1
EXHIBIT 10.37
SECOND AMENDMENT TO LEASE
-------------------------
REFERENCE is made to that certain Lease dated June 1, 1992 by and between
South Shore Bank, as landlord, and Collaborative Research Incorporated, as
tenant, as amended by that certain Lease Amendment dated August 1, 1994 by and
between ACTMED Limited Partnership, successor-in-interest to South Shore Bank,
as landlord ("Landlord"), and Collaborative Research Incorporated, as tenant
(collectively, the "Lease"), for those certain premises consisting of
approximately 23,305 square feet located on the second floor of that certain
building situated at 100 Beaver Street, Waltham, Massachusetts 02154, all as
more particularly described in the Lease.
WHEREAS, Genome Therapeutics Corporation is successor-in-interest to
Collaborative Research Incorporated as tenant under the Lease ("Tenant"), and
WHEREAS, Landlord and Tenant wish to amend the Lease as set forth herein.
NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant agree that the Lease shall be amended
as follows:
1. Subjects Referred to (Article 1.1)
----------------------------------
a) PREMISES. The term "Premises" is hereby amended to be "Approximately
23,305 square feet of rentable space on the second floor of the
Building ("Current Premises"), and from and after the date that
Landlord delivers possession of the following in accordance with the
terms of this Lease, approximately 25,847 square feet located on the
first floor, 4,034 square feet located on the second floor and 7,000
square feet located on the third floor of the Building ("Lexicon
Premises"), now occupied by Lexicon, Inc. ("Lexicon"), and from and
after the date that Landlord delivers possession in accordance with
the terms of this Lease, approximately 21,270 square feet of
rentable space on the third floor of the Building ("ACT Premises")
currently occupied by ACT Medical, Inc. ("ACT"), together with the
right to use any paved parking areas and loading docks located on
the lot on which the Building is located subject to the Rules and
Regulations attached hereto as EXHIBIT C. The Current Premises,
Lexicon Premises, and ACT Premises are collectively referred to as
"the Premises."
b) MANAGING AGENT. The term "Managing Agent" is hereby amended to be
"Sandact, Inc.".
1
2
c) LANDLORD'S & MANAGING AGENT'S ADDRESS. The term "Landlord's &
Managing Agent's Address" is hereby amended to be "P.O. Box 442,
Hull, MA 02045."
d) TERM EXPIRATION DATE. The term "Term Expiration Date" is hereby
amended to be "the date which is ten (10) years after the date the
Lexicon Premises are delivered to Tenant in accordance herewith."
e) PREMISES DESIGN FLOOR AREA. The term "Premises Design Floor Area" is
hereby deleted in its entirety.
f) ANNUAL FIXED RENT RATE. The term "Annual Fixed Rent" is hereby
amended as follows:
"For the Current Premises:
Period $/square foot $/annum
------ ------------- -------
From the date hereof through $15.20 $354,236.00
July 31, 1996
August 1, 1996 to July 31, 1997 $15.45 $360,062.25
August 1, 1997 to July 31, 1998 $15.95 $371,714.75
August 1, 1998 to July 31, 1999 $16.70 $389,193.50
August 1, 1999 through the $16.70 $389,193.50
Term Expiration Date
For the Lexicon Premises:
Period $/square foot $/annum
------ ------------- -------
Commencing thirty (30) days $9.00 $331,884.00
after Landlord delivers the for the
Lexicon Premises in accordance entirety
herewith - the date which is of the
five (5) years after the date Lexicon
Landlord delivers the Lexicon Premises
Premises in accordance herewith
("Year Five Date") $27,000.00
with
respect to
3000 s.f.
to be
delivered
on or
about
August 26,
1996 as
set forth
below
2
3
The day following the Year $10.00 $368,760.00
Five Date - Term Expiration
Date
For the ACT Premises:
Period $/square foot $/annum
------ ------------- -------
Commencing ninety (90) days $9.00 $191,430.00
after Landlord delivers the
ACT Premises in accordance
with the terms herewith -
Year Five Date
The day following the Year $10.00 $212,700.00"
Five Date - Term Expiration
Date
a) SECURITY DEPOSIT. The term "Security Deposit" is hereby amended to
be as follows:
"$59,039.33. After delivery of the Lexicon Premises to Tenant,
Tenant shall deposit an additional $55,314.00. After delivery
of the ACT Premises, Tenant shall deposit an additional
$31,905.00."
b) TENANT'S PROPORTIONATE FRACTION. The term "Tenant's Proportionate
Fraction" is hereby amended to be a fraction, the numerator which
shall be the leasable square footage of the Premises leased
hereunder from time to time and the denominator shall be the
leasable square footage of the Building.
2. Initial Construction (Section 3.1) is hereby modified by:
a) deleting the first sentence thereof and substituting the following
therefor:
"Tenant agrees to accept the Premises in "as-is" condition, provided
that notwithstanding the foregoing, Landlord shall deliver the
Lexicon Premises and ACT Premises (i) in broom clean condition, (ii)
in accordance with the State Building Code 780 CMR, (iii) in
compliance with the barrier free regulations set forth in 521 CMR,
and (iv) with such other repairs and the cost thereof as agreed to
between the parties (subsection (ii) - (iv) being collectively
referred to as "Landlord's Building Improvements")"; and
b) adding the following sentence at the end of the first paragraph:
"Landlord agrees not to charge any supervising fee for any work
performed by Tenant."
3
4
3. PREPARATION OF PREMISES FOR OCCUPANCY (SECTION 3.2) is hereby amended by
deleting the second paragraph thereof and adding the following before the
first paragraph thereof:
"Landlord agrees to deliver 3000 square feet of the Lexicon
Premises located on the third floor on or before August 26, 1996.
Landlord agrees to deliver the balance of the Lexicon Premises and
ACT Premises on or before October 1, 1996, and March 1, 1997,
respectively (collectively, the "Relocation Dates"). Notwithstanding
the foregoing, Landlord may delay delivery of possession of the ACT
Premises until August 1, 1998 upon prior written notice to Tenant
which notice is delivered on or before March 1, 1997. Tenant
acknowledges that Lexicon and ACT are currently leasing portions of
the Building as set forth herein. If Landlord, after using
reasonable efforts to remove Lexicon, is unable to deliver
possession of the entirety of the Lexicon Premises to Tenant by
December 31, 1996, and provided that Landlord's inability to so
deliver possession is not due to fire, casualty, or any act or
omission of Tenant, its agents, contractors, employees, licensees or
invitees, then (i) Tenant shall receive one (1) day of free rent for
the Lexicon Premises for each day after November 15, 1996 until
December 31, 1996, and two (2) days of free rent for each day during
January, February, and March of 1997 in which Landlord fails to so
deliver the Premises, provided Tenant shall not be entitled to any
additional free rent for each day after March 31, 1997 in which
Landlord fails to so deliver the Premises, and (ii) if Landlord has
not so delivered the entirety of the Lexicon Premises to Tenant by
March 31, 1997, then Tenant may terminate this Second Amendment to
Lease, it being understood that the Lease shall continue in full
force and effect with respect to the Current Premises.
Notwithstanding the foregoing, if Landlord has delivered 3000 square
feet of the Lexicon Premises as set forth above in accordance with
the terms of this Lease, then this Second Amendment to Lease shall
continue in full force and effect with respect to the Current
Premises and said 3000 s.f. of the Lexicon Premises.
If Landlord has delivered the Lexicon Premises in accordance with
the terms hereof, and if Landlord, after using reasonable efforts to
remove ACT, is unable to deliver possession of the ACT Premises to
Tenant by November 1, 1998, and provided Landlord's inability to so
deliver possession is not due to fire, casualty, force majeure, or
any act or omission of Tenant, its agents, contractors, employees,
licensees or invitees, then (i) Landlord shall so notify Tenant of
such inability, and (ii) any reference to the "ACT Premises" shall
be deemed stricken from this Second Amendment to Lease, it being
understood that the Lease shall continue in full force and effect
with respect to the Current Premises and the Lexicon Premises.
4
5
Notwithstanding anything to the contrary set forth herein,
"reasonable efforts" as set forth in this Section 3.2 shall include
the institution of court proceedings for eviction, but "reasonable
efforts" shall not require Landlord to pay any sum of money to
Lexicon or ACT.
4. CERTAIN REQUIREMENTS APPLICABLE TO INSURANCE POLICIES (SECTION 4.2.2.4) is
hereby modified by deleting the last sentence thereof.
5. UTILITIES (SECTION 4.2.3) is hereby modified by deleting "to the extent .
. . Tenant and the Premises," from the first sentence thereof, and by
deleting "provided that if said utilities . . . use of utilities." from
the second sentence thereof.
6. ASSIGNMENT AND SUBLETTING (SECTION 5.2.1) is hereby amended by deleting
the last sentence of the first paragraph and substituting the following
therefor:
"In the event that any assignee, subtenant, or occupant pays to
Tenant any amounts (whether by lump sum or monthly payments) in
excess of $10.00 per square foot on a triple net basis for space
leased as office space, or $23.00 per square foot on a triple net
basis for space leased as laboratory space, Tenant shall promptly
pay fifty percent (50%) of all such excess to Landlord as and when
received by Tenant after first deducting from such excess, the
reasonable expenses incurred by Tenant in obtaining such assignment
or sublease, provided such expenses are amortized over the term
hereof."
7. NOTICES FROM ONE PARTY TO THE OTHER (SECTION 9.1) is hereby amended by
deleting the last sentence thereof and substituting the following sentence
therefor:
"A copy of any notice to Landlord shall be sent to: Mary C. Mazzio,
Esquire, Brown, Rudnick, Freed & Gesmer, P.C., One Financial Center,
Boston, Massachusetts 02111 in the same manner as Landlord's Notice,
and a copy of any notice to the Tenant shall be sent to Francis X.
Hanlon, Esquire, Ropes & Gray, One International Place, Boston,
Massachusetts 02110 in the same manner as Tenant's Notice."
8. The following is hereby added to the Lease as a new Section 9.15:
9.15 SIGNAGE. Tenant shall have the right to erect its corporate
logo in locations on Beaver Street and on the Building that are
mutually agreed upon by the parties hereto.
9. EXHIBITS. EXHIBITS A, A-1, A-2, and E are hereby deleted in their
entirety, and the EXHIBIT A attached hereto is added to the Lease as a new
EXHIBIT A thereof.
10. EXHIBIT D (TENANT'S EXTENSION OPTION) is hereby modified by:
5
6
a) deleting the phrase "one (1) period of five (5) years" in the first
sentence thereof and substituting the phrase "two (2) periods of
five (5) years" therefor,
b) by deleting the word "option" in the second sentence thereof and
substituting the word "options" therefor,
c) by deleting the word "period" in the first sentence of the second
paragraph thereof and substituting the word "periods" therefor, and
d) further, by adding the following phrase after the words "office
and laboratory space" in the second sentence of the second paragraph
thereof:
", excluding the structural laboratory improvements constructed by
Tenant after the date hereof in the Lexicon Premises and the ACT
Premises,"
11. EXHIBIT G (TENANT IMPROVEMENT ALLOWANCE) is hereby modified by deleting
the first paragraph thereof and by deleting the phrase "with respect to
the Allowance" in the first sentence of the second paragraph and
substituting the phrase "with respect to a $100,000 Allowance granted
pursuant to the First Lease Amendment" therefor.
12. EXHIBIT H attached hereto is hereby added to the Lease as EXHIBIT H.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Lease.
EXCEPT as modified by this Second Amendment, all other terms of the Lease
remain unchanged and in full force and effect.
6
7
WITNESS our hands and seal this ____ day of _____________, 1996.
LANDLORD: TENANT:
ACTMED LIMITED PARTNERSHIP GENOME THERAPEUTICS, INC.
By: SANDACT INC., its sole general
partner
By: ________________________ By: _______________________________
7
8
EXHIBIT A
---------
1. BUYER'S REPRESENTATION AND AGREEMENTS. Buyer represents,
warrants and covenants with Seller as follows:
(i) Buyer is a corporation that has been duly organized and is
validly existing in good standing under the laws of its state of
incorporation;
(ii) Buyer has full power and right to enter into and perform its
obligations under this Agreement and the other agreements
contemplated herein to be executed and performed by it;
(iii) Buyer is not in the hands of a receiver nor is application for
a receiver pending, Buyer has not made an assignment for the benefit
of creditors, nor has Buyer filed, or had filed against it, any
petition in bankruptcy; and
(iv) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (1) have been
duly authorized, executed and delivered by Buyer and the persons
executing this Agreement and other documents on behalf of Buyer are
duly authorized to execute the same, and (2) do not and will not (A)
require any governmental or other consent, (B) violate or conflict
with any judgment, decree or order of any court applicable to or
affecting Buyer, (C) violate or conflict with any law or
governmental regulation applicable to Buyer, (D) violate or conflict
with the organizational documents of Buyer, and (E) result in the
breach of, or constitute a default under, any agreement, contract,
indenture or other instrument or obligation to which Buyer is a
party or is otherwise bound. Upon the assumption that this Agreement
constitutes the legal, valid and binding obligation of Seller, this
Agreement constitutes the legal, valid and binding obligation of
Buyer.
2. CASUALTY/TAKING. If, prior to the Closing Date, all or a significant
portion of the Property is destroyed by fire or casualty or taken by
eminent domain (or is the subject of a pending taking which has not
yet been consummated), Seller shall notify Buyer of such fact
promptly after obtaining knowledge thereof and either Buyer or
Seller shall have the right to terminate this Agreement by giving
notice to the other not later than ten (10) days after the giving of
Seller's notice. For the purposes hereof, a "significant portion" of
the Property shall mean such a portion of the Property as shall have
a value in excess of $735,687.00. If either party elects to
terminate this Agreement as aforesaid, this Agreement shall
terminate and be of no further force and effect and neither party
shall have any liability to the other hereunder. If neither Seller
nor Buyer elects to terminate this Agreement as aforesaid, or if an
"insignificant portion" (i.e., anything other than a significant
portion) of the Property is destroyed by fire or casualty or taken
by eminent domain (or becomes the subject of a pending taking), then
the sale of the Property shall be consummated as herein provided at
the Purchase Price (without abatement), and Seller shall assign to
Buyer, without recourse, at the
8
9
Closing all of Seller's right, title and interest in and to all net
insurance proceeds received by Seller in connection with a fire or
casualty, and any net award, if any, received in connection with a
taking.
3. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had
executed the same document. All such counterparts shall be construed
together and shall constitute one instrument.
9
10
EXHIBIT H
Tenant's Option to Purchase
---------------------------
Provided that no Event of Default has occurred hereunder, Tenant shall
have a right to purchase the Building to be exercised prior to August 31, 1997,
time being of the essence, upon the following terms and conditions:
1. The purchase price ("Purchase Price") for the Building shall be
(a) $7,356,870.00, based on a price of $90.00 per rentable square
foot; plus
(b) if Tenant exercises its purchase option hereunder after ACT and/or
Lexicon vacate the Building, the Landlord's cost of carrying the ACT
Space or the Lexicon Space during Tenant's 30- and 90-day fit-up
periods, respectively (including lost rent at the rate of $9.00 per
square foot per annum), plus a pro rata share of Additional Rent, as
defined in Article 4 of the Lease; plus
(c) the cost of Landlord's Building Improvements.
2. Tenant shall notify Landlord of its intent to purchase the Building by
written notice ("Tenant's Notice") to Landlord prior to August 31,
1997, a copy of which shall be accompanied with a deposit of 10% of the
Purchase Price to be sent simultaneously to Whittier Partners, the
Tenant's Notice to be in the form attached to this EXHIBIT H as EXHIBIT
H-1. Upon receipt of an executed original of Tenant's Notice, Landlord
shall promptly execute and deliver to Tenant an executed copy thereof.
3. Notwithstanding the foregoing, Tenant's right to give Tenant's Notice
and exercise this purchase option shall terminate on June 1, 1997, July
1, 1997, or August 1, 1997, unless prior to each such date, Tenant has
paid to Landlord a non-refundable sum of $10,000.00 in each case in
order to retain Tenant's purchase option for the next succeeding month.
Time is of the essence of each such date.
4. If (a) Tenant (i) does not timely exercise its purchase right as set
forth above or (ii) fails to pay the non-refundable sums of $10,000.00
to Landlord prior to June 1, July 1, or August 1, as the case may be,
as set forth above or (iii) fails to otherwise fulfill the conditions
hereunder or set forth in Tenant's Notice, Tenant's right to purchase
the Building shall terminate and shall be null and void, and Landlord
shall have no further obligation to sell the Building to Tenant, and
may sell the Building to another party upon such terms and conditions
as Landlord may deem appropriate, free and clear of any rights in favor
of Tenant contained herein.
10
11
5. Tenant shall indemnify and hold harmless Landlord, and defend Landlord
with counsel approved by Landlord, from and against any and all losses,
damages, liability, claims and judgment in connection with Tenant's
failure, after having executed its right to purchase the Building, to
fulfill its obligations hereunder or under the Tenant's Notice This
provision shall survive the termination or expiration of this Lease.
Notwithstanding the foregoing, if Tenant has paid Landlord the deposit
required pursuant to Section 5 of Tenant's Notice, then this indemnity
shall be deemed null and void, it being understood that Seller's
damages shall be limited to the amount of the deposit as set forth in
Section 19 of the Tenant's Notice.
6. Tenant, after the termination or expiration of Tenant's rights to
purchase the Building, and within five (5) days after receipt of
Landlord's request, shall execute and deliver to Landlord an agreement
prepared by Landlord, in recordable form, confirming the termination of
Tenant's rights to purchase the Building. Tenant's failure to so
execute and deliver such agreement shall entitle Landlord to execute
and record in the appropriate Registry of Deeds (including the Land
Registration Office therein, if applicable) an affidavit confirming the
termination of Tenant's purchase rights hereunder, which affidavit
shall be binding upon the parties hereto and may be relied upon by
third parties. Notwithstanding Landlord's rights as set forth in the
foregoing sentence, and without limiting the generality of Tenant's
indemnification as set forth above, Tenant shall be liable for any and
all damages and expenses including, without limitation, delay damages,
loss of opportunity damages and attorney's fees incurred as a result of
Tenant's wrongful failure to execute the agreement confirming
termination of Tenant's purchase rights hereunder, or Tenant's
execution of an affidavit or other document stating that Tenant's
purchase rights have not terminated if the affidavit or other document
shall prove to be false, except as otherwise provided in Section 5
above if Tenant has paid Landlord the deposit pursuant to Section 5 of
Tenant's Notice.
7. Tenant may not assign, mortgage, pledge, encumber or otherwise transfer
("Transfer") its interest or rights set forth hereunder, and any such
purported Transfer or attempt to Transfer shall be void and without
effect, and shall terminate this right to purchase (except with respect
to the obligation set forth in Paragraph (4) hereof).
8. Notice of Tenant's right to purchase the Building shall be included in
a Notice of Lease to be executed by the parties and recorded by Tenant
in the Registry of Deeds (including the Land Registration Office
therein, if applicable).
9. Time is of the essence with respect to all aspects of this right to
purchase.
11