EXHIBIT 10.7
SUBLEASE
1. PARTIES. This Sublease ("Sublease") is entered into as of the 3rd
day of April 1997, by and between Aerogen, Inc., ("Sublessee"), and Microbar,
Inc., ("Sublessor"), as a Sublease under the Lease dated December 17, 1996,
("Master Lease") entered into by The Realty Associates Fund III, L.P., as
Lessor ("Master Lessor"). A copy of the Master Lease is attached hereto,
marked Exhibit "A," and incorporated herein by reference. Pursuant to the
Master Lease, Sublessor leases from Master Lessor approximately 75,000 of
space (the "Original Premises") located in those certain buildings
("Buildings") at 0000 Xxxxxxx Xxxxx and 0000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx. Except as otherwise expressly provided herein, any capitalized
terms used herein and not defined, shall have the same meaning as they have
in the Master Lease.
2. PROVISIONS CONSTITUTING SUBLEASE.
A. This Sublease is and at all time shall be subject and
subordinate to the Master Lease. Sublessee shall take no action which would
cause Sublessor to be in default of its obligations under the Master Lease,
and Sublessee shall assume and perform all of its obligations under this
Sublease, (including those obligations of Sublessor under Master Lease that
are incorporated herein and are the obligation of Sublessee) and Sublessee
shall indemnify and hold Sublessor harmless from and against all liability,
costs, damages, claims, demands and expenses, including reasonable attorneys'
fees and costs, arising out of Sublessee's failure to do so. Sublessor shall
fully perform all of its obligations under the Master Lease (except to the
extent any of the same are the obligation of Sublessee hereunder) and shall
indemnify and hold Sublessee harmless from and against all liability, costs,
damages, claims, demands and expenses, including reasonable attorneys' fees
and costs, arising out of Sublessor's failure to do so. Each party's
obligations under this Paragraph 2.A shall survive the expiration or earlier
termination of this Sublease. Upon any termination of the Master Lease, this
Sublease shall terminate concurrently therewith except as otherwise provided
in the Consent of Landlord to Sublease and without any liability of Sublessor
to Sublessee; provided, however, that a lease termination due to Sublessor's
default of its obligations under the Master Lease or this Sublease, shall be
subject to the indemnification set forth above. Sublessor shall not enter
into any amendment or modification of the Master Lease materially adversely
affecting Sublessee's use of or right to possession of the Premises (as
defined below) without the prior written consent of Sublessee which will not
be unreasonably withheld (and except as may be specifically permitted by this
Sublease). Notwithstanding the foregoing, Sublessor shall have the right, at
its sole election, to exercise any discretionary right to terminate the
Master Lease granted Sublessor in the Master Lease as of the date hereof.
B. All of the terms and conditions contained in the Master Lease
which are not in conflict with the provisions of this Sublease are
incorporated herein with respect to
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the Premises, except for Article 1 paragraphs 5, 6, 7, 8, 9, 10, 11, 12, 15
and 18, Article III (but excepting Section 3.7 from this exclusion), Section
4.6, Section 12.1, Article XX, Section 21.1, Exhibits A and D, and paragraphs
1 through 5.7 through 10, 11(a), 11(g) and 11 (h) of the Addendum to Lease,
as terms and conditions of this Sublease (with each reference therein to
Lessor and Lessee to be deemed to refer to Sublessor and Sublessee and each
reference therein to Commencement Date shall mean the Commencement Date as
used in this Sublease), and along with all of the following paragraphs set up
in this Sublease shall be the complete terms and conditions of this Sublease.
With respect to obligations or services to be performed or provided by Master
Lessor under the Master Lease including without limitation those set forth in
Articles IX, X, XII and XIII, Sublessee agrees Sublessor's sole obligation
shall be to exercise reasonable efforts to require Master Lessor to comply
with such obligations as provided in Section 18 hereof.
3. PREMISES. Sublessor leases to Sublessee, and Sublessee hires from said
Sublessor, subject to the terms and conditions contained herein, approximately
25,000 square foot of space, located at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx of
Santa Clara, California, (the "Premises"), as more particularly shown on Exhibit
B attached hereto.
4. TERM.
4.1 TERM. The term of this Sublease shall be for a period commencing on
that date which is forty-five (45) days after the full execution of this
Sublease, and the consent thereto of Master Lessor (the "Commencement Date"),
and ending on that date which is one day prior to the third anniversary of the
Commencement Date, provided that if such date does not fall on the last day of a
calendar month the term shall be extended to the last day of such month, or such
earlier date as the Master Lease may be terminated pursuant to the terms
thereof. The parties agree to execute a writing memorializing the Commencement
Date once it has been established. Sublessee shall be obligated to accept
possession of the Premises on the Commencement Date whether or not the Tenant
Improvements (as defined herein) have been substantially completed.
4.2 DELAY IN COMMENCEMENT. Notwithstanding said Commencement Date, if
for any reason Sublessor cannot delivery possession of the Premises to Sublessee
on such date, Sublessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Sublease or the obligations of
Sublessee hereunder or extend the term hereof, but in such case Sublessee shall
not be obligated to pay rent until possession of the Premises is delivered to
Sublessee; provided, however, that if Sublessor shall not have delivered
possession of the Premises within thirty (30) days from such Commencement Date,
Sublessee may, at Sublessee's option, by notice in writing to Sublessor, cancel
this Sublease by providing written notice thereof to Sublessor within ten (10)
days after the expiration of the aforesaid thirty (30) day period. Effective
immediately, if this Sublease is canceled as herein provided, Sublessor shall
return any monies previously deposited by Sublessee and the parties shall be
discharged from all obligations hereunder.
4.3 EARLY POSSESSION. Upon full execution of this Sublease and delivery
of the Letter of Credit in accordance with Section 8 B., Sublessor shall permit
Sublessee to
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occupy the Premises for the purpose of constructing the Tenant Improvements
prior to the Commencement Date subject to all of the provisions of this
Sublease except the obligation to pay rent. Such early possession shall not
advance the termination date of this Sublease.
5. RIGHT OF FIRST REFUSAL TO EXTEND: Sublessee will have a one-time
right of first offer to extend the Sublease, if Sublessor determines that it
will not utilize the subject premises for any length of time after the
expiration date of the Sublease term. Sublessor will notify Sublessee that
the space is available, and on what terms Sublessor would be willing to
sublease the space not later than September 30, 1999. Except as modified by
any terms specifically addressed in Sublessor's Notice, the terms of the
Sublease will apply to the space. Sublessee will have 10 business days to
notify Sublessor of Sublessee's election to extend the Sublease. If Sublessee
exercises its right to sublease the space, Sublessor and Sublessee will amend
the Sublease, modify the rent and other Sublease terms affected by the
extension of the Sublease. If, however, Sublessee elects not to lease the
space or Sublessee fails to notify Sublessor of Sublessee's election to lease
the space within a 10 business-day period, Sublessor will have the right to
sublease the space to a third party without further notice to Sublessee.
6. TENANT IMPROVEMENTS: Subject to Sublessee's satisfaction of the
condition set forth in Section 8 B. and this Section 6, Sublessor agrees to
fund $100,000 (the "Allowance") of the cost of the Tenant Improvements
described and referred to in Exhibit C attached hereto. Notwithstanding the
foregoing or anything contained herein to the contrary, Sublessor's
obligation to fund the Allowance or any portion thereof shall be subject to
the condition precedent that Sublessor receives the Allowance from Master
Lessor in accordance with the Master Lease. Provided Sublessor has received
such funds from Master Lessor, Sublessor agrees to reimburse Sublessee for
costs incurred by Sublessee to construct the Tenant Improvements described on
Exhibit C attached hereto (collectively, the "Tenant Improvements") in an
amount not to exceed $100,000, provided further that (a) prior to commencing
construction of the Tenant Improvements, Sublessee has obtained Sublessor's
and Master Lessor's approval of the Tenant Improvements and the plans and
specifications therefor in writing; (b) if requested by Master Lessor,
Sublessee has furnished Master Lessor with a lien and completion bond in form
and amount reasonably satisfactory to Sublessor and Master Lessor (provided
Sublessor may not withhold its approval if Master Lessor approves); (c)
Sublessee has entered into a contract with McClarney Construction as general
contractor for the construction of the Tenant Improvements; (d) Sublessee's
architect shall have delivered a written certificate to Sublessor that the
Tenant Improvements identified in the Request for Payment have been
substantially completed in accordance with the approved plans and
specifications; (e) Sublessor has received fully executed unconditional lien
waivers as to work which was subject of prior Request for Payments and
conditional lien waivers as to current work in the form prescribed by law
from Sublessee's contractor, all subcontractors and suppliers furnishing
labor or materials with respect to the Tenant Improvements; (f) Sublessee has
constructed the Tenant Improvements in accordance with the requirements of
the Master Lease and this Sublease, and with all applicable laws, codes,
permits, and the Americans with Disabilities Act; (g) Sublessee has furnished
its Request for Payment no later than July 3, 1997; and (h) Sublessee has
complied with the
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terms of the Master Lease respecting the Tenant Improvements. All work to be
performed by Sublessee pursuant hereto shall be performed in good and
workmanlike manner using new materials. Sublessee agrees to use reasonable
efforts to complete the Tenant Improvements prior to the Commencement Date or
within a reasonable time period following the Commencement Date.
7. RENT. Rent shall commence on the Commencement Date (as defined
herein). The monthly rent shall be payable in advance on the first day of
each calendar month as follows:
Base Rent:
Months 01-12 $1.40 per square foot per month NNN ($35,000.00 per month)
Months 13-24 $1.45 per square foot per month NNN ($36,250.00 per month)
Months 25-36 $1.50 per square foot per month NNN ($37,500.00 per month)
Sublessee shall pay Sublessor upon the execution hereof the sum of
Thirty-five Thousand Dollars ($35,000.00) as rent for the first month of the
Term. Rent for any period during the term hereof which is less than one month
shall be a pro-rata portion of the monthly installment. In addition to base
rent, Sublessee shall pay as additional rent ("Additional Rent") within three
(3) days after demand all other amounts payable by Sublessor under the Master
Lease (other than the Monthly Rent referred to in paragraph 1.9 of the Lease)
which are incurred at the request of Sublessee or which are applicable to the
Premises. It is the intent of the parties that Sublessee shall pay all costs
and expenses relating to the Premises which arise under the Master Lease,
whether or not such costs and expenses are specifically referred to herein.
Rent shall be payable to Sublessor in lawful money of the United
States, without prior notice, demands, or offset.
In the event of any casualty or condemnation affecting the Premises,
rent payable by Sublessee shall be abated hereunder, but only to the extent that
rent under the Master Lease is abated with respect to the Premises. Sublessee
waives any right to terminate the Sublease in connection with such casualty or
condemnation except that to the extent such right is granted Sublessor under the
Master Lease, Sublessee shall have the same right with respect to the
termination of this Sublease.
8. SECURITY DEPOSIT PROVISIONS.
A. Upon the execution of this Sublease, Sublessee shall deposit with
Sublessor a cash security deposit in the amount of thirty-seven thousand five
hundred dollars ($37,500.00) (the "Security Deposit"). Sublessor may apply all
or part of the Security deposit to any unpaid rent or other charges due from
Sublessee or to cure any other defaults of Sublessee. If Sublessor uses any part
of the Security Deposit, Sublessee shall restore the Security Deposit to its
full amount within thirty (30) days after Sublessor's written request. No
interest shall be paid on the Security Deposit. Sublessor shall not be required
to keep the Security Deposit separate from its other accounts and no trust
relationship is created with respect to the Security Deposit. Sublessor shall
refund
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the unused portion of the Security Deposit to Sublessee within thirty (30)
days after the expiration or earlier termination of this Sublease.
B. In addition to the Security Deposit, Sublessee shall deliver to
Sublessor, promptly after the date that Master Lessor consents to this Sublease,
an irrevocable unconditional standby letter of credit made payable to Sublessor
in the amount of ninety thousand dollars ($90,000) (the "Letter of Credit") as
additional security for the performance of Sublessee's obligations under this
Sublease. The Letter of Credit shall be issued by a bank selected by Sublessee,
and approved by Sublessor, and shall be in form acceptable to Sublessor, with an
expiration date no less than one (1) year after issuance, and shall permit
Sublessor to draw on the Letter of Credit by presentation of a sight draft in an
amount equal to the extent of costs to cure a breach or default of this Sublease
by Sublessee, provided Sublessor has given Sublessee any notice and grace period
required under this Sublease with respect thereto. The Letter of Credit also
shall provide that if it is not renewed or replaced with a substitute letter of
credit no later than twenty (20) business days before the expiration date of the
Letter of Credit, then Sublessor may draw down the Letter of Credit. Within
thirty (30) days after the expiration or earlier termination of this Sublease or
as soon thereafter as is practical, Sublessor shall return to Sublessee the
original or replacement Letter of Credit, or so much thereof as remains after
curing any defaults of Sublessee hereunder, including without limitation, any
failure to surrender the Premises in the condition required pursuant to Section
19 hereof.
C. Sublessor's obligations under this paragraph 8 shall survive the
expiration or earlier termination of this Sublease.
9. SIGNAGE: Sublessee has the right to monument signage in appropriate
locations (subject to city and Master Lessor approval).
10. USE. The Premises shall be used and occupied only for research and
development purposes, sales of medical devices and other legal related uses.
11. BROKERS. Sublessor and Sublessee each represent and warrant to the
other that it has dealt only with CPS as brokers ("Brokers") in connection
with this Sublease transaction. Each of the Sublessor and Sublessee shall
indemnify and hold harmless the other from and against any and all claims,
liabilities, losses, damages, costs and expenses (including, without
limitation, attorneys fees) arising out of or related to any breach of such
party's representation and warranty set forth in this Paragraph 11. The
commission due to Brokers pursuant to this lease transaction shall be paid
per separate agreement by Sublessor.
12. CONDITION OF PREMISES. Sublessee hereby accepts the Premises in their
"as-is" condition existing as of the date hereof, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing
and relating to the use of the Premises, and accepts this Sublease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto.
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13. PARKING. Sublessee shall be entitled to 25% of all on-site parking
spaces provided at the Project.
14. REPRESENTATIONS AND WARRANTIES. Sublessor hereby represents and
warrants to Sublessee as follows: the copy of the Master Lease attached
hereto as Exhibit "A" is accurate and complete; the Master Lease constitutes
the entire agreement between Master Lessor and Sublessor with respect to the
Premises; there are no defaults under the Master Lease, and to the best of
Sublessor's knowledge, no event has occurred which, with the passage of time,
the giving of notice, or both, would constitute a default under the Master
Lease; and Sublessor has not assigned or sublet the Premises to any other
party, nor has Sublessor encumbered the Premises or its leasehold estate
pursuant to the Master Lease.
15. COUNTERPARTS. This Sublease may be signed in multiple counterparts
which, when signed by all parties, shall constitute a binding agreement.
16. ATTORNEYS' FEES. In any action between the parties arising out of
this Sublease, the prevailing party in the action shall be entitled, in
addition to damages, injunctive relief or other relief; to its reasonable
costs and expenses including, without limitation, costs and reasonable
attorneys' fees fixed by the court.
17. OBTAINING MASTER LESSOR'S CONSENT. Sublessor shall use commercially
reasonable efforts to obtain Master Lessor's consent to this Sublease
pursuant to the Master Lease. If Sublessor fails to so obtain Master,
Lessor's consent substantially in the form of Exhibit F attached hereto on or
before May 9, 1997, then Sublessee, at its option, shall have the right to
terminate this Sublease by delivering to Sublessor at any time thereafter
written notice of Sublessee's election, In such event, Sublessor shall
immediately return to Sublessee all amounts previously paid by Sublessee to
Sublessor under this Sublease.
18. SUBLESSOR'S OBLIGATIONS. To the extent that the provision of any
services or the performance of any maintenance or any other act (singly
and/or collectively, "Master Lessor Obligations") is the responsibility of
Master Lessor, Sublessor, upon Sublessee's request, shall make reasonable
efforts to cause Master Lessor to perform such Master Lessor Obligations;
provided, however, that in no event shall Sublessor be liable to Sublessee
for any liability, loss or damage whatsoever in the event that Master Lessor
shall fail to perform the same, nor shall Sublessee be entitled to withhold
rent or terminate this Sublease.
Except as provided in this paragraph 18, Sublessee acknowledges that
Sublessor is not in a position to furnish the services set forth in the Master
Lease, obtain a nondisturbance agreement, or to perform certain other
obligations which are not within Sublessor's control, including without
limitation, maintenance, repairs and replacements, compliance with laws, and
restoration of the Premises or Buildings after casualty or condemnation.
Notwithstanding anything to the contrary contained therein, Sublessee agrees to
look solely to the Master Lessor to furnish and perform all services and
obligations of Master Lessor under the Master Lease.
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19. SURRENDER OF PREMISES. Notwithstanding anything in the Sublease or
Master Lease to the contrary, Sublessee agrees to surrender the Premises at
or upon the expiration or termination of this Sublease in shell condition
with all Tenant Improvements demolished and free of debris, as more
particularly described in Exhibit D attached hereto.
SUBLESSOR: MICROBAR, INC. SUBLESSEE: AEROGEN, INC.
By: /S/ Xxxxx X. Xxxxxxx By: /S/ Xxxxxx Xxxxx
---------------------------- ----------------------------
Title: C.F.O Title: C.E.O
------------------------- -------------------------
Date: 4/25/97 Date: 4/25/97
-------------------------- --------------------------
CONSENT BY MASTER LESSOR: See attached Exhibit F.
Exhibit A - Master Lease
Exhibit B - Premises
Exhibit C - Tenant Improvements
Exhibit D - Sublessee's Surrender Obligations
Exhibit E - Sublessee's Environmental Questionnaire
Exhibit F - Consent of Master Lessor
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AMENDMENT NO. 1 TO
SUBLEASE
This Amendment Xx. 0 ("Xxxxxxxxx Xx. 0") dated for reference purposes only July
1, 1999 amends as set forth below that certain Sublease, dated as of April 3,
1997 (the "Sublease") by and between MICROBAR, INC. ("Sublessor") and AEROGEN,
INC. ("Sublessee"). Capitalized terms not defined herein shall have the same
meaning as defined in the Sublease unless the context requires otherwise.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublessor and Sublessee covenant and agree as follows:
AGREEMENT
1) Sublessor and Sublessee hereby agree to the following modifications to
the Sublease.
a) SECTION 4.1. TERM is hereby amended so that the expiration date of
the Sublease shall be December 31, 2001.
b) Section 5. Right Of First Offer To Extend is hereby amended to
read as follows:
"If Sublessor does not need of the Premises for its own business
purposes, which need shall be determined in Sublessor's sole and
absolute discretion (i.e. if the space becomes available to lease
to any third party), then Sublessee will have a one-time right of
first offer to extend the term of this Sublease for a period of
one (1) year. If Sublessor will not need the Premises beyond the
initial term hereof, Sublessor will notify Sublessee on or prior
to May 30, 2001 that the space will become available, and on what
terms Sublessor would be willing to sublease the space. Except as
modified by any terms specifically addressed in Sublessor's
Notice, the terms of the Sublease will apply to the space.
Sublessee will have 30 business days to notify Sublessor of
Sublessee's election to extend the Sublease. If Sublessee
exercises its right to sublease the space, Sublessor and Sublessee
will amend the Sublease, modify the rent and other Sublease terms
affected by the extension of the Sublease. If, however, Sublessee
elects not to lease the space or Sublessee fails to notify
Sublessor of Sublessee's election to lease the space within a 30
business-day period, Sublessor will have the right to sublease the
space to a third party without further notice to Sublessee. In the
event that Sublessor does not notify Sublessee on or prior to May
30, 2001 that the space will become available, then Sublessee
shall have no further rights hereunder."
c) SECTION 7. RENT is hereby amended to read as follows:
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Months 01-12 $1.40 per square foot per month NNN ($35,000.00 per month)
Months 13-24 $1.45 per square foot per month NNN ($36,250.00 per month)
Months 25-36 $1.50 per square foot per month NNN ($37,500.00 per month)
Months 37-48 $1.55 per square foot per month NNN ($38,750.00 per month)
Months 49- expiration $1.60 per square foot per month NNN ($40,000.00 per month)
d) Section 8.B. is hereby amended to that if there has been no
default under this Sublease, then upon the natural expiration of
the Letter of Credit in effect at the time of this Amendment, the
amount required for a replacement Letter of Credit shall be
seventy thousand dollars ($70,000.00).
e) SECTION 19. SURRENDER OF PREMISES is hereby amended to read as
follows:
"Notwithstanding anything in the Sublease or Master Lease to the
contrary, at or upon the expiration or earlier termination of this
Sublease, Sublessee agrees to surrender (i) the lab/manufacturing
area of the Premises (as shown in Exhibit A) in shell condition
with all Tenant Improvements demolished and free of debris, if so
requested by Sublessor and otherwise in its as-improved condition,
less lab cabinets (ii) the office portion of the Premises in its
as-improved condition."
f) SECTION 20. CROSS DEFAULT. is hereby added and shall read as
follows:
"Any default hereunder shall also be deemed to be a default under
that certain sublease by and between Sublessor and Sublessee for
those certain premises located at 0000 Xxxxxxx Xxxxx, dated as of
July 1, 1999."
2) Except as set forth in this Amendment No. 1, the Sublease continues in
full force and effect according to its terms.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the
date set forth above.
SUBLESSOR: MICROBAR, INC. SUBLESSEE: AEROGEN, INC.
By: /S/ Xxxxx X. Juhdlo By: /S/ Xxxx X. Xxxx
---------------------------- ----------------------------
(signature) (signature)
By: XXXXX X. JUHDLO By: XXXX X. XXXX
---------------------------- ----------------------------
(printed name) (printed name)
Its: C.E.O Its: C.E.O.
---------------------------- ----------------------------
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CONSENT OF MASTER LESSOR
THE REALTY ASSOCIATES FUND III, L.P., the Master Lessor under the Sublease
hereby consents to the foregoing Amendment No. 1 to the Sublease.
Master Lessor:
THE REALTY ASSOCIATES FUND III, L.P.
By:
------------------------------------------
(signature)
Name:
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Title:
---------------------------------------
Date:
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EXHIBIT A - AMENDMENT TO LEASE
0000 XXXXXXX XXXXX
[GRAPHIC]
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