Exhibit 10.1

 

SIXTH AMENDMENT TO LEASE

 

This Sixth Amendment to Lease (“Sixth Amendment”), dated as of January 8, 2015
(the “Effective Date”), is entered into by and between Balzer Family
Investments, L.P., a California limited partnership (“Lessor”), and Anacor
Pharmaceuticals, Inc., a Delaware corporation (“Lessee”).

 

RECITALS

 

A.                                    Lessor and Lessee entered into that
certain Lease dated October 16, 2002 (as amended, extended, supplemented or
otherwise modified prior to the Effective Date, the “Lease”; capitalized terms
used but not defined herein shall have the respective meanings ascribed thereto
in the Lease) for the Premises located at 1060 East Meadow Circle, Palo Alto,
California.

 

B.                                    The term of the Lease is scheduled to
expire on December 31, 2015.

 

C.                                    Lessor and Lessee now desire to provide
Lessee with three (3) additional options to extend the term of the Lease on the
terms and conditions set forth in this Sixth Amendment.

 

AGREEMENT

 

In consideration of the mutual covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Lessor and Lessee agree as follows:

 

1.                                      Additional Options to Extend.  The Lease
is hereby amended by adding thereto a new Paragraph 36, Additional Options to
Extend, which shall read as follows:

 

“36.                         Additional Options to Extend.

 

(a)                                 Lessor hereby grants Lessee the option to
further extend the term of this Lease for two (2) consecutive periods of twelve
(12) months each, and one (1) additional period of three (3) months, commencing
January 1, 2016, January 1, 2017, and January 1, 2018, respectively.  Lessee may
exercise each of the foregoing options to extend the term by giving written
notice of exercise to Lessor at least three (3) months, but no more than nine
(9) months, prior to December 31, 2015, December 31, 2016, and December 31,
2017, respectively; provided, that if Lessee is in a state of uncured default
after the expiration of applicable notice and cure periods (referred to herein
as “in default”) at either the time of exercise of an option or at the
commencement of the applicable option period, such notice shall be void and of
no force or effect.  Each such option period, if exercised, shall be upon the
same terms and conditions as the initial term of this Lease, including the
payment by Lessee of the Operating Expenses of the Premises in accordance with
Paragraph 4(b) of this Lease and the payment by Lessee of the real property
taxes and assessments in accordance with Paragraph 4(c) of this Lease, except
that (1) Lessee shall pay Monthly Base Rent during such option period as set
forth in Paragraph 36(b), (2) there shall be no additional option to extend the
term (other than any remaining options under this Paragraph 36), and (3) Lessee
shall accept the Premises on the commencement of such option period in their
then “as is” condition, subject to any continuing repair and maintenance
obligations of Lessor under this Lease.  If Lessee does not exercise any such
option in a timely manner, such option and any succeeding option, if applicable,
shall automatically lapse, time being of the essence.  The “lease term” as used
in this Lease shall include the initial term and any option period(s), if
exercised.

 

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(b)                                 Lessee shall pay to Lessor during the option
periods described in this Paragraph 36, if exercised, Monthly Base Rent as
follows:

 

Period

 

Rent/SF/Month/NNN

 

Monthly Base Rent

 

 

 

 

 

Jan 1, 2016 – Dec 31, 2016

 

 

$2.00

 

$30,600.00/month

Jan 1, 2017 – Dec 31, 2017

 

 

see below

 

 

Jan 1, 2018 – Mar 31, 2018

 

 

see below

 

 

 

The Monthly Base Rent for the second and third option periods set forth above
shall be ninety-five percent (95%) of the then current fair market rental for
the Premises as of the commencement of the applicable option period (hereafter,
the “current fair market rental”) as determined by agreement between Lessor and
Lessee, if possible, and by the process of appraisal if Lessor and Lessee cannot
reach agreement on the current fair market rental of the Premises.  If Lessor
and Lessee agree on the current fair market rental of the Premises for the
applicable option period, then Lessor and Lessee shall execute an amendment to
this Lease to set forth ninety-five percent (95%) of such amount as the Monthly
Base Rent for such option period.

 

If Lessor and Lessee are unable to agree upon the current fair market rental of
the Premises within thirty (30) days after the date Lessee has notified Lessor
in writing of Lessee’s exercise of the applicable option to extend the term,
then an appraisal shall be performed by one appraiser if the parties are able to
agree upon one appraiser.  If the parties are unable to agree upon one appraiser
within fifteen (15) days after the expiration of the foregoing 30-day period,
then each party shall appoint an appraiser and the two appraisers shall select a
third appraiser.  Each appraiser selected shall be a member of the American
Institute of Real Estate Appraisers (AIREA) with at least five (5) years of
full-time commercial real estate appraisal experience in the Palo Alto research
and development rental market.

 

If only one appraiser is selected, the single appraiser shall notify the parties
in simple letter format of its determination of the current fair market rental
for the Premises for the applicable option period within fifteen (15) days
following its selection.  Such appraisal shall be binding upon the parties as
the current fair market rental for the Premises for the applicable option period
and shall be based upon the then current rental rate paid by tenants for
premises of similar age, size, quality of construction and specifications in the
vicinity of the Premises, but excluding the value, if any, of any improvements
to the Premises constructed at Lessee’s expense, either at the commencement of
the initial term or thereafter during the lease term with Lessor’s prior written
consent.    If multiple appraisers are selected, each appraiser shall notify the
parties in simple letter format of its determination of the current fair market
rental for the Premises

 

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for the applicable option period (based on the foregoing criteria) within
fifteen (15) days following its selection.  If two (2) or more of the appraisers
agree on the current fair market rental for the Premises, such agreement shall
be binding on the parties.  If multiple appraisers are selected and two
(2) appraisers are unable to agree on the current fair market rental for the
Premises, the current fair market rental for the Premises shall be determined by
taking the average of the appraisals; provided, that any high or low appraisal,
differing from the middle appraisal by more than ten percent (10%), shall be
disregarded in calculating the average of the appraisals.  Upon final
determination of the current fair market rental for the Premises for the
applicable option period, Lessor and Lessee shall execute an amendment to this
Lease to set forth ninety-five percent (95%) of such amount as the Monthly Base
Rent for such option period.

 

If only one appraiser is selected, then each party shall pay one-half of the
fees and expenses of that appraiser.  If three appraisers are selected, each
party shall bear the fees and expenses of the appraiser it selected and one-half
of the fees and expenses of the third appraiser.

 

(c)                                  The options to extend the term that are
granted to Lessee by this Paragraph 36 are granted for the personal benefit of
Anacor Pharmaceuticals, Inc. (“Anacor”) only, and may be exercised only by
Anacor or by a “Permitted Affiliate” under Paragraph 16(h) of this Lease.  Said
options may not be assigned or transferred to any assignee or sublessee other
than a “Permitted Affiliate.

 

(d)                                 If Lessee exercises any of the options to
extend that are granted to Lessee by this Paragraph 36, Lessor hereby grants to
Lessee the option to terminate this Lease at any time following such exercise by
giving prior written notice of termination to Lessor, provided that the
effective date of termination shall be not less than six (6) months after the
receipt by Lessor of the written notice of termination. If Lessee exercises such
termination right, Lessee shall pay all rent due and perform all of Lessee’s
other obligations hereunder through the effective date of termination. Monthly
Base Rent and Additional Rent shall be prorated as of the effective date of
termination.”

 

4.                                      Condition of Premises. Pursuant to
California Civil Code Section 1938, Lessor hereby notifies Lessee that the
Premises have not been inspected by a Certified Access Specialist (CASp).

 

5.                                      Brokers.   Lessor and Lessee each
represent and warrant to the other that it has not had any dealings with any
real estate broker, agent, finder or other person with respect to this Sixth
Amendment that would result in a commission or finder’s fee being payable in
connection with the execution hereof.  No commission or finder’s fee shall be
payable by Lessor or Lessee with respect to this Sixth Amendment, any option
extension period exercised by Lessee, or any other extension of the term of the
Lease pursuant to the terms of the Lease, as such terms may be amended by this
Sixth Amendment.

 

6.                                      Notices.  Paragraph 23 of the Lease is
hereby amended to provide that copies of all notices to (i) Lessor shall be
delivered to Berliner Cohen, 10 Almaden Blvd., 11th Floor, San Jose, CA 95113,
Attn:  Nancy Brandt, Esq and (ii) Lessee shall be delivered to Anacor
Pharmaceuticals, Inc., 1020 East Meadow Circle, Palo Alto, CA 94303, Attn:
General Counsel.

 

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7.                                      No Further Modifications.  Except to the
extent modified by this Sixth Amendment, the terms and provisions of the Lease
shall remain unmodified and in full force and effect.  On and after the
Effective Date, each reference in the Lease to “this Lease,” “hereunder,”
“hereof,” “herein” or words of like import will mean and be a reference to the
Lease (as amended, extended, supplemented or otherwise modified prior to the
Effective Date), as further amended by this Sixth Amendment.

 

8.                                      Counterparts.  This Sixth Amendment may
be executed in counterparts, each of which shall constitute an original, but all
of which together shall constitute one and the same instrument.  Delivery of an
executed counterpart of a signature page of this Sixth Amendment by facsimile or
in electronic format (e.g., “pdf”) shall be effective as delivery of a manually
executed counterpart of this Sixth Amendment.

 

LESSOR

 

LESSEE

 

 

 

BALZER FAMILY INVESTMENTS, L.P.,

 

ANACOR PHARMACEUTICALS,

a California limited partnership

 

INC., a Delaware corporation

 

 

 

 

By:

W.F. Batton Management Company,

 

By:

/s/Lucy O. Day

 

a California corporation,

 

 

 

General Partner

 

Name: Lucy O. Day

 

 

 

 

 

 

By:

/s/ Harold Balzer

 

Title: VP HR and Finance

 

 

Harold Balzer, President

 

 

 

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