Document:

Third Amendment to Sublease Agreement

 Exhibit 10.6 
 THIRD AMENDMENT TO SUBLEASE AGREEMENT 
 THIS THIRD AMENDMENT TO SUBLEASE AGREEMENT
(“Agreement”), dated for reference purposes December 22, 2005, is made by and between F5 Networks, Inc., a Washington corporation (“Sublandlord”), and Cell Therapeutics, Inc., a Washington corporation
(“Subtenant”). The capitalized terms in this Agreement shall have the meaning given to those same terms in the Sublease, unless a different meaning has been provided herein. 
 RECITALS 
 A. Sublandlord and Subtenant have entered into a certain Sublease
Agreement dated March 30, 2001, as thereafter modified and supplemented by a First Amendment to Sublease Agreement dated April 13, 2001, a Second Amendment to Sublease Agreement dated March 6, 2002, a Letter Agreement Regarding
Generator Use dated March 4, 2004, and a Closed Circuit TV Agreement entered into effective as of January 12, 2005, and amended effective as of April 29, 2005 (collectively, the “Sublease”). 
 B. The parties now desire to remove certain space from the Subleased Premises and return the same to the Sublandlord, and to otherwise modify the
Sublease to reflect this contraction of the Subleased Premises, only as expressly provided for herein. 
 NOW, THEREFORE, for good and
valuable consideration, the parties hereby amend the Sublease as follows: 
  

	1.	Subleased Premises. 

 a. Effective January 16,
2006, there shall be removed from the Subleased Premises approximately 33,127 rentable square feet of space, consisting of 28,854 rentable square feet described as Area No. 2A and Area No. 2B in the Sublease, comprising the entire second
floor of the Building, together with approximately 4,273 rentable square feet on the first floor of the Building located in Area 1A, the first floor space being depicted on Exhibit A hereto (collectively, the “Deleted Space”). After
removal of the Deleted Space, the Subleased Premises shall be deemed to consist of 76,984 rentable square feet. The Deleted Space shall be delivered by Subtenant to Sublandlord no later than January 16, 2006, in a broom-clean, but otherwise
“AS-IS,” condition. Subtenant shall remove all furniture, office equipment and any other personal property, including all security cameras (subject to obtaining Master Landlord’s consent to such removal), currently located within the
Deleted Space. Sublandlord shall have the right to use, in common with others entitled thereto, Common Areas in the Building associated with or convenient for use of the Deleted Space. 
 b. Within the second floor space of the Deleted Space, Subtenant shall be permitted to place its wiring and cabling within those electrical closets,
wiring closets and cabling rooms depicted on Exhibit B hereto in locations and quantities as reasonably determined by Sublandlord. Further, Sublandlord shall permit Subtenant access to the said closets/rooms to maintain, repair and inspect its
wiring and cabling at reasonable times as requested by Subtenant upon reasonable notice to Sublandlord. 
  

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 c. Sublandlord reserves the right to use cooperatively with Subtenant on a non-exclusive basis the
Building loading dock for both shipping and receiving, as well as reasonable access through the Subleased Premises (the location to be reasonably determined by Subtenant) sufficient to transport office and construction equipment between the loading
dock and the Building elevators. 
 d. Sublandlord reserves (i) the right of access in all stairways and elevators between those
portions of the Building not within the Subleased Premises and the Building rooftop, (ii) the right to install and maintain additional mechanical equipment on the Building rooftop reasonably necessary to serve those portions of the Building not
within the Subleased Premises, (iii) the right to use existing mechanical and electrical risers, shafts, sleeves and penetrations between Sublandlord’s spaces within the Building and the Building rooftop, which right shall be shared with
Subtenant. 
 e. Section 1 of the Sublease is hereby amended to reflect these changes contained in (a) - (c) above herein. 

 

	2.	Base Rent. Section 3.1 of the Sublease is hereby amended to provide that, commencing April 1, 2006, annualized Base Rent for the Subleased Premises less the Deleted
Space shall be as follows: 

  

			
	 Period
	  	Annualized Base Rent (per RSF)
	 April 1, 2006 – December 31, 2006
	  	$35.38
	 January 1, 2007 – March 31, 2007
	  	$36.81
	 April 1, 2007 – December 31, 2007
	  	$36.38
	 January 1, 2008 – March 31, 2008
	  	$37.81
	 April 1, 2008 – December 31, 2008
	  	$37.38
	 January 1, 2009 – March 31, 2009
	  	$38.81
	 April 1, 2009 – December 31, 2009
	  	$38.38
	 January 1, 2010 – March 31, 2010
	  	$39.81
	 April 1, 2010 – December 31, 2010
	  	$39.38
	 January 1, 2011 – March 31, 2011
	  	$40.81
	 April 1, 2011 – December 31, 2011
	  	$40.38
	 January 1, 2012 – March 31, 2012
	  	$41.81
	 April 1, 2012 – July 31, 2012
	  	$41.38

  

	3.	 Operating Expenses. As a result of the deletion of the Deleted Space from the Subleased Premises, as provided for in Section 1 above herein,
Subtenant’s proportionate share of all Expenses, as defined in Section 4(c) of the Master Lease, shall be proportionately reduced commencing April 1, 2006. For purposes of calculating Subtenant’s proportionate share of Expenses,
the Subleased Premises shall be deemed to be 76,984 rentable square feet. Subtenant’s proportionate share of Expenses separately allocated to 

  

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the Building shall be 69.91% (calculated by dividing the agreed area of the remaining Subleased Premises, namely 76,984 rentable square feet, by the total
area of the Building, which is deemed to be 110,111 rentable square feet). Section 3.2 of the Sublease is hereby amended to reflect these changes. 
  

	4.	Parking. Subtenant’s entitlement to parking rights shall be proportionately reduced to reflect the Subleased Premises as revised by Section 1 of this Agreement.
Because the Subleased Premises is reduced by 33,127 rentable square feet, Subtenant’s parking rights shall be reduced by 63 stalls. Section 6 of the Sublease is hereby amended to reflect these changes. 

  

	5.	Generator. Sublandlord shall at all times retain the right to replace the Generator so long as the replacement Generator is of sufficient capacity to continue to provide the
power to Subtenant specified in the Sublease, and more particularly in the Letter Agreement dated March 4, 2004. 

  

	6.	Brokers. Sublandlord has been represented by Washington Partners, Inc. in this transaction and Subtenant has been represented by C.B. Richard Ellis, Inc. Each party shall be
separately responsible to its broker pursuant to separate agreements and shall indemnify and hold the other party harmless from any cost, expense or liability (including costs of suit and reasonable attorneys’ fees) for any compensation,
commission or fees claimed by any real estate broker or agent other than their respective brokers (identified above) in connection with this Agreement or its negotiation by reason of any act of the indemnifying party.

  

	7.	Notices. Subtenant’s address for notice purposes, and Section 16 of the Sublease, hereby amended as follows: 

 Cell Therapeutics, Inc. 
 501 Elliott Avenue,
Suite 400 
 Seattle, WA 98199 
 Attention: Dr. James Bianco 
 cc: Legal Affairs 
  

	8.	Conditions Precedent. This Agreement is conditioned upon Master Landlord consenting to this Agreement pursuant to the Landlord’s Consent to Subleasing attached to this
Agreement as Exhibit B (the “Master Landlord Consent”). If Master Landlord has not so consented to this Agreement within thirty (30) days after this Agreement has been signed by Sublandlord and Subtenant, then either party may
terminate this Agreement by delivering written notice of termination to the other party. 

  

	9.	 Miscellaneous. In the event of any conflict between the terms of this Agreement and the Sublease, this Agreement shall control. The parties hereby ratify and
confirm their obligations under the Sublease as amended by this Agreement. This Agreement, the Sublease and all exhibits attached to the Sublease and this Agreement, and the Master Lease, constitute the entire agreement between Sublandlord and
Subtenant with respect to the Subleased Premises, and may not be amended or altered except by written agreement 

  

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executed by both parties. This Agreement may be executed in one or more counterparts; each signed counterpart shall be deemed an original and all
counterparts together shall constitute a single, integrated agreement. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At the request of
either party, the parties will confirm facsimile-transmitted signatures by signing an original document. 
 IN WITNESS WHEREOF the
parties hereto hereby execute this Third Amendment to Sublease Agreement as of the day and year first above written. 
  

									
	SUBLANDLORD	 		 	SUBTENANT
			
	 F5 Networks, Inc.,
 a Washington
corporation
	 		 	 Cell Therapeutics, Inc.,
 a Washington
corporation

					
	By:	 	  
	 		 	By:	 	  

	Name:	 	  
	 		 	Name:	 	  

  

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	STATE OF WASHINGTON	 	)
		 	) ss.
	COUNTY OF KING	 	)

 I certify that I know or have satisfactory evidence that
                     is the person who appeared before me, and said person acknowledged that s/he signed this instrument, and on oath stated
that s/he was authorized to execute the instrument and acknowledged it as the Third Amendment to Sublease Agreement of F5 NETWORKS, INC. to be free and voluntary act of such party for the uses and purposes mentioned in the instrument. 
 DATED: December     , 2005 
  

	
	  
 (Signature)

	
	  
 (Please print name
legibly)

	
	 NOTARY PUBLIC in and for the State of
 Washington,
residing at                             .
 My commission expires:
                            .

  

 5 

			
	STATE OF WASHINGTON	 	)
		 	) ss.
	COUNTY OF KING	 	)

 I certify that I know or have satisfactory evidence that
                             is the person who appeared before me, and said person acknowledged
that s/he signed this instrument, and on oath stated that s/he was authorized to execute the instrument and acknowledged it as the Third Amendment to Sublease Agreement of CELL THERAPEUTICS, INC. to be free and voluntary act of such party for the
uses and purposes mentioned in the instrument. 
 DATED: December     , 2005 
  

	
	  
 (Signature)

	
	  
 (Please print name
legibly)

	
	 NOTARY PUBLIC in and for the State of
 Washington,
residing at                             .
 My commission expires:
                            .

  

 6 

 EXHIBIT A 
 Deleted First Floor Space 
  

 7 

 EXHIBIT B 
 Electrical Closets and Cabling Rooms 
  

 8 

 EXHIBIT C 
 Master Landlord Consent to Subleasing 
  

 9Agreement to Modify the Corporation's Compensation Arrangement

 Exhibit 10.42 
 Modified Compensation Arrangement for Non-Employee Directors 
 On February 17, 2006, the Board
of Directors (the “Board”) of Cell Therapeutics, Inc. (the “Corporation”) voted to modify the Corporation’s compensation arrangements for non-employee directors. 
 Under the Corporation’s prior arrangements, non-employee directors were granted fully vested options to purchase 15,000 shares of the
Corporation’s common stock, no par value (“Common Stock”) upon joining the Board and were granted fully vested options to purchase 12,000 shares of Common Stock each year thereafter (15,000 shares for the then current Chairman
of the Board) (the “Annual Grant”). Further, all non-employee directors received an annual retainer of $18,000 ($22,000 for the then Chairman of the Board) and additional annual retainers of $1,000 for serving as a member of a Board
committee and as the chair of a Board committee. In addition, non-employee directors received fees of $1,500 for each Board meeting attended in person and $1,000 for each Board meeting attended via telephone, and $500 for each committee meeting
attended whether in person or via telephone. 
 Under the new compensation arrangements, each new non-employee director will be granted
options to purchase 24,000 shares of Common Stock upon joining the Board (the “Initial Grant”), such Initial Grant to vest after one year and be exercisable up to the earliest of (i) three years from such director’s
termination of service from the Board or (ii) the option expiration date. Further, the annual retainer for all non-employee directors was increased to $25,000, the annual retainer for the chair of the Audit Committee was increased to $7,500,
the annual retainer for the chair of the Compensation Committee was increased to $5,000 and the annual retainer for the chair of any other Board committees was increased to $2,500. There was no change in the Annual Grant or the meeting fees provided
to non-employee directors. 
 For non-employee directors currently serving on the Board, the Board approved a “make-whole” option
grant equal to the difference between 24,000 shares and such director’s initial option grant (the “Make-Whole Grant”). In addition, the Board approved a fully vested special option grant to purchase Common Stock for those
non-employee directors who made exceptional contributions in 2004 and 2005 (the “Special Grant”). Phillip M. Nudelman, Ph.D. received a Special Grant to purchase 18,000 shares of Common Stock, Mary O. Mundinger, Dr. PH received
a Special Grant to purchase 12,000 shares of Common Stock and Vartan Gregorian, Ph.D received a Special Grant to purchase 8,000 shares of Common Stock. Each Make-Whole Grant and Special Grant was issued at an exercise price of $1.97 per share, the
fair market value of the Corporation’s common stock on the date of grant. Each Make-Whole Grant and Special Grant have a term of ten years and are fully vested as of the date of grant. Further, each of Drs. Nudelman, Mundinger and Gregorian
received an additional retainer equal to 50% of the annual retainer in place during 2005, or $9,000. 

 SIGNATURE 
 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
  

									
		 		 	CELL THERAPEUTICS, INC.
				
	Date: February 24, 2006	 		 	By:	 	/s/    LOUIS A. BIANCO
		 		 		 		 	Louis A. Bianco
		 		 		 		 	Executive Vice President, Finance & Administration

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