Item 1.02 Termination of a Material Definitive Agreement.
On December 23, 2022 (the "Effective Date"), Otonomy, Inc. (the "Company")
entered into a Lease Termination Agreement (the "Agreement") with ARE-SD Region
No. 34, LLC, a Delaware limited liability company ("Landlord") with respect to
the Company's lease (the "Lease") of its headquarters at 4796 Executive Drive,
San Diego, California 92121 (the "Premises"). The Agreement provides that the
Lease will terminate on December 31, 2022 (the "Lease Termination Date").
As consideration for Landlord's entry into the Agreement and acceleration of the
expiration date of the Lease, the Company has agreed to: (a) pay to Landlord a
lease termination payment of $4,440,732.90, (b) allow Landlord to draw upon the
letter of credit it provided as a security deposit in the amount of $694,743.75
and (c) convey ownership to Landlord of certain items of personal property,
furniture and fixtures located within the Premises. The Agreement also provides
for certain contingent payments payable by Landlord to the Company in the event
that Landlord enters into a new lease for the Premises with a third party or
parties (any such third party, a "New Tenant") pursuant to which the New Tenant
actually commences paying rent at a rate higher than that provided in the Lease
during the period from the Effective Date through April 5, 2023. The Company
will have no further rent obligations to Landlord pursuant to the Lease or
Agreement following the Effective Date.
The foregoing description of the Agreement does not purport to be complete and
is qualified in its entirety by reference to the full text of the Agreement, a
copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registration
The information set forth in Item 1.02 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Item
No. Description
10.1 Lease Termination Agreement, dated December 23, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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