Exhibit 10.1
FOURTH AMENDMENT TO LEASE
     This Fourth Amendment to Lease (the “Fourth Amendment”) is made and entered
into as of August 25, 2010 (the “Effective Date”) by and between THE BOARD OF
TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate
powers under the laws of the State of California (“Landlord”), and STEMCELLS,
INC., a Delaware corporation (“Tenant”).
     A. Landlord and Tenant entered into that certain Restated and Amended Lease
dated as of December 19, 2002, as amended by that certain Lease Amendment dated
as of August 1, 2003 (the “First Amendment”), that certain Second Amendment to
Lease dated April 1, 2005 (the “Second Amendment”) and that certain Third
Amendment to Lease dated October 12, 2009 (the “Third Amendment”) (the Restated
and Amended Lease, as amended by the First Amendment, Second Amendment and Third
Amendment, collectively, the “Lease”), pursuant to which Landlord has leased to
Tenant 68,162 rentable square feet in that certain property commonly known as
3155 Porter Drive, Palo Alto, California and more particularly described in the
Lease (“Premises”). Each capitalized term not defined in this Fourth Amendment
shall have the same meaning given to such term in the Lease.
     B. Landlord and Tenant now desire to amend the Lease further, on the terms
and conditions more particularly set forth below.
     NOW THEREFORE, Landlord and Tenant hereby agree as follows:
     Section 1 Third Amendment. Effective as of the Recapture Date (defined
below), the Third Amendment shall be superseded in its entirety by this Fourth
Amendment and have no further force or effect. This Fourth Amendment will be
terminable by either party, upon delivery of written notice to the other, if the
Recapture Date does not occur on or before October 31, 2010; provided that any
party who is currently in default of its obligations under this Fourth Amendment
shall have no termination right unless and until such default is cured, as more
particularly described in the Lease.
     Section 2 Recapture of Space.
     2.1 Promptly following the Effective Date, Tenant shall surrender to
Landlord and Landlord shall recapture from Tenant a portion of the second floor
of the Premises comprising 16,962 square feet of Rentable Area and depicted on
Exhibit A attached hereto (the “Recapture Space”). Tenant shall deliver the
Recapture Space in broom clean condition and containing the Alterations,
equipment and fixtures in existence in the Recapture Space on April 13, 2010, as
observed during an inspection of the Recapture Space by Landlord and Tenant, but
not including Tenant’s Property, which will be removed by Tenant prior to the
walk-through described below. For the avoidance of doubt, the parties have
identified in attached Exhibit B certain items to be retained in the Recapture
Space after the Recapture Date and certain equipment to be removed from the
Recapture Space prior to the walk-through. Tenant shall notify Landlord in
writing when Tenant is prepared to deliver the Recapture Space, and Tenant and
Landlord shall conduct a walk-through inspection within three (3) business days
thereafter so that Landlord can determine whether Tenant has complied with the
surrender requirements of this paragraph. Unless Landlord reasonably objects in
writing within two (2) business days of the walk-through to the condition of the
Recapture Space, specifically either (i) that the Recapture Space is not broom
clean or (ii) that the Recapture Space does not contain equipment or fixtures
identified by Landlord as having existed in the Recapture Space as of

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April 13, 2010, the date of such inspection shall be the “Recapture Date”. In
the event of such an objection by Landlord, Tenant will have the right to
schedule one or more additional walk-throughs with Landlord for the purpose of
establishing compliance with the surrender requirements of this paragraph.
Failure by Landlord to conduct a walk-through within the time prescribed will be
deemed acceptance of the Recapture Space by Landlord and satisfaction of
Tenant’s obligations under this paragraph; and, in such an event, the date of
notice delivered to Landlord will be the deemed Recapture Date.
     2.2 As of the Recapture Date: (a) the term “Premises” shall exclude the
Recapture Space, (b) the Premises shall be deemed to be comprised of 51,200
square feet of Rentable Area and (c) Tenant’s Share of Operating Expenses under
the Lease shall be 73.87% (51,200/69,312).
     2.3 Landlord shall be responsible for the demise and separation of the
Recapture Space from the Premises (the “Recapture Work”), and Tenant shall
reimburse Landlord for Landlord’s actual reasonable costs and expenses in
connection with the Recapture Work; provided that Tenant shall in no event be
obligated to reimburse Landlord for any costs or expenses that exceed the sum of
$20,000, in the aggregate, and Tenant shall have no obligation to reimburse
Landlord for the Recapture Work unless Landlord either (a) enters into an
agreement to lease the Recapture Space to a new tenant during the Term, or
(b) notifies Tenant in writing that Landlord will occupy the Recapture Space
prior to the expiration of the Term. Tenant acknowledges that Landlord shall
have no obligation to demise the Recapture Space unless it will be occupied by
Landlord or a new tenant prior to the expiration of the Term. In the event
Landlord does not undertake and complete the Recapture Work prior to the
Expiration Date set forth in Section 3 of this Amendment, Tenant shall have no
reimbursement obligation to Landlord.
     2.4 Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant’s business, any loss of occupancy
or quiet enjoyment of the Premises or any other loss occasioned thereby which
results from the Recapture Work or any other activities of Landlord in the
Recapture Space after the Recapture Date; provided, however, Landlord does not
disrupt the conduct of Tenant’s animal research operations in the Premises.
Notwithstanding the foregoing, Tenant agrees and acknowledges that so long as
Landlord undertakes its work in a manner that is reasonable for a multi-tenant
building, the construction of a demising wall and door into the Recapture Space
will not be a disruption of the conduct of Tenant’s animal research operations.
Tenant will have a right to review and comment on any plans for Recapture Work,
and Landlord shall use commercially reasonable efforts to accommodate any
comments by Tenant relating to the avoidance of unreasonable interference with
Tenant’s occupancy of the Premises.
     2.5 As of the Effective Date, Landlord shall have the right to access the
Recapture Space to show the Recapture Space to prospective tenants and to
inspect the Recapture Space in anticipation of the Recapture Work. Landlord
shall use reasonable efforts to provide Tenant with twenty-four (24) hours’
telephonic notice prior to accessing the Recapture Space until such time as the
Recapture Space is separately demised.
     Section 3 Term. The Expiration Date of the Lease shall be June 30, 2011.
Tenant shall have no further rights to renew or extend the term of the Lease and
Section 3(B) of the Second Amendment to Lease shall be deleted in its entirety.

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     Section 4 Base Monthly Rent. The Base Monthly Rent payable by Tenant during
the remainder of the Term shall be as follows:

                      Base Monthly Rent per     Period During Term   rentable
square foot   Base Monthly Rent
Effective Date – Recapture Date
  $ 2.65     $ 180,629.30  
Recapture Date – March 31, 2011
  $ 2.65     $ 135,680.00  
April 1, 2011 – June 30, 2011
  $ 2.73     $ 139,776.00  

Tenant will be entitled to a proportionate adjustment to Base Rent and Tenant’s
Share of Operating Expenses for any partial month after the Recapture Date.
     Section 5 Condition of the Premises. Tenant hereby confirms that Tenant
currently occupies the Premises in its “as-is” condition, and Landlord shall not
be obligated to make any alterations, additions, repairs or improvements or to
do any work whatsoever on, to or within the Premises, except as otherwise
required by the Lease.
     Section 6 Space Sharing Agreement. Landlord and Tenant each hereby release,
acquit and forever discharge, as of the Recapture Date, the other and the
other’s officers, directors, trustees, agents, representatives, employees,
successors, affiliates, and assigns (collectively, “Agents”) from any and all
claims, demands, debts, charges, complaints, liabilities, causes of action,
damages, and obligations of whatever kind or nature, whether known or unknown or
suspected or unsuspected which such party or any of its respective Agents may
have, claim to have, or which may hereafter accrue, whether in their own right
or by assignment, transfer or grant from any other person or entity, against the
other and its Agents, or any of them, arising out of, or relating to or in any
way connected with, the Space Sharing Agreement between Landlord and Tenant
dated as of February 1, 2001, as amended by an Amendment dated as of
November 15, 2002 and an Amendment dated as of May 1, 2004 (the “Space Sharing
Agreement”), or any services or payments thereunder. In connection with such
release, Landlord and Tenant each hereby waives any and all rights conferred
upon it by the provisions of Section 1542 of the California Civil Code, which
reads as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his settlement with the
debtor.
Each of the parties hereby covenants that it will not make, assert or maintain
against the other and its Agents, or any of them, any claim or action arising
under the Space Sharing Agreement. The parties acknowledge and agree that this
mutual release of claims once Landlord recaptures the Recapture Space is a
material term of this agreement; each agrees to deliver to the other, upon
reasonable request and after the Recapture Date, a mutual release of claims
arising under the Space Sharing Agreement substantially similar to the one
contained herein, If required for a full release of claims thereunder. This
Fourth Amendment effects the settlement of claims that are denied and contested
and nothing contained in this agreement shall constitute, or be construed as, an
admission by either party of any liability of any kind to the other party or to
any third person. Each party represents to the other that (i) such party has the
authority to enter into this Fourth Amendment and perform its obligations
hereunder, including the release of claims arising under the Space Sharing
Agreement, (ii) this Fourth Amendment has been duly authorized by all requisite
action with respect to such party, (iii) this Fourth Amendment has

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been duly executed and delivered by such party and constitutes the legal, valid
and binding obligation of such party enforceable in accordance with its terms,
and (iv) the execution, delivery and performance of this Fourth Amendment will
not, directly or indirectly, conflict with the terms of or result in any
violation or breach of any agreement or other document to which such party is a
party or by which such party is bound, or result in a violation of any law,
rule, regulation, order, judgment or decree to which such party is subject.
     Section 7 Security Deposit. Upon the Recapture Date, the Security Deposit
shall be reduced to $389,039 for the remainder of the Term.
     Section 8 Brokerage Commission. Neither Landlord nor Tenant was represented
by a broker with respect to this Amendment. Tenant was represented by Cornish &
Carey Commercial (“Tenant’s Broker”) with respect to the Third Amendment, and
Landlord shall pay Tenant’s Broker a commission based on the extension of the
Lease from its previous expiration date of March 31, 2010 to the Expiration Date
pursuant to the terms of a separate commission agreement. Tenant and Landlord
represent and warrant that they have had no other dealings with any other real
estate broker or agent in connection with this Amendment. Tenant and Landlord
shall indemnify, defend and hold the other harmless from and against all
liabilities arising from any other claims of brokerage commissions or finder’s
fees based on Tenant’s or Landlord’s, as applicable, dealings or contacts with
brokers or agents, other than, as to Tenant, Tenant’s Broker.
     Section 9 Effect of Amendment. As modified by this Fourth Amendment, all of
the terms and conditions of the Lease remain unchanged and in full force and
effect. In the event of any express conflict or inconsistency between the terms
of this Fourth Amendment and the terms of the Lease, the terms of this Fourth
Amendment shall control and govern.
     Section 10 Counterparts. This Fourth Amendment may be executed in any
number of counterparts, each of which shall be an original, but all of which,
when taken together, shall constitute one and the same instrument.
     Section 11 Amendments. This Fourth Amendment may not be amended, except by
an instrument in writing executed by a duly authorized officer or director of
the respective parties.
     Section 12 Captions. The section and subsection headings of this Fourth
Amendment are inserted for reference only and are not a part of this agreement.
     Section 13 Attorneys’ Fees. In the event of any dispute arising out of or
relating to this Fourth Amendment or the breach hereof, or to interpret upon
reasonable controversy any of the terms, covenants or conditions of this Fourth
Amendment, the prevailing party shall recover, in addition to any other damages
awarded, its reasonable attorneys’ fees and costs incurred in litigating,
arbitrating or otherwise settling or resolving such dispute.
     Section 14 Governing Law. This Fourth Amendment shall be governed by, and
construed in accordance with, the laws of the State of California applicable to
contracts executed in and to be performed in California without regard to
conflicts of laws principles.

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     IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment
as of the Effective Date.

                      LANDLORD:       TENANT:    
 
                    THE BOARD OF TRUSTEES OF THE LELAND       STEMCELLS, INC.,  
  STANFORD JUNIOR UNIVERSITY       a Delaware corporation    
 
                   
By:
  /s/ Jean Snider
 
      By:   /s/ Ken Stratton
 
    Name: Jean Snider       Name: Ken Stratton     Its: Managing Director      
Its: General Counsel    

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