Document:

Exhibit

Exhibit 10.1

HOLOGIC, INC.

2012 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED

1.    Purpose.

The Hologic, Inc. 2012 Employee Stock Purchase Plan (the "Plan") is intended to provide a method whereby employees of Hologic, Inc. (the "Company") and participating subsidiaries will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Company's $.01 par value common stock (the "Common Stock").  It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code").  The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code and applicable guidance and regulations issued thereunder.

2.    Eligible Employees.

(a)    All employees of the Company or any of its participating subsidiaries who are employed before the first day of the applicable Offering Period (as defined below) shall be eligible to receive options under this Plan to purchase the Company's Common Stock.  

(b)    The following employees shall not be eligible to participate in the Plan (i) any employee whose customary employment is for not more than twenty (20) hours per week and (ii) any employee if immediately after the option is granted, would own Common Stock equal to five (5%) percent (including shares subject to such option) or more of the total combined voting power or value of all classes of stock of the Company or of its parent corporation or subsidiary corporation as the terms "parent corporation" and "subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee.

3.    Stock Subject to the Plan.

The stock subject to the options granted hereunder shall be shares of the Company's authorized but unissued Common Stock, treasury shares or shares of Common Stock reacquired by the Company, including shares purchased in the open market.  The aggregate number of shares which may be issued pursuant to the Plan is 5,500,000, subject to increase or decrease by reason of stock split-ups, reclassifications, stock dividends, and the like.  The 2008 Amended and Restated Employee Stock Purchase Plan (the “Prior Plan”) shall terminate upon the expiration of the Offering Period under the Prior Plan that is in process at the time of the stockholder approval of this Plan.  If the number of shares of Common Stock reserved and available for any Offering Period (as defined hereto) is insufficient to satisfy all purchase requirements for that Offering Period, the reserved and available shares for that Offering Period shall be apportioned among participating employees in proportion to their options. 

4.    Offering Periods and Stock Options.

(a)    Six month periods during which payroll deductions will be accumulated under the Plan ("Offering Periods") will include the periods (i) beginning January 1 and ending on the following June 30 and (ii) beginning July 1 and ending on the following December 31.  The first Offering Period under this Plan shall commence on July 1, 2012.  In addition, the Committee may in its sole and absolute discretion provide for additional Offering Periods provided that such Offering Period shall not exceed twenty-seven (27) months or any other limitation imposed by Section 423 of the Code.  Deductions shall only be made from regularly scheduled payroll distributions occurring within the Offering Period.  The Offering Commencement Date is the first day of each Offering Period.  The Offering Termination Date is the applicable date on which an Offering Period ends under this Section. 

(b)    On each Offering Commencement Date, the Company will grant to each eligible employee who is then a participant in the Plan an option to purchase on the Offering Termination Date at the Option Exercise Price, as provided in this paragraph (b), that number of full shares of Common Stock reserved for the purpose of the Plan calculated to be the whole number quotient of his or her accumulated payroll deductions on the Offering Termination Date (including any amount carried forward pursuant to Section 8 hereof) divided by the Option Exercise Price; provided that (i) such employee remains eligible to participate in the Plan throughout such Offering Period and (ii) that for such employee, the maximum number of shares of Common Stock subject to such option shall not exceed 500, subject to increase or decrease by reason of stock split-ups, reclassifications, stock dividends, and the like.  The Option Exercise Price for each Offering Period shall be the lesser of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Termination Date.  In the event of an increase or decrease in the number of outstanding shares of Common Stock through stock split-ups, reclassifications, stock dividends, changes in par value and the like, an appropriate adjustment shall be made in the number of shares and Option Exercise Price per share provided for under the Plan, either by a proportionate increase in the number of shares and proportionate decrease in the Option Exercise Price per share, or by a proportionate decrease in the number of shares and a proportionate increase in the Option Exercise Price per share, as may be required to enable an eligible employee who is then a participant in the Plan to acquire on the Offering Termination Date that number of full shares of Common Stock as his accumulated payroll deductions on such date will pay for at the Option Exercise Price, as so adjusted.

(c)    For purposes of this Plan, the term "fair market value" on any date means, if the Common Stock is listed on a national securities exchange, the closing price of the Common Stock on such date on such exchange or as reported on NASDAQ or, if the Common Stock is traded in the over-the-counter securities market, the average of the high and low bid quotations for the Common Stock on such date, each as published in the Wall Street Journal.  If no shares of Common Stock are traded on the Offering Commencement Date or Offering Termination Date, the fair market value will be determined by taking the closing price on the immediately preceding business day on which shares of Common Stock are traded.

(d)    For purposes of this Plan the term "business day" as used herein means a day on which there is trading on the national securities exchange on which the Common Stock is listed.

(e)    No employee shall be granted an option which permits his rights to purchase Common Stock under the Plan and any similar plans of the Company or any parent or participating subsidiary corporations to accrue at a rate which exceeds, during any calendar year, $25,000 of the fair market value of such stock (to be calculated based on the fair market value of the stock at the Offering Period Commencement Date for each calendar year in which such option is outstanding at any time.  The purpose of the limitation in the preceding sentence is to comply with and shall be construed in accordance with Section 423(b)(8) of the Code.

5.    Exercise of Option.

Each eligible employee who continues to be a participant in the Plan on the Offering Termination Date shall be deemed to have exercised his or her option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date, plus any amount carried forward pursuant to Section 8 hereof, will pay for at the Option Exercise Price, but in no event may an employee purchase shares of Common Stock in excess of 500 shares of Common Stock on any Offering Termination Date, subject to limitations set forth in Section 4(e).  If a participant is not an employee on the Offering Termination Date and throughout an Offering Period, he or she shall not be entitled to exercise his or her option.  All options issued under the Plan shall, unless exercised as set forth herein, expire at the end of the Offering Termination Date with respect to the Offering Period during which such options were issued.

6.    Authorization for Entering Plan.

(a)    An eligible employee may enter the Plan by filling out, signing and delivering, either in writing or electronically to the extent permitted by the Board of Directors, to a brokerage firm (“Captive Broker”) designated by the Chief Financial Officer of the Company an authorization ("Authorization"): 

(i)        stating the amount to be deducted regularly from his or her pay; 

(ii)    authorizing the purchase of stock for him or her in each Offering Period in accordance with the terms of the Plan; 

(iii)    specifying the exact name in which Common Stock purchased for him or her is to be issued in accordance with Section 11 hereof; and 

(iv)    at the discretion of the employee in accordance with Section 14, designating a beneficiary who is to receive any Common Stock and/or cash in the event of his or her death. 

Such Authorization must be received by the Captive Broker at least ten (10) business days or such shorter time period as determined by the Company it is sole discretion before an Offering Commencement Date.

(b)    The Company will accumulate and hold for the employee's account the amounts deducted from his or her pay.  No interest will be paid or otherwise credited thereon.  Participating employees may not make any separate cash payments into their account.  
(c)    Unless an employee files a new Authorization or withdraws from the Plan, his or her deductions and purchases under the Authorization he or she has on file under the Plan will continue as long as the Plan remains in effect.  An employee may increase or decrease the amount of his or her payroll deductions as of the next Offering Commencement Date by following the process mandated by the Company or the Captive Broker.  Such new Authorization must be executed at least (10) business days or such shorter time period as determined by the Company it is sole discretion before the date of such next Offering Commencement Date.

7.    Maximum Amount of Payroll Deductions.

An employee may authorize payroll deductions in any whole percentages up to but not more than ten percent (10%) of his or her base pay in effect at each offering commencement date; and provided further that the maximum percentage shall be reduced to meet the requirements of Section 4(e) hereof.  Base pay means regular straight-time earnings and, if applicable, commissions, but excluding payments for overtime, bonuses, reimbursements and any other special payments.

8.    Unused Payroll Deductions.

Only full shares of Common Stock may be purchased.  Any balance remaining in an employee's account after a purchase will be reported to the employee and will, in the sole discretion of the Company, either be (i) carried forward to the next Offering Period or (ii) refunded to the employee in the next applicable payroll period.  However, in no event will the amount of the unused payroll deductions carried forward exceed the Option Exercise Price per share for the immediately preceding Offering Period unless 500 shares of Common Stock have been purchased during the Offering Period.  If for any Offering Period the amount of unused payroll deductions should exceed the Option Exercise Price per share, the amount of the excess for any participant shall be refunded to such participant, without interest.

9.    Change in Payroll Deductions.

Deductions may be decreased only once during an Offering Period and no increases will be permitted during an Offering Period.

10.     Withdrawal from the Plan.

(a)    An employee may withdraw from the Plan and withdraw all but not less than all of the payroll deductions credited to his or her account under the Plan at any time prior to the Offering Termination Date by notifying the Captive Broker at least five (5) business days, or such other time as the Company or the Captive Broker may require, prior to the Offering Termination Date, in which event the Company will promptly refund without interest the entire balance of such employee's deductions not theretofore used to purchase Common Stock under the Plan.

(b)    If employee withdraws from the Plan, the employee's rights under the Plan will be terminated and no further payroll deductions will be made.  To reenter, such an employee must re-enroll through the Captive Broker at least ten (10) business days before the next Offering Commencement Date. Such Authorization will become effective for the Offering Period that commences on such Offering Commencement Date.  Notwithstanding the foregoing, employees who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, who withdraw from the Plan may not reenter the Plan until the next Offering Commencement Date which is at least six months following the date of such withdrawal.

11.    Issuance of Stock.

The Company shall in its sole discretion either (i) deliver a certificate or certificates representing the Certificates for Common Stock issued to participants that will be delivered as soon as practicable after each Offering Period or (ii) issue the Common Stock in book entry form, registered in the name of the employee with the Captive Broker.  Common Stock purchased under the Plan will be issued only in the name of the employee, or in the case of employees who are not subject to Section 16 of the Securities Exchange Act of 1934, as amended, if the employee's Authorization so specifies, in the name of the employee and another person of legal age as joint tenants with rights of survivorship.

12.    No Transfer or Assignment of Employee's Rights.

An employee's rights under the Plan are his or hers alone and may not be transferred or assigned to, or availed of by, any other person.  Any option granted to an employee may be exercised only by him or her, except as provided in Section 13 in the event of an employee's death.

13.    Termination of Employee's Rights.

(a)    Except as set forth in the last paragraph of this Section 13, an employee's rights under the Plan will terminate when he or she ceases to be an employee because of retirement, resignation, lay-off, discharge, death, change of status, failure to remain in the customary employ of the Company for greater than twenty (20) hours per week, or for any other reason.  A Withdrawal Notice will be considered as having been received from the employee on the day his or her employment ceases, and all payroll deductions not used to purchase Common Stock will be refunded.

(b)    If an employee's payroll deductions are interrupted by any legal process, a Withdrawal Notice will be considered as having been received from him or her on the day the interruption occurs.

(c)    Upon termination of the participating employee's employment because of death, the employee's beneficiary (as defined in Section 14) shall have the right to elect, by written notice given to the Chief Financial Officer of the Company or his designee prior to the expiration of the thirty (30) day period (or such shorter period if the next Offering Termination Date is less than 30 days after the employee’s death) commencing with the date of the death of the employee, either (i) to withdraw, without interest, all of the payroll deductions credited to the employee's account under the Plan, or (ii) to exercise the employee's option for the purchase of shares of Common Stock on the next Offering Termination Date following the date of the employee's death for the purchase of that number of full shares of Common Stock reserved for the purpose of the Plan which the accumulated payroll deductions in the employee's account at the date of the employee's death will purchase at the applicable Option Exercise Price (subject to the maximum number set forth in Section 5), and any excess in such account will be returned to said beneficiary.  In the event that no such written notice of election shall be duly received by the Chief Financial Officer of the Company or his designee (including without limitation, the Captive Broker), the beneficiary shall automatically be deemed to have elected to withdraw the payroll deductions credited to the employee's account at the date of the employee's death and the same will be paid promptly to said beneficiary, without interest.

14.    Designation of Beneficiary.

A participating employee may file with the Captive Broker a designation of a beneficiary who is to receive any Common Stock and/or cash in case of his or her death.  Such designation of beneficiary may be changed by the employee at any time with the Captive Broker or by written notice to the Company.  Upon the death of a participating employee and upon receipt by the Company of proof of the identity and existence at the employee's death of a beneficiary validly designated by him under the Plan, the Company shall deliver such Common Stock and/or cash to such beneficiary.  In the event of the death of a participating employee and in the absence of a beneficiary validly designated under the Plan who is living at the time of such employee's death, the Company shall deliver such Common Stock and/or cash to the executor or administrator of the estate of the employee, or if, to the knowledge of the Company, no such executor or administrator has been appointed, the Company, in the discretion of the Committee, may deliver such Common Stock and/or cash to the spouse or to any one or more dependents of the employee as the Committee may designate.  No beneficiary shall, prior to the death of the employee by whom he or she has been designated, acquire any interest in the Common Stock or cash credited to the employee under the Plan.

15.    Termination and Amendments to Plan.

(a)    The Plan may be terminated at any time by the Company's Board of Directors, effective on the next following Offering Termination Date.  Notwithstanding the foregoing, it will terminate when all of the shares of Common Stock reserved for the purposes of the Plan have been purchased.  Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase Common Stock will be refunded without interest.

(b)    The Board of Directors reserves the right to amend the Plan from time to time in any respect; provided, however, that no amendment shall be effective without stockholder approval if the amendment would (a) except as provided in Sections 3, 4, 24 and 25, increase the aggregate number of shares of Common Stock to be offered under the Plan, or (b) change the class of employees eligible to receive options under the Plan; provided, further, that so long as there is a requirement under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, for stockholder approval of the Plan and certain amendments thereto, any such amendment which (a) materially increases the number of shares of Common Stock which may be issued under the Plan, (b) materially increases the benefits accruing to participants in the Plan or (c) materially modifies the requirements as to eligibility for participation in the Plan, shall be subject to stockholder approval.

16.    Sale of Stock Purchased Under the Plan and Tax Withholding.

(a)    In order to comply with certain tax requirements, all US employees will agree by entering the Plan, promptly to give the Company notice of any such Common Stock disposed of within two years after the Offering Commencement Date on which the related option was granted showing the number of such shares disposed of.  The employee assumes the risk of any market fluctuations in the price of such Common Stock.  
(b)    To the extent that a participating employee realizes ordinary income in connection with a sale or other transfer of any shares of Common Stock purchased under the Plan, the Company or its participating subsidiary may withhold amounts needed to cover such taxes from any payments otherwise due and owing to the participating employee, or from shares that would otherwise be issued to the participating employee hereunder or employee may provide the Company with funds sufficient to cover such taxes.  Any participating US employee who sells or otherwise transfers shares purchased under the Plan, through means other than the Captive Broker, within two (2) years after the beginning of the Offering Commencement Period in which the shares were purchased must within thirty (30) days of such transfer notify the Chief Financial Officer of the Company or his designee in writing of such transfer.

17.    Company's Payment of Expenses Related to Plan.

The Company will bear all costs of administering and carrying out the Plan; provided, however, that a participating employee shall be solely responsible for brokerage commissions related to his or her purchases and sales hereunder.

18.    Participating Subsidiaries.

The term "participating subsidiaries" shall mean any United States or foreign subsidiary of the Company, unless otherwise excluded from participating in the Plan by the Committee (as defined in Section 19).  The Committee shall have the power to make such determination before or after the Plan is approved by the stockholders.  
19.    Administration of the Plan.

(a)    The Plan shall be administered by a committee of "disinterested" directors as that term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended, appointed by the Board of Directors of the Company, which shall be the Company's Compensation Committee (the "Committee").  The Committee shall consist of not less than three members of the Company's Board of Directors.  The Board of Directors may from time to time remove members from, or add members to, the Committee.  Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors.  No member of the Committee shall be eligible to participate in the Plan while serving as a member of the Committee.

(b)    The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final.  The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best.  With respect to persons subject to Section 16 of the Securities and Exchange Act of 1934, as amended, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under said Act.  To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by that Committee.  

(c)    No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it.  The Company shall indemnify each member of the Board of Directors and the Committee to the fullest extent permitted by law with respect to any claim, loss, damage or expense (including counsel fees) arising in connection with their responsibilities under this Plan.

(d)     With respect to employees of the Company and its participating subsidiaries who are employed outside of the United States and subject to the laws of a foreign jurisdiction, the Committee may make such adjustments to the terms and conditions of the options or offerings hereunder (including adjustments that are less favorable than the requirements that would apply to employees of the Company and or its subsidiaries located in the United States) as necessary to comply with the laws of a foreign jurisdiction.  In the event that (i) the Committee determines that the laws of a foreign jurisdiction would prohibit the issuance of an option or offering hereunder; or (ii) compliance with the laws of a foreign jurisdiction would result in the Plan violating the requirements of Section 423 of the Code, then the Committee may in its discretion exclude employees of the Company’s foreign subsidiary from participating in the Plan.

20.    Shareholder Status/Employment.

(a)    Neither the granting of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the Company with respect to the shares covered by such option until such shares have been purchased by and issued to him or her.

(b)    Neither the Plan or any option granted hereunder confers upon any employee the right to continued employment with the Company or any of its participating subsidiaries, nor will an employee’s participation in the Plan restrict or interfere in any way with the right of the Company or any of its participating subsidiaries to terminate the employee’s employment at any time, unless otherwise restricted by a separate written agreement between the Company and employee.  

21.    Application of Funds.

The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan may be used for any corporate purposes, and the Company shall not be obligated to segregate participating employees' payroll deductions.

22.    Governmental Regulation.

(a)    The Company's obligation to sell and deliver shares of the Company's Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such stock.

(b)    In this regard, the Board of Directors may, in its discretion, require as a condition to the exercise of any option that a Registration Statement under the Securities Act of 1933, as amended, with respect to the shares of Common Stock reserved for issuance upon exercise of the option shall be effective.

23.    Transferability.

Neither payroll deductions credited to an employee's account nor any rights with regard to the exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the employee.  Any such attempted assignment, transfer, pledge, or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Section 10.

24.    Effect of Changes of Common Stock.

If the Company should subdivide or reclassify the Common Stock which has been or may be optioned under the Plan, or should declare thereon any dividend payable in shares of such Common Stock, or should take any other action of a similar nature affecting such Common Stock, then the number and class of shares of Common Stock which may thereafter be optioned (in the aggregate and to any individual participating employee) shall be adjusted accordingly.

25.    Merger or Consolidation.

If the Company should at any time merge into or consolidate with another corporation, the Board of Directors may, at its sole and absolute discretion, either (i) terminate the Plan and refund without interest the entire balance of each participating employee's payroll deductions, or (ii) entitle each participating employee to receive on the Offering Termination Date upon the exercise of such option for each share of Common Stock as to which such option shall be exercised the securities or property to which a holder of one share of the Common Stock was entitled upon and at the time of such merger or consolidation, and the Board of Directors shall take such steps in connection with such merger or consolidation as the Board of Directors shall deem necessary to assure that the provisions of this Section 25 shall thereafter be applicable, as nearly as reasonably possible.  A sale of all or substantially all of the assets of the Company shall be deemed a merger or consolidation for the foregoing purposes.

26.    Approval of Stockholders.
This plan was originally adopted by the Board of Directors on November 1, 2011 and approved by stockholders on March 6, 2012.  The plan was amended by the Board of Directors on December 16, 2015 and approved by stockholders on March 2, 2016.  

1Exhibit 10.13

 

SECOND AMENDMENT TO LEASE

 

This Second Amendment to Lease (this “Amendment”) is effective as of December 4, 2015 (“Amendment Effective Date”), and is entered into by and between MIDDLEFIELD PARK, a California general partnership (“Landlord”), and DERMIRA, INC., a Delaware corporation (“Tenant”).

 

RECITALS

 

A.            Landlord and Tenant entered into that certain Lease Agreement dated July 24, 2014, as amended by that certain First Amendment of Lease dated September 10, 2014 (collectively, the “Lease Agreement”), pursuant to which Landlord is leasing to Tenant, and Tenant is leasing from Landlord, certain Premises commonly known as Suite 150 consisting of 18,651 rentable square feet (the “Suite 150 Space”) located at 275 Middlefield Road, Menlo Park, California (the “Building”), as more particularly described in the Lease.

 

B.            The Lease will expire by its terms on November 30, 2019 (the “Lease Termination Date “), and the parties wish to extend the term of the Lease on the following terms and conditions.

 

C.            Tenant desires to expand the Premises (defined in the Lease) to include the following additional space: (i) 8,022 rentable square feet described as Suites 200 and 210, as outlined in red on Exhibit A attached hereto (the “Suite 200/210 Expansion Space”), and (ii) 18,519 rentable square feet described as Suite 50, as shown on Exhibit B attached hereto (the “Suite 50 Expansion Space,” and collectively with the Suite 200/210 Expansion Space, the “Expansion Space”), on the following terms and conditions.

 

AGREEMENT

 

In consideration of the respective agreements hereinafter set forth, Landlord and Tenant agree as follows:

 

1.             Defined Terms.  All initially capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Lease.

 

2.             Extension.  The term of the Suite 150 Space is hereby extended through December 31, 2021 (the “First Extended Expiration Date”).  The portion of the term of the Lease beginning on December 1, 2019 which is the date immediately following the Lease Termination Date and ending on the First Extended Expiration Date shall be referred to herein as the “Extended Term.”

 

3.             Expansion.

 

3.1.         Effect of Expansion.  Effective as of the Expansion Space Commencement Date (defined in Paragraph 3.2 below), the Premises shall be increased by the addition of the Expansion Space, and, from and after the Expansion Space Commencement Date, the Expansion Space shall be deemed a portion of the Premises.  The term of the Lease for the Expansion Space (the “Expansion Space Term”) shall commence on the Expansion Space Commencement Date and, unless sooner terminated in accordance with the Lease, end on the First Extended

 

1

 

Expiration Date.  From and after the Expansion Space Commencement Date, the Expansion Space shall be subject to all the terms and conditions of the Lease except as provided herein.  Except as may be expressly provided herein, Landlord makes no representation or warranty with respect to the existing Suite 150 Space or the Expansion Space, and the Expansion Space is being delivered to Tenant in its “AS-IS” condition.  Notwithstanding the foregoing, Landlord shall deliver the Expansion Space to Tenant in good working order and repair on the date possession of the Expansion Space is delivered to Tenant, including, without limitation, the roof, HVAC, electrical, plumbing and lighting systems serving the Expansion Space and in the event of any defects therein, Landlord, at its sole cost, shall repair each such defect promptly after being informed thereof in writing and in reasonable detail by Tenant so long as Tenant provides Landlord with written notice of any defect within ninety (90) days of the Expansion Space Commencement Date.

 

3.2.         Expansion Space Commencement Date.  As used herein, “Expansion Space Commencement Date” means December 1, 2016.

 

4.                                      Basic Rent.

 

4.1.         Suite 150 Space.

 

4.1.1       Suite 150 Space during the Period Prior to the Extended Term.  With respect to the Suite 150 Space during a period prior to the Extended Term, the schedule of Basic Rent is hereby confirmed as follows:

 

	
Period
    	
 
    	
Monthly Basic Rent
    	
 
    
	
December 1,   2016 — November 30, 2017
    	
 
    	
$
    	
103,880.94
    	
 
    
	
December 1,   2017 — November 30, 2018
    	
 
    	
$
    	
106,997.37
    	
 
    
	
December 1,   2018 — November 30, 2019
    	
 
    	
$
    	
110,207.29
    	
 
    

 

All such Basic Rent shall be payable by Tenant in accordance with the terms of the Lease.

 

4.1.2       Suite 150 Space during Extended Term.  With respect to the Suite 150 Space during the Extended Term, the schedule of Basic Rent shall be as follows:

 

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Period of
   Extended
   Term
    	
 
    	
Monthly Rate Per
   Square Foot
    	
 
    	
Monthly Basic Rent
    	
 
    
	
December 1,   2019 — November 30, 2020
    	
 
    	
$
    	
6.09
    	
 
    	
$
    	
113,513.51
    	
 
    
	
December 1,   2020 — December 31, 2021
    	
 
    	
$
    	
6.27
    	
 
    	
$
    	
116,918.91
    	
 
    

 

All such Basic Rent shall be payable by Tenant in accordance with the terms of the Lease Agreement.

 

4.2.                            Suite 200/210 Expansion Space during Expansion Space Term.  With respect to the Suite 200/210 Expansion Space during the Expansion Space Term, the schedule of Basic Rent shall be as follows:

 

	
Period During
   Expansion Space
   Term
    	
 
    	
Monthly Rate Per
   Square Foot
    	
 
    	
Monthly Basic Rent
    	
 
    
	
December 1,   2016 — November 30, 2017
    	
 
    	
$
    	
5.57
    	
 
    	
$
    	
44,682.54
    	
 
    
	
December 1,   2017 — November 30, 2018
    	
 
    	
$
    	
5.74
    	
 
    	
$
    	
46,046.28
    	
 
    
	
December 1,   2018 — November 30, 2019
    	
 
    	
$
    	
5.91
    	
 
    	
$
    	
47,410.02
    	
 
    
	
December 1,   2019 — November 30, 2020
    	
 
    	
$
    	
6.09
    	
 
    	
$
    	
48,853.98
    	
 
    
	
December 1,   2020 — December 31, 2021
    	
 
    	
$
    	
6.27
    	
 
    	
$
    	
50,297.94
    	
 
    

 

All such Basic Rent shall be payable by Tenant in accordance with the terms of the Lease Agreement; provided, however, that Tenant shall pay with respect to the Suite 200/210 Expansion Space, concurrently with the mutual execution and delivery of this Amendment, the installment of Basic Rent for the first full calendar month for which Basic Rent is payable hereunder (i.e. the fourth (4th) full calendar month of the Expansion Space Term).  Notwithstanding the foregoing, Basic Rent for the Suite 200/210 Expansion Space shall be abated, in the amount of $44,682.54 per month, for the first three (3) full calendar months of the Expansion Space Term.  If Tenant exercises its Termination Right pursuant to Paragraph 10 below, Landlord shall credit the pre-paid rent for the Suite 200/210 Expansion Space against the Termination Fee payable by Tenant pursuant to Paragraph 10 below, or if the Landlord leases the Suite 200/210 Expansion Space to a third party after the Termination Option is exercised and as a result no Termination Fee is payable in accordance with Paragraph 10 below, Landlord shall credit the pre-paid rent against Basic Rent payable with respect to the Suite 50 Expansion Space.

 

3

 

4.3          Suite 50 Expansion Space during Expansion Space Term.  With respect to the Suite 50 Expansion Space during the Expansion Space Term, the schedule of Basic Rent shall be as follows:

 

	
Period During
   Expansion Space
   Term
    	
 
    	
Monthly Rate Per
   Square Foot
    	
 
    	
Monthly Basic Rent
    	
 
    
	
December 1,   2016 — November 30, 2017
    	
 
    	
$
    	
4.90
    	
 
    	
$
    	
90,743.10
    	
 
    
	
December 1,   2017 — November 30, 2018
    	
 
    	
$
    	
5.05
    	
 
    	
$
    	
93,520.95
    	
 
    
	
December 1,   2018 — November 30, 2019
    	
 
    	
$
    	
5.20
    	
 
    	
$
    	
96,298.80
    	
 
    
	
December 1,   2019 — November 30, 2020
    	
 
    	
$
    	
5.35
    	
 
    	
$
    	
99,076.65
    	
 
    
	
December 1,   2020 — December 31, 2021
    	
 
    	
$
    	
5.51
    	
 
    	
$
    	
102,039.69
    	
 
    

 

All such Basic Rent shall be payable by Tenant in accordance with the terms of the Lease Agreement; provided, however, that Tenant shall pay with respect to the Suite 50 Expansion Space, concurrently with the mutual execution and delivery of this Amendment, the installment of Basic Rent for the first full calendar month for which Basic Rent is payable hereunder (i.e. the fourth (4th) full calendar month of the Expansion Space Term).  Notwithstanding the foregoing, Basic Rent for the Suite 50 Expansion Space shall be abated, in the amount of $90,743.10 per month, for the first three (3) full calendar months of the Expansion Space Term.

 

5.             Additional Rent.  Beginning on the Expansion Space Commencement Date, Tenant shall pay Additional Rent with respect to the Expansion Space pursuant to Paragraph 4.D of the Lease Agreement.

 

6.             Security Deposit.  The last paragraph of Paragraph 4.F of the Lease Agreement is hereby deleted in its entirety and replaced with the following:

 

“Provided that no monetary Event of Default (as defined in Paragraph 22 of the Lease Agreement) has occurred during the Term and then exists and no other Event of Default then exists, Landlord agrees that Tenant may reduce the Security Deposit or the Letter of Credit to the sum of $350,000 after the 30th month following the Expansion Space Commencement Date.”

 

7.             Improvements to Suite 150 Space and the Expansion Space.

 

7.1.         Configuration and Condition of the Suite 150 Space and Expansion Space.  Tenant acknowledges that it is in possession of the Suite 150 Space and that it has inspected the Expansion Space, and subject to Landlord’s repair, replacement and maintenance responsibilities under the Lease Agreement, agrees to accept each such space in its existing configuration and condition (or, in the case of the Expansion Space, in such other configuration and condition as any existing tenant of the Expansion Space may cause to exist in accordance with its lease), without any

 

4

 

representation by Landlord regarding its configuration or condition and without any obligation on the part of Landlord to perform or pay for any alteration or improvement, except as may be otherwise expressly provided in this Amendment.

 

7.2.         Responsibility for Improvements to the Expansion Space.  Landlord, at its sole cost, shall supervise the construction of certain improvements to the Expansion Space in accordance with Exhibit C attached hereto (the “Work Letter”).

 

8.             Assignment and Subletting.  The second paragraph of Paragraph 19 of the Lease Agreement is hereby deleted in its entirety and replace with the following:

 

“Notwithstanding anything to the contrary in this Lease, Landlord may elect to terminate this Lease as to the Suite 150 Space, the Suite 200/210 Expansion Space, and/or the Suite 50 Expansion Space, in the event Tenant requests to sublease more than 50% of the Suite 150 Space, the Suite 200/210 Expansion Space or the Suite 50 Expansion Space, as applicable, for a term of more than 90% of the balance of the term of this Lease remaining for such space on the contemplated commencement date of such a sublease.  Tenant may void Landlord’s election to terminate as to the applicable Suite 150 Space, the Suite 200/210 Expansion Space, and/or the Suite 50 Expansion Space, by withdrawing the requested consent within two (2) business days of Landlord election to terminate.”

 

9.             Option to Extend the Lease.  Addendum Two of the Lease is hereby deleted in its entirety and replaced with Addendum Two attached hereto.

 

10.          Termination Right.  Tenant shall have a one-time option to terminate this Lease as to the Suite 200/210 Expansion Space on the terms and conditions set forth in this Paragraph 10.

 

10.1        Conditions to Termination Right; Grant of Termination Right.  If, on or prior to September 30, 2016, (i) the results from Tenant’s ongoing DRM01 Phase 2b trial or DRM04 Phase 3 trial are negative, and, as a consequence thereof, Tenant will not proceed to the next phase of development for either or both trials, and (ii) Tenant provides Landlord with written notice of the condition listed in (i) above concurrently with its written notice to terminate the Lease (the “Termination Notice”) as to the Suite 200/210 Expansion Space, Tenant is hereby granted the one-time option to terminate the Lease early (the “Termination Option”) as to the Suite 200/210 Expansion Space, effective thirty (30) days after the Termination Notice is delivered to Landlord (the “Termination Date”).  If Tenant elects to exercise the Termination Option, Tenant must do so in compliance with the terms and conditions set forth herein.

 

10.2        Termination Fee.  In the event that Tenant elects to exercise the Termination Option, Tenant shall pay to Landlord a fee (the “Termination Fee”) in the amount equal to the sum of Basic Rent and Tenant’s share of Additional Rent for the first six (6) months of the Expansion Space Term (without any right to abatement).  The Termination Fee shall be paid in six (6) monthly installments beginning on the Expansion Space Commencement Date (the “Termination Fee Payment Period”).  Notwithstanding the forgoing, in the event Landlord leases the Suite 200/210 Expansion Space after the Termination Date, and Landlord commences collecting rent pursuant to

 

5

 

the terms of such new lease for periods applicable to any period falling within the Termination Fee Payment Period, then Tenant shall have no obligation to pay the portion of the Termination Fee applicable to such period.  Landlord shall provide Tenant with written notice if Landlord enters into a lease for the Suite 200/210 Expansion Space, which notice shall also indicate the Basic Rent payable under such third party lease, if any, for any portion of the term of the third party lease falling within the Termination Fee Payment Period.  If Tenant exercises the Termination Option hereunder, Landlord shall use commercially reasonable efforts to lease the Suite 200/210 Expansion Space at market rent, and shall provide no greater than a “market” free rent amount.

 

10.3        Failure of Tenant to Exercise or Pay Termination Fee.  If Tenant fails to deliver the Termination Notice to Landlord within the time permitted hereunder, or does not effectively exercise the Termination Option in accordance the terms hereof, this Lease as to the Suite 200/210 Expansion Space shall continue beyond the Termination Date, and Tenant shall continue to be bound by the terms of the Lease as to the Suite 200/210 Expansion Space as if the Termination Option had not been exercised.  If Tenant fails to deliver the Termination Fee, or any portion thereof, to Landlord on any installment date as required hereunder and subject to Landlord’s obligation to provide Tenant notice and time to cure, such failure shall be deemed an Event of Default under the Lease.

 

11.          Parking.  The parties acknowledge and agree that, pursuant to the terms of the Lease, with respect to the Suite 150 Space, Tenant is entitled to use seventy-five (75) unreserved parking spaces in the common parking areas of the Complex.  In addition, during the Expansion Space Term and any extension, with respect to the Suite 200/210 Expansion Space, Tenant shall have the right to use an additional thirty-two (32) unreserved parking spaces (the “Suite 200/210 Parking Spaces”) in the common parking areas of the Complex in accordance with the terms of the Lease; provided if this Lease is terminated as to the Suite 200/210 Expansion Space, Tenant’s right to use the Suite 200/210 Parking Spaces shall terminate concurrently therewith.  In addition, during the Expansion Space Term, with respect to the Suite 50 Expansion Space, Tenant shall have the right to use (i) sixty-eight (68) additional unreserved parking spaces in the common parking areas of the Complex, and (ii) six (6) reserved parking stalls located in the area shown on Exhibit E attached hereto.

 

12.          Signs.  At Tenant’s cost, and so long as Tenant leases space on the first and second floors of the Building, Landlord shall increase the size of Tenant’s interior building lobby signage on the first floor of the Building.  The signage may be increased to approximately double the current Dermira signage as shown on Exhibit D attached hereto.

 

13.          California Civil Code Section 1938.  Pursuant to California Civil Code § 1938, Landlord hereby states that the Suite 150 Space and the Expansion Space have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil Code § 55.52).

 

14.          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 Lease, excepting only Cornish & Carey Commercial dba Newmark Cornish & Carey (“Tenant’s Broker”), which represents Tenant, and Cushman & Wakefield (“Landlord’s Broker”), which represents Landlord, and that they know of no other real estate broker or agent who is entitled to

 

6

a commission in connection with this Lease.  Landlord shall make payment of the brokerage fee due the Landlord’s Broker pursuant to and in accordance with a separate agreement between Landlord and Landlord’s Broker.  If Tenant exercises the Termination Option, no fee or commission shall be owed or paid with respect to the Suite 200/210 Expansion Space.  Any fee or commission payable with respect to the Suite 200/210 Expansion Space shall not be paid until after September 30, 2016.  Except for amounts owing to Landlord’s Broker and Tenant’s Broker, 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, and 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 the indemnifying party’s dealings with any real estate broker or agent.

 

15.          Counterparts.  This Amendment may be executed in counterparts, each of which will constitute an original, but all of which together will constitute one and the same instrument.  The parties agree that a signed copy of this Amendment transmitted by one party to the other party(ies) by facsimile or electronic transmission will be binding upon the sending party to the same extent as if it had delivered a signed original of this Amendment.

 

16.          Miscellaneous.  All references in this Amendment to the Lease shall be deemed to refer to the Lease, as modified by the terms of this Amendment.  In the event of a conflict between the terms and provisions of the Lease and the terms and conditions of this Amendment, the terms and provisions of this Amendment shall prevail.  As amended herein, the Lease remains in full force and effect and is hereby ratified by the parties.

 

7

 

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

 

 

	
“LANDLORD”:
    	
 
    
	
 
    	
 
    
	
MIDDLEFIELD   PARK, a California general partnership
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Boyd C. Smith
    	
 
    
	
Name:
    	
Boyd   C. Smith
    	
 
    
	
Title:
    	
General   Partner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
“TENANT”
    	
 
    
	
 
    	
 
    
	
DERMIRA, INC.,   a
    	
 
    
	
Delaware   corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Thomas Wiggans
    	
 
    
	
Name:
    	
Thomas   Wiggans
    	
 
    
	
Its:
    	
Chairman   and CEO
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Andrew Guggenhime
    	
 
    
	
Name:
    	
Andrew   Guggenhime
    	
 
    
	
Its:
    	
COO   and CFO
    	
 
    

 

8

 

EXHIBIT A

 

Suite 200/210 Expansion Space

 

[SEE ATTACHED]

 

9

 

 

10

 

EXHIBIT B

 

Suite 50 Expansion Space

 

[SEE ATTACHED]

 

11

 

 

12

 

EXHIBIT C

 

Work Letter

 

[SEE ATTACHED]]

 

13

 

EXHIBIT C

 

TENANT WORK LETTER

 

This Tenant Work Letter (“Tenant Work Letter”) sets forth the terms and conditions relating to the construction of improvements for the Expansion Space.  This Tenant Work Letter is attached as Exhibit C to that certain Second Amendment to Lease dated December 4, 2015 (the “Second Amendment”).  All references in this Tenant Work Letter to the “Lease” shall mean the relevant portions of the Lease as defined in the Second Amendment.

 

SECTION 1

 

TENANT IMPROVEMENTS

 

Landlord shall, at its sole cost, supervise the construction of tenant improvements (the “Tenant Improvements”) constructed by Tenant and approved by Landlord in accordance with this Tenant Work Letter.  The scope of Tenant Improvements shall consist of: (i) new carpet and paint and non-structural reconfiguration of certain offices and rooms in Suite 50 Expansion Space (the “Suite 50 TI”); (ii) new carpet and paint and non-structural reconfiguration of certain offices and rooms in the Suite 200/210 Expansion Space (the “Suite 200/210 TI”); and (iii) at Tenant’s election, an internal staircase between the Suite 150 Space and the Suite 50 Expansion Space (“Access TI”), the location of which shall be mutually acceptable to both Landlord and Tenant.  The scope of the Tenant Improvements shall not include changes or modifications to the structure of the Building, the roof, and/or any base building system located in the Building.  Subject to Landlord’s obligation to pay for exterior code compliance (exterior being the common areas and path of travel to Building) at Landlord’s sole cost, the Tenant Improvements (including any building code upgrades required within the Premises as a result of the construction of the Tenant Improvements) shall be constructed by Contractor at Tenant’s sole cost.  The Tenant Improvements shall be constructed with materials and finishes consistent with the existing materials and finishes in the Building.  Landlord shall have the right to require the removal of the Tenant Improvements (or any portion thereof) and restoration of the Premises as a result thereof in accordance with Section 8 of the Lease Agreement; provided, however, Tenant shall provide Landlord with written notice at least one hundred twenty (120) days prior to the end of the term to ascertain whether Landlord will require the removal of the Access TI.

 

SECTION 2

 

CONSTRUCTION DRAWINGS

 

2.1          Selection of Architect/Construction Drawings.  Tenant shall retain Fawni Hill as the architect (the “Architect”) to prepare the Construction Drawings for all Tenant Improvements.  If required by Landlord, Tenant shall retain engineering consultants designated by Landlord (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, life-safety, and sprinkler work in the Expansion Space.  If Tenant is unsatisfied with the services provided by Architect or Engineer, Tenant may hire an alternate architect or engineer provided Tenant obtains Landlord’s prior written consent which shall not be unreasonably withheld or delayed.  The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the “Construction Drawings.”  All Construction Drawings shall comply with the drawing format and specifications determined by Landlord, and shall be subject to Landlord’s approval.  Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the base building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith.  Landlord’s review of the Construction Drawings as set forth in this Section 2, shall be for its own purpose and shall not imply Landlord’s review of the same, or obligate Landlord to review the same for quality, design, compliance with applicable laws or other like matters.  Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in

 

14

 

connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings.

 

2.2          Space Plan.  On or before June 1, 2016, Tenant shall cause Architect to prepare a space plan (“Space Plan”) for Suite 50 Expansion Space, at Tenant’s sole cost, which Space Plan shall include a layout and designation of all offices, rooms and other partitioning, their intended use, equipment to be contained therein, and at Tenant’s election, the Access TI, and Tenant shall deliver the Space Plan to Landlord for Landlord’s approval.  Tenant may elect to also include a space plan for Suite 200/210 Expansion Space or delay the initiation of the Suite 200/210 TI until some future date which shall be agreed to between Tenant and Landlord.

 

2.3          Final Working Drawings.  On or before August 1, 2016, Tenant shall cause the Architect and the Engineers to complete the Construction Drawings for the Space Plan, and cause the Architect to compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the “Final Working Drawings”), and shall submit the same to Landlord for Landlord’s approval.

 

2.4          Approved Working Drawings.  Landlord shall submit the Landlord-approved Final Working Drawings (the “Approved Working Drawings”) to the applicable local governmental agency for all applicable building permits necessary to allow the Contractor, (as defined below), to commence and fully complete the construction of the Tenant Improvements (collectively, the “Permits”), and, in connection therewith, Tenant shall coordinate with Landlord in all phases of the permitting process.  Tenant shall pay for all permit fees and costs, at Tenant’s sole cost.  No changes, modifications or alterations in the Approved Working Drawings may be made without the prior written consent of Landlord which shall not be unreasonably withheld or delayed.

 

2.5          Time Deadlines.  Tenant shall cooperate with Architect, the Engineer, and Landlord to complete all phases of the Construction Drawings and the permitting process and to receive the Permits, and with the Contractor, for approval of the Cost Proposal, (as defined below), in accordance with the dates set forth in this Tenant Work Letter.  Tenant shall meet with Landlord on a weekly basis (or such other basis as Tenant and Landlord shall reasonably determine) to discuss Landlord’s progress in connection with the same.

 

SECTION 3

 

CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

3.1          Contractor.  A general contractor, under the supervision of Landlord, shall construct the Tenant Improvements (the “Contractor”).  Tenant shall select one of the following two (2) contractors to serve as Contractor, Brett Construction or Gidel and Kocal, and Landlord hereby approves each of the contractors listed in this sentence to serve as Contractor.  Tenant shall enter into all construction contract agreements directly with Contractor.  If Tenant is unsatisfied with the services provided by Contractor, Tenant may hire an alternate contractor  provided Tenant obtains Landlord’s prior written consent which shall not be unreasonably withheld or delayed.  Landlord shall not be entitled to any supervision fee or management fee in connection with the construction of the Tenant Improvements.

 

3.2          Cost Proposal.  After the Approved Working Drawings are signed by Landlord and Tenant and Tenant and Contractor have executed a construction agreement, Tenant will deliver to Landlord a copy of the cost proposal as agreed to by Tenant and Contractor (the “Cost Proposal”).

 

3.3          Construction of Tenant Improvements by Contractor under the Supervision of Landlord.  Contractor shall construct the Tenant Improvements (under the supervision of Landlord) in a good and workmanlike manner in accordance with all applicable laws, and in accordance with the Approved Working Drawings.  Landlord and Tenant shall work together in good faith with Architect and the Contractor to ensure that the construction of the Tenant Improvements do not trigger Title 24 code compliance upgrades.  Landlord, at its option, may post notices of non-responsibility or similar notices in or on the Premises in connection therewith.  Tenant shall at all times permit such notices to be posted in the Premises and remain posted in the Premises until Tenant Improvements are completed. To the extent the construction of the Tenant Improvements triggers building code compliance upgrades, Landlord shall be responsible for the cost of such changes to the extent the changes are located in the common areas

 

15

 

of the Complex or the Building, and Tenant shall be responsible for the cost of such changes to the extent the changes are located within the Expansion Space or the Suite 150 Space.   Within ten (10) days after completion of construction of the Tenant Improvements, Tenant and Landlord shall cause the Contractor and the Architect to record a Notice of Completion in the office of the Recorder of San Mateo County in accordance with Section 3093 of the Civil Code of  the State of California or any successor statute and furnish a copy thereof to Landlord upon recordation, failing which, Landlord may itself execute and file the same on behalf of Tenant as Tenant’s agent for such purpose.   In addition, Tenant, immediately after the Substantial Completion of the Premises, shall have prepared and delivered to the Building management office a copy of the “as built” plans and specifications (including all working drawings) for the Tenant Improvements, together with a computer disk containing the Approved Working Drawings in AutoCAD (to the extent Tenant has the Approved Working Drawings in AutoCAD) and in PDF format.  If Landlord has the base building plans in AutoCAD format, Landlord shall provide the same to Tenant.

 

SECTION 4

 

SUBSTANTIAL COMPLETION

 

4.1          Substantial Completion.  “Substantial Completion” of the Premises shall occur upon the completion of construction of the Tenant Improvements in the Premises pursuant to the Approved Working Drawings, with the exception of any punchlist items and any tenant fixtures, work-stations, built-in furniture, or equipment to be installed by Tenant.  In the event Substantial Completion does not occur by the Expansion Space Commencement Date due to any reason other than a Prior Tenant Delay or a Landlord Delay, and as a direct consequence, Contractor had less than thirty (30) days to perform Tenant Improvements in accordance with the Approved Working Drawings prior to the Expansion Space Commencement Date, Tenant shall not be entitled to any additional abatement of Basic Rent and the Expansion Space Commencement Date shall not be extended or otherwise modified as a result thereof.  “Prior Tenant Delay” is the delay caused due to the current tenant of the Expansion Space vacating the Expansion Space after November 1, 2016.   “Landlord Delay” shall mean Landlord’s failure to timely approve the Construction Drawings as set forth in herein or construction delays caused by required building code upgrades to the common areas of the Building.  In the event that Substantial Completion does not occur by the Expansion Space Commencement Date due to Prior Tenant Delay and/or Landlord Delay, and as a direct consequence Contractor had less than thirty (30) days to perform Tenant Improvements in accordance with the Approved Working Drawings prior to the Expansion Space Commencement Date, then (in addition to the Basic Rent abatement provided in Section 4.2 and Section 4.3 of the Second Amendment to Lease), Tenant shall be entitled to a per diem abatement of Basic Rent for each day of delay in the completion of the Tenant Improvements.

 

SECTION 5

 

MISCELLANEOUS

 

5.1          Tenant’s Representative.  Tenant has designated Stephen Cheng as its sole representative with respect to the matters set forth in this Tenant Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

 

5.2          Landlord’s Representative.  Landlord has designated Milan Patel as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.  Jack Issa will act as Landlord’s representative in connection with the supervision of the construction of the Tenant Improvements.

 

5.3          Time of the Essence in This Tenant Work Letter.  Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days.  In all instances where Tenant is required to approve or deliver an item, if no written notice of approval is given or the item is not delivered within the stated time period, at Landlord’s sole option, at the end of said period the item shall automatically be deemed approved or delivered by Tenant and the next succeeding time period shall commence.

 

16

 

EXHIBIT D

 

Signage

 

 

17

 

EXHIBIT E

 

Location of Reserved Parking Spaces

 

[SEE ATTACHED]

 

18

 

 

19

 

ADDENDUM TWO

 

Option to Extend the Lease

 

This Addendum Two (“Addendum”) is incorporated as part of that certain Lease Agreement dated for reference purposes as July 24, 2014, as amended by that certain First Amendment of Lease dated September 10, 2014, and as further amended by that certain Second Amendment to Lease dated December 4, 2015 (collectively, the “Lease”), by and between Middlefield Park, a California general partnership (“Landlord”), and Dermira, Inc., a Delaware Corporation (“Tenant”), for the leasing of certain premises located at 275 Middlefield Road, Menlo Park, California, as more particularly described in Exhibit A to the Lease (as amended by the First and Second Amendments) (the “Premises”). The terms, conditions and provisions of this Addendum are hereby incorporated into and are made a part of the Lease.  Any capitalized terms used herein and not otherwise defined herein shall have the meaning ascribed to such terms as set forth in the Lease.

 

1.                                      Option to Extend. Tenant is granted an option to extend (the “Extension Option”) the term of the Lease as to the entire Premises being leased by Tenant at the time the Extension Option is exercised for one (1) additional period of five (5) years (the “Option Term”) from the First Extended Expiration Date.  The Extension Option described in this Addendum is personal to Tenant and may not be assigned, voluntarily or involuntarily, separate from or as part of the Lease.  Such extension shall be on the same terms and conditions as provided in the Lease Agreement with the exception of the Basic Monthly Rent, which shall be determined pursuant to this Addendum.  The initial Basic Monthly Rent for the extension period shall be equal to the fair market rental for the Premises as of the date six (6) months prior to the commencement of the Option Term; however, the Basic Monthly Rent for the Option Term shall not be less than the Basic Monthly Rent for the month immediately prior to the First Extended Expiration Date plus three percent (3%).  The fair market rental shall be determined (a) without consideration for the particular use of the Premises by Tenant but shall be for the permitted use of the Premises, (b) shall take into consideration all Tenant Improvements that are the property of Landlord or that would become the property of Landlord upon expiration or termination of the Lease (upon Landlord’s election for the same), (c) shall take into consideration any concessions that may then be offered for similar properties (i.e. free rent, tenant improvement allowances, etc.), and (d) without discount for the fact that no leasing commissions shall be paid. The Basic Monthly Rent for the Option Term shall be subject to three percent (3%) annual increases.

 

It shall be a condition precedent to the exercise of the Extension Option that no Event of Default exists at the time the Extension Option is exercised.  If Tenant elects to exercise this Extension Option, Tenant shall exercise the Extension Option only by written notice (the “Option Notice”) to Landlord on or before December 31, 2020. The burden of actual delivery of the Option Notice is on the Tenant.

 

In the event Tenant exercises the Extension Option hereunder, Tenant shall, within a period of one hundred fifty (150) days and one hundred eighty (180) days prior to the First Extended Expiration Date, deliver to Landlord written notice of Tenant’s opinion of the fair market rental value, as set forth above, and Tenant’s support for such figure (i.e. comparable lease information).

 

20

 

Landlord shall thereafter promptly communicate with Tenant as to Landlord’s response to Tenant’s  opinion as to the rental value and the parties shall thereafter promptly meet and endeavor to agree upon the fair market rental of the Premises.

 

If the rental for the Option Term has not been agreed upon, as set forth above, at least One Hundred Twenty (120) days prior to the First Extended Expiration Date (“Initial Meeting Period”), then the determination of the rental shall be promptly submitted to arbitration.  Tenant shall select, within fifteen (15) days of the expiration of the Initial Meeting Period, referred to above, a licensed real estate agent with at least five years commercial experience in the City in which the Premises are located involving properties similar to the Property under this Lease.  Tenant shall provide to Landlord (a) the name, address, company affiliation, and phone number of such agent (b) and a list of the agents qualifications, and (c) a statement that Landlord has fifteen (15) days to nominate Landlord’s own agent, in writing, within such fifteen (15) day period such that such information is actually received by Landlord within such time period.  Landlord shall have a period of fifteen (15) days after actual receipt of Tenant’s information, as set forth above, to nominate its own agent.  Thereafter, said agents shall meet for the purpose of determining the rental, as set forth above, for the applicable extension period.  If Tenant fails to so nominate an agent and provide the notice, as set forth above, the Landlord’s reasonable opinion of value shall be the rental value for the Option Term.  If Landlord fails to nominate an agent, as set forth above, Tenant shall provide to Landlord a written notice setting forth that Tenant’s agent shall determine the rental value if Landlord does not nominate an agent within fifteen (15) additional days.  Such notice must be actually received by Landlord before the fifteen (15) days commences to run.  If Landlord thereupon fails to so select an agent, the one agent retained by Tenant shall set the fair market rental.  If the two agents do not agree upon the rent, as set forth above, within thirty (30) days of their selection, they shall, within fifteen (15) days thereafter, select a third agent with the qualifications, referred to above, and if they do not so agree on a third agent, the third arbitrator shall be appointed by the presiding judge of the Superior Court in the County in which the Premises are located.  Tenant shall be required to petition such Court within ten (10) days of the expiration date of the time for the selection of the third agent, as set forth above, requesting the earliest possible determination by the Court.  At Landlord’s election, such petition shall be on an ex parte basis with notice and opportunity by Landlord to attend such hearing.  The Tenant’s failure to so petition the Court, as set forth herein and within the time period set forth herein, shall void the Tenant’s option exercise.  The three agents shall determine whether Landlord’s value or Tenant’s value is closest to the fair market rental, as set forth above, within a thirty (30) day period of the appointment of the third agent and if they cannot agree upon the same, as set forth above, the third agent shall select the fair market rental value as determined by either Landlord’s agent or Tenant’s agent which most closely reflects the fair market rental value as determined by the third agent.

 

Each party shall pay his own agent and the cost of the third agent, if necessary, shall be paid by the Tenant.  The determination shall be signed by both parties and shall thereupon become a part of the Lease Agreement.  If the Basic Monthly Rent for the Option Term has not been determined by the First Extended Expiration Date, Tenant shall pay an estimated Basic Monthly Rent of One Hundred Fifteen percent (115%) of the Basic Monthly Rent due for the Premises then leased by Tenant for the last month of the Extended Term.  Any deficiency shall be payable by Tenant to Landlord within ten (10) days of the determination of the Basic Monthly Rent for the Option Term.  Any surplus shall be a credit for Basic Monthly Rent to become thereafter due.

 

21

 

2.                                      Condition of Premises for the Extended Terms.  If Tenant timely and properly exercises the Extension Option in strict accordance with the terms contained herein: (1) Tenant shall accept the Premises in its then “As-Is” condition subject to Landlord’s repair, replacement, and maintenance obligations under the Lease, and (2) Landlord shall not be required to perform any additional improvements to the Premises.

 

3.                                      Limitations On, and Conditions To, Extension Option.  At Landlord’s option, this Extension Option shall terminate and be of no force or effect if any of the following events occur: (1) an Event of Default exists on the date Landlord receives the Option Notice and/or (2) Tenant has assigned its rights and obligations under all or part of the Lease or Tenant has subleased all or part of the Premises, except to a Permitted Assignee; and/or (3) Tenant has failed to exercise properly the Extension Option described in this Addendum in a timely manner in strict accordance with the provisions of this Addendum; and/or (4) the Lease has been terminated earlier, pursuant to the terms and provisions of the Lease.

 

4.                                      Time is of the Essence.  Time is of the essence with respect to each and every time period set forth in this Addendum.

 

22

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