EXHIBIT 10.16
FOURTH AMENDMENT TO SUBLEASE AND LEASE AGREEMENT
THIS FOURTH 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 5th day of November, 1997.
RECITALS
A. Landlord and Tenant have entered into that certain Sublease
and Lease Agreement (the "Original Lease") dated October 2, 1996, as amended
by that certain First Amendment to Sublease and Lease Agreement (the "First
Amendment") dated October 30, 1996, that certain Letter Agreement dated April
9, 1997, and that certain Third Amendment to Lease dated April 16, 1997
(collectively the "Existing Lease"). All capitalized terms used herein shall
have the same meaning ascribed to them in the Existing Lease, unless
expressly defined in this Amendment.
B. Landlord and Tenant desire to modify certain provisions of the
Existing Lease as set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant hereby agree as follows:
1. Landlord's Obligation to Reimburse Tenant for Costs Incurred By
Tenant in Performing Landlord's Obligations.
(a) DELETION OF SECTION 4 OF THE FIRST AMENDMENT. Section 4
of the First Amendment provides that Tenant shall remove and/or xxxxx
asbestos containing materials located in the interior of the premises or on
the roof thereof ("ACM"). Such paragraph provides that Landlord shall pay the
costs of such removal and/or abatement within thirty (30) days of receipt of
invoices regarding the costs thereof. Landlord and Tenant desire to modify
such method of payment, and the cost reimbursement provisions of Section 4
of the First Amendment are hereby deleted. The cost reimbursement provisions
of this Section 1 shall supersede and fully replace the provisions of Section
4 of the First Amendment.
(b) TENANT'S COSTS INCURRED IN CONNECTION WITH PERFORMANCE OF
LANDLORD'S OBLIGATIONS AND ADJUSTMENT TO DECEMBER RENT. Tenant has incurred
the amount of $235,197.00 (referred to herein as the "First Portion of the
Reimbursable Amount") in connection with the performance of certain work for
which Landlord has agreed to reimburse Tenant, including, without limitation,
abatement of ACM, abatement of lead, repair of damage caused by Landlord's
contractor, demolition of canopy, installation of sidewalk, clean-up,
demolition of storage shed, and certain building and fire code compliance
work. Landlord's payment of the First Portion of the Reimburseable Amount
shall satisfy all of Landlord's reimbursement obligations to Tenant with
respect to lead abatement in Phase I of the Building.
1.
The Base Rent under the Lease is intended to increase to $59,150 effective in
January 1998. As an accommodation to Landlord, Tenant has agreed to increase
the December 1997 Base Rent to $59,150, provided that Landlord reimburses
Tenant the amount of $18,850 (referred to herein as the "Second Portion of
the Tenant's Reimbursable Amount"). The First Portion of the Reimbursable
Amount and the Second Portion of the Tenant's Reimbursable Amount are
collectively referred to herein as the "Reimbursable Amount".
(c) REDUCTION IN RENT OR TENANT REIMBURSABLE AMOUNT.
Beginning on January 1, 1998, Tenant shall be entitled to deduct from the
rental amount due each month, an amount necessary to amortize the
Reimbursable Amount over a period of twelve (12) months at an annual interest
rate of ten per cent per annum, with interest commencing to accrue on January
1, 1998.
(d) REPAYMENT OF ALL OUTSTANDING TENANT REIMBURSABLE AMOUNT
UPON SALE OR REFINANCING. Notwithstanding Tenant's right to reduce the rent
in accordance with Section 1(b), above, Landlord shall repay to Tenant all
unpaid Tenant Reimbursable Amount, plus all accrued and unpaid interest, upon
the closing of a financing or sale of Landlord's interest in the real
property subject to the Lease (the "Property"). Upon such payment, the offset
right in Paragraph 1(c) shall terminate.
2. "SUBJECT IMPROVEMENTS" UNDER FIRST AMENDMENT. Section 1 of the
2.
First Amendment provides that Landlord shall contribute an amount equal to
fifty percent (50%) of the difference between (x) the actual costs incurred
by Tenant to modify or construct the Subject Improvements (as defined
therein), less (y) Five Hundred Thousand Dollars, but in no event more than
$250,000. The amounts which Landlord is required to pay under Section 1 of
the First Amendment are referred to herein as the "Landlord's Portion of
Shared Costs". Section 2 of the First Amendment provides two methods for
Landlord to repay Landlord's Portion of Shared Costs. Section 2 of the First
Amendment is hereby deleted and replaced with the provisions of this
Paragraph 2 of this Fourth Amendment.
(a) RENTAL REDUCTION IN CONNECTION WITH LANDLORD'S PORTION OF
SHARED COSTS. Beginning on January 1, 1999, Tenant shall be entitled to
deduct from the rental amount due each month, an amount necessary to amortize
the Landlord's Portion of Shared Costs over a period of eighteen (18) months
at an annual interest rate of ten per cent per annum, such interest to
commence accruing as of July 1, 1998.
(b) REPAYMENT OF LANDLORD'S PORTION OF SHARED COSTS UPON
SALE OR REFINANCING. Notwithstanding Tenant's right to reduce the rent in
accordance with Section 2(a), above, Landlord shall repay to Tenant any
unpaid Landlord's Portion of Shared Costs, plus all accrued and unpaid
interest, upon the closing of a financing or sale of Landlord's interest in
the Property. Upon such payment, the offset right in Paragraph 2(a) shall
terminate.
3. EXTENSION OF DUE DATE OF $5,000,000 LOAN. In consideration for
Tenant's agreement to extend the due date of the April 14, 1997 Secured
Promissory Note in the amount of $5,000,000 (the "Note") until the earlier of
(i) December 31, 1997, or (ii) the date upon which financing or sale of
Landlord's interest in the Property in consummated, Landlord and Tenant have
agreed to the modifications to the Lease described herein.
4. NO FURTHER MODIFICATIONS. Except as expressly set forth
herein, the terms and conditions of the Existing Lease shall remain
unmodified and in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth
Amendment as of the date first set forth above.
LANDLORD: TENANT:
TMT ASSOCIATES, LLC. INHALE THERAPEUTIC SYSTEMS,
a California limited liability company a California corporation
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxx Xxxxx Xxxx
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Its: Member Its: Chief Operating Officer
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3.
