Exhibit 10.006

 

FOURTH AMENDMENT TO TEN-YEAR INDUSTRIAL NET LEASE AGREEMENT

 

(Covering Building 8 Space and Building 3 Space, in Phase I of Seaport Centre)

 

This Fourth Amendment to Ten-Year Industrial Net Lease Agreement (“Amendment”)
is entered into, and dated for reference purposes, as of October 18, 2002 (the
“Execution Date”) by and between METROPOLITAN LIFE INSURANCE COMPANY, a New York
corporation (“Metropolitan”), as Landlord (“Landlord”), and CYGNUS, INC., a
Delaware corporation (“Cygnus”), as Tenant (“Tenant”), with reference to the
following facts (“Recitals”):

 

A.  Metropolitan’s predecessor in interest as Landlord (Seaport Centre Venture
Phase I, a California general partnership, herein, the “Venture”) and Tenant’s
predecessor in interest as Tenant (Cygnus Research Corporation, a California
corporation) entered into that certain written Lease dated September 27, 1988
(the “Original Lease”), for certain premises of approximately 20,880 square feet
of space in Building 8 of Phase I (“Building 8 Space”), whose current street
address remains 701 Galveston Street, Redwood City, California, all as more
particularly described in the Original Lease, which Original Lease included
Rider No. 1 To Seaport Centre Standard Lease and Exhibits A, A-1, B & C.

 

B.  The Venture and Tenant’s predecessor in interest as Tenant at the time
(then, Cygnus Therapeutic Systems, a California corporation) entered into that
certain written First Amendment To Ten-Year Industrial Net Lease Agreement dated
May 15, 1992 (the “First Amendment”) for certain space in Building 5 of Phase I
(“Building 5 Space”), and that certain written Second Amendment To Ten-Year
Industrial Net Lease Agreement dated August 8, 1992 (the “Second Amendment”) for
certain space of approximately 11,158 square feet in Building 3 of Phase I
(“Building 3 Space”), whose current street address remains 501 Chesapeake
Street, Redwood City, California.

 

C.  Landlord and Tenant entered into that certain written Third Amendment to
Ten-Year Industrial Net Lease Agreement dated as of June 8, 1998 (the “Third
Amendment”).

 

D.  The Original Lease, as amended prior to this Amendment, is referred to as
the “Existing Lease”. The “Existing Premises”, prior to this Amendment, shall
mean the “Building 8 Space” (as defined in the Third Amendment, approximately
20,880 square feet of space Building 8 of Phase I, whose current street address
remains 701 Galveston Drive, Redwood City, California) and the “Building 3
Space” (as defined in the Third Amendment, approximately 11,158 square feet in
Building 3 of Phase I, whose current street address remains 501 Chesapeake
Street, Redwood City, California).

 

E.  Tenant subleases the Building 8 Space to Ortho-McNeil (“Ortho-McNeil”) and
desires to surrender the Building 8 Space to Landlord to reduce Tenant’s future
lease obligations. Landlord and Tenant desire to provide for (i) Tenant’s
surrender of the Building 8 Space; (ii) continuation of the Existing Lease as to
the remaining Building 3 Space; and (iii) other amendments of the Existing
Lease, in strict accordance with the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants set
forth herein and in the Existing Lease, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

Section 1. Scope of Amendment; Defined Terms. Except as expressly provided in
this Amendment, the Existing Lease shall remain in full force and effect. Should
any inconsistency arise between this Amendment and the Existing Lease as to the
specific matters which are the subject of this Amendment, the terms and
conditions of this Amendment shall control. The term “Existing Lease” defined
above shall refer to the Existing Lease as it existed before giving effect to
the modifications set forth in this Amendment and the term “Lease” as used
herein and in the Existing Lease shall refer to the Existing Lease as modified
by this Amendment. All capitalized terms used in this Amendment and not defined
herein shall have the meanings set forth in the Existing Lease unless the
context clearly requires otherwise.

 

 

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Section 2.               Condition Precedent. This Amendment and the obligations
of each party hereunder are expressly subject to the condition precedent of the
execution by Cygnus and Landlord of a new written lease with Ortho-McNeil for
the Surrender Space (defined below) and certain additional space satisfactory in
all respects in form and substance to Landlord, in Landlord’s sole discretion
(the “Ortho-McNeil Lease”). If such condition precedent is not satisfied or
waived in writing by Landlord in its sole discretion, this Amendment shall be
null and void, and of no force or effect, and the Existing Lease shall remain in
full force and effect unmodified by this Amendment. Landlord shall give Tenant
written notice of the satisfaction or waiver of this condition precedent.

 

Section 3.               Surrender Space & Amendments of Existing Lease
Thereafter.

 

(a)           Surrender Space. For purposes of this Amendment, the “Surrender
Space” means the Building 8 Space.

 

(b)           Surrender Date.  On or before 11:59 p.m. on the date (the
“Surrender Date”) which is the later of: (1) October 15, 2002, or (2) the date
Landlord and Tenant have executed this Agreement, or (3) the date the condition
precedent is satisfied or waived by Landlord (and the actual date of
satisfaction of the condition precedent shall be the operative date for purposes
of this determination, regardless whether it occurs earlier or later than notice
from Landlord of such satisfaction). Tenant shall vacate and deliver to Landlord
exclusive possession of the Surrender Space pursuant to the same provisions and
requirements of the Existing Lease as would apply to surrender of the Premises
upon expiration of the Existing Lease, except that the Surrender Space shall be
delivered with Ortho-McNeil in occupancy and with all real property improvements
and systems servicing the Premises in place, and with all trade fixtures of
either Tenant or Ortho-McNeil in place. Tenant shall deliver to Landlord any
plans and specifications pertaining to the Surrender Space.

 

(c)           Obligations Until Surrender; Proration.  All of the terms,
covenants, agreements and conditions of the Existing Lease remain in full force
and effect with respect to the Surrender Space through the Surrender Date.
Tenant shall continue to pay all rent and monetary obligations which accrue
through and including the Surrender Date, as such become due and payable under
the Existing Lease. As of 11:59 p.m. on the Surrender Date, the surrender of the
Surrender Space will be deemed effective and the monetary obligations with
respect to the Surrender Space shall be prorated, billed and payable in the
manner provided in the Existing Lease, in the same manner as would apply if the
term of the Existing Lease expired on the Surrender Date with respect to the
Surrender Space.

 

(d)           Effect on Existing Lease After Surrender Date. After the Surrender
Date, the Existing Lease shall continue in full force and effect for the
remainder of the term of the Existing Lease upon and subject to all of the terms
and provisions of the Existing Lease, except as amended by this Amendment,
including, without limitation, the following modifications of the Existing
Lease:

 

(i)  the Surrender Space shall cease to be part of the Premises, and the
Premises shall consist only of the Building 3 Space, and Tenant shall have no
right to possession, use or lease of the Surrender Space or any options or other
rights with respect to the Surrender Space;

 

(ii) Tenant’s obligation to pay monthly base rent with respect to the Surrender
Space shall cease, but the base rent for the Building 3 Space shall remain
unaffected by this Amendment, and accordingly Tenant’s monthly base rent for the
Premises, is changed to the monthly amounts during the respective periods shown
in the following table:

 

Period (inclusive of dates listed)

 

Monthly Base Rent

 

 

 

 

 

day after Surrender Date - 12/10/02

 

$26,825.69

 

12/11/02 - 12/10/03

 

$27,625.35

 

 

 

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(iii) Tenant shall no longer be obligated to pay monthly its proportionate share
of Building Operating Expenses accruing after the Surrender Date with respect to
the Surrender Space, but Tenant shall continue to pay its proportionate share of
Building Operating Expenses accruing after the Surrender Date with respect to
the Building 3 Space, which equals twenty-nine percent (29%) as stated in the
Third Amendment;

 

(iv) Tenant’s proportionate share of Project Operating Expenses (as defined in
the Third Amendment, as the percentage obtained by dividing the aggregate
rentable square footage of the Premises located in the Project by the total
rentable square footage of the Project) shall change to two and 76/1000 percent
(2.076%);

 

(v) Tenant’s proportionate share of Phase Operating Expenses of and attributable
to Phase I (as defined in the Third Amendment, as the percentage obtained by
dividing the aggregate rentable square footage of the Premises located in Phase
I by the total rentable square footage of Phase I) shall change to three and
697/1000 percent (3.697%); and

 

(vi) the aggregate number of parking spaces provided for Tenant’s use is reduced
to thirty-four (34).

 

(e) Holding Over. Notwithstanding any provision of this Amendment to the
contrary, in the event that Tenant fails timely to vacate and deliver exclusive
possession of the Surrender Space to Landlord by the Surrender Date as required
under the Existing Lease, except as amended by this Amendment, Tenant shall be
deemed to be holding over with respect to the Surrender Space without the
express written consent of Landlord, such possession shall be a tenancy at
sufferance and the provisions of Section 36 of the Original Lease shall apply.

 

(f) No Release. Notwithstanding any provision of the foregoing to the contrary,
neither this Amendment nor the acceptance by Landlord of the Surrender Space
shall in any way:

 

(i) be deemed to excuse or release Tenant from any obligation or liability with
respect to the Surrender Space (including, without limitation, any obligation or
liability under provisions of the Existing Lease to indemnify, defend and hold
harmless Landlord or other parties, or with respect to any breach or breaches of
the Existing Lease) which obligation or liability (x) first arises on or prior
to the date on which Tenant delivers to Landlord possession of the Surrender
Space or (y) arises out of or is incurred in connection with events or other
matters which took place on or prior to such date, or

 

(ii) affect any obligation under the Existing Lease which by its terms is to
survive the expiration or sooner termination of the Existing Lease.

 

Section 4. Change of Address for Copies of Notices to Landlord. The Foster City,
California address for a copy of all notices to Landlord set forth Section 14 of
the Third Amendment is hereby changed as follows (but the other address for all
notices to Landlord remain unchanged):

 

Metropolitan Life Insurance Company

400 South El Camino Real, Suite 800

San Mateo, CA 94402

Attention: Assistant Vice President

 

Section 5. Tenant Estoppel. Tenant hereby confirms and ratifies the Existing
Lease, as amended hereby, and acknowledges that Landlord is not in default under
said Existing Lease as of the date of this Amendment.

 

Section 6. Time of Essence. Without limiting the generality of any other
provision of the Existing Lease, time is of the essence to each and every term
and condition of this Amendment.

 

 

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Section 7. Brokers. Tenant represents that Tenant has dealt with no broker
representing Tenant in connection with this Amendment and that no broker is
representing Tenant in negotiating this Amendment or is entitled to any
commission in connection herewith. Tenant hereby protects, defends, indemnifies
and holds Landlord and its agents and employees harmless from all liabilities
arising from or in connection with any claim of any broker claiming to represent
Tenant in connection with this Amendment. Landlord represents that Cornish and
Carey Commercial (“CC”) is representing Landlord in connection with this
Amendment. Landlord hereby protects, defends, indemnifies and holds Tenant and
its agents and employees harmless from all liabilities arising from or in
connection with any claim of CC or any other broker claiming to represent
Landlord in connection with this Amendment.

 

Section 8. Attorneys’ Fees. Each party to this Amendment shall bear its own
attorneys’ fees and costs incurred in connection with the discussions preceding,
negotiations for and documentation of this Amendment. In the event any party
brings any suit or other proceeding with respect to the subject matter or
enforcement of this Amendment or the Existing Lease, as amended, the prevailing
party (as determined by the court, agency or other authority before which such
suit or proceeding is commenced) shall, in addition to such other relief as may
be awarded, be entitled to recover attorneys’ fees, expenses and costs of
investigation as actually incurred, including court costs, expert witness fees,
costs and expenses of investigation, and all attorneys’ fees, costs and expenses
in any such suit or proceeding (including in any action or participation in or
in connection with any case or proceeding under the Bankruptcy Code, 11 United
States Code Sections 101 et seq., or any successor statutes, in establishing or
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).

 

Section 9. Effect of Headings; Recitals: Exhibits. The titles or headings of the
various parts or sections hereof are intended solely for convenience and are not
intended and shall not be deemed to or in any way be used to modify, explain or
place any construction upon any of the provisions of this Amendment. Any and all
Recitals set forth at the beginning of this Amendment are true and correct and
constitute a part of this Amendment as if they had been set forth as covenants
herein. Exhibits, schedules, plats and riders hereto which are referred to
herein are a part of this Amendment.

 

Section 10. Entire Agreement; Amendment. This Amendment taken together with the
Existing Lease, together with all exhibits, schedules, riders and addenda to
each, constitutes the full and complete agreement and understanding between the
parties hereto and shall supersede all prior communications, representations,
understandings or agreements, if any, whether oral or written, concerning the
subject matter contained in this Amendment and the Existing Lease, as so
amended, and no provision of the Existing Lease as so amended may be modified,
amended, waived or discharged, in whole or in part, except by a written
instrument executed by all of the parties hereto.

 

Section 11. Authority. Each party represents and warrants to the other that it
has full authority and power to enter into and perform its obligations under
this Amendment, that the person executing this Amendment is fully empowered to
do so, and that no consent or authorization is necessary from any third party.
Landlord may request that Tenant provide Landlord evidence of Tenant’s
authority.

 

Section 12. Counterparts. This Amendment may be executed in duplicates or
counterparts, or both, and such duplicates or counterparts together shall
constitute but one original of the Amendment. Each duplicate and counterpart
shall be equally admissible in evidence, and each original shall fully bind each
party who has executed it.

 

Section 13. Telecopied Signatures. In order to expedite the transaction
contemplated herein, telecopied signatures may be used in place of original
signatures on this Amendment. All signatories to this Amendment intend to be
bound by such signatures, are aware that the other party or parties will rely on
the telecopied signatures and hereby waive any defenses to the enforcement of
the terms of this Amendment based on the fact that a signature was telecopied.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first set forth above.

 

TENANT: CYGNUS, INC.,

 

a Delaware corporation

 

By:

/s/ John C Hodgman

 

Print Name:

John C Hodgman

 

Title:

Chairman, President & CEO

 

 

 

 

LANDLORD: METROPOLITAN LIFE INSURANCE COMPANY,

a New York corporation

 

By:

/s/ B Jill Fitzgerald

 

Print Name:

B Jill Fitzgerald

 

Title:

Assistant Vice President

 

 

 

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