EXHIBIT 10.2
SECOND AMENDMENT OF TERMINATION AGREEMENT AND TERMINATION OF
OPTION AGREEMENT
THIS SECOND AMENDMENT OF TERMINATION AGREEMENT AND TERMINATION OF
OPTION AGREEMENT (this "Second Amendment") is entered into as of July 1, 2003,
by and among AMB PROPERTY, L.P., a Delaware limited partnership ("AMB"), NUVELO,
INC., a Nevada corporation, successor by merger to Hyseq, Inc., a Nevada
corporation ("Nuvelo"), and XXXXXX XXXXXXXX, an individual ("Guarantor"). AMB,
Nuvelo and Guarantor are sometimes referred to individually herein as a "Party"
and collectively as the "Parties."
RECITALS
A. AMB, Nuvelo and Guarantor were parties to that certain
Conditional Lease Termination Agreement dated as of October 1, 2002 (the
"Termination Agreement") pursuant to which the lease between AMB and Nuvelo
dated as of June 23, 2000, as amended by that certain First Amendment to Lease
Agreement dated December 14, 2000 (as so amended, the "Lease"), relating to, and
Nuvelo's right to possession of, the approximately 59,300 rentable square feet
located at 225, 249 and 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx (the
"Property"), was terminated, all as more particularly described in the
Termination Agreement.
B. In connection with the Termination Agreement, AMB and Nuvelo
also entered into that certain Real Property Option and Sale Agreement and Joint
Escrow Instructions dated as of October 1, 2002 (the "Option Agreement")
pursuant to which AMB granted to Nuvelo an option to purchase the Property on
the terms and conditions contained in the Option Agreement (the "Option"). As
partial consideration for the Option, Nuvelo also executed a Promissory Note
dated November 1, 2002 (the "Original Note") in the principal amount of
$2,600,000 in favor of AMB, and issued to AMB a Warrant to Purchase Shares of
Common Stock dated November 1, 2002 for up to 195,130 shares of common stock of
Nuvelo (the "Original Warrants"). A Memorandum of Option dated November 18, 2002
executed by AMB and Nuvelo was recorded on November 18, 2002 in the Official
Records of the County of Santa Xxxxx, State of California (the "Official
Records") as Instrument No 16622221.
C. Guarantor executed a guaranty (the "Original Guaranty") of
Nuvelo's obligations under the Original Note. Under the Original Guaranty,
Guarantor also guaranteed and promised to pay any avoidance by Nuvelo, Nuvelo's
successors or Nuvelo's creditors of all or any part of the sum of $3,100,000
which amount represents a portion of the termination fee paid to AMB pursuant to
the Termination Agreement, or the recovery of any portion of such termination
fee directly or indirectly from AMB as a preference, fraudulent transfer or
otherwise under the Bankruptcy Code or other similar laws, which guarantee and
promise terminated on February 3, 2003.
D. The Parties acknowledge that AMB is holding an irrevocable
letter of credit number 306S234524 dated November 13, 2002 in the amount of
$250,000 (the "Repair Letter of Credit") issued by Union Bank of California (the
"Issuing Bank") in favor of AMB, as Beneficiary, for the account of Nuvelo, as
Applicant, which letter of credit secures the obligations of Nuvelo to repair
the Property set forth in the Termination Agreement and certain
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side letters executed by the Parties in connection therewith (the "Original
Repair Obligations"). The Parties also acknowledge that in accordance with the
Termination Agreement, the Existing Letter of Credit (as defined in the
Termination Agreement) in the amount of $3,000,000 was previously returned by
AMB to the Issuing Bank and has been cancelled.
E. The Termination Agreement, the Option Agreement, the Original
Note, the Warrants, the Original Guaranty, the Repair Letter of Credit and the
other instruments and documents executed by or entered into among the Parties in
connection therewith, are referred to herein sometimes collectively as the
"Original Transaction Documents."
F. The Parties entered into a certain Pre-Negotiation and
Extension Agreement dated as of April 29, 2003, as amended by the letter
agreement dated May 7, 2003, providing for, among other things, the extension of
the Option Period (as defined in the Option Agreement) until 5:00 p.m. (Pacific
Standard Time) on May 9, 2003 (as amended, the "Pre-Negotiation Agreement").
G. The Parties entered into a certain Amendment of Termination
Agreement and Termination of Option Agreement (referred to herein as the
"Amendment") on May 9, 2003, that became effective on May 16, 2003, and certain
Modification Documents (as defined in the Amendment) that also became effective
on May 16, 2003. The Amendment and the Modification Documents supersede the
Original Transaction Documents. The Amendment provides for amendment of the
Repair Letter of Credit and termination of the Option, the Option Agreement and
the other Original Transaction Documents, all on and subject to the terms and
conditions provided in the Amendment and in the other Modification Documents.
The Amendment and the Modification Documents further provide for termination of
the Original Note and the issuance of the Amended and Restated Promissory Note,
in accordance with which the principal balance under the Amended and Restated
Promissory Note and all charges, costs and expenses due under it are due and
payable to AMB from Nuvelo in full on May 1, 2005. Further, the Amendment
provides for the issuance by Nuvelo of a warrant for AMB to purchase up to
200,000 shares of Nuvelo common stock. The Amendment together with the other
Modification Documents are referred to in this Second Amendment collectively as
the "Amendment Documents."
H. The Parties now desire to amend the Amendment Documents in
order to modify the arrangements made for the restoration of the Property. The
Parties desire to cancel the Repair Letter of Credit number 306S234534 dated
November 13, 2002, as amended, and have Nuvelo pay the sum of $250,000 directly
to AMB. The Parties further desire to permit AMB to use certain materials owned
by Nuvelo in the restoration of the Property. Nuvelo desires to make
arrangements for the payment of $10,000 to Xxxx Project Management for their
services with respect to the restoration project. Finally, AMB desires to
terminate Nuvelo's obligation to restore the Property in accordance with the
terms of Section 6 of the Amendment. Capitalized terms used but not otherwise
defined herein shall have the same meanings as in the Amendment Documents.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and intending to be legally bound hereby, the Parties covenant
and agree as follows:
AGREEMENT
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1. Section 6 of the Amendment is hereby deleted in its entirety.
2. Effective as of the Effective Date, as hereinafter defined,
the Original Repair Obligations set forth in Paragraph 5 of the Termination
Agreement and the side letters executed by the Parties in connection therewith
are terminated in their entirety. As of the Effective Date, Nuvelo has no
further obligations of any kind whatsoever with respect to the repair or
restoration of the Property under the Amendment Documents. Nuvelo agrees to
provide AMB with the materials set forth in Exhibit E attached to this Second
Amendment solely for the purpose of AMB's restoration of the Property. Nuvelo
further agrees to allow AMB and its contractors, solely with the escort of an
agent or employee of Nuvelo, reasonable access to [***] for the sole purpose of
removing the materials listed on Exhibit E attached to this Second Amendment,
and no other materials of any kind whatsoever. The materials listed on Exhibit E
attached to this Second Amendment are provided to AMB at no cost to AMB in their
current "AS IS" condition, without warranty, express or implied. AMB shall
repair any damage to the premises of [***] caused by AMB's removal of the
materials.
3. Not more than 1 business day after the Effective Date, AMB
shall return the Repair Letter of Credit number 306S234534 dated November 13,
2002, as amended by the Repair Letter of Credit Amendment, to Union Bank for
cancellation effective upon the Effective Date.
4. On July 1, 2003, Nuvelo shall wire to AMB $250,000 United
States dollars (the "Repair Monies") in accordance with the following
instructions: [***]
5. On July 1, 2003, Nuvelo shall pay to Xxxx Project Management,
LLC., care of [***], $10,000 United States dollars ("Xxxx Monies") as payment in
full for all services provided to Nuvelo relating to repair and restoration of
the Property. Nuvelo shall promptly provide AMB with a written payment
notification ("Payment Notification") which shall include copy of the check for
the Xxxx Monies and evidence of delivery of the Xxxx Monies to Xxxx Project
Management, LLC.
6. Section 10 of the Amendment is amended by deleting the last
sentence of Section 10 of the Amendment.
7. EXHIBIT E of the Amendment is amended by deleting EXHIBIT E in
its entirety and replacing it with the Exhibit E attached to this Second
Amendment.
8. In addition to the deletion of Section 6 of the Amendment, the
Amendment Documents are amended by deleting any and all references to, and
obligations associated with, Repair Obligations, Repair Deadline, Work, and any
other obligations of any kind whatsoever regarding or otherwise relating to
repair or restoration of the Property by Nuvelo, including without limitation
such references or obligations set forth or implied in any warranty, indemnity,
discussion of liability or in Section 11 of the Amendment. AMB acknowledges and
agrees that upon the Effective Date Nuvelo has no obligation to, and no
liability with respect to, restoration or repair of the Property. AMB further
acknowledges and agrees that upon the Effective Date Nuvelo has no obligation of
any kind whatsoever under the Amendment Documents to maintain a letter of credit
of any kind whatsoever for the benefit of AMB.
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9. Any failure by AMB to return the original Repair Letter of Credit,
as amended, as provided in Section 3 of this Second Amendment is a material
breach of the Amendment by AMB. AMB shall execute such additional documents and
instruments reasonably requested by Nuvelo or the Issuing Bank to permit the
cancellation of the Repair Letter of Credit effective upon the Effective Date.
10. For purposes of this Second Amendment, the term "Effective Date"
shall mean the later of (i) the date on which AMB receives the Repair Monies
from Nuvelo and (ii) the date on which AMB receives the Payment Notification
from Nuvelo. If the Effective Date does not occur on or before July 10, 2003,
then, unless AMB elects in writing to waive the same and to continue this Second
Amendment, this Second Amendment shall terminate and be of no further force and
effect and the Amendment Documents shall remain in full force and effect.
11. This Second Amendment is governed by and construed and enforced in
accordance with the laws of the State of California, without giving effect to
the principles of conflicts of law.
12. This Second Amendment is binding upon and inures to the benefit of
the respective successors and assigns of each of the Parties.
13. This Second Amendment may be executed in one or more counterparts,
each of which constitutes an original and all of which taken together constitute
one agreement. Any counterpart may be executed by facsimile copy and is binding
on the Parties.
14. Each person executing this Second Amendment represents that such
person has full authority and legal power to do so and bind the Party on whose
behalf he or she has executed this Second Amendment.
15. Except as expressly modified by this Second Amendment, all of the
terms and provisions of the Amendment Documents remain in full force and effect
and are hereby ratified and confirmed by AMB, Nuvelo and Guarantor.
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IN WITNESS WHEREOF, the parties have executed this Second Amendment of
Termination Agreement and Termination of Option Agreement on the day and year
first above written.
AMB:
AMB PROPERTY, L.P., A DELAWARE LIMITED PARTNERSHIP
By: AMB PROPERTY CORPORATION, a Maryland corporation, its
general partner
By: ______________________________
Xxxx X. Xxxxx
Its: Senior Vice President
NUVELO:
NUVELO, INC., A NEVADA CORPORATION
By: _____________________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and CFO
By: _____________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title: Senior Vice President, Human Resources
GUARANTOR:
___________________________________________
XXXXXX XXXXXXXX
SSN #: [***]
The undersigned, the wife of Xxxxxx Xxxxxxxx, hereby
consents to the foregoing Second Amendment and
acknowledges that such Second Amendment and the other
documents entered into by Xxxxxx Xxxxxxxx in connection
therewith creates binding obligations of Xxxxxx Xxxxxxxx
and the undersigned, and their individual, joint and
community assets.
SPOUSE OF GUARANTOR:
___________________________________
XXXXXXX XXX XXXXXXXX
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SSN #: [***]
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EXHIBIT E
The following itemization details those materials to be provided to AMB from
stored inventory at [***] for the sole purpose of completing cold shell
improvements at the Property.
MATERIAL SCHEDULE
- 2 urinals
- 4 water closets
- 2 floor drains
- 20 drain caps
- 15 plumbing elbows/connectors
- 210 pieces 6" metal studs (18'-0" long)
- 50 pieces 3 5/8" metal studs (9'-0" long)
- 15 pieces of slotted track (10'-0" long)
- 125 sheets of the 4'-0" X 10'-0" sheetrock
- Twenty-four 8'-0" suspended 2 bulb light fixtures
- 1,500 lineal feet of conduit and wire for lighting circuits
- other materials required to complete the cold shell
improvements that are mutually identified and mutually agreed
upon by the parties
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