EXHIBIT 10.19
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease ("Amendment") is entered into, and dated
for reference purposes, as of September 25, 2002 (the "Execution Date") by and
between METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
("Metropolitan"), as Landlord ("Landlord"), and GENELABS TECHNOLOGIES, INC. a
California corporation ("Genelabs"), as Tenant ("Tenant"), with reference to the
following facts ("Recitals"):
A. Tenant's predecessor in interest as Lessee (Gene Labs, Inc.) and
Metropolitan's predecessor in interest as Lessor (Seaport Centre Venture Phase
II, a California general partnership) entered into that certain written
Five-Year Industrial Net Lease Agreement (the "Original Lease") dated July 29,
1986 naming Lincoln Property Company N.C., Inc., as Manager and Agent for Owner
as Lessor, for certain premises ("Original Premises") in the building with an
address of 000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, in Phase II of Seaport
Centre, as more particularly described in the Original Lease. The Original Lease
was amended by that certain First Amendment to Industrial Net Lease Agreement
dated as of March 23, 1987 (the "First Amendment") and by that certain Second
Amendment to Industrial Net Lease Agreement dated as of September 4, 1987 (the
"Second Amendment") for certain additional premises ("Additional Premises")
described therein, and by that certain Third Amendment to Five-Year Industrial
Net Lease Agreement dated June 10, 1992 (the "Third Amendment") and by that
certain Fourth Amendment to Lease dated as of June 17, 1997 (the "Fourth
Amendment"). The Original Lease as so amended is referred to herein as the
Existing Lease. The Original Premises and Additional Premises are collectively
referred to herein as the "Premises."
B. Landlord and Tenant now desire to provide for extension of the
Term and other amendments of the Existing Lease as more particularly set forth
below.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants set forth herein and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
Section 1. Scope of Amendment; Defined Terms. Except as expressly
provided in this Amendment, the Existing Lease shall remain in full force and
effect. Should any inconsistency arise between this Amendment and the Existing
Lease as to the specific matters which are the subject of this Amendment, the
terms and conditions of this Amendment shall control. The term "Existing Lease"
defined above shall refer to the Existing Lease as it existed before giving
effect to the modifications set forth in this Amendment and the term "Lease" as
used herein and in the Existing Lease shall refer to the Existing Lease as
modified by this Amendment, except as expressly provided in this Amendment. All
capitalized terms used in this Amendment and not defined herein shall have the
meanings set forth in the Existing Lease unless the context clearly requires
otherwise.
Section 2. Extension of Term. Landlord and Tenant acknowledge and agree
that notwithstanding any provision of the Existing Lease to the contrary, the
current Term pursuant to the Existing Lease will expire on November 30, 2002,
and that the Term is hereby extended for the period of forty-eight (48) months
(the "Extended Term") commencing on December 1, 2002 (the "Extension
Commencement Date") and expiring November 30, 2006 (hereafter, the "Expiration
Date" in lieu of the date provided in the Existing Lease), unless sooner
terminated pursuant to the terms of the Lease. This extension is with respect to
the entire Premises. Landlord and Tenant acknowledge and agree that this
Amendment provides all rights and obligations of the parties with respect to
extension of the current Term, whether or not in accordance with any other
provisions, if any, of the Existing Lease regarding renewal or extension, and
any such provisions, options or rights for renewal or extension provided in the
Existing Lease are hereby deleted as of the Execution Date.
Section 3. Monthly Rent for Extended Term. Notwithstanding any provision
of the Existing Lease to the contrary, commencing on the Extension Commencement
Date and continuing
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through the Expiration Date of the Extended Term, the amount of monthly base
rent due and payable by Tenant for the Premises shall be as follows:
Period Monthly Amount Monthly Rate/RSF
------ -------------- ----------------
12/01/2002 - 11/30/2003 $102,452.70 $2.10
12/01/2003 - 11/30/2004 $105,526.28 $2.163
12/01/2004 - 11/30/2005 $108,692.07 $2.228
12/01/2005 - 11/30/2006 $111,952.83 $2.295
Section 4. Tenant's Proportionate Share of Operating Expenses.
Notwithstanding any provision of the Existing Lease to the contrary, commencing
on the Extension Commencement Date and continuing through the Expiration Date of
the Extended Term, Tenant shall pay Tenant's proportionate share of operating
expenses (including Utilities not separately metered to the Premises) and for
such purposes Tenant's proportionate share is conclusively agreed to be 20.71%,
which is determined by dividing the total square footage of the Premises (at
this date conclusively agreed to be 48,787 square feet) by the total square
footage of Phase II of Seaport Centre (at this date conclusively agreed to be
235,620 square feet).
Section 5. Increase in the Security Deposit; Letter of Credit.
Notwithstanding any provision of the Existing Lease to the contrary, on or
before the Extension Commencement Date, Tenant shall pay Landlord an amount
sufficient to increase the Security Deposit specified in the Existing Lease from
the amount of Thirty-five Thousand Four Hundred Forty-one Dollars ($35,441.00)
("Original Deposit") to the amount of One Hundred Eleven Thousand, Nine Hundred
Fifty-three Dollars ($111,953.00), which greater amount is the Security Deposit
hereafter required under the Lease. The entire amount of the Security Deposit
(and not less than the full amount) may be given to Landlord in the form of an
irrevocable letter of credit meeting the requirements set forth herein ("Letter
of Credit"). In the event Tenant delivers to Landlord the Letter of Credit, then
within thirty (30) days after receipt of the Letter of Credit, Landlord shall
refund to Tenant the Original Deposit in cash, and upon delivery of such Letter
of Credit the Original Deposit shall no longer be deemed a part of the Security
Deposit. The Letter of Credit shall be an unconditional "clean" Letter of Credit
and require no documents, and shall be in form, scope and substance as required
by this Section, and shall be from a banking institution reasonably satisfactory
to Landlord (but in no event from any bank that would cause Landlord to be in
violation of insurance regulations applicable to Landlord). It shall also be in
compliance with all applicable laws and regulations, including, without
limitation, applicable regulations of the Comptroller of the Currency. Said
Letter of Credit may have an initial term of no greater than one (1) year, and
shall be extended or reissued in a manner and from a banking institution
satisfactory to Landlord, or replaced by Tenant, in each case at least
forty-five (45) days prior to its expiration with another Letter of Credit which
complies with the requirements of this Section, so that in all events (and
notwithstanding any earlier date certain set forth as the expiration date in the
Letter of Credit) the Letter of Credit shall continue in effect until the date
which is sixty (60) days after the date the Lease has expired or been terminated
and Landlord has recovered possession ("Termination Date"). The Letter of Credit
shall be in the form attached as Exhibit A or in such other form as shall be
satisfactory to Landlord, in its sole discretion. Tenant shall pay all expenses,
points and/or fees charged by the issuer or incurred by Tenant in obtaining,
transferring or replacing the Letter of Credit. Upon a proposed sale or other
transfer of any interest (i) of Landlord in the Premises or this Lease, or (ii)
in or of Landlord (including, without limitation, consolidations, mergers or
other entity changes), in all such events Tenant, at its sole cost and expense
and upon ten (10) business days notice, shall, concurrent with Landlord's
delivery to the issuer of the then outstanding Letter of Credit, deliver or
cause issuer to deliver to any such transferees, successors or assigns a
replacement Letter of Credit on identical terms (except for the stated
beneficiary) from the same issuer naming such transferees, successors or assigns
as the new beneficiary or beneficiaries thereof. It is agreed that in the event
(i) Tenant defaults in the performance or observance of any of the terms,
provisions, covenants and conditions of this Lease, including the payment of
Rent or any other sum due from Tenant with respect to the Lease, or (ii) the
Letter of Credit is not extended or replaced by Tenant in a manner
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which complies with the foregoing provisions of this Section, Landlord shall
have the right but shall not be required to, from time to time, without
prejudice to any other right or remedy Landlord may have on account thereof, to
present the Letter of Credit for payment and to use, apply or retain the whole
or any part of the proceeds (x) to the extent Landlord could use, apply or
retain any other funds deposited with Landlord as a Security Deposit hereunder,
and (y) to compensate Landlord for unpaid past Rent, future Rent loss, and other
losses, damages and costs Landlord has incurred or will incur by reason of
Tenant's default, including Landlord's calculation of the unpaid past Rent,
future Rent loss, and all other losses, costs and damages, that Landlord would
be entitled to recover if Landlord were to pursue recovery under California
Civil Code Section 1951.2. In the event that any amount of the Letter of Credit
or proceeds thereof held by Landlord is so used, applied or retained, Tenant
shall replenish such amount. If Landlord presents the Letter of Credit for
payment, no interest shall be payable to Tenant on the proceeds. Tenant shall
not assign or encumber or attempt to assign or encumber the Letter of Credit (or
the proceeds thereof) held as part of the Security Deposit, and neither Landlord
nor its successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance.
Section 6. ADA. The parties hereby agree that (a) Landlord shall be
responsible for compliance with Title III of the Americans With Disabilities Act
of 1990 (42 U.S.C. Section 12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively referred to herein as the "ADA") in the Common Areas
(defined below), except as provided below, (b) Tenant shall be responsible for
ADA Title III compliance in the Premises, including any leasehold improvements
or other work to be performed in the Premises under or in connection with this
Lease, (c) Landlord may perform, or require that Tenant perform, and Tenant
shall be responsible for the cost of, ADA Title III "path of travel"
requirements triggered by Tenant's Alterations in the Premises, and (d) Landlord
may perform, or require Tenant to perform, and Tenant shall be responsible for
the cost of, ADA Title III compliance in the Common Areas necessitated by the
Building being deemed to be a "public accommodation" instead of a "commercial
facility" as a result of Tenant's use of the Premises. Tenant shall be solely
responsible for requirements under Title I of the ADA relating to Tenant's
employees. For all purposes of this Lease, Common Areas shall mean all areas of
the Real Property made available by Landlord from time to time for the general
common use or benefit of the tenants of the building, their employees and
invitees or the public, as such areas currently exist and as they may be changed
from time to time.
Section 7. AS IS Condition of Premises; Alteration by Tenant; No
Allowance. Notwithstanding any provision of the Existing Lease to the contrary,
the following provisions shall govern with respect to the Extended Term:
7.1 AS-IS. Notwithstanding any provision of the Existing Lease to the
contrary, Tenant hereby accepts the Premises in its "AS IS" condition existing
as of the date hereof, without any express or implied representations or
warranties of any kind by Landlord, its brokers, manager or agents, or the
employees of any of them regarding the Premises, and Landlord shall not have any
obligation to construct or install any tenant improvements or alterations or to
pay for any such construction or installation. Tenant acknowledges that Tenant
presently occupies the Premises.
7.2. Alterations Generally. Notwithstanding anything in the Existing
Lease to the contrary, in the event that Tenant desires to do alterations,
additions or improvements to the Premises (collectively referred to herein as
"Alterations"), excluding paint, carpet, repairs, maintenance and replacements
of existing equipment and trade fixtures if no building permit is required for
such work or replacement (the "Excluded Alterations"), the plans and work shall
be subject to and in compliance with the terms and provisions of the Existing
Lease with respect to such Alterations (including, without limitation, Section
11 of the Original Lease), except as otherwise expressly provided in this
Amendment. Tenant shall pay Landlord a fee ("Construction Fee") for reviewing
and supervising the Alterations (but not
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Excluded Alterations) in an amount not to exceed an amount equal to the sum of
two percent (2%) of the cost of the Alterations (but not Excluded Alterations)
up to $500,000 per job, plus one percent (1%) of the cost of the Alterations
(but not Excluded Alterations) in excess of $500,000, excluding from such cost
of the Alterations only the cost of buying items which may be removed from the
Premises by Tenant upon the expiration of the Term, including but not limited to
movable furniture and trade fixtures, laboratory benches, equipment and modular
rooms, and excluding such cost only if Tenant provides reasonable documentation
to Landlord to substantiate both that those items qualify for such exclusion and
the cost of buying them.
7.3. Design & Construction Responsibility for any Alterations. Tenant
shall be responsible for the suitability for the Tenant's needs and business of
the design and function of all Alterations and for their construction in
compliance with (i) all laws, rules, orders, ordinances, directions, regulations
and requirements of all governmental authorities, agencies, offices,
departments, bureaus and boards having jurisdiction thereof, (ii) all rules,
orders, directions, regulations and requirements of the pacific Fire Rating
Bureau, or of any similar insurance body or bodies ((i) and (ii) collectively
referred to herein as "Laws") and (iii) all rules and regulations of Landlord.
Without limiting the generality of the foregoing, Landlord and Tenant
acknowledge and agree that such Laws include all building codes and regulations,
Title 24, and the ADA.
Section 8. Amendment of Section 15 Re Assignment; Sublease. The Existing
Lease is hereby further amended by amending Section 15 of the Original Lease as
follows: (i) Sections 15.b. and 15.d. are deleted in their entirety and of no
further force or effect; and (ii) the following language is added to the end of
Section 15 as Sections 15.f and 15.g:
f. Tenant shall pay Landlord on the first day of each month
during the term of the sublease or assignment, fifty percent (50%) of
the amount by which the sum of all rent and other consideration (direct
or indirect) paid by the subtenant or assignee for such month exceeds:
(i) that portion of the base rent and Tenant's proportionate share of
operating expenses due under the Lease for said month which is allocable
to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid
in making any improvements or substitutions in the Premises required by
any sublease or assignment; and (3) "free rent" periods, costs of any
inducements or concessions given to subtenant or assignee, moving costs,
and other amounts in respect of such subtenant's or assignee's other
leases or occupancy arrangements. All such costs and expenses shall be
amortized over the term of the sublease or assignment pursuant to sound
accounting principles.
g. Notwithstanding anything to the contrary contained in this
Section 15, Tenant shall have the right, without the prior written
consent of landlord, and without any right of recapture by Landlord or
payment of any transfer premium as described in section 15.f., to
sublease all or a portion of the Premises or to assign this Lease to the
following "Permitted Transferees": (i) a corporation controlling,
controlled by or under common control with Tenant; (ii) a successor to
Tenant by merger, consolidation, or nonbankruptcy reorganization; or
(iii) a purchaser of more than fifty percent (50%) of Tenant's capital
stock or assets. The term "control," as used in this Section 15.g. shall
mean the ownership, directly or indirectly, of more than fifty percent
(50%) of the voting securities of, or possession of the right to vote,
in the ordinary direction of its affairs, of more than fifty percent
(50%) of the voting interest in, any person or entity, provided however,
with respect to control of the shares of stock of Tenant in the event
that Tenant is a "Public Company" (defined below) at the time of, or
immediately before giving effect to the transfer in question, the phrase
"thirty-five percent (35%)" shall be substituted in place of the phrase
"fifty percent (50%)" in making any determination of control for
purposes of this Section 15.g. The term "Public Company" shall mean a
corporation whose shares of stock are registered with the Securities and
Exchange Commission in accordance with applicable laws and are publicly
listed and publicly traded through the New York Stock Exchange or
American Stock Exchange, or listed and publicly traded through the
NASDAQ national market or NASDAQ small market or the over-the-counter
market. Provided however, as a condition of the pre-consent to transfer
to persons qualifying as Permitted Transferees pursuant to this Section
15.g, Tenant and each
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Permitted Transferee shall deliver to Landlord: (x) an assumption by the
Permitted Transferee (except in the event of a sublease) for the benefit
of Landlord in writing in a form acceptable to Landlord of all of
Tenant's obligations and liability under the Lease, with a draft of such
proposed assumption to be delivered no later than five (5) days prior to
the effective date of the assignment and a fully executed original of
such assumption to be delivered no later than five (5) days after the
effective date; (y) a fully executed copy of an assignment or sublease
agreement between Tenant and the Permitted Transferee, to be delivered
no later than five (5) days after the effective date; and (z) such
documents or information which Landlord reasonably requests for the
purpose of substantiating whether or not the assignment or sublease is
to a Permitted Transferee, to be delivered promptly after Landlord's
written request.
Section 9. Amendment of Section 20 Re Insurance. The Existing Lease is
hereby further amended by amending Section 20 of the Original Lease to provide
that notwithstanding any provision of the Existing Lease to the contrary:
9.1 Tenant's Insurance. Tenant, at Tenant's expense, agrees to
maintain in force during the Extended Term: (a) Commercial General Liability
Insurance on a primary basis and without any right of contribution from any
insurance carried by Landlord covering the Premises on an occurrence basis
against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease, which insurance shall be for not less than a combined single
limit of Five Million Dollars ($5,000,000.00); (b) Workers' Compensation and
Employers' Liability Insurance to the extent required by and in accordance with
the Laws of the State of California; (c) "All Risks" property insurance in an
amount adequate to cover the full replacement cost of all Tenant alterations and
additions to the Premises, equipment, installations, fixtures and contents of
the Premises in the event of loss; and (d) In the event a motor vehicle is to be
used by Tenant in connection with its business operation from the Premises,
Comprehensive Automobile Liability Insurance coverage with limits of not less
than Three Million and No/100 Dollars ($3,000,000.00) combined single limit
coverage against bodily injury liability and property damage liability arising
out of the use by or on behalf of Tenant, its agents and employees in connection
with this Lease, of any owned, non-owned or hired motor vehicles. The amount of
the coverage and limits of the insurance pursuant to sub-parts (a) and (c) of
the preceding sentence shall be subject to increase pursuant to the provisions
of the third full paragraph of Section 20 of the Existing Lease.
9.2. Form of Policies. Each policy referred to in Section 9.1 above
shall satisfy the following requirements. Each policy shall (i) name Landlord
and Insignia ESG, Inc. (the property manager for the building as of the date
hereof), and to the extent identified in writing by Landlord, any different
property manager for the building, the Mortgagee or ground lessor of Phase II of
Seaport Centre and the leasing manager for the building and their respective
directors, officers, agents and employees, as additional insureds (except
Workers' Compensation and Employers' Liability Insurance), (ii) be issued by one
or more responsible insurance companies licensed to do business in the State of
California reasonably satisfactory to Landlord and rated A+ XV or better in
Best's Insurance Guide, (iii) where applicable, provide for deductible amounts
reasonably satisfactory to Landlord and not permit co-insurance, (iv) shall
provide that such insurance may not be canceled or amended without thirty (30)
days' prior written notice to the Landlord (except as a result of nonpayment of
premiums, for which ten (10) days' prior written notice shall be required) and
(v) each policy of "All-Risks" property insurance shall provide that the policy
shall not be invalidated should the insured waive in writing prior to a loss,
any or all rights of recovery against any other party for losses covered by such
policies. Tenant shall deliver to Landlord certificates (reasonably satisfactory
to Landlord) of insurance for all policies and renewals thereof to be maintained
by Tenant hereunder prior to the Extension Commencement Date and not less than
five (5) days prior to the expiration date of each policy. Further, within sixty
(60) days after Landlord's request for certified copies of any or all policies
and renewals thereof to be maintained by Tenant hereunder, Tenant shall deliver
to Landlord the requested certified copies.
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9.3 Waiver of Subrogation.
(a) Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.
(b) Tenant agrees to include, if obtainable at no, or minimal,
additional cost, and so long as the same is permitted under the laws of the
State of California, in its "All Risks" insurance policy or policies on Tenant
alterations and additions to the Premises, whether or not removable, and on
Tenant's furniture, furnishings, fixtures and other property removable by Tenant
under the provisions of this Lease appropriate clauses pursuant to which the
insurance company or companies (i) waive the right of subrogation against
Landlord and/or any tenant of space in the building with respect to losses
payable under such policy or policies and/or (ii) agree that such policy or
policies shall not be invalidated should the insured waive in writing prior to a
loss any or all right of recovery against any party for losses covered by such
policy or policies. If Tenant is unable to obtain in such policy or policies
either of the clauses described in the preceding sentence, Tenant shall, if
legally possible and without necessitating a change in insurance carriers, have
Landlord named in such policy or policies as an additional insured. If Landlord
shall be named as an additional insured in accordance with the foregoing,
Landlord agrees to endorse promptly to the order of Tenant, without recourse,
any check, draft, or order for the payment of money representing the proceeds of
any such policy or representing any other payment growing out of or connected
with said policies, and Landlord does hereby irrevocably waive any and all
rights in and to such proceeds and payments.
(c) In all cases that a waiver of subrogation would be required
pursuant to Section 9.3(a), Landlord hereby waives any and all right of recovery
which it might otherwise have against Tenant, its servants, agents and
employees, for loss or damage occurring to the real property and the fixtures,
appurtenances and equipment therein, except Tenant alterations and additions, to
the extent the same are covered by Landlord's insurance, notwithstanding that
such loss or damage may result from the negligence or fault of Tenant, its
servants, agents or employees. In all cases that a waiver of subrogation would
be required pursuant to Section 9.3(b), Tenant hereby waives any and all right
of recovery which it might otherwise have against Landlord, its servants, and
employees and against every other tenant in the real property who shall have
executed a similar waiver for loss or damage to tenant alterations and
additions, whether or not removable, and to Tenant's furniture, furnishings,
fixtures and other property removable by Tenant under the provisions hereof to
the extent the same is covered or coverable by Tenant's insurance required under
this Lease, notwithstanding that such loss or damage may result from the
negligence or fault of Landlord, its servants, agents or employees, or such
other tenant and the servants, agents or employees thereof.
(d) Landlord and Tenant hereby agree to advise the other promptly if
the clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any cancellation or change of the terms of any such policy which would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional insureds shall, to the extent obtainable, contain agreements by the
insurers to the effect that no act or omission of any additional insured will
invalidate the policy as to the other additional insureds.
Section 10. Amendment of Section 38.j Re Limitation of Landlord's
Liability. The Existing Lease is hereby further amended by amending and
restating in its entirety Section 38.j. of the Original Lease as follows:
Notwithstanding any other provision of this Lease to the contrary, the liability
of Landlord for its obligations under this Lease is limited solely to Landlord's
interest in Phase II of Seaport Center as the same may from time to time be
encumbered, up to a maximum liability of
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Five Million Dollars ($5,000,000.00) in value of such unencumbered equity
interest, and no personal liability shall at any time be asserted or enforceable
against any other assets of Landlord or against Landlord's stockholders,
directors, officers or partners on account of any of Landlord's obligations or
actions under this Lease.
Section 11. Option To Extend.
(a) Landlord hereby grants Tenant a single option to further extend
the Term of the Lease for an additional period of four (4) years (such period
may be referred to as the "Option Term"), as to the entire Premises as it may
then exist, upon and subject to the terms and conditions of this Section (the
"Option To Extend"), and provided that at the time of exercise of such right:
(i) Tenant must be in occupancy of at least fifty percent (50%) of the Premises;
and (ii) there has been no material adverse change in Tenant's financial
position from such position as of the date of execution of this Amendment, as
certified by Tenant's independent certified public accountants, and as supported
by Tenant's certified financial statements, copies of which shall be delivered
to Landlord with Tenant's written notice exercising its right hereunder.
(b) Tenant's election (the "Election Notice") to exercise the Option
To Extend must be given to Landlord in writing no earlier than the date which is
eighteen (18) months before the Expiration Date of the Extended Term and no
later than the date which is twelve (12) months before the Expiration Date of
the Extended Term. If Tenant either fails or elects not to exercise its Option
to Extend by not timely giving its Election Notice, then the Option to Extend
shall be null and void.
(c) The Option Term shall commence immediately after the expiration
of the Extended Term. Tenant's leasing of the Premises during the Option Term
shall be upon and subject to the same terms and conditions contained in the
Lease except that: (i) the Monthly Base Rent shall be amended to an amount to
equal the "Option Term Rent", defined and determined in the manner set forth in
the immediately following Subsection (and otherwise, Tenant shall continue to
pay Tenant's proportionate share of "operating expenses" and other charges
pursuant to the Lease and Tenant shall continue to pay directly the utility or
service provider for all utilities or services which Tenant is to obtain
directly pursuant to other provisions of the Lease, collectively, "Triple Net
Payables"); (ii) the Security Deposit shall be increased, if applicable, to
equal one hundred percent (100%) of the highest monthly installment of the
Option Term Rent (the increase, if any, shall be payable upon the commencement
date of the Option Term), but in no event shall the Security Deposit be
decreased; (iii) Tenant shall accept the Premises in its "AS-IS" condition
without any obligation of Landlord to repaint, remodel, repair, improve or alter
the Premises or to provide Tenant any allowance therefor; and (iv) there shall
be no further option or right to extend the term of the Lease. If Tenant timely
and properly exercises the Option To Extend, references in the Lease to the Term
shall be deemed to mean the Term as extended by the Option Term unless the
context clearly requires otherwise.
(d) The Option Term Rent shall mean the greater of (i) the Monthly
Base Rent payable by Tenant under this Lease calculated at the rate applicable
for the last full month of the Extended Term ("Preceding Rent") or (ii) the
"Prevailing Market Rent" (defined below). During the Option Term, Tenant shall
continue to pay Triple Net Payables (as defined in the preceding Subsection),
and such Triple Net Payables shall be taken into account in determining, but
shall be additional to and not included in, the Preceding Rent or Prevailing
Rent, as such terms are used herein. As used herein, "Prevailing Market Rent"
shall mean the base rent and all other monetary payments and escalations,
including consumer price increases, payable by a tenant, excluding Triple Net
Payables (provided however, Prevailing Market Rent shall be determined taking
into account an obligation to pay such Triple Net Payables, so, for example, any
comparable transaction with so-called gross rent shall be adjusted to be
equivalent to the base rent and payments which would be payable if such tenant
was obligated to pay Triple Net Payables as Tenant does), that Landlord could
obtain from a third party desiring to lease the Premises on an AS IS basis
(without further improvements, but otherwise in surrender condition in
accordance with the Lease) for a term equal
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to the Option Term and commencing when the Option Term is to commence under
market leasing conditions, and taking into account the following by comparison
between the Premises and the other space or between the proposed transactions:
the size, location and floor levels; the type and quality of tenant
improvements; the age and location of the project; quality of construction of
the project; services to be provided by Landlord or by tenant; the rent, all
other monetary payments and escalations obtainable for new leases of space
comparable to the Premises in Phase II of Seaport Center and in comparable
buildings in the mid-Peninsula area, and other factors that would be relevant to
such a third party in determining what such party would be willing to pay
therefor, provided, however, that Prevailing Market Rent shall include an
adjustment for so-called free rent, if any, applicable after substantial
completion of any tenant improvements, but shall not be reduced or adjusted for
"Tenant Concessions" (as defined below), if any, being offered to prospective
new tenants of comparable space. For purposes of the preceding sentence, the
term "Tenant Concessions" shall include, without limitation, tenant improvement
allowances and work, moving allowances, and lease takeovers. The determination
of Prevailing Market Rent based upon the foregoing criteria shall be made by
Landlord, in the good faith exercise of Landlord's business judgment. Within
thirty (30) days after Tenant's exercise of the Option To Extend, Landlord shall
notify Tenant of Landlord's determination of Option Term Rent for the Premises.
If Landlord's determination of Prevailing Market Rent is greater than the
Preceding Rent, and if Tenant, in Tenant's sole discretion, disagrees with the
amount of Prevailing Market Rent determined by Landlord, Tenant may elect to
revoke and rescind the exercise of the option by giving written notice thereof
to Landlord within ninety (90) days after notice of Landlord's determination of
Prevailing Market Rent.
(e) This Option to Extend is personal to Genelabs and may not be used
by, and shall not be transferable or assignable (voluntarily or involuntarily)
to any person or entity, provided however, so long as the occupancy requirement
is satisfied by Genelabs or by a Permitted Assignee (defined below), this right
may be exercised by Genelabs or by such Permitted Assignee, and such Permitted
Assignee may exercise the right without Genelabs joining in or consenting to
such exercise, and notwithstanding any provision of the Lease to the contrary,
Genelabs shall remain liable for all obligations under the Lease, including
those resulting from any such exercise, with the same force and effect as if
Genelabs had joined in such exercise. For purposes hereof, the term "Permitted
Assignee" shall mean an assignee of the Lease to which Landlord has consented
pursuant to Section 15 of the Lease and which has complied with Section 15 of
the Lease, or an assignee of the Lease which is a Permitted Transferee (as
defined in this Amendment) which has complied with Section 15.g of the Lease.
(f) Upon the occurrence of any of the following events, Landlord
shall have the option, exercisable at any time prior to commencement of the
Option Term, to terminate all of the provisions of this Section with respect to
the Option to Extend, with the effect of canceling and voiding any prior or
subsequent exercise so this Option to Extend is of no force or effect:
(i) Tenant's failure to timely exercise the Option to Extend in
accordance with the provisions of this Section.
(ii) The existence at the time Tenant exercises the Option to
Extend or at the commencement of the Option Term of a material default
on the part of Tenant under the Lease beyond any applicable cure period,
and without limiting the generality of what is a material default, any
default in payment beyond any applicable cure period shall be deemed to
be material;
(g) Without limiting the generality of any provision of the Lease,
time shall be of the essence with respect to all of the provisions of this
Section.
Section 12. Consent to Extension of Genitope Sublease. Reference is made
to that written consent dated March 2, 2001 to Sublease by Tenant, as
sublandlord, to Genitope Corporation, as Subtenant, executed by and between
Landlord, Tenant and Subtenant (the "Consent
8
to Sublease"). The referenced Sublease consists of that certain Sublease
Agreement between Tenant and Subtenant dated June 22, 1997, as amended by the
First Amendment to Sublease Agreement dated as of October __, 1999, the Second
Amendment to Sublease Agreement dated as of April 1, 2000 and the Third
Amendment to Sublease Agreement dated as of September 1, 2000. In connection
with this Amendment, Tenant has requested that Landlord consent to an extension
by Tenant of the Sublease Agreement by and between Tenant and Genitope
Corporation for a portion of the Premises for a period not to exceed expiration
of the Extended Term. Landlord consents to such extension subject to and upon
the following: (a) the Sublease shall continue to be subject and subordinate to
the Existing Lease, as amended by this Amendment, and to all its terms,
covenants, conditions, provisions and agreements, and for such extension, all
references to the Prime Lease in the Consent to Sublease shall mean the Existing
Lease, as amended by this Amendment; (b) the terms and conditions of the Consent
to Sublease shall continue to apply; (c) commencing upon the Extension
Commencement Date, Section 15.f of the Lease (as added pursuant to Section 8 of
this Amendment) shall apply to the Sublease; and (d) Tenant shall deliver to
Landlord a copy of the executed amendment extending the Sublease within ten (10)
days after it is executed by Tenant and Subtenant.
Section 13. Notices; Change of Address. Notwithstanding any provision of
the Existing Lease to the contrary, the current addresses for notices to be sent
to Landlord under the Lease and for payments to Landlord pursuant to the Lease
are changed to the following (the first address being the address for payments):
Notices to Landlord shall be addressed:
Metropolitan Life Insurance Company
c/o Seaport Centre Project Manager
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
with copies to the following:
Metropolitan Life Insurance Company
000 Xxxxx Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Vice President, Real Estate Investments
and
Metropolitan Life Insurance Company
000 Xxxxx Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Associate General Counsel
Section 14. Brokers. Tenant represents that except for Landlord's Broker
(defined below), Tenant has not dealt with any real estate broker, sales person,
or finder in connection with the subject matter of this Amendment, and no such
person is entitled to any commission, broker's or finder's fee or similar
compensation in connection herewith. Tenant hereby agrees to indemnify, protect,
defend and hold Landlord harmless from and against any and all liabilities,
demands and claims for commissions, fees or any compensation (and costs and
expenses in connection therewith, including, without limitation, attorneys fees
and costs of defense) by any person arising out of any dealing or discussion
allegedly had by Tenant with any such person in connection with the subject
matter of this Amendment. Landlord represents that in connection with the
subject matter of this Amendment it is represented by Cornish & Xxxxx
("Landlord's Broker") and, except for Landlord's Broker, Landlord has not dealt
with any real estate broker, sales person, or finder in connection with the
subject matter of this Amendment. Landlord hereby agrees to pay such commission,
if any, to which Landlord's Broker is entitled in connection with the subject
matter of this Amendment pursuant
9
to Landlord's written agreement with Landlord's Broker and agrees that Tenant is
not obligated to pay or fund any amount to Landlord's Broker.
Section 15. Time of Essence. Without limiting the generality of any
other provision of the Existing Lease, time is of the essence to each and every
term and condition of this Amendment.
Section 16. Attorneys' Fees. Each party to this Amendment shall bear its
own attorneys' fees and costs incurred in connection with the discussions
preceding, negotiations for and documentation of this Amendment. In the event
any party brings any suit or other proceeding with respect to the subject matter
or enforcement of this Amendment or the Existing Lease as amended, the
prevailing party (as determined by the court, agency or other authority before
which such suit or proceeding is commenced) shall, in addition to such other
relief as may be awarded, be entitled to recover attorneys' fees, expenses and
costs of investigation as actually incurred, including court costs, expert
witness fees, costs and expenses of investigation, and all attorneys' fees,
costs and expenses in any such suit or proceeding (including in any action or
participation in or in connection with any case or proceeding under the
Bankruptcy Xxxx, 00 Xxxxxx Xxxxxx Code Sections 101 et seq., or any successor
statutes, in establishing or enforcing the right to indemnification, in
appellate proceedings, or in connection with the enforcement or collection of
any judgment obtained in any such suit or proceeding).
Section 17. Effect of Headings; Recitals: Exhibits. The titles or
headings of the various parts or sections hereof are intended solely for
convenience and are not intended and shall not be deemed to or in any way be
used to modify, explain or place any construction upon any of the provisions of
this Amendment. Any and all Recitals set forth at the beginning of this
Amendment are true and correct and constitute a part of this Amendment as if
they had been set forth as covenants herein. Exhibits, schedules, plats and
riders hereto which are referred to herein are a part of this Amendment.
Section 18. Entire Agreement; Amendment. This Amendment taken together
with the Existing Lease, together with all exhibits, schedules, riders and
addenda to each, constitutes the full and complete agreement and understanding
between the parties hereto and shall supersede all prior communications,
representations, understandings or agreements, if any, whether oral or written,
concerning the subject matter contained in this Amendment and the Existing
Lease, as so amended, and no provision of the Existing Lease as so amended may
be modified, amended, waived or discharged, in whole or in part, except by a
written instrument executed by all of the parties hereto.
Section 19. Authority. Each party represents and warrants to the other
that it has full authority and power to enter into and perform its obligations
under this Amendment, that the person executing this Amendment is fully
empowered to do so, and that no consent or authorization is necessary from any
third party. Landlord may request that Tenant provide Landlord evidence of
Tenant's authority.
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Section 20. Counterparts. This Amendment may be executed in duplicates
or counterparts, or both, and such duplicates or counterparts together shall
constitute but one original of the Amendment. Each duplicate and counterpart
shall be equally admissible in evidence, and each original shall fully bind each
party who has executed it.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.
TENANT: GENELABS TECHNOLOGIES, INC.,
a California corporation
By: /s/ XXXXX X. XXXX
---------------------------------------------------
Print Name: Xxxxx X. Xxxx
-------------------------------------
Title: Charman of Board/Chief Executive Officer
------------------------------------------
(Chairman of Board, President or Vice President)
By: /s/ XXXXXXX X. XXXX
---------------------------------------------------
Print Name: Xxxxxxx X. Xxxx
-------------------------------------
Title: Chief Financial Officer
------------------------------------------
(Secretary, Assistant Secretary, CFO or Assistant Treasurer)
LANDLORD: METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation
By: /s/ XXXX X. XXXXXX
---------------------------------------------------
Print Name: Xxxx X. Xxxxxx
-------------------------------------
Title: Assistant Vice President
------------------------------------------
11
EXHIBIT A
FORM LETTER OF CREDIT
FOR INTERNAL IDENTIFICATION PURPOSES ONLY
Our No. ____________ Other __________
Applicant ____________________________
TO: Metropolitan Life Insurance Company
000 X. Xx Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Vice President
IRREVOCABLE LETTER OF CREDIT NO. ___________
We hereby establish this irrevocable Letter of Credit in favor of the
aforesaid addressee ("Beneficiary") for drawings up to United States $__________
effective immediately. This Letter of Credit is issued, presentable and payable
at our office at [issuing bank's address in the San Francisco Bay Area] and
expires with our close of business on ___________, 20__.
The term "Beneficiary" includes any successor by operation of law of the
named Beneficiary including, without limitation, any liquidator, rehabilitator,
receiver or conservator.
We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit No. ________, for all or any part of this Credit if
presented at our office specified in paragraph one on or before the expiry date
or any automatically extended expiry date.
Except as expressly stated herein, this undertaking is not subject to
any agreement, condition or qualification. The obligation of [issuing bank]
under this Letter of Credit is the individual obligation of [issuing bank], and
is in no way contingent upon reimbursement with respect thereto.
It is a condition of this Letter of Credit that it is deemed to be
automatically extended without amendment for one year from the expiry date
hereof, or any future expiration date, but not beyond January 31, 2007, unless
forty-five (45) days prior to an expiration date we notify you by registered
mail that we elect not to consider this Letter of Credit renewed for any such
additional period.
This Letter of Credit is transferable by the Beneficiary at no charge to
any transferee of the Beneficiary. Transfer of this Letter of Credit is subject
to receipt of Beneficiary's instructions in the form attached hereto as Exhibit
A accompanied by the original Letter of Credit and amendments(s) if any. Cost or
expenses of such transfer shall be for the account of the Applicant or, at
Beneficiary's option, may be paid by Beneficiary, subject to Beneficiary's right
to reimbursement by Applicant.
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This Letter of Credit is subject to and governed by the Laws of the
State of New York and the 1993 revision of the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce (Publication 500)
and, in the event of any conflict, the Laws of the State of New York will
control. If this Credit expires during an interruption of business as described
in article 17 of said Publication 500, the bank hereby specifically agrees to
effect payment if this Credit is drawn against within 30 days after the
resumption of business.
Very truly yours,
------------------------------
[issuing bank]
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Exhibit A to Form Letter of Credit
_____________________________
c/o _________________________
_____________________________
_____________________________
Attention:___________________
Re: Irrevocable Letter of Credit No. ________________
Ladies & Gentlemen:
The undersigned acknowledges receipt of your advice No. ____________ of
a credit issued in our favor, the terms of which are satisfactory. We now return
the original advice of the said credit with all amendments and extensions, if
any, and hereby irrevocably transfer the said credit and all amendments and
extensions thereof, if any, to:
____________________________
[Name of Transferee]
____________________________
[Address]
You are to inform the transferee of this transfer and such transferee
shall have sole rights as beneficiary under the credit, including any
amendments, extension or increases thereof, without notice to or further assent
from us.
This transfer is at no charge or cost to Beneficiary or the transferee.
Yours very truly,
Beneficiary
By:_______________________
(Bank)
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