Exhibit 4.13
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (this "First Amendment") is
dated as of June 17, 2003, between ARE 9880 CAMPUS POINT, LLC, a Delaware
limited liability company ("Landlord"), and LION BIOSCIENCE, INC., a Delaware
corporation ("Tenant").
A. Landlord's predecessor in interest, Aid Association for
Lutherans, a Wisconsin Corporation ("Original Landlord") and Tenant's
predecessor in interest, Trega Biosciences, Inc., a Delaware corporation
("Original Tenant") entered into that certain Lease dated as of September 24,
1997, (the "Lease"), with respect the building located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Building"), pursuant to which Original
Landlord leased to Original Tenant certain premises comprising 100% of the
rentable area of the Building (the "Premises"). Initially capitalized terms not
specifically defined herein shall have the meanings set forth in the Lease.
B. Tenant has succeeded to the interest of Original Tenant under
the Lease, and Landlord has succeeded to the interest of Original Landlord under
the Lease.
C. The Lease by its original terms will terminate on April 30, 2008
("Original Termination Date").
D. Landlord and Tenant have agreed to amend the Lease to provide
Tenant with an option to terminate the Lease on an earlier date than the
Original Termination Date.
E. Landlord and Tenant desire to amend the Lease further upon the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree, and amend the Lease as follows:
1. Effective Date of First Amendment. This First Amendment, and the
respective rights and obligations of Landlord and Tenant hereunder, shall be
effective as of the date of mutual execution and delivery hereof (the "First
Amendment Effective Date").
2. Approval of Lender. Original Landlord has provided a loan to
Landlord, which is secured by a deed of trust encumbering the Building for the
benefit of Original Landlord. Pursuant to the terms of Landlord's agreement with
Original Landlord, Original Landlord has the right to approve any modification
of a lease of the Building. The effectiveness of this First Amendment is subject
to the condition precedent that approval of Original Landlord is granted
("Original Landlord Approval"). Landlord hereby agrees to use commercially
reasonable efforts
to obtain Original Landlord Approval on or before June 23, 2003. If for any
reason, Original Landlord Approval has not been obtained on or before June 23,
2003, then Tenant shall have the right to declare this First Amendment null and
void, provided Tenant gives Landlord a cure period of seven (7) days after
written notice during which Landlord may obtain the approval of Original
Landlord, in which case this First Amendment shall continue in full force and
effect. If for any reason, Original Landlord Approval has not been obtained on
or before June 30, 2003, then Landlord shall have the right to declare this
First Amendment null and void as of June 30, 2003, by written notice to Tenant,
provided that prior to June 30, 2003, Landlord covenants to use commercially
reasonable efforts to obtain the consent of Original Landlord, and if the
consent of Original Landlord is obtained then this First Amendment shall
continue in full force and effect.
3. Grant of Option to Terminate.
(A) Landlord hereby agrees to grant Tenant an option
to terminate the Lease prior to the Original Termination Date as set
forth in this Section 3. At any time on or after January 2, 2004, but
before the Last Notice Date, as hereinafter defined, Tenant shall have
the option to terminate the Lease (the "Termination Option") by
delivering to Landlord written notice (the "Termination Notice") of
Tenant's clear intent to elect to exercise the Termination Option, with
such termination to be effective as of the Effective Termination Date
(defined below). The "Last Notice Date" shall be the later of: (i)
February 2, 2004, or (ii) the date which is 10 business days after
Tenant receives a Reminder Notice, as hereinafter defined, from
Landlord. A "Reminder Notice" shall be defined as written notice from
Landlord to Tenant given on or before January 15, 2004 advising Tenant
that Tenant has not yet exercised the Termination Option.
(B) The Termination Option is subject to the
condition precedent and shall become effective if and only if, on or
before the date which is 92 days after delivery to Landlord of the
Deposit (as defined below): (i) subject to Subparagraph (C) below, no
petition under the United States Bankruptcy Code is filed by or against
Tenant and, (ii) Tenant does not make an assignment for the benefit of
creditors pursuant to California Code of Civil Procedure Section 493.010
or other similar law.
(C) Notwithstanding the foregoing Subparagraph (B),
if an involuntary petition in bankruptcy is filed against Tenant during
such period of 92 days, then Tenant shall have a period of up to 90 days
to cause the dismissal of such petition. If Tenant causes the dismissal
of such involuntary petition, then the condition precedent to the
effectiveness of the Termination Option shall be deemed satisfied as of
the date which is 92 days after the date of delivery of the Deposit.
(D) If a voluntary petition under the United States
Bankruptcy Code is filed, an involuntary petition is filed and not
dismissed as provided in Subparagraph (C) above, or any an assignment
for the benefit of creditors is so made, then the Termination Option
shall not become effective, and notwithstanding any other provision of
this First Amendment, the Letter of Credit shall thereafter be deemed to
be security for Tenant's obligations under the Lease.
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(E) The conditions set forth in Subparagraphs (B)
and (C) of this Section 2, the delivery of the Deposit, the approval of
Original Lender, and the timely giving of the Termination Notice by
Tenant are the only conditions to the exercise by Tenant of the
Termination Option.
(F) If Tenant timely exercises the Termination
Option, the term of the Lease shall terminate as of the Effective
Termination Date. The "Effective Termination Date" shall be a date
during the month of February 2004 which is not earlier than February 2,
2004, and is designated by Tenant in the Termination Notice. Tenant
shall have no further obligation to pay Rent or other charges due under
the Lease with respect to any time period after the Effective
Termination Date (including, without limitation, any obligation to pay
any adjustment ("True-Up Payments") in the amount of Additional Rent
payable by Tenant based upon the actual amount of Operating Expenses for
calendar years 2003 and 2004). Tenant shall, subject to Section 9A
below, vacate and the deliver to the Premises to Landlord, broom clean,
free of the property of Tenant and anyone claiming by, through, or under
Tenant (including any Subtenant Parties). Tenant shall not remove fume
hoods, exhaust hoods, glass washing equipment, the emergency generator
and transfer switch, cage washers, or the vivarium. Tenant hereby
acknowledging that the provisions of Section 12 of the Lease shall apply
in the event of any breach of its obligation to vacate and deliver the
Premises to Landlord as provided in the immediately preceding sentence.
The foregoing provision which exculpates Tenant from any further
obligation to pay Rent after delivery of the Deposit shall not be deemed
to limit Tenant's financial obligations for Haz Mats Claims as set forth
herein.
(G) If Tenant does not exercise the Termination
Option, then the Lease will continue in full force and effect after the
Effective Termination Date.
(H) If Tenant exercises the Termination Option,
Landlord and Tenant agree to cooperate reasonably with one another in
signing any further instrument as may be reasonably necessary to confirm
the termination of the Lease, including without limitation those
instruments described in Section 32 of the Lease.
4. Payment of Rent. On or before the date which is five (5)
business days after the date Landlord notifies Tenant in writing that Landlord
has received Original Landlord Consent (which notice shall contain evidence
reasonably satisfactory to Tenant of receipt of Original Landlord Consent),
Tenant shall deposit with Landlord a deposit (the "Deposit"), to be used
exclusively for the payment of all of Tenant's obligations for Rent (the term
"Rent" shall be deemed to include without limitation obligations for Additional
Rent and any other payments due by Tenant) under the Lease for the period
between the First Amendment Effective Date and the Effective Termination Date,
and as otherwise set forth herein. The Deposit shall be in the Letter of Credit
Amount, as hereinafter defined. The Deposit shall be in the form of an
unconditional and irrevocable letter of credit (the "Letter of Credit"): (i)
substantially in form attached hereto as Exhibit A, (ii) naming Landlord as
beneficiary, (iii) expressly allowing Landlord to draw upon it at any time from
time to time by delivering to the issuer notice that Landlord is entitled to
draw thereunder, (iv) issued by Deutsche Bank or another FDIC-insured financial
institution satisfactory to Landlord, (v) redeemable by presentation of a sight
draft in the state of California, and (vi) having an expiration date of March
31, 2004. The "Letter of
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Credit Amount" shall be $4,130,000.00, reduced by the amount of any payments
which Tenant pays, or has paid, to Landlord on account of Rent for the period
commencing as of June 1, 2003 and ending on the date Tenant delivers the Letter
of Credit to Landlord. The Deposit shall be held by Landlord for the payment of
Rent under the Lease. Tenant shall continue to be responsible for the payment of
its utilities as provided in the Lease. Monthly, on or after the day that Basic
Annual Rent is due and payable by Tenant under the Lease, Landlord shall draw
from the Letter of Credit an amount equal to Tenant's obligations in respect of
Rent (with Rent being Basic Annual Rent and Additional Rent under the Lease,
including without limitation any True-Up Payments, as defined in Section 3(F)
above) for such month. The Deposit is not intended to be a security deposit.
Nevertheless, Tenant hereby waives the provisions of any law, now or hereafter
in force, which provide that Landlord may claim from a security deposit only
those sums reasonably necessary to remedy defaults in the payment of Rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may draw upon the Letter of Credit for the payment of Rent and other
charges payable under the Lease, and the Termination Payment, as hereinafter
defined. If Tenant exercises the Termination Option, Tenant shall have no
further obligation to pay Rent beyond the amount of the Deposit, except as
expressly set forth herein, whether or not the Deposit is for any reason
sufficient to pay for such obligations. If Tenant elects to exercise the
Termination Option, then as of the Effective Termination Date, Landlord shall
have the right to draw from the Letter of Credit the full remaining amount of
the Letter of Credit, which amount shall be deemed to be Additional Rent under
the Lease payable in consideration of Tenant's exercise of the Termination
Option. If Tenant does not elect to exercise the Termination Option, then
Landlord shall continue to draw monthly Rent from the Deposit until the Deposit
is exhausted, and Tenant shall thereafter pay Rent as set forth in the Lease.
5. Security Deposit. The parties acknowledge that Landlord is
holding a Security Deposit (as defined in Section 9 of the Lease) in the amount
of $161,156.25. As of the First Amendment Effective Date, the full amount of the
Security Deposit shall belong to and be retained by Landlord as Additional Rent
in consideration of granting Tenant the Termination Option.
6. Tenant's Maintenance Obligations.
(A) Subject to the conditions and other provisions set forth
in this Section 6, Landlord and Tenant hereby agree that as of the First
Amendment Effective Date, Section 17.2 of the Lease regarding Tenant's
obligations to keep the Premises in good condition and repair, is modified so
that during the period between the First Amendment Effective Date and the
Effective Termination Date, Tenant shall not be obligated to maintain the
Premises, except as provided herein. From and after the First Amendment
Effective Date, Landlord shall assume full and complete responsibility for
maintenance and repair of the foundation, floor slab, parking lot, load bearing
walls, roof and all other structural components of the Premises, and shall
assume full and complete responsibility for the repair and maintenance of all
Major Building Systems, as hereinafter defined. "Major Building Systems" are
hereby defined to mean the heating and air conditioning system, roof, plumbing
and electrical connections to the Building, and any other major systems of the
Building. Landlord shall not be responsible for minor repairs and maintenance in
the interior of the Premises, including without limitation failure of rest room
facilities to operate, replacement of light bulbs, repair of the Building
security system, or failure
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of any laboratory equipment to operate properly. The parties acknowledge and
agree that Landlord shall have no obligation to provide any services to the
Subtenant under the Services Agreement between Tenant and the Subtenant or
otherwise, except for Landlord's obligations for maintenance and repair as set
forth in this Section 6(A).
(B) If Tenant does not elect to exercise the Termination
Option, then Section 17.2 shall be reinstated into the Lease as of the Effective
Termination Date.
(C) Tenant hereby represents to Landlord that as of the
First Amendment Effective Date Tenant has terminated Tenant's radioactive
materials license with respect to Tenant's operations at the Premises, and that
all decommissioning of laboratory space in is complete except that: (i)
Subtenant's radioactive materials license will not be terminated until on or
before February 2, 2004; (ii) Tenant may continue to use up to approximately
2,000 square feet of the Premises for non-radioactive laboratory work ("Tenant's
Wet Lab"). Tenant hereby covenants to provide Landlord with reasonable
documentation of the surrender of Tenant's radioactive materials license, and
the decommissioning of Tenant's Wet Lab, and to cooperate with Landlord in
obtaining the same documentation from the Subtenant. Tenant covenants it will
cease use of Tenant's Wet Lab and will decommission Tenant's Wet Lab on or
before December 31, 2003.
(D) Tenant hereby covenants that, except for Tenant's Wet
Lab and the Subleased Premises: (i) Tenant will not use any portion of the
Premises after the First Amendment Effective Date for laboratory purposes after
the First Amendment Effective Date, and (ii) the Premises (excluding Tenant' Wet
Lab and the Subleased Premises) shall be used only for general office and
information technology purposes.
(E) If Tenant exercises the Termination Option, Landlord
will, notwithstanding anything to the contrary in the Lease contained
(including, without limitation Section 35.4), accept the Premises in "as is"
condition on the Effective Termination Date, without any obligation on the part
of Tenant to perform any repairs or maintenance to the Premises.
(F) Tenant shall, subject to Section 20.7 of the Lease, be
responsible for any damage to the Premises caused by the negligence or willful
misconduct of Tenant, or any agent, employee, contractor, or invitee of Tenant
between the First Amendment Effective Date and the Effective Termination Date,
and
(G) Tenant shall be responsible for Haz Mat Claims as
provided in Section 7 below, and for any Hazardous Materials contamination to
the Premises which is caused by Hazardous Materials introduced to the Premises
by Tenant or anyone claiming under Tenant (including any Subtenant Parties)
between the First Amendment Effective Date and the Effective Termination Date.
7. Tenant's Obligations for Hazardous Materials. Tenant shall be
responsible for any claims by Landlord for violations of Tenant's obligations
under the Lease with respect to Hazardous Materials, and for any Hazardous
Materials contamination to the Premises which is caused by Hazardous Materials
introduced to the Premises by Tenant or anyone claiming under
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Tenant (including any Subtenant Parties) between the First Amendment Effective
Date and the Effective Termination Date ("Haz Mats Claims"). During a period of
forty-five (45) days from the First Amendment Effective Date, at Landlord's
cost, Landlord shall conduct a Base Line Study, as defined in Section 38 of the
Lease, of that portion of the Premises which does not comprise the Subleased
Premises, for the purpose of creating a plan (the "Surrender Plan") identifying
those actions which need to be taken to make certain that the Premises are
surrendered as of the Effective Termination Date in compliance with applicable
environmental laws. Tenant shall cooperate with Landlord in the preparation of
the Surrender Plan, and in the implementation of the Surrender Plan. The
Surrender Plan shall provide for an additional study (the "Final Study"), at
Landlord's expense, of the Premises (including the Subleased Premises) at around
the time of the Effective Termination Date, to determine if Landlord can make
any Haz Mats Claims against Tenant. If the Base Line Study or the Final Study
indicates a violation of the obligations of Tenant under the Lease, Landlord
shall so notify Tenant of such Haz Mats Claim. Tenant shall cause the
remediation of any condition which is the basis of Haz Mats Claims. Tenant shall
be liable to Landlord for the cost of such remediation, whether performed by
Landlord or Tenant.
8. Assignment and Subletting. Effective as of the First Amendment
Effective Date, Tenant shall thereafter have no further right to assign or
sublet any portion of the Premises, without Landlord's prior written consent;
provided however that if Tenant does not exercise the Termination Option, then
from and after the Effective Termination Date, this Section 7 shall be void and
of no further force or effect and the provisions of Section 24 of the Lease
shall be reinstated.
9. Landlord's Access. From and after the First Amendment Effective
Date, Landlord and Landlord's agents and contractors shall have the right of
access to the Premises at all times for the purposes of making repairs or
alterations to the Premises, and performing those maintenance obligations
required to be performed by Landlord hereunder; provided that such access and
any such work does not unreasonably interfere with the use of the Premises by
Tenant and Subtenant. Tenant shall cooperate reasonably with Landlord while
Landlord is in the Premises, including relocating its use of the Premises as
reasonably necessary in order to accommodate Landlord's work in the Premises;
provided that Landlord exercises its rights in a manner which does not
unreasonably interfere with the use of the Premises by Tenant and Subtenant.
From and after the First Amendment Effective Date, Landlord may post signs on or
around the Building advertising that the Premises are available for leasing, and
show the Building to prospective tenants.
10. Release of Claims. Landlord and Tenant acknowledge that this
First Amendment results from extended negotiation in which both parties have
been assisted by counsel. Landlord hereby agrees as of the date of delivery of
the Deposit to release Tenant and waive all claims against Tenant in the nature
of the Released Claims, as hereinafter defined. The "Released Claims" shall mean
all claims for payment of Rent as defined in Section 4 above, and all claims
arising out of the condition of the Premises, including without limitation
claims that Tenant failed to maintain the Premises properly as required by the
terms of the Lease; provided however, that Released Claims shall not include (a)
Haz Mats Claims, as defined herein, (b) any Hazardous Materials contamination
for which Tenant is responsible under Section 6, or (c) claims arising out of
the failure of Tenant to meet its obligations under this First Amendment
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including without limitation as set forth in Section 6(f) above and with respect
to the Subleased Premises, as defined herein. Either party shall within 10 days
of the request of the other party execute and deliver a reasonable document
confirming the release of the Released Claims. If Tenant does not exercise the
Termination Option, then as of the Effective Termination Date this Section 10
shall be deemed void and of no further force or effect.
11. Tenant's Sublease.
(A) Reference is made to a Sublease Agreement ("Sublease")
dated as of July 25, 2000 by and between Tenant, as successor-in-interest to
Original Tenant, as Sublandlord, and MediGene, Inc. ("Subtenant") as
successor-in-interest to Neurovir Therapeutics, Inc., as Subtenant, for a
portion of the Premises (the "Subleased Premises"). The Subleased Premises
contain 16,723 square feet. Landlord agrees to accept no obligation or
responsibility for the provision of services to Subtenant.
(B) Tenant hereby represents that it has entered into a
Termination Agreement dated May 16, 2003 ("Termination Agreement") with
Subtenant whereby the term of the Sublease is terminated effective as of
February 2, 2004. Landlord hereby consents to the Termination Agreement, and
Landlord hereby waives any right which it has (whether pursuant to the Consent
to Sublease by and among Original Landlord, Neurovir Therapeutics, Inc., and
Trega Biosciences, Inc., or otherwise) to require the Subtenant to continue to
bound to Landlord under the Sublease after February 2, 2004.
(C) Notwithstanding anything herein to the contrary, Tenant
shall remain responsible to Landlord for making certain that on or before the
Effective Termination Date: (i) the Subleased Premises shall be decommissioned
in accordance with the regulations of the U.S. Nuclear Regulatory Commission
and/or the applicable California agency for the control of radiation, (ii) the
Subleased Premises shall be released for unrestricted use under any applicable
governmental program for the control of radiation and appropriate documentation
confirming that has been delivered to Landlord, and (iii) Subtenant delivers the
report of Occupational Services Inc. ("OSI") or other certified industrial
hygienist reasonably acceptable to Landlord stating that OSI or such other
hygenist has examined the Subleased Premises and found no evidence that the
Subleased Premises contains Hazardous Materials, as defined in the Sublease, the
Lease, or the Services Agreement, or is otherwise in violation of any law,
regulation or ordinance relating to Hazardous Materials. In addition, Tenant
shall cause Subtenant to provide to Landlord a copy of its most current chemical
waste removal manifest and a certification from Subtenant executed by an officer
of Subtenant that no Hazardous Materials or other potentially dangerous or
harmful chemicals brought in the Sublease Premises which have not been fully
removed from the Sublease Premises, and that neither Subtenant, nor has anyone
claiming by, through our under Subtenant, brought Hazardous Materials or other
such chemicals onto other portions of the Building or the land on which the
Building is located which have not been fully removed.
12. Vacancy. Landlord hereby agrees that vacancy or abandonment of
the Premises shall not be deemed to be a default by Tenant in its obligations
under the Lease.
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13. Authority. Each party (the "Representing Party") hereby
represents and warrants to the other party that: (a) the individual executing
this Amendment on behalf of the Representing Party has the full authority to
execute and bind the Representing Party to its obligations under this Amendment,
(b) the Representing Party has not assigned its interest in this Lease (other
than a collateral assignment by Landlord to the Original Landlord), and (iii)
except for the Original Landlord's Approval, no approval or consent by any third
party is required in order to enable the Representing Party to enter into this
Amendment or to comply with its obligations under this Amendment.
14. Governing Law. This First Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.
15. Counterparts. This First Amendment may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts taken together shall constitute but
one and the same instrument. Signature pages may be detached from the
counterparts and attached to a single copy of this First Amendment to physically
form one document.
16. Confidentiality.
(A) Landlord and Tenant hereby agree that subject to the
exceptions set forth in Section 16 (B) below and, except as otherwise provided
herein, (i) neither shall participate in or generate any press release
announcing this First Amendment without the prior written consent of the other
and (ii) Landlord and Tenant shall hold material terms of this First Amendment
(the "Confidential Information") in strict confidence and shall not disclose the
Confidential Information to any third party, except as expressly authorized by
the other party in writing. For the purposes of this Section 16, Confidential
Information shall not include information that: (a) was in the public domain
prior to the First Amendment Effective Date, or (b) becomes part of the public
domain after the First Amendment Effective Date, other than as a result of the
Landlord's or Tenant's material breach of this Agreement. Further,
notwithstanding anything to the contrary herein, each party may disclose to one
another or to the trier the Confidential Information in any litigation or other
dispute resolution proceeding between Landlord and Tenant.
(B) Notwithstanding the provisions of Section 16(A), (i)
Landlord or Tenant may issue any such release or make such announcement
referenced in Section 16(A) or disclose Confidential Information to the extent
required, in the opinion of the disclosing party's legal counsel, by order of
any court of competent jurisdiction, by any governmental agency, by any
applicable law, rule or regulation, including without limitation German or U.S.
corporate, securities or stock trading laws or regulations, or by any applicable
stock exchange or stock association rule or by any U.S. generally accepted
accounting (US-GAAP) rules, and (ii) Tenant may disclose the Confidential
Information to its agents, brokers, subtenants, employees and attorneys with a
need to know such information, provided that any person to whom any of the
Confidential Information is delivered is informed by Tenant of the strictly
confidential nature of the Confidential Information and such person agrees in
writing to be bound by confidentiality restrictions at least as restrictive as
those contained herein.
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(C) The parties hereby agree that a material breach of this
Section 16 will cause irreparable damage for which recovery of monetary damages
would be an inadequate remedy, and that either party shall therefore be entitled
to obtain timely injunctive relief, as well as such further relief as may be
granted by a court of competent jurisdiction.
17. Reaffirmation of Obligations. Tenant hereby acknowledges and
reaffirms all of its obligations under the Lease, as such Lease has been amended
by this First Amendment, and agrees that any reference made in any other
document to the Lease shall mean the Lease as amended pursuant to this First
Amendment. Except as expressly provided herein, the Lease remains unmodified and
in full force and effect.
SIGNATURES APPEAR ON FOLLOWING PAGE
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IN WITNESS WHEREOF, Landlord and Tenant have caused this First
Amendment to be duly executed and delivered as of the date first above written.
"Tenant"
LION BIOSCIENCE, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and General Counsel
"Landlord"
ARE-9880 CAMPUS POINT, LLC,
a Delaware limited liability company
By: ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
a Delaware limited partnership, managing member
By: ARE-QRS CORP.,
a Maryland corporation, general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
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