FOURTH AMENDMENT TO LEASE
Exhibit 10.30
FOURTH AMENDMENT TO LEASE
This FOURTH AMENDMENT TO LEASE (“Amendment”) is made and entered into as of November 11, 2010,
by and between HCP LS REDWOOD CITY, LLC, a Delaware limited liability company (“Landlord”), and
CARDICA, INC., a Delaware corporation (“Tenant”).
RECITALS:
A. Landlord and Tenant are parties to that certain Office Lease dated April 25, 2003 (the
“Office Lease”), pursuant to which Tenant currently leases approximately 29,614 rentable square
feet of space (the “Premises”) in the building (the “Building”) located at 000 Xxxxxxx Xxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx. The Office Lease, as amended by (i) the First Amendment dated January
21, 2004, (ii) the Second Amendment to Office Lease Agreement dated November 19, 2007, and (iii)
the Third Amendment to Office Lease Agreement dated as of November 17, 2009, is referred to herein
as the “Lease”.
B. The parties desire to amend the Lease on the terms and conditions set forth in this
Amendment.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Terms. All capitalized terms when used herein shall have the same respective
meanings as are given such terms in the Lease unless expressly provided otherwise in this
Amendment.
2. Condition of the Premises. Landlord and Tenant acknowledge that Tenant has been
occupying the Premises pursuant to the Lease, and therefore Tenant continues to accept the Premises
in its presently existing, “as is” condition.
3. Extended Lease Term. Pursuant to the Lease, the Lease Term is scheduled to expire
on August 31, 2011. Landlord and Tenant hereby agree to extend the Lease Term for a period of four
(4) years, from September 1, 2011, through August 31, 2015 (the “Extended Term.”), on the terms and
conditions set forth in this Amendment. The Right of First Offer set forth in Article II of
Exhibit F to the Office Lease is hereby deleted and shall be of no further force or effect.
4. Improvement Allowance. Landlord hereby grants Tenant an improvement allowance
in the amount of $5.00 per rentable square foot of the Premises (i.e., $148,070.00) (the
“Improvement Allowance”) to be used by Tenant in connection with the construction of alterations
and refurbishment of improvements (the “Improvements”) in the Premises. The Improvement Allowance
shall not be used by Tenant for any moving or relocation expenses, furniture or fixtures, or
personal property. Any Improvements shall be made by Tenant in accordance with the terms of
Section IX C of the Office Lease, and shall be subject to the terms of Section VIII
of the Office Lease. Landlord shall disburse the Improvement Allowance to Tenant following the
completion of the Improvements, and in accordance with Landlord’s reasonable and customary
disbursement procedures, which include the requirement that Tenant provide invoices and other
evidence of the costs incurred, and applicable lien waivers and releases. Notwithstanding the
foregoing, (i) Landlord shall have no obligation to pay the Improvement Allowance to Tenant until
after January 1, 2011, and (ii) any amount of the Improvement Allowance that has not been allocated
or disbursed on or before December 31, 2011, shall revert to Landlord and Tenant shall have no
further rights thereto. Landlord shall not charge a supervisory or construction management fee
relating to the Sublease Improvements, but Landlord shall be permitted to recover from Tenant or
deduct from the Improvement Allowance Landlord’s actual out-of-pocket fees paid by Landlord to
third party consultants or service providers which Landlord determines reasonably necessary to
facilitate its review and approval of the Improvements. Except as expressly provided above,
Landlord shall not be obligated to provide or pay for any improvement work or services related to
the improvement of the Premises.
5. Rent.
5.1 Base Rent. Prior to January 1, 2011, Tenant shall continue to pay monthly
installments of Base Rent for the Premises in accordance with the terms of the Office Lease.
Commencing on January 1, 2011, and continuing through the Extended Term, Tenant shall pay monthly
installments of Base Rent for the Premises as follows:
Monthly | ||||||||||||
Annual | Installment | Monthly Rental Rate | ||||||||||
Calendar Year | Base Rent | of Base Rent | per Square Foot | |||||||||
2011 |
$ | 621,894.00 | $ | 51,824.50 | $ | 1.75 | ||||||
2012 |
$ | 639,662.40 | $ | 53,305.20 | $ | 1.80 | ||||||
2013 |
$ | 664,538.16 | $ | 55,378.18 | $ | 1.87 | ||||||
2014 |
$ | 710,736.00 | $ | 59,228.00 | $ | 2.00 | ||||||
2015 |
$ | 746,272.80 | $ | 62,189.40 | $ | 2.10 |
5.2 Additional Rent. Tenant’s Pro Rata Share, Tenant’s Monthly Expense and Tax
Payment and all other monetary obligations of Tenant under the Lease shall remain in full force and
effect, and shall not be modified by this Amendment.
6. Option Right. Landlord hereby grants to the originally named Tenant herein
(“Original Tenant”), one (1) option to extend the Lease Term for a period of two (2) years (the
“Option Term”), which option shall be irrevocably exercised only by written notice delivered by
Tenant to Landlord not more than twelve (12) months nor less than nine (9) months prior to the
expiration of the Extended Term, provided that the following conditions (the “Option Conditions”)
are satisfied: (i) as of the date of delivery of such notice, Tenant is not in default under this
Lease, after the expiration of any applicable notice and cure period; (ii) as of the end of the
Lease Term, Tenant is not in default under this Lease, after the expiration of any applicable
notice and cure period; and (iii) the Lease then remains in full force and effect and Original
Tenant or a Permitted Assignee occupies the entire Premises at the time the option to extend is
exercised and as of the commencement of the Option Term. Landlord may, at Landlord’s option,
exercised in Landlord’s sole and absolute discretion, waive any of the Option Conditions in which
case the option, if otherwise properly exercised by Tenant, shall remain in full force and effect.
Upon the proper exercise of such option to extend, and provided that Tenant satisfies all of the
Option Conditions (except those, if any, which are waived by Landlord), the Lease Term, as it
applies to the Premises, shall be extended for a period of two (2) years. The rights contained in
this Section 6 shall be personal to Original Tenant, and may not be exercised by any
assignee, sublessee or other transferee.
6.1 Option Rent. The annual Rent payable by Tenant during the Option Term (the
“Option Rent”) shall be equal to the “Fair Rental Value,” as that term is defined below, for the
Premises as of the commencement date of the Option Term. The “Fair Rental Value,” as used in this
Lease, shall be equal to the annual rent per rentable square foot (with appropriate consideration
given to any “base year” or “expense stop” applicable thereto), including any included period
increases in fixed rentals, at which tenants (pursuant to leases consummated within the twelve (12)
month period preceding the first day of the Option Term), are leasing non-sublease, non-encumbered,
non-equity space which is not significantly greater or smaller in size than the subject space, for
a comparable lease term, in an arm’s length transaction, which comparable space is located in the
“Comparable Buildings,” as that term is defined, below (transactions satisfying the foregoing
criteria shall be known as the “Comparable Transactions”), taking into consideration all relevant
factors, including the following concessions (the “Concessions”): (a) rental abatement
concessions, if any, being granted such tenants in connection with such comparable space; (b)
tenant improvements or allowances provided or to be provided for such comparable space, and taking
into account the value, if any, of the existing improvements in the subject space, such value to be
based upon the age, condition, design, quality of finishes and layout of the improvements and the
extent to which the same can be utilized by a general office user other than Tenant; and (c) other
reasonable monetary concessions being granted such tenants in connection with such comparable
space. The Concessions (A) shall be reflected in the effective rental rate (which effective rental
rate shall take into consideration the total dollar value of such Concessions as amortized on a
straight-line basis over the applicable term of the Comparable Transaction (in which case such
Concessions evidenced in the effective rental rate shall not be granted to Tenant)) payable by
Tenant, or (B) at Landlord’s election, all such Concessions shall be granted to Tenant in
kind. The term “Comparable Buildings” shall mean the Building and those other class A life
sciences buildings which are comparable to the Building in terms of age (based upon the date of
completion of construction or major renovation of to the building), quality of construction, level
of services and amenities, size and appearance, and are located in Redwood City, California and the
surrounding commercial area.
6.2 Determination of Option Rent. In the event Tenant timely exercises an option to
extend the Lease Term, Landlord shall notify Tenant of Landlord’s determination of the Option Rent
on or before the Lease Expiration Date. If Tenant, on or before the date which is ten (10) days
following the date upon which Tenant receives Landlord’s determination of the Option Rent, in good
faith objects to Landlord’s determination of the Option Rent, then Landlord and Tenant shall
attempt to agree upon the Option Rent using their best good-faith efforts. If Landlord and Tenant
fail to reach agreement within ten (10) days following Tenant’s objection to the Option Rent (the
“Outside Agreement Date”), then each party shall make a separate determination of the Option Rent,
as the case may be, within five (5) days, and such determinations shall be submitted to arbitration
in accordance with Sections 6.2(a) through 6.2.7, below. If Tenant fails to object
to Landlord’s determination of the Option Rent within the time period set forth herein, then Tenant
shall be deemed to have objected to Landlord’s determination of Option Rent.
(a) Landlord and Tenant shall each appoint one arbitrator who shall be, at the option
of the appointing party, a real estate broker, appraiser or attorney who shall have been
active over the five (5) year period ending on the date of such appointment in the leasing
or appraisal, as the case may be, of other class A life sciences buildings located in the
Redwood City market area. The determination of the arbitrators shall be limited solely to
the issue of whether Landlord’s or Tenant’s submitted Option Rent is the closest to the
actual Option Rent, taking into account the requirements of Section 6.2, above, as
determined by the arbitrators. Each such arbitrator shall be appointed within fifteen (15)
days after the Outside Agreement Date. Landlord and Tenant may consult with their selected
arbitrators prior to appointment and may select an arbitrator who is favorable to their
respective positions. The arbitrators so selected by Landlord and Tenant shall be deemed
“Advocate Arbitrators.”
(b) The two (2) Advocate Arbitrators so appointed shall be specifically required
pursuant to an engagement letter within ten (10) days of the date of the appointment of the
last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral
Arbitrator”) who shall be qualified under the same criteria set forth hereinabove for
qualification of the two Advocate Arbitrators, except that neither the Landlord or Tenant or
either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral
Arbitrator prior or subsequent to his or her appearance. The Neutral Arbitrator shall be
retained via an engagement letter jointly prepared by Landlord’s counsel and Tenant’s
counsel.
(c) The three arbitrators shall, within thirty (30) days of the appointment of the
Neutral Arbitrator, reach a decision as to whether the parties shall use
Landlord’s or Tenant’s submitted Option Rent, and shall notify Landlord and Tenant
thereof.
(d) The decision of the majority of the three arbitrators shall be binding upon
Landlord and Tenant.
(e) If either Landlord or Tenant fails to appoint an Advocate Arbitrator within
fifteen (15) days after the Outside Agreement Date, then either party may petition the
presiding judge of the Superior Court of San Mateo County to appoint such Advocate
Arbitrator subject to the criteria in Section 5.2.7(b), above, or if he or she
refuses to act, either party may petition any judge having jurisdiction over the parties to
appoint such Advocate Arbitrator.
(f) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral
Arbitrator, then either party may petition the presiding judge of the Superior Court of San
Mateo County to appoint the Neutral Arbitrator, or if he or she refuses to act, either party
may petition any judge having jurisdiction over the parties to appoint such arbitrator.
(g) The cost of the Neutral Arbitrator shall be paid by Landlord and Tenant equally;
each party shall pay its own Advocate Arbitrator.
(h) In the event that the Option Rent shall not have been determined pursuant to the
terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay
the Option Rent initially provided by Landlord to Tenant, and upon the final determination
of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts
of Option Rent due, and the appropriate party shall make any corresponding payment to the
other party.
7. Letter of Credit. Effective as of January 1, 2011, the amount of the Letter of
Credit required to be maintained by Tenant under the Lease shall be reduced to $100,000. Promptly
after such date, Landlord shall reasonably cooperate with Tenant in arranging for a reduction of
the Letter of Credit currently held by Landlord, or for the issuance of a replacement letter of
credit, so that the amount of the Letter of Credit held by Landlord is equal to such reduced
amount. Any charges or fees imposed by the issuer in connection with such reduction or replacement
of the Letter of Credit shall be paid by Tenant.
8. Notices. Notwithstanding anything to the contrary contained in the Lease, as of
the date of this Amendment, any Notices to Landlord must be sent, transmitted, or delivered, as the
case may be, to the following addresses:
if to Landlord:
|
HCP LS Redwood City, LLC | |
c/o HCP, Inc. | ||
0000 Xxxxxx Xxxxxxx Xxx, Xxxxx 000 | ||
Xxxx Xxxxx, XX 00000 | ||
Attention: Legal Department | ||
and | ||
HCP Life Science Estates | ||
000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000 | ||
Xxxxx Xxx Xxxxxxxxx, XX 00000 | ||
Attention: Xxx Xxxxxxxxxxxxx | ||
and | ||
Xxxxx Xxxxxxx Xxxx Xxxxxx Xxxxxxx & Xxxxxx LLP | ||
1901 Avenue of the Stars | ||
Xxxxx 0000 | ||
Xxx Xxxxxxx, Xxxxxxxxxx 00000 | ||
Attention: Xxxxx X. Xxxxxx, Esq. |
9. Brokers. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Amendment
other than CB Xxxxxxx Xxxxx and Xxxxx Xxxx LaSalle (the “Brokers”), and that they know of no other
real estate broker or agent who is entitled to a commission in connection with this Amendment.
Each party agrees to indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses
(including without limitation reasonable attorneys’ fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any real estate broker
or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The
terms of this Section 8 shall survive the expiration or earlier termination of the term of
the Lease, as hereby amended.
10. No Further Modification. Except as specifically set forth in this Amendment, all
of the terms and provisions of the Lease shall remain unmodified and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first above
written.
“LANDLORD” | HCP LS REDWOOD CITY, LLC, a Delaware limited liability company |
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By: | /s/ Xxxxxxxx Xxxxxxxxxxxxx | |||
Name: | Xxxxxxxx Xxxxxxxxxxxxx | |||
Its: Senior Vice President |
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“TENANT” | CARDICA, INC., a Delaware corporation |
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By: | /s/ Xxxxxxxxx X. Xxxxx | |||
Its: Vice President |
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Date: 11/9/10 |
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By: | /s/ Xxxxxx X. Xxxxxx | |||
Its: CFO |
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Date: 11/9/10 |
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