Exhibit 10.57
TWELFTH AMENDMENT TO LEASE
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This Twelfth Amendment to that certain lease (this "TWELFTH AMENDMENT")
dated as of the 9 day of March, 1999, between HUB PROPERTIES TRUST, a Maryland
real estate investment trust ("LANDLORD") and CORVAS INTERNATIONAL, INC., a
Delaware corporation ("TENANT").
WHEREAS, Hartford Accident and Indemnity Company (the "Original
Landlord") and Corvas, Inc. (the "ORIGINAL TENANT") entered into a certain lease
dated March 28, 1989 of a portion of the premises located at 0000 Xxxxxxx Xxxx
Xxxx, Xxx Xxxxx, Xxxxxxxxxx (the "PROPERTY"), as amended by certain Lease
Amendments dated March 23, 1990 and May 18, 1990; and
WHEREAS, Corvas International, Inc., a California corporation
("Corvas") succeeded to the interests of Original Tenant under the lease as set
forth in Consent to Assignment of Lease dated March 13, 1991; and
WHEREAS, Original Landlord and Corvas entered into a Third Lease
Amendment dated May 16, 1991; Fourth Lease Amendment dated January 21, 1992;
Fifth Lease Amendment dated April 15, 1992; Sixth Lease Amendment dated July 16,
1992; and Seventh Lease Amendment dated January 18, 1993;
WHEREAS, Tenant succeeded to the interest of Corvas as set forth in
Consent to Assignment of Lease dated September 14, 1993; and
WHEREAS, Xxxxxxx Realty I Limited Partnership succeeded to the interest
of Original Landlord; and
WHEREAS, Xxxxxxx and Tenant entered into an Eighth Lease Amendment
dated July 7, 1995 and a Ninth Lease Amendment dated March 15, 1996; and
WHEREAS, Landlord has succeeded to the interest of Xxxxxxx as set forth
in Assignment and Assumption of Leases, Contracts and Other Property Interests
dated December 5, 1996; and
WHEREAS, Landlord and Tenant entered into a Tenth Amendment to Lease
dated May 12, 1997 and Eleventh Amendment to Lease dated April 23, 1998; and
WHEREAS, for purposes of this Twelfth Amendment, the above-referenced
lease dated March 28, 1989 as amended on March 23, 1990; May 18, 1990; May 16,
1991; January 21, 1992; April 15, 1992; July 16, 1992; January 18, 1993; July 7,
1995; March 15, 1996, May 12, 1997 and April 23, 1998 shall be hereinafter
defined collectively as "the LEASE"; and
WHEREAS, Tenant wishes to extend the term of the Lease and Landlord is
willing to agree to such extension upon the terms and conditions hereinafter set
forth.
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NOW, THEREFORE, in consideration of the foregoing and for other
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, Landlord and Tenant agree that the Lease is hereby amended as
follows:
1. The definition of "TERMINATION DATE" set forth in Section II.E. of
the Lease shall be amended by deleting the date "September 30, 1999" therefrom
and inserting the date "September 30, 2006" in its place.
2. The definition of "BASE RENT" set forth in Section II.G of the Lease
shall be amended by inserting the following at the end thereof:
"10/01/99 - 09/30/00, $ 850,850.40
10/01/00 - 09/30/01, $ 880,630.16
10/01/01 - 09/30/02, $ 911,452.22
10/01/02 - 09/30/03, $ 943,353.05
10/01/03 - 09/30/04, $ 976,370.41
10/01/04 - 09/30/05, $1,010,543.37
10/01/05 - 09/30/06, $1,045,912.39"
3. The definition of "MONTHLY INSTALLMENTS OF BASE RENT" set forth in
Section II.H of the Lease shall be amended by inserting the following at the end
thereof:
"10/01/99 - 09/30/00, $ 70,904.20
10/01/00 - 09/30/01, $ 73,385.85
10/01/01 - 09/30/02, $ 75,954.35
10/01/02 - 09/30/03, $ 78,612.75
10/01/03 - 09/30/04, $ 81,364.20
10/01/04 - 09/30/05, $ 84,211.95
10/01/05 - 09/30/06, $ 87,159.37"
4. Section II.W.a.(a) of the Lease shall be amended by inserting the
following at the end thereof:
"10/01/99 - 09/30/00, $ 28.20
10/01/00 - 09/30/01, $ 29.19
10/01/01 - 09/30/02, $ 30.21
10/01/02 - 09/30/03, $ 31.27
10/01/03 - 09/30/04, $ 32.36
10/01/04 - 09/30/05, $ 33.49
10/01/05 - 09/30/06, $ 34.67"
5. The following shall be inserted into the Lease at the end of Rider
G.2.:
"EXTENSION OPTION". So long as there exists no default of Tenant, this
Lease is still in full force and effect, and Tenant shall not have sublet,
assigned or otherwise transferred all or any
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portion of its interest under this Lease, Tenant shall have the right to extend
the term of this Lease for one (1) additional period (the "EXTENDED TERM") of
three (3) years. The Extended Term shall commence on the day succeeding the
expiration of the current term and shall end on the day immediately preceding
the third anniversary of the commencement of the Extended Term. All of the
terms, covenants and provisions of this Lease applicable immediately prior to
the expiration of the then current term shall apply to the Extended Term except
that (i) the Base Rent for the Extended Term shall be the greater of (a) the
Annual Fixed Rent in effect on the day preceding the commencement of the
Extended Term without giving effect to any abatements, set-offs or concessions
then in effect, or (b) the Market Rate (as hereinafter defined) for the Premises
determined as of the commencement of the Extended Term, as designated by
Landlord by notice to Tenant ("LANDLORD'S NOTICE"), but subject to Tenant's
right to dispute as hereinafter provided; and (ii) Tenant shall have no further
right to extend the term of this Lease beyond the Extended Term hereinabove
provided. If Tenant shall elect to exercise the aforesaid option, it shall do so
by giving Landlord notice of its intention to do so not later than September 30,
2005, nor sooner than March 31, 2005. If Tenant fails to give such notice to
Landlord, the term of this Lease shall automatically terminate no later than the
end of the current term, and Tenant shall have no further option to extend the
term of this Lease, it being agreed that time is of the essence with respect to
the giving of any such notice. If Tenant gives such notice, the extension of
this Lease shall be automatically effected without the execution of any
additional documents.
The term Market Rate shall mean (a) the then annual rental rate and
terms for the Premises for the applicable period (determined (i) as if the
Premises were available in the then rental market, (ii) based on the assumptions
that Landlord has had a reasonable time to locate a tenant, and neither Landlord
nor the prospective tenant is under a compulsion to rent, and (iii) taking into
consideration any increases or possible increases in rent from and after the
commencement of the Extended Term then being included in leases for comparable
space in the Building or in comparable buildings based on changes in price
indices, including the consumer price index, cost of living or other similar
increases, or periodic market rental adjustments.
If Tenant disagrees with Landlord's designation of the Market Rate, and
the parties cannot agree upon the Market Rate by the date that is thirty (30)
days following Landlord's Notice, then the Market Rate shall be submitted to
appraisal as follows: Within fifteen (15) days after the expiration of such
thirty (30) day period, Landlord and Tenant shall each give notice to the other
specifying the name and address of the appraiser each has chosen. The two
appraisers so chosen shall meet within ten (10) days after the second appraiser
is appointed and if, within twenty (20) days after the second appraiser is
appointed, the two appraisers shall not agree upon a determination of the Market
Rate in accordance with the following provisions they shall together appoint a
third appraiser. If only one appraiser shall be chosen whose name and address
shall have been given to the other party within such fifteen-day period and who
shall have the qualifications hereinafter set forth, that sole appraiser shall
render the decision which would otherwise have been made as hereinabove
provided.
If said two appraisers cannot agree upon the appointment of a third
appraiser within ten (10) days after the expiration of such twenty (20) day
period, then either party, on behalf of both and on notice to the other, may
request such appointment by the President of the American
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Arbitration Association (or any successor organization) in accordance with its
then prevailing rules. In the event that all three appraisers cannot agree upon
such Market Rate within ten (10) days after the third appraiser shall have been
selected, then each appraiser shall submit his or her designation of such Market
Rate to the other two appraisers in writing; and Market Rate shall be determined
by calculating the average of the two numerically closest (or, if the values are
equidistant, all three) values so determined.
Each of the appraisers selected as herein provided shall have at least
ten (10) years experience as a commercial real estate broker in the San Diego
metropolitan area dealing with properties of the same type and quality as the
Building. Each party shall pay the fees and expenses of the appraiser it has
selected and the fees and expenses of the third appraiser and all other expenses
(not including counsel fees which shall be borne separately by each of the
parties) of the appraisal shall be borne equally by the parties hereto except
that the fees and expenses of the sole appraiser shall be borne equally by the
parties. The decision and award of the appraiser(s) shall be in writing and be
final and conclusive on all parties, and counterpart copies thereof shall be
delivered to both Landlord and Tenant. Judgment upon the award of the
appraiser(s) may be entered in any court of competent jurisdiction.
The sole appraiser, both appraisers or the majority of the appraisers
(as applicable) shall determine the Market Rate of the Premises for the
applicable period as of the New Rent Date and render a decision and award as to
their determination to both Landlord and Tenant within twenty (20) days after
the appointment of the third appraiser or the expiration of such fifteen-day
period. In addition to the considerations set forth in the definition of Market
Rate set forth above, in rendering such decision and award, the appraisers shall
assume that (i) the Landlord and prospective tenant are typically motivated,
well-informed and well-advised, and each is acting in what it considers it own
best interest; (ii) the Premises (w) are fit for immediate occupancy and use "as
is", (x) require no additional work by Landlord or the prospective tenant, (y)
are appropriate and desired for immediate occupancy by the prospective tenant,
and (z) contain no work that has been carried out thereon by Tenant, its
subtenant(s), or its or their successors in interest during the term of the
Lease which has diminished the rental value of the Premises; and (iii) that in
the event of the Premises having been destroyed or damaged by fire or other
casualty, they have been fully restored. In rendering such decision and award,
the appraiser(s) shall consider the market fixed annual rents then being charged
for comparable space in other similar buildings in the San Diego metropolitan
area but shall not modify the provisions of this Lease.
If the dispute between the parties as to the Market Rate has not been
resolved before the commencement of Tenant's obligation to pay the Base Rent
based upon determination of such Market Rate, then Tenant shall pay the Base
Rent under the Lease based upon the Market Rate designated by Landlord in
Landlord's Notice until either the agreement of the parties as to the Market
Rate, or the decision of the appraiser(s), as the case may be, at which time
Tenant shall pay any underpayment of the Base Rent to Landlord, or Landlord
shall refund any overpayment of the Base Rent to Tenant.
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Landlord and Tenant hereby waive the right to an evidentiary hearing
before the appraiser(s) and agree that the appraisal shall not be an arbitration
nor be subject to state or federal law relating to arbitrations."
6. Effective October 1, 1999, Section (f) of Rider 1 (Expense
Contribution) shall be deleted in its entirety.
7. Tenant acknowledges that the premises (the "PREMISES") demised by
the Lease are as of the date hereof in good condition and are appropriate for
its use and occupancy. Nevertheless, if Tenant shall desire to perform certain
leasehold improvements in the Premises, and shall prepare the complete
construction plans and specifications necessary for such work and receive
Landlord's approval therefore on or before September 30, 2000, Landlord shall
make Landlord's Contribution (as hereinafter defined) available to Tenant, as
follows:
Within fifteen (15) days following completion of such work and receipt
by Landlord of invoices for such work from Tenant's contractor(s) and lien
waivers from such contractors, and provided Tenant has obtained any permits or
approvals (including but without limitation any certificate of occupancy)
required as a result of such work, and such work shall have been performed in
accordance with the plans approved by Landlord and any applicable laws and there
shall then exist no default of Tenant, Landlord shall remit to Tenant that
amount ("LANDLORD'S CONTRIBUTION") being the lesser of the cost of such work as
shown by such invoices or $150,860.00; provided further that Landlord's
Contribution may not be applied toward any invoice not received by Landlord by
September 30, 2001.
8. Effective October 1, 1999, Section II.L. of the Lease shall be
amended to increase the Security Deposit required under the Lease to
$212,712.00, and Tenant shall, upon or before such date, deliver to Landlord a
clean irrevocable Letter of Credit (the "LETTER OF CREDIT") in the amount of
such increased Security Deposit in a form acceptable to Landlord upon the
following terms and conditions:
The Letter of Credit shall (a) be unconditional and irrevocable and
otherwise in form and substance satisfactory to Landlord; (b) be at all times in
the amount of the Security Deposit, and shall permit multiple draws without a
corresponding reduction in the amount of the Letter of Credit; (c) be issued by
a commercial bank reasonably acceptable to Landlord from time to time; (d) be
made payable to, and expressly transferable and assignable at no charge by, the
owner from time to time of the Property (which transfer/assignment shall be
conditioned only upon the execution by such owner of a written document in
connection with such transfer/assignment; (e) be payable at sight upon
presentment to a local branch of the issuer of a simple sight draft accompanied
by a certificate of Landlord stating either that Tenant is in default under the
Lease or that Landlord is otherwise permitted to draw upon such Letter of Credit
under the express terms of the Lease, and the amount that Landlord is owed (or
is permitted to draw) in connection therewith; and (f) shall either expire
ninety (90) days following the expiration of the term of the Lease, or be
replaced not less than thirty (30) days prior to the expiration of the then
current Letter of Credit so that the original Letter of Credit or a replacement
thereof shall be in full force and effect throughout the term of the Lease and
for a period of ninety (90) days thereafter.
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Tenant shall deliver to Landlord any replacement Letter of Credit not less than
thirty (30) days prior to the expiration of the then current Letter of Credit.
If Landlord transfers the Security Deposit to any transferee of the Property or
Landlord's interest therein, then such transferee shall be liable for the return
of the Security Deposit, and Landlord shall be released from all liability for
the return thereof. Notwithstanding anything in this Lease to the contrary, any
grace period or cure periods which are otherwise applicable, shall not apply to
any of the foregoing, and, specifically, if Tenant fails to comply with the
requirements of subsection (f) above, Landlord shall have the immediate right to
draw upon the Letter of Credit in full and hold the proceeds thereof as cash
security deposit. Each Letter of Credit shall be issued by a commercial bank
that has a credit rating with respect to certificates of deposit, short term
deposits or commercial paper of at least P-2 (or equivalent) by Xxxxx'x Investor
Service, Inc., or at least A-2 (or equivalent) by Standard & Poor's Corporation.
If the issuer's credit rating is reduced below P-2 (or equivalent) by Xxxxx'x
Investor Service, Inc., or at least A-2 (or equivalent) by Standard & Poor's
Corporation, or if the financial condition of the issuer changes in any other
materially adverse way, then Landlord shall have the right to require that
Tenant obtain from a different issuer a substitute letter of credit that
complies in all respects with the requirements of this Section, and Tenant's
failure to obtain such substitute letter of credit within ten (10) days after
Landlord's written demand therefor (with no other notice, or grace or cure
period being applicable thereto) shall entitle Landlord to immediately draw upon
the existing Letter of Credit in full, without any further notice to Tenant.
9. Effective October 1, 1999, Exhibit F to the Lease is deleted in its
entirety.
10. Reference is made to that certain letter agreement (the "LETTER
AGREEMENT") dated December 8, 1997, by and between Landlord and Tenant relating
to the "storage room" located in the northeastern corner of the parking garage.
Commencing October 1, 1999, rent for this space shall be $2,422.20 per annum
($201.85 per month). All other terms and conditions of the Letter Agreement
shall remain unchanged.
11. Tenant shall, in addition to all other amounts due under the Lease,
as amended hereby, continue to pay to Landlord, as additional rent, $430.93 on
the first day of each month through December 2002 on account of the amortization
(with interest) of the cost of the installation of a certain fire alarm system
in the Premises.
12. Tenant warrants and represents that it has dealt with no broker in
connection with the execution of this Twelfth Amendment to Lease other than
Biotech Realty Partnerships ("BRP") and Colliers International ("Colliers").
Landlord shall pay a brokerage commission of $178,008.81 to BRP and a brokerage
commission of $99,286.68 to Colliers, half of each payment to be paid upon
execution hereof and the other half of each to be paid on or about October 1,
1999. Tenant agrees to indemnify Landlord and hold it harmless from and against
any and all brokerage claims arising out of this Twelfth Amendment other than
the amounts to be paid by Landlord as provided in the foregoing sentence.
13. Except as herein specifically amended, this Lease is hereby
ratified and confirmed.
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IN WITNESS WHEREOF, the parties have hereto executed this Twelfth
Amendment the date first above-written.
LANDLORD:
HUB PROPERTIES TRUST, a Maryland
real estate investment trust
By: /S/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Its: Sr. Vice President
TENANT:
CORVAS INTERNATIONAL, INC., a Delaware
corporation
By: /S/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Its: President & CEO
