EXHIBIT 10.7
FIRST AMENDMENT TO SUBLEASE AGREEMENT
between
SRM/PCCP HARBOR BAY ASSOCIATES, LLC
and
PENINSULA PHARMACEUTICALS INC.
This First Amendment to Sublease ("First Amendment"), dated as of
November 1, 2003 (the "Execution Date"), is made by and between SRM/PCCP HARBOR
BAY ASSOCIATES, LLC, a Delaware limited liability company (Master Landlord and
Sublessor, hereinafter referred to as "Landlord") and PENINSULA PHARMACEUTICALS
INC., a Delaware corporation (previous Subtenant and now direct Tenant, and for
clarity herein referred to as "Peninsula" and in the Sublease as "Subtenant" or
"Tenant").
RECITALS
A. Sumitomo Bank Leasing and Finance, Inc., ("Sumitomo") and Lucent
Technologies Inc. predecessor-in-interest to Landlord ("Lucent") previously
entered into that certain Master Lease of Land and Improvements dated as of May
4, 2000 (the "Master Lease") for the entire Lucent Technology Campus (now known
as The Waterfront at Harbor Bay Business Park), including the building located
at 0000 Xxxxxx Xxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx (the "1701 Building").
B. Lucent and Peninsula previously entered into that certain Sublease
Agreement dated as of October 30, 2002, (the "Sublease") for approximately 7,500
rentable square feet of leased premises in the 1701 Building (the "Subleased
Premises").
C. Sumitomo previously assigned its rights and interest under the Master
Lease to Lucent and in connection with the previous sale of the Lucent
Technology Campus, Lucent assigned its rights and interest in the Master Lease
and Sublease to Landlord.
D. By means of an Estoppel Certificate dated as of May 20, 2003, Peninsula
agreed and acknowledged (i) the assignment of Lucent's interest in the Master
Lease to Landlord with respect to the Subleased Premises and (ii) the assignment
of the Sublease, effecting Peninsula to become the direct Tenant to Landlord. In
turn, Landlord has recognized the Sublease with Peninsula.
E. Peninsula now desires, among other things, to increase the amount of
square footage leased from the Landlord on the Lucent Technology Campus, move to
an adjacent building in the Lucent Technology Campus located at 0000 Xxxxxx Xxx
Xxxxxxx (the "1751 Building"), and extend the term of the Sublease and
underlying applicable Master Lease, and Landlord has agreed to such
modification, upon all of the terms and conditions contained in this Amendment.
G. Unless otherwise specified, capitalized terms are used herein as such
terms are defined in the Master Lease and Sublease.
NOW, THEREFORE, in consideration of the mutual terms and conditions contained in
this First Amendment, and for other valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Amendment of Property. The definition of "Property" shall be deleted
and replaced with the following new definition:
"Property" means certain land and property referred to as The
Waterfront at Harbor Bay Business Park, located at Harbor Bay Parkway,
Alameda, California, consisting of 6 buildings, including the 1701
Building and the 1751 Building, and containing a total of 379,640
rentable square feet.
2. Amendment of Building. Commencing upon November 1, 2003, the definition
of "Building" shall be amended to include the 1751 Building. Commencing
on January 1, 2004, the definition of "Building" shall be further
amended to delete from such definition the 1701 Building.
3. Amendment of Subleased Premises. The Subleased Premises as set forth in
Section 1(a) of the Sublease are hereby modified as follows:
Commencing upon November 1, 2003, the definition of "Subleased
Premises" shall be amended to include 12,358 rentable square
feet ("rsf"), measured in accordance with the current BOMA
standard, on the second floor of 0000 Xxxxxx Xxx Xxxxxxx (the
"1751 Building") as more specifically shown on the attached
EXHIBIT A-1. Commencing on January 1, 2004, the definition of
"Subleased Premises" shall be amended to delete all rentable
square footage in the 1701 Building. The Landlord acknowledges
and agrees that, during the period commencing on November 1,
2003 and expiring on December 31, 2003, Peninsula shall only
be required to pay Base Rent for that portion of the Subleased
Premises located in the 1701 Building.
4. Deletion of Section 1(b). Section 1(b) of the Sublease shall be deleted
in its entirety.
5. Amendment of Section 2. Section 2 of the Sublease shall be deleted in
its entirety and replaced with the following new Section 2:
"2. Termination of Prime Lease. The parties understand and acknowledge
that the Prime Lease has been terminated, Landlord is now the fee owner
of the Property, and the Sublease is now a direct lease between
Peninsula and Landlord. Notwithstanding the termination of the Prime
Lease, those provisions of the Prime Lease applicable to the Subleased
Premises remain incorporated into the Sublease. The terms of the
leasehold arrangement between Landlord and Tenant are set out
in the Prime Lease and this First Amendment to Sublease Agreement, and
are referred to collectively as the "Lease."
6. Deletion of Section 3. Section 3 of the Sublease shall be deleted in
its entirety.
7. Amendment of Section 4. Section 4 of the Sublease shall be deleted in
its entirety and replaced with the following new Section 4:
"4. Obligations under Prime Lease. Sublandlord shall be deemed the
Prime Landlord under the Prime Lease, and shall be required to perform
those obligations of the Prime Landlord under the Prime Lease, and
shall be liable to Peninsula for a breach of all covenants,
representations, or other undertakings under the Prime Lease that are
applicable to the Subleased Premises."
8. Amendment of Term. The definition of "Expiration Date" in Section 5(a)
of the Sublease shall be changed from 11:59 a.m. on July 31, 2004, to
11:59 p.m. on December 31, 2008.
9. Amendment of Exhibit B. As of January 1, 2004, Exhibit B to the
Sublease shall be replaced in its entirety with the new Exhibit B-1
"Furniture Inventory" attached to this First Amendment. Tenant has had
the opportunity to inspect the existing phone and data wiring in the
1751 Building, and accepts such pre-existing phone and data wiring "As
Is" "Where Is". During the Term, Tenant shall have access to the
communications closet on the first floor of the 1751 Building through
which telecommunications lines enter the 1751 Building and are directed
to the second floor of the 1751 Building (the "Communications Closet").
Tenant shall have the right to route phone and data lines from the
Communications Closet to the Subleased Premises. Landlord covenants
that at all times during the Term, the Communications Closet shall be a
Common Area of the 1751 Building that is accessible to all tenants of
the 1751 Building, including Tenant.
Part of the Subleased Premises in the 1751 Building includes a server
room that does not currently have any entry into the Subleased
Premises, but instead has only an entry from the Common Area of the
1751 Building (the "Server Room"). Tenant shall have the option, at its
expense but subject to Landlords approval of final plans,
specifications and permits, which approval shall not be unreasonably
withheld, to create a doorway entry that will open directly from the
Subleased Premises into the Server Room. In addition, Tenant shall have
the option, at its expense, to deactivate (per instruction from
Netversant who is Landlord's security consultant) all keycard access to
the entry of the Server Room from the Common Area of the 1751 Building
and install a deadbolt or other locks on such entry in order to prevent
any access to the Server Room from the Common Area of the 1751
Building. At Landlord's option at the end of the Term, Tenant shall
remove the entry to the Server Room from the Subleased Premises and
restore said area to the condition and finish that exists as of the
Execution Date.
10. Amendment of Base Rent. The monthly Base Rent as last set forth in
Section 7(a) of the Sublease is hereby amended as of January 1, 2004 to
read as follows:
(a) For the period commencing January 1, 2004 through
December 31, 2004 (such period, "Year 1"), the total Rent payable by
Tenant each month shall be equal to $19,772.80, which amount is equal
to $1.60 per rsf multiplied by 12,358 rsf. Tenant shall not owe any
other rent amounts to Landlord for Year 1 including, without
limitation, Additional Rent under Section 7(c); provided, however,
Tenant shall owe any additional charges for Tenant's non-Business Hours
utility usage. For clarity, Landlord shall bear all Operating Expenses
and Taxes during Year 1 and Tenant shall bear all Base Rent and charges
for Tenant's non-Business Hours utility charges, as applicable, during
Year 1. Landlord shall provide an invoice to Tenant for Tenant's
non-Business Hours charges, if any, and Tenant shall pay such invoice
within thirty (30) days of its receipt thereof. Tenant shall have the
right to audit Landlord's records to determine the accuracy of the
invoiced amounts in accordance with the audit procedures set forth in
Section 8.3(e).
Thereafter during the Term, the Base Rent payable by
Tenant shall be as follows:
Months Monthly Base Rent
------ -----------------
1/05 through 12/05 ("Year 2") $14,211.70 per month
1/06 through 12/06 ("Year 3") $14,829.60 per month
1/07 through 12/07 ("Year 4") $15,447.50 per month
1/08 through 12/08 ("Year 5") $16,065.40 per month
11. Amendment of Operating Costs. Commencing on January 1, 2005, the terms
of the Sublease shall be amended from an industrial gross/full service
to a triple net basis. Section 8 of the Sublease shall be deleted as of
January 1, 2004. As of January 1, 2005, the following new Section 8
shall automatically be added with the following language to read as
follows:
"8. Operating Expenses and Taxes.
8.1 Definitions.
(a) For purposes of this Sublease, the following
definitions shall apply (Tenant means Peninsula).
(i) "ADJUSTMENT DATE" shall mean January 1, 2005 and
each January 1 thereafter falling within the Term.
(ii) "ADJUSTMENT YEAR" shall mean each calendar year
during which an Adjustment Date falls.
(iii) "LANDLORD'S STATEMENT" shall mean a written
statement furnished by Landlord to Tenant containing a computation or
information relating
to any Additional Rent asserted by Landlord to be due pursuant to the
provisions of this Lease, and containing back up data reasonably
sufficient for Peninsula to verify the computation of Additional Rent.
(iv) "TENANT'S PROPORTIONATE SHARE" shall be (x)
3.26% with relation to the Campus based on 12,358 rentable square feet
in the Premises compared to the total of 379,640 rentable square feet
in the Property, and (y) 16.91% with relation to the Building based on
12,358 rentable square feet in the Premises compared to 73,081 rentable
square feet in the Building. All expenditures incurred on a Property
basis shall be correspondingly allocated on such Property percentage
basis to Tenant, and all expenditures incurred on a Building basis
shall be correspondingly allocated on such Building percentage basis to
Tenant.
(v) "OPERATING EXPENSES" shall mean:
All reasonable and necessary costs and expenses paid by or
incurred on behalf of Landlord in respect of the operation, cleaning,
repair, safety, management, security and maintenance of the Building or
Property, as the case may be, including the Common Areas of the
Building and the common exterior areas of the Property (but on the
basis that the Building and Property, as applicable, are fully
occupied), and in respect of the services provided to tenants, which
are reasonable, directly allocable and directly attributable to the
operation of the Building or Property, as the case may be, including:
(1) salaries, wages and bonuses paid to, and the
cost of any hospitalization, medical, surgical, union and general
welfare benefits (including group life insurance), any pension,
retirement or life insurance plan and other benefits or similar
expenses relating to, employees of Landlord or its property manager to
the extent engaged full-time in the operation, cleaning, repair,
safety, management, security or maintenance of the Property as a whole
or the Building, as the case may be;
(2) social security, unemployment and other
payroll taxes, the cost of providing disability and worker's
compensation coverage imposed by any law or regulation, union contract
or otherwise in respect of the employees describe in (1) above;
(3) the cost of electricity, gas, steam, water,
air conditioning and other fuel and utilities solely allocable to the
exterior common areas of the Property and to the common areas of the
Building that are not the obligation of any particular tenant;
(4) the reasonable cost of casualty, rent,
liability, fidelity, plate glass and any other similar insurance, but
only to the extent a prudent landlord of a comparable building would
carry the type and amounts of such insurance;
(5) the reasonable cost of repairs, maintenance
and painting of the exterior common areas of the Property and the
Building;
(6) the reasonable cost or rental of all
building and cleaning supplies, tools, materials and equipment for the
cleaning and maintenance of the exterior common areas of the Property
and the Building;
(7) the reasonable cost of supplies for the
cleaning and maintenance of the exterior common areas of the Property
and the Building,
(8) the reasonable cost of work uniforms and dry
cleaning of such uniforms for those employees described in (1) above;
(9) window cleaning, guard, watchman or other
security personnel, service or system for the exterior common areas of
the Property and the Building;
(10) management fees not in excess of the lesser
of five percent (5%) of gross revenue from the Building or the then
prevailing market rates for management fees payable for buildings with
similar uses to, similarly situated with, and in the same geographic
locale as, the Building;
(11) reasonable charges of independent
contractors performing work included within this definition of
Operating Expenses;
(12) legal, accounting and other professional
fees and disbursements incurred in connection with the operation and
management of the Property or Building, as the case may be. Excluded,
however, are legal, accounting and other professional fees and
disbursements incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating, or improving space
for tenants or other occupants or prospective tenants or other
occupants of the Property;
(13) association fees and dues;
(14) depreciation of hand tools and other movable
equipment used in the operation, cleaning, repair, safety, management,
security or maintenance of the Campus provided the original cost of
such equipment did not constitute an Operating Expense;
(15) exterior landscaping for the Property and
interior landscaping for the common areas of the Building; and
(16) amortization on a straight-line basis across
the useful life of the cost of capital improvements to the Building,
the Common Areas and/or the Campus (A) occasioned by any rules, laws or
regulations effective subsequent to the Commencement Date of this
Lease, but excluding Landlord's cost of
modifications and/or new improvements to the Building, the Common Areas
and/or the Campus required by the Americans with Disabilities Act as in
effect as of the Commencement date of this Lease or (B) that are
commercially reasonable and reduce costs that would otherwise be
included in Operating Expense or improve life/safety conditions.
Notwithstanding anything to the contrary contained in this Lease, the
following shall not be included within Operating Expenses:
(1) Leasing commissions, attorneys'
fees, costs, disbursements, and other expenses incurred in connection
with negotiations or disputes with tenants, or in connection with
leasing, renovating, or improving space for tenants or other occupants
or prospective tenants or other occupants of the Property.
(2) The cost of any service sold to
any tenant (including Tenant) or other occupant for which Landlord is
entitled to be reimbursed as an additional charge or rental over and
above the basic rent and escalations payable under the lease with that
tenant.
(3) Any depreciation on the
Property.
(4) Costs of a capital nature,
including but not limited to capital improvements and alterations,
capital repairs, capital equipment, and capital tools as determined in
accordance with generally accepted accounting principles.
(5) Expenses in connection with
services or other benefits of a type that are not provided to Tenant
but which are provided another tenant or occupant of the Property.
(6) Overhead profit increments paid
to Landlord's subsidiaries or affiliates for management or other
services on or to the building or for supplies or other materials to
the extent that the cost of the services, supplies, or materials
exceeds the cost that would have been paid had the services, supplies,
or materials been provided by unaffiliated parties on a competitive
basis.
(7) All interest, loan fees, and
other carrying costs related to any mortgage or deed of trust or
related to any capital item, and all rental and other payable due under
any ground or underlying lease, or any lease for any equipment
ordinarily considered to be of a capital nature (except janitorial
equipment which is not affixed to the Property.)
(8) Any compensation paid to clerks,
attendants, or other persons in commercial concessions operated by
Landlord.
(9) Advertising and promotional
expenditures.
(10) Costs of repairs and other work
occasioned by fire, windstorm, or other casualty of an insurable
nature.
(11) Any costs, fines, or penalties
incurred due to violations by Landlord of any governmental rule or
authority, this Lease or any other lease in the Property, or due to
Landlord's negligence or willful misconduct.
(12) The cost of correcting any
building code or other violations which were violations prior to the
Commencement Date of this Lease.
(13) The cost of containing,
removing, or otherwise remediating any contamination of the Property
(including the underlying land and ground water) by any toxic or
hazardous materials (including, without limitation, asbestos and
"PCB's") where such contamination was not caused by Tenant.
(14) Costs for sculpture, paintings,
or other objects of art (and insurance thereon or extraordinary
security in connection therewith).
(15) Wages, salaries, or other
compensation paid to any executive employees above the grade of
building manager.
(16) Any other expense that under
generally accepted accounting principles and practice consistently
applied would not be considered a normal maintenance or operating
expense.
(b) For each Adjustment Year falling wholly or partially
within the Term, Tenant shall pay to Landlord as Additional Rent,
Tenant's Proportionate Share of the amount of Operating Expenses for
such Adjustment Year.
8.2 Tax Expenses.
(a) For purposes of this Sublease the following
definitions shall apply.
(i) "TAXES" shall mean:
(1) All real estate taxes, assessments
(special or otherwise), sewer and water rents, rates and charges, and
any other governmental levies, impositions and charges of a similar
nature (but not including income taxes, franchise, capital or stock
taxes, gift or inheritance taxes or any other tax imposed upon or
measured by Landlord's income or profits) ("IMPOSITIONS"), which may be
levied, assessed or imposed on or in respect of all or any part of the
Property, whether or not the same constitute one or more tax lots (but
not including any Imposition on any tenant's property). If, however, by
law, any assessment may be divided and paid in annual installments,
then, for the purposes of this definition, (i) such assessment shall be
deemed to have been so divided and to be payable in the maximum number
of annual installments permitted by law,
and (ii) there shall be deemed included in Taxes for an Adjustment
Year, the annual installment of such assessment becoming payable during
such year, together with interest payable during such year on such
annual installment and on all installments thereafter becoming due as
provided by law, all as if such assessment had been so divided.
(2) Any reasonable and appropriate
expenses incurred by Landlord in contesting any of the foregoing or the
assessed valuation of all or any part of the Property.
(3) If at any time during the Term the
methods of taxation prevailing at the date hereof shall be altered so
that in lieu of or in addition to whole or any part of the Impositions
now levied, assessed or imposed on all or any part of the Property,
there shall be levied, assessed or imposed (i) an Imposition based on
the income or rents received therefrom whether or not wholly or
partially as a capital levy or otherwise, or (ii) an Imposition
measured by or based in whole or in part upon all or any part of the
Building and imposed on Landlord, then all such Impositions shall be
deemed to be Taxes.
(ii) Taxes shall not include any of the
following: Impositions upon improvements or alterations made by the
Landlord or other tenants outside of the Building, or upon additions to
the Property or Building; or penalties; or interest paid by the
Landlord on account of taxes.
(b) If, as a result of any application or proceeding or
otherwise, there should be a reduction in the Taxes for any Adjustment
Year in respect of which Landlord shall have previously rendered a
Landlord's Statement, Landlord shall refund to Tenant Tenant's
Proportionate Share of such refund, which refund shall be paid to
Tenant within twenty (20) days after receipt by Landlord, unless Tenant
advises Landlord within fifteen (15) days after receipt by Landlord of
such refund to include an adjustment for the succeeding Adjustment Year
to reflect such decrease in Taxes. Landlord may deduct from such refund
all costs and expenses, including reasonable counsel fees, incurred by
Landlord in connection with the application or proceeding to reduce the
Taxes in respect of any Adjustment Year. Landlord shall promptly refund
to Tenant Tenant's Proportionate Share of any refunds in Taxes received
after the Expiration Date of this Lease.
8.3 Payment of Operating Expenses and Taxes.
(a) For each Adjustment Year, Tenant shall pay to
Landlord, as Additional Rent, Tenant's Proportionate Share of the
actual Operating Expenses and Taxes. Notwithstanding the foregoing,
during the applicable Adjustment Year, Tenant shall pay such
Proportionate Share based on an estimate of such amount provided by
Landlord in accordance with Section 8.3(b). After the close of each
Adjustment Year, the parties shall undertake a reconciliation based on
the estimated Proportionate Share paid by Tenant during the applicable
Adjustment
Year and the actual Proportionate Share for such Adjustment Year in
accordance with Section 8.3(c).
(b) On or prior to the first Adjustment Date for the
Subleased Premises and at least forty-five (45) days prior to each
Adjustment Date thereafter, Landlord shall advise Tenant in writing of
Landlord's good faith, reasonable estimate of Tenant's Proportionate
Share of annual Operating Expenses for the applicable Adjustment Year
and of Taxes for the applicable Adjustment Year. Commencing on the
first day of each Adjustment Year, Tenant shall pay as Additional Rent
one-twelfth (1/12th) of Tenant's estimated Proportionate Share of
Operating Expenses and Taxes concurrently with the monthly Fixed Rent
payment.
(c) Within ninety (90) days after the close of each
Adjustment Year, Landlord shall deliver to Tenant an itemized
Landlord's Statement showing in reasonable detail the (i) actual
Operating Expenses and Taxes for the previous year broken down by
component expenses; (ii) Tenant's Proportionate Share of such Operating
Expenses and Taxes; (iii) the amount of the estimated Proportionate
Share of such Operating Expenses paid by Tenant during such Adjustment
Year ;and (iv) the amount of the estimated Proportionate Share of such
Taxes paid by Tenant during such Adjustment Year. If the amount of the
estimated Proportionate Share of Operating Expenses and/or Taxes, as
applicable, paid by Tenant during the applicable Adjustment Year
exceeds the actual Proportionate Share of Operating Expenses and/or
Taxes for such Adjustment Year, Landlord shall refund such excess
amount to Tenant within ninety (90) days after the close of such
Adjustment Year. Conversely, if the amount of the estimated
Proportionate Share of Operating Expenses and/or Taxes, as applicable,
paid by Tenant during the applicable Adjustment Year is less than the
actual Proportionate Share of Operating Expenses and/or Taxes for such
Adjustment Year, Tenant shall pay to Landlord the difference between
the amount paid by Tenant and the amount actually owed for such
Adjustment Year within thirty (30) days after receipt of Landlord's
Statement.
(d) Landlord's failure to submit a Landlord's Statement
to Tenant within six (6) months after the expiration of any Adjustment
Year shall be deemed a conclusive waiver of Landlord's right to any
Additional Rent relating to such Landlord's Statement for such
Adjustment Year. Landlord's failure to submit a Landlord's Statement
shall not deprive Tenant of its right to recover from Landlord if
Tenant's estimated payments exceed the amounts actually due from Tenant
for Operating Expenses or Taxes. If Landlord has not provided a
Landlord's Statement to Tenant within six (6) months after the
expiration of any Adjustment Year and Tenant subsequently requests in
writing that Landlord provide such Landlord's Statement, Landlord shall
provide such Landlord's Statement to Tenant within thirty (30) days
after the date on which Landlord receives such request. Subject to the
preceding sentence, the obligations of Landlord and Tenant with respect
to any Additional Rent shall survive the expiration or earlier
termination of the Term.
(e) Landlord agrees to maintain complete records of all
costs reimbursable by Tenant under the terms of this Lease, including
all Operating Expenses and Taxes. All such records shall be maintained
in accordance with generally accepted accounting practices and shall be
retained for a period of three (3) years after the end of the
applicable Adjustment Year. Tenant shall have the right, through itself
or its representatives, to examine, copy and audit such records at all
reasonable times at Landlord's office during Business Hours. Each
Landlord's Statement shall be conclusive and binding upon Tenant
unless, within six (6) months after the date on which Tenant receives a
particular Landlord's Statement, Tenant notifies Landlord that it
disputes the correctness of such Landlord's Statement. Pending the
determination of such dispute by audit results, agreement or otherwise,
Tenant shall pay Additional Rent in accordance with the applicable
Landlord's Statement, and such payment shall be without prejudice to
the position of Tenant. If Tenant's audit shows that the amount paid by
Tenant for Operating Expenses and Taxes for any Adjustment Year exceeds
the amount due for such period, then unless Landlord contests the
results of the audit as provided below, Landlord shall refund the
amount overpaid by Tenant, and if the Operating Expenses and Taxes
exceeded by more than five percent (5%) the amount actually due, then
Landlord shall also pay for Tenant's audit costs. If such audit shows
that the amount paid by Tenant for Operating Expenses and Taxes was
less than that due, then within 30 days following commencement of
Tenant's audit, Tenant shall pay such shortfall to Landlord. If
Landlord contests Tenant's audit, then within 30 days following
Landlord's contest, Tenant may submit the matter to binding arbitration
conducted by a sole arbitrator under the jurisdiction and the rules of
the American Arbitration Association in Oakland, California. The
arbitrator shall award fees and costs to the prevailing party."
12. Amendment of Commencement Date. The "Commencement Date" with respect to
the 1751 Building shall mean January 1, 2004.
13. Amendment of Repairs and Maintenance. On January 1, 2005, the terms of
the Sublease shall be amended from an industrial gross/full service to
a triple net basis. Therefore, the terms of Section 12 shall be deleted
and replaced with the following language to read as follows:
"12. Repairs and Maintenance.
(a) During the Term, Landlord shall perform diligently,
promptly and in a first class and good and workmanlike manner in
compliance with all applicable Legal Requirements, all maintenance,
repairs and replacements to: (i) the structural components of the
Building, including without limitation the roof, exterior walls,
bearing walls, support beams, foundations, columns, exterior doors and
windows and lateral support to the Building; (ii) the parking lots,
areas and garages, and the other exterior Common Areas, including their
lighting systems; (iii) the exterior improvements to the Building,
including walkways, shrubbery and landscaping; (iv) the plumbing and
fire sprinkler systems servicing the Building, including electrical and
mechanical lines and equipment associated
therewith; (vi) the Building heating, ventilation and air conditioning
systems and electrical and mechanical lines and equipment associated
therewith, ("HVAC"), and life safety systems for the Building; (vii)
the elevators of the Building; (viii) the glass including cleaning and
replacements; (ix) the roof membrane of the Building; (x) the exterior
surfaces of the Building; and (xi) any part of the Building for which
Tenant has not expressly assumed responsibility. The costs associated
with Landlord's maintenance obligations with respect to the Premises
and Building shall be deemed Operating Expenses for which Tenant shall
bear its Proportionate Share; provided, however that the Landlord shall
bear all of such Operating Expenses during Year 1.
(b) If Tenant shall have given Landlord notice of
Landlord's failure to perform any repair or other work which Landlord
is required to perform under this Lease, and such failure shall
continue unremedied for thirty (30) days following notice as aforesaid
(or if such default is of such nature as the same cannot be cured
within said thirty (30) day period, then if Landlord shall not have
promptly commenced to cure such default within said thirty (30) day
period and thereafter prosecuted the curing of such default to
completion with due diligence), or without notice to Landlord in the
case of an emergency, Tenant may, at its option, at any time thereafter
perform such work and cure such default for the account of Landlord,
and to the extent that the cost to perform such work reasonably
expended by Tenant exceeds Tenant's Proportionate Share of the cost
Tenant would have paid if Landlord had performed its obligations, then
such excess out-of-pocket costs reasonably incurred by Tenant shall not
be deemed to be an Operating Expense, Tenant shall not have any
liability with respect to such excess costs, and Landlord agrees to
reimburse Tenant such costs within thirty (30) days of written demand
therefor by Tenant. In the event that Landlord fails to make such
payment when due, it shall bear interest until paid at the Interest
Rate.
(c) Except for Landlord's obligations as set forth in
Paragraph 12(a) above, during the Term, Tenant shall, at its sole
expense, maintain the interior portion of the Subleased Premises in
good condition and repair, including, but not limited to, (i) perform
its own redecorating of the interior of the Subleased Premises if
desired by Tenant; (ii) be responsible for all maintenance and repairs
of the interior of the Subleased Premises and any maintenance or
repairs required as a result of Tenant's negligence, unless covered by
any insurance policy maintained or required to be maintained by
Landlord or unless caused by the gross negligence or willful misconduct
of Landlord, its agents or representatives; and (iii) maintain all
computer and telecommunications wiring and outlets, any interior glass,
and Landlord's furniture within the Subleased Premises in as good a
condition as existed on January 1, 2004, reasonable wear and tear
excepted. If Tenant fails to do so, Landlord may give Tenant notice
thereof and if Tenant does not remedy such deficiency within 45 days of
the giving of such notice, then Landlord may, but shall not be required
to, enter the Subleased Premises and put them in good condition, and
Landlord's costs thereof as set forth in Landlord's demand to Tenant
shall automatically become due and payable as Additional Rent. Tenant
shall reimburse Landlord within thirty (30) days following its
demand for all costs incurred by Landlord, plus an administrative fee
of five percent (5%) of such costs, in making alterations to the
structural, mechanical, electrical, plumbing or life safety systems of
the Building and to the Common Areas which may be required under
applicable Legal Requirements as a result of Tenant's particular use of
the Premises or Alterations made within the Premises by Tenant or by
Landlord at the request of Tenant."
14. Amendment of Service and Utilities. On January 1, 2005, the terms of
the Sublease shall be amended from an industrial gross to a triple net
basis. Therefore, the terms of Section 13 shall be deleted and replaced
with the following language to read as follows:
13. Services and Utilities
(a) Landlord shall provide all services for the Building
and Subleased Premises consistent with an office flex/research and
development building in the geographic area where the Property is
located, the cost of which shall be included in Operating Expenses.
(b) At Tenant's option, Landlord shall provide janitorial
and cleaning services for the Subleased Premises, the actual,
reasonable cost of which shall be included in Operating Expenses.
(c) Tenant shall pay for all utilities consumed on the
Subleased Premises, including after-hours usage.
(d) Parking. Tenant shall have the right to use an
unlimited number of non-exclusive, non-reserved parking spaces at the
Building for the use of Tenant's employees and business visitors,
subject to any applicable rules and regulations. Notwithstanding
anything in the Prime Lease to the contrary, Tenant shall not be
entitled to reserved parking. Landlord agrees that none of the tenants,
in addition to Tenant, in the 1751 Building shall be permitted to have
any reserved parking.
(e) Signage. Tenant shall have the right to have its
company name listed in the building directory located in the lobby of
the Building, if any, at no additional charge to Tenant. Tenant shall
also be allowed signage on entry doors to Tenant's suite and Landlord
shall work with Tenant to accommodate reasonable additional signage
directing visitors to Tenant's suite at no additional charge to Tenant.
Tenant shall be allowed to have signage in front of the Building at no
additional charge to Tenant, provided that such signage meets the
reasonable signage guidelines established by Landlord.
15. Peninsula's Leasing of Subleased Premises As-Is. Subject to Section 15,
Peninsula hereby acknowledges and agrees that it is leasing, and hereby
accepts, the Subleased Premises in the 1751 Building in its AS-IS
condition and no further improvements shall be made by Landlord, except
that Landlord agrees to repair the carpeting throughout the Subleased
Premises, and remove map wallpaper and
paint the underlying wall in one of the offices in the Subleased
Premises prior to December 1, 2003. Tenant shall accept the Premises in
its "as-is" condition as of the date of delivery by Landlord. Tenant
shall have the right to use the exisiting furniture within the
Subleased Premises during the Lease term, and shall return such
furniture at the Lease term expiration in good condition, subject to
normal wear and tear only.
16. Notwithstanding anything to the contrary in this Lease, Landlord
warrants to the best of its knowledge and without further independant
investigation, that on the commencement of the term hereof, (a) the
Property and Building shall comply with all laws, codes, ordinances and
other governmental requirements then applicable to the Property and
Building, and (b) the Subleased Premises, including the improvements
and equipment therein, shall be in good working order, condition, and
repair.
17. Each Party's addresses for notice purposes under Section 32 of the
Sublease shall be deleted and replaced with the following:
If to Tenant prior to January 1, 2004:
Peninsula Pharmaceuticals, Inc.
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: President & Chief Executive Officer
If to Tenant on or after January 1, 2004:
Peninsula Pharmaceuticals, Inc.
0000 Xxxxxx Xxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: President & Chief Executive Officer
If to Landlord:
SRM-PCCP Harbor Bay Associates, LLC
c/o SRM Associates
0000 Xxxxxx Xxx Xxxxxxx, Xxxx 0000
Xxxxxxx, XX 00000
Attn: Property Manager
18. Deletion of Section 38. Section 38 of the Sublease shall be deleted in
its entirety.
19. Brokers. Each party hereby acknowledges that no broker, finder or other
person has represented such party with respect to this Amendment. Each
party agrees to indemnify, defend and hold the other party harmless
from all demands, judgments, damages, costs and expenses (including
attorneys' fees and costs) resulting from any claims that may be
asserted against the other party by any broker, finder or
other person with whom the indemnifying party has or purportedly has
dealt in connection with this Amendment.
20. Successors and Assigns. All of the covenants, terms and conditions set
forth herein shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
21. Right of First Opportunity. Landlord and Tenant acknowledge that as of
the date of mutual execution of this First Amendment, the remaining
space on the second floor of the Building of approximately 25,400 rsf
("Adjacent Space") is vacant and available for lease. Subject to any
superior rights of any third party tenant, provided this Lease is in
full force and effect and Tenant is not in default hereunder, Landlord
shall notify Tenant at such time as it receives a bonafide proposal
from a third party tenant to lease any portion of the Adjacent Space.
Tenant shall have a right of first opportunity to negotiate with
Landlord to lease such Adjacent Space. Conversely, Tenant shall keep
Landlord apprised of its space requirements if, during the Lease term,
Tenant's space needs exceed the Subleased Premises. Furthermore, if,
after fifteen (15) days of negotiation, Landlord and Tenant are unable
to agree on mutually satisfactory terms for Tenant to lease the
Adjacent Space, then Landlord shall be free to deal with such Adjacent
Space, with no further regard to Tenant.
(Remainder of Page Left Intentionally blank)
22. Ratification of Lease Terms. All other non-conflicting terms,
provisions, covenants and conditions of the Lease, Sublease and all
exhibits and addendum thereto shall continue in full force and effect
and are hereby ratified by the parties hereto.
LANDLORD: PENINSULA:
SRM/PCCP HARBOR BAY ASSOCIATES, LLC, PENINSULA PHARMACEUTICALS INC.
a Delaware limited liability company a Delaware corporation
By: PCCP LB Harbor Bay Associates, LLC
a Delaware limited liability company
Its: Managing Member
By: PCCP Equities II, LLC
a Delaware limited liability company
Its: Co-Managing Member
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxx
------------------------------- --------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President Title: President and CEO
EXHIBIT A-1
[GRAPHIC]
EXHIBIT B-1
0000 XXXXXXXXX 0XX XXXXX XXXX XXXX
10/14/2003
Outside Hallway
Black/Red Credence Table 8' 1
Conference Room 2000/Flight Room
Black Leather Chairs 14
Black/Maroon Training Table 12' 2
Black/Maroon Training Table Round Corner
Right side round 1
Left side round 1
Black/Maroon Side Table 8'7" 1
Black/Maroon Podium 1
Black Dry Erase Board 20'x 48" 1
Room 2004
Lab Racks 4
Inside Hallway
DFM Shelf 48"x 12" 1
Room 2201 A & B
Black Task Chairs 2
Black Liberty Guest Chair 1
Rosemount Teardrop 1
Pedestal BBF 2
FF 2
Rosemount Station with double overhead 1
Rosemount Xxxx Station 1
Whiteboard 36" 48" 1
Meridian two drawer lateral cabinet (locked no key) 1
Kitchen
Refrigerator 1
Dishwasher 1
Message board 36" x 48" 1
First Aid Cabinet 1
Recycle Garbage Can 1
Floor Mat 44" x 65" 1
Room 2202
Xxxx Liberty Guest Chair 2
DFM 36" round table 1
Black Task Chairs 1
XXX Xxxxxxx 0
XXX Xxx Xxxxx 00" x 60" 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Putty two drawer lateral file cabinet 1
Black cloth board 102" x 24" 1
Room 2203
DFM Station 1
DFM three shelf bookcase 1
DFM four drawer lateral file 1
DFM dry erase board 48" x 60" 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Xxxx Liberty Guest Chairs 2
Black Task chairs 1
Black cloth board 102" x 24" 1
Room 2204
Xxxxxxxxx Xxxxxxx 0
Xxxxxxxxx Xxxxxxxx 0
Xxxx Xxxxxxx guest chair 1
Black Task Chair 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 2
Xxxx two shelf bookcase 1
Whiteboard 36" x 48" 1
Room 2205
Rosemount Station 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 1
Black Task Chair 1
Whiteboard 36" x 48" 1
Room 2206
DFM Station 1
DFM three shelf bookcase 1
DFM four drawer lateral file cabinet 0
XXX Xxx Xxxxx 00" x 60" 1
Black task chair 1
Xxxx Liberty Guest Chair 2
Black cloth board 102" x 24" 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Room 2207
DFM Station 1
DFM three shelf bookcase 1
DFM four drawer lateral file cabinet 0
XXX Xxx Xxxxx 00" x 60" 1
Black Task Chair 1
Xxxx Liberty Guest Chair 2
Wall Picture 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Room 2210
Xxxxxxxxx Xxxxxxx 0
Xxxxxxxxx Xxxxxxxx I
Whiteboard 36" x 48" 1
Black Task Chair 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 2
Room 2211
Rosemount Station 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 1
Black Task Chair 1
Storage Room/ Room 2212
Fire King Safe four drawer letter size 1
Supply Cabinet five shelf 36" x 72" 1
Supply Cabinet four shelf 36" x 66"
Copy Room/ Room 2213
Folding tables 60" 2
Xxxx three shelf bookcase 1
Room 2232
Rosemount Station 1
Rosemount Teardrop 1
Black Task Chair 1
Whiteboard 36" x 48" 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 1
Room 2231/Meeting Room
Xxxx Round table 48" 1
Xxxx Conference Room Chairs 4
Room 2230
Rosemount Station 1
Black Task Chair 1
Xxxx Liberty Guest Chair 1
Xxxx Pedestal BBF 1
Xxxx Pedestal FF 1
Whiteboard 36" x 48" 1
Room 2228
DFM Station - long desk 1
DFM two drawer lateral file cabinet 1
DFM three shelf bookcase 0
XXX Xxx Xxxxx 00" x 48" 1
DFM Pedestal BBF 1
DFM four drawer lateral file cabinet 1
Black Task Chair 1
Xxxx Liberty Guest Chair 3
Black Cloth board 102" x 24" 1
Room 2223/Conference Room
Black/Xxxx Conference Table 105" 1
Xxxx Conference Chairs 7
Rosemount Teardrop 1
Whiteboard 36" x 48" 1
Room 2222
DFM Station 1
DFM four drawer lateral file cabinet 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
DFM three shelf bookcase 0
XXX Xxx Xxxxx 00" x 60" 1
Black Cloth board 102" x 24" 1
Black Task Chair 1
Room 2221
DFM Station 1
DFM four drawer lateral file cabinet 1
DFM three shelf bookcase 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Black Cloth board 102" x 24" 2
Black Task Chair 0
XXX Xxx Xxxxx 00" x 60" 1
Room 2220
DFM Station 1
DFM Pedestal BBF 1
DFM Pedestal FF 1
Xxxx Liberty Guest Chair 4
Black Task Chair 1
Cubical #1
Portable printer station 1
Xxxx Pedestal BBF 28
Xxxx Pedestal FF 27
Black Task Chair 23
Teknion Workstation 24
Xxxx Liberty Guest Chair 3
Privacy Screen 4
Stationary printer station 1
Xxxx two drawer lateral file cabinet 1
Black Conference Chair 1
Cubical #2
Teknion Workstation 6
Xxxx Pedestal BBF 10
Xxxx Pedestal FF 10
Black Task Chair 6
Black Liberty Guest Chair 1
Xxxx two drawer lateral file cabinet 1
Cubical #3
Teknion Workstation 8
Xxxx Pedestal BBF 8
Xxxx Pedestal FF 9
Black Task Chair 7
Xxxx Conference Chairs 1
Privacy Screen 1
Stationary printer station 2
Cubical #4
Teknion Bullpen 1
Xxxx Conference Chair 1
Black Conference Chair 1
Black Task Chair 2
IMPORTANT NOTE: The above list is intended to reflect the inventory of
furnishings and equipment presently within the Premises. Tenant should
independently verify the accuracy of this list. Under no circumstances does the
First Amendment imply that if any item above is not actually located within the
Premises as of the Execution Date that Landlord shall be obligated to procure
same their cost or otherwise.
