Exhibit 10.16
FIRST AMENDMENT TO LEASE
This First Amendment to Lease (this "AMENDMENT") is made and entered into
as of the ____ day of November, 2003 by and between ONE OAK PARK DRIVE, L.L.C.,
a Delaware limited liability company (the "LANDLORD") having an address at c/o
Connelly Properties, L.L.C., 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, and CAMBRIDGE HEART, INC., a Delaware corporation (the
"TENANT") having an address at Xxx Xxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxxxx
00000.
WITNESSETH THAT:
WHEREAS, pursuant to a Lease Agreement dated June __, 2000 (the "LEASE"),
the Landlord leased to the Tenant certain space in that certain building known
as and numbered One Oak Park Drive, in the Town of Bedford, Middlesex County,
Massachusetts, as more particularly described in the Lease;
WHEREAS, the Landlord and the Tenant wish to amend the Lease in certain
respects;
NOW THEREFORE, in consideration of the foregoing recitals and for further
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Landlord and the Tenant do hereby agree as follows:
1. EFFECTIVE DATE; DEFINITIONS. For purposes of this Amendment, the "EFFECTIVE
DATE" shall mean December 1, 2003. The amendments to the Lease set forth in
Section 2 of this Amendment shall be effective prospectively only, commencing on
the Effective Date. Such amendment shall have no retroactive effect with respect
to periods occurring prior to the Effective Date. Unless the context requires
otherwise, the terms used herein shall be construed in conformity with the
definitions set forth in the Lease.
2. AMENDMENTS TO LEASE. Effective as of the Effective Date, the Lease is
amended as follows:
a. Paragraph 1 of the Lease is amended by substituting "10,480" for
"11,000" where it appears in the Paragraph.
b. Paragraph 3 of the Lease is amended by substituting "at midnight on
November 30, 2005" for "at midnight on the last day of the month in which the
third (3rd) anniversary of the Term Commencement Date occurs" where it appears
in such Paragraph.
c. Paragraph 5 of the Lease is amended by deleting the Paragraph in its
entirety and substituting the following in place thereof.
"5. BASIC RENT
Commencing on the Term Commencement Date, and continuing through and
including November 30, 2003, the Tenant shall pay Basic Rent to the
Landlord at the annual rate of One Hundred Thirty-Two Thousand and 00/100
Dollars ($132,000.00), payable in advance on the first day of each calendar
month in equal installments at the rate of Eleven Thousand and 00/100
Dollars ($11,000.00) per month. Commencing on December 1, 2003, and
continuing through and including November 30, 2005, the Tenant shall pay
Basic Rent to the Landlord at the annual rate of One Hundred Twenty
Thousand Five Hundred Twenty and 00/100 Dollars ($120,520.00), payable in
advance on the first day of each calendar month in equal installments at
the rate of Ten Thousand Forty-Three and 34/100 Dollars ($10,043.34) per
month. Basic Rent shall be payable to the Landlord at the address set forth
above or such other address as the Landlord may thereafter specify by
notice to the Tenant, without counterclaim, set off, deduction or defense
and, except as otherwise expressly provided herein, without abatement."
d. Paragraph 6 of the Lease is amended by deleting the Paragraph in its
entirety and substituting the following in place thereof:
"6. OPERATING EXPENSES; TAXES
a. DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:
i. "BASE OPERATING EXPENSES": The aggregate amount of Operating
Expenses incurred by the Landlord during calendar year 2004.
ii. "BASE TAXES": The aggregate amount of Taxes incurred by the
Landlord during calendar year 2004.
iii. "OPERATING EXPENSES": Collectively, any and all charges,
costs and expenses of every kind and nature whatsoever that the
Landlord may from time to time actually incur, and the reasonable
value, based on competitive rates, of any materials and services that
the Landlord may provide in good faith with respect to the ownership,
operation and maintenance of the Building and the Property, including,
without limitation, (1) making repairs to and undertaking maintenance
of the Building and the Property, including all alterations and
improvements to the common areas of the Building; (2) providing
utilities, including heat, water, sewer, electricity, air conditioning
and ventilation to the Premises and to the common areas of the
Building and the Property (expressly excluding electricity service for
the Premises, for which the Tenant shall pay a separate charge as
provided in Paragraph 8); (3) providing daily cleaning and rubbish
removal; (4) providing watering, landscaping and lawn care for the
Property; (5) sanding, plowing and removal of snow and ice from
driveways, walkways and parking areas; (6) maintaining casualty and
liability insurance with respect to the Landlord, the Premises, the
Building and the Property;
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(7) reasonable administrative and management costs of the Landlord,
but "Operating Expenses" shall not include any of the expenses set
forth in EXHIBIT B attached hereto.
IV. "TAXES": Any and all real estate taxes, betterments and
special assessments or amounts in lieu or in the nature thereof and
any other taxes, levies, water rents, sewer use charges and other
excises, franchises, imposts and charges, general and special (and the
entire amount of any interest, penalties and costs attributable to
delayed payment of the Tenant's portion thereof where such delay is
the fault of the Tenant) of whatever name and nature, and whether or
not now within the contemplation of the parties hereto, which may now
or hereafter be levied, assessed or imposed by the United States of
America, The Commonwealth of Massachusetts, the Town of Bedford or any
other authority, or become a lien upon all or any part of the
Property, the Building, the Premises, the use or occupation thereof,
or upon the Landlord and the Tenant in respect thereof, or upon the
basis of rentals thereof or therefrom, or upon the estate hereby
created, or upon the Landlord by reason of ownership of the reversion.
Notwithstanding the foregoing, "Taxes" shall not include exclude (i)
franchise, corporate, estate, gift, inheritance, succession, capital
levy, transfer tax, and income or profits taxes or charges upon the
rent payable by Tenant under the Lease, (ii) any fines, interest,
penalties and the like imposed as the result of late payment (unless
such late payment was caused by the Tenant's late payment of its share
of the excess), and (iii) any amounts resulting from improvements made
to the Building or the Property by the Landlord or any other person
other than the Tenant after the Building and the Property were
assessed for purposes of calculating Base Taxes.
v. "TENANT'S PERCENTAGE": Fifty Percent (50%).
b. ADJUSTMENT OF OPERATING EXPENSES. If during any portion of any
calendar year (including calendar year 2004 for purposes of establishing
Base Operating Expenses), at least 95% of the Building's rentable area was
not occupied by tenants, then actual Operating Expenses incurred by the
Landlord shall be reasonably extrapolated by the Landlord to the estimated
Operating Expenses that would have been incurred if the Building were fully
occupied by tenants and, for purposes of this Paragraph 6, 95% of such
extrapolated amount shall be deemed to be the Operating Expenses for such
year.
c. TENANT'S PAYMENT OF OPERATING EXPENSE AND TAX EXCESS. The Tenant
shall pay to the Landlord, as Additional Rent, the Tenant's Percentage of
the amount, if any, by which the aggregate of Operating Expenses and Taxes
in any calendar year shall exceed the aggregate of Base Operating Expenses
and Base Taxes. The Tenant shall prepay to the Landlord monthly, in the
same manner as Basic Rent, one-twelfth (1/12) of the total of all such
amounts that the Landlord may from time to time reasonably estimate will be
payable, by the Tenant under this Paragraph 6(c) in respect of such
excess. As soon as any such amounts so payable are actually determined,
appropriate adjustments of any overpayments or underpayments shall be made
by the Landlord and the Tenant.
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d. TENANT'S PAYMENT OF OTHER TAXES. The Tenant shall pay or cause to
be paid to the Landlord as Additional Rent not later than ten (10) days
prior to the date the same are due or twenty-one (2l) days after written
notice thereof to the Tenant, whichever is later, all taxes and excises
upon the personal property and equipment of the Tenant located at the
Premises or the Property.
e. OTHER ADDITIONAL RENT. The Tenant agrees to pay, in addition to
the Tenant's obligations with respect to taxes, insurance premiums,
utilities costs, costs of repairs and maintenance and other costs which are
specifically set forth herein, to the Landlord upon demand as Additional
Rent: (i) any and all charges, costs, expenses, and obligations of every
kind and nature whatsoever as the Landlord may from time to time actually
incur in good faith with regard to the Premises or the operation or
maintenance thereof, except as otherwise expressly agreed in this Lease,
including, without limiting the generality of the foregoing, reasonable
attorneys' fees incurred by the Landlord in connection with any amendments
to, consents under and subleases and assignments of this Lease requested by
the Tenant and in connection with the enforcement of rights and pursuit of
the remedies of the Landlord under this Lease (whether during or after the
expiration or termination of the Term of this Lease), and (ii) all other
costs identified in this Lease as "ADDITIONAL RENT."
f. LATE PAYMENTS. If any payment of Basic Rent or Additional Rent is
not paid to the Landlord when due or within any applicable grace period,
then at the Landlord's option, without notice and in addition to all other
remedies hereunder, the Tenant shall pay upon demand to the Landlord, as
Additional Rent, interest thereon at an annual rate equal to the corporate
rate of Fleet Bank (or its successor) from time to time in effect, plus
four percent (4%), such interest to be computed from the date such Basic
Rent or Additional Rent was originally due through the date when paid in
full.
g. REAL ESTATE TAX ABATEMENTS. Subject to the rights of any
Mortgagees (as hereinafter defined), the Landlord may, at the request of
the Tenant or any other tenant or tenants of the Building, use reasonable
efforts to obtain an abatement of or to contest or review by legal
proceedings or otherwise any such tax, levy, charge or assessment. In such
event the Tenant and such other tenants shall pay such tax, levy, charge or
assessment (under protest, if necessary). The Tenant shall pay as
Additional Rent the Tenant's Percentage of (i) any such tax, levy, charge
or assessment that may be determined to be due, and (ii) any and all costs
or expenses (including reasonable attorneys' fees) that the Landlord may
incur in connection with any such proceedings. The Tenant shall be entitled
to share in any refund or abatement, net of such costs and expenses, which
may be made of any tax, levy, charge or assessment in the same proportion
that the same was paid by the Tenant or with the Tenant's funds."
e. The Lease is amended to add a new Paragraph 33 to read in its
entirety as follows:
"33. EXTENSION OF THE TERM
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On the conditions (any one or more of which conditions the Landlord
may waive, at its election, by written notice to the Tenant at any time)
that (i) both at the time of option exercise and as of the commencement of
the applicable extension term, the Tenant is not in default of its
covenants and obligations under this Lease beyond all applicable grace and
cure periods, (ii) the Landlord has not given the Tenant two (2) or more
notices of default within any consecutive twelve (12) month period during
the Term, and (iii) as of the commencement of the applicable extension
term, Cambridge Heart, Inc. occupies the entire Premises, the Tenant may
elect to extend the Term as follows:
a. The Tenant may elect to extend the Term for a one (1) year period
commencing December 1, 2005, but only if the Tenant gives notice thereof to
the Landlord by June 1, 2005, but not before December 1, 2004. If the
Tenant so elects to extend the Term, such extension shall be on the same
terms and conditions set forth herein, except Basic Rent, which shall be
determined as hereinafter set forth.
b. The word "Term" as used elsewhere in this Lease shall, unless
otherwise expressly provided herein, include the initial Term and such one
(1) year extension period, if the Tenant shall have given timely and proper
notice of exercise of its option to so extend the Term. Time shall be of
the essence for any notice permitted or required to be given hereunder.
c. The annual rate of Basic Rent payable during the one (1) year
extension period of the Term shall be payable without offset at an annual
rate equal to the greater of (i) the effective annual rate of Basic Rent
payable during the year immediately prior to the commencement of such
extension period, and (ii) the "Market Rent" determined as hereinafter
provided. The "MARKET RENT" shall be the fair rental value for space of
equivalent size and character in Bedford, Massachusetts under a one year
lease, taking into account all relevant factors.
d. The Market Rent shall be proposed by the Landlord within thirty
(30) days of the receipt of the Tenant's notice that it intends to extend
the term of the Lease. The Market Rent so proposed by the Landlord is
referred to herein as the "LANDLORD'S PROPOSED MARKET RENT." The Landlord's
Proposed Market Rent shall he deemed to be the Market Rent unless the
Tenant notifies the Landlord, within fifteen (15) days of the Tenant's
receipt of the Landlord's Proposed Market Rent notice, that the Landlord's
Proposed Market Rent is not satisfactory to the Tenant (the "TENANT'S
REJECTION NOTICE").
e. If the Market Rent is not otherwise agreed upon by the Landlord
and the Tenant within fifteen (15) days after the Landlord's receipt of the
Tenant's Rejection Notice, then:
(1) The Landlord and the Tenant shall notify one another within
ten (10) days of the expiration of said fifteen day period of the
name and address of the appraiser designated by each. Such two (2)
appraisers shall, within twenty (20) days after the designation of the
second appraiser, make their determination of the Market
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Rent in writing and give notice thereof to each other and to the
Landlord and the Tenant. Such two (2) appraisers shall have twenty
(20) days after the receipt of notice of each other's determinations
to confer with each other and to attempt to reach agreement as to the
determination of the Market Rent. If such appraisers shall concur in
such determination within said twenty (20) day period, then they shall
give notice thereof to the Landlord and the Tenant and such
concurrence shall be final and binding upon the Landlord and the
Tenant. If such appraisers shall fail to concur as to such
determination within said twenty (20) day period, then they shall give
notice thereof to the Landlord and the Tenant and shall immediately
designate a third appraiser. If the two (2) appraisers shall fail to
agree upon the designation of such third appraiser within five (5)
days after said twenty (20) day period, then they or either of them
shall give notice of such failure to agree to the Landlord and the
Tenant and, if the Landlord and the Tenant fail to agree upon the
selection of such third appraiser within five (5) days after the
appraiser(s) appointed by the parties give notice as aforesaid, then
either party on behalf of both may apply to the American Arbitration
Association or any successor thereof to designate a third appraiser,
or on such association's failure, refusal or inability to act, to a
court of competent jurisdiction, for the designation of such third
appraiser.
(2) All appraisers shall be commercial real estate brokers who
shall have had at least ten (10) years' continuous experience as a
commercial real estate broker in the Boston, Massachusetts area.
(3) The third appraiser shall conduct such investigations as he
or she may deem appropriate and shall, within ten (10) days after the
date of his or her designation, make an independent determination of
the Market Rent.
(4) If none of the determinations of the appraisers varies from
the mean of the determinations of the other appraisers by more than
ten percent (10%), the mean of the determinations of the three (3)
appraisers shall be the Market Rent of the Premises. If, on the other
hand, the determination of any single appraiser varies from the mean
of the determinations of the other two (2) appraisers by more than ten
percent (10%), the mean of the determination of the two (2) appraisers
whose determinations are closest shall be the Market Rent.
(5) The determination of the appraisers, as provided above,
shall be conclusive upon the parties and shall have the same force and
effect as a judgment made in a court of competent jurisdiction.
(6) Each party shall pay fees, costs and expenses of the
appraiser selected by it and its own counsel fees and one-half (1/2)
of all other expenses and fees of any such appraisal."
3. CONFIRMATION OF TENANT'S OBLIGATION TO PAY FOR UTILITIES. The Tenant
confirms and agrees that, pursuant to Paragraph 8 of the Lease, the Tenant is
obligated to pay, directly to the appropriate
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utility company, all charges relating to the provision of electricity to the
Premises during the Term (including, without limitation, electricity to power
heat and air conditioning for the Premises), as measured by separate meters
serving the Premises. The Tenant also confirm and agrees that, pursuant to
Paragraph 8 of the Lease, the Tenant is obligated to pay for: water beyond
normal office usage, telephone service, overtime and special services as set
forth in Paragraph 8 of the Lease, and any additional HVAC facilities used in
connection with any room devoted substantially to the operation of one or more
computers, which amounts the Landlord shall reasonably determine. All such
amounts payable by the Tenant under Paragraph 8 of the Lease shall constitute
Additional Rent under the Lease.
4. LANDLORD'S WORK. The Landlord shall, at its sole cost and expense, perform
the work described in EXHIBIT A attached hereto. The Landlord shall exercise
diligent and commercially reasonable efforts to complete this work by December
15, 2003.
5. BROKERS. The Landlord and the Tenant each warrant and represent to the
other that it has not dealt with any broker or finder with respect to this
Amendment other than The Staubach Company of New England, LLC and Xxxxxxxx &
Grew (collectively, the "RECOGNIZED BROKERS"). The Landlord shall be responsible
for paying each of the Recognized Brokers a brokerage commission pursuant to a
separate agreement between the Landlord and such Recognized Broker. The Landlord
and the Tenant shall each defend, indemnify and hold the other harmless from and
against any and all liability, claims, suits, demands, judgments, costs,
interest and expense (including, without being limited to, reasonable attorneys'
fees and expenses) which the indemnified party may be subject to or suffer by
reason of any claim made by any person, firm or corporation, other than either
of the Recognized Brokers, for any commission, expense or other compensation as
a result of the execution and delivery of this Amendment, which is based on
alleged conversations or negotiations by said person, firm or corporation with
the indemnifying party and in breach of the foregoing representations.
6. MISCELLANEOUS. This Amendment may be executed in several counterparts, each
of which will be deemed an original, and all of such counterparts together shall
constitute one and the same instrument. Except as hereby modified, the Lease is
ratified and confirmed and remains in full force and effect.
[Signatures Appear on the Following Page]
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IN WITNESS WHEREOF, the Landlord and the Tenant have caused this
instrument to be executed under seal as of the day and year first above
written.
LANDLORD:
ONE OAK PARK DRIVE, L.L.C., a Delaware
limited liability Company
By: Xxxxxxxx Properties, L.L.C., a Delaware
limited liability company, its
Authorized Person
By:____________________________________
Name: Xxxx X. Xxxxxxxx
Title: Manager
TENANT:
CAMBRIDGE HEART, INC., a Delaware
corporation
By: /s/ Xxxxx Xxxxxxxxxxx
_________________________________
Name: Xxxxx Xxxxxxxxxxx
Title: Pres & CEO
EXHIBIT A
Landlord's Work
ENVIRONMENT
a. Add a plastic curtain to the exterior shipping door.
b. Add small heater hanging from ceiling to heat the shipping area.
c. All necessary caulking will be done.
d. Door and frame in shipping area will be replaced and painted.
e. Replace three (3) VAV 17kw heating and cooling boxes, replace
eighteen (18) control damper motors for all existing HVAC boxes and eighteen
(18) new digital thermostats. We will put back the electronic time clock that
Cambridge Heart asked us to remove so that the setback will work properly.
Replace the flex duct with hard duct and add diffuser deflectors with fire
rings where needed. Rebalance the entire system.
f. We will provided Cambridge Heart with a plan showing the zone for
each thermostat.
MAINTENANCE & REPAIRS
a. Bathroom countertops will be replaced.
b. Metal dividers will be replaced.
c. Shipping area ceiling tile will be replaced.
d. Broken and scarred ceiling tiles will be replaced throughout the
building.
e. Vinyl baseboard in the shipping area will be replaced.
f. Security light will have dusk to xxxx.
g. Pest Control will be addressed.
DEMO
a. Partitioning next to Xxx P's office will be removed.
b. Approximately 10 linear feet of partitioning between the service
area and manufacturing area will be removed.
c. Approximately 26 linear feet of partitioning will be removed next
to the service area.
d. Approximately 13 linear feet of partitioning will be removed by the
stock room.
CONSTRUCTION
a. Build approximately 50 linear feet of drywall partitioning per
drawing dated 8/11/03.
b. Replace carpet throughout the entire premises with Landlord's
standard carpet, color and type to be selected by the Tenant.
c. Paint the entire premises the same color as it is now.
d. Electric will be modified as needed to accommodate the demo & new
construction.
e. Provide vertical blinds for the front reception area.
f. Provide and install a 6070 solid cote birch finish door with hollow
metal frame (Dutch type door).
g. Loading dock pad will be increased to 20 feet long by 11 feet wide.
h. In Cambridge Heart's CEO office we will take existing wallboard
down, insulate, and then replace wallboard with 5/8 inch wallboard extending
above the ceiling. We will also replace insulation above the office ceiling.
[End of Exhibit A]
EXHIBIT B
Exclusions from Operating Expenses
Operating Expenses, as defined in Paragraph 6(a)(iii) of the Lease,
shall not include any of the following:
(i) interest, principal, points and fees, amortization or other
costs associated with any debt and rent payable under any lease to which
this Lease is subject, and all costs and expenses associated with any
such debt or lease and any ground lease rent, irrespective of whether
this Lease is subject or subordinate thereto;
(ii) expenses reimburseable to the Landlord by other tenants or
third parties for services provided directly to such parties, to the
extent such services are either not provided to the Tenant, or are
provided in excess of the services provided to the Tenant;
(iii) costs reimbursed to the Landlord from the proceeds of insurance
or condemnation awards;
(iv) expenses incurred by the Landlord to resolve disputes, or
enforce or negotiate lease terms, with prospective or existing tenants,
or in connection with the negotiation of the terms of any financing,
sale or syndication of the Building;
(v) costs of alterations, capital improvements, equipment replacement
and other items that are, under GAAP, properly classified as capital
expenditures, PROVIDED, HOWEVER, that the Landlord may include in the
Common Expenses, on an annual basis, the amount of principal and interest
payments that would be required to pay for each capital item over its
useful life (as determined by the Landlord in accordance with GAAP as
in effect at the time of acquisition of the capital item), with level
payments of principal and interest, at an annual interest rate of six
percent (6%);
(vi) expenses incurred by the Landlord to lease space to new tenants
or to retain existing tenants, including leasing commissions, advertising
and promotional expenditures;
(vii) expenses incurred by the Landlord to prepare, renovate, repaint,
redecorate or perform any other work in any space leased to an existing
tenant or prospective tenant of the Building;
(viii) costs of repairs or replacements necessary due to damage caused
by the Landlord or the Landlord's agents, employees or contractors, or by
other tenants in the Building;
(ix) any penalty or fine incurred by the Landlord due to the
Landlord's violation of any federal, state, or local law or regulation;
(x) property management fees in excess of 2.5% of the Building's
gross rents each year; and,
(xi) costs associated with the operation of the business of the
partnership or entity that constitutes the Landlord, as the same are
distinguished from the costs of operation of the Building and the
Property, including partnership accounting and legal matters, costs of
defending any lawsuits with any mortgagee (except as the actions of the
Tenant may be in issue), costs of selling, syndicating, financing,
mortgaging, or hypothecating any of the Landlord's interests in the
Building, costs of any disputes between the Landlord and employees
(if any) not engaged in Building operation, disputes of the Landlord
with Building management, or outside fees paid in connection with
disputes with other tenants.
[End of Exhibit B]
