EXHIBIT 10.39
AMENDMENT NO. 2 TO
LEASE DATED NOVEMBER 29,1999
BRISBANE TECHNOLOGY PARK
THIS AMENDMENT NO. 2 TO LEASE (this "Amendment"), dated November 16,
2000, is made and entered into by and between GAL-BRISBANE, L.P., a California
limited partnership ("Landlord"), AND XXXXXXXX.XXX, INC., a Delaware corporation
("Tenant").
Landlord and Tenant entered into that certain Lease dated November 29,
1999 (the "Original Lease"), as amended by that certain First Amendment to Lease
dated May 4, 2000 (the "First Amendment, and together with the Original Lease,
collectively, the "Lease") for premises within Building A (the "Building A
Premises") at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx, and premises within
Building B (the "Building B Premises") at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx
Xxxxxxxxxx and premises within Building C (the "Building C Premises") at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx. Terms used herein that are defined in
the Lease shall have the meanings therein defined. Landlord and Tenant have
agreed that the Lease is to be terminated as to the Building A Premises and the
Building B Premises in accordance with the terms hereinafter set forth.
Accordingly, Landlord and Tenant hereby agree as follows:
l. Confirmation of Rentable Area and Commencement and Expiration
Dates.
(a) The rentable area of each of the Building A Premises, the
Building B Premises and the Building C Premises as set forth in the Lease
Summary shall be deemed to be the accurate rentable areas for all purposes of
the Lease. As set forth in the Lease Summary, the rentable areas for each
building are as follows: Building A has 55,883 rentable square feet of space;
Building B has 61,414 rentable square feet of space; and Building C has 65,987
rentable square feet of space.
(b) The Commencement Date for each of Buildings A, B and C is
October 8, 2000.
(c) The Expiration Date for each of Buildings A, B and C is as
follows:
Building A Expiration Date: November 30, 2010
Building B Expiration Date: November 30, 2011
Building C Expiration Date: November 30, 2012
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2. Right to Lease Buildings A and B. Effective as of October 23,
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2000, (a) Landlord shall have the exclusive right to lease space within
Buildings A and B to third parties on such terms as it shall see fit; (b)
Landlord waives its claim for any breach of the provisions of Paragraph N of
Exhibit C to the Lease; and (c) from and after October 23, 2000, unless and
until Tenant waives a Termination Event in accordance with paragraph 3(b) below,
(i) Tenant's obligation to construct the Tenant Improvements described in the
Lease with respect to Buildings A and B shall be limited to the obligation to
(x) complete Revised Core Improvements as provided in paragraph 5(c) below, and
(y) install elevators in the Building A Premises and the Building B Premises as
provided in the Lease, (ii) Tenant shall have no right to occupy the Building A
Premises or the Building B Premises, except to the extent required to complete
Tenant's Work described in clause (i) above, and (iii) Tenant's obligations with
respect to the Building A Premises and the Building B Premises, other than
pursuant to clause (i) above, shall be limited to those set forth in Paragraphs
3.A.(i), 3.B, 5.C., 7, 9, 10, 11, 12, 18, and 24 of the Lease and Exhibit C to
the Lease; provided, however, that Tenant's obligations under Paragraphs 5.C.,
7, 9, 11 and 18 and Exhibit C to the Lease (collectively, the "TI - Related
Obligations) shall continue only until the Tenant Improvements referred to in
clause (i) above are completed. Upon the occurrence of a Termination Event
described in paragraph 3 below, Tenant shall have continuing rights and
liabilities with respect to the Termination Space as provided in paragraph 4(e)
below.
3. Termination Event. A "Termination Event" shall occur with respect
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to each of the Building A Premises and the Building B Premises, or any part
thereof, upon the first to occur of:
(a) execution of a lease between Landlord and a new tenant,
and the commencement of the rental obligation under such lease or the initial
occupancy by the tenant of the premises leased under such lease, whichever is
the earlier to occur; or
(b) October 7, 2001, unless Tenant elects by notice given to
Landlord not earlier than October 1, 2001 and not later than October 7, 2001 to
waive the Termination Event; provided, however, that any such waiver of the
Termination Event by Tenant shall not be effective as to any space in the
Building A Premises or the Building B Premises for which Landlord has executed a
letter of intent with a prospective tenant and is in active lease negotiations
with such tenant or for which Landlord has a lease agreement executed by
Landlord and tenant. Upon such waiver of a Termination Event, the provisions of
paragraph 2(c) shall no longer apply and the date by which Tenant shall complete
Tenant's Work under Paragraph N of Exhibit C to the Lease shall be February 5,
2002.
The portion of the Premises as to which a Termination Event has occurred is
hereinafter referred to as "Termination Space." Landlord shall promptly notify
Tenant of the occurrence of a Termination Event and the Termination Space to
which it relates.
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4. Consequences of Termination Event. Upon the occurrence of a
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Termination Event:
(a) the Lease shall be terminated as to the Termination Space;
(b) the Base Rent shall be reduced by an amount equal to the
product obtained by multiplying the rentable area of the Termination Space by
$2.00 per square foot;
(c) the Security Deposit shall be reduced by an amount equal
to the product obtained by multiplying $4,398,816 by a fraction, the numerator
of which is the rentable area of the Termination Space and the denominator of
which is 183,284 square feet, and Tenant shall be entitled to substitute a
Letter of Credit in the amount of the reduced Security Deposit for the Letter of
Credit then held by Landlord; provided that Tenant pays all fees and costs
associated with the issuance of the new or modified Letter of Credit, and so
long as the new or modified Letter of Credit satisfies the requirements of
Paragraph 28(b) of the Lease;
(d) in the event the Termination Event occurs on or before
March 31, 2001, Tenant shall pay to Landlord, as a condition of the Lease being
terminated as to the Termination Space, an amount equal to the product obtained
by multiplying the rentable area of the Termination Space by $6.00 per square
foot, provided that no such payment shall be due if the Termination Event is
based on the lease of space to Intermune Pharmaceuticals, Inc. or any entity
controlled by, controlling or under common control with Intermune
Pharmaceuticals, Inc; and
(e) Although the Lease shall be terminated as to the
Termination Space as provided herein, Landlord and Tenant agree that any
obligations of Tenant under the Lease arising and/or accruing pursuant to
paragraph 2 above prior to such Lease termination (and with respect to the
TI-Related Obligations, any such obligations arising and/or accruing prior to
completion of the Tenant Improvements described in paragraph 2(c)(i) above)
shall survive the Lease termination (and with respect to the TI-Related
Obligations, shall survive the completion of the Tenant Improvements described
in paragraph 2(c)(i) above) as though the natural expiration of the Lease had
occurred (with respect to the Termination Space) on the date the applicable
Termination Event occurs (or with respect to the TI-Related Obligations, on the
date completion of the Tenant Improvements described in paragraph 2(c)(i)
occurs).
5. Improvement Payments.
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(a) Landlord shall reimburse Tenant an amount equal to
$298,000 (the "Elevator Allowance") on account of the elevators installed, or in
the process of being installed, by Tenant in Buildings A, B and C. The Elevator
Allowance shall be disbursed to Tenant in accordance with Paragraph 4.2 of the
First Amendment. Notwithstanding anything to the contrary contained herein or in
the Lease, Tenant shall not make more than one (1) request for disbursement of
the Elevator Allowance, or portion thereof each calendar month, and if Tenant is
requesting, within the same calendar month, a disbursement of the Tenant
Improvement Allowance and/or Additional Tenant
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Improvement Allowance with respect to completion of the Building C Tenant
Improvements or a disbursement of the Tenant improvement Allowance with respect
to completion of the Revised Core Improvements in Buildings A and/or Building B,
then any request for disbursement of all or a portion of the Elevator Allowance
pursuant to Paragraph 4.2 of the First Amendment must be made on the same date
as, and in conjunction with, the other disbursement requests.
(b) Building C has been completed and Tenant is in occupancy
of the Building C Premises. Within thirty (30) days after satisfaction of all of
the following conditions, Landlord shall pay Tenant $1,979,610 in payment of the
Tenant Improvement Allowance and Additional Tenant Improvement Allowance for
Building C, $111,766 in payment of $2.00 per square foot from the Additional
Tenant Improvement Allowance for Building A, and $122,828 in payment of $2.00
per square foot from the Additional Tenant Improvement Allowance for Building B,
for a total payment of $2,214,204 ($33.56 per square foot of rentable area in
Building C):
(i) copies of invoices paid by Tenant in connection
with the construction of the Tenant Improvements for Building C in an
amount not less than $2,214,204, have been provided to Landlord;
(ii) unconditional lien waivers from Tenant's Contractor
and all subcontractors, materialmen and suppliers that have performed
work or supplied materials for work performed and materials installed
by or for Tenant in Building C, have been provided to Landlord;
(iii) a certificate from Tenant's Architect identifying
the Tenant Improvements in Building C that have been substantially
completed and certifying that those Tenant Improvements have been
substantially completed, has been provided to Landlord;
(iv) a certificate from Tenant's construction manager
certifying that the Tenant Improvements installed in Building C have
been substantially completed, has been provided to Landlord; and
(v) evidence has been provided to Landlord that a
certificate of occupancy has been issued for Building C.
(c) The "Revised Core Improvements" shall be the tenant
improvements shown on the Submitted Plans referred to in the First Amendment to
Lease dated May 4, 2000, as modified by the drawings prepared by HPC
Architecture dated August 31, 2000 entitled "Owner Revisions" and as described
in the Memo from Xxxxxx X. Xxxx of HPC Architecture dated October 30, 2000 (the
"Memo") with respect to Building B but applicable to Building A as well,
exclusive of improvements indicated in the Memo to be provided by tenant. Tenant
shall cause the Revised Core Improvements presently under construction in
Buildings A and B to be completed as expeditiously as possible in accordance
with the applicable terms of the Lease. Within thirty (30) days after
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satisfaction of all of the following conditions in respect of each of Buildings
A and B, Landlord shall pay Tenant the Tenant Improvement Allowance due to
Tenant under the Lease for Building A or B, as applicable:
(i) copies of invoices paid by Tenant in connection
with the construction of the Revised Core Improvements for Building A
or B in the amount of the Tenant Improvement Allowance due, have been
provided to Landlord;
(ii) unconditional lien waivers from Tenant's Contractor
and all subcontractors, materialmen and suppliers that have performed
work or supplied materials for work performed and materials installed
by or for Tenant in Building A or B, as applicable, have been provided
to Landlord;
(iii) a certificate from Tenant's Architect identifying
the Revised Core Improvements in Building A or B that have been
substantially completed and certifying that those Revised Core
Improvements have been substantially completed, has been provided to
Landlord;
(iv) a certificate from Tenant's construction manager
certifying that the Revised Core Improvements installed in Building A
or B have been substantially completed, has been provided to Landlord;
and
(v) evidence has been provided to Landlord that the
building inspector for the City of Brisbane has given final sign-off on
the building permit for the Revised Core Improvements installed in
Building A or B.
(d) Landlord shall not be obligated to pay any sums due to
Tenant pursuant to this paragraph 5 for so long as Tenant is in default in any
material terms of the Lease. Landlord and Tenant agree that for the purposes of
satisfying the foregoing conditions precedent to payment, Paragraph N of Exhibit
C to the Lease is not a material term of the Lease.
6. Adjustment to Base Rent for Building C. Paragraph M(ii)(b) of
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Exhibit C to the Lease provides for any Additional Tenant Improvement Allowance
to be repaid to Landlord on an amortized basis over 10 years at 10% interest.
Landlord and Tenant acknowledge that the aggregate Additional Tenant Improvement
Allowance to be made to Tenant is $564,529 ($329,935 of which is the Building C
Additional Tenant Improvement Allowance, $111,766 of which is from the Building
A Additional Tenant Improvement Allowance, and $122,828 of which is from the
Building B Additional Tenant Improvement Allowance), and that the monthly
amortization of the aggregate Additional Tenant Improvement Allowance over 10
years at 10% interest is $7,460.29. The Amortization Period shall be January 1,
2001 through December 31, 2010, and during the Amortization Period Tenant shall
pay to Landlord, as an addition to Base Rent, $7,460.29 per month in order to
amortize the aggregate Additional Tenant Improvement Allowance.
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7. Confirmation. Landlord and Tenant hereby ratify and confirm all
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of the provisions of the Lease, as modified by paragraphs 1 through 6 above.
8. Real Estate Commissions.
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(a) The remaining unpaid commission due to BT Commercial Real
Estate upon Tenant's occupancy of Buildings A and B pursuant to a separate
agreement between Landlord and BT Commercial Real Estate shall be payable on a
pro rata basis only if and to the extent any space in Building A or B is not
leased to a new tenant on or before October 7, 2001, and Tenant has waived the
Termination Event that would otherwise occur pursuant to paragraph 3(b) above.
(b) No commission shall be due to BT Commercial Real Estate by
reason of the return of any space in Building A or B by Tenant to Landlord
pursuant to the terms hereof.
(c) The Exclusive Authorization to Sublease dated August 30,
2000 between Tenant and BT Commercial Real Estate as to Buildings A and B is
hereby terminated in its entirety. In the event space in Building A or B is
leased by Landlord to Intermune Pharmaceuticals, Inc. on or before March 31,
2001, Landlord shall cause BT Commercial Real Estate or any other real estate
broker used by Landlord in connection with such lease to pay one-half the
commission due it in respect of such lease to Xxxxxx Xxxxxxx of BT Commercial
Real Estate.
9. Waiver of Termination Event. If Tenant waives a Termination Event
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with respect to Buildings A or B or any portion thereof as provided in paragraph
3(b) hereof and such waiver is deemed effective under paragraph 3(b), then upon
such waiver Tenant shall resume its full rights and obligations under the Lease
for those portions of the Building A Premises and Building B Premises that do no
constitute Termination Space.
10. Signage. Upon termination of the Lease as to Buildings A and/or
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B, the Project will become a multi-tenant office business park, and the signage
program for the Project shall be redesigned as described in that certain Memo
via Fax from Xxxxx X. Xxxxx to Xxx Xxxxxxxx dated August 15, 2000 and pursuant
to the provisions of Section 32 of the Lease. Tenant shall pay the costs of the
new, multi-tenant signage within thirty (30) days after an invoice therefor from
Landlord on a pro rata basis based on Tenant's Project Percentage determined by
its occupancy of Building C. If and when Tenant occupies more space in the
Project upon the waiver of a Termination Event as provided in Section 3(b)
hereof, then Tenant shall pay the additional signage costs on a pro rata basis.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
No. 2 to Lease as of the date first above written.
GAL-BRISBANE, L.P., a XXXXXXXX.XXX, INC., a
California limited partnership Delaware corporation
By: Brisbane Tech LLC, a By: /s/ XXXX XXXX
Delaware limited liability -------------------------------------
company, its General Partner Name: Xxxx Xxxx
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By: Stuhlmuller Real Estate, LLC, Its: CEO
a Delaware limited liability -------------------------------
company, Manager
By: /s/ XXXXX X. XXXXXXX
By: /s/ XXXXX X. XXXXXXXXXXX -------------------------------------
------------------------- Name: Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxxxx -------------------------------
Manager Its: COO/CFO
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[signed on Nov 22, 2000]
/s/ XXXXX X. XXXXXXX
JOINDER
The undersigned hereby joins, consents to and agrees to be bound
by the provisions of paragraph 8 above.
BT COMMERCIAL REAL ESTATE
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
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Its: Principal
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