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EXHIBIT
10.7
AMENDMENT TO OFFICE
LEASE AGREEMENT
Seaport Centre
East
700-750 Chesapeake
Drive
Redwood City,
California
THIS AMENDMENT TO OFFICE
LEASE AGREEMENT (“ Amendment ”) is dated as of
April 3, 2007 (the “ Effective Date ”), and
is entered into by SLOUGH REDWOOD CITY, LLC, a Delaware limited
liability company (“ Landlord ”) and EMPHASYS
MEDICAL, INC., a Delaware corporation (“ Tenant
”), with reference to the following facts:
Recitals
A. Landlord (as successor to
CA-Seaport Centre Limited Partnership) and Tenant are parties to an
Office Lease Agreement dated as of October 31, 2003 (the
“ Initial Lease ”), covering premises consisting
of 12,309 rentable square feet (the “ Initial Premises
”) located in the one-story building commonly known as 700
Chesapeake Drive (Building 19) (the “ Building
”) in the project formerly known as Seaport Centre East and
presently part of the Britannia Seaport Centre, Redwood City,
California. The Term of the Initial Lease is scheduled to expire on
April 14, 2010, subject to two 5-year renewal options as set
forth in the Initial Lease.
B. As of the Expansion
Commencement Date (as defined below), Landlord and Tenant wish to
add the “Refusal Space” as defined in the Initial
Lease, consisting of 12,282 rentable square feet located adjacent
to the Initial Premises and comprising the entire remainder of the
Building, to the Premises covered by the Lease for the remainder of
the initial Term of the Lease (as extended by this Amendment) and,
if applicable, for any renewal term duly elected by Tenant under
the Lease. For purposes of this Amendment and of the Lease as
modified by this Amendment, the term “ Expansion
Premises ” shall mean the additional 12,282 rentable
square feet described in the preceding sentence; the term “
Premises ” shall mean and include both the Initial
Premises and the Expansion Premises; and the term “
Lease ” shall mean the Initial Lease as modified by
this Amendment. In connection with the addition of the Expansion
Premises to the Initial Premises pursuant to this Amendment,
Landlord and Tenant also wish to modify certain provisions of the
Initial Lease and certain of their respective rights and
obligations thereunder, all subject to and as more particularly set
forth in this Amendment. As of the Effective Date, this Amendment
modifies and amends the Initial Lease and supersedes any
inconsistent provisions of the Initial Lease with respect to the
matters covered by this Amendment.
C. Capitalized terms used in
this Amendment as defined terms but not specifically defined in
this Amendment shall have the meanings assigned to such terms in
the Initial Lease.
Agreement
NOW, THEREFORE, in
consideration of the mutual agreements contained in this Amendment
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant
agree as follows:
1. Expansion Premises
Included in Premises; Base Rent; Pro Rata Share; Utilities
.
(a) As of the date Landlord
designates, by written notice to Tenant, as the date on which the
Expansion Premises are available for early occupancy by Tenant as
provided in this Amendment (the “ Expansion Commencement
Date ”), the Expansion Premises are added to the Initial
Premises and shall constitute part of the Premises under the Lease
for all purposes, except as otherwise expressly provided herein.
The parties acknowledge that the Expansion Premises are presently
occupied by an existing tenant, which is expected to vacate the
Expansion Premises on April 4, 2007. Landlord will use
reasonable efforts to cause the Expansion Commencement Date to
occur on April 5, 2007 or as soon as practicable thereafter,
but Tenant acknowledges that the Expansion Commencement Date may be
delayed beyond April 5, 2007 to the extent there is any delay
by the existing tenant in its surrender of the Expansion Premises
and its completion of any required decommissioning or closure
procedures with respect to the Expansion Premises, and/or to the
extent that Landlord may require a brief vacancy period (which
Landlord presently estimates at no more than two weeks) in order to
perform any of the work Landlord is required to perform in the
Expansion Premises pursuant to this Amendment and to prepare the
Expansion Premises for tender to Tenant for early access
purposes.
(b) The Base Rent specified
in the Initial Lease for the period through April 14, 2010
shall remain applicable to the Initial Premises and is not affected
by this Amendment. The Base Rent applicable to the Expansion
Premises for the period from the Expansion Commencement Date
through the remainder of the initial Term of the Lease (as extended
by this Amendment), which Base Rent shall be added to the Base Rent
for the Initial Premises to arrive at the total Base Rent payable
for the Premises under the Lease for the period through
April 14, 2010, shall be as set forth in the following table,
and the Base Rent applicable to the entire Premises for the
period from April 15, 2010 through April 14, 2012 (the
period for which the initial Term of the Lease is being extended
pursuant to this Amendment), shall be as set forth in the following
table.
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Period
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Monthly Base
Rental Rate |
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Square
Feet |
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Monthly Base
Rent |
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Through 08/31/07
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none |
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N/A |
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none |
* |
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09/01/07 — 12/31/07
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$ |
2.20 psf |
|
8,000 sf |
|
$ |
17,600.00 |
* |
|
01/01/08 — 04/14/08
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|
$ |
2.20 psf |
|
12,282 sf |
|
$ |
27,020.40 |
* |
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04/15/08 — 04/14/09
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|
$ |
2.30 psf |
|
12,282 sf |
|
$ |
28,248.60 |
* |
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04/15/09 — 04/14/10
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|
$ |
2.40 psf |
|
12,282 sf |
|
$ |
29,476.80 |
* |
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04/15/10 — 04/14/11
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|
$ |
2.50 psf |
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24,591 sf |
|
$ |
61,477.50 |
** |
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04/15/11 — 04/14/12
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$ |
2.60 psf |
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24,591 sf |
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$ |
63,936.60 |
** |
| * |
For Expansion Premises only |
(c) The square footage used
in Paragraph 1(b) above in calculating the monthly base rental
applicable to the Expansion Premises for periods prior to
January 1, 2008, in being less than the entire square footage
of the Expansion Premises, is not meant to imply any limitation on
Tenant’s right or ability to have access to and to use the
entire Expansion Premises during such months, and shall not affect
in any way the calculation of Tenant’s Pro Rata Share under
the Lease (which shall include the entire square footage of the
Expansion Premises,
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beginning on the date specified in
Paragraph 1(e) below). Such reduced square footage in
Paragraph 1(b) merely represents a method of implementing an
economic agreement between the parties with respect to the
calculation of Tenant’s monthly base rental obligation during
the periods prior to January 1, 2008.
(d) Since the Expansion
Premises are the same as the Refusal Space defined in the Initial
Lease, the Right of First Refusal set forth in
Exhibit F to the Initial Lease is superseded by this
Amendment and is of no further force or effect.
(e) Effective as of the
earlier to occur of September 1, 2007 or the date Tem’
commences actual business operations in the Expansion Premises (as
opposed to construction of tenant improvements and performance of
other work in preparation for Tenant’s commencement of actual
business operations in the Expansion Premises), Tenant’s Pro
Rata Share under the Lease shall be increased from 6.9928% to
13.2545% , based on a rentable square footage of 24,591
square feet for the Premises and on a rentable square footage of
185,529 square feet for the six buildings located at 200, 400, 600,
700, 800 and 900 Chesapeake Drive. For purposes of Expenses and/or
Taxes which are billed and allocated on a per-building basis rather
than for the entire 6-building Chesapeake campus, however,
Tenant’s Pro Rata Share of such Expenses and/or Taxes
allocable to the 700 Chesapeake Drive Building shall be increased,
as of the date specified in the preceding sentence, from 50.0055%
to 100% .
(f) Notwithstanding the
provisions of Paragraph 1(e) above, from and after the
Expansion Commencement Date (including during Tenant’s early
access period under this Amendment with respect to the Expansion
Premises), Tenant shall be responsible for payment all costs for
utilities and services supplied to the entire Premises (including
the Expansion Premises).
2. Term; Renewal
Options .
(a) The Termination Date for
the initial Term of the Lease, which had previously been
established as April 14, 2010 pursuant to the Commencement
Letter dated April 20, 2004 executed by Tenant and by the
original landlord under the Lease, is hereby extended to
April 14, 2012.
(b) Tenant shall have the
option to extend the Term of the Lease, at the minimum rental set
forth in Paragraph 2(c) or 2(d) below, as applicable, and
otherwise upon all the terms and provisions applicable to the
initial Term of the Lease, for up to two (2) additional
periods of five (5) years each, the first commencing upon the
expiration of the initial Term hereof on the revised Termination
Date set forth above and the second commencing upon the expiration
of the first extended term hereof (if applicable). Exercise of such
option with respect to the first extended term shall be by written
notice to Landlord at least six (6) months and not more than
twelve (12) months prior to the Termination Date for the
initial Term. Exercise of such option with respect to the second
extended term shall be by written notice to Landlord at least six
(6) months and not more than twelve (12) months prior to
the expiration of the first extended term hereof (if applicable).
If Tenant is in default hereunder, beyond any applicable notice and
cure periods, on the date of such notice or on the date the
applicable extended term is to commence, then the exercise of the
applicable option shall be of no force or effect, the
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extended term shall not commence and
this Lease shall expire at the end of the then current term hereof
(or at such earlier time as Landlord may elect pursuant to the
default provisions of this Lease). If Tenant properly exercises one
or both renewal options under this Paragraph 2(b), then all
references in the Lease (other than in this Paragraph 2(b)
itself) to the “Term” of the Lease shall be construed
to include the extension term(s) thus elected by Tenant. Except as
expressly set forth in this Paragraph 2(b), Tenant shall have
no right to extend the term of this Lease beyond its prescribed
term. Without limiting the generality of the preceding sentence,
the renewal options set forth in this Paragraph 2(b) supersede
and replace the First Renewal Option and Second Renewal Option set
forth in Exhibit F to the Lease, which shall be of no
further force or effect. The renewal options set forth in this
Paragraph 2(b) may be exercised by Tenant or by any permitted
assignee of Tenant’s interest under the Lease which is in
possession of the Premises at the time of such exercise, but may
not be exercised by or assigned to any subtenant of the Premises or
any portion thereof.
(c) If Tenant duly exercises
its renewal option for the first extended term provided under
Paragraph 2(b) above, the monthly base rental payable for the
entire Premises during such first extended term shall be as follows
(representing, as to each year, an increase of four percent
(4%) over the monthly base rental for the immediately
preceding Lease year):
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Period
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Monthly Base
Rental Rate |
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Square
Feet |
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Monthly Base
Rent |
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04/15/12 — 04/14/13
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$ |
2.7040 psf |
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24,591 sf |
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$ |
66,494.06 |
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04/15/13 — 04/14/14
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$ |
2.8122 psf |
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24,591 sf |
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$ |
69,153.83 |
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04/15/14 — 04/14/15
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$ |
2.9246 psf |
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24,591 sf |
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$ |
71,919.98 |
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04/15/15 — 04/14/16
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$ |
3.0416 psf |
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24,591 sf |
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$ |
74,796.78 |
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04/15/16 — 04/14/17
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$ |
3.1633 psf |
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24,591 sf |
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$ |
77,788.65 |
(d) If Tenant duly exercises
its renewal option for the second extended term provided under
Paragraph 2(b) above, the monthly base rental payable for the
entire Premises during such second extended term shall be as
follows (representing, as to each year, an increase of four percent
(4%) over the monthly base rental for the immediately
preceding Lease year):
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Period
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Monthly Base
Rental Rate |
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Square
Feet |
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Monthly Base
Rent |
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04/15/17 — 04/14/18
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$ |
3.2898 psf |
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24,591 sf |
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$ |
80,900.20 |
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04/15/18 — 04/14/19
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$ |
3.4214 psf |
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24,591 sf |
|
$ |
84,136.20 |
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04/15/19 — 04/14/20
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$ |
3.5583 psf |
|
24,591 sf |
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$ |
87,501.65 |
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04/15/20 — 04/14/21
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$ |
3.7006 psf |
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24,591 sf |
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$ |
91,001.72 |
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04/15/21 — 04/14/22
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$ |
3.8486 psf |
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24,591 sf |
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$ |
94,641.79 |
3. Condition of Expansion
Premises . Tenant is accepting the Expansion Prem
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