Exhibit 10.1

FIFTH AMENDMENT TO LEASE

 

This Fifth Amendment to Lease (this “Fifth Amendment”) is made and entered into
effective as of August 15, 2018, which is the date that this Fifth Amendment has
been fully executed by all of those persons required to sign it (the “Effective
Date”), by and between De Anza Enterprises LLC, a California limited liability
company (“Landlord”), and DURECT Corporation, a Delaware corporation (“Tenant”),
with respect to the following facts:

 

R E C I T A L S:

 

A.On or about February 18, 1999, De Anza Enterprises, Ltd., a joint venture of
Hover Family Trust, Sarah T. Behel, Julia G. Hover Smoot, David H. Hover, Teresa
Korol, and Johnson Family Trust (the “Joint Venture”), entered into that certain
Modified Net Single Tenant Lease Agreement (the “Original Lease”) with Tenant
with respect to the lease of that certain real property and improvements thereon
commonly known as 10240 Bubb Road, Cupertino, California, as more particularly
described in the Original Lease (the “Premises”).

 

B.On or about February 18, 2004, the Joint Venture and Tenant entered into that
certain Amendment to Lease Agreement with respect to the lease of the Premises
(the “First Amendment”); on or about August 6, 2009, the Joint Venture and
Tenant entered into that certain Second Amendment to Lease with respect to the
lease of the Premises (the “Second Amendment”); on or about December 21, 2010,
the Joint Venture and Tenant entered into that certain Third Amendment to Lease
with respect to the lease of the Premises (the “Third Amendment”); on or about
August 20, 2013, the Joint Venture and Tenant entered into that certain Fourth
Amendment to Lease with respect to the lease of the Premises (the “Fourth
Amendment”).  The Original Lease, the First Amendment, the Second Amendment, the
Third Amendment, and the Fourth Amendment are referred to herein collectively as
the “Lease.”

 

C.The Joint Venture was Landlord’s predecessor in interest as the owner of the
Premises and landlord under the Lease.

 

D.All capitalized terms used in this Fifth Amendment and not otherwise defined
herein shall have the meanings ascribed to them in the Lease.

 

E.Landlord and Tenant have now agreed to amend the Lease to extend the Extension
Term and to make such other changes to the Lease upon the terms and conditions
as described herein.

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

 

1.Extension of Expiration Date; Affirmation of Option.  The parties acknowledge
that Recital C of the Fourth Amendment provides that the Extension Term shall
expire on February 19, 2019 (the “Expiration Date”).  The parties further
acknowledge that Section 2 of the Fourth Amendment grants Tenant an Option,
which allows Tenant to further extend the term

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of the Lease beyond the Expiration Date for an additional five (5) year period,
which is subject to the terms and conditions set forth in Section 35 of the
Original Lease, and which shall be treated as the Second Renewal Term under
Section 35 of the Original Lease.  The parties further acknowledge that,
pursuant to Section 35 of the Original Lease, the Option for the Second Renewal
Term shall be exercised by Tenant giving Landlord written notice of its
intention to do so at least one hundred eighty (180) days before the end of
First Renewal Term, which the parties agree for purposes of this Fifth Amendment
shall mean the Expiration Date.  The parties further acknowledge that the date
that is one hundred eighty (180) days before the Expiration Date (without regard
for any modifications made pursuant to this Section 1 of the Fifth Amendment) is
August 23, 2018.  Based on the foregoing facts, the parties hereby agree that,
as of the Effective Date, the Expiration Date is hereby extended for an
additional five (5) year period (the “New Extension Term”), to February 19,
2024, and the Option granted to Tenant for a Second Renewal Term pursuant to
Section 35 of the Original Lease, as modified by the provisions of Section 2 of
the Fourth Amendment and this Section 1 of the Fifth Amendment, shall remain
exercisable as provided under the terms and conditions of the Lease by Tenant
giving Landlord written notice of its intention to do so on or before August 23,
2023.  For the avoidance of doubt, provided that Tenant gives Landlord written
notice of its intention to exercise the Option for the Second Renewal Term on or
before August 23, 2023, and is not in default of any of the terms and conditions
of the Lease, the Second Renewal Term shall extend from February 20, 2024
through February 19, 2029.

 

2.Base Monthly Rental for the New Extension Term.  The parties hereby agree that
the Lease is hereby further amended so that, commencing on the first day of the
New Extension Term, the monthly rent for the Premises and the Service Yards (the
“Rent”) shall be payable as follows:

 

 

Months of Term

Calendar Period

Rent

 

 

1 – 12

2/20/2019 – 2/19/2020

$80,000.00

 

13 – 24

2/20/2020 – 2/19/2021

$82,400.00

 

25 – 36

2/20/2021 – 2/19/2022

$84,872.00

 

37 – 48

2/20/2022 – 2/19/2023

$87,418.16

 

49 – 60

2/20/2023 – 2/19/2024

$90,040.70

 

 

 

 

3.HVAC Replacement.  Notwithstanding anything in Section 18.C of the Original
Lease to the contrary, but in addition to and without limiting Landlord’s
obligations thereunder, the parties agree that Landlord shall replace the HVAC
equipment on the building at the Premises (the “Building”) at Landlord’s sole
cost and expense in the manner described in that certain Revised Proposal dated
March 26, 2018, prepared by Therma Corporation, a copy of which is attached
hereto and made a part hereof as Exhibit “A” (the “HVAC Work”), subject to the
following additional terms and conditions:

 

 

a.

The parties shall schedule the performance of as much of the HVAC Work as
practicably possible to occur during Tenant’s 2018 Christmas holiday shutdown.

 

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b.

All permits required for the performance of the HVAC Work shall be included in
the HVAC Work at Landlord’s sole cost.

 

 

c.

All repairs to the structural components of the Building required for the
performance of the HVAC Work shall be included in the HVAC Work at Landlord’s
sole cost.

 

 

d.

All roof repairs required for the performance of the HVAC Work shall be included
in the HVAC Work at Landlord’s sole cost.

 

 

e.

All electrical work required for the performance of the HVAC Work shall be
included in the HVAC work at Landlord’s sole cost.

 

4.Premises Repairs.  Notwithstanding anything in Section 17 of the Original
Lease to the contrary, but in addition to and without limiting Landlord’s
obligations thereunder, the parties agree that Landlord shall repair and repaint
the front parapet of the building (the “Building”), repair the damage caused to
the front stairway leading to the Building by the growth of a redwood tree, and
remedy any safety concerns caused as a result of such damage, all at Landlord’s
sole cost and expense.

 

5.Representation; Brokerage Commissions.  With regard to the negotiation of the
terms of this Fifth Amendment, the parties acknowledge that Tenant has been
represented by Joe Elliott and Colliers International (“Tenant’s Broker”), and
that Landlord has been represented by Daniel S. Gonzales, Esq., and the law firm
of Ferrari Ottoboni Caputo & Wunderling.  The parties further acknowledge that
Landlord shall be responsible for the payment of its own attorneys’ fees in the
negotiation of the terms of this Fifth Amendment.  The parties agree that
Landlord shall pay a commission of 1½% of the value of the New Extension Term to
Tenant’s Broker pursuant to the terms and conditions of a separate agreement
between Landlord and Tenant’s Broker.  The parties further agree that each party
shall be responsible for the payment of its own representation in the
negotiation of the terms of the Second Renewal Term in the event that Tenant
exercises the Option for a Second Renewal Term.

 

6.Miscellaneous

 

a.Conflicts.  Notwithstanding anything to the contrary in the Lease, in the
event of a conflict or inconsistency between the terms of the Lease and the
terms and conditions of this Fifth Amendment, the terms and conditions set forth
in this Fifth Amendment shall control and shall be deemed to supersede the
printed terms of the Lease.  Whether or not specifically amended by this Fifth
Amendment, all of the terms and provisions of the Lease are hereby amended to
the extent necessary to give effect to the purpose and intent of this Fifth
Amendment.

 

b.Ratification.  Except as expressly amended and/or modified by this Fifth
Amendment, the terms and provisions of the Lease are hereby ratified, confirmed,
and shall remain unmodified and in full force and effect.

 

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c.Authority.  The individuals signing this Fifth Amendment on behalf of each
party represent and warrant that such individual has the authority under the
company’s governing documents to execute and deliver this Fifth Amendment in the
name of and on behalf of the company.

 

d.Successors and Assigns.  The Lease, as amended hereby, shall apply to and bind
Landlord and Tenant and their respective successors and assigns.

 

e.Multiple Counterparts.  This Fifth Amendment may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute together one and the same instrument.  In order to facilitate the
agreements contemplated by this Fifth Amendment, signatures transmitted by
facsimile or via e-mail in a “PDF” format may be used in place of original
signatures.  Each party intends to be bound by such party’s facsimile or “PDF”
format signature on this Fifth Amendment, is aware that the other parties are
relying on such party’s facsimile or “PDF” format signature, and hereby waives
any defenses to the enforcement of this Fifth Amendment based upon the form of
signature.

 

(The remainder of this page is intentionally left blank; signatures follow on
next page.)

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IN WITNESS WHEREOF, the parties hereto have duly executed this Fifth Amendment
             as of the date first written above.  

 

LANDLORD:TENANT:

 

De Anza Enterprises LLC,DURECT Corporation,

A California limited liability companya Delaware corporation

 

By:/s/ Sarah (“Sally”) BehelBy:/s/ Matthew J. Hogan

 

Name: Sarah (“Sally”) Behel Name: Matthew J. Hogan

 

Its: Manager Its: Chief Financial Officer

 

Dated: 8/7/2018Dated: 8/15/2018

 

 

 

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EXHIBIT “A”

(Therma Corporation Revised Proposal dated March 26, 2018)

 

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