublessee. All reasonable actual, third
party out of pocket costs and expenses so incurred (including fees and expenses
of counsel), together with interest thereon at the Overdue Rate from the date
on which such sums or expenses are paid by the Sublessor, shall be paid by the
Sublessee to the Sublessor as Supplemental Rent.

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[Sublease].

ARTICLE XVIII

PURCHASE PROVISIONS

     SECTION 18. 1. Purchase of the Property and the Equipment. (a) Subject to
the conditions contained herein, the Sublessee shall have the option to
purchase, on either (i) the second (2nd), third (3rd) or fourth (4th)
anniversary of the Commencement Date, (ii) the Expiration Date, (iii) within
sixty (60) days after the Sublessor’s notice to the Sublessee of the
termination of this Sublease in accordance with Article XIV or Article XV
hereof, (iv) within sixty (60) days after the Sublessor notifies the Sublessee
that the Sublessor does not consent to a plan of restoration or repair,
submitted by the Sublessee to the Sublessor pursuant to Section 16.1(j) hereof
or (v) within not less than thirty (30) nor more than sixty (60) days after the
Sublessee’s notice to Sublessor exercising the Sublessee’s purchase option
under Section 23.2 hereof (each such date, a “Purchase Closing Date), all (but
not less than all) of the Property and the Equipment at the Purchase Price,
plus all accrued and unpaid Rent and all other amounts then due under this
Sublease. The Sublessee’s exercise of its option pursuant to this Section 18.1
shall be subject to the condition that the Sublessee shall have delivered, with
respect to its purchase options under clauses (i), (ii), (iii) and (iv) above,
to the Sublessor a notice. of the Sublessee’s exercise of such purchase option
not less than thirty (30) days prior to the applicable Purchase Closing Date
or, with respect to its purchase option under clause (y) above, the requisite
notice provided for in Section 23.2. Provided that timely notice of the
exercise of a purchase option is given by the Sublessee, the Basic Term of this
Sublease shall, if it would otherwise terminate prior to the Purchase Closing
Date, be extended to the Purchase Closing Date.

		
	 	     (b) If the Sublessee exercises its option pursuant to this Section
18.1 then, upon the Sublessor’s receipt of all amounts due in connection
therewith,, the Sublessor shall transfer (and cause the Prime Lessor to
transfer) to the Sublessee or its designee all of the Sublessor’s (or the
Prime Lessor’s) right, title and interest in and to the Property and the
Equipment (including, without limitation, any insurance proceeds paid in
connection with any Casualty or award or compensation paid in connection
with any Condemnation, which proceeds, award or compensation shall be
retained by the Sublessee) in accordance with the procedures set forth in
Section 21.1(a) hereof. Such transfer shall be effective as of such
Purchase Closing Date. The Sublessee may designate, in a notice given to
the Sublessor not less than ten (10) Business Days prior to the closing of
such purchase (time being of the essence), the transferee or transferees
to whom the conveyance shall be made (if other than to the Sublessee), in
which case such conveyance shall (subject to the terms and conditions set
forth herein) be made to such designee; provided, however, that such
designation of a transferee or transferees shall not cause the Sublessee
to be released, fully or partially, from any of its obligations under this
Sublease, including, without limitation, the obligation to pay to the
Sublessor the Purchase Price on such Purchase Closing Date. The Sublessor
reserves the right to defer any Purchase Closing Date (but not by more
than 30 days) so that such Purchase Closing Date corresponds to a date on
which the Prime Lessor is obligated to sell the Property and Equipment to
the Sublessor under the Prime Lease.

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[Sublease]

     SECTION 18.2. Make Whole Premium. The Sublessee acknowledges that, if the,
Sublessee shall purchase the Property and Equipment on a date other than the
Expiration Date, the Sublessor shall forego the collection of Basic Rent for
the period (the ‘Make Whole Period”) from the Purchase Closing Date until the
Expiration Date. Accordingly, the Sublessee hereby agrees to pay to the
Sublessor, as part of the Purchase Price, an amount (the “Make Whole Premium”),
determined as of the Purchase Closing Date, equal to the then present value of
the amount of interest that would accrue, at the Base Rate in effect on the
Purchase Closing Date, during the Make Whole Period on the sum of the Equipment
Balance and Building Balance. Such present value shall be determined (a) based
on the assumption that such. accrued interest would be paid in full on each
Basic Rent Payment Date during the Make Whole Period and (b) using discount
factor equal to the Prime Rate in effect as of the Purchase Closing Date, plus
one percent (1%).

     SECTION 18.3 Prime Lease Purchase Option. In order to effect the
provisions of this Article XVII the Sublessor agrees that, upon exercise by the
Sublessee of its right and option to purchase the Property, and Equipment, the
Sublessor shall exercise its right and option to purchase the Property and
Equipment in accordance with the terms of the Prime Lease and direct and cause
the Prime Lessor to transfer the Property and Equipment to the Sublessee in
accordance with the terms of this Sublease, and, in connection therewith, the
Sublessor hereby designates the Sublessee as its designee to purchase the
Property and Equipment. In the event that the Purchase Price payable hereunder
is less than the purchase price payable under the Prime Lease for the purchase
of the Property and Equipment, the Sublessor shall be responsible for, and
shall pay, the amount of such difference to the Prime Lessor (or shall
reimburse the Sublessee for the amount of such difference if so paid by the
Sublessee). To the extent that the Purchase Price payable by the Sublessee
hereunder exceeds the purchase price payable by the Sublessor under the Prime
Lease, the Sublessor shall retain the difference.

ARTICLE XIX

ACQUISITION AND SUBLEASING OF EQUIPMENT

     SECTION 19. 1. Acquisition of Equipment. The acquisition of any Equipment
after the Commencement Date and the subleasing thereof by the Sublessor to the
Sublessee hereunder shall be subject to the provisions of this Article XIX All
Equipment to be acquired and subleased to the Sublessee shall be Qualified
Equipment identified by the Sublessee, by notice to the Sublessor (the
“Equipment Purchase Notice) which shall set forth, with respect to each item of
Equipment identified therein, the proposed Acquisition Cost thereof and, for
all such Equipment the proposed Acquisition Date thereof, which shall not be
less than five (5) Business Days after the date of the Equipment Purchase
Notice. The Sublessee shall provide such information as the Prime Lessor or the
Sublessor may reasonably request (i) to confirm that the Equipment so
identified constitutes Qualified Equipment, (ii) to confirm the Acquisition
Cost of such Equipment and (iii) to enable the Prime Lessor (if it so elects)
to obtain an Appraisal of such Equipment. Upon (a) the delivery by the
Sublessee of the Equipment Purchase Notice, (b) the confirmation by the
Sublessor that such Equipment is Qualified Equipment, (c) the completion of the
Appraisal of such Equipment (to the extent required by the Prime Lessor) and
(d) the confirmation of the Sublessor and the Prime Lessor of the Acquisition
Cost of such

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[Sublease]

Equipment, the Sublessor shall advance or cause the Prime Lessor to advance to
the Sublessee or such other Person owning such Equipment, of an amount equal to
the Acquisition Cost of such Equipment for the purchase thereof, subject to the
satisfaction of the conditions set forth in Section 19.2 hereof Provided the
conditions set forth in Section 19.2 are satisfied, the advance of the
Acquisition Cost shall be made not later than the latest of (a) five (5)
Business Days after the delivery of the Equipment Purchase Notice, (b) five (5)
Business days after the Prime Lessor’s receipt of the Appraisal of such
Equipment (if the Prime Lessor elects to require such Appraisal) and (c) the
date so specified in the Equipment Purchase Notice.

     SECTION 19.2. Conditions to Purchase of Equipment. The purchase of any
Equipment after the Commencement Date and the subleasing thereof to the
Sublessee hereunder shall be subject to the following conditions:

		
	 	     (a)- (a) Representations and Warranties. On the date of the
Equipment Purchase Notice and on the applicable Acquisition Date, the
representations and warranties of the Sublessee and the Guarantor
contained in Article XXIV hereof shall be true and correct in all material
respects as though made on and as of such date
	 
	 	     (b) No Sublease Event of Default. On the date of the Equipment
Purchase Notice and on the applicable Acquisition Date, there shall not
have occurred and be continuing any Sublease Event of Default and, after
giving effect to the purchase of such Equipment and the subleasing thereof
to the Sublessee, there shall not have occurred and be continuing any
Sublease Event of Default.
	 
	 	     (c) Maximum Amount. After giving effect to the acquisition of such
Equipment and the subleasing thereof to the Sublessee hereunder, the
Sublease Balance shall not exceed Forty Million Dollars ($40,000,000).
	 
	 	     (d) Minimum Amount. Unless otherwise agreed to by the Sublessor, the
aggregate Acquisition Cost of all Equipment added to the Sublease on any
Acquisition Date shall not be less than One Million Dollars ($1,000,000),
except in the case of the purchase and sublease of Equipment on the final
Acquisition Date hereunder.
	 
	 	     (e) . Acquisition Date. No Equipment shall have an Acquisition Date
later than the last day of the Second Rental Period.
	 
	 	     (f), Governmental Approvals. All approvals (if any) required from
any Governmental Authority with respect to such Equipment, the acquisition
thereof and the installation thereof at the Property shall have been
received, except any that are not then available and that the Sublessee
identifies will be available and obtained in due course when necessary for
the installation of the Equipment.
	 
	 	     (g) Taxes. All Taxes payable in connection with the acquisition of
such Equipment shall have been paid or will be paid -upon the advance of
the Acquisition Cost.
	 
	 	     (h) Insurance. The Sublessee shall have furnished to the Sublessor
satisfactory evidence that such Equipment is (or upon the Acquisition
thereof by the

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[Sublease]

		
	 	Prime Lessor will be) covered by insurance in compliance with the
provisions of Article XIII hereof.
	 
	 	     (i) Equipment Supplement The Sublessee and the, Sublessor shall have
executed and delivered a fully-completed Equipment Supplement with respect
to such Equipment.
	 
	 	     (j) Transfer Documentation. The Purchase Order for such Equipment
shall have been assigned to the Sublessor, and the Prime Lessor or (if
applicable under Section 19.3 hereof) the Sublessor shall have received
and approved such bills of sale or other documentation as shall be
reasonably necessary or appropriate to evidence the transfer to the Prime
Lessor or (if applicable under the provision of Section 19.3 hereof) the
Sublessor of title to such Equipment, which transfer shall be on an “as
basis, without any representation or warranty other than with respect to
title thereto.
	 
	 	     (k) Authorized Officer’s Certificate. The Sublessee shall have
delivered to the Sublessor the Sublessee’s certificate, dated as of the
Acquisition Date of such Equipment, executed by an Authorized Officer on
behalf of the Sublessee and certifying that the conditions set forth in
this Article XIX have been satisfied.

     SECTION 19.3. Sublessor’s Election to Own Equipment. In the case of
Equipment designated for acquisition after the date of this Sublease, the
Sublessor, with respect to some or all of such Equipment, may elect, in lieu of
causing the Prime Lessor to acquire such Equipment, to acquire such Equipment
itself (and, if the Prime Lessor is not obligated under the Prime Lease
Documents to acquire such Equipment, the Sublessor shall acquire such Equipment
itself) and lease the same directly to the Sublessee. In such event, this
Sublease shall constitute, with respect to such Equipment, a direct lease
between the Sublessor as lessor and the Sublessee as the lessee, on all of the
terms and conditions contained herein (including without limitation the
Sublessee’s options to purchase), except that such Equipment shall not be
subject and subordinate to the Prime Lease. With respect to any such Equipment
so acquired by the Sublessor, the Sublessor may thereafter elect to sell and
transfer the same to the Prime Lessor and lease the same back from the Prime
Lessor, in which event the lease of such Equipment by the Sublessor to the
Sublessee shall, without further action of the parties hereto, become a
sublease of such Equipment by the Sublessor to the Sublessee. on all of the
terms and conditions contained herein (including without limitation the
Sublessee’s options to purchase).

ARTICLE XX

EQUIPMENT

     SECTION 20.1. Replacement of Equipment.

     (a)  In the event that any Equipment at any time becomes worn out,
lost, stolen, destroyed, seized, confiscated, damaged beyond repair or
permanently rendered unfit for use for any reason whatsoever, the
Sublessee shall replace such Equipment with other equipment meeting the
requirements of clause (b) of this Section 20.1 (each a “Replacement Item’
) on or before the first day of the next succeeding calendar month so

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[Sublease]

long as such date is at least fifteen (15) days after the date of the event
giving rise to the requirement to replace such Equipment, and if such date is
within the applicable period mentioned above, the Sublessee shall effect the
replacement on or before the first day of the calendar month thereafter;
provided however in the event that the Sublessee is unable to replace such
Equipment within such fifteen (15) day period, the Sublessee shall provide
evidence that such Sublessee is working diligently toward replacing such
Equipment, however in no event shall the time period required to replace such
Equipment exceed sixty (60) days in cases where replacement is within the
reasonable control of the Sublessee and one hundred. twenty days (120) where
replacement. is outside the reasonable control of the Sublessee from the date
of the event which caused such Equipment to be replaced. Notwithstanding the
occurrence of any such event,, the Sublessee’s obligation to pay Rent with
respect to such Equipment shall continue unabated for the then remainder of the
Basic Term. Upon the satisfaction of the conditions specified in this Section
20.1, the Sublessor shall-execute and deliver, and shall cause the Prime Lessor
to execute and deliver, such documents as may be required to release the
Equipment which had been replaced (each a “Substituted Item”) from the terms
and scope of this Sublease and the Prime Lease, all at the Sublessee’s expense.
Immediately upon the effectiveness of the exchange of any Replacement Item for
a Substituted Item becoming incorporated, installed o*r attached, without
further act-’(i) title to the Substituted Item shall thereupon vest in the
Sublessee, free and clear of all rights of the Prime Lessor and the Sublessor,
and shall no longer be deemed Equipment hereunder, (ii) title to such
Replacement Item shall thereupon vest in the Prime Lessor; (iii) the leasehold
interest to such Replacement Item shall thereupon vest in the Sublessor; and
(iv) such Replacement Item shall become subject to this Sublease and be deemed
part of all Equipment subject to the Prime Lease, and this Sublease for all
purposes hereof and thereof The parties hereto shall execute or cause to be
executed such documents as may be reasonably necessary to effect the foregoing.

     (b)  The Sublessor shall release, or cause to be released, Substituted
Items from this Sublease subject to the following conditions:

     (i)  the Replacement Items shall be located upon the Property;

	 	 	 	 	 
	 	 	 	
5.	 

     (ii)  the Replacement Items shall perform at least the same function as the
Substituted Items and are collectively the same or greater value, utility and
useful life as the Substituted Items on the date the Replacement Items became
subject to this Sublease and the Sublessee shall deliver a certificate of an
Authorized Officer of the Sublessee, which certificate shall contain a
representation and warranty of the Sublessee with respect to the above (such
certificate to be in form and substance reasonably satisfactory to the
Sublessor);

     (iii)  there shall not have occurred and be continuing any Sublease Event
of Default, and no Sublease Event of Default shall occur as a result of the
replacement;

     (iv)  the Sublessee shall have furnished evidence in form and substance
satisfactory to the Sublessor and the Prime Lessor that such Replacement Items
are free and clear of any Liens other than Permitted Liens;

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[Sublease]

		
	 	     (v) all taxes, fees and other charges in connection. with the
execution, delivery, recording, filing and registration of all necessary
documents with respect to the Replacement Items shall have been paid or
provisions for such payment shall have been made to the satisfaction of
the Prime Lessor and the Sublessor; and
	 
	 	     (vi) the Sublessor shall have received such other documents as may
reasonably, be requested.

     SECTION 20.2. Identification of Equipment, Location of Equipment, Personal
Prop

		
	 	     (a) Identification of Equipment. The Sublessee shall maintain
throughout the Basic Term any and all records necessary to clearly
identify and locate all Equipment subject to this Sublease and such
records shall be subject to the Sublessor’s inspection. right set forth in
Section 4.2 hereof
	 
	 	     (b) Location of Equipment. Except as otherwise provided herein, the
Sublessor hereby covenants, represents,, and warrants that all Equipment
shall at all times (after the installation thereof) remain located upon
the Property. Subject to the provisions of Sections 20.1(a), Article X
and Article XI the Sublessee shall not remove the Equipment from the
Property absent the prior, written consent of the Sublessor, and in the
event of such consent, only in accordance with any conditions that may be
required by the Sublessor. Notwithstanding the foregoing (but subject to
the provisions of Section 20.4), the Sublessee may use or store, at its
facility in Cambridge, Massachusetts, Equipment having an aggregate
Acquisition Cost not in excess of $1,000,000 and designated in writing by
the Sublessee, provided, however, that the Sublessee shall take such
actions as the Sublessor or the Prime Lessor may reasonably require to
assure the Prime Lessor’s and the Sublessor’s ability to take possession
of such Equipment upon termination of the Prime Lease or the Sublease (as
applicable).
	 
	 	     (c) Personal Property. It is intended by the Sublessor and the
Sublessee that, each item of Equipment is and shall be and remain personal
property notwithstanding the manner in which such item of Equipment may be
attached or affixed to realty.

     SECTION 20.3. Insurance Proceeds. In the event that all or a portion of
any Equipment is damaged or destroyed (by Casualty, Condemnation or otherwise),
or is lost or stolen, any insurance- proceeds, award or compensation payable
with respect to such damaged, destroyed, lost or stolen Equipment shall be paid
directly to the Sublessee for the sole purpose of reconstruction,
refurbishment, repair or replacement of the Property; provided, however, that
(a) if a Sublease Event of Default shall have occurred and be continuing, such
award, compensation or insurance proceeds shall be paid directly to the
Sublessor or, if received by the Sublessee, shall be held in trust for the
Sublessor and (b) in the event that such reconstruction, refurbishment, repair
or replacement cannot be completed prior to the end of the Term, then all such
insurance proceeds payable with respect to such damage or destruction shall be
retained by the Sublessor, and the Sublessor may terminate this Sublease as
provided in Article XV hereof (subject to Sublessee’s option to purchase the
Property and Equipment and retain the Casualty

42

 

[Sublease]

insurance proceeds and Condemnation award or compensation as provided in.
Article XVIII hereof).

     SECTION 20.4. Return of Equipment. Upon the expiration of the Basic Term
or earlier termination of this Sublease . in accordance with the terms thereof,
unless the Equipment has been purchased by the Sublessee or another Person, the
Sublessee shall return the Equipment. to the Sublessor in accordance with and
subject to Section 15.2 hereof and the following conditions:

		
	 	     (a) all and not less than all of the Equipment shall be surrendered
at such time;
	 
	 	     (b) all Equipment shall be in good condition, repair and working
order (ordinary wear and tear excepted) and the Sublessee shall have made
all repairs as required by all Requirements of Law and Insurance
Requirements; and
	 
	 	     (c) all Equipment shall be returned to the Property.,

ARTICLE XXI

PROCEDURES RELATING TO PURCHASE

     SECTION21.1. Provisions Relating to the Exercise of Purchase Option. In
connection with the Sublessee’s purchase of the Property and Equipment in
accordance with Section 18.1 hereof, then, upon the applicable Purchase Closing
Date and payment of the Purchase Price:

		
	 	     (a) the Sublessor shall execute and deliver (or direct and cause the
Prime Lessor to execute and deliver) to the Sublessee or its designee, at
the Sublessee’s cost and expense, to escrow for closing pursuant t o the
terms hereof. (i) escrow instructions; (ii) a quitclaim deed to the
Sublessee or its designee and other ‘instruments of transfer with respect
to the Property sufficient to convey fee simple, marketable and insurable
title to the Property free and clear of any Liens, mortgages and other
encumbrances (except for Permitted Encumbrances and acts done or suffered
by the Sublessee), (iii) a bill of sale with respect to the Equipment,
(iv) an assignment of the Sublessor’s and the Prime Lessor’s entire
interest in the Property and Equipment,~. (v) a release of the Permitted
Sublessor Liens, and (vi) such other additional affidavits and
instruments, in each case ‘in recordable for in and otherwise in
conformity with local custom, which collectively shall transfer to
Sublessee all of the Prime Lessor’s and the Sublessor’s interests in the
Property and Equipment as required under this Article XXI free and clear
of any mortgages and other encumbrances (except for Permitted Encumbrances
and acts done or suffered by the Sublessee);
	 
	 	     (b) (b) the Property and Equipment shall be conveyed to the Sublessee
“AS IS” (except for warranties of title in the quitclaim deed) and in
their then present physical condition;

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[Sublease)

		
	 	     (c) the Sublessor shall (i) execute and deliver to the Sublessee and
the Sublessee’s title insurance company an affidavit as to the Sublessor’s
title and Sublessor Liens, (ii) cause the Prime Lessor to execute and
deliver to the Sublease and the Sublessee’s title insurance company an.
affidavit as to the Prime Lessor’s title and any Liens created by Prime
Lessor; and (iii) execute and deliver to Sublessee in recordable form a
statement of termination of this Sublease and the Prime Lease; and
	 
	 	     (d) the Sublessee shall pay all Taxes, title insurance premiums,
escrow costs and other closing expenses (other than attorney’s fees of the
Sublessor and the Senior Interest Holders) related to such purchase.

ARTICLE XXII

ESTOPPEL CERTIFICATES; ACCEPTANCE OF SURRENDER; NO MERGER OF TITLE

     SECTION 22. 1. Estoppel Certificates. At any time and from time to time
upon not less
than twenty (20) Business Days’ prior request by the Sublessor or the Sublessee
(the “Requesting Party”, the other party (whichever party shall have received
such request, the “Certifying Party”) shall furnish to the Requesting Party a
certificate signed by an individual having the office of vice president or
higher in the Certifying Party certifying that this Sublease is in full force
and effect (or that this Sublease is in full force and effect as modified and
setting forth the modifications); the dates to which the Basic Rent and
Supplemental Rent have been paid; to the best knowledge of the signer of such
certificate, whether or not the Requesting Party is in default under any of its
obligations here-under (and, if so, the nature of such alleged default); and
such other matters under this Sublease as the Requesting Party may reasonably
request under the circumstances giving rise to the delivery of such
certificate. Any such certificate furnished pursuant to this Article XXII may
be relied upon by the Requesting Party, and any existing or bona fide
prospective mortgagee, purchaser or lender, and any accountant or auditor, of,
from or to the Requesting Party (or any Affiliate thereof)

     SECTION 22.2. Acceptance of Surrender. No surrender to the Sublessor of
this Sublease or of the Property or Equipment or of any part thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by the Sublessor, and no act by the Sublessor or any representative or
agent of the Sublessor, other than a written acceptance, shall constitute an
acceptance of any such surrender.

     SECTION 22.3. No Merger of Title. There shall be no merger of this
Sublease or of the leasehold estate created hereby by reason of the fact that
the same Person may acquire, own or hold, directly or indirectly, in whole or
in part, (a) this Sublease or the leasehold estate created hereby or any
interest in this Sublease or such leasehold estate, (b) the fee interest in the
Property, except as may expressly be stated in a written instrument duly
executed and delivered by the appropriate Person or (c) a beneficial interest
in the Sublessor.

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[Sublease]

ARTICLE XXIII

DEFAULTS UNDER PRIME LEASE DOCUMENTS

     SECTION 23. 1. Notices of Default. The Sublessor shall direct and has
directed the Prime Lessor to deliver to the Sublessee a copy of any notice of
any breach or default delivered by the Prime Lessor under the Prime Lease
Documents. Any failure of the Prime Lessor to deliver or any delay in
delivering such notice shall not affect the obligations of the Sublessor under
Section 26.14 hereof or any rights or obligations of the parties under this
Sublease.

		
	 	SECTION 23.2. Purchase Option. If the Prime Lessor or the Sublessor gives
notice of a breach or default by the Sublessor of its obligations under
the Prime Lease Documents, or the, Sublessor is in default of its
obligations under the Prime Lease Documents, then (unless such default or
event also constitutes or results from a breach or default by the
Sublessee in the performance of its obligations hereunder, in which event
the provisions of this Section 23.2 shall not apply), unless the Sublessor
shall deliver to the Sublessee, within sixty (60) days of the date of such
notice (or such earlier date on which such breach or default, if not
cured, would become a “Lease Event of Default” under the Prime Lease)
reasonably satisfactory evidence that such breach or default has been
cured or is being cured in accordance with the provisions of the Prime
Lease, the Sublessee shall have the right and option, exercisable by
notice to the Sublessor, to purchase all (but not less than all) of the
Property and Equipment in accordance with the provisions of this Sublease.

ARTICLE XXIV

REPRESENTATIONS AND WARRANTIES

          As a material inducement to the Sublessor’s entry into this Sublease, the
Sublessee and the Guarantor represent and warrant the following to the
Sublessor as of the date hereof and as of the Commencement Date:

     SECTION 24. 1. Binding Obligations. The Sublessee is authorized to
execute, deliver. and perform the obligations under this Sublease, and such
obligations shall be valid and binding obligations of the Sublessee. The
Guarantor is authorized to execute, deliver and perform the obligations under
the Guaranty, and such obligations. shall be valid and binding obligations of
the Guarantor.

     SECTION 24.2. No Violation. The Sublessee’s and the Guarantor’s execution
and delivery of and. performance under this Sublease (or the Guaranty, as
appropriate) do not: (a) require any consent or approval not already obtained;
(b) to the Sublessee’s or the Guarantor’s actual knowledge, violate any
governmental requirement or any other statute, law, regulation or ordinance or
any order or ruling of any court or governmental entity; statute, law,
regulation or ordinance or any order or ruling of any court or governmental
entity; or (c) conflict with, or constitute a breach or default or permit the
acceleration of obligations under any agreement, contract, lease, or other
document by which the Sublessee or the Guarantor is bound or affected.

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[Sublease]

     SECTION 24.3. Compliance with Laws. To the actual knowledge of the
Sublessee, the Sublessee has all Necessary Permits for the current use and
operation of the Property and -Equipment located at the Property.

     SECTION 24.4. Financial Condition. All financial statements and
information heretofore delivered. by the Sublessee or the Guarantor to the
Sublessor, including, without limitation, information relating to the financial
condition of the Sublessee and the Guarantor, fairly and accurately represent
the financial. condition of the entities described therein and have been
prepared in accordance with generally accepted accounting principles,
consistently applied. The Sublessee acknowledges and agrees that the Sublessor
may request and obtain additional information from third party credit reporting
agencies or any such similar service regarding any of the above, including,
without limitation, credit reports.

     SECTION 24.5. No Material Adverse Change. There has been no material
adverse change in the business, operations or financial condition of the
Sublessee or the, Guarantor since. the date of the latest financial statements
finished by the Sublessee or the Guarantor to the Sublessor with respect
thereto and, except as otherwise disclosed to the. Sublessor in writing,
neither the Sublessee nor the Guarantor has entered into any material
transaction which is not disclosed in such financial statements.

     The phrases “the Sublessee’s knowledge’ or “the Guarantor’s knowledge” and
other words and phrases of like import shall mean the actual, not constructive
or imputed, knowledge of the chief financial officer(s) of the Sublessee or the
Guarantor without any obligation on his part to make any independent
investigation of the matters being represented and warranted, or to make any
inquiry of other persons, or to research or examine any file, records, books,
correspondence and the like.

ARTICLE XXV

[RESERVED]

ARTICLE XXVI

MISCELLANEOUS

     SECTION 26. 1. Survival; Severability; Etc. Anything contained in this
Sublease to the contrary notwithstanding, all claims against and liabilities of
the Sublessee or the Sublessor arising from events commencing prior to the
expiration or earlier termination of this Sublease shall survive such
expiration or earlier termination for a period of one year except as to
indemnification obligations of either party, which shall continue to survive.
If any term, or provision of this Sublease or any application thereof shall be
declared invalid or unenforceable, the remainder of this Sublease and any other
application of such term or provision shall not be affected thereby. If any
right or option of the Sublessee provided in this Sublease, including any right
or option described in Article XIV XV. or XVIII hereof, would, in the absence
of the limitation imposed by this sentence, be invalid or unenforceable as
being in violation of the rule

46

 

[Sublease]

against perpetuities or any other rule of law relating to the vesting of an
interest in or. the suspension of the power of alienation of property, then
such right or option shall be exercisable only during the period which shall
end twenty-one (21) years after the date of death of the last survivor of the
descendants of Franklin D. Roosevelt, the former President of the United
States,, Henry Ford, the deceased automobile manufacturer, and John D.
Rockefeller, the founder of the Standard Oil Company, known to be alive on the
date of the execution, acknowledgment and delivery of this Sublease.

     SECTION 26.2. Amendments and Modifications. Neither this Sublease nor any
provision hereof may be amended, waived, discharged or terminated except by an
instrument ‘in writing signed by the Sublessor and the Sublessee.

     SECTION 26.3. No Waiver. No failure by the Sublessor or the Sublessee to
insist upon the strict performance of any term hereof or to exercise any
right,, power or remedy upon a default here-under, and no acceptance of full or
partial payment of Rent during the continuance of any such default, shall
constitute a waiver of any such default or of any such term. To the fullest
extent permitted by law, no waiver of any default shall affect or, alter this
Sublease, and this Sublease shall continue in full force and effect with
respect to any other then existing or subsequent default.

     SECTION 26.4. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by (i) United States mail, or (ii) a prepaid
nationally recognized overnight courier service, and any such notice shall
become effective when actually. received (as evidenced by the return receipt)
after being deposited in the mail, certified or registered return receipt
requested with appropriate postage prepaid or when delivery is first refused,
or one (1) Business Day after delivery to a nationally recognized overnight
courier service specifying overnight delivery, and shall be directed to the
address of such Person as indicated on Exhibit C. From time to time any party
may designate a new address for purposes of notice hereunder by written notice
to each of the other parties hereto in accordance with this Section.

     SECTION 26.5. Successors and Assigns. All the terms and provisions of
this Sublease shall inure to the benefit of the parties hereto and their
respective permitted successors and permitted assigns.

     SECTION 26.6. Headings’ and Table of Contents. The headings and table of
contents in~ this Sublease are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof

     SECTION 26.7. Counterparts. This Sublease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

     SECTION 26.8. GOVERNING LAW. THIS SUBLEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, TUE LAWS OF

47

 

[Sublease]

THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.

     SECTION 26.9. Liability Limited. The parties hereto agree that except as
specifically set forth in this Sublease, the Sublessor shall have no personal
liability whatsoever to Sublessee or its respective successors and assigns for
any claim or obligation based on or in respect of this Sublease or arising in
any way from the transactions contemplated hereby, and recourse, if any, shall
be solely had against the Sublessor’s interest in the Property and Equipment or
from payments (other than payments due to the Sublessor with respect to
indemnities,- reimbursement of expenses or fees, in each case payable to the
Sublessor for its own account) received from the Sublessee (it being
acknowledged and agreed by each party hereto that all such personal liability
of the Sublessor is expressly ''Waived and released as a condition of, and as
consideration for, the delivery by the Sublessor of this Sublease); provided,
however, that the Sublessor shall be liable in its individual capacity (a) for
its own willful misconduct or gross negligence, (b) breach of any of its
representations, warranties or covenants -under this Sublease and (c) its
indemnification obligations hereunder.

     SECTION 26. 10. Naming and Signage of the Property. The Sublessee shall
have the sole and exclusive right, at any time and from time to time, to select
the name or names of the Property, and the sole and exclusive right to
determine not to use any name in connection with the Property, as well as all
rights in respect of signage for or in connection with the Property, provided,
however, that neither the name of the Property nor any signage shall include
any reference to the Sublessor, the Prime Lessor or other Senior Interest
Holder. Neither the Prime Lessor nor the Sublessor shall have or acquire any
right or interest with respect to any such name or names used at any time by
the Sublessee, or any trade name, trademark service mark or other intellectual
property of any type of the Sublessee. The Sublessor shall cooperate with the
Sublessee to effectuate the Sublessee’s sign rights hereunder, at no cost to
the Sublessor.

     SECTION 26.11. Expenses. Whenever this Sublease provides for the
reimbursement by the Sublessee of costs and expenses of the Sublessor or any
other party, then such reimbursement obligation shall be limited to actual,
out-of-pocket third-party costs and expenses including, but not limited to,
reasonable attorneys’ fees.

     SECTION 26.12. Sublessor of Representations. The Sublessor represents and
warrants to the Sublessee that (i) each of the Prime Lease Documents and
Sublease has been duly authorized by all necessary action on the part of the
Sublessor and has been duly executed and delivered by the Sublessor, (ii) the
execution, delivery and performance thereof by the Sublessor will not (a)
require any consent or approval of any Person, other than such consents and
approvals as have been obtained, (b) to the Sublessor’s knowledge, contravene
any Applicable Law binding on the Sublessor or (c) contravene or result in any
breach of or constitute any default under the Sublessor’s organizational
documents, or any indenture, mortgage, loan agreement, contract, partnership or
joint venture agreement, lease (including without limitation the Prime Lease
Documents) or other agreement or instrument to which the Sublessor is a party
or by which the Sublessor is bound, and (iii) this Sublease is permitted under
the Prime Lease Documents and any provisions of the Prime Lease Documents. The
Sublessor further represents, wan-ants and covenants that (x) provided that the
Sublessee complies with the corresponding terms and conditions of this
Sublease, the Sublessor shall comply with all the terms and conditions of the
Prime Lease Documents and (y) provided that the Sublessee complies with the
terms and provisions of this Sublease, no provision of the Prime Lease will,
nor will the Sublessor take any action to amend, modify, supplement or
otherwise affect the Prime Lease Documents in a manner that will, prevent the
Sublessee from realizing all of its rights under this Sublease, including,
without limitation, the Sublessor’s right to purchase the Property and
Equipment as provided in this Sublease. Promptly after obtaining knowledge of
or receiving notice of the same, the Sublessor shall provide the Sublessee with
written notice of any default by the Prime Lessor or the Sublessor under the
Prime Lease Documents which would (with or without giving of notice, the
passage of time or both) entitle the Prime Lessor or the Sublessor to cancel or
otherwise terminate the Prime Lease.

48

 

     SECTION 26. 13. Notice of Sublease. A notice of this Sublease (and any
amendment hereof) shall be executed by the Sublessor and the Sublessee and
recorded, at the Sublessee’s expense, in the land records of the jurisdiction
in which the Property is situate.

     SECTION 26.14. Sublessor’s Indemnification. Provided no Sublease Event of
Default has occurred that is continuing, the Sublessor-shall indemnify and hold
harmless the Sublessee from and against all Claims, direct or indirect (but,
except as otherwise provided in the next to last sentence of this ‘ Section
26.14, not consequential), to the extent arising out of any default, by the
Sublessor under the Prime Lease or any supplement thereto concerning any
Equipment subleased to the Sublessee hereunder (unless such default also
constitutes, or results from, a failure by the Sublessee to perform its
obligations hereunder) or any consensual termination by the Sublessor and the
Prime Lessor of the Prime Lease or any such supplement thereto before the
Expiration Date that is not consented to be Sublessee. Damages incurred by the
Sublessee pursuant to the contracts identified in Exhibit G hereto shall,
notwithstanding the limitation on consequential damages set forth herein, be
covered by the Sublessor’s foregoing indemnification. The purchase price paid
by the Sublessee to acquire the Property and Equipment shall not constitute
damages except to the extent that the same exceeds the Purchase Price that
would have been payable by the Sublessee hereunder upon exercise of its option
to purchase the Property and Equipment.

     SECTION 26.15. Sublessee Indemnification.

		
	 	     (a) Subject to the provisions of Section 26.15(b) hereof, the
Sublessee hereby agrees to. indemnify, defend and hold harmless the
Sublessor from and against all Claims relating to or arising. out of (i)
the sublease of the Property, the Equipment or any part thereof or
interest therein or the use or occupancy of the Property or the Equipment,
(ii) the breach by the Sublessee of any covenant, representation or
warranty in this Sublease, (iii) any occurrence on or about the Property
to the extent arising out of or related to the use, operation,
maintenance, possession, or occupancy of the Property or the Equipment by
the Sublessee, (iv) the presence in, on or under any of the Property or
Equipment of any Hazardous Materials, or any release or discharge of any
Hazardous Materials on, under, from or onto any of the Property or the
Equipment, which presence, release or discharge constitutes an
Environmental Violation, (v) the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous
Materials that at any time are located or present on or -under or that at
any time migrate, flow, percolate, diffuse or in any way move onto or
under any of the Property or the Equipment, and

49

 

[Sublease]

		
	 	which constitutes an Environmental Violation, (vi any lack of compliance
with, Environmental Laws at the Property or with respect to the Equipment,
or any act or omission causing an Environmental Violation that requires
remediation or would allow any Governmental Authority to record a Lien on
the land records of the Property or with respect to the Equipment, or
(vii) any residual contamination on or under any of the Land, affecting
any natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling,
storage, transport or disposal of any such Hazardous Materials at or from
the Property or the Equipment.
	 
	 	     (b) Notwithstanding the provisions of Section 26.15(a) the Sublessee
shall not be required to indemnify the Sublessor under this Sublease for
(i) consequential damages, (ii) any Claim arising by reason of an act or
event occurring after the later of (A) the Expiration Date and (B) the
Sublessee’s surrender of the Property and Equipment to the Sublessor, (ii)
any Claim with respect to which the Sublessor is, obligated to indemnify
the Sublessee. under Section 2.14 hereof, (iii) any Claim arising out of
the willful misconduct or negligence or breach of any warranty or
representation or covenant by the Sublessor under this Sublease, or (iv)
any amount payable -under or in respect of the Prime Lease Documents
(except to the extent such amounts are payable by the Sublessee under this
Sublease). The Sublessee shall be entitled to a credit against any payment
due under this Section 26.15 for any insurance recoveries or other
reimbursements actually received by the Sublessor, in respect of the Claim
which is the subject of the Sublessee’s indemnification hereunder, under
or from any insurance paid for, directly or indirectly, by the Sublessee
or assigned to the Sublessor by the Sublessee, to the extent such
insurance recoveries exceed the Sublessor’s costs and expenses incurred in
recouping such insurance recovery.

     SECTION 26.16. Other Agreements. Nothing contained herein shall modify or
affect the rights or obligations of the parties hereto under any other
contracts, agreements or business relationships between them, and the terms and
conditions of this Sublease (including without limitation the indemnifications
provided for under Sections 26.14 and 26.15) shall apply solely to the
transaction described and provided for in this Sublease.

     SECTION 26.17. Brokers. The Sublessor and the Sublessee respectively
represent and warrant to each other that neither of them has consulted or
negotiated with any broker or finder with regard to this Sublease. Each of them
will indemnify the other against and hold the other harmless from any claims
for fees or commissions from anyone with whom either of them has consulted or
negotiated with regard to the Property.

     SECTION 26.18.. Further Assurances’ At any time and from time to time, upon reasonable request by a party hereto, the other party, shall make, execute
and deliver, or cause to be made, executed and delivered, to the requesting
party, any and all such reasonable instruments of further assurance,
certificates and other documents as may be reasonably necessary or desirable in
order to effect, complete, or perfect, or to continue and preserve, the
obligations of the parties hereunder and the purpose and intent of this
Sublease.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

50

 

     IN WITNESS WHEREOF, the parties have caused this Sublease be duly executed
and delivered as a sealed instrument of the date first above written.

	 	 	 	 	 	 	 
	 	 	BAXTER CAPITAL CORPORATION, as

Sublessor	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ Steven J. Meyer

	 	 
	 	 	 	 	Name: Steven J. Meyer

Title: President & CEO	 	 
	 	 	 	 	 	 	 
	 	 	ACAMBIS, INC., as Sublessee	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ Brian Feeney	 	 
	 	 	 	 	
	 	 
	 	 	 	 	Name: Brian Feeney

Title: Controller	 	 
	 	 	 	 	 	 	 
	 	 	The undersigned Acambis plc joins in this
Sublease for the limited purpose of making the
representations and warranties concerning the
Guarantor set forth in Article XXIV	 	 
	 	 	 	 	 	 	 
	 	 	ACAMBIS plc, as Guarantor	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ Gordon Cameron	 	 
	 	 	 	 	
	 	 
	 	 	 	 	Name: Gordon Cameron

Title: CFO	 	 

 

 

EXHIBIT A

LEGAL DESCRIPTION

     The land shown as Lot 90 on a plan entitled “Subdivision Plan Shawmut
Industrial Park, Canton, Mass.”, dated October 10, 1986, prepared by James W.
Haley, P.L.S.,, which plan is. recorded as Plan No. 1587 of 1986 in Plan Book
344, to which reference is made for a more particular description.

     Said Lot 90 contains 2.335 acres according to said plan.

 

 

EXHIBIT B

INTENTIONALLY OMITTED

 

 

EXHIBIT C

NOTICES

	 	 	 
	If to the Sublessor.
	 	 	 
	 	 	
c/o Baxter Healthcare Corporation

One Baxter Parkway

Deerfield, IL 60015

Attention: Treasurer
	 	 	 
	With a copy to:
	 	 	 
	 	 	
Baxter Healthcare Corporation

One Baxter Parkway

Deerfield, IL 60015

Attention: Law Department
	 	 	 
	If to the Sublessee:
	 	 	 
	 	 	
Acambis, Inc.

38 Sidney Street

Cambridge, NIA 02139

Attention: Chief Financial Officer
	 	 	 
	With a copy to:
	 	 	 
	 	 	
Hale and Dorr LLP

60 State Street

Boston, MA 02109-1803

Attention: Keith Barnett, Esq.

 

 

EXHIBIT D

FORM OF EQUIPMENT: SCHEDULE

EQUIPMENT SCHEDULE NO.

	 	 	 	The Acquisition Date for the Equipment subject to this Equipment
Schedule is
     ,      .
	 
	 	2.	 	The Acquisition Cost for the Equipment subject to this Equipment
Schedule is $     .
	 
	 	3.	 	The Equipment subjected to- the Sublease pursuant to this Equipment
Schedule is described in Exhibit I hereof

     The parties acknowledge and agree that the Equipment covered hereby is
subject to the Sublease as of the Acquisition Date set forth above.

	 	 	 	 	 
	 	 	BAXTER CAPITAL CORPORATION,

as the Sublessor
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:

Title:
	 	 	 	 	 
	 	 	ACAMBIS, INC., as the Sublessee
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:

Title:

 

 

[Sublease]

EXHIBIT I

TO EQUIPMENT SCHEDULE

	 	 	 	 	 	 	 	 	 
	Description of	 	Acquisition	 	Acquisition
	Equipment	 	Date	 	Cost
	
	 	
	 	

	 

 

 

EXHIBIT E

PERMITTED ENCUMBRANCES

Rights and easements granted New England Telephone and Telegraph Company and
Boston Edison Light Company by James M. Salah dated December 10, 1973 recorded
with Norfolk County Registry of Deeds in Book 5054, Page 102. (Affects Shawmut
Road and abutting land within ten (10’) feet of said Road).

	 	 	NOTE: All references contained hereinafter to Streets, or Street addresses
are shown on a Plan entitled “Subdivision Plan, Shawmut Industrial Park,
Canton, Mass.” By James W. Haley dated October 10, 1986, recorded with
Norfolk County Registry of Deeds as Plan No. 1587 of 1986 in Plan Book 344
(the “Survey Plan”).

Title to and rights of Elsa Hemler, her heirs, successors and assigns to a
one-tenth (1/10) interest in a portion of the premises if any, due to the lack
of probate of estate of Elsa Hemler who inherited a one-tenth (1/10) interest
from August Pebler, which interest was purportedly conveyed by a deed recorded
with Norfolk County Registry of Deeds on May 20,1955 in Book 3368, Page 395, by
daughter of Elsa Hemler.

Title to and rights of Paul Pebler, his heirs, successors and assigns to a
one-tenth (1/10) interest in a portion of the premises if any, due to the lack
of probate of estate of Paul Pebler who
inherited a one-tenth (I/ 10) interest, which interest was purportedly conveyed
by a deed recorded with said Deeds on July 1, 1955 in Book 3382, page 148, by
widow and son of Paul Pebler.

Riparian rights in a brook (known as Hudson Road Outlet) and drainage easement
as shown on a plan entitled “Plan of Land Canton, Mass.”, dated September 10,
1968, by James W. Haley, Civil Engineer which plan is recorded with said Deeds
as Plan No. 967 of 1968 in Plan Book 225.

Rights and easements granted to Boston Edison Company and New England Telephone
and Telegraph Company dated July 9, 1975, recorded with said Deeds in Book
5114, Page 525. (Affects Shawmut Road and abutting land within ten (10’) feet
of said Road).,

Plan entitled “ALTA/ACSM Land Title Survey, 90 Shawmut Road, Canton,
Massachusetts” prepared by United Surveyors and Engineers dated November 15,
2001 discloses the following:

	a)	 	portions of building encroach into front and side yard setbacks;
	 
	b)	 	sewer line crosses northwesterly portion of property adjacent to Shawmut
Road.

 

 

EXHIBIT F

PERMITTED MODIFICATIONS

Initial improvements to the Property (including, without limitation, the
installation of Equipment and the Sublessee’s Personalty and Equipment) made or
to be made to commission the Property as a biopharmaceutical research,
development and manufacturing facility, substantially in. accordance with the
plans and specifications described below (as the same may be modified, amended
or supplemented to complete such initial improvements):

1.     The following Drawings prepared by Bio-Metrics (Project No. 266):

	 	 	 
	TSM-1	 	
Rees Monitor System

Touch Screen Map
	 	 	 
	SK-1	 	
New WFI and Existing/New

Utilities Distribution
	 	 	 
	SK-2	 	
WFI Distribution

To Viral Side
	 	 	 
	SK-3	 	
Bacterial WFI Drops
	 	 	 
	SK-4	 	
Rees Monitor System

Points, Remote Panels,

Traffic Lights and Monitors
	 	 	 
	SK-5	 	
HVAC Sensor Locations
	 	 	 
	SK-6	 	
Connection Between

U.S. Filter and

Mueller Equipment

2.     Drawings and Specifications prepared by PS&S Engineering P.C. (Project No.
2500-003)
dated November 29,2001.

 

 

EXHIBIT G

EXISTING CONTRACTS

1.     A contract dated September 20, 2000 between Oravax Inc. (now re-named
Acambis, Inc.)
and the Centers for Disease Control and Prevention (Contract No.
200-2000-00001).

2.     A contract dated November 2 8, 2001 between Acambis, Inc. and the Centers
for Disease
Control and Prevention (Contract No. 200-2000-00004).

3.     A contract manufacturing agreement dated December 5, 2000 between, inter
alia,
Oravax Inc. (now re-named Acambis, Inc.) and Baxter Healthcare Corporation.

 

 

EQUIPMENT SCHEDULE NO. 1

	 	1.	 	The Acquisition Date for the Equipment subject to this Equipment
Schedule is
December 21, 2001.
	 
	 	2.	 	The Acquisition Cost for the Equipment subject to this Equipment
Schedule is
$10,000,000, comprised of (a) the leasehold improvements located on
the Property
(as defined in the Sublease), having an Acquisition Cost of
$6,418,808, and (b) the
Equipment described in Exhibit 1 having an Acquisition Cost of
$3,581,192.
	 
	 	3.	 	The Equipment subjected to the Sublease pursuant to this Equipment
Schedule
consists of (a) the leasehold improvements located on the Property
(as defined in the
Sublease) and (b) the Equipment described in Exhibit I hereof.

     The parties acknowledge and agree that the Equipment covered hereby is
subject to the
Sublease as of the Acquisition Date set forth above.

	 	 	 	 	 	 	 
	 	 	BAXTER CAPITAL CORPORATION

as the Sublessor	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ Steven J. Meyer
	 	 
	 	 	 	 	
	 	 
	 	 	 	 	Name: Steven J. Meyer

Title: President & CEO	 	 
	 	 	 	 	 	 	 
	 	 	ACAMBIS, INC., as the Sublessee	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ B. P. Feeney	 	 
	 	 	 	 	
	 	 
	 	 	 	 	Name: Brian P. Feeney 

Title: Controller	 	 

 

 

EQUIPMENT SCHEDULE NO. 2

	 	1.	 	The Acquisition Date for the Equipment subject to this Equipment
Schedule is
December 21, 2001.
	 
	 	2.	 	The Acquisition Cost for the Equipment subject to this Equipment
Schedule is
$8,562,279.64.
	 
	 	3.	 	The Equipment subjected to the Sublease pursuant to this Equipment
Schedule is
described in Exhibit I hereof.

     The parties acknowledge and agree that the Equipment covered hereby is
subject to the
Sublease as of the Acquisition Date set forth above.

	 	 	 	 	 	 	 
	 	 	BAXTER CAPITAL CORPORATION

as the Sublessor	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ Steven J. Meyer

	 	 
	 	 	 	 	Name: Steven J. Meyer

Title: President & CEO	 	 
	 	 	 	 	 	 	 
	 	 	ACAMBIS, INC., as the Sublessee	 	 
	 	 	 	 	 	 	 
	 	 	
By:
	 	/s/ B. P. Feeney	 	 
	 	 	 	 	
	 	 
	 	 	 	 	Name: Brian P. Feeney 

Title: Controllerexv4w13

 

Exhibit 4.13

FIRST AMENDMENT TO SUBLEASE

     THIS FIRST AMENDMENT TO SUBLEASE (the “Amendment”), dated as of April 16,
2003 between BAXTER CAPITAL CORPORATION, a Delaware corporation (“Sublessor”),
and ACAMBIS, INC., a Delaware corporation (“Sublessee”).

     WHEREAS, Sublessor and Sublessee have previously entered into that certain
Sublease dated as of December 21, 2001 which, together with all exhibits and
schedules thereto and further amendments and modifications thereof, if any, is
hereinafter referred to as the “Sublease” (capitalized terms used and not
otherwise defined herein having the meanings given therein); and

     WHEREAS, the Sublessor and Sublessee desire to amend the Sublease to
revise the Base Rate set forth therein; and

     WHEREAS, Sublessor is willing to amend the Sublease on the terms and
conditions set forth in this Amendment; and

     NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by each party hereto as follows:

     Section 1.
Amendment of the Sublease. It is hereby agreed and understood
that, as of the Effective Date the Sublease is hereby amended as follows:

	 	1.1	 	Amendment to Section 1.1. Definitions. The definition of
“Base Rate” set forth in Section 1.1 Definitions shall be amended
and restated in its entirety to read as follows:

		
	 	“Base Rate” means six and one-quarter percent (6.25%) per
annum.

	 	1.2	 	Amendment to Section 3.6 Maximum Rate of Interest. The
first sentence of Section 3.6 shall be deleted in its entirety.

     Section 2. Effective Date. The effective date of this Amendment shall be
January 1, 2003.

     Section 3. Miscellaneous.

     A.     Each of the Sublessor and Sublessee represents and warrants to the
other, respectively, that the representations and warranties of the (i)
Sublessor set forth in Section 26.12 of the Sublease, and (ii) Sublessee set
forth, and as qualified, in Article XXIV of the Sublease, are true and correct
in all material respects on and as of the date of this Amendment with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date. The
Sublessee further represents and warrants that to “the Sublessee’s knowledge”,
as such phrase is defined in Section 24.5 of the Sublease, no Sublease Event of
Default has occurred and is continuing.

     B.     Except as expressly amended and modified by this Amendment, the
Sublease is and shall continue to be in full force and effect in accordance
with the terms thereof, and

 

 shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.

     C.     This Amendment may be executed by the parties hereto in counterparts,
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

     D.     This Amendment shall be construed in accordance with and governed by
the internal laws, and not the laws of conflict, of the Commonwealth of
Massachusetts.

     E.     The headings contained in this Amendment are for ease of reference only
and shall not be considered in construing this Amendment.

[SIGNATURE PAGE TO FOLLOW]

2

 

     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Sublease be duly executed as of the day and year first above written.

	 	ACAMBIS, INC.

	 	By:_______________________________

Name:_____________________________

Title:______________________________

	 	BAXTER CAPITAL CORPORATION

	 	By:_______________________________

Name:_____________________________

Title:______________________________

3

 

ACKNOWLEDGMENT, AGREEMENT AND CONSENT

OF GUARANTOR

The undersigned Guarantor, for good and valuable consideration, receipt of
which is hereby acknowledged: (a) hereby acknowledges receipt of a copy of the
foregoing First Amendment to Sublease dated as even date herewith (the “First
Amendment”), acknowledges that such Guarantor has read and reviewed the terms
thereof, and acknowledges that such Guarantor has been afforded an adequate
opportunity to have the Amendment reviewed by such Guarantor’s counsel; (b)
hereby consents to the terms and conditions of the Amendment; and (c) hereby
acknowledges and agrees that such Guarantor’s duties, obligations and
liabilities to the Sublessor, in connection with the Sublease as amended by the
First Amendment, under the Guaranty shall be continuing and shall remain in
full force and effect against such Guarantor. Guarantor further represents
that the representations and warranties of the Guarantor set forth in the
Sublease are true and correct in all material respects on and as of the date of
this Amendment with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date.

IN WITNESS WHEREOF, Guarantor has duly executed this Acknowledgement, Agreement
and Consent of Guarantor this 16th day of April, 2003.

	 	ACAMBIS, PLC

	 	By:_______________________________

Name:_____________________________

Title:______________________________

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