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EXHIBIT 10.16
FIRST AMENDMENT TO LEASE
FIRST AMENDMENT TO LEASE ("Amendment") is entered into as of
September 24, 1997 between HAYWARD POINT EDEN I LIMITED PARTNERSHIP, a Delaware
limited partnership ("Landlord") and RIBOGENE, INC., a California corporation
("Tenant"), with reference to the following facts:
A. Landlord and Tenant are parties to a Lease dated as of March 7, 1997
(the "Lease") covering certain premises consisting of approximately 25,000
square feet of space in Building J in the Britannia Point Eden Business Park in
Hayward, California (the "Premises"). Building J and the Premises are presently
under construction pursuant to the terms of the Lease.
B. Landlord and Tenant wish to enter into this Amendment in order to
reflect a change in the street address of the Premises, to reflect changes in
the tenant improvement allowance and the base rent structure for the Premises as
initially defined in the Lease, to bring certain additional space under the
Lease on the terms and conditions set forth herein (thereby implementing a
letter agreement dated March 7, 1997 between Landlord and Tenant with respect to
such additional space), and to make other related or incidental changes to the
Lease. Terms not otherwise defined herein shall have the meanings given them in
the Lease.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Chancre of Address of Premises. The Lease in several places
identifies the address of the Premises as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇. The parties have now determined that the street address for Building J,
when completed, will be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Accordingly, the
references to the street address of the Premises in Section 1.1 of the Lease
(description of Premises), in Section 17.1 of the Lease (notice address for
Tenant after the Commencement Date) and in the first paragraph of Exhibit D to
the Lease (form of Acknowledgement of Lease Commencement) are hereby amended to
show such address as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
2. Change in Tenant Improvement Allowance and Rent Schedule. The
parties have agreed to increase the tenant improvement allowance for the
Premises from $65 per square foot to $80 per square foot, and to make related
changes in the base rent structure set forth in Section 3.1(a) of the Lease. To
reflect those changes, the Lease is amended as follows:
(a) The rental table set forth in Section 3.1(a) of the
Lease is amended to read in its entirety as follows:
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"Months Minimum Rental
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001 - 012 $40,000.00 ($1.60/sq ft)
013 - 024 $40,000.00 ($1.60/sq ft)
025 - 036 $44,000.00 ($1.76/sq ft)
037 - 048 $45,500.00 ($1.82/sq ft)
049 - 060 $47,250.00 ($1.89/sq ft)
061 - 072 $48,750.00 ($1.95/sq ft)
073 - 084 $50,500.00 ($2.02/sq ft)
085 - 096 $52,500.00 ($2.10/sq ft)
097 - 108 $54,250.00 ($2.17/sq ft)
109 - 120 $56,250.00 ($2.25/sq ft)
121 - 132 $58,250.00 ($2.33/sq ft)
133 - 144 $60,500.00 ($2.42/sq ft)
145 - 156 $62,750.00 ($2.51/sq ft)
157 - 168 $65,000.00 ($2.60/sq ft)
169 - 180 $67,500.00 ($2.70/sq ft)"
(b) Section 3.1(c) of the Lease is amended to read in its
entirety as follows:
"(c) The minimum rental amounts specified in this
Section 3.1 are based upon an estimated tenant improvement allowance of
Eighty Dollars ($80.00) per square foot for the work to be performed by
Landlord on the Premises under Section 2.4 and Exhibit C. If Landlord's
total direct costs of such work (including, but not limited to,
construction costs, permit fees and charges, architects', engineers'
and other consulting and professional fees and all other related costs
incurred in connection with the design and construction of the work,
including up to $50,000 in fees incurred by Tenant for architectural,
engineering, space planning and other professional services rendered by
professionals approved in writing by Landlord, such approval not to be
unreasonably withheld, in connection with the design of the work to be
performed by Landlord on the Premises) are less than the product of
Eighty Dollars ($80.00) times the area of the Premises (in square feet)
as determined in good faith by Landlord's architect on the basis
described in Section 3.1(b) above, then the minimum rental amounts
specified in Section 3.1(a) shall be reduced by an amount equal to one
cent ($0.01) per square foot per month for each One Dollar ($1.00) by
which such total direct costs are less than Eighty Dollars ($80.00)
times the area of the Premises in square feet. If, following completion
of the initial tenant improvements in the Initial Premises, Tenant
wishes to have Landlord construct additional tenant improvements in the
Initial Premises at any time within six (6) years after the
Commencement Date, then Landlord will provide an additional tenant
improvement allowance (the "Phase II Improvement Allowance") up to a
maximum of Five Hundred Thousand Dollars ($500,000.00). To the extent
any of such Phase II Improvement Allowance is used, the monthly minimum
rent shall be increased, commencing upon completion of the improvements
constructed with the Phase II Improvement Allowance and continuing
until the earlier to occur of the Termination Date of the initial term
of this Lease or the date which is ten (10) years after the date of
completion of the improvements constructed with the Phase II
Improvement Allowance, by a supplemental rent payment in an amount
equal to the amount necessary to fully amortize the funds actually
expended from the Phase II Improvement Allowance on a monthly level
payment basis, with an imputed return at the rate of fourteen percent
(14%) per annum, over the lesser of ten (10) years or the period of
time remaining to the Termination Date of the initial term of this
Lease."
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(c) Section 16.1 of the Lease is amended to increase the
initial Security Deposit required from Tenant to Forty Thousand and No/100
Dollars ($40,000.00), consistent with the changes to the monthly base rent
structure as set forth above.
(d) The second paragraph of Exhibit C of the Lease is
amended to read in its entirety as follows:
"As reflected in Section 3.1(c) of this Lease, Landlord has
agreed to make available for the interior improvements in the
Premises a tenant improvement allowance of Eighty Dollars ($80.00)
per square foot, subject to Tenant's rights to review and approve
budget amounts and bids under this Exhibit C. Landlord's total direct
costs of the interior tenant improvements (including, but not limited
to, construction costs, permit fees and charges, architects',
engineers' and other consulting and professional fees, and all other
related costs incurred in connection with the design and construction
of the work, including up to $50,000 in fees incurred by Tenant for
architectural, engineering, space planning and other professional
services rendered by professionals approved in writing by Landlord,
such approval not to be unreasonably withheld, in connection with the
design of the work to be performed by Landlord on the Premises) shall
be chargeable against the tenant improvement allowance. If Landlord's
actual direct costs of such interior tenant improvements are less
than Eighty Dollars ($80.00) per square foot, then there shall be a
rental adjustment in accordance with Section 3.1(c) of this Lease."
3. Additional Premises. Building J, when completed, will consist of
approximately 30,000 square feet of space. The Premises as defined in the Lease
consist of approximately 25,000 square feet in Building J (the "Original
Premises"); the remaining 5,000 square feet of Building J are defined as part of
the "Option Space" in which Tenant has certain first refusal rights under
Section 1.3 of the Lease. Landlord and Tenant now wish to include such remaining
5,000 square feet of Building J (the "Additional Premises") in the space covered
by the Lease, and therefore agree as follows:
(a) Lease of Additional Premises. Landlord leases to Tenant
and Tenant hires and leases from Landlord the Additional Premises, on all of the
terms, covenants and conditions set forth in the Lease as modified by this
Amendment, including (but not limited to) any and all warranties relating to the
Premises. The "Premises" as defined in the Lease shall be construed to include
both the Original Premises and the Additional Premises, whenever the term
"Premises" is used in the Lease or in this Amendment, except as otherwise
expressly provided herein.
(b) Option Space. Clause (a) of Section 1.3 of the Lease is
hereby deleted, thereby deleting the Additional Premises from the definition of
the "Option Space" under the Lease, and the depiction of the "Option Space" on
Exhibit A to the Lease is modified accordingly.
(c) Rental. The rent provisions presently found in Sections
3.1(a), (b) and (c) of the Lease (as modified in Paragraph 2 of this Amendment)
shall be construed to apply solely to the Original Premises. The following
rental provisions shall apply to the Additional Premises during the initial term
of the Lease:
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(i) Tenant shall pay to Landlord as minimum rental
for the Additional Premises, in advance, without deduction, offset,
notice or demand, on or before the Commencement Date as defined in the
Lease with respect to the Original Premises and on or before the
first day of each subsequent calendar month of the term of the Lease,
the following amounts per month;
Months Minimum Rental
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001 - 012 $4,250.00 ($0.85/sq ft)
013 - 024 $4,250.00 ($0.85/sq ft)
025 - 036 $4,420.00 ($0.884/sq ft)
037 - 048 $4,597.00 ($0.9194/sq ft)
049 - 060 $4,781.00 ($0.9562/sq ft)
061 - 072 $4,972.00 ($0.9944/sq ft)
073 - 084 $5,171.00 ($1.0342/sq ft)
085 - 096 $5,378.00 ($1.0756/sq ft)
097 - 108 $5,593.00 ($1.1186/sq ft)
109 - 120 $5,816.00 ($1.1632/sq ft)
121 - 132 $6,049.00 ($1.2098/sq ft)
133 - 144 $6,291.00 ($1.2582/sq ft)
145 - 156 $6,543.00 ($1.3086/sq ft)
157 - 168 $6,804.00 ($1.3608/sq ft)
169 - 180 $7,077.00 ($1.4154/sq ft)
If the obligation to pay minimum rental hereunder commences on other
than the first day of a calendar month or if the term of the Lease
terminates on other than the last day of a calendar month, the minimum
rental for such first or last month of the term of the Lease, as the
case may be, shall be prorated based on the number of days the term of
the Lease is in effect during such month. If an increase in minimum
rental becomes effective on a day other than the first day of a
calendar month, the minimum rental for that month shall be the sum of
the two applicable rates, each prorated for the portion of the month
during which such rate is in effect.
(ii) The minimum rental amounts specified in
subparagraph (c)(i) above are based upon an estimated area of 5,000
square feet for the Additional Premises. If the actual area of the
Additional Premises, when completed, is greater or less than 5,000
square feet, the minimum rentals specified in subparagraph (c)(i)
shall be adjusted proportionately to the change in the area of the
Additional Premises, as determined in good faith by Landlord's
architect on the basis of measurement from the exterior faces of
exterior walls, from the centerline of interior demising walls, and
from the drip line of any exterior overhangs.
(iii) The minimum rental amounts specified in
subparagraph (c)(i) above are based upon an estimated tenant
improvement allowance of Fifteen and No/100 Dollars ($15.00) per
square feet for the initial work to be performed by Landlord on the
Additional Premises under subparagraph (g) below. If Landlord's total
direct costs of such initial work (including, but not limited to,
construction costs, permit fees and charges, architects', engineers'
and other consulting and professional fees and all other related costs
incurred in connection with the design and construction of the work),
subject to Tenant's approval rights expressly set forth below with
respect to certain improvement costs (such total direct costs, subject
to Tenant's approval rights where applicable, being hereinafter
referred to as the "Allowable Costs"), exceed the product of Fifteen
Dollars ($15.00) times the
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area of the Additional Premises in square feet (measured in accordance
with subparagraph (c)(ii) above), then such excess Allowable Costs
shall be charged against the additional tenant improvement allowances
described in subparagraph (h) below (up to the maximum amounts
specified therein) and shall result in a rental adjustment pursuant to
subparagraph (c)(iv) below, unless Tenant elects instead to pay the
excess Allowable Costs from such initial work in a lump sum, in which
event Tenant shall pay such excess Allowable Costs to Landlord in cash
within thirty (30) days after written request from Landlord,
accompanied by supporting documentation in reasonable detail with
respect to the determination of such excess amount, and no rental
adjustment shall be made with respect thereto. If Landlord's Allowable
Costs for such initial work exceed the maximum aggregate allowances
available under this subparagraph (c)(iii) and subparagraph (h) below,
Tenant shall pay the amount of such excess to Landlord in cash within
thirty (30) days after written request from Landlord, accompanied by
supporting documentation in reasonable detail with respect to the
determination of such excess amount. If Landlord's Allowable Costs for
such initial work are less than Fifteen Dollars ($15.00) times the
area of the Additional Premises in square feet (measured in accordance
with subparagraph (c)(ii) above), then the minimum rental amounts set
forth in subparagraph (c)(i) above with respect to the Additional
Premises shall be reduced by an amount equal to one and three tenths
cents ($0.013) per square foot per month for each One Dollar ($1.00)
by which such Allowable Costs are less than Fifteen Dollars ($15.00)
times the area of the Additional Premises in square feet.
(iv) If and when Landlord performs initial or
supplemental work on the Additional Premises and the cost of such work
is chargeable in whole or in part against the additional tenant
improvement allowances described in subparagraph (h) below, then to
the extent of such charge against the additional tenant improvement
allowances, the minimum rental amounts set forth in subparagraph
(c)(i) above shall be adjusted as follows:
(A) To the extent of any charges against the
additional tenant improvement allowance of $50.00 per square
foot under subparagraph (h) below, the minimum rental
amounts specified in subparagraph (c)(i) above shall be
increased by an amount equal to the applicable Recovery Rate
times the area of the Additional Premises in square feet as
determined under subparagraph (c)(ii) above, which increase
(the "Additional TI Rent") shall become effective upon
substantial completion (except for punch list items) of the
improvements constructed with such additional tenant
improvement allowance and shall continue throughout the
remainder of the initial term of the Lease, unless Tenant
elects instead to pay the amounts chargeable against such
additional tenant improvement allowance in a lump sum, in
which event Tenant shall pay such amounts to Landlord in
cash within thirty (30) days after written request from
Landlord, accompanied by supporting documentation in
reasonable detail with respect to the determination of such
amounts, and no rental adjustment shall be made with respect
thereto. In addition, on each anniversary of the
Commencement Date occurring after the date on which any
Additional TI Rent under this subparagraph
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(c)(iv)(A) becomes payable, the Additional TI Rent shall be
increased to an amount equal to one hundred four percent
(104%) of the amount of the Additional TI Rent that was
payable in the month immediately prior to such anniversary
(corresponding to the step increases already built into the
basic rent schedule for the Original Premises under Section
3.1(a) of the Lease and for the Additional Premises under
subparagraph (c)(i) above); provided, however, that for any
Additional TI Rent under this subparagraph (c)(iv)(A) that
first becomes payable other than on an anniversary of the
Commencement Date, the adjustment under this sentence for
the first such anniversary after the effective date of the
Additional TI Rent shall be prorated based on the ratio that
the number of days from such effective date to such first
anniversary bears to 365. For purposes of this subparagraph,
the term "Recovery Rate" shall mean (I) for any Allowable
Costs expended by Landlord on or before the third (3rd)
anniversary of the Commencement Date, one and three-tenths
cents ($0.013) per square foot per month for each one Dollar
($1.00) charged against the additional tenant improvement
allowance; (II) for any Allowable Costs expended by Landlord
after the third (3rd) anniversary and on or before the
fourth (4th) anniversary of the Commencement Date, one and
four-tenths cents ($0.014) per square foot per month for
each One Dollar ($1.00) charged against the additional
tenant improvement allowance; (III) for any Allowable Costs
expended by Landlord after the fourth (4th) anniversary and
on or before the fifth (5th) anniversary of the Commencement
Date, one and five-tenths cents ($0.015) per square foot per
month for each One Dollar ($1.00) charged against the
additional tenant improvement allowance; and (IV) for any
Allowable Coats expended by Landlord after the fifth (5th)
anniversary of the Commencement Date, one and six-tenths
cents ($0.016) per square foot per month for each One Dollar
($1.00) charged against the additional tenant improvement
allowance.
(B) To the extent of any charges against the
Phase II tenant improvement allowance of $100,000.00 under
subparagraph (h) below, the minimum rental amounts specified
in subparagraph (c)(i) above shall be increased by a
supplemental rent payment in an amount equal to the amount
necessary to fully amortize the amounts charged against such
Phase II allowance on a monthly level payment basis, with an
imputed return at the rate of fourteen percent (14%) per
annum, over the lesser of ten (10) years or the period of
time remaining to the Termination Date of the initial term
of the Lease, which increase shall become effective upon
substantial completion (except for punch list items) of the
improvements constructed with such Phase II allowance and
shall continue until the end of the amortization period on
which the calculation of the rental increase amount was
based, unless Tenant elects instead to pay the amounts
chargeable against the Phase II tenant improvement allowance
in a lump sum, in which event Tenant shall pay such amounts
to Landlord in cash within thirty (30) days after written
request from Landlord, accompanied by supporting
documentation in reasonable detail with respect to the
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determination of such amounts, and no rental adjustment
shall be made with respect thereto.
(d) Operating Expenses. Section 5.1(a) of the Lease is
amended to provide that Tenant's Operating Cost Share is One Hundred Percent
(100%) and Section 5.1(b) of the Lease is deleted, since Tenant will now be
occupying all of Building J (when completed).
(e) Subleasing of Additional Premises. The parties
acknowledge that Tenant intends to try to sublease the Additional Premises for a
limited period of time until Tenant is ready to occupy the Additional Premises
itself. Landlord acknowledges that as required by Section 11.1 of the Lease,
Landlord shall not unreasonably withhold its consent to any such sublease for
which Landlord's consent is requested by Tenant.
(f) Security Deposit. Concurrently with Tenant's execution
of this Amendment, Tenant shall deposit with Landlord the sum of Four Thousand
Two Hundred Fifty and No/100 Dollars ($4,250.00) as an additional Security
Deposit under Section 16.1 of the Lease, bringing the total Security Deposit to
$44,250.00.
(g) Initial Improvements. The economic provisions of Exhibit
C to the Lease, as it presently exists, relating to interior improvements in the
"Premises" shall be construed to apply solely to the improvement of the Original
Premises. Landlord agrees to undertake and diligently complete, subject to
delays for causes beyond its reasonable control (excluding financial inability),
interior tenant improvements in the Additional Premises in accordance with
Approved Plans and Specifications to be developed, mutually approved and
modified from time to time, as necessary, in accordance with the same procedures
applicable to the Original Premises under Exhibit C to the Lease; the provisions
and procedures applicable to the Original Premises under Exhibit C to the Lease
with respect to selection of contractors, bidding of subcontracts, review and
approval of plans, specifications, costs, bids and budgets, and like matters
shall similarly apply to the Additional Premises under this subparagraph (g).
Landlord's work in the Additional Premises shall be performed in a neat and
workmanlike manner and shall conform to all applicable governmental codes, laws
and regulations in force at the time such work is completed. Landlord and Tenant
shall both use their best endeavors to develop, review and approve all space
plans, working drawings, final drawings, specifications, changes (if applicable)
and other matters relating to the Additional Premises promptly and diligently.
Landlord shall make available for the initial interior improvements to the
Additional Premises a basic tenant improvement allowance of Fifteen Dollars
($15.00) per square foot, subject to the rent adjustment provisions in
subparagraphs (c)(iii) and (c)(iv) above. The cost of the demising wall between
the Original Premises and the Additional Premises (to permit convenient
subleasing of the Additional Premises by Tenant) shall be charged fifty percent
(50%) to the tenant improvement allowance for the Original Premises and fifty
percent (50%) to the tenant improvement allowance for the Additional Premises.
(h) Supplemental Improvements. Tenant shall be entitled to
have Landlord perform supplemental improvements to the Additional Premises, over
and above the $15.00 per square foot allowance contemplated under subparagraph
(g) above, as part of the initial build-out of the Additional Premises or at any
other Lime (and from time to time) within six (6) years after the Commencement
Date under the Lease. The procedure for design, approval of plans,
specifications and costs, and construction of such supplemental improvements
shall be the same as that provided
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in subparagraph (g) above for the initial improvements to the Additional
Premises. Landlord shall make available for the supplemental improvements to the
Additional Premises an additional basic tenant improvement allowance of Fifty
Dollars ($50.00) per square foot (making an aggregate basic tenant improvement
allowance of $65.00 per square foot for the Additional Premises, just as was
provided for the Original Premises under the Lease), subject to the rent
adjustment provisions in subparagraphs (c)(iii) and (c)(iv) above; if Landlord's
Allowable Costs in connection with such supplemental improvements exceed Fifty
Dollars ($50.00) per square foot, then Landlord will provide an additional Phase
II tenant improvement allowance of up to One Hundred Thousand Dollars
($100,000.00) for the Additional Premises (corresponding to the $500,000 Phase
II Improvement Allowance for the Original Premises under the Lease), likewise
subject to the rent adjustment provisions in subparagraphs (c)(iii) and (c)(iv)
above.
(i) Brokers. Landlord agrees to pay a brokerage commission
to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ in connection with the consummation of this Amendment in
accordance with a separate agreement. Tenant represents and warrants that no
other broker participated in the consummation of this Amendment and agrees to
indemnify, defend and hold Landlord harmless against any liability, cost or
expense, including, without limitation, reasonable attorneys' fees, arising out
of any claims for brokerage commissions or similar compensation in connection
with any conversations, prior negotiations or other dealings by Tenant with any
other broker.
4. Full Force and Effect. Except as expressly modified in this
Amendment, the Lease has not been modified or amended and remains in full force
and effect. This Amendment expressly supersedes the letter agreement dated as of
March 7, 1997 between Landlord and Tenant, in which Landlord and Tenant agreed
to enter into a First Amendment to Lease with respect to the space defined
herein as the Additional Premises.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the date first set forth above.
"Landlord" "Tenant"
HAYWARD POINT EDEN I LIMITED RIBOGENE, INC., a California
PARTNERSHIP, a Delaware corporation
limited partnership
By: BRITANNIA DEVELOPMENTS,
INC., a California By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
corporation, Its ------------------------------------
Managing Partner Its: VP Finance & Administration, CFO
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------
▇. ▇. ▇▇▇▇▇▇▇
President
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