Exhibit 10.24.1
SECOND AMENDMENT TO LEASE
DATED: November 24, 1999
BETWEEN: EVERGREEN CORPORATE CENTER LLC,
an Oregon limited liability company ("Landlord")
AND: MEDICALOGIC, INC., an Oregon corporation ("Tenant")
A. Landlord and Tenant are parties to an Industrial Business Park
Lease dated January 15, 1997 (the "Lease Agreement"), as amended by an
Addendum to Lease dated January 15, 1997 (the "Addendum") and as further
amended by an Amendment to Lease dated July 15, 1999 (the "First
Amendment"). The Lease Agreement, the Addendum, and the First Amendment are
collectively referred to in this Second Amendment to Lease (the "Second
Amendment") as the "Lease."
B. Pursuant to the First Amendment, Landlord and Tenant agreed to
expand the Premises by adding approximately 27,652 square feet to the
Premises, as described in the First Amendment (the "First Expansion Space").
Landlord and Tenant desire to expand the First Expansion Space as described
in the First Amendment, in accordance with the terms and conditions set forth
in this Second Amendment.
C. The capitalized terms used in this Second Amendment shall have
the meanings given to them in the Lease unless expressly amended by this
Second Amendment.
NOW, THEREFORE, in consideration of the mutual promises of the
parties set forth in this Second Amendment, Landlord and Tenant agree as
follows, effective as of July 15, 1999:
1. EXPANSION OF EXPANSION SPACE. The Expansion Space as described in
the First Amendment is increased by 18,226 square feet (the "Additional
Expansion Space"). The description of the Expansion Space, as set forth in
Section 1 of the First Amendment, is deleted and replaced with:
approximately 45,878 square feet of space in Building 3 in the area which is
crosshatched on the attached Exhibit A (the "Expansion Space").
2. RENT. In addition to the Base Monthly Rent increases set forth in
Section 2 of the First Amendment, Base Monthly Rent shall increase due to the
addition of the Additional Expansion Space, commencing on July 1, 2000, and
continuing throughout the Term in accordance with the following schedule:
Time Period Base Monthly Rent Increase
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July 1, 2000 through April 30, 2003 $18,773.00
May 1, 2003 through April 30, 2006 $20,462.00
May 1, 2006 through December 14, 2007 $22,304.00
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3. ADDITIONAL RENT. The reference to 27,652 in the sixth line of
Section 3 of the First Amendment is replaced with 45,878.
4. ADDITIONAL MODIFICATIONS TO FIRST AMENDMENT. The First Amendment is
further modified as follows:
4.1 Section 6 of the First Amendment is deleted.
4.2 Section 1.1 of the Expansion Space Work Agreement which is attached
as Exhibit C to the First Amendment is deleted and replaced with the
following:
1.1 Landlord agrees to provide certain improvements in the
Expansion Space in accordance with this Expansion Space Work Agreement.
1.1.1 Landlord shall pay up to $774,256.00 ($28.00 per
square foot in the First Expansion Space)(the "First TI Allowance")
towards the cost of designing and constructing the improvements in the
First Expansion Space subject to and in accordance with the terms and
conditions of this Expansion Space Work Agreement. At least $553,040.00
($20.00 per square foot in the First Expansion Space) of the First TI
Allowance must be used for improvements made to the First Expansion
Space on or before May 31, 2000 or else the First TI Allowance shall be
reduced as follows. If $553,040.00 is not spent for improvements made to
the First Expansion Space on or before May 31, 2000, the First TI
Allowance shall be reduced by the difference between $774,256.00, and
the amount spent for improvements made to the First Expansion Space on
or before May 31, 2000. Tenant acknowledges that the availability of the
First TI Allowance is conditioned on Tenant accepting the work in the
First Expansion Space on or before May 31, 2000, as described in the
certificate attached as Exhibit D (the "Teachers Certificate") to be
executed and delivered by Tenant on or before May 31, 2000. If such
conditions are fulfilled then, on or before May 31, 2000, Tenant shall
execute the Teachers Certificate and send the original and a copy
thereof to Landlord. If at least $553,040.00 of the First TI Allowance
is spent for improvements made to the First Expansion Space on or before
May 31, 2000, then any remaining amount of the First TI Allowance may be
spent at any time during the Term.
1.1.2 Landlord shall pay up to $510,328.00 ($28.00 per
square foot in the Additional Expansion Space) (the "Additional TI
Allowance") towards the cost of designing and constructing the
improvements in the Additional Expansion Space subject to and in
accordance with the terms and conditions of this Expansion Space Work
Agreement. At least $364,520.00 ($20.00 per square foot in the
Additional Expansion Space) of the Additional TI Allowance must be used
for improvements made to the Additional Expansion Space on or before
September 30, 2000 or else the Additional TI Allowance shall be reduced
as follows. If $364,520.00 is not spent for improvements made to the
Additional Expansion Space on or before September 30, 2000, the
Additional TI Allowance
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shall be reduced by the difference between $364,520.00, and the amount
spent for improvements made to the Additional Expansion Space on or
before September 30, 2000. If at least $364,520.00 of the Additional TI
Allowance is spent for improvements made to the Additional Expansion
Space on or before September 30, 2000, then any remaining amount of the
Additional TI Allowance may be spent at any time during the Term.
4.3 The First TI Allowance and the Additional TI Allowance are
collectively referred to in the First Amendment and this Second Amendment as
the "TI Allowance."
4.4 Section 1.2 of the Expansion Space Work Agreement which is attached
as Exhibit C to the First Amendment is deleted and replaced with the following:
1.2.1 All costs, fees, and expenses in connection with the
design and construction of the improvements in the First Expansion Space
in excess of the First TI Allowance paid in accordance with Section
1.1.1 shall be paid for by Tenant within twenty (20) days after billing
therefor. If Tenant desires to borrow funds from Landlord for such excess
amount, Landlord agrees to loan funds to Tenant in an amount not to
exceed $138,260.00 ($5.00 per square foot in the First Expansion Space)
solely for costs, fees, and expenses to design and construct
improvements in the First Expansion Space (the "First Expansion TI
Loan"). The First Expansion TI Loan shall accrue interest at the rate of
11 percent per annum, commencing on the date of the first advance on the
First Expansion TI Loan (the "First Expansion First Advance Date") and
continuing until such time as the entire First Expansion TI Loan and all
accrued interest are paid in full. Tenant shall repay the First
Expansion TI Loan with monthly payments sufficient to amortize the First
Expansion TI Loan over the period of time beginning on the First
Expansion First Advance Date and ending on December 14, 2007, taking
into account interest at the rate of 11 percent per annum. Payments on
the First Expansion TI Loan will begin on the first day of the first
calendar month following the First Expansion First Advance Date and shall
continue on the first day of each month through December 1, 2007 and
shall be paid in full on or before December 1, 2007 or any earlier
termination date of the Lease. Landlord shall inform Tenant of the
monthly amount to be paid under the Expansion TI Loan as soon as
practicable after substantial completion of the tenant improvements
for which the First Expansion TI Loan is used. If the amount is not
determined prior to May 1, 2000, then Tenant's first payment under the
First Expansion TI Loan shall be sufficient to pay the monthly payments
due from May 1, 2000 to the date on which Tenant is informed of the
monthly payment amount. Upon Landlord's request, Tenant shall execute
and deliver to Landlord a promissory note, setting forth the terms of
Tenant's obligation to repay the First Expansion TI Loan, in the form
attached as Exhibit E.
1.2.2 All costs, fees, and expenses in connection with the
design and construction of the improvements in the Additional Expansion
Space in
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excess of the Additional TI Allowance paid in accordance with Section
1.1.2 shall be paid for by Tenant within twenty (20) days after billing
therefor. If Tenant desires to borrow funds from Landlord for such excess
amount, Landlord agrees to loan funds to Tenant in an amount not to
exceed $91,113.00 ($5.00 per square foot in the Additional Expansion
Space) solely for costs, fees, and expenses to design and construct
improvements in the Additional Expansion Space (the "Additional
Expansion TI Loan"). The Additional Expansion TI Loan shall accrue
interest at the rate of 11 percent per annum, commencing on the date of
the first advance on the Additional Expansion TI Loan (the "Additional
Expansion First Advance Date") and continuing until such time as the
entire Additional Expansion TI Loan and all accrued interest are paid in
full. Tenant shall repay the Additional Expansion TI Loan with monthly
payments sufficient to amortize the Additional Expansion TI Loan over
the period of time beginning on the Additional Expansion First Advance
Date and ending on December 14, 2007, taking into account interest at
the rate of 11 percent per annum. Payments on the Additional Expansion
TI Loan will begin on the first day of the first calendar month
following the Additional Expansion First Advance Date and shall
continue on the first day of each month through December 1, 2007 and
shall be paid in full on or before December 1, 2007 or any earlier
termination date of the Lease. Landlord shall inform Tenant of the
monthly amount to be paid under the Additional Expansion TI Loan as soon
as practicable after substantial completion of the tenant improvements
for which the Additional Expansion TI Loan is used. If the amount is not
determined prior to September 30, 2000, then Tenant's first payment
under the Additional Expansion TI Loan shall be sufficient to pay the
monthly payments due from September 30, 2000 to the date on which Tenant
is informed of the monthly payment amount. Upon Landlord's request,
Tenant shall execute and deliver to Landlord a promissory note, setting
forth the terms of Tenant's obligation to repay the Additional Expansion
TI Loan, in the form attached as Exhibit E.
4.5 The Teachers Certificate attached as Exhibit D to the First
Amendment is replaced with the Teachers Certificate attached as Exhibit B to
this Second Amendment.
4.6 Landlord approves ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ as the architect to serve as
the Planner, as defined in Section 2.1 of the Expansion Space Work Agreement
which is attached as Exhibit C to the First Amendment.
4.7 Landlord approves either ▇▇▇▇▇ Construction Company, R&H
Construction Company or ▇▇▇▇▇▇ ▇▇▇▇ Construction Company as the contractor to
construct the improvements in the Expansion Space. With respect to all work
related to the improvements to the Expansion Space, the cost of which exceeds
the TI Allowance, Tenant shall pay ▇▇▇▇▇▇ ▇▇▇▇ Development Company a fee in
the amount of five percent (5%) of the cost of the work in excess of the TI
Allowance.
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5. SECURITY DEP0SIT. Contemporaneously with the execution of this
Second Amendment, Tenant shall pay Landlord $22,304.00 as an increased
security deposit which shall be held and disbursed in accordance with the
provisions of Section 6.1 of the Lease Agreement.
6. BROKERAGE COMMISSIONS. Landlord agrees to pay Tenant's broker,
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ Northwest Limited Partnership ("NBS") a fee in the
amount described in a letter addressed to NBS from ▇▇▇▇▇▇ ▇▇▇▇ Brokerage
Company dated June 18, 1999 for the additional area (18,226 square feet)
added to the Expansion Space pursuant to this Second Amendment. One half of
the commission shall be payable upon full execution of this Second Amendment
by Landlord and Tenant, and the remainder shall be paid when Tenant begins
paying rent for the Expansion Space at the rate of $1.03 per square foot.
7. EFFECT OF SECOND AMENDMENT. The Lease is modified only in the
specific respects set forth in this Second Amendment. Except as expressly
modified, the Lease remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Second
Amendment as part of the Lease effective as of July 15, 1999.
LANDLORD: EVERGREEN CORPORATE CENTER LLC
By: Marzer Venture, and Oregon general partnership
By: ▇▇▇▇ Group Partnership No. 4
By:
--------------------------------
Title:
---------------------------------
By: Schnitzer Investment Corp., an Oregon
corporation
By:
---------------------------------
Title: ---------------------------------
TENANT: MEDICALOGIC, INC., an Oregon corporation
By: /s/ Guy E. Field
---------------------------------
Its: VP Finance
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EXHIBIT B
STATEMENT OF TENANT IN RE: LEASE
Date: May 31, 2000
Teachers Insurance and Annuity
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn:
---------------------------
RE: TIAA Appl. #▇▇-▇▇▇
▇▇▇▇ Mtge. #000447000
Name of Project: Evergreen Corporate Center
Address: ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
It is our understanding that you have a mortgage upon the subject
premises and as a condition precedent thereof have required this
certification of the undersigned.
The undersigned, as tenant, under that certain lease dated January
15,1997, as amended by an Amendment to Lease dated July 15, 1999, and a
Second Amendment to Lease dated November 24, 1999, made with Evergreen
Corporate Center LLC, as landlord, hereby ratifies said lease and certifies
that:
1. the "Commencement Date" of said lease is December 15, 1997; and
2. the undersigned is presently solvent and free from reorganization
and/or bankruptcy; and
3. the operation and use of the premises do not involve the
generation, treatment, storage, disposal or release of a hazardous
substance or a solid waste into the environment other than to the
extent necessary to conduct its ordinary course of business in the
premises and in accordance with all applicable environmental laws,
and that the premises are being operated in accordance with all
applicable environmental laws, zoning ordinances and building
codes; and
4. the current base rental payable pursuant to the terms of said lease
is $126,004.00 per month; and further, additional rental pursuant
to said lease is payable as provided in the Lease; and
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5. said lease is in full force and effect and has not been assigned,
modified, supplemented, or amended in any way (except as set forth
above) and the undersigned is not in default thereunder; and
6. the lease described above represents the entire agreement between
the parties as to the leasing of the premises; and
7. the term of said lease expires on December 14, 2007; and
8. Landlord has spent at least $553,040.00 of the First TI Allowance,
as defined in the Second Amendment to Lease, and the work performed
in the Expansion Space is acceptable to the undersigned.
9. no rental has been paid in advance and no security (except the
security deposit in the amount of $143,143.00) has been deposited
with landlord; and
10. tenant's floor area is 120,888 rentable square feet; and
11. the most recent payment of current basic rental was for the payment
due on May 1, 2000, and all basic rental and additional rental
payable pursuant to the terms of the lease have been paid up to
said date; and
12. the undersigned acknowledges notice that landlord's interest under
the lease and the rent and all other sums due thereunder will be
assigned to you as part of the security for a mortgage loan by you
to landlord. In the event that Teachers Insurance and Annuity
Association of America, as lender, notifies the undersigned of a
default under the mortgage and demands that the undersigned pay its
rent and all other sums due under the lease to lender, tenant agrees
that it shall pay its rent and all such other sums to lender.
Very truly yours,
MEDICALOGIC, INC.
By: /s/ Guy E. Field
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Its: VP Finance
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