Lease Agreement, Worcester Business Development

EXHIBIT 10.12


MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK


Worcester, Massachusetts


FOUR BIOTECH PARK


SPACE LEASE


WORCESTER BUSINESS DEVELOPMENT CORPORATION


to


PHYTERA, INC.


1993


TABLE OF CONTENTS


PAGE ARTICLE 1 REFERENCE DATA AND DEFINITIONS.................................. 1
Section 1.01 Terms and Titles Referred To............................ 1
Section 1.02 General Provisions...................................... 3
Section 1.03 Definitions............................................. 3


ARTICLE 2 PREMISES........................................................ 9
Section 2.01 Premises................................................ 9
Section 2.02 Appurtenances........................................... 9
Section 2.03 Landlord's Fixtures..................................... 9


ARTICLE 3 TERM............................................................ 10
Section 3.01 Term Commencement....................................... 10
Section 3.02 Termination............................................. 10
Section 3.03 Estoppel Certificate.................................... 10


ARTICLE 4 RENT............................................................ 10
Section 4.01 Basic Rent.............................................. 10
Section 4.02 Adjustment of Basic Rent................................ 10


ARTICLE 5 USE OF PREMISES................................................. 10
Section 5.01 Use Restricted.......................................... 10


ARTICLE 6 OPERATING EXPENSES; TAXES....................................... 10
Section 6.01 Operating Expenses and Taxes............................ 10
Section 6.02 Monthly Payments of Additional Rent..................... 11
Section 6.03 Annual Statements....................................... 11
Section 6.04 Assessments and Other Taxes............................. 11
Section 6.05 Accounting Periods...................................... 12
Section 6.06 Abatement of Taxes...................................... 12
Section 6.07 Exemption From Taxes.................................... 12


ARTICLE 7 IMPROVEMENTS.................................................... 12
Section 7.01 Tenant Fit-up........................................... 12
Section 7.02 Time for Completion..................................... 13
Section 7.03 Notice of Substantial Completion Date................... 13


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TABLE OF CONTENTS


(CONTINUED)


PAGE
Section 7.04 Delays.................................................. 13
Section 7.05 Tenant's Access to the Premises......................... 13
Section 7.06 Improvements by Tenant.................................. 14


ARTICLE 8 BUILDING SERVICES............................................... 15
Section 8.01 Basic Services.......................................... 15
Section 8.02 Other Janitors.......................................... 15
Section 8.03 Additional Services..................................... 15
Section 8.04 Limitations on Landlord's Liability..................... 15
Section 8.05 Electric Service........................................ 15


ARTICLE 9 TENANT'S COVENANTS.............................................. 16
Section 9.01 Pay Rent................................................ 16
Section 9.02 Occupancy of the Premises............................... 16
Section 9.03 Rules and Regulations................................... 16
Section 9.04 Safety.................................................. 16
Section 9.05 Equipment............................................... 16
Section 9.06 Pay Taxes............................................... 17
Section 9.07 Maintenance............................................. 17
Section 9.08 Redelivery.............................................. 17
Section 9.09 Tenant Financial Information............................ 17


ARTICLE 10 COMPLIANCE WITH REQUIREMENTS.................................... 17
Section 10.01 Legal Requirements...................................... 17
Section 10.02 Contests................................................ 18
Section 10.03 Land Disposition Agreement.............................. 18
Section 10.04 Environmental Legal Requirements........................ 18


ARTICLE 11 COVENANT AGAINST LIENS.......................................... 18
Section 11.01 No Liens................................................ 18
Section 11.02 Discharge............................................... 18


ARTICLE 12 ACCESS TO PREMISES.............................................. 19
Section 12.01 Access.................................................. 19


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(CONTINUED)


PAGE ARTICLE 13 ASSIGNMENT AND SUBLETTING: OCCUPANCY ARRANGEMENTS............ 19
Section 13.01 Assignment and Subletting............................... 19
Section 13.02 Procedure............................................... 19


ARTICLE 14 INDEMNITY..................................................... 20
Section 14.01 Tenant's Indemnity...................................... 20
Section 14.02 Claims by Landlord...................................... 21
Section 14.03 Landlord's Liability.................................... 21


ARTICLE 15 INSURANCE..................................................... 21
Section 15.01 Tenant's Insurance...................................... 21
Section 15.02 General Insurance Requirements.......................... 22
Section 15.03 Landlord's Insurance.................................... 23


ARTICLE 16 WAIVER OF SUBROGATION......................................... 23
Section 16.01 Waiver of Subrogation................................... 23
Section 16.02 Waiver of Rights........................................ 23


ARTICLE 17 DAMAGE AND RESTORATION........................................ 23
Section 17.01 Substantial Damage...................................... 23
Section 17.02 Restoration............................................. 24


ARTICLE 18 EMINENT DOMAIN................................................ 24
Section 18.01 Total Taking............................................ 24
Section 18.02 Partial Taking.......................................... 24
Section 18.03 Awards and Proceeds..................................... 24


ARTICLE 19 QUIET ENJOYMENT............................................... 25
Section 19.01 Landlord's Covenant..................................... 25
Section 19.02 Subordination and Non-Disturbance....................... 25
Section 19.03 Notice to Mortgagee and Ground Lessor................... 25
Section 19.04 Other Provisions Regarding Mortgagees................... 26


ARTICLE 20 DEFAULTS; EVENTS OF DEFAULT................................... 26
Section 20.01 Defaults................................................ 26
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PAGE
Section 20.02 Tenant's Best Efforts................................... 27
Section 20.03 Elimination of Default.................................. 27


ARTICLE 21 LANDLORD'S REMEDIES; DAMAGES ON DEFAULT....................... 27
Section 21.01 Landlord's Remedies..................................... 27
Section 21.02 Possession.............................................. 27
Section 21.03 Right to Relet.......................................... 28
Section 21.04 Survival of Covenants, Etc.............................. 28
Section 21.05 Right to Equitable Relief............................... 28
Section 21.06 Right to Self Help; Interest On Overdue Rent............ 29


ARTICLE 22 NOTICES....................................................... 29
Section 22.01 Notices and Communications.............................. 29


ARTICLE 23 WAIVERS....................................................... 29
Section 23.01 No Waivers.............................................. 29


ARTICLE 24 SECURITY DEPOSIT.............................................. 30
Section 24.01 Security Deposit........................................ 30


ARTICLE 25 GENERAL PROVISIONS............................................ 30
Section 25.01 Unavoidable Delays...................................... 30
Section 25.02 Estoppel Certificates................................... 30
Section 25.03 Right to Relocate....................................... 30
Section 25.04 Holding Over............................................ 31
Section 25.05 Governing Law........................................... 31
Section 25.06 Partial Invalidity...................................... 31
Section 25.07 Notice of Lease......................................... 31
Section 25.08 Interpretation.......................................... 31
Section 25.09 Consents................................................ 31
Section 25.10 Entire Agreement; Changes............................... 31
Section 25.11 Binding Effect.......................................... 32
Section 25.12 Time of the Essence..................................... 32
Section 25.13 Table of Contents....................................... 32


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(CONTINUED)


PAGE EXHIBIT A: LANDLORD'S SERVICES EXHIBIT B: LEASE PLAN EXHIBIT C: WORK LETTER EXHIBIT D: ESTOPPEL CERTIFICATE EXHIBIT E: RENT RIDER EXHIBIT: RIDER AND ADDENDUM


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MASSACHUSETTS BIOTECHNOLOGY RESEARCH PARK


FOUR BIOTECH PARK


SPACE LEASE


THIS LEASE is made in Worcester, Massachusetts effective on the Date of Lease stated in Article 1 between the Landlord and the Tenant named in Article 1.


In consideration of the Rent payable by Tenant and of the agreements to be performed and observed by Tenant, Landlord hereby leases the Premises to Tenant, and Tenant hereby takes the Premises from Landlord, subject to the provisions and for the term stated below:


ARTICLE 1


Reference Data and Definitions
------------------------------


Section 1.01 Terms and Titles Referred To. Each reference in this lease to
---------------------------- any of the following terms and titles incorporates the data stated for that term or title in this Section 1.01:


DATE OF LEASE: November 1, 1993


LANDLORD: WORCESTER BUSINESS DEVELOPMENT CORPORATION, a Massachusetts corporation established pursuant to the provisions of Chapter 600 of the Acts of 1965, its successors and assigns.


LANDLORD'S ADDRESS: One Innovation Drive
Worcester, Massachusetts 01605


TENANT: PHYTERA, INC., a corporation organized under the laws of Delaware.


TENANT'S ADDRESS: After the Term Commencement Date, Tenant's address will be the Premises; before the Term Commencement Date, Tenant's address will be:


One Innovation Drive
Worcester, MA 01605


TERM COMMENCEMENT DATE: Premises A - March 1, 1994 or as defined in Section 1.03, if different. Premises B - June 1, 1994 or as defined in Section 1.03, if different.


STATED EXPIRATION DATE: February 29, 2004 or as defined in Section 1.03, if different.


LAND: Land owned by Waldo Corporation as Trustee of Four Biotech Realty Trust under Declaration of Trust dated April 15, 1993, recorded with Worcester District


Registry of Deeds (the "Registry") in Book 15199, Page 67, being Parcel 10A on the plan entitled "Plan of Property Owned by Worcester Business Development Corporation of Parcels 10A, 10B, 10C, Plantation Street, Worcester, Massachusetts", dated December 16, 1992 and recorded with the Registry in Plan Book 670, Plan 70, containing a total area of 4.2929 acres, more or less, described in a deed from Worcester Business Development Corporation to Waldo Corporation as Trustee Four Biotech Realty Trust dated May 3, 1993 and recorded with the Registry in Book 15199, Page 72.


PREMISES: Premises A - That portion of the second floor of the Building shown as outlined or hatched on the Lease Plan attached as Exhibit B-1.


Premises B - That portion of the first floor of the Building shown as outlined or hatched on the Lease Plan attached as Exhibit B-2.


RENTABLE AREA OF THE PREMISES: Premises A - 11,800 square feet
Premises B - 14,000 square feet
------
TOTAL 25,800 square feet


RENTABLE AREA OF THE BUILDING: 93,000 square feet


TENANT'S SHARE:* Premises A - 12.7%
Premises B - 15.1%
-----
TOTAL 27.8%


DESIGN START DATE: June 1, 1993 (See Exhibit C - Work Letter)


LEASE TERM: Ten (10) Lease Years plus the partial month, if any, between the Term Commencement Date and the first day of the next calendar month.


BASIC RENT:* For each Lease Year of the first Fixed Rental Period, an amount equal to the product of (a) the Rentable Area of the Premises multiplied by (b) the sum of (i) $9.00 plus (ii) an amount determined by multiplying that portion of Tenant's Cost paid by Landlord by 17% and dividing the product by the number of square feet of Rentable Area of the Premises.


FIXED RENTAL PERIOD: Each successive period of three (3) Lease Years beginning on the Term Commencement Date.


ESTIMATED OPERATING EXPENSES: $4.50 per square foot of Rentable Area for the calendar year in which the Lease Term begins.


ESTIMATED TAXES: $1.00 per square foot of Rentable Area for the calendar year in which the Lease Term begins.


__________________________________ * See Rider and Addendum - #1


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INITIAL MONTHLY PAYMENT: $11,825.00


SECURITY DEPOSIT: Not Applicable


GUARANTOR: Alpha-Beta Technology, Inc. as to Premises B, only


PERMITTED USE: Research and development; general office and limited light manufacturing to the extent authorized under the City of Worcester Zoning Ordinance.


Section 1.02 General Provisions. For all purposes of this Lease, unless the
------------------ context otherwise requires:


(a) A pronoun in one gender includes and applies to the other genders
as well.


(b) Each definition stated in Section 1.01 or 1.03 of this Lease
applies equally to the singular and the plural forms of the word or term
defined.


(c) Any reference to a document defined in Section 1.03 of this Lease
is to the document as originally executed, or, if amended or supplemented
as provided in this Lease, to the document as amended or supplemented and
in effect at the relevant time of reference.


(d) All accounting terms not otherwise defined in this Lease have the
meanings assigned to them under generally accepted accounting principles.


(e) All references in Section 1.01 are subject to the specific
definitions (if any) in Section 1.03.


Section 1.03 Definitions. Each underlined word or term in this Section 1.03
----------- has the meaning stated immediately after it.


Additional Rent. All Taxes, Operating Expenses, costs, expenses and other
--------------- charges (other than Basic Rent) due from Tenant to Landlord or incurred by Landlord as the result of a Default.


Additional Services. Services provided to Tenant or in respect of the
------------------- Premises which are not Basic Services described in Exhibit A.


Authorizations. All franchises, licenses, permits and other governmental
-------------- consents issued by Governmental Authorities under Legal Requirements which are or may be required for the occupancy of the Premises and the conduct of a Permitted Use on the Premises.


Basic Services. The Landlord's services described in Exhibit A.
--------------


Building. The building on or to be constructed or under construction
-------- on the Land.


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Business Day. A day which is not a Saturday, Sunday or other day on
------------ which banks in Worcester, Massachusetts, are authorized or required by law or executive order to remain closed.


Common Areas. All areas of the Building devoted to the common use of
------------ the occupants of the Building or all occupants of multi-tenant floors or the provision of Basic or Additional Services to occupants of the Building, including but not limited to air shafts pipes, wires, ducts, conduits, elevator shafts and elevators, stairwells and stairs, restrooms, mechanical rooms, janitor closets, vending areas, loading docks and loading facilities.


Default. Any event or condition specified in Article 20 so long as
------- any applicable requirements for the giving of notice or lapse of time or both have not been fulfilled.


Event of Default. Any event or condition specified in Article 20 if
---------------- all applicable requirements for the giving of notice or lapse of time or both have been fulfilled.


Governmental Authority. United States of America, Commonwealth of
---------------------- Massachusetts, City of Worcester, County of Worcester, and any political subdivision, agency, department, commission, board, bureau or instrumentality of any of them.


Ground Lease. The lease of the Land (a) from WBDC to Landlord, or if
------------ that lease has not been executed as of the date of this Lease, (b) to be entered into between WBDC and its assignee of Landlord's interest under this Lease.


Ground Lessor. WBDC or any successor under or assignee of the Ground Lease.
-------------


Hazardous Substances. "Oil", "hazardous materials", "hazardous
-------------------- wastes" and "hazardous substances" as those terms are defined under the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., as amended, the Resource Conservation and Recovery Act of
------ 1976, 42 U.S.C. Section 6901, et seq., as amended, Massachusetts General Laws,
------ Chapters 21C and 21E, as amended, and the regulations from time to time adopted under those laws.


Improvements. All (i) structures located in and forming a part of the
------------ Premises, including but not limited to, walls, ceilings, doors and floor covering, (ii) pipes, wires, conduits, controls and fixtures relating to utilities located in and serving the Premises, (iii) casework, including but not limited to, benches, tables, cabinets and storage facilities, connected to a utility or affixed to the Premises or the Building and (iv) fixtures, equipment and personal property of any kind installed on the Premises in such a manner that they become part of the Premises or the Building under law or that they cannot be removed without material damage to the structure, fixtures, equipment or personal property or to the Premises or the Building.


Insurance Requirements. All terms of any policy of insurance maintained by
---------------------- Landlord or Tenant and applicable to the Land, the Building or the Premises; all requirements of the issuer of any such policy; and all orders, rules, regulations and other requirements of the National Fire Protection Association (or any other body exercising


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similar functions) applicable to any condition, operation, use or occupancy of all or any part of the Premises.


Land Disposition Agreement. The agreement dated June 13, 1984 between
-------------------------- the Commonwealth of Massachusetts, Division of Capital Planning and operations, and WBDC relating to the acquisition by WBDC of the land in the Park.


Landlord's Fixtures. All fixtures and equipment paid for by Landlord
------------------- and installed in the Building or the Premises for use by Tenant, whether before or during the Lease Term and whether or not shown in the Working Drawings, irrespective of whether or how the fixtures or equipment may be affixed to the Premises, or the Building.


Landlord's Work. The work to be done by Landlord with respect to the
--------------- Premises described in the Work Letter.


Lease. This document, all exhibits and riders attached and referred to in
----- this document and all amendments to this document, the exhibits and riders.


Lease Term. The period stated in Section 1.01 beginning on the Term
---------- Commencement Date. The Lease Term includes the period of any extension exercised by Tenant as provided in this Lease.


Lease Termination Date. The earliest to occur of (a) the Stated
---------------------- Expiration Date, (b) the termination of this Lease by Landlord as the result of an Event of Default or (c) the termination of this Lease under Article 17 (Damage or Destruction) or Article 18 (Eminent Domain).


Lease Year. Each twelve consecutive calendar month period ending on the day
---------- before an anniversary of the Term Commencement Date (or on the day before the first day of the next succeeding calendar month if the Term Commencement Date occurs other than on the first day of a month); provided that (a) the first Lease Year includes the partial month, if any, between the Term Commencement Date and the first day of the next calendar month and (b) the last Lease Year will end on the Lease Termination Date.


Legal Requirements. (a) All statutes, codes, ordinances (and rules
------------------ and regulations thereunder) and all executive, judicial and administrative orders, judgments, decrees and injunctions of or by any Governmental Authority which are applicable to any condition or use of the Premises, Building or Land, and (b) the provisions of all Authorizations.


Occupancy Arrangement. With respect to all or any part of the
--------------------- Premises or this Lease, and whether (a) written or unwritten or (b) for all or any portion of the Lease Term, an assignment, a sublease, a tenancy at will, a tenancy at sufferance or any other arrangement (including but not limited to a license or concession) under which a Person occupies the Premises for any purpose.


Operating Expenses. All expenses, costs, and disbursements of every
------------------ kind which Landlord pays or becomes obligated to pay in connection with the operation, management, repair, cleaning and maintenance of the Land and the Building (including


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all facilities and equipment in operation on the Term Commencement Date and such additional facilities and equipment in subsequent years as may be determined by Landlord to be necessary or beneficial in reducing Operating Expenses) and the provision of Basic Services, including, but not limited to (a) wages, salaries and fees, including taxes, insurance, and benefits of all Persons engaged in connection with Basic Services, (b) the cost of (i) all supplies and materials, electricity and lighting, for Common Areas, (ii) water, heat, air conditioning, and ventilating for the Building, (iii) all maintenance, janitorial, and service agreements, (iv) snow removal and maintenance of parking and landscaped areas, (v) all insurance, including the cost of casualty and liability insurance applicable to the Building and Landlord's personal property used in connection with the Building, (vi) repairs and general maintenance, (vii) capital items which are primarily for the purpose of reducing Operating Expenses or which may be required by a Governmental Authority, amortized over the reasonable life of the capital items with the reasonable life and amortization schedule being determined by Landlord in accordance with generally accepted accounting principles, (viii) pursuing an application for an abatement of Taxes to the extent not deducted from the abatement, if any, received, (ix) independent auditors, (x) that portion of Landlord's central accounting functions allocable to the Building and (xi) office space for the manager of the Building, (c) management fees, not to exceed eight percent (8%) of Basic Rent in any Lease Year, and (d) maintenance charges with respect to the Land imposed on the Landlord under the Ground Lease. Operating expenses will be determined on the accrual basis in accordance with generally accepted accounting principles consistently applied.


Operating Expenses do not include (i) costs of services ...