EXHIBIT 10.3
Assignment and Assumption of Lease
This Assignment and Assumption of Lease ("Assignment") is made this
21st day of August, 2001 by and between Xxxxxxx.xxx, Inc., a Delaware
corporation ("Assignor"), and Connetics Corporation, a Delaware corporation
("Assignee").
RECITALS
A. Assignor is tenant under that certain Industrial Building Lease
dated December 16, 1999, by and between West Bayshore Associates, a general
partnership, Xxxxxx X. Xxxxx, Xxxxx Xxx Xxxxx, Xx., Xxxxx X. Xxxxxxx, and Xxxxxx
X. XxXxx (collectively, "Landlord"), and Assignor (as modified from time to
time, the "Lease"), respecting certain premises (the "Premises") within the
building located at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx, a true
copy of which, together with any and all addenda and amendments, is attached
hereto as Exhibit A and made a part hereof;
B. Assignor now desires to assign the Lease to Assignee and Assignee
desires to assume Assignor's obligations under the Lease;
AGREEMENT
Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor and Assignee agree as
follows:
1. Effective Date of Assignment. Upon the mutual execution of this
Assignment ("Effective Date"), Assignor shall give possession of the Premises to
Assignee. Assignor and Assignee hereby acknowledge and agree that upon the
Effective Date, Assignor shall be entitled to remain in a portion of the
Premises pursuant to that certain Sublease dated as of the date hereof by and
between Assignee, as sublandlord, and Assignor, as sublessee ("3290 Sublease")
attached as Exhibit B hereto and a made a part hereof, upon the terms and
conditions of the 3290 Sublease.
2. Assignment of Lease. Assignor does hereby assign and transfer to
Assignee all of Assignor's right, title, and interest in and to the Lease and
the Premises. Assignor hereby agrees to indemnify Assignee against and hold
Assignee harmless from any and all cost, liability, loss, damage or expense,
including, without limitation, attorneys' fees, arising out of Assignor's breach
of the Lease prior to the Effective Date.
3. Assumption of Obligations. Assignee does hereby accept this
assignment and, for the benefit of Assignor and Landlord,
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expressly assumes and agrees to keep, perform, and fulfill all the terms,
covenants, conditions, and obligations, required to be kept, performed, and
fulfilled by Assignor as tenant under the Lease, including the making of all
payments due to or payable on behalf of Landlord under the Lease when due and
payable. Assignee hereby agrees to indemnify Assignor and hold Assignor harmless
from any and all cost, liability, loss, damage or expense, including, without
limitation, attorneys' fees, arising out of or relating to events occurring
after the Effective Date and rising out of Assignee's obligations as tenant
under the Lease or Assignee's breach of the Lease. If Assignee breaches its
obligations under the Lease and Assignor (i) pays rent to Landlord, and/or (ii)
fulfills any of Assignee's other obligations in order to prevent Assignee from
being in default, Assignee immediately shall reimburse Assignor for the amount
of rent or costs expended by Assignor together with interest on those sums at
the highest rate allowed by law.
4. Security Deposit. The parties acknowledge that Landlord currently
holds a security deposit in the amount of $304,996.16 in cash and $914,988.49 in
the form of a letter of credit (collectively, the "Security Deposit") pursuant
to the terms of the Lease. Assignee hereby agrees to deliver to Landlord prior
to the Effective Date a replacement letter of credit in such amount and form as
agreed to by and between Assignee and Landlord, which shall replace the letter
of credit currently held by Landlord under the Lease. Upon (i) approval and
acceptance by Landlord of the replacement letter of credit, and (ii) return of
the original letter of credit currently held by Landlord to Assignor, Assignor
shall release all claims to the Security Deposit, which thereafter will be held
by Landlord for the benefit of Assignee, subject to the provisions of the Lease.
It is expressly agreed by the parties hereto that return of the letter of credit
currently held by Landlord to Assignor as specified in this Section 4 shall be a
condition precedent to the effectiveness of this Assignment and of Assignor's
obligations hereunder.
5. Access to Server Room. Pursuant to that certain Sublease dated as of
the date hereof by and between Assignee, as sublessor, and Assignor, as
sublessee ("3294 Sublease") attached as Exhibit C hereto and made a part hereof,
Assignor will be subleasing a portion of the premises located at 0000 Xxxx
Xxxxxxxx Xxxxxx, Xxxx Xxxx ("0000 Premises"), which premises are located
adjacent to the Premises, all upon the terms and conditions of the 3294
Sublease. A portion of the Premises is comprised of Assignor's IT data center as
shown as cross-hatched on Exhibit D attached hereto and a made a part hereof
("Assignor's Server Room"). During the term of the 3294 Sublease, Assignee
hereby grants to Assignor the sole right of occupancy and use of Assignor's
Server Room, without obligation to pay rent or other compensation therefor.
Access to Assignor's
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Server Room shall be from the 3294 Premises and via the electrical room
identified on Exhibit D, and Assignor shall have the right to secure the
doorways to Assignor's Server Room to prevent entry to the same from the
Premises. Assignor and Assignee hereby agree that each shall indemnify, defend,
protect and hold the other harmless from and against any and all claims or
liability for any injury or damage to any person or property, including any
reasonable attorneys' fees, occurring in, on or about Assignor's Server Room to
the extent such injury or damages is caused by its, or its employees', agents'
or contractors' negligence or willful misconduct.
6. Right of First Offer. The parties hereby acknowledge and agree that
it is the express intent of each party hereto that this Assignment also assign
to Assignee the right of first offer granted to Assignor pursuant to Section 33
of the Lease, subject only to the consent of the Landlord to the same.
7. Brokers. Each party to this Assignment warrants and represents to
the other that such party has not retained any real estate broker, finder or
other person whose services would form the basis for a claim for any commission
or fee in connection with this Assignment or the transactions contemplated
thereby. Each party agrees to save, defend, indemnify and hold the other party
free and harmless from any breach of its warranty and representation as set
forth in the preceding sentence, including the other party's attorney's fees.
8. Contingency. Notwithstanding anything to the contrary herein, this
Assignment is contingent upon the consent of the Landlord as evidenced by the
execution by Landlord of the Consent set forth below.
9. Amendment of Lease. Landlord and Assignee shall not amend the Lease
without Assignor's written consent. Any amendment of the Lease in violation of
this provision shall not be binding upon Assignor.
10. Successors and Assigns. This Assignment shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
11. Counterparts. This Assignment may be executed in multiple
counterparts, each of which shall be deemed an original.
12. Attorneys' Fees. If there is any legal or arbitration action or
proceeding between the parties to enforce any provision of this Assignment or to
protect or establish any right or remedy of any of the parties, the unsuccessful
party to such action or proceeding will pay to the prevailing party all costs
and expenses,
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including reasonable attorneys' fees incurred by such prevailing party in such
action or proceeding and in any appearance in connection therewith, and if such
prevailing party recovers a judgment in any action, proceeding or appeal, such
costs, expenses and attorneys' fees will be determined by the court or
arbitration panel handling the proceeding and will be included in and as a part
of such judgment.
13. Notices. Any notices or other communications required or permitted
under this Assignment will be in writing and either served personally or sent by
prepaid, first-class mail, return receipt requested, or by overnight courier,
and addressed to the other party at the addresses set forth below. Either party
may change its address by notifying the other party of the change in address.
14. Use. Assignor and Assignee hereby agree that upon the Effective
Date, subject to the consent of the Landlord, Section 9(a) of the Lease shall be
amended to provide that Tenant shall additionally have the right to use the
Premises for biotech research and development, including the use of wet
laboratories.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the date first above written.
ASSIGNOR:
Xxxxxxx.xxx, Inc.
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Its:
-----------------------------
Address:
---------------------------------
---------------------------------
---------------------------------
ASSIGNEE:
Connetics Corporation,
a Delaware corporation
By:
------------------------------
Name:
----------------------------
Its:
-----------------------------
Address:
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---------------------------------
---------------------------------
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EXHIBIT A
MASTER LEASE
[TO BE ATTACHED]
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EXHIBIT B
3290 SUBLEASE
[TO BE ATTACHED]
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EXHIBIT C
3294 SUBLEASE
[TO BE ATTACHED]
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EXHIBIT D
ASSIGNOR'S SERVER ROOM
[TO BE ATTACHED]
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Consent of Landlord
The undersigned is the Landlord in the Lease described in the above
Assignment and hereby consents to the foregoing assignment of all right, title
and interest of Assignor under the Lease. Landlord hereby agrees as follows:
(a) Landlord will concurrently send to Assignor any notice of default
that Landlord sends to Assignee.
(b) If Assignee is in default under the Lease, before Landlord can
exercise any of the rights available to Landlord because of such
default, Assignor shall have the right for (i) three (3) business
days after the period expires for curing rent defaults, and (ii)
five (5) business days after the period expires for curing
nonrent defaults.
(c) Landlord hereby expressly consents to the assignment of the right
of first offer pursuant to Section 33 of the Lease to Assignee.
(d) Landlord hereby expressly consents to the replacement of
Assignor's irrevocable Letter of Credit which forms a part of the
Security Deposit under the Lease by an irrevocable letter of
credit from Assignee naming the Landlord as beneficiary on terms
as agreed between the Landlord and Assignee.
(e) Landlord hereby acknowledges and agrees to the amendment to
Section 9(a) of the Lease, pursuant to Section 14 of the
Assignment.
[signatures appear on next page]
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Date: August ___, 2001
Landlord:
West Bayshore Associates,
a general partnership
By:
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Name:
----------------------------
Its:
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Xxxxxx X. Xxxxx
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Xxxxx Xxx Xxxxx, Xx.
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Xxxxx X. Xxxxxxx
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Xxxxxx X. XxXxx
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