| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 5, 2019, Curis, Inc. (the “Company”) entered into a Lease Agreement (the “Lease Agreement”), with 128 Spring Street Lexington, LLC (the “Landlord”) pursuant to which the Company has agreed to lease 21,772 square feet of property located on the 500 Levelof C Building to be used for office, research and laboratory space (the “Leased Premises”) located at 128 Spring Street in Lexington, Massachusetts. The Company intends to move all of its operations currently conducted at 4 Maguire Road, Lexington, Massachusetts to the Leased Premises.
Under the terms of the Lease Agreement, the Landlord has agreed to make certain leasehold improvements to the Leased Premises to suit the Company’s use (the “Improvements”). The term of the Lease Agreement commences on the date that the Improvements are completed and asigned-off building permit or a certificate of occupancy (temporary or permanent) permitting the use of the Leased Premises by the Company is available (the “Commencement Date”) and expires on the last day of the calendar month in which the day immediately preceding the seventh (7th) anniversary of the Commencement Date occurs, unless sooner terminated or extended in accordance with the terms and conditions of the Lease Agreement. If the Commencement Date does not occur on or before July 10, 2020, we may terminate the Lease Agreement by providing written notice to the Landlord on or before such date. Pursuant to the terms of the Lease Agreement, the Company has (i) the option to extend the term of the Lease Agreement for one additional five-year period and (ii) aone-time right of first offer to lease additional space on the 400 Level of C Building that may become available for occupancy from time to time during the term of the Lease Agreement. The base rent for any additional space leased from the Landlord will be the fair market rent.
The total cash obligation for the base rent over the seven (7) year term of the Lease Agreement is approximately $8,341,941.80 and the Company will start paying rent on the Commencement Date. In addition to the base rent, the Company is also responsible for its share of operating expenses and real estate taxes, in accordance with the terms of the Lease Agreement. The Company will provide a security deposit in the amount of $816,450.03 to the Landlord, which may be reduced by up to $272,150.01 over time in accordance with the terms of the Lease Agreement. The Landlord has agreed to pay up to $3,046,426.60 for the Improvements. To partially secure the Company’s obligations under the Lease Agreement, the Company established an irrevocable letter of credit in the amount of $816,450.03 for the benefit of the Landlord, which may be reduced to $544,300.02 over time in accordance with the terms of the Lease Agreement.
If the Company is considered in default under the terms of the Lease Agreement (a “Default”) and fails to cure such Default in the applicable time period prescribed under the Lease Agreement, the Landlord may terminate the Lease Agreement and the Company would be subject to certain penalties, obligations and payments including, but not limited to, the obligation to reimburse the Landlord for the costs incurred in connection with any such default, including the cost of reletting the Leased Premises; and the obligation to continue paying rent and all expenses and taxes payable under the Lease Agreement for the remainder of the term of the Lease Agreement, offset by the net proceeds of any rent actually received by the Landlord in connection with the reletting of the Leased Premises, or, in lieu of paying the remaining rent
