Third Amendment to Sublease Agreement between Regen Biologics, Inc. and Genitope Corporation
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This agreement is the third amendment to a sublease between Regen Biologics, Inc. and Genitope Corporation for office space in Redwood City, California. It extends the sublease term to May 31, 2006, adjusts the monthly rent, and sets out how operating expenses will be calculated and paid. The subtenant is responsible for rent and a share of expenses, with an initial expense abatement. The amendment is only effective if Regen secures an extension of its own master lease with the landlord.
EX-10.9 6 f91944a1exv10w9.txt EXHIBIT 10.9 EXHIBIT 10.9 THIRD AMENDMENT TO SUBLEASE BETWEEN REGEN BIOLOGICS, INC. AND GENITOPE CORPORATION THIS THIRD AMENDMENT TO SUBLEASE (this "THIRD AMENDMENT") is made and entered into as of the 16th day of May, 2003, by and between REGEN BIOLOGICS, INC., a Delaware corporation ("REGEN"), and GENITOPE CORPORATION, a Delaware corporation ("SUBTENANT"). RECITALS This Third Amendment is made and entered into with reference to the following recitals: A. Regen and Subtenant entered into a Sublease dated August 3, 1999, which was amended by a Second Amendment to Sublease Agreement dated October 1, 2000, which amendment was styled as a "second amendment" because Subtenant and Regen previously agreed to extend the term of the Sublease and such extension was treated as a "first amendment", as further amended by a Second Amendment to Sublease dated February 25, 2002 (collectively, as amended, the "SUBLEASE"), for the sublease of approximately 7,655 square feet of rentable area and 603 square feet of rentable common area (i.e. Subtenant's share of common area between Regen and Subtenant that is rentable area under the Master Lease) (the "SUBLEASED PREMISES") in the building commonly known as "Building 12" of Seaport Center, and located at 545 Penobscot Drive, Redwood City, California 94063. B. Regen and Subtenant wish to execute this Third Amendment to provide for an extension of the term of the Sublease and to modify the base rent, operating expense and other related provisions of the Sublease. NOW, THEREFORE, in consideration of the foregoing, the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Regen and Subtenant agree as follows: 1. DEFINED TERMS. All defined terms herein shall have the meaning given to such term in the Sublease or the Master Lease, as applicable, unless specifically defined herein. 2. INCORPORATION OF RECITALS. The foregoing recitals are incorporated by reference into this Section 2 as if set forth in this Paragraph 2 in full. 3. TERM. The term of the Sublease is extended and will expire on May 31, 2006, unless sooner terminated in accordance with the terms of the Sublease. In no event will the term of the Sublease extend beyond the term of the Master Lease. 4. RENT. Notwithstanding anything to the contrary in the Sublease, commencing on June 1, 2003 (the "MODIFIED RENT COMMENCEMENT DATE"), and continuing through the term of the Sublease (as extended by the terms of this Third Amendment), Subtenant shall pay base monthly rent ("RENT") in advance on the first day of each calendar month to Regen in the amounts specified below: 1.
If the Modified Rent Commencement Date and/or the last day of the Sublease term do not fall on the first day of a month or the last day of a month, as applicable, the rent payable hereunder will be pro-rated on a per day basis based on the actual number of days in such month. Commencing on the Modified Rent Commencement Date, the foregoing rent payable by Subtenant under the terms of the Sublease (as modified by the terms of this Third Amendment) shall be payable on a triple-net basis and will not include any costs for real property taxes, Operating Expenses (as defined in the Master Lease), janitorial services, utilities, garbage removal and the like, which costs will be paid by Subtenant in accordance with the terms of Section 5 below. 5. EXPENSES. As of the Modified Rent Commencement Date, the pro-rata share of Operating Expenses payable by Subtenant to Regen (the "EXPENSE") shall be calculated pursuant to Section 5(a) of this Third Amendment, wherein Subtenant's prorata share is based on the ratio of: (i) the total square feet subleased by Subtenant pursuant to the Sublease to (ii) the total square feet leased by Regen pursuant to the Master Lease. (a) EXPENSE CALCULATION. The expense shall be calculated by Regen, and Subtenant's pro rata share shall be invoiced to Subtenant on a monthly basis. Subject to the abatement described in Subsection (b) immediately below, Subtenant shall owe and pay to Regen its pro-rata share of the Expense, such Expense to be calculated as follows: actual monthly Operating Expenses billed to Regen by the Master Landlord, plus actual monthly operating expenses incurred by Regen (including, without limitation, all Operating Expenses actually incurred by Regen), but not billed by the Master Landlord, in relation to the Master Premises rented by Regen pursuant to the Master Lease. Notwithstanding anything to the contrary contained in this Third Amendment, Subtenant shall not be obligated to pay any monthly operating expenses or Operating Expense not applicable to the Subleased Premises. The monthly expenses referred to herein will include estimates of expenses reasonably anticipated to be incurred by Regen but not billed by Master Lessor and Operating Expenses for such period, which will be adjusted at the end of each year according to the Master Lease. Once the adjustments are received from the Master Landlord, Regen shall provide a revised statement to Subtenant showing such adjustments, together with, as appropriate, (i) an invoice for the remaining amount due from Subtenant to Regen or (ii) a check for the refund amount due from Regen to Subtenant. All such monthly invoices will be paid by Subtenant, together with the next monthly Rent payment, and in no event later than thirty (30) days after receipt by Subtenant of such invoices. (b) Regen shall abate the first amounts due and payable by Subtenant during the Term under this Section 5 for the Expense up to an amount equal to Twenty-Seven Thousand Seven Hundred One and 46/100 Dollars ($27,701.46) (the "EXPENSE ABATEMENT"). From time to time as amounts are first due and payable by Subtenant to Regen for its pro-rata share of the 2. Expense in accordance with the terms of this Section 5, Regen shall abate such amounts up to the amount of the Expense Abatement. (c) Notwithstanding anything to the contrary contained in the Sublease, this Third Amendment or the Master Lease, within ninety (90) days after receipt by Subtenant of Regen's statement of the Expense for any prior calendar year during the Term, Subtenant shall have the right, at Subtenant's sole cost and expense, upon ten (10) business days prior written notice, to inspect the applicable books of Regen during the business hours of Regen at Regen's office in the Building, or, at Regen's option, such other location as Regen reasonably may specify, for the purpose of verifying the information contained in the statement, provided that the party inspecting such books is an employee of a reputable accounting firm that provides a full range of accounting services that is hired on a per-hour basis (and not on a contingency basis), and Subtenant uses reasonable efforts to maintain the confidentiality of such audit and the results thereof. Unless Subtenant asserts specific errors within ninety (90) days after receipt of the statement, the statement shall be deemed correct as between Regen and Subtenant. 6. NO ALLOWANCE. Regen and Subtenant agree that Regen will not be obligated to provide any tenant improvement allowances whatsoever, or perform any work in the Premises, in connection with the execution of this Third Amendment. 7. APPROVALS; EFFECTIVENESS. Regen and Subtenant acknowledge that Regen is negotiating the terms of an amendment to the Master Lease with Master Landlord to extend the term of the Lease until May 31, 2006 (the "PRIME LEASE AMENDMENT"). Regen and Subtenant agree that the effectiveness of this Third Amendment is expressly conditioned on (i) Regen and Master Landlord executing and delivering the Prime Lease Amendment and (ii) Regen's receipt of Master Landlord's written consent to the terms of this Third Amendment (collectively (i) and (ii) are the "APPROVALS"). Regen shall use good faith reasonable efforts to obtain the Approvals by May 31, 2003. If the Approvals are not obtained by Regen on or before May 31, 2003 this Third Amendment will automatically terminate and be of no further force and effect. If the Prime Lease Amendment is executed by Regen and Master Landlord, the following provisions of the Prime Lease Amendment shall not be incorporated into the Sublease, as amended by this Third Amendment: Section 3, 7, and 9. 8. RECAPTURE. Commencing on May 31, 2005, Regen will have the ongoing right to terminate the Sublease with respect to all or any portion of the Subleased Premises, provided that Regen has delivered written notice to Subtenant (the "RECAPTURE NOTICE") of such termination at least six (6) months prior to the date of such termination. The Recapture Notice shall specify the date of termination (the "RECAPTURE TERMINATION DATE") and the applicable portion (or all) of the Subleased Premises being recaptured by Regen and terminated under the Sublease (the "RECAPTURED PREMISES"). If the Recaptured Premises does not constitute the entire Subleased Premises and Regen elects to terminate the Sublease with respect to the Recaptured Premises then (a) Subtenant shall vacate and tender the Recaptured Premises to Regen on the Recapture Termination Date as if the Recapture Termination Date had been originally set forth in the Sublease as the expiration date of the term of the Sublease with respect to the Recaptured Premises, and (b) as to all portions of the Subleased Premises other than the Recaptured Premises, this Sublease shall remain in full force and effect except that the Rent, additional rent and the Expense payable pursuant to Section 5 of this Third Amendment shall be reduced 3. proportionately. If the Recaptured Premises does not constitute the entire Subleased Premises, Regen shall pay all expenses of construction reasonably required to permit the operation of the Recaptured Premises separate from the balance of the Subleased Premises. If the Recaptured Premises constitutes the entire Subleased Premises and Regen elects to terminate the Sublease, then (1) Subtenant shall vacate and tender the entire Subleased Premises to Regen on the Recapture Termination Date, and (2) the term of the Sublease shall terminate on the Recapture Termination Date as if the Recapture Termination Date had been originally set forth in the Sublease as the expiration date of the term of the Sublease. 9. MASTER LANDLORD'S OBLIGATIONS. Notwithstanding anything to the contrary contained in the Sublease (as amended by this Third Amendment), the following provisions of the Master Lease hereby are incorporated into the Sublease, except that (i) references to "Landlord" shall mean only Master Landlord, and (ii) "Landlord's" obligations thereunder shall remain "Master Landlord Obligations" as defined in Section 20(a) of the Sublease: Paragraphs 3(c), 3(d), 3(e), 3(f) and 3(g): Paragraph 6(a); Paragraph 13; and Paragraph 14. In the event of a conflict between the provisions of the Master Lease (as amended by the Prime Lease Amendment), to the extent incorporated into the Sublease and this Third Amendment, and the provisions of the Sublease as modified by this Third Amendment, the provisions of the Sublease as modified by this Third Amendment shall control. 10. HAZARDOUS MATERIALS. Attached hereto as Exhibit A is a current list of Subtenant's Permitted Hazardous Materials and Hazardous Materials Plans. From time to time after the date of this Third Amendment, but in no event more than two (2) times during each calendar year, Subtenant may submit a proposed list of Subtenant's Permitted Hazardous Materials to Regen. Regen shall use commercially reasonable efforts to promptly approve or disapprove such proposed list, such approval not to be unreasonably withheld by Regen. In addition, Regen shall promptly submit such proposed list to Master Landlord and request Master Landlord's approval of same. Subtenant shall promptly reimburse Regen for all costs and expenses incurred by Regen as a result of Regen submitting such proposed list to Master Landlord for review. If Regen and Master Landlord consent to the proposed list, then provided that Subtenant complies with the terms of the Master Lease (as incorporated by the Sublease) related to such Permitted Hazardous Materials, Subtenant shall have the right to bring such listed materials onto the Subleased Premises. However, until Regen and Master Landlord approve such proposed list in accordance with the terms of this Third Amendment, Subtenant shall not have any right to bring any Hazardous Materials onto the Subleased Premises. Regen shall not be liable or responsible for Master Landlord's failure to review and/or approve any proposed list of Subtenant's Permitted Hazardous Materials from Subtenant and if Master Landlord fails to review or approve such list, the Sublease will continue in full force and effect without offset or abatement of any sums payable by Subtenant. Notwithstanding anything to the contrary contained in the Sublease, the Master Lease or this Third Amendment, Regen shall protect, indemnify, defend upon demand with counsel reasonably acceptable to Subtenant, and hold harmless Subtenant and its officers, directors, employees and agents from and against any and all liabilities, losses, claims, actual out-of-pocket damages (excluding punitive or consequential damages (i.e., lost profits, lost business opportunity), interest, penalties, fines, monetary sanctions, attorneys' fees, experts' fees, court costs, remediation costs, investigation costs, and other expenses arising from and after the commencement date of the Sublease to the extent 4. caused solely by the use, storage, treatment, transportation, release or disposal of Hazardous Materials on or about the Premises by Regen or Regen's agents, employees or contractors. 11. SECURITY DEPOSIT. Regen and Subtenant acknowledge that as of the date of this Third Amendment, Regen is holding Subtenant's security deposit in the amount of $41,290.00. Provided that, as of June 1, 2003, no default on the part of Subtenant under this Sublease shall then be in existence beyond applicable notice and cure periods nor shall any default beyond any applicable notice and cure periods have theretofore occurred, and further provided that, within the immediately preceding thirty (30) days, Regen shall have reviewed and, in Regen's reasonable discretion, approved Subtenant's then-most recent audited financial statements (Subtenant hereby agreeing to deliver audited financial statements for Subtenant, prepared within sixty (60) days of such delivery, to Regen with Subtenant's request for Regen's review and approval of same), Subtenant shall have the right to reduce the amount of the Security Deposit to the sum of Fifteen Thousand Six Hundred Ninety and 20/100 Dollars ($15,690.20) upon written request to Regen. If all of the aforesaid conditions are met, Regen shall so reduce the Security Deposit and shall return the excess funds equal to the difference between the current security deposit and the reduced security deposit or $25,599.80, to Subtenant within three business of the date the aforesaid conditions have been met. 12. NO OTHER AMENDMENT. Except to the extent expressly set forth in this Third Amendment, the Sublease remains in full force and effect, without amendment, in accordance with its terms. 13. BROKERS. Each party hereto represents and warrants that it has dealt with no broker in connection with this Third Amendment and the transactions contemplated herein between Regen and Subtenant. Each party shall indemnify, protect, defend and hold the other party harmless from all costs and expenses (including reasonable attorneys' fees) arising from or relating to a breach of the foregoing representation and warranty. 14. AUTHORIZATION. The undersigned warrant that they have been authorized and directed to execute this Third Amendment on behalf of their respective entities. 15. COUNTERPARTS. This Third Amendment may be signed in two or more counterparts, each of which will be deemed an original and all of which shall constitute one agreement. 16. TITLES. The titles of the sections and subsections of this Third Amendment are for convenience of reference only and are not to be considered in construing this Third Agreement. (Signature Page Follows) 5. IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the day and year above written. REGEN REGEN BIOLOGICS, INC., a Delaware corporation By: /s/ Brian D. Varidi ------------------------------ Name: Brian D. Varidi Title: SVP and CFO SUBTENANT GENITOPE CORPORATION, a Delaware corporation By: /s/ Dan W. Denney, Jr. ------------------------------ Name: Dan W. Denney, Jr. Title: CEO 6. EXHIBIT A CHEMICAL INVENTORY MAY 12, 2003 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 1 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 2 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 3 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 4 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 5 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 6 Exhibit A Chemical Inventory May 12, 2003
Exhibit A Sublease 525 Penobscot 7