EXHIBIT 10.13
FIRST AMENDMENT TO SUBLEASE
AND LEASE AGREEMENT
This First Amendment to Sublease and Lease Agreement (this
"Amendment") is made by and between TMT Associates, LLC, a California limited
liability company ("Landlord"), and Inhale Therapeutic Systems, a California
corporation ("Tenant"), effective as of the 30th day of October, 1996.
RECITALS
A. Landlord and Tenant have entered into that certain Sublease
and Lease Agreement (the "Lease") dated October 2, 1996. All capitalized
terms used herein shall have the same meaning ascribed to them in the Lease,
unless expressly defined in this Amendment.
B. Landlord and Tenant desire to modify certain provisions of the
Lease as set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant hereby agree as follows:
1. PAYMENT OF CERTAIN COSTS. Landlord and Tenant acknowledge and
agree that construction cost estimates received by Tenant for certain
components of the Tenant Improvements described below are in excess of
amounts contemplated at the time of execution of the Lease. The components of
the Tenant Improvements which are the subject of this Paragraph 1 are: (a)
the installation of a new roof membrane and necessary repairs required to
install a new roof membrane of the premises, but excluding any structural
modifications to the roof which Tenant may desire to perform, (b) the
exterior rear wall of the premises (excluding the installation of any glass
or windows, but including exterior doors), (c) construction of the front
portion of the parking lot which is necessary to install approximately 7,200
square feet of parking improvements to replace a portion of the building to
be removed, and (d) construction of the rear parking lot (such components of
the Tenant Improvements referred to herein as the "Subject Improvements"). In
addition to the Tenant's Improvement Allowance currently set forth in the
Lease in the amount of Five Million Dollars ($5,000,000). Landlord shall
contribute an amount (the "Subject Amount") toward the cost of performing the
approved modifications to and construction of the Subject Improvements equal
to fifty percent (50%) of the difference between: (x) the actual costs
incurred by Tenant to modify or construct the Subject Improvements, less (y)
Five Hundred Thousand Dollars ($500,000). Notwithstanding the preceding
sentence, in no event shall the Subject Amount exceed Two Hundred Fifty
Thousand Dollars ($250,000). Upon Tenant's completion of the Subject
Improvements, Tenant shall deliver to Landlord invoices and other reasonable
supporting documentation requested by
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Landlord required to determine the amount of the costs incurred by Tenant to
modify and/or construct the Subject Improvements. Tenant's determination of
such costs shall be subject to Landlord's approval, which shall not be
unreasonably withheld.
2. METHOD OF PAYMENT. Landlord shall pay the Subject Amount in
accordance with either of the two provisions set forth below:
(a) At such time as Landlord obtains the Tenant Improvement
Loan, Landlord may finance an additional amount as is necessary to obtain the
funds to pay the Subject Amount to Tenant in cash upon the closing of such
financing, provided that Tenant shall have no responsibility with respect to
repayment of such additional loan amount and such amount shall not be
considered a part of the Tenant Improvement Loan for any purpose under the
Lease, or
(b) The potential reduction in monthly Base Rent set forth in
Paragraph 3.2(b) of the Lease, which potential reduction may commence upon
the thirteenth (13th) month following the Rent Commencement Date, shall be
increased to that amount which is necessary to amortize the sum of Five
Hundred Thousand Dollars ($500,000) plus the Subject Amount at an interest
rate of ten percent (10%) per annum over a period of eighteen (18) months.
Such monthly reduction amount shall not exceed Forty-Five Thousand Forty-Two
Dollars and Eighty-One Cents ($45,042.81). The references in such Paragraph
3.2(b) to Five Hundred Thousand Dollars ($500,000) shall be increased to Five
Hundred Thousand Dollars ($500,000), plus the Subject Amount.
3. TENANT'S PAYMENT OF ADDITIONAL COSTS. Landlord and Tenant
mutually intend that Tenant may finance Tenant's share of the additional
costs for the Subject Improvements. Therefore, the Tenant's Improvement
Allowance (as defined in Paragraph 34.1(d) of the Lease) shall be increased
to an amount equal to the sum of Five Million Dollars ($5,000,000), plus the
Subject Amount, but in no event shall the Tenant's Improvement Allowance
exceed Five Million Two Hundred Fifty Thousand Dollars ($5,250,000). In
accordance with the provisions of Lease, the Tenant Improvement Loan shall
also be increased by a similar amount. In the event Landlord is unable to
obtain the Tenant Improvement Loan, as contemplated by the Lease, Tenant
shall fund Tenant's share of the increased cost of the Subject Improvements
in cash together with the other Tenant Improvement Costs.
4. PAYMENT OF COSTS OF ASBESTOS REMOVAL. Landlord and Tenant
acknowledge and agree that the Landlord's Work (as defined in Paragraph
34.1(a) of the Lease) currently includes removal and/or abatement of asbestos
containing materials located in the interior of the premises or on the roof
thereof. The obligation to remove and/or xxxxx any asbestos containing
materials which may be located in the interior of the premises or on the roof
thereof shall be deleted from the Landlord's Work, and such removal and/or
abatement shall be performed by Tenant. Landlord shall pay any increase in
the costs incurred by Tenant to install and construct the Tenant Improvements
which are caused by
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and directly relate to Tenant's removal and/or abatement of asbestos
containing materials located in the interior of the premises or on the roof
thereof. Such amounts shall be payable within thirty (30) days of Landlord's
receipt of invoices and reasonable supporting documentation requested by
Landlord evidencing the costs incurred by Tenant to perform such removal
and/or abatement.
5. CONFIRMATION OF SATISFACTION OF CERTAIN CONDITIONS. Tenant
acknowledges and agrees that the condition to Tenant's obligations under the
Lease set forth in subparagraph 1(b) has been satisfied, provided that such
satisfaction shall not be completed until Landlord and Tenant have fully
executed this Amendment, and that the condition set forth in subparagraph
1(c) has been fully satisfied.
6. NO FURTHER MODIFICATIONS. Except as expressly set forth
herein, the terms and conditions of the Lease shall remain unmodified and in
full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the date first set forth above.
LANDLORD:
TMT ASSOCIATES, LLC, a California
limited liability company
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Member
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Member
TENANT:
Inhale Therapeutic Systems, a
California corporation
By: /s/ Xxxx Xxxxx Xxxx
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Its: Exec. VP Tech Ops
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