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EXHIBIT 10.40
Execution Copy
SUBLEASE
ARTICLE I
REFERENCE DATA
1.1 SUBJECTS REFERRED TO.
Each reference in this Sublease to any of the following subjects shall be
construed to incorporate the data stated for that subject in this Section 1.1:
Date of Sublease: January 22, 1998
Sublandlord: Immulogic Pharmaceutical Corporation
Sublandlord's Address: 610 Lincoln Street, Waltham, Massachusetts 02154
Subtenant: SCRIPTGEN Pharmaceuticals, Inc.
Subtenant's Address: 200 Boston Avenue
Medford, Massachusetts 02155
Overlandlord: Lincoln Street Trust, u/d/t dated July 6, 1963 and
recorded with the Middlesex South District Registry
of Deeds in Book 10333, Page 194
Overlandlord's Address: P.O. Box 9189, Waltham, Massachusetts 02254
Attention: Real Estate Manager
Overlease: Lease dated November 29, 1991 between Overlandlord as landlord
and Sublandlord as tenant, as amended by First Amendment to
Lease dated May 8, 1992, a copy of which is attached hereto as
Exhibit A.
Overleased Premises: The building situated on the Land (defined
in the Overlease) at 610 Lincoln Street, Waltham,
Massachusetts, as described in the Overlease,
containing approximately 85,430 rentable square feet
of space.
Premises: The Premises are that portion of the Overleased Premises
described in Section 2.1 hereof.
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Rentable Floor Area
of Premises: Date: Square Feet:
February 1, 1998 28,476
July 1, 1998 56,954
October 1, 1998 85,430
Commencement Date: February 1, 1998
Term Expiration Date: August 31, 2002
Monthly Fixed Rent: The Monthly Fixed Rent shall consist of Monthly Base
Rent and Monthly Improvements Rent in the amounts
set forth below:
Monthly Base Rent: Period: Rent:
2/1/98-6/30/98 $35,595.00
7/1/98-9/30/98 $71,192.50
10/1/98-8/31/02 $106,787.50
Monthly Improvements Rent:
Period: Rent:
2/1/98-6/30/98 $30,849.00
7/1/98-9/30/98 $61,700.17
10/1/98-8/31/02 $92,549.17
Permitted Uses: All uses permitted in the Overlease.
Security Deposit: $500,000, subject to reduction in accordance with the
provisions of Section 8.6 hereof.
1.2 EXHIBITS.
The exhibits listed below in this section are incorporated in this Sublease
by reference and are to be construed as part of this Sublease:
EXHIBIT A Overlease
EXHIBIT B Floor Plan of Premises
EXHIBIT C Letter of Credit
EXHIBIT D Sign
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ARTICLE II
PREMISES AND TERM
2.1 PREMISES. Subject to and with the benefit of the provisions of this
Sublease, Sublandlord hereby subleases the Premises to Subtenant, and Subtenant
subleases the Premises from Sublandlord. From the Commencement Date through June
30, 1998, the Premises shall mean the second floor of the Building. From July 1,
1998 through September 30, 1998, the Premises shall mean the second and third
floors of the Building. From October 1, 1998 for the remainder of the Term, the
Premises shall mean all of the Overleased Premises.
The Premises are subleased in their condition "as is" on the date of this
Sublease. Subtenant accepts the Premises in such condition. Sublandlord shall be
responsible for the repair of any material damage to the Premises caused by
Sublandlord's actions in vacating the Premises between the date of this Sublease
and the delivery of possession of the Premises to Subtenant.
Sublandlord further grants Subtenant the right to use, as appurtenant to
the Premises and in common with Sublandlord, Overlandlord, and all others now or
hereafter entitled thereto (a) such lobbies, hallways, stairways, elevators and
common areas in the Building as are necessary for access to and from the
Premises, and (b) four (4) parking spaces for each 1,000 rentable square feet of
space included in the Premises from time to time.
2.2 TERM. To have and to hold beginning on the Commencement Date and
continuing until the Term Expiration Date (the "Term"). Provided that Subtenant
is not in default hereunder beyond applicable grace or cure periods, the
Subtenant shall have the right to extend the term of this Sublease for three (3)
additional periods of five (5) years each on all of the terms and conditions set
forth in Section 2.4.1 of the Overlease, except that (a) Subtenant shall provide
Sublandlord with not less than fourteen (14) months notice of its desire to
exercise each such extension option, and (b) the Annual Fixed Rent to be paid by
Subtenant to Sublandlord shall be equal to ninety five percent (95%) of the then
prevailing market rate, as such prevailing market rate is determined by
Sublandlord and Overlandlord in accordance with the provisions of Section 2.4.1
of the Overlease. Subtenant shall have no further extension rights. In the event
Subtenant exercises either of the foregoing extension options, all references in
this Sublease to the Term shall mean the Term as so extended. In connection with
the determination of fair market rent under the Overlease, Sublandlord agrees to
(i) promptly provide to Subtenant Overlandlord's estimate of the prevailing
market rate, (ii) consult with subtenant before agreeing to accept or reject
Overlandlord's estimate, (iii) select an arbitrator reasonably acceptable to
Subtenant in the event Subtenant desires to arbitrate Overlandlord's
determination of fair market rent in accordance with the provisions of the
Overlease, and
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(iv) consult with Subtenant throughout such arbitration process. Subtenant shall
exercise its option to rescind its election to extend the Term by notice to
Sublandlord within three (3) days of the date of the final arbitrator's
decision.
ARTICLE III
RENT
3.1 MONTHLY FIXED RENT. Subtenant shall pay Sublandlord the Monthly Fixed
Rent as follows: So much of the Monthly Fixed Rent as is equal to the
installment of Annual Fixed Rent payable under the Overlease shall be paid
directly to the Overlandlord on or before the 25th day of the month prior to the
month such Annual Fixed Rent is due under the Overlease. Subtenant shall provide
simultaneous evidence of such payment to Sublandlord. The remainder of the
Monthly Fixed Rent shall be payable in advance on the first calendar day of each
month in the Term; and for any portion of a calendar month at the beginning of
or end of the Term, the corresponding fraction of the Monthly Fixed Rent in
advance.
3.2 OPERATING EXPENSES. Under Section 2.6.1 of the Overlease, Sublandlord
is required to pay (a) 100% of Landlord's Operating Expenses, and (b) an amount
equal to the excess (if any) of Landlord's Taxes over Base Taxes, as such terms
are defined in the Overlease (collectively, the "Expense Pass Throughs").
Subtenant shall pay Sublandlord as Additional Rent hereunder (i) one third (1/3)
of such Expense Pass Throughs for the period beginning February 1, 1998 and
ending June 30, 1998, (ii) two thirds (2/3) of such Expense Pass Throughs for
the period beginning July 1, 1998 and ending September 30, 1998, and (iii) 100%
of such Expense Pass Throughs for the period beginning October 1, 1998 and
continuing for the remainder of the Term. Subtenant shall pay directly to the
Overlandlord, such amount within 10 days of monthly billing by Sublandlord,
which bills shall include, where applicable, copies of the applicable statements
from Overlandlord. Subtenant shall provide simultaneous evidence of such payment
to Sublandlord. Any surplus shall be promptly refunded to Subtenant and any
deficit in such payment shall be promptly paid by Subtenant after the
Overlandlord finally determines the amounts payable by the Sublandlord under the
Overlease.
3.3 PAYMENT. To the extent not paid directly to Overlandlord, all payments
of Monthly Fixed Rent and Expense Pass Throughs shall be made to Sublandlord at
Sublandlord's Address set forth in Section 1.1 or to such other address as
Sublandlord may designate by notice to Subtenant from time to time.
ARTICLE IV
SUBLANDLORD'S COVENANTS AND WARRANTIES
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4.1 SUBLANDLORD'S OBLIGATIONS. Sublandlord shall make reasonable efforts to
cause Overlandlord to fulfill its obligations set forth in the Overlease with
respect to the Premises.
4.2. OVERLEASE. The copy of the Overlease attached hereto as Exhibit A is
true, accurate and complete, and represents the entire agreement between
Sublandlord and Overlandlord with respect to the Premises. Except as shown on
Exhibit A, the Overlease has not been modified, amended or terminated and is in
full force and effect. Sublandlord will not amend, modify or agree to terminate
the Overlease without Subtenant's prior consent, which may be withheld in
Subtenant's sole discretion. Notwithstanding the foregoing, the Sublandlord
shall be permitted to terminate this Sublease in the event Sublandlord obtains a
direct lease between the Subtenant and the Overlandlord on all of the terms and
conditions set forth in this Sublease (a "Replacement Lease"). Subtenant agrees
to execute and deliver the Replacement Lease at Sublandlord's request.
Sublandlord is not in default under the Overlease, nor has Sublandlord done or
failed to do anything which with notice, the passage of time or both could ripen
into a default. To Sublandlord's knowledge, Overlandlord is not in default under
any of its obligations under the Overlease.
4.3 QUIET ENJOYMENT. Upon payment of the rent and performance of and
compliance with the covenants, terms and conditions upon Subtenant's part to be
performed and complied with hereunder, Subtenant shall lawfully, peacefully and
quietly have, hold, occupy and enjoy the Premises during the Term without
hindrance or molestation by Sublandlord or any persons lawfully claiming by,
through or under Sublandlord, subject to the terms and conditions of this
Sublease and the Overlease.
ARTICLE V
SUBTENANT'S COVENANTS
Subtenant covenants during the Term and such further time as Subtenant
occupies any part of the Premises:
5.1 SUBTENANT'S PAYMENTS. Subtenant shall pay all Monthly Fixed Rent,
Expense Pass Throughs and all other additional rent payable hereunder when due.
Subtenant shall also pay all costs of utilities furnished to the Premises. To
the extent such utilities are not separately metered to the Premises, Subtenant
shall pay to Sublandlord, as Additional Rent, the following portion of such
common utilities charged to Sublandlord (i) one third (1/3) of such utilities
for the period beginning February 1, 1998 and ending June 30, 1998, (ii) two
thirds (2/3) of such utilities for the period beginning July 1, 1998 and ending
September 30, 1998, and (iii) 100% of such utilities for the period beginning
October 1, 1998 and continuing for the remainder of the Term.
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5.2 MAINTENANCE AND REPAIR. Subtenant shall maintain the Premises in the
condition required by the Overlease.
5.3 OCCUPANCY AND USE. Subtenant shall not use the Premises for any uses
other than the Permitted Uses, and shall not make any use of the Premises which
is prohibited by any applicable law, ordinance, code, regulation, license,
permit, variances or governmental order.
5.4 ASSIGNMENT AND SUBLETTING. Except as permitted by the terms of the
Overlease, Subtenant shall not assign, transfer, mortgage or pledge this
Sublease, or sublease (which term shall be deemed to include the granting of
concessions and licenses and the like) all or any part of the Premises, or
suffer or permit this Sublease or the leasehold estate hereby created or any
other rights arising under this Sublease to be assigned, transferred or
encumbered, in whole or in part, whether voluntarily, involuntarily or by
operation of law, or permit the occupancy of the Premises by anyone other than
Subtenant. Any attempted assignment, transfer, mortgage, pledge, sublease or
encumbrance in violation of the foregoing shall be void. If any assignment or
sublease is permitted, and, if the aggregate rent and other charges payable to
Subtenant thereunder (including without limitation any amounts paid for
leasehold improvements or on account of Subtenant's costs associated therewith,
but deducting Subtenant's costs such as architect's fees, brokerage fees, tenant
improvements and the like) exceed the aggregate rent and other charges paid
hereunder with respect to the space in question, Subtenant shall pay to
Sublandlord, as additional rent, one-half the amount of such excess.
ARTICLE VI
CASUALTY AND TAKING
6.1 TERMINATION OF OVERLEASE. In the event that during the Term, all or any
part of the Premises or the Overleased Premises are destroyed or damaged by fire
or other casualty or taken by eminent domain, and either Sublandlord or
Overlandlord terminates the Overlease pursuant to its terms because of such
damage, destruction or taking, then this Sublease shall likewise terminate on
the same date that the Overlease terminates. Sublandlord shall give Subtenant
prompt notice of such termination and the date on which it shall occur.
Subtenant shall also have the same right to terminate this Sublease as the
Sublandlord has to terminate the Overlease as tenant under Section 6.1 of the
Overlease, except such termination election must be made within five (5) days of
the expiration of the twelve (12) month period set forth in Section 6.1 of the
Overlease.
6.2 REPAIR AND RESTORATION. In the event any such damage, destruction or
taking of the Premises occurs and this Sublease is not terminated pursuant to
Section 6.1 above, then Sublandlord shall cause Overlandlord to repair and
restore
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the Premises as required by the terms of the Overlease. A just proportion of the
Monthly Fixed Rent, and any other additional rent hereunder shall be abated
until Overlandlord shall have put the Premises or what may remain thereof into
proper condition for use and occupancy, and in the case of a taking which
permanently reduces the area of the Premises, a just proportion of such rent
shall be abated for the remainder of the Term.
6.3 RESERVATION OF AWARD. Any and all rights to receive awards made for
damages to the Premises and the leasehold hereby created accruing by reason of
exercise of eminent domain or by reason of anything lawfully done in pursuance
of public or other authority, are reserved to Sublandlord and Overlandlord.
Subtenant hereby releases and assigns to Sublandlord and Overlandlord all
Subtenant's rights to such award and covenants to deliver such further
assignments and assurances thereof as Sublandlord or Overlandlord may from time
to time request.
ARTICLE VII
OVERLEASE
7.1 SUBLEASE SUBJECT TO OVERLEASE. This Sublease is subject to the
Overlease. Subject to this Section 7.1, all terms and conditions of the
Overlease (except for: Section 1.1, Section 2.1.1, Section 2.4, Section 2.4.1,
the second sentence of the first paragraph of Section 2.5, Section 3.1, Section
3.2, the last sentence of Section 5.11, the second sentence of Section 5.2,
Section 8.3, the personal representation and warranties set forth in Section
8.16 (such representations and warranties being made by the Subtenant but not by
the persons executing this Lease on behalf of Subtenant) Article X, the first
sentence of Article XII and Exhibit B) are incorporated into and made a part of
this Sublease as if Sublandlord were the landlord thereunder and Subtenant were
the tenant. In case of conflict between the incorporated provisions of the
Overlease and the remaining provisions of this Sublease, the latter shall
control. Subtenant assumes and agrees to perform the tenant's obligations under
the Overlease during the Term, except that the obligation to pay rent or other
amounts to Overlandlord under the Overlease shall not be an obligation of
Subtenant, and Subtenant shall instead pay the rent under this Sublease.
Subtenant shall not commit or suffer any act or omission that will violate any
of the provisions of the Overlease. Overlandlord has covenanted under the
Overlease to perform repairs and maintenance and provide services pursuant to
the Overlease. Sublandlord shall exercise due diligence in attempting to cause
Overlandlord to perform its obligations under the Overlease for the benefit of
Subtenant. In addition, if Overlandlord defaults in its obligations under the
Overlease to maintain the Premises or to furnish services to the Premises and
such default materially interferes with Subtenant's use and enjoyment of the
Premises, Sublandlord authorizes Subtenant to deal directly with Overlandlord
regarding such default (but no such authorization shall relieve
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Sublandlord of its obligation to use due diligence and/or reasonable efforts, as
set forth above in this Section 7.1 or above in Section 4.1, respectively).
If the Overlease terminates as a result of a default or breach of
Sublandlord or Subtenant under this Sublease and/or the Overlease, then the
defaulting party shall be liable to the nondefaulting party for the direct
damage suffered as a result of such termination. Sublandlord covenants not to
commit or suffer any act or omission that will violate the Overlease. Neither
Sublandlord nor Subtenant shall be liable to the other under this Section 7.1 of
any indirect, special or consequential damages, including business interruption
or lost profits.
7.2 EXCLUDED OBLIGATIONS. Notwithstanding anything to the contrary herein,
the incorporated provisions of the Overlease are amended or qualified as
follows:
i. Sublandlord shall not be liable under any circumstances for a loss of or
injury to property, or interference with Subtenant's business, however
occurring, incidental to any failure to furnish any utilities or services.
ii. Sublandlord shall have no responsibility to perform or construct (or to
pay the cost of performing or constructing) any repair, maintenance or
improvement in or to the Premises except to the extent required of it as tenant
under the Overlease.
iii. Rent shall be abated under this Sublease only to the extent that
Sublandlord receives a corresponding rent abatement under the Overlease
(provided, however, that the foregoing limitation shall not apply for any period
during which Sublandlord fails to deliver the Premises to Subtenant on the dates
set forth in this Sublease).
iv. Wherever the Overlease grants to Sublandlord a grace or cure period,
the corresponding grace or cure period under this Sublease shall be two (2)
business days shorter in duration.
The parties acknowledge that Sublandlord's ability to satisfy certain of
its obligations to Subtenant under this Sublease is contingent upon the full and
timely performance of Overlandlord's obligations under the Overlease. The
parties further acknowledge that, while Sublandlord will use reasonable efforts
to cause Overlandlord to perform its obligations under the Overlease,
Sublandlord will not be liable to Subtenant for any breach of Sublandlord's
obligations under this Sublease, nor shall such breach diminish Sublandlord's
rights hereunder, where the same is caused by or attributable to the failure of
Overlandlord to perform its obligations under the Overlease.
7.3 OVERLANDLORD'S RIGHTS. Overlandlord shall have all rights with respect
to the Premises which it has reserved to itself as landlord under the Overlease.
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7.4 TERMINATION OF OVERLEASE. In the event that Overlandlord terminates the
Overlease pursuant to its terms or the Overlease otherwise terminates or
expires, this Sublease shall likewise and simultaneously terminate.
ARTICLE VIII
MISCELLANEOUS
8.1 NOTICES FROM ONE PARTY TO THE OTHER. All notices required or permitted
hereunder shall be in writing and addressed, if to the Subtenant, at Subtenant's
Address, Attention Karen A. Hamlin, Senior Director of Operations, with a copy
to David B. Currie, Esq., Choate, Hall & Stewart, Exchange Place, Boston, MA
02109, or such other address as Subtenant shall have last designated by notice
in writing to Sublandlord and, if to Sublandlord, at Sublandlord's Address or
such other address as Sublandlord shall have last designated by notice in
writing to Subtenant. Any notice shall be deemed duly given when mailed to such
address postage prepaid, via recognized overnight courier or by registered or
certified mail, return receipt requested, or when delivered to such address by
hand.
8.2 ESTOPPEL CERTIFICATE. Upon not less than 20 days prior notice by the
requesting party, either party shall execute, acknowledge and deliver to the
other a statement in writing, addressed to such person as the requesting party
shall designate, certifying (a) that this Sublease is unmodified and in full
force and effect, (b) the dates to which Monthly Fixed Rent and additional rent
have been paid, and (c) that the requesting party is not in default hereunder
(or, if in default, specifying the nature of such default in reasonable detail).
Any such certificate may be relied upon by the person to which it is addressed
as to the facts stated therein.
8.3 BROKERAGE. Subtenant and Sublandlord mutually represent and warrant
that they have dealt with no broker in connection with this transaction except
for Lynch Murphy Walsh & Partners and Fallon Hines & O'Connor (the "Brokers").
Each agrees to defend, indemnify and save the other harmless from and against
any and all cost, expense or liability suffered by the other as a result of any
breach of such representation and warranty. Sublandlord shall pay the commission
due to the Brokers.
8.4. APPLICABLE LAW AND CONSTRUCTION. This Sublease shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
If any term, covenant, condition or provision of this Sublease or the
application thereof to any person or circumstances shall be declared invalid or
unenforceable by the final ruling of a court of competent jurisdiction having
final review, the remaining terms, covenants, conditions and provisions of this
Sublease and their
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application to persons or circumstances shall not be affected thereby and shall
continue to be enforced and recognized as valid agreements of the parties.
There are no oral or written agreements between Sublandlord and Subtenant
affecting this Sublease. This Sublease may be amended, and the provisions hereof
may be waived or modified, only by instruments in writing executed by
Sublandlord and Subtenant.
The titles of the several Articles and Sections contained herein are for
convenience only and shall not be considered in construing this Sublease.
Unless repugnant to the context, the words "Sublandlord" and "Subtenant"
appearing in this Sublease shall be construed to mean those named above and
their respective heirs, executors, administrators, successor and assigns, and
those claiming through or under them respectively. If there be more than one
tenant, the obligations imposed by this Sublease upon Subtenant shall be joint
and several.
8.5 CONSENT BY OVERLANDLORD. This Sublease is conditioned upon procuring
the consent of Overlandlord to this Sublease in accordance with the Overlease
(the "Consent"), and the Sublandlord and Subtenant shall cooperate with each
other in seeking Overlandlord's Consent. If Consent is not obtained within ten
(10) business days of the date of this Sublease (the "Consent Period"), this
Sublease may be terminated by Sublandlord or Subtenant upon the delivery of
notice to the other party hereto. If this Sublease is so terminated: (i) all
consideration previously paid by Subtenant to Sublandlord on account of this
Sublease shall be returned to Subtenant; and (ii) the parties thereupon shall be
relieved of any further liability or obligation under this Sublease, except for
those liabilities or obligations which have accrued and remain unperformed as of
the date this Sublease is so terminated.
8.6 SECURITY DEPOSIT. Sublandlord acknowledges receipt of the Security
Deposit from Subtenant simultaneously with the execution hereof. The Security
Deposit will be held by Sublandlord, as security in an interest bearing account,
for and during the Term, which deposit shall be returned to Subtenant, within 30
days after the expiration or termination of this Sublease, provided there exists
no breach of any undertaking of Subtenant. Provided Subtenant is not in default
of this Sublease, all interest on the Security Deposit shall be paid to
Subtenant on an annual basis on each anniversary of the Commencement Date. If
all or any part of the Security Deposit is applied to an obligation of Subtenant
hereunder, Subtenant shall immediately upon request by Sublandlord restore the
Security Deposit to its original amount. Subtenant shall not have the right to
call upon Sublandlord to apply all or any part of the Security Deposit to cure
any default or fulfill any obligation of Subtenant, but such use shall be solely
in the discretion of Sublandlord. Provided Subtenant is not in default of any of
its obligations hereunder, the Security Deposit shall be reduced to $250,000
(and $250,000 refunded to Subtenant) within 10 days
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after Subtenant provides evidence reasonably satisfactory to Sublandlord that
Subtenant has successfully completed a public offering of Subtenant's common
stock which raised not less than $30,000,000. Notwithstanding the foregoing, the
Subtenant shall be permitted to provide the Security Deposit by delivery of a
letter of credit in the form attached hereto as Exhibit C, which letter of
credit shall be drawn on a bank approved by Sublandlord in its reasonable
discretion.
8.7 SIGNAGE RIGHTS. Sublandlord agrees that, subject to Overlandlord's
consent, Subtenant shall be permitted to construct a sign on the Premises
substantially similar in size and design to Sublandlord's existing sign.
Sublandlord's sign shall be removed from the Premises on or about the date
Sublandlord vacates the Building.
8.8 ACCESS. Sublandlord shall not take any steps to deny Subtenant access
to the Premises 24 hours a day.
8.9 PERMITS. Subtenant shall have the right to terminate this Sublease
during the Consent Period in the event Subtenant is not satisfied, in its
discretion, that it will be able to obtain all permits and approvals necessary
for the operation of its business at the Premises. Subtenant's termination right
shall be void if not exercised within the Consent Period.
EXECUTED as a sealed instrument in two or more counterparts on the day and
year first above written.
Sublandlord:
Immulogic Pharmaceutical Corporation
By: /s/ J. Joseph Marr
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Title: President and CEO
Subtenant:
SCRIPTGEN Pharmaceuticals, Inc.
By: /s/ Mark T. Weedon
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Title: President and CEO
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The undersigned, Lincoln Street Trust, as landlord under the "Overlease"
described in the above Sublease, hereby consents (a) to the execution of such
Sublease and the terms and conditions set forth therein, and (b) to the
installation by Subtenant of a sign on the Premises consistent with the design
set forth on Exhibit __ attached hereto. Nothing herein shall be interpreted to
modify the undersigned's rights and obligations under the Overlease.
Overlandlord:
Lincoln Street Trust
By: /s/ Michael D. Bank
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Name: , as
Trustee and not individually
hereunto duly authorized
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