EXHIBIT 10.50
FOURTH AMENDMENT TO LEASE
RENEWAL
This FOURTH AMENDMENT TO LEASE (this "Fourth Amendment") is made this 29th day
of November, 2001 (the "Reference Date"), by and between TEACHERS INSURANCE &
ANNUITY ASSOCIATION OF AMERICA, INC., a New York corporation ("Landlord") and
SONUS PHARMACEUTICALS, INC., a New York corporation ("Landlord") and SONUS
PHARMACEUTICALS, INC., a Delaware corporation ("Tenant").
RECITALS
Landlord is the landlord and Tenant is the tenant under that certain Lease
dated January 14, 1994 (the "Initial Lease"), for premises located at 00000
00xx Xxxxxx XX, Xxxxxxx, Xxxxxxxxxx 00000, Building L, Unit 102 (the "Initial
Premises"), as modified by First Amendment to Lease dated for reference
purposes August 26, 1996 (the "First Amendment"), by the Second Amendment dated
for reference purposes October 28, 1997 (the "Second Amendment"), and by the
Third Amendment dated for reference purposes October 15, 1998 (the "Third
Amendment"). As used herein the "Amended Lease shall mean the Initial Lease as
modified by the First Amendment, Second Amendment and Third Amendment; and the
"Lease" shall mean the Amended Lease as further amended by this Fourth
Amendment.
The parties desire to further amend the Amended Lease and effective on the
Reference Date stated above the portions of the Lease as numbered below shall
be amended to read as follows:
Except as otherwise specifically defined herein all capitalized terms shall
have the meanings assigned in the Amended Lease.
1.g. EXTENDED TERM OF THE LEASE: The Lease Expiration Date shall be July 31,
2007.
1.h. RENT ADJUSTMENT: Additional Base Monthly Rent Adjustments shall be as
follows:
Effective Date of Rent New Base Monthly Rent
Increase
May 1, 2002 $0.00
June 1, 2002 $45,750.00
October 1, 2002 $0.00
November 1, 2002 $45,750.00
October 1, 2003 $0.00
November 1, 2003 $45,750.00
August 1, 2004 $48,500.00
August 1, 2006 $51,500.00
1k. SECURITY DEPOSIT: On May 1, 2002, the Security Deposit shall be increased
to $51,500.00 of which $18,039.00 has previously been deposited with Landlord.
15. RELEASE AND INDEMNITY.
a. Indemnity. Tenant shall indemnify, defend (using legal counsel reasonably
acceptable to Landlord) and save Landlord and its property manager harmless
from all claims, suits, losses, damages, fines, penalties, liabilities and
expenses (including Landlord's personnel and overhead costs and attorneys fees
and other costs incurred in connection with claims, regardless of whether such
claims involve litigation, but excluding consequential damages such as lost
profits) resulting from any actual or alleged injury (including death) of any
person or from any actual or alleged loss of or damage to, any property arising
out of or in connection with (i) Tenant's occupation, use or improvement of the
Premises, or that of its employees, agents or contractors, (ii) Tenant's breach
of its obligations hereunder, or (iii) any act or omission of Tenant or any
subtenant, licensee, assignee or concessionaire of Tenant, or of any officer,
agent, employee, guest or invitee of Tenant, or of any such entity in or about
the Premises, provided that this indemnity shall not apply to claims to the
extent caused by Landlord's gross negligence or willful misconduct. Tenant
agrees that the foregoing indemnity specifically covers actions brought by its
own employees. This indemnity with respect to acts or omissions during the term
of this Lease shall survive termination or expiration of this Lease. The
foregoing indemnity is specifically and expressly intended to,
constitute a waiver of Tenant's immunity under Washington's Industrial
Insurance Act, RCW Title 51, to the extent necessary to provide Landlord with a
full and complete indemnity from claims made by Tenant and its employees, to
the extent provided herein. Tenant shall promptly notify Landlord of casualties
or accidents occurring in or about the Premises. LANDLORD AND TENANT
ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS OF SECTION 8 AND THIS SECTION
15 WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM.
b. LANDLORD INDEMNITY. Except as otherwise provided in this Section 15,
Landlord shall indemnify, defend (using legal counsel reasonably acceptable to
Tenant) and save Tenant harmless from all claims, suits, losses, fines,
penalties, liabilities and expenses (including Tenant's personnel and overhead
costs and attorneys' fees and other costs incurred in connection with claims,
regardless of whether such claims involve litigation, but excluding
consequential damages such as lost profits) resulting from any actual or
alleged injury (including death) of any person or from any actual or alleged
loss of or damage to, any property to the extent caused by the intentional
misconduct or gross negligence of Landlord or of any employee or agent of
Landlord in the Common Areas. Landlord agrees that the foregoing indemnity
specifically covers actions brought by its own employees. This indemnity with
respect to actions or omissions during the term of this Lease shall survive
termination or expiration of this Lease. The foregoing indemnity is
specifically and expressly intended to constitute a waiver of Landlord's
immunity under Washington's Industrial Insurance Act, RCW Title 51, to the
extent necessary to provide Tenant with a full and complete indemnity from all
claims made by Landlord and its employees to the extent provided herein.
LANDLORD AND TENANT ACKNOWLEDGE THAT THE INDEMNIFICATION PROVISIONS OF SECTION
15 WERE SPECIFICALLY NEGOTIATED AND AGREED UPON BY THEM.
c. RELEASE. Tenant hereby fully and completely releases all claims against
Landlord for any losses or other damages sustained by Tenant or any person
claiming through Tenant resulting from any accident or occurrence in or upon
the Premises, including but not limited to: any defect in or failure of Project
equipment; any failure to make repairs; any defect, failure, surge in, or
interruption of Project facilities or services; any defect in or failure of
Common Areas; broken glass; water leakage; the collapse of any Building
component; or any act, omission or negligence of co-tenants, licensees or any
other persons or occupants of the Building, provided only that the release
contained in this Section 15(b) shall not apply to claims for actual damage to
persons or property (excluding consequential damages such as lost profits) to
the extent caused by Landlord's gross negligence or willful misconduct or
breach of its express obligations under this Lease which Landlord has not cured
within a reasonable time after receipt of written notice of such breach from
Tenant. Notwithstanding any other provision of this Lease, and to the fullest
extent permitted by law, Tenant hereby agrees that Landlord shall not be liable
for injury to Tenant's business or any loss of income therefrom, whether such
injury or loss results from conditions arising upon the Premises or the
Project, or from other sources or places including, without limitation, any
interruption of services and utilities or any casualty, or from any cause
whatsoever, including Landlord's negligence, and regardless of whether the
cause of such injury or loss or the means of repairing the same is inaccessible
to Landlord or Tenant. Tenant may elect, at its sole cost and expense, to
obtain business interruption insurance with respect to such potential injury
and loss.
d. LIMITATION ON INDEMNITY. In compliance with RCW 4.24.115 as in effect on
the date of this Lease, all provisions of this Lease pursuant to which Landlord
or Tenant (the "Indemnitor") agrees to indemnify the other (the "Indemnitee")
against liability for damages arising out of bodily injury to Persons or damage
to property relative to the construction, alteration, repair, addition to,
subtraction from, improvement to, or maintenance of, any building, road, or
other structure, project, development, or improvement attached to real estate,
including the Premises, (i) shall not apply to damages caused by or resulting
from the sole negligence of the Indemnitee, its agents or employees, and (ii)
to the extent caused by or resulting from the concurrent negligence of (a) the
Indemnitee or the Indemnitee's agents or employees, and (b) the Indemnitor or
the Indemnitor's agents or employees, shall apply only to the extent of the
Indemnitor's negligence; PROVIDED, HOWEVER, the limitations on indemnity set
forth in this Section shall automatically and without further act by either
Landlord or Tenant be deemed amended so as to remove any of the restrictions
contained in this Section no longer required by then applicable law.
c. DEFINITIONS. As used in any Section establishing indemnity or release of
Landlord, "Landlord" shall include Landlord, its partners, officers, agents,
employees and contractors, and "Tenant" shall include Tenant and any person or
entity claiming through Tenant.
16. INSURANCE: Tenant shall, throughout the term of this Lease and any renewal
hereof, at its own expense, keep and maintain in full force and effect, a policy
of commercial general liability (occurrence form) insurance, including
contractual liability (including Tenant's indemnification obligations under this
Lease) insuring Tenant's activities upon, in or about the Premises or the
Project, against claims of bodily injury or death or property damage or loss
with a combined single limit of not less than One Million Dollars ($1,000,000)
per occurrence and an excess/umbrella liability insurance policy with minimum
limits of not less than Five Million Dollars ($5,000,000), with such increases
in limits as Landlord may from time to time require consistent with insurance
requirements of institutional landlords in similar projects in the area, if such
increased limits are available at commercially reasonable terms. If Tenant
manufactures on the Premises consumer goods using any materials supplied by
Landlord (including but not limited to water supplied as part of utilities to
the Premises), Tenant's insurance shall include products liability insurance, on
a claims made basis, in the amounts specified for the commercial general
liability insurance.
Tenant shall further, throughout the term of this Lease and any renewal
thereof, at its own expense, keep and maintain in full force and effect,
property insurance for what is commonly referred to as "Special Cause of Loss"
or "Special" coverage insurance (excluding earthquake and flood) on tenant's
leasehold improvements in an amount equal to one hundred percent (100%) of the
replacement value thereof with a coinsurance waiver. Tenant shall use the
proceeds from any such policy for the restoration of Tenant's improvements or
alterations, unless restoration is not an available option. As used in this
Lease, "tenant's leasehold improvements" shall mean any alterations, additions
or improvements installed in or about the Premises by or with Landlord's
permission or otherwise permitted by this Lease, whether or not the cost
thereof was paid for by Tenant.
All insurance required to be provided by Tenant under this Lease: (a) shall be
issued by Insurance companies authorized to do business in the state in which
the premises are located with a financial rating of at least an A VIII status
as rated in the most recent edition of Best's insurance Reports; (b) shall be
issued as a primary policy, or umbrella policy where appropriate (in which case
there shall be a per location endorsement making the limits available at each
location); shall be on an occurrence basis, except with respect to products
liability; (c) name Landlord and Landlord's property manager as additional
insured; and (d) shall contain an endorsement requiring at least 30 days prior
written notice of cancellation to Landlord and Landlord's lender, before
cancellation or change in coverage, scope or amount of any policy. Tenant shall
deliver a certificate or copy of such policy together with evidence of payment
of all current premiums to Landlord within 30 days of execution of this Lease
and at the time of all renewals thereof. If Tenant fails at any time to
maintain the insurance required by this Lease, and fails to cure such default
within ten (10) business days of written notice from Landlord then, in addition
to all other remedies available under this Lease and applicable law, Landlord
may purchase such insurance on Tenant's behalf and the cost of such insurance
shall be Additional Rent due within ten (10) days of written invoice from
Landlord to Tenant.
Landlord and Tenant release and relieve the other, and waive their entire right
of recovery for loss or damage to property located within or constituting a
part or all of the Building or the Development to the extent that the loss or
damage is covered by (a) the injured party's insurance, or (b) the insurance
the injured party is required to carry under this Article 16, whichever is
greater. This waiver applies whether or not the loss is due to the negligent
acts or omissions of Landlord or Tenant, or their respective officers,
directors, employees, agents, contractors, or invitees. Each of Landlord and
Tenant shall have their respective property insurers endorse the applicable
insurance policies to reflect the foregoing waiver of claims, provided however,
that the endorsement shall not be required if the applicable policy of
insurance permits the named insured to waive rights of subrogation on a blanket
basis, in which case the blanket waiver shall be acceptable.
30. TENANT IMPROVEMENT ALLOWANCE: Landlord shall make up to One Hundred Sixty
Thousand Six Hundred Eighty Dollars ($160,680) (the "Fourth Amendment Tenant
Improvement Allowance") available to Tenant after January 1, 2002 but before
October 1, 2003 to reimburse Tenant for actual out-of-pocket costs paid to
third parties for designing and constructing tenant improvements to the
Premises pursuant to plans reasonably approved by Landlord and otherwise
subject to the provisions of Section 14. Landlord shall pay the Fourth
Amendment Tenant Improvement Allowance within thirty (30) days of invoice
submitted after the improvements have been inspected and accepted by Tenant
(less minor punch list items). Landlord
may require lien releases as a condition of payment. Tenant confirms that
Landlord's obligations under any previous tenant improvement allowances have
been satisfied.
If Tenant utilizes the entire Fourth Amendment Tenant Improvement Allowance,
Landlord shall make available to Tenant after January 1, 2002 but before
October 1, 2003 up to an additional Two Hundred Seventy-Five Thousand Dollars
($275,000) as a supplemental Tenant Improvement Allowance (the "Fourth
Amendment Supplemental Tenant Improvement Allowance") to be expended for the
same purposes, subject to the same approvals, and with the same disbursement
provisions as the Fourth Amendment Tenant Improvement Allowance. If Tenant
utilizes all or some of the Fourth Amendment Supplemental Tenant Improvement
Allowance, then commencing with the first payment of Base Monthly Rent due
after payment of the Fourth Amendment Supplemental Tenant Improvement
Allowance, Tenant shall pay monthly, as additional Base Monthly Rent, an amount
sufficient to amortize the Fourth Amendment Supplemental Tenant Improvement
Allowance on an equal payments basis over the then remaining term of this Lease
(excluding any renewal terms) with interest at ten percent (10%) per annum
(which payments shall include amortization of interest accrued from date of
disbursement to the first amortization payment).
35. OPTION TO RENEW. Tenant is granted the right to extend the term of this
Lease beyond the expiration date of the initial Lease Term for one (1)
successive period of thirty-six (36) months (the "Extended Term"). This
replaces any prior Options to Renew. If Tenant has materially defaulted in its
obligations under this Lease, and failed to cure such defaults within any
applicable cure period, then Tenant's right to extend the Lease for the
Extended Term shall automatically terminate. Tenant's right to extend the Lease
for the Extended Term is personal to Tenant and may not be exercised by any
subtenant. Tenant's extension rights shall apply to all of the Property under
lease to Tenant at the time. From and after the commencement of the Extended
Term, all of the terms, covenants, and conditions of the Lease shall continue
in full force and effect as written, except that Base Rent for the Extended
Term shall be at the then prevailing market rate (the "Fair Market Rent") for
similar space in the Project but not less than that paid in the last month of
the initial term. Tenant shall provide Landlord one hundred eighty (180) days
written notice of its intent to renew the Lease.
If Landlord and Tenant are not able to agree on the Fair Market Rent for the
Extended Term within thirty days after Tenant's notice of election to renew,
then such Fair Market Rent shall be determined as follows. Landlord and Tenant
shall each select an appraiser with at least ten years experience in the
office/high-tech industrial market in the eastside area. If the two appraisers
are unable to agree within ten days after their selection, they shall select a
similarly qualified third appraiser (the "Neutral Appraiser"). Within twenty
days after selection of the Neutral Appraiser, the three appraisers shall
simultaneously exchange determinations of Fair Market Rent. If the lowest
appraisal is not less than ninety percent (90%) of the highest appraisal, then
the three appraisals shall be averaged and the result shall be the Fair Market
Rent. If the lowest appraisal is less than ninety percent (90%) of the highest
appraisal, then the Fair Market Rent shall be deemed the rent set forth in the
appraisal that is closest in dollar amount to the appraisal submitted by the
Neutral Appraiser.
All other terms and conditions of the above described Lease shall remain in full
force and effect.
Landlord: Teachers Insurance & Annuity
Association of America, Inc.
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By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Its: Assistant Secretary
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Tenant: Sonus Pharmaceuticals, Inc.
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By: /s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
Its: CFO
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STATE OF New York )
)ss.
COUNTY OF New York )
I certify that I know or have satisfactory evidence that Xxxxx X.
Xxxxxxxx is the person who appeared before me, and said person acknowledged
that he signed this instrument, on oath stated that he was authorized to
execute the instrument and acknowledged it as the Assistant Secretary of
Teachers Insurance & Annuity Association of America, Inc. to be the free and
voluntary act of such party for the uses and purposes mentioned in the
instrument.
Date: November 30, 2001
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[SEAL OF XXXXXXX X. XXXXXXXXX, NOTARY PUBLIC, STATE OF NEW YORK]
/s/ XXXXXXX X. XXXXXXXXX
--------------------------------
(Signature)
Xxxxxxx X. Xxxxxxxxx
--------------------------------
(Print Name)
Notary Public, in and for the State
of New York, residing at New York,
N.Y.
My Commission Expires 8/17/02
XXXXXXX X. XXXXXXXXX
Notary Public, State of New York
No. 01RO6011725
Qualified in Suffolk County
Commission Expires August 17, 2002
STATE OF Washington )
)ss.
COUNTY OF King )
I certify that I know or have satisfactory evidence that Xxxxxxx X.
Xxxxx is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to
execute the instrument and acknowledged it as the CFO of Sonus Pharmaceuticals,
Inc. to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
Dated: November 29, 2001
--------------------------
[SEAL OF XXXXXXXXX X. XXXXXXXX, NOTARY PUBLIC, STATE OF WASHINGTON]
/s/ XXXXXXXXX X. XXXXXXXX
--------------------------------
(Signature)
Xxxxxxxxx X. Xxxxxxxx
--------------------------------
(Print Name)
Notary Public, in and for the State
of Washington, residing at
Newcastle
My Commission Expires 4/2/04
