THIRD AMENDMENT TO SUBLEASE
This THIRD AMENDMENT TO SUBLEASE ("Third Amendment") is executed
this 11th day of February, 1999, between ELI LILLY AND COMPANY, an Indiana
corporation ("Sublessor"), and TRIANGLE PHARMACEUTICALS, INC. ("Sublessee").
Recitals
WHEREAS, Sublessor and Sublessee executed a Sublease dated January
18, 1996, pursuant to which Sublessor subleased to Sublessee a portion of the
building commonly known as 4611 University Drive, Durham, North Carolina, which
Sublease has heretofore been amended by amendments dated as of March 1, 1996,
and August 2, 1997, respectively, executed by Sublessor and Sublessee (the
Sublease as heretofore amended is hereinafter referred to as the "Sublease").
WHEREAS, Sublessor and Sublessee desire to further amend the
Sublease in the manner set forth in this Third Amendment; and
WHEREAS, all terms used in this Third Amendment with initial capital
letters and not otherwise defined herein shall have the respective meaning
ascribed to them in the Sublease.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, Sublessor and Sublessee agree as follows:
Agreement
1. From and after the date that this Third Amendment is fully
executed and consented to in a consent agreement (the "Consent") between
Sublessor, Sublessee, and GRA Durham Associates Limited, LLC ("Prime Landlord")
and the UP5 Space (defined below) delivered to Sublessee, the Entire Premises is
expanded to include all of the building commonly known as University Place V,
located at 4615 University Drive, Durham, North Carolina, consisting of
approximately 48,824 rentable square feet of space (the "UP5 Space"), and such
UP5 Space shall thereafter constitute a part of the premises leased pursuant to
the Sublease for the remaining portion of the Extended Term for all purposes of
the Sublease. In the event that the UP5 Space has not been delivered to
Sublessee with the Prime Landlord's consent on or before March 1, 1999,
Sublessee shall have the right to terminate this Third Amendment. The Entire
Premises subleased by Sublessee from Sublessor, consisting of 51,302 rentable
square feet in the building commonly known as 4611 University Drive, Durham, NC,
as such term is defined prior to this Third Amendment, shall be hereafter
referred to as the "UP4 Space".
2. From and after the date that this Third Amendment is fully
executed, the Consent is fully executed, and the UP5 Space is delivered to
Sublessee, Section 6 and Section 7 of the Sublease are deleted in their entirety
and replaced with the following:
The Rent payable by Sublessee to Sublessor for the UP5 Space shall
be as follows:
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PERIOD ANNUAL RENT
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02/01/99 - 12/31/99 512,001
01/01/00 - 12/31/00 1,023,839
01/01/01 - 12/31/01 1,017,980
01/01/02 - 12/31/02 1,035,557
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01/01/03 - 09/30/03 766,415
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The Rent payable by Sublessee to Sublessor for the UP4 Space shall
be as follows:
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PERIOD ANNUAL RENT
--------------------- -----------------
02/01/99 - 12/31/99 680,595.67
01/01/00 - 12/31/00 760,704.00
01/01/01 - 12/31/01 783,108.00
01/01/02 - 12/31/02 800,823.00
01/01/03 - 09/30/03 617,163.06
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The Rent thus payable by Sublessee to Sublessor for the Entire
Premise shall be as follows:
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PERIOD ANNUAL RENT
--------------------- -----------------
02/01/99 - 12/31/99 1,192,596.68
01/01/00 - 12/31/00 1,784,543.00
01/01/01 - 12/31/01 1,801,088.00
01/01/02 - 12/31/02 1,836,380.00
01/01/03 - 19/30/03 1,383,578.06
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The Rent to be paid as provided in this Paragraph 2 shall be paid in equal
monthly installments, in the manner set forth in the Sublease and shall be pro
rated for partial months.
3. Section 10 of the Sublease is deleted in its entirety and
replaced with the following:
"NET LEASE: This Sublease is a "net lease", subject to the
qualifications contained in this Section 10 and elsewhere in the
Sublease. The Rent is a net rental payment and all costs of
maintenance, repairs, utilities, and any and all other expenses
necessary in connection with the operation or maintenance of the
Entire Premises, as imposed on Sublessor, or as Sublessor is
otherwise obligated to pay, as tenant under the Lease, will be paid
solely by Sublessee during the Extended term of the Sublease.
Notwithstanding the above, Sublessor shall continue to pay common
area costs and expenses, as provided in Section 6(B) of the lease
and real estate taxes as provided in Section 8 of the Lease, and
shall provide casualty insurance coverage as provided in Section
9(B) of the Lease. Without in any way limiting the generality of
this Section 10, except as provided in the preceding sentence, the
terms, provisions, covenants and conditions of the third grammatical
paragraph of Section 6(A) of the Lease are applicable to this
Sublease with the same force and effect as if Sublessee was the
Tenant under the Lease and Sublessor was the Landlord under the
Lease."
4. Sublessee has recently completed a diagnostic evaluation of the
HVAC system for the Entire Premises (the "Evaluation"). Sublessor shall pay to
Sublessee an improvement allowance
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of fifty thousand and no/100 ($50,000.00), within thirty (30) days after the
effective date of this Third Amendment, for repairs or replacements recommended
as a result of such Evaluation (the Evaluation, together with the work done
pursuant thereto, is hereinafter referred to collectively as the "HVAC Work").
In the event such allowance is not delivered to Sublessee within said thirty
(30) days, Sublessee shall have the right to offset such amounts against rents
due under the Sublease. It is understood that among the HVAC Work to be done
will be repairs of existing systems, the purchase and installation of additional
units, and a modification to the HVAC system necessary to bring the system into
year 2000 compliance (meaning able to effectively process data, including dates,
in order to operate and function property on and after January 1, 2000). It is
expressly understood that Sublessee is not obligated to do all of the work
recommended in the Evaluation nor does Sublessee need to proceed with all of the
HVAC Work all at one time. Sublessee shall provide Sublessor with copies of paid
receipts showing its direct expenses arising from the HVAC Work until Fifty
Thousand and No/100 Dollars ($50,000.00) worth of work is completed and shall
return the excess balance of this allowance, if any, with thirty (30) days of
the completion of the HVAC Work. The HVAC Work shall be done in compliance with
all provisions of the Sublease. Sublessor has received a copy of, and approved,
the Evaluation and agrees that the HVAC Work to be done shall be based upon the
recommendations resulting from the Evaluation.
5. The provisions of Section 19 of the Sublease shall be and are
modified as provided in this Paragraph 5. The FFE and tenant improvements in the
Entire Premises shall, upon the satisfaction of the conditions described in
Section 1 and the expansion of the Entire Premises to include the UP5 Space,
become the property of Sublessee, and shall be transferred from Sublessor to
Sublessee for the consideration of the making of the Sublease and one dollar
($1.00) in hand paid. Sublessor shall execute a bill of sale or such similar
documentation to evidence the transfer of the FFE and tenant improvements to
Sublessee.
6. All of the provisions of the Sublease, except as herein expressly
amended and modified, shall remain in full force and effect. This Third
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
7. Upon the full execution of this Third Amendment, Sublessor and
Sublessee shall enter into an amendment to memorandum of lease, to be recorded
at Sublessee's expense at the Durham County Registry.
8. This Third Amendment shall not be effective unless and until the
Consent is fully executed.
9. Without limiting other portions of this Third Amendment, the
provisions of Section 28 of the Sublease shall apply to the Entire Premises and
Sublessee shall further be permitted, without further consent, to sublease
portions of the Entire Premises to Trimeris, Inc.
10. Notwithstanding anything in the Sublease to the contrary,
Sublessee shall not be required to remove alterations to the UP5 Space, or other
portions of the Entire Premises, if such alterations and improvements were
approved in accordance with the Sublease, unless at the time of such approval
Sublessee is notified by Sublessor or Prime Landlord that such removal will be
required. The foregoing provisions shall not affect Sublessee's obligation under
paragraph 10 of the Sublease to remove any alterations or improvements for which
Sublessor's or Prime Landlord's consent was not required to be obtained.
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IN WITNESS WHEREOF, the parties have executed this Third Amendment
as of the date above written.
ELI LILLY AND COMPANY
By: /s/ Michael L. Eagle
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Its: VP, Manufacturing
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TRIANGLE PHARMACEUTICALS INC.
By: /s/ Chris A. Rallis
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Its: Vice President, Business
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Development and General Counsel
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