1
EXHIBIT 10.2
SUBLEASE
This Sublease (the "Sublease") is made as of this 16th day of July, 1999,
by and among ArQule, Inc., a Delaware corporation (the "Sublessor"), and Pfizer
Inc. a Delaware corporation (the "Sublessee").
The parties to this instrument hereby agree with each other as follows:
ARTICLE I
SUMMARY OF BASIC SUBLEASE PROVISIONS
------------------------------------
1.1 BASIC DATA
ALL CAPITALIZED TERMS USED HERE[N SHALL HAVE THE MEANINGS ASCRIBED TO THEM [N
THE PRIME LEASE (HEREINAFTER DEFINED) UNLESS OTHERWISE DEFINED HEREIN.
Commencement Date: The date on which the Premises are
deemed ready for occupancy by
Sublessee. See Section 3.1.
Sublessor: ArQule, Inc.
Present Mailing Address 000 Xxxxxx Xxxxxx
of Sublessor: Xxxxxxx, Xxxxxxxxxxxxx 00000
Sublessor' s Representative: [*]
Sublessee: Pfizer Inc
Present Mailing Address of Sublessee: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sublessee's Representative: [*]
Prime Lessor: Xxxxxxxx Properties, LLC
(successor-in-interest to Xxxxxxxx
Properties Management, Inc.), as
agent for Beautyrest, Inc. and
Boston North, LLC (successor-in-
interest to WRB, Inc.)
Present Mailing Address 000 Xxxx Xxxxxxxx Xxxx
of Prime Lessor: Xxxxxx, Xxxxxxxxxxxxx 00000
------------------
*Confidential treatment has been requested for the marked portion.
2
Permitted Uses: For Suites [*]: As described in
Section 3 of Prime Lease 1 (as
defined below), and Sections G and
H of the Rider to Prime Lease 1.
For Suites [*]: As described in
Section 3 of Prime Lease 2 (as
defined below), and Sections 5 and
6 of Amendment #1 to Prime Lease 2.
Premises: [*] rentable square feet of space
in Suites [*], located on [*] of
the building known as 000 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx (the
"Building"), together with the
right to use Sublessor's FF&E (as
hereinafter defined), and together
with the right to have access to
and use in common with Sublessor
the Collaboration Areas (as
described in Section 2.1 of this
Sublease). The Premises demised
under this Sublease consist of a
portion of the premises leased by
Sublessor from Prime Lessor under
Prime Lease 1, Prime Lease 2, and a
separate Commercial Lease dated
September 29, 1993, as amended,
between Prime Lessor, as landlord,
and ArQule Partners, L.P
(Sublessor's predecessor in
interest) as tenant, with respect
to approximately [*] square feet on
the [*] floors of the Building (the
"Third Floor Lease"); Prime Lease
1, Prime Lease 2, and the [*] Lease
are referred to herein collectively
as the "Xxxxxxxxx" and the premises
leased by Sublessor under the
Xxxxxxxxx are referred to herein
collectively as the "Leased
Premises".
Prime Lease 1: Collectively, that certain
Commercial Lease dated July 27,
1995, as supplemented by Rider to
Lease dated July 27, 1995 (the
"Rider to Prime Lease 1"), and as
amended by Amendment to Lease #1
dated January 24, 1996 ("Amendment
#1 to Prime Lease 1"), Amendment to
Lease #2 dated September 10, 1997
("Amendment #2 to Prime Lease 1"),
and Amendment to Lease #3 dated
January 12, 1998 ("Amendment #3 to
Prime Lease 1")
------------------
*Confidential treatment has been requested for the marked portion.
2
3
between Prime Lessor, as landlord,
and Sublessor, as tenant. A copy of
Prime Lease I is attached hereto
and incorporated herein by
reference as EXHIBIT A.
Prime Lease 2: Collectively, that certain
Commercial Lease dated December 20,
1996, as supplemented by Rider to
Lease dated December 20, 1996 (the
"Rider to Prime Lease 2"), and as
amended by Amendment to Lease #1
dated August 15, 1997 ("Amendment
#1 to Prime Lease 2"), Amendment to
Lease #2 dated March 18, 1997
("Amendment #2 to Prime Lease 2"),
Amendment to Lease #3 dated
September 15, 1997 ("Amendment #3
to Prime Lease 2"), Amendment to
Lease #4 dated September 30, 1997
("Amendment #4 to Prime Lease 2"),
Amendment to Lease #5 dated
November 28, 1997 ("Amendment #5 to
Prime Lease 2"), and Amendment to
Lease #6 dated January 12, 1998
("Amendment #6 to Prime Lease 2")
between Prime Lessor, as landlord,
and Sublessor, as tenant. A copy of
Prime Lease 2 is attached hereto
and incorporated herein by
reference as EXHIBIT B.
Prime Lease: Collectively, Prime Lease 1 and
Prime Lease 2.
Base Rent: [*] per annum payable in advance in
equal quarterly installments of [*]
each. See Section 6.1.
Additional Rent: So that the Base Rent payable to
Sublessor hereunder shall be net to
Sublessor, Sublessee shall pay as
additional rent hereunder:
Sublessee's Prorata Share of [*]
Prorata Share: The percentage equal to area of the
pertinent portion of the Premises
divided by the area of the
pertinent portion of the entire
Leased Premises. The Prorata Share
shall be adjusted in the event the
area of either the Premises demised
under this Sublease or the Leased
Premises shall change during the
Sublease
------------------
*Confidential treatment has been requested for the marked portion.
3
4
Term. As of the Commencement Date,
Sublessee's Prorata Share shall be
as follows:
- With respect to items of
Additional Rent, if any,
allocable solely to the
portion of the Premises [*]
located within the portion of
the Leased Premises [*]
demised under Prime Lease 1
and related to costs and
expenses attributable solely
to such portion of the Leased
Premises as is demised under
Prime Lease 1,[*].
- With respect to items of
Additional Rent, if any,
allocable solely to the
portion of the Premises [*]
located within the portion of
the Leased Premises [*]
demised under Prime Lease 2
and related to costs and
expenses attributable solely
to such portion of the Leased
Premises as is demised under
Prime Lease 2, [*].
- With respect to items of
Additional Rent, if any,
allocable to the Premises [*]
and related to costs and
expenses attributable solely
to such portion of the Leased
Premises [*] as is demised
under the Prime Lease, [*].
- With respect to items of
Additional Rent, if any,
allocable to the Premises [*]
and related to costs and
expenses attributable to all
of the Leased Premises [*].
Sublease Term or Term: Beginning on the Commencement Date
and expiring on the Term Expiration
Date.
Term Expiration Date: December 31, 2003, unless extended
or earlier terminated as provided
herein.
Sublessor's FF&E: All furnishings, fixtures and
equipment physically located in
the Premises as of the
------------------
*Confidential treatment has been requested for the marked portion.
4
5
date of this Sublease, including,
without limitation, [*] , as such
furnishings, fixtures and equipment
are more fully described on the
attached Exhibit C; explicitly
excluded from Sublessor's FF&E,
however, shall be all fixtures,
equipment, workstations and the
like that constitute [*] physically
located in the Premises as of the
date of this Sublease as more fully
described in Exhibits C and E of
the Technology Agreement as defined
below (the [*]).
Technology Agreement: That certain Technology Acquisition
Agreement, dated July __, 1999,
between Sublessor and Sublessee.
The parties hereby agree that,
except as otherwise expressly
provided in this Sublease to the
contrary, the respective rights and
obligations of the parties under
the Technology Agreement are wholly
independent of and separate from
the respective rights and
obligations of the parties under
this Sublease.
ARTICLE II
PREMISES
--------
2.1 LEASE OF PREMISES
Sublessor hereby leases to Sublessee, and Sublessee hereby accepts and
leases from Sublessor, upon and subject to the terms and provisions of the Prime
Lease (except as may otherwise be expressly Set forth in the written Sublease
Consent entered into on or about the date hereof by and among Prime Lessor,
Sublessor and Sublessee), all of Sublessor's right, title and interest in and to
the Premises for the Permitted Uses, subject to the right of Sublessor, which
right Sublessor hereby reserves, for itself, its employees, licensees,
consultants and contractors, during the term of the Technology Agreement to have
access to and use the Premises in common with Sublessee in furtherance of the
parties' business collaboration to the extent and in the manner described in the
Technology Agreement. Subject to the terms and provisions of the Prime Lease and
the collaboration procedures, if any, agreed upon by the parties pursuant to the
Technology Agreement, Sublessee shall have the right to have access to and use
in common with Sublessor and subtenants or other occupants of other portions of
the Leased Premises to whom Sublessor may from time to time grant similar rights
(provided that no such other subtenant's or occupants' rights may be
inconsistent with or unreasonably interfere with the respective rights
------------------
(continued...)
*Confidential treatment has been requested for the marked portion.
5
6
and obligations of Sublessor and Sublessee under the Technology Agreement) the
following: [*] (the items described in the preceding clauses (i) through (iii)
are referred to herein collectively as the "Collaboration Areas"). Also included
as part of the Premises sublet hereunder is the right, in common with Sublessor,
to exercise all of Sublessor's appurtenant rights under the Prime Lease to use
the common areas and facilities of the Building (including, without limitation,
the parking facilities serving the Building), subject in all events to the Prime
Lessor's rights expressly reserved and excepted in the Prime Lease and to Prime
Lessor's rules and regulations, if any.
2.2 PRIME LEASE
2.2.1 Sublessor hereby represents and warrants that: (i) Sublessor is
lessee under the Prime Lease; (ii) the Prime Lease is in full force and effect,
Sublessor has submitted to Sublessee a true and complete copy of the Prime Lease
and the Prime Lease has not been modified except as set forth in Section 1.1
hereof; (iii) Sublessor has not received any notice of default on the part of
Sublessor as tenant under the Prime Lease which has not been cured, nor has
Sublessor given Prime lessor notice of any default on the part of Prime Lessor
as landlord under the Prime Lease which has not been cured, nor does Sublessor
have any knowledge of any default by either party under the Prime Lease; and
(iv) Sublessor has not received any notice or complaint that any portion of the
Premises built out or otherwise improved by Sublessor fails to comply with the
physical accessibility requirements of the Americans With Disabilities Act.
Sublessee warrants and acknowledges that it has reviewed the Prime Lease and is
satisfied with the arrangements therein reflected. Sublessee also warrants that
it is satisfied with the present condition of the Premises (which Sublessee
takes "as is" without any representation or warranty by Sublessor regarding the
condition of the Premises or the fitness of the Premises for any particular use
except as otherwise specifically set forth in the Technology Agreement) and with
Sublessee's ability to use the Premises on the terms herein set forth.
Sublessor also represents that it has heretofore used and/or stored, and
shall from the date hereof through the Commencement Date use and/or store, in
the Leased Premises certain hazardous or toxic materials or substances,
including without limitation oil and radioactive materials (collectively,
"Hazardous Substances") regulated by local, state or Federal law (for example,
the Federal Comprehensive Environmental Response Compensation Liability Act of
1980, the Massachusetts Hazardous Waste Management Act and the Massachusetts Oil
and Hazardous Material Release Prevention Act). Sublessor further represents and
warrants that it has heretofore used, stored and disposed of, and shall from the
date hereof through the Commencement Date use, store and dispose of, all such
Hazardous Substances strictly in accordance with all applicable laws and that it
has not caused or permitted the release or discharge of any Hazardous Substances
in or about the Premises that has not been fully cleaned up and remediated in
accordance with all applicable laws. Sublessor shall indemnify and hold harmless
Sublessee from any claims, losses, liability, costs and expenses incurred by
Sublessee as a result of any breach by Sublessor of any of the foregoing
representations relating to Sublessor's use, storage and disposal of Hazardous
Substances. Sublessor shall, prior to the
------------------
*Confidential treatment has been requested for the marked portion.
6
7
Commencement Date, engage an independent and accredited industrial hygiene
consultant to certify that the Premises are free from any biological or chemical
contamination or any contamination by other Hazardous Substances.
2.2.2 The Prime Lease is by this reference incorporated into and made a
part hereof, except that:
(i) all of the following references in the Prime Lease to "Lessor",
"Lessee", "lease" and "leased premises", respectively, shall be deemed
to refer to Sublessor, Sublessee, this Sublease and the Premises
subleased hereunder, respectively:
PRIME LEASE 1
(a) Section 3 (Use of Premises)
(b) Section 4 (Additional Rent), except that Sublessee shall
only be obligated to pay its Prorata Share of the additional
rent described in this Section 4.
(c) Section 6 (Compliance with Laws), except that nothing in the
second sentence of this Section shall obligate, or be deemed
to obligate, Sublessee to provide worker's compensation
insurance for any of Sublessor's employees.
(d) Section 8 (Maintenance), except for the first and last
grammatical sentences; and except further, that in the
second grammatical sentence of this provision the phrase
"fire or other casualty or Lessor's negligence or misconduct
only excepted" shall be deemed to be revised to read "fire
or other casualty or Prime Lessor's or Sublessor's
negligence or misconduct only excepted."
(e) The first grammatical sentence of Section 15 (Lessee's
Liability and Insurance), except that the last phrase of
such sentence shall be deemed to read "resulting from the
sole willful misconduct or omission or negligence of Prime
Lessor or Sublessor."
(f) Section 19 (Default) except that the references in the
second grammatical sentence to "security deposit" and the
reference to "to any unamortized improvements completed for
Lessee's occupancy," shall be deemed to be deleted, since
they are inapplicable.
(g) Section 21 (Occupancy), except for the second and third
grammatical sentences; and except further, that in the first
grammatical sentence the phase "except the obligation for
the payment of extra rent for any period of less than one
month" shall be deemed to be deleted, since it is
inapplicable.
7
8
(h) Section 22 (Fire Prevention)
(i) Section 24 (Environment)
(j) Section 26 (Surrender), except that in the second
grammatical sentence of this provision the phrase "fire or
other casualty or Lessor's negligence or misconduct only
excepted" shall be deemed to be revised to read "fire or
other casualty or Prime Lessor's or Sublessor's negligence
or misconduct only excepted."
(k) Section 27 (General), except that clause (h) of this Section
shall be deemed to be revised to read "Sublessor makes no
representation or warranty, express or implied, concerning
the suitability of the Premises for Sublessee's intended use
except as otherwise expressly set forth in the Technology
Agreement"; and that clause (i) shall be deleted.
(l) Xxxxxxx 00 (Xxxxxxx)
(x) Sections E, G, H, I, T and X of Rider to Prime Lease 1
(n) The second grammatical sentence of Section K of Rider to
Prime Lease 1
(o) Section 3 of Amendment Ito Prime Lease 1 provided that
Sublessee shall be entitled to remove the equipment set
forth in this Section 3 only to the extent that Sublessee
has installed such equipment at its sole expense.
PRIME LEASE 2
(a) Section 3 (Use of Premises)
(b) Section 4 (Additional Rent), except that Sublessee shall
only be obligated to pay its Prorata Share of the additional
rent described in this Section 4.
(c) Section 6 (Compliance with Laws) , except that nothing in
the second sentence of this Section shall obligate, or be
deemed to obligate, Sublessee to provide worker's
compensation insurance for any of Sublessor's employees.
(d) Section 9 (Maintenance), except for the first and last
grammatical sentence; and except further, that in the second
grammatical sentence of this provision the phrase "fire or
other casualty or Lessor's negligence or misconduct only
excepted" shall be deemed to be revised to read "fire or
other casualty or Prime Lessor's or Sublessor's negligence
or misconduct only excepted."
8
9
(e) Section 16 (Liability), except that the last phase of such
sentence shall be deemed to read "resulting from the sole
willful misconduct or omission or negligence of Prime Lessor
or Sublessor."
(f) Section 20 (Default), except that the references in the
second grammatical sentence to "security deposit" and the
reference to "to any unamortized improvements completed for
Lessee's occupancy," shall be deemed to be deleted, since
they are inapplicable.
(g) Section 22 (Occupancy), except for the second and third
grammatical sentences; and except further, that in the first
grammatical sentence the phrase "except the obligation for
the payment of extra rent for any period of less than one
month" shall be deemed to be deleted, since it is
inapplicable.
(h) Section 23 (Fire Prevention)
(i) Section 25 (Environment)
(j) Section 27 (Surrender), except that in the second
grammatical sentence of this provision the phrase "fire or
other casualty or Lessor's negligence or misconduct only
excepted" shall be deemed to be revised to read "fire or
other casualty or Prime Lessor's or Sublessor's negligence
or misconduct only excepted."
(k) Section 28 (General), except that clause (h) of this Section
shall be deemed to be revised to read "Sublessor makes no
representation or warranty, express or implied, concerning
the suitability of the Premises for Sublessee's intended use
except as otherwise expressly set forth in the Technology
Agreement"; and that clause (i) shall be deleted.
(l) Section 30 (Waivers)
(m) Sections 1, K, V and Z, provided that Sublessee shall be
entitled to remove the equipment set forth in Section Z only
to the extent that Sublessee has installed such equipment at
its sole expense
(n) The second grammatical sentence of Section M of Rider to
Prime Lease 2
(o) Sections 4, 5 and 6 of Amendment #1 to Prime Lease 2
(ii) All references in the following sections and/or provisions of
each of Prime Lease and Prime Lease 2 to "Lessor", "Lessee", "lease",
and "leased premises", respectively, shall be deemed to refer to Prime
Lessor, Sublessee, this Sublease and the Premises subleased hereunder,
respectively [i.e., it is the intention of the
9
10
parties that Prime Lessor shall retain all of its rights and
obligations under such sections and/or provisions; that Sublessor
shall not be entitled to exercise any of Prime Lessor's rights, nor
shall be bound by any of Prime Lessor's obligations, under such
sections and/or provisions; and that Sublessee shall be entitled to
exercise all of Lessee's rights, and shall be bound by all of Lessee's
obligations, under such sections and/or provisions]:
PRIME LEASE 1
(a) The first and last grammatical sentence of Section 5
(Utilities)
(b) Section 7 (Fire, Casualty, Eminent Domain)
(c) The first and last grammatical sentence of Section 8
(Maintenance)
(d) Section 9 (Alterations)
(e) Section 11 (Subordination)
(f) Section 12 (Lessor's Access)
(g) Section 13 (Snow Removal)
(h) Section 14 (Access and Parking)
(i) Section 16 (Fire Insurance)
(j) Xxxxxxx 00 (Xxxxxxx Xxxx)
(k) Section 25 (Responsibility)
(l) Section A of Rider to Prime Lease I
(m) Section B of Rider to Prime Lease I
(n) Section C of Rider to Prime Lease 1
(o) Section D of Rider to Prime Lease 1
(p) Section F of Rider to Prime Lease 1
(q) Section J of Rider to Prime Lease 1
(r) The first grammatical sentence of Section K of Rider to
Prime Lease 1
(s) Section M of Rider to Prime Lease 1
(t) Section C) of Rider to Prime Lease 1
10
11
(u) Section P of Rider to Prime Lease 1
(v) Section Q of Rider to Prime Lease 1
(w) Section R of Rider to Prime Lease 1
(x) Section S of Rider to Prime Lease 1
(y) Section U of Rider to Prime Lease 1
(z) Section X of Rider to Prime Lease I
(aa) The second grammatical sentence of Section Z of Rider to
Prime Lease 1
(bb) Section 3 of Amendment #1 to Prime Lease I, provided that
Sublessee be entitled to remove the equipment set forth in
this Section 3 only to the extent that Sublessee has
installed such equipment at its sole expense.
(cc) Sections 1, 2 and 3 of Amendment #2 to Prime Lease 1
(dd) Section 1 of Amendment #3 to Prime Lease 1, except that such
industrial hygiene consultant's certification shall run to
the benefit of both Prime Lessor and Sublessor
PRIME LEASE 2
(a) The first and last grammatical sentence of Section 5
(Utilities)
(b) Section 7 (Fire, Casualty, Eminent Domain)
(c) Section 8 (Fire Insurance)
(d) Section 9 (Maintenance), first and last sentences only
(e) Section 10 (Alterations)
(f) Section 12 (Subordination)
(g) Section 13 (Lessor's Access)
(h) Section 14 (Snow Removal)
(i) Section 15 (Access and Parking)
(j) Xxxxxxx 00 (Xxxxxxx Xxxx)
(k) Section 26 (Responsibility)
11
12
(l) The second grammatical sentence of Section B of Rider to
Prime Lease 2
(m) Section E of Rider to Prime Lease 2
(n) Section F of Rider to Prime Lease 2
(o) Section G of Rider to Prime Lease 2
(p) Section H of Rider to Prime Lease 2
(q) Section J of Rider to Prime Lease 2
(r) Section L of Rider to Prime Lease 2
(s) The first grammatical sentence of Section M of Rider to
Prime Lease 2
(t) Section 0 of Rider to Prime Lease 2
(u) Section Q of Rider to Prime Lease 2
(v) Section R of Rider to Prime Lease 2
(w) Section S of Rider to Prime Lease 2
(x) Section T of Rider to Prime Lease 2
(y) Section U of Rider to Prime Lease 2
(z) Section W of Rider to Prime Lease 2
(aa) Section Z of Rider to Prime Lease 2
(bb) Section Z of Rider to Prime Lease 2, provided that Sublessee
shall be entitled to remove the equipment set forth in this
Section Z only to the extent that Sublessee has installed
such equipment at its expense.
(cc) Section 2 of Amendment #6 to Prime Lease 2, except that such
industrial hygiene consultant's certification shall run to
the benefit of both Prime Lessor and Sublessor.
(iii) The following sections and/or provisions of each of Prime Lease I and
Prime Lease 2 are expressly excluded from this Sublease (i.e., they shall be
deemed to be incorporated into this Sublease) either because they are
inapplicable, or they are superseded by specific provisions hereof:
12
13
PRIME LEASE 1
(a) Section 1 (Rent)
(b) Section 2 (Security Deposit)
(c) Section 5 (Utilities), except for the first and last
grammatical sentence
(d) Section 10 (Assignment or Subleasing)
(e) Section 15 (Lessee's Liability and Insurance), except for
the first grammatical sentence
(f) Section 17 (Brokerage)
(g) Section 18 (Signs)
(h) Section 20 (Notice)
(i) The second and third grammatical sentences of Section 21
(Occupancy)
(j) Section 28 (Security Agreement)
(k) Section L of Rider to Prime Lease 1
(l) Section N of Rider to Prime Lease 1
(m) Section Q of Rider to Prime Lease 1
(n) Section V of Rider to Prime Lease 1
(o) Section W of Rider to Prime Lease 1
(p) Section Y of Rider to Prime Lease 1
(q) The first grammatical sentence of Section Z of Rider to
Prime Lease 1
(r) Sections 1 and 2 of Amendment #1 to Prime Lease 1
PRIME LEASE 2
(a) Section 1 (Rent)
(b) Section 2 (Security Deposit)
13
14
(c) Section 5 (Utilities), except for the first and last
grammatical sentence
(d) Section 11 (Assignment or Subleasing)
(e) Section 17 (Insurance)
(f) Section 18 (Signs)
(g) Section 19 (Brokerage)
(h) Section 21 (Notice)
(i) The second and third grammatical sentences of Section 21
(Occupancy)
(j) Section 29 (Security Agreement)
(k) Section A of Rider to Prime Lease 2
(l) Section C of Rider to Prime Lease 2
(m) Section D of Rider to Prime Lease 2
(n) Section N of Rider to Prime Lease 2
(o) Section P of Rider to Prime Lease 2
(p) Section V of Rider to Prime Lease 2
(q) Section X of Rider to Prime Lease 2
(r) Section Y of Rider to Prime Lease 2
(s) Sections 1, 2 and 3 of Amendment #1 to Prime Lease 2
(t) Amendment #2 to Prime Lease 2
(u) Amendment #3 to Prime Lease 2
(v) Amendment #4 to Prime Lease 2
(w) Amendment #5 to Prime Lease 2
(x) Section 1 to Amendment #6 to Prime Lease 2
2.2.3 Except as otherwise expressly set forth in the written Sublease
Consent entered into on or about the date hereof by and among Prime Lessor,
Sublessor and Sublessee, this Sublease is and shall remain subject and
subordinate in all respects to the Prime Lease, and to all
14
15
renewals, modifications, consolidations, replacements and extensions thereof. In
the event of termination or cancellation of the Prime Lease for any reason
whatsoever with respect to all or any portion of the Premises, this Sublease
shall automatically terminate with respect to all or such portion of the
Premises.
2.2.4 Except as may otherwise be specifically set forth in the Technology
Agreement or this Sublease, Sublessor shall have no obligation to provide any
services of any nature whatsoever to Sublessee or to or for the benefit of the
Premises, or to expend any money for the repair of the Premises, and Sublessee
agrees to look solely and directly to Prime Lessor for the furnishing of any
services, expenditure of any sums, or performance of any obligations that
Sublessor is not required to furnish, expend or perform under the Technology
Agreement or this Sublease, but nothing in the foregoing shall be deemed to
exculpate or otherwise release Sublessor from, or prevent Sublessee from looking
directly to Sublessor for, any liability arising out of Sublessor's negligent,
willful or malicious acts or omissions or Sublessor's misconduct, or the failure
of Sublessor to perform its express obligations hereunder; nor shall the
foregoing relieve Sublessor of its express obligations set forth in this
Sublease. Sublessor shall, however, upon the request of Sublessee from time to
time (which request may be oral), use due diligence and reasonable efforts to
cause Prime Lessor to furnish such services, expend such sums, and observe and
perform such obligations. Sublessor's only obligations under the Prime Lease
with respect to such obligations of Prime Lessor are to use the aforesaid due
diligence and reasonable efforts and to make those payments of all rent and
other charges due to Prime Lessor thereunder. Sublessor hereby agrees that, so
long as Sublessee makes timely payment to Sublessor of all rent and other
charges payable by Sublessee hereunder, Sublessor shall make timely payment of
all rent and other charges due to Prime Lessor as landlord under the Sublease.
Except to the extent that this Sublease imposes such obligations on Sublessee,
it is the intention of the parties that Sublessee comply with, and to such
extent Sublessee agrees to comply with, all of Sublessor's obligations as lessee
under the Prime Lease with respect to the Premises to the same extent and with
the same force and effect as if Sublessee were Lessee thereunder. Sublessee
shall have no claim against Sublessor for any default by Prime Lessor under
Prime Lease. If as a result of any default by Prime Lessor as landlord under the
Prime Lease, Sublessor as tenant under the Prime Lease is entitled to any offset
or similar rights against Prime Lessor, Sublessee shall be entitled to a fair
and equitable share of such offset or similar rights. If Prime Lessor shall
default under any of it obligations under the Prime Lease with respect to the
Premises, Sublessee shall have the right, at Sublessee's sole cost and expense,
but in the name of Sublessor, to make demand or prosecute any appropriate action
or proceeding against Prime Lessor for the enforcement of the obligations of
Prime Lessor with respect to the Premises. Sublessor agrees that it will sign
such demand, pleading and/or other papers as may be required or appropriate to
enable Sublessee to proceed in Sublessor's name to enforce the obligations of
Prime Lessor; provided, however, that Sublessee will pay all costs and expenses
in the prosecution of any action or any proceeding so taken by Sublessee, and
agrees to defend and indemnify Sublessor against all costs and liability arising
therefrom.
2.2.5 Sublessee shall neither do, nor permit anyone else to do, nor permit
to be done anything that would increase Sublessor's obligations to Prime Lessor
under the Prime Lease (unless Sublessee shall indemnify Sublessor from such
increased obligation), or that would cause the Prime Lease to be cancelled,
terminated or forfeited. Sublessor shall not amend or modify (nor agree to amend
or modify) the Prime Lease in any way that would increase Sublessee's
15
16
obligations or diminish Sublessee's rights under this Sublease, nor shall
Sublessor do, nor permit to do or be done, anything that would cause the Prime
Lease to be cancelled, terminated or forfeited.
2.2.6 Sublessor shall copy Sublessee on any notice of default, termination
or otherwise affecting the existence or validity of the Sublease, given by
Sublessor or Prime Lessor to the other.
2.2.7 Sublessor hereby agrees that, as set forth in the written Sublease
Consent entered into on or about the date hereof by and among Prime Lessor,
Sublessor and Sublessee, to enable Sublessee to use and occupy the Premises for
the full Sublease Term, Sublessor has exercised its option to extend the lease
term of Prime Lease 1 with respect to the Premises, through July 30, 2005 and
its option to extend the lease term of Prime Lease 2 with respect to the
Premises through July 30, 2006.
2.3 SUBLESSEE'S EXPANSION OPTION
So long as Sublessee is not in default hereunder beyond any applicable
notice, grace and cure period, Sublessee shall have the one time only right and
option to sublease all or any substantial portion of the Leased Premises
currently retained and occupied by Sublessor ("Sublessor's Retained Space"). If
Sublessee exercises its option as hereinafter set forth, Sublessee's occupancy
of such expansion space shall be pursuant to a separate sublease agreement on
terms substantially similar to this Sublease, but modified to delete all
references and provisions relating to the Technology Agreement and to
incorporate the economic terms and conditions applicable to such new sublease
for new expansion space; and rent for any such expansion space shall be fair
market rent, on a triple net basis, for a sublease term co-terminous with the
expiration of the term of the Prime Lease. To exercise such expansion option,
Sublessee must give written notice to Sublessor not later than September 30,
1999, which notice shall specify the portion of the Leased Premises that
Sublessor wishes to sublease, and the date (which date shall be no later than
three (3) months after the date of such notice) on which Sublessee wishes to
enter into a sublease for such expansion space. Within thirty (30) days after
Sublessor's receipt of any expansion notice from Sublessee, Sublessor shall give
Sublessee written notice of Sublessor's reasonable determination of fair market
rent for such expansion space (`Sublessor's Rent Rate Determination"). Sublessee
shall have the option, within twenty (20) days of receipt of the Sublessor's
Rent Rate Determination to accept Sublessor's Rent Rate Determination or to
reject Sublessor's Rent Rate Determination and withdraw the exercise of its
option to expand. If Sublessee accepts Sublessor's Rent Rate Determination,
Sublessor and Sublessee shall enter into a new sublease agreement with respect
to such expansion space as aforesaid. If Sublessee exercises this option, the
expansion space shall be delivered to Sublessee in its then existing condition,
"as is", and Sublessor shall have no obligation to make any alterations or
improvements to the expansion space. If Sublessee shall fail to exercise its
expansion option hereunder within the time periods set forth above Sublessee
shall have no further expansion rights under this Section.
------------------
*Confidential treatment has been requested for the marked portion.
16
17
If, however, Sublessee exercises such option but rejects Sublessor's Rent
Rate Determination, Sublessee shall have no further right or option to expand
the Premises, but in such case if Sublessor desires to sublease all or any
substantial portion of Sublessor's Retained Space to any third party at any time
prior to September 1, 2003 (unless Sublessee has exercised its right under
Section 9.1 to request that Sublessor surrender its interest in and to the
Premises and the Prime Lease [to the extent applicable to the Premises], in
which case such date shall be deemed to be the Term Expiration Date), at a rent
rate materially more favorable to such third party subtenant than the amount of
Sublessor's Rent Rate Determination rejected by Sublessee (for purposes of this
Sublease, a reduction in the fair market rent, on a triple net basis, of more
than [*] percent [*] shall be deemed to be "materially more favorable"), prior
to consummating any such third party sublease, Sublessor shall first offer such
expansion space to Sublessee at such materially more favorable rent rate but
otherwise on the terms and conditions described above in this Section 2.3.
Within twenty (20) days after Sublessee's receipt of any such reduced rent rate
proposal, Sublessee shall notify Sublessor in writing whether or not Sublessee
wishes to sublease such expansion space at such reduced rent rate. If Sublessee
accepts Sublessor's reduced rent rate notice, then Sublessor and Sublessee shall
enter into a new sublease agreement with respect to such expansion space as
described above. If Sublessee fails or declines to accept Sublessor's reduced
rent rate notice within such twenty day period, then Sublessor shall be entitled
to sublease such expansion space or any other portion of Sublessor's Retained
Space to any party at a rent rate not materially more favorable to such third
party than the amount of such reduced rent rate rejected by Sublessee. Once
Sublessor has subleased any portion of Sublessor's Retained Space to any third
party in the manner as aforesaid, all of Sublessee's rights under this Section
2.3 in and to such portion of Sublessor's Retained Space so subleased to such
third party shall terminate and be of no further force and effect and
Sublessee's rights under this Section 2.3 shall thereupon terminate and be of no
further force and effect.
Sublessee acknowledges, however, that any such sublease by Sublessee of
expansion space under this Section 2.3 shall be subject to the approval of the
Prime Lessor in accordance with the Prime Lease (Sublessor shall not be
responsible for the failure or refusal of Prime Lessor to consent to any such
sublease of expansion space).
ARTICLE III
TERM OF SUBLEASE
----------------
3.1 TERM
The term of this Sublease shall be for the period specified in Section 1.1
as the Sublease Term.
For purposes of this Sublease, the Premises shall be deemed ready for
occupancy on the date on which Sublessor certifies to Sublessee that the
Premises are in a condition and otherwise ready for use and occupancy by
Sublessee for the conduct of the parties' business collaboration to the extent
and in the manner contemplated by the Technology Agreement.
------------------
*Confidential treatment has been requested for the marked portion.
17
18
3.2 SUBLESSEE'S EARLY TERMINATION OPTION
If Sublessee exercises its right under Sections 9.1 and 9.2 of the
Technology Agreement to terminate the Technology Agreement and makes the
termination and other payments required under such Section 9.2, then this
Sublease shall terminate, effective on the termination date of the Technology
Agreement, with the same force and effect as if such early termination date were
the originally scheduled Term Expiration Date.
The parties expressly acknowledge and agree that notwithstanding the
termination of the Technology Agreement for any reason, other than a termination
under Sections 9.1 and 9.2 thereof as expressly described above, this Sublease
shall remain in force and effect and the respective rights and obligations of
the parties under this Sublease shall remain unchanged as a result of
termination of the Technology Agreement.
ARTICLE IV
PREMISES
--------
4.1 CONDITION OF PREMISES; MAINTENANCE
Sublessee agrees to accept the Premises and Sublessor's FF&E in their "as
is" condition, generally in the same order and condition as the Premises as
Sublessor's FF&E are in as of the date hereof, without any representation or
warranty other than as set forth in the Technology Agreement. Sublessor shall
maintain and repair the Premises, at Sublessee's sole cost and expenses (which
costs and expenses shall be payable by Sublessee as part of Additional Rent), in
a professional and workmanlike manner, and keep the Premises in the same order,
repair and condition that they were in on the Commencement Date, reasonable wear
and tear and damage by fire, other casualty, improvements made to the Premises
in accordance with Section 4.4, below, or the acts or omissions of Sublessee
excepted.
4.2 SUBLESSOR'S SERVICES
In addition to Sublessor's repair and maintenance obligations with respect
to the Premises set forth in Section 4.1 above, for so long as the Technology
Agreement remains in force and effect, Sublessor shall provide to Sublessee, at
Sublessee's cost and expense (which costs and expenses shall be payable by
Sublessee as part of Additional Rent), the following services and facilities
("Sublessor's Additional Services") to substantially the same extent and in
substantially the same manner that Sublessor provided such services and
facilities for the conduct of Sublessor's business in the Premises as of the
date of this Sublease:
(a) [*]
(b) [*]
------------------
*Confidential treatment has been requested for the marked portion.
18
19
(c) [*]
(d) [*]
(e) [*]
From and after the date on which the Technology Agreement is terminated,
for any reason whatsoever, Sublessor shall have no obligation to provide any of
Sublessor's Additional Services.
4.3 FURNISHINGS, FIXTURES AND EQUIPMENT
Sublessee shall have the right to use all of Sublessor's FF&E. Until such
time as Sublessee has exercised, and closed the purchase under, the FF&E
Purchase Option set forth in Section 9.2, below, Sublessor shall maintain and
repair Sublessor's FF&E, at Sublessee's sole cost and expense, in the same
order, repair and condition that they were in on the Commencement Date or the
condition they are thereafter placed by virtue of improvements to Sublessor's
FF&E made in accordance with Section 4.4 below, reasonable wear and tear [not
affecting functionality] and damage by fire, other casualty, or the acts or
omissions of Sublessee excepted.
Sublessor shall, at its expense prior to the Commencement Date, remove from
the Premises the Sublessor's existing AMAP(TM) System to enable Sublessor to
configure and install in the Premises a new AMAP(TM) System in the Premises in
the manner and within the time periods specified in Section 3.1 of the
Technology Agreement.
4.4 IMPROVEMENTS IN OR TO THE PREMISES
Sublessee shall make no improvements, alterations, renovations, or
additions in or to the Premises or Sublessor's FF&E, or any portion thereof
without the prior written consent of Sublessor, which consent shall not be
unreasonably withheld or delayed, subject in any event to Sublessee also having
obtained the consent of Prime Lessor (Sublessor shall not be responsible for the
failure or refusal of Prime Lessor to consent to any such improvements,
alterations, renovations or additions); Sublessor hereby agrees that it shall
not withhold or delay its consent to any improvements, alterations, renovations
or additions to which Prime Lessor consents, so long as Sublessee agrees, upon
the expiration or earlier termination of this Sublease, to remove the same and
restore the Premises to substantially the condition they were in prior to such
improvements, alterations, renovations or additions. Any such approved
improvements, alterations, renovations or additions shall be constructed by
Sublessee (or by Sublessor if required under the Technology Agreement), at the
sole cost and expense of Sublessee in accordance with plans and specifications
therefor reasonably approved in advance by Sublessor and shall be done in a good
and workmanlike manner, and in compliance with all applicable laws, rules and
regulations.
------------------
*Confidential treatment has been requested for the marked portion.
19
20
Without limiting the generality of the foregoing, Sublessee shall have the
right, at its sole cost and expense, to install such security system and
equipment as it deems necessary, provided that such system and equipment shall
not impair either Sublessor's or Prime Lessor's own security systems. Toward
achieving the goal that each party's security system and equipment does not
interfere with the other party's, Sublessor and Sublessee agree to review the
design and installation of their respective security systems with one another,
subject to the reasonable security and business confidentiality needs of each
party. Sublessor shall not be responsible for any financial or property losses
which Sublessee may suffer relating to actions of third parties other than
Sublessor, including, but not limited to, thefts, robberies, or other crimes;
nothing in this Section 4.4 or elsewhere in this Sublease, however, shall be
deemed to exculpate Sublessor from any liability arising out of the negligence
or willful misconduct of Sublessor, its agents, contractors or employees.
4.5 ACCESS, ENTRY AND INSPECTION
4.5.1 For so long as the Technology Agreement remains in force and effect,
Sublessor agrees to limit access to the Premises to ArQule Staff (as such
capitalized term is defined in the Technology Agreement) and Sublessor's
management personnel, employees and other individuals who are otherwise
authorized by Sublessee to have access to the Premises (e.g., for training,
technical support or facilities maintenance); provided, however, that Sublessee
shall also allow Sublessor access to the Premises as otherwise required under
this Sublease.
4.5.2 Sublessor and Sublessee acknowledge that the Premises occupy only
portions of the Leased Premises and that Sublessor (or its other subtenants)
occupies and uses Sublessor's Retained Space for its (or their) purposes. The
parties agree that the Premises and the Sublessor's Retained Space shall each be
safe, secure and separate from the other. But Sublessor and/or other subtenants
or occupants and Sublessee will occupy and use the Collaboration Areas for its
or their business purposes. Accordingly, Sublessor and Sublessee each agrees
that it (and its subtenants) will use the Collaboration Areas in such manner as
to prevent and/or minimize any unreasonable interference to the business
activities of the other party and to recognize and respect the reasonable
business security and confidentiality needs of the other party.
4.5.3 At reasonable times, and upon reasonable advance notice to Sublessee
(except that, in the event of any emergency, Sublessor may enter the Premises at
any time without notice), Sublessee shall permit Sublessor, its agents and
invitees to enter and inspect the Premises or any portion thereof during
Sublessee's regular business hours, subject in all events to Sublessee's
reasonable confidentiality and security needs.
4.6 SURRENDER
4.6.1 Sublessee shall surrender the Premises to Sublessor at the end of the
Term in accordance with Section 26 of the Prime Lease and (as applicable)
Section 1 of Amendment #3 to Prime Lease 1 and Section 2 of Amendment #6 to
Prime Lease 2, all to the extent modified by the terms of this Sublease
(together as so modified, the "Surrender Obligations"), and in the condition
described in Section 4.1, above, reasonable wear and tear and damage by fire or
other casualty and acts or omissions of Sublessor excepted.
20
21
4.6.2 If Sublessee has not exercised the FF&E Purchase Option on or before
the Term Expiration Date, Sublessee shall surrender all of Sublessor's FF&E not
then owned by Sublessee to Sublessor at the end of the Term in accordance with
the Surrender Obligations, and in the condition described in Section 4.3, above,
reasonable wear and tear and damage by fire or other casualty and acts or
omissions of Sublessor excepted.
ARTICLE V
USES; ASSIGNMENT AND SUBLETTING
-------------------------------
5.1 PERMITTED USES
Sublessee agrees that the Premises shall be used and occupied for the
Permitted Uses only, and in compliance with all applicable laws, rules and
regulations now or hereafter in effect. As set forth in Section 4.2 above and in
the Technology Agreement, for so long as the Technology Agreement remains in
force and effect. Sublessor shall, to the extent requested by and at the sole
cost and expense of Sublessee, apply for and obtain all licenses, permits and
approvals, renew, amend or modify existing licenses, permits and approvals, and
perform all other obligations as required to conduct Sublessee's business
operations in the Premises in compliance with all such laws, rules and
regulations. If the Technology Agreement is terminated but this Sublease remains
in full force and effect, Sublessor shall cooperate with Sublessee, reasonably
and in good faith but at no out-of-pocket expense to Sublessor, to transfer any
such licenses, permits and approvals to Sublessee or otherwise to assist
Sublessee to apply for and seek to obtain such licenses, permits and approvals
in Sublessee's own name.
5.2 ASSIGNMENT AND SUBLETTING BY SUBLESSEE
Sublessee shall not, by operation of law or otherwise, assign, mortgage,
pledge, encumber or in any manner transfer this Sublease or any interest of
Sublessee hereunder, or sublet or permit the Premises or any part thereof to be
used or occupied by others, without the prior consent of Sublessor, which
consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, Sublessor hereby agrees that Sublessee may, without the consent of
Sublessor but upon prior notice to Sublessor, assign this Sublease or sub-sublet
all or any portion of the Premises to any "affiliate" of Sublessee, or to any
corporation or other business entity into which Sublessee may merge or to which
Sublessee may sell all or substantially all of its assets or capital stock. For
purposes of this Sublease, the term "affiliate" shall mean any corporation or
other legal entity owning directly or indirectly, fifty percent (50%) or more of
the voting capital shares or similar voting securities of Sublessee; any
corporation or other legal entity fifty percent (50%) or more of the voting
capital shares or similar voting rights of which is owned, directly or
indirectly, by Sublessee or any corporation or other legal entity fifty percent
(50%) or more of the voting capital shares or similar voting rights of which is
owned, directly or indirectly, by a corporation or other legal entity which own,
directly or indirectly, fifty percent (50%) or more of the voting capital share
or similar voting securities of Sublessee. The foregoing restrictions on
transfer of any interest in Sublessee shall not apply to any transfer of the
capital stock of Sublessee for so long as the capital stock of Sublessee is
publicly traded on any nationally or regionally recognized securities exchange.
Sublessee acknowledges, however, that any such assignment or sub-sublet shall be
subject to the approval of the Prime Lessor in
21
22
accordance with the Prime Lease (Sublessor shall not be responsible for the
failure or refusal of Prime Lessor to consent to any such assignment or
sub-sublet). Notwithstanding any assignment by Sublessee or sub-sublease by
Sublessee of all or any portion of the Premises, the Sublessee originally named
herein shall remain liable to Sublessor for all obligations of Sublessee
hereunder.
5.3 ASSIGNMENT BY SUBLESSOR
Sublessor hereby agrees that for so long as the Technology Agreement
remains in force and effect. Sublessor shall not assign its rights as lessee
under the Prime Lease (and Sublessor under this Sublease) without the prior
written consent of Sublessee, which consent shall not be unreasonably withheld
or delayed.
ARTICLE VI
RENT AND UTILITIES
------------------
6.1 BASE RENT AND ADDITIONAL RENT
6.1.1 The Base Rent and Additional Rent specified in Section 1.1 hereof,
and any other charges payable pursuant to this Sublease, shall be payable by
Sublessee to Sublessor at Sublessor's mailing address (or to such other place as
Sublessor may from time to time designate by notice to Sublessee).
6.1.2 During the Term of this Sublease, Base Rent shall be due and payable,
in advance, on the first day of each and every calendar quarter during the Term
of this Sublease.
6.1.3 During the term of this Sublease, Sublessee shall pay to Sublessor,
monthly in advance, prorata monthly installments on account of the projected
Additional Rent payable by Sublessee for the coming calendar year. Attached
hereto as Exhibit D is a schedule, in reasonable detail, showing by line items,
the costs and expenses incurred by Sublessor in calendar year 1998 in operating
the Leased Premises. Not less than forty-five (45) days prior to the
Commencement Date, Sublessor shall deliver to Sublessee a written invoice, in
reasonable detail, calculating the estimated monthly installments on account of
projected Additional Rent on the basis of Sublessor's most recent operating and
maintenance budget information available; Sublessor may adjust such estimated
monthly installments from time to time if Sublessor determines that the annual
amount of Additional Rent will increase above Sublessor's initial estimate due
to increase in costs of services or supplies or other reasonable grounds, but
monthly installments at any such adjusted amount shall not be due and payable
until forty-five (45) days after receipt by Sublessee of a written invoice, in
reasonable detail, calculating such adjusted monthly installment amount.
Promptly after the end of each calendar year, Sublessor shall provide Sublessee
with a statement, in reasonable detail, that calculates the actual amount of
Additional Rent for the preceding calendar year, the actual amount of monthly
installments paid by Sublessee for such year and the amount of the adjustment,
if any, between Sublessor and Sublessee on account of Additional Rent for each
calendar year. If the total of such monthly installments in any calendar year is
greater than the actual amount of Additional Rent for such year, Sublessee shall
be entitled to a credit against Sublessee's rental obligations hereunder in the
22
23
amount of such excess (or if after the expiration of the Sublease Term, such
excess shall be paid to Sublessee). If the total of such monthly installments is
less than the actual amount of Additional Rent for such calendar year, Sublessee
shall pay to Sublessor the amount of such deficiency within forty-five (45) days
after receipt of an invoice thereafter.
Within six (6) months after receipt of Sublessor's annual reconciliation
statement, Sublessee may request to audit (at Sublessee's expense) the
Additional Rent for the preceding calendar year. Such audit shall take place at
Sublessor's office in the Metropolitan Boston Area where its books and records
are kept or at such other location in the Metropolitan Boston area are designed
by Sublessor. If such audit discloses a discrepancy (a "Discrepancy") between
(a) the final amount of the Additional Rent for such year determined by
Sublessor and used for purposes of making the annual adjustment described above
and (b) the actual amount of the Additional Rent for such year as determined and
confirmed by such audit, and Sublessor concurs in the result of such audit, or
if Sublessor does not concur but any arbitration proceedings (as described
below) regarding such audit determine and confirm the existence of a
Discrepancy, additional appropriate adjustments shall be paid to Sublessor or
Sublessee as the case may be; if the Discrepancy resulted in Sublessee being
overcharged by more than three and one-half percent (3.50%) for such year, the
cost of such audit shall be borne by Sublessor, otherwise the costs of such
audit shall be paid by Sublessee. If the Sublessor does not concur with the
results of such audit, the matter shall be submitted to binding arbitration with
the American Arbitration Association at its office in Boston, Massachusetts in
accordance with procedures designated by its applicable rules.
6.1.4 Base Rent for any partial calendar quarter shall be paid by Sublessee
to Sublessor on a prorata basis. Other charges payable by Sublessee on a monthly
basis, as provided, shall likewise be prorated.
6.1.5 All Base Rent, Additional Rent and other amounts due under this
Sublease shall be paid without demand (except as otherwise expressly provided
herein to the contrary), offset or deduction. Sublessee shall be entitled to a
fair and equitable share of all rent abatements set forth in the Prime Lease
which Sublessor has been granted with respect to the Premises.
6.2 LATE PAYMENTS
If any installment of Base Rent, Additional Rent or other charges is not
paid on or before the date such payment is due and payable and such non-payment
continues for more than five (5) days after written notice thereof from
Sublessor, it shall bear interest at a rate equal to the average prime
commercial rate from time to time established by Fleet Bank of Massachusetts
plus three percent (3%) per annum from such due date, which interest shall be
immediately due and payable to Sublessor; provided, however, that nothing
contained herein shall be construed as permitting Sublessor to charge or receive
interest in excess of the maximum legal rate then allowed by law.
23
24
ARTICLE VII
INSURANCE
---------
7.1 INSURANCE COVERAGE
7.1.1 To the extent Sublessee does not self-insure as described in Section
7.1.4, below, Sublessee shall carry and maintain, throughout the Term hereof, at
its own cost and expense, (a) a commercial general liability insurance policy
insuring against any claim up to [*] for each occurrence, and up to [*] in the
aggregate, involving bodily injury (including death) or damage to property and
(b) a fire and other casualty policy insuring (i) the full replacement value of
the [*] and other laboratory equipment, (ii) the full replacement value of
Sublessee's improvements, fixtures, furnishings, equipment and personal property
located in the Premises or any portion thereof, and (iii) the full replacement
value of Sublessor's FF&E against loss or damage by fire, theft, sprinkler
leakage and such other risks or hazards as are insurable under present and
future forms of "All Risk" insurance policies, and (c) during any period that
construction or renovations are being performed at any portion of the Premises,
the insurance required in (b) above shall be written on a builder's risk,
completed value, non-reporting form, meeting all of the terms in (b) above,
cover the total value of the work performed, materials, equipment, machinery and
supplies furnished, and contain soft cash (loss of rents) coverage and
permission to occupy endorsements. Said casualty policy shall also insure
against physical damage to the Premises arising out of an accident covered
thereunder.
7.1.2 All insurance policies required under Section 7.1.1, above, are to be
written by good and solvent insurance companies licensed or authorized to do
business in the Commonwealth of Massachusetts with a minimum Best's rating of
A-VI; shall be for such limits and with such maximum deductibles as Sublessor
may reasonably require (Sublessee hereby agreeing that Sublessor shall in no
event be responsible for payment of any such deductibles); and shall name
Sublessor, Prime Lessor, Beautyrest Property, Inc. and Boston North, LLC
(successor-in-interest to WRB, Inc.) as loss payees and additional insureds, as
applicable (provided, however, that the casualty policy insuring Sublessor's
FF&E shall name Sublessor as the insured, and Sublessee, Prime Lessor,
Beautyrest Property, Inc. and Boston North, LLC (successor-in-interest to WRB,
Inc.) as loss payees and additional insureds, as applicable. Sublessor expressly
reserves the right to increase limits and require adjustments to coverage as
industry standards hereafter change and Prime Lessor hereafter requires.
Sublessee will furnish Sublessor with such information as Sublessor may
reasonably request from time to time as to the full replacement cost of
Sublessee's improvements, fixtures, furnishings, equipment and personal property
located in the Premises or any portion thereof or Sublessor's FF&E within ten
(10) days after a request therefor.
7.1.3 Sublessee shall also pay its Prorata Share of all insurance premiums
allocable to both the Premises and other portions of the Leased Premises that
Sublessor is required to pay to Prime Lessor as additional rent under the Prime
Lease.
------------------
*Confidential treatment has been requested for the marked portion.
24
25
7.1.4 So long as this Sublease remains in full force and effect and
Sublessee has a net worth in excess of [*] (as "net worth" is defined and
determined in accordance with generally accepted accounting principles),
Sublessee may self-insure against the risks described in Section 7.1.1, above,
and shall not be required to maintain insurance under this Article 7; provided,
however, that to the extent any type of risk may not be self-insured under any
applicable law, rule or regulation (including, without limitation, risks covered
by industrial accident insurance, occupational disease insurance or workmen's
compensation insurance), Sublessee shall obtain insurance covering such risks in
accordance with applicable laws, rules and regulations to the extent of the
respective statutory limits pertaining to the work or operations conducted in or
on the Premises.
7.2 EVIDENCE OF INSURANCE
Prior to the time insurance is first required to be carried (or
self-insurance is first required to be maintained) by Sublessee under Section
7.1, above (e.g., upon execution of this Sublease), and thereafter at least
fifteen (15) days prior to the expiration date of any such policy, Sublessee
agrees to deliver to Sublessor a certificate of insurance (or other evidence of
such insurance satisfactory to Sublessor) upon which both Sublessor and Prime
Lessor are entitled to rely, which shall contain an endorsement that any such
insurance policy may not be cancelled without at least ten (10) days' prior
written notice to each insured. Sublessee's failure to provide and keep in force
the aforementioned insurance (or self-insurance) or to make the aforementioned
payments to Sublessor shall be regarded as a default hereunder, entitling
Sublessor to exercise any or all of the remedies provided in this Sublease in
the event of Sublessee's default. All insurance policies carried by Sublessee
shall be written as primary coverage policies not contributing with or secondary
to coverage which Sublessor carries.
7.3 INSURANCE SUBROGATION
Insofar as, and to the extent that, the following may be effective without
invalidating or making it impossible to secure insurance coverage obtainable
from good and solvent insurance companies licensed or authorized to do business
in the Commonwealth of Massachusetts with a minimum Best's rating of A-VI, each
of Sublessor and Sublessee mutually agrees that, with respect to any hazard that
is covered by property insurance, real and personal, including betterments and
improvements, then being carried by them respectively, the one carrying such
insurance and such loss releases the other of and from any and all claims with
respect to such loss. Each of Sublessor and Sublessee further mutually agrees
that its respective insurance company shall have no right of subrogation against
the other or the other's insurance company on account thereof.
------------------
*Confidential treatment has been requested for the marked portion.
25
26
ARTICLE VIII
CASUALTY AND TAKING
-------------------
If the Premises or any portion thereof is damaged by fire or other
casualty, or taken by eminent domain, Sublessee shall promptly notify Prime
Lessor and Sublessor. Under Section 7 of the Prime Lease, Prime Lessor may
terminate the Prime Lease if a substantial portion of the Premises or the
Building is substantially damaged or taken. If (a) Prime Lessor fails to give
written notice of its intention to restore as set forth in Section 7 of the
Prime Lease, or (b) Prime Lessor does not complete restoration or reconstruction
of the Premises or any portion thereof in the manner and within the time periods
set forth in such Section 7, Sublessee shall have the right to terminate this
Sublease by giving both Sublessor and Prime Lessor written notice of such
termination within the applicable notice period set forth in Section 7 of the
Prime Lease. In addition, if Sublessor elects to terminate the Prime Lease
pursuant to such Section 7, the Prime Lease shall cease and come to an end, and
this Sublease shall similarly terminate. Sublessee acknowledges that Sublessor
shall, in no event, have any obligation whatsoever to reconstruct or restore the
Premises or any portion thereof damaged by fire or other casualty or taken by
eminent domain. If this Sublease is not terminated as a result of damage by fire
or other casualty or eminent domain, Sublessor shall repair and/or replace any
items of Sublessor's FF&E damaged, in no event, however, shall Sublessor be
required to expend for such repair and restoration any amount in excess of the
net insurance proceeds made available to Sublessor as a result of such damage if
and to the extent that Sublessee is required hereunder to carry the insurance
covering such risks.
ARTICLE IX
SUBLESSOR'S SURRENDER OF PRIME LEASE;
SUBLESSEE'S FF&E PURCHASE OPTION
-------------------------------------
9.1 SURRENDER OF PRIME LEASE
Sublessor shall, upon Sublessee's prior written request given to Sublessor
at least one hundred twenty (120) days prior to the Term Expiration Date,
surrender all of its interest in and to the Premises and the Prime Lease (to the
extent applicable to the Premises) to Prime Lessor in order to enable Sublessee
to enter into a direct lease with Prime Lessor for the Premises; provided,
however, that such surrender shall not be effective unless and until Prime
Lessor has agreed in writing to accept Sublessor's surrender with the same force
and effect as if the date of such surrender were the originally scheduled
expiration date of the Prime Lease with respect to the Premises.
9.2 SUBLESSEE'S FF&E PURCHASE OPTION
Sublessee shall have the option to purchase those portions of Sublessor's
FF&E described on Schedule C as "Assets Owned/Controlled by ArQule" at the
expiration of the Term of this Sublease, provided that (a) Sublessee provides
Sublessor written notice of its exercise of such
26
27
purchase option at least [*] days prior to the Term Expiration Date and (b)
Sublessor surrenders its interest in and to the Premises to Prime Lessor in
accordance with Section 9.1 above. The purchase price for such portions of
Sublessor's FF&E shall be the fair market value of such portions of Sublessor's
FF&E as of the Term Expiration Date.
Upon the closing of the sale of such portions of Sublessor's FF&E or any
part thereof to Sublessee, Sublessor shall convey good title (free and clear of
Prime Lessor's security interest under Section 28 of the Prime Lease and all
other liens and encumbrances) to such portions of Sublessor's FF&E, and such
portions of Sublessor's FF&E shall be substantially in the condition the same is
required to be maintained hereunder, but otherwise without any representation or
warranty from Sublessor. Sublessor agrees to assign to Sublessee any
manufacturer's warranty in its name covering such portions of Sublessor's FF&E
to the extent such manufacturer's warranty is assignable.
Sublessor shall provide to Sublessee its determination of the fair market
value of such portions of Sublessor's FF&E within [*] days of Sublessor's
receipt of Sublessee's written notice of the exercise of such purchase option.
Sublessee shall have the option, within [*] days of the Sublessor's notice, to
accept the Sublessor's estimate or to reject Sublessor's estimate and request
arbitration. Failure by the Sublessee to respond to the Sublessor's notice
within the [*] day period shall be deemed an acceptance of the Sublessor's
estimate. In the event Sublessee rejects Sublessor's estimate, then the fair
market value shall be arbitrated in accordance with the following procedure. The
parties within [*] days after Sublessee's rejection of Sublessor's estimate
shall each identify an impartial third party to serve as an arbitrator and these
two arbitrators shall seek to identify one mutually acceptable impartial third
party to serve as the third arbitrator. If either party has not designated its
arbitrator to the other in a timely fashion, then the determination of the other
party's arbitrator shall be final. All such arbitrators shall be facilities
managers of biotechnology or pharmaceutical facilities, having current and at
least ten (10) years' prior experience in operating, designing or constructing
biotechnology or pharmaceutical facilities in the Greater Boston area. If the
two arbitrators are unable to agree upon a third arbitrator within [*] days, the
third arbitrator shall be selected by J.A.M.S/ENDISPUTE, or any successor
entity. If neither J.A.M.S/ENDISPUTE nor any successor entity exists at the time
of the dispute, the third arbitrator shall be selected by the American
Arbitration Association ("AAA") or any successor entity. If neither AAA nor any
successor exists at the time of the dispute, the third arbitrator shall be
selected by the largest private provider of dispute resolution services then
doing business in the Greater Boston area. Within [*] days after the parties are
notified as to the identity of the third arbitrator, each of the three
arbitrators shall submit his or her final determination of the fair market value
of such portions of Sublessor's FF&E (the "Final Value Determination") to the
other arbitrators. The two Final Value Determinations which are closest to each
other shall be averaged and this average shall be designated as the fair value.
If the highest and lowest Final Value Determinations are equally close to the
middle Final Value Determination then the middle one shall be designated as the
fair market value. If one of the arbitrators has not submitted its Final Value
Determination to the other arbitrators within the time limits set forth herein,
the other
------------------
*Confidential treatment has been requested for the marked portion.
27
28
arbitrators will designate the average of their Final Value Determinations as
the fair market value. The arbitrators shall notify the parties of their
decision in writing within such [*] day period. All costs incurred for the
services of the arbitrator shall be borne equally by the parties. The fair
market value as designated by the arbitrators shall be final and binding and the
parties shall have no further recourse to such determination.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
10.1 INDEMNIFICATION BY SUBLESSEE
Sublessee hereby indemnifies and covenants to save Sublessor harmless from
and against any and all claims, liabilities or penalties asserted by or on
behalf of any person, firm, corporation or public authority regarding:
(i) any injury to person, or loss of or damage to property, sustained
or occurring on the Premises or any portion thereof arising from or
related to the act, omission, fault, negligence or misconduct of
Sublessee, its servants, agents, employees or invitees (provided,
however, that nothing in this Section shall require Sublessee to
indemnify Sublessor from any claims, liabilities or penalties arising
out of any negligent acts or omissions of, or misconduct by, Sublessor
or Sublessor's servants, agents, employees or invitees on the Premises
from time to time pursuant to the Technology Agreement).
(ii) any injury to person, or loss of or damage to property, sustained
or occurring in or about the Building or the lot surrounding the
Building and other than on the Premises or any portion thereof (and,
in particular, without limiting the generality of the foregoing, on or
about the elevators, stairways, public corridors, sidewalks,
concourses, approaches, area ways, roof or other appurtenances and
facilities used in connection with the Building, the Premises or any
portion thereof) arising from the use or occupancy of the Building,
the Premises or any portion thereof by Sublessee or any person
claiming by, through or under Sublessee (other than Sublessor, its
servants, agents, employees or invitees), and arising from or related
to the act, omission, fault, negligence or misconduct of any person
other than Sublessor, or its servants, agents, employees or invitees,
and in addition to, and not in limitation of the foregoing provision
(i); and
(iii) any work or thing whatsoever (including monies due on account
thereof) done on the Premises or any portion thereof during the Term
of this Sublease and during the period of time, if any, prior to the
Commencement Date when Sublessee may have been given access to the
Premises or any portion thereof,
------------------
*Confidential treatment has been requested for the marked portion.
28
29
except to the extent caused by any negligent acts or omissions or
misconduct of Sublessor, its servants, agents, employees or invitees;
and, with respect to any of the foregoing, from and against all costs, expenses
(including, without limitation, reasonable attorneys' fees) and liabilities
incurred in connection with any such claim, or any action or proceeding brought
thereon. If any action or proceeding is brought against Sublessor based on any
such claim, Sublessee, upon notice from Sublessor, shall at Sublessee's sole
cost and expense resist or defend such action or proceeding, and employ counsel
therefor reasonably satisfactory to Sublessor. The foregoing indemnification
shall survive termination of this Sublease.
10.2 INDEMNIFICATION BY SUBLESSOR
Sublessor hereby indemnifies and covenants to save Sublessee harmless from
and against any and all claims, liabilities or penalties asserted by or on
behalf of any person, firm, corporation or public authority regarding any injury
to person, or loss of or damage to property, arising from or related to the act,
omission, fault, negligence or misconduct of Sublessor, its servants, agents,
employees or invitees (provided, however, that nothing in this Section shall
require Sublessor to indemnify Sublessee from any claims, liabilities or
penalties arising out of any negligent acts or omissions of, or misconduct by,
Sublessee or any of Sublessee's servants, agents, employees or invitees on the
Premises or in the Building, provided further, however, that for purposes of
this limitation on Sublessor's indemnification obligations, neither Sublessor
nor its servants, agents, employees or invitees shall be deemed to constitute
Sublessee's agents or invitees by virtue of the Technology Agreement or
otherwise) and, with respect to any of the foregoing, from and against all
costs, expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred in connection with any such claim, or any action or
proceeding brought thereon. If any action or proceeding is brought against
Sublessee based on any such claim, Sublessor, upon notice from Sublessee, shall
at Sublessor's sole cost and expense resist or defend such action or proceeding,
and employ counsel therefor reasonably satisfactory to Sublessee. The foregoing
indemnification shall survive termination of this Sublease.
10.3 LIMITATION OF SUBLESSOR'S LIABILITY
The agreements contained in this Sublease on the part of Sublessor shall be
binding on Sublessor only during and in respect to such period as Sublessor
holds the interest as lessee under the Prime Lease. In no event shall Sublessor
or Sublessee ever be responsible to the other for loss of business or other
indirect or consequential damages arising out of any breach of the agreements
contained in this Sublease.
10.4 NO BROKERAGE
The parties represent that they have dealt with no real estate broker or
agent in connection with this Sublease or with anyone who would otherwise be
entitled to a brokerage commission or other compensation with respect to this
Sublease. Each of Sublessor and Sublessee agrees to defend and indemnify the
other against any claims, losses, damages,
29
30
liabilities or expenses (including reasonable attorneys' fees) arising out of
the breach of any of its respective foregoing representations.
10.5 NOTICES
Whenever by the terms of this Sublease notice, demand or other
communication shall or may be given, either to Sublessor, Sublessee or Prime
Lessor, the same shall be adequately given if in writing and delivered by hand
or sent by registered or certified mail, postage prepaid:
If intended for Sublessor, addressed to it at the Present Mailing Address
of Sublessor, with a copy to Sublessor's attorneys, Xxxxxx & Dodge LLP, Xxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx,
Esquire (or to such other address or addresses as may from time to time
hereafter be designated by Sublessor by like notice).
If intended for Sublessee, addressed to it at the Present Mailing Address
of Sublessee, with a copy to Pfizer Central Research, Xxxxxxx Xxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxx 00000, Attention: General Counsel and to Xxxx and Xxxx
LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx
Xxxxxxx, Esquire (or to such other address or addresses as may from time to
time hereafter be designated by Sublessee by like notice).
If intended for Prime Lessor, addressed to it at the Present Mailing
Address of Prime Lessor (or to such other address or addresses as may from
time to time hereafter be designated by Prime Lessor by like notice).
All such notices shall be effective upon receipt or refusal to receive.
10.6 EFFECTIVENESS OF SUBLEASE
This Sublease shall not be effective until and unless Prime Lessor has
given its consent hereto, which consent shall be in form and substance
reasonably satisfactory to Sublessee; Sublessor shall be responsible for paying
all costs and expenses payable to Prime Lessor under the Prime Lease in
connection with obtaining such consent. Sublessor shall use reasonable efforts
to obtain Prime Lessor's consent, but shall not be responsible for the failure
or refusal of Prime Lessor to consent to this Sublease.
10.7 BINDING AGREEMENT
This Sublease shall bind and inure to the benefit of the parties hereto and
such respective heirs, representatives, successors or assigns as are permitted
by this Sublease. This Sublease contains the entire agreement of the parties
with respect to the subleasing of the Premises and may not be modified except by
an instrument in writing signed by the parties hereto. This Sublease shall be
governed by the laws of The Commonwealth of Massachusetts.
10.8 REPRESENTATIVES
Each party authorizes the others to rely in connection with their
respective rights and obligations under this Sublease upon approval and other
actions on the party's behalf by Sublessor's Representative, in the case of
Sublessor, and by Sublessee's Representative, in the
30
31
case of Sublessee, or by any person designated in substitution of or in addition
to said representatives by notice to the parties thereon relying.
10.9 COUNTERPARTS
This Sublease may be signed in any number of counterparts, and in such
event each shall act as an original for all purposes, so long as each party has
signed at least one counterpart.
Executed under seal as of the date first written above.
Sublessor: ARQULE, INC.
By: /s/ Xxxxxxx Xxxx
---------------------------
Its
Here unto duly authorized
Sublessee: PFIZER INC
By: /s/ Xxxxxx Xxxxx
---------------------------
Its
Here unto duly authorized
Exhibits:
--------
Exhibit A: Prime Lease I
Exhibit B: Prime Lease 2
Exhibit C: List of Sublessor's FF&E
Exhibit D: List of Operating Expense Line Items
31
32
EXHIBIT A
---------
[Previously filed as Exhibit 10.7 to ArQule's Registration Statement on Form S-1
(File No. 333-11105) and incorporated herein by reference.]
33
EXHIBIT B
---------
[Previously filed as Exhibit 10.22 to ArQule's Registration Statement on Form
S-1 (File No. 333-22945) and incorporated herein by reference.]
34
EXHIBIT C
---------
[*]
-----------------
* Confidential treatment has been requested for the marked portions.
35
EXHIBIT D
---------
-----------------
* Confidential treatment has been requested for the marked portions.
36
XXXXXXXX PROPERTIES, LLC
STANDARD FORM
SUBLEASE CONSENT
In connection with two leases currently in effect between the parties at
000 Xxxxxx Xxxxxx, Xxxxxx [*] ("lease 1") and Suites [*] ("lease 2"), Medford,
Massachusetts, executed on July 27, 1995 (lease 1), and December 20, 1996 (lease
2), both as heretofore amended, and terminating July 30, 2000 (lease 1), and
July 30, 2001 (lease 2), and in consideration of one dollar ($1.00) and other
mutual benefits to be derived herefrom, Xxxxxxxx Properties, LLC, LESSOR, and
ArQule, Inc., LESSEE, hereby agree to amend said lease 1 and lease 2
(collectively, the "lease") as follows:
1. LESSEE desires to sublease to Pfizer Inc. (SUBLESSEE) approximately
[*] rentable square feet at the above-referenced premises ("the subleased
premises") effective on the Commencement Date established under the
sublease (scheduled to occur on or before February 1, 2000), LESSOR
acknowledges receipt of $250 towards its expenses in connection with this
consent, and LESSEE shall, upon execution of this Sublease Consent by all
three parties, pay any additional reasonable charges that me be due in
accordance with the lease in connection with this consent.
2. LESSOR, as provided in the lease, hereby approves LESSEE's sublease to
SUBLESSEE. LESSEE represents that the attached document is a true and
complete copy of the sublease. LESSEE and SUBLESSEE shall not amend the
attached sublease without LESSOR's prior written consent, which consent
shall not be unreasonably withheld or delayed. Notwithstanding the
provisions of this sublease, LESSOR is not a party to it and shall not be
bound by it.
3. SUBLESSEE agrees to comply with all covenants, conditions and terms of
the lease as fully as if, for purposes hereof, SUBLESSEE were LESSEE under
the lease, except as expressly stated in the attached Rider to Sublease
Consent.
4. Notwithstanding the foregoing, however, LESSEE shall continue to
remain liable to LESSOR, as provided in the lease, for the payment of all
rent and for the full performance of all covenants and conditions of the
lease.
5. LESSEE shall pay LESSOR an additional security deposit of [*] upon
execution of this Sublease Consent by all three parties, subject to the
same terms and conditions provided in Section 2 of the lease.
6. SUBLESSEE shall, upon its execution of this Sublease Consent, supply
LESSOR with a certificate of insurance in the amount of [*] naming LESSOR
and the owner of the building (OWNER) as additional insureds. LESSOR and
OWNER shall be included as
------------------
*Confidential treatment has been requested for the marked portion.
32
37
additional insureds using standard endorsement ISO Form CG 20 26 11 85 or
another similar form specifically approved in advance by LESSOR.
7. Any notices from LESSOR to LESSEE shall be served at 000 Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxxxxx 00000 and otherwise as provided
in the lease. Any notices from LESSOR to SUBLESSEE shall be served at the
subleased premises, with copy to Pfizer Central Research, Xxxxxxx Xxxxx
Xxxx, Xxxxxx, Xxxxxxxxxxx 00000, Attention: General Counsel and otherwise
as provided in the lease.
8. Acceptance of any payments by LESSOR from SUBLESSEE pursuant to the
Rider to Sublease Consent shall not establish a new tenancy or in any way
affect the relationship between LESSOR and LESSEE and LESSEE's covenants
and obligations under the lease. See the attached Rider to Sublease
Consent.
9. Intentionally deleted.
10. To the extent any inconsistency exists between the lease and the
sublease, the terms and conditions of the lease shall govern, except as
expressly stated in the attached Rider to Sublease Consent.
11. *LESSOR represents that Xxxxxxxx Properties, LLC has succeeded to all
interests of Xxxxxxxx Properties Management, Inc. as LESSOR, that
Beautyrest, Inc. and Boston North, LLC (successor-in-interest to WRB, Inc.)
are the owners of the building, and that LESSOR has full right, power and
authority, by its signature below, to bind Beautyrest, Inc. and Boston
North, LLC (successor-in-interest to WRB, Inc.).
12. See the attached Rider to Sublease Consent for additional provisions.
All other terms, conditions and covenants of the lease shall continue to
apply. In Witness Whereof, LESSOR, LESSEE and SUBLESSEE have hereunto set their
hands and commons seals this 16th day of July, 1999.
LESSOR: XXXXXXXX PROPERTIES, LLC LESSEE: ArQule, Inc.
By: /s/ Xxxxxxx Xxxxxxxx By: Xxxxx Xxxxxxxxxx
------------------------------ ---------------------------
Executive Vice President
SUBLESSEE: Pfizer Inc.
By: Xxxxxx Xxxxx
---------------------------
33
38
XXXXXXXX PROPERTIES, LLC
RIDER TO SUBLEASE CONSENT
-------------------------
The following additional provisions are incorporated into and made a part
of the attached Sublease Consent by and among ArQule, Inc., as LESSEE, Pfizer
Inc. as SUBLESSEE, and Xxxxxxxx Properties, LLC, as LESSOR:
A. LESSOR and LESSEE hereby agree that the lease is modified as follows:
(1) Notwithstanding any provisions in the lease to the contrary, LESSOR
hereby acknowledges that LESSEE has duly exercised its options to extend the
terms of lease 1 and lease 2; accordingly; the termination date of lease 1 is
now July 30, 2005, and the termination date of lease 2 is now July 30, 2006.
(2) Notwithstanding any provisions in the lease to the contrary, LESSEE
hereby agrees that LESSEE shall pay to LESSOR [*].
X. XXXXXX hereby agrees that upon SUBLESSEE's attornment as stated below,
SUBLESSEE's use, possession and enjoyment of the subleased premises shall not be
interfered with, notwithstanding termination of the lease, and such use,
possession and enjoyment shall continue uninterrupted as more completely set
forth herein.
C. Except as stated below in this Rider Paragraph C and Rider Paragraph D
below, upon the expiration or other termination of the lease prior to its
scheduled expiration date, for any reason whatsoever, SUBLESSEE shall attorn to
LESSOR, and LESSOR shall accept SUBLESSEE's attornment, as tenant of the
subleased premises, on all the terms and conditions of the lease as modified by
Rider Paragraph D below (the lease with such Rider Paragraph D modifications
being referred to as the "Attorned Lease"); provided however, that if the lease
is being terminated in whole or in part by reason of any default arising from or
related to acts of the SUBLESSEE in or with respect to the subleased premises
which would entitle LESSOR to exercise the remedy of termination under the terms
and conditions of the lease ("SUBLESSEE Defaults"), then LESSOR shall be fully
entitled to terminate the lease and to rescind the recognition and attornment
set forth herein (in such case SUBLESSEE shall vacate and surrender the
subleased premises peaceably; any holding over in the subleased premises by
SUBLESSEE in such case shall be deemed a holding over under the terms of the
lease and SUBLESSEE shall be liable for all loss, damage or expense incurred by
LESSOR as a result of such holding over and shall pay rent at the revised
monthly rate set forth in Section 21 of lease 1 and Section 22 of lease 2). Such
recognition and attornment shall be self-operative and shall be effective
without the execution of any further instrument on the part of either party;
however, SUBLESSEE
------------------
*Confidential treatment has been requested for the marked portion.
34
39
and LESSOR shall execute, upon the written request of either party, an
instrument confirming such recognition and attornment.
D. In the event of any recognition and attornment between LESSOR and
SUBLESSEE as provided in Rider Paragraph C above, SUBLESSEE's use and occupancy
of the subleased premises shall be on all of the terms and conditions of the
lease, as modified by the following provisions:
(1) All references in the lease to LESSOR shall be deemed to refer to
LESSOR named in this Sublease Consent and all references in the lease to LESSEE
shall be deemed to refer to SUBLESSEE named in this Sublease consent.
(2) The premises demised under the lease shall be deemed to be the
subleased premises consisting of [*] square feet of space in Suites [*] in the
building only, not the premises described in the lease.
(3) The base rent payable by SUBLESSEE shall be the base rent set forth in
Section 1.1 of the Sublease, not the base rent set forth in the lease.
(4) The term of SUBLESSEE's occupancy shall be the "Sublease Term" set
forth in Section 1.1 of the Sublease, not the term set forth in the lease.
(5) SUBLESSEE shall be entitled to terminate the Attorned Lease (as if the
Attorned Lease were the Sublease) in accordance with Section 3.2 of the
Sublease.
(6) The following provisions of the lease shall be deemed deleted in their
entirety:
lease 1 -
a) Section 1 (Rent)
b) Section 2 (Security Deposit)
c) Section 17 (Brokerage)
d) The second and third grammatical sentences of Section 21
(Occupancy)
e) Section 28 (Security Agreement)
f) Section Y of Rider to lease 1
g) The first grammatical sentence of Section Z of Rider to
lease 1
h) Sections 1 and 2 of Amendment #1 to lease 1
lease 2 -
a) Section 1 (Rent)
b) Section 2 (Security Deposit)
c) Section 19 (Brokerage)
------------------
*Confidential treatment has been requested for the marked portion.
35
40
d) The second and third grammatical sentences of Section 22
(Occupancy)
e) Section 29 (Security Agreement)
f) Section A of Rider to lease 2
g) Section C of Rider to lease 2
h) Section D of Rider to lease 2
i) Sections 1, 2 and 3 of Amendment #1 to lease 2
j) Amendment #2 to lease 2
k) Amendment #3 to lease 2
l) Amendment #4 to lease 2
m) Amendment #5 to lease 2
n) Section 1 to Amendment #6 to lease 2
E. From and after receipt of a copy of the LESSOR's notice to LESSEE of
LESSOR's intention to terminate the lease, SUBLESSEE shall pay all rent
thereafter due and payable under the Sublease directly to LESSOR (any such rent
payments received by LESSOR from SUBLESSEE shall be applied by LESSOR as a
credit toward LESSEE's obligations under the lease) and shall otherwise fully
and faithfully observe and perform (x) all of its obligations under the Sublease
while the Sublease remains in effect, and (z) all of its obligations as LESSEE
under the Attorned Lease. LESSOR hereby agrees to indemnify SUBLESSEE and hold
SUBLESSEE harmless from any claims made by LESSEE with respect to any rents so
paid by SUBLESSEE to LESSOR at LESSOR's direction; LESSEE hereby agrees that
SUBLESSEE shall have the right to rely on any such notice and direction from
LESSOR, without any obligation to inquire as to whether there exists any default
by LESSEE under the lease; that LESSEE shall have no right or claim against
SUBLESSEE on account of any rental payments made by SUBLESSEE to LESSOR
following receipt of such notice and direction; and that as between LESSEE and
SUBLESSEE, any payments made, or obligations performed, by SUBLESSEE to or for
the benefit of LESSOR from and after receipt of such notice and direction shall
be deemed to have be paid to and/or performed for the benefit of, LESSEE.
X. XXXXXX agrees to give to SUBLESSEE a copy of notice of any default
given to LESSEE respecting the performance of any obligations of LESSEE that
would entitle LESSOR, under the terms of the Lease or by law, to terminate the
lease.
X. XXXXXX agrees to list SUBLESSEE on the tenant directories in the
lobbies of the building at 000 Xxxxxx Xxxxxx, Xxxxxxx.
H. Nothing in this Rider to Sublease Consent or the Sublease Consent to
which this Rider is attached, nor anything in the Sublease or any Attorned
Lease, shall be deemed or construed to amend, modify, alter or otherwise affect
in any way the lease or the respective rights and obligations of LESSOR and
LESSEE under the lease. The recognition and attornment of SUBLESSEE by LESSOR
shall have no effect on any obligations of LESSEE under the lease or on any
rights and remedies of LESSOR against LESSEE under the lease.
36
41
LESSOR: XXXXXXXX PROPERTIES, LLC LESSEE: ArQule, Inc.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxxxx
----------------------------- -------------------------
Executive Vice President
SUBLESSEE: Pfizer Inc.
By: /s/ Xxxxxx Xxxxx
-------------------------
37
