Exhibit 10.4
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made and entered into as of this 19 day of June, 2023, by and between TC LEGACY PHASE I VENTURE, LLC, a Delaware limited liability company (“Landlord”), and REATA PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).
RECITALS
A. Landlord and Tenant entered into a certain Lease Agreement dated October 15, 2019, as amended by that certain First Amendment to Lease Agreement, dated May 27, 2020 (collectively, the “Lease”). Unless otherwise defined herein, terms used herein with initial capital letters shall have the same meanings assigned to such terms in the Lease.
B. Tenant has not constructed the Tenant Improvements and as the result thereof, Landlord did not fund the full amount of the Improvement Allowance.
C. Tenant now desires to construct the Tenant Improvements in and with respect to the Specified Floors (defined below), and Landlord has agreed to fund to Tenant a construction allowance in an aggregate amount of up to $29,822,141.00 (the “New Allowance”) to offset a portion of the hard costs to be incurred by Tenant in connection with such construction. For the avoidance of doubt, the New Allowance is provided to Tenant without deduction for any Space Plan Allowance or Improvement Allowance previously funded by Landlord under the Lease.
D. Landlord and Tenant desire to amend the Lease.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, Landlord and Tenant hereby amend the Lease as follows:
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Tenant hereby covenants and agrees that all Hard Costs described in any draw request submitted by Tenant shall be paid by Tenant to the TI Contractor (or by Tenant to any subcontractor identified in the draw request as being entitled to receive payment of the Hard Costs directly from Tenant), subject to the receipt of the disbursement of the New Allowance. No disbursement of the New Allowance shall be paid with respect to the portion of any draw request which is the subject of a dispute between Tenant and the TI Contractor (or a subcontractor, as applicable) until such dispute is resolved.
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(a) Base Rent. During the Initial Term, Tenant shall pay base rent for the Premises (“Base Rent”) in accordance with this Section 5. Until June 30, 2023, Tenant shall pay Base Rent to Landlord in an amount equal to $953,340.00 per month, payable on or before the first day of each calendar month. No Base Rent shall be payable for the Lease Year commencing on July 1, 2023, and ending June 30, 2024. Commencing on July 1, 2024, and continuing on or before the first day of each calendar month thereafter until and including June 1, 2025, Tenant shall pay Base Rent to Landlord in amount equal to $1,178,465.00 per month, or $14,141,583.00 annually.
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All Base Rent shall be payable on or before the first day of each calendar month.
(b) Escalations of Base Rent. Beginning on July 1, 2025, and continuing on the first day of each successive Lease Year thereafter through the end of the Initial Term, the Base Rent for such Lease Year shall be the Base Rent in effect as of the final day of the preceding Lease Year, increased by one and ninety-five hundredths percent (1.95%) per annum. A schedule reflecting the annual Base Rent and monthly installments of such annual Base Rent for each Lease Year during the Initial Term commencing on July 1, 2023, is attached hereto as Exhibit B. Landlord and Tenant hereby agree that each Lease Year after the first Lease Year will commence on July 1st and end on June 30th.
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EXECUTED AND DELIVERED as of the date and year first above written.
LANDLORD:
TC LEGACY PHASE I VENTURE, LLC,
a Delaware limited liability company
By: TC Legacy Phase I Member, LLC,
a Delaware limited liability company,
its managing member
By: TCDFW Office Development, Inc.,
a Delaware corporation,
its sole member
By: /s/ Scott A. Krikoriw
Print: Scott A. Krikoriw
Its: President & CEO
TENANT:
REATA PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ Michael D. Wortley
Print: Michael D. Wortley
Its: Executive Vice President
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EXHIBIT A
INTERIM DRAW REQUEST EXAMPLE
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EXHIBIT B
ANNUAL BASE RENT
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EXHIBIT C
APPROVED SPECIFIED FLOORS TI PLANS
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EXHIBIT D
APPROVED TI CONTRACT
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EXHIBIT E
FORM OF TERMINATION OF EXPANSION OPTION
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