EXHIBIT 10.8
SUBLEASE
1. PARTIES. This Sublease ("Sublease") is entered into as of the 9th day of
August 1999, by and between Aerogen, Inc., ("Sublessee"), and Microbar, Inc.,
("Sublessor"), as a Sublease under the Lease dated December 17, 1996, entered
into by The Realty Associates Fund III, L.P., as Lessor ("Master Lessor"), as
amended by that certain Amendment dated as of April 28, 1999 expanding the
Premises (as defined thereunder) to include 0000 Xxxxxxx Xxxxx ("Master Lease").
Sublessor warrants that there have been no changes to the terms of the Master
Lease, with the exception of creating "The Third Amendment to Lease", a copy of
which is attached hereto, marked Exhibit "A" and incorporated by reference.
Pursuant to the Master Lease, Sublessor leases from Master Lessor approximately
98,500 of space (the "Original Premises") located in those certain buildings
("Buildings") at 0000 Xxxxxxx Xxxxx, 0000 Xxxxxxx Xxxxx and 0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx. Except as otherwise expressly provided herein, any
capitalized terms used herein and not defined, shall have the same meaning as
they have in the Master Lease.
2. PROVISIONS CONSTITUTING SUBLEASE.
A. This Sublease is and at all time shall be subject and subordinate to
the Master Lease. Sublessee shall take no action which would cause Sublessor to
be in default of its obligations under the Master Lease, and Sublessee shall
assume and perform all of its obligations under this Sublease, (including those
obligations of Sublessor under Master Lease that are incorporated herein and are
the obligation of Sublessee) and Sublessee shall indemnify and hold Sublessor
harmless from and against all liability, costs, damages, claims, demands and
expenses, including reasonable attorneys' fees and costs, arising out of
Sublessee's failure to do so. Sublessor shall fully perform all of its
obligations under the Master Lease (except to the extent any of the same are the
obligation of Sublessee hereunder) and shall indemnify and hold Sublessee
harmless from and against all liability, costs, damages, claims, demands and
expenses, including reasonable attorneys' fees and costs, arising out of
Sublessor's failure to do so. Each party's obligations under this Paragraph 2.A
shall survive the expiration or earlier termination of this Sublease. Upon any
termination of the Master Lease, this Sublease shall terminate concurrently
therewith except as otherwise provided in the Consent of Landlord to Sublease
and without any liability of Sublessor to Sublessee; provided, however, that a
lease termination due to Sublessor's default of its obligations under the Master
Lease or this Sublease, shall be subject to the indemnification set forth above.
Sublessor shall not enter into any amendment or modification of the Master Lease
materially adversely affecting Sublessee's use of or right to possession of the
Premises (as defined below) without the prior written consent of Sublessee which
will not be unreasonably withheld (and except as may be specifically permitted
by this Sublease). Notwithstanding the foregoing, Sublessor shall have the
right, at its sole election, to exercise any discretionary right to terminate
the Master Lease granted Sublessor in the Master Lease as of the date hereof.
1.
B. All of the terms and conditions contained in the Master Lease which
are not in conflict with the provisions of this Sublease are incorporated herein
with respect to the Premises, except for Article 1 paragraphs 5, 6, 7, 8, 9, 10,
11, 12, 15 and 18, Article III (but excepting Section 3.7 from this exclusion),
Section 4.6, Section 12.1, Article XX, Section 21.1, Exhibits A and D, and
paragraphs 1 through 5.7 through 10, 11(a), 11(g) and 11 (h) of the Addendum to
Lease, as terms and conditions of this Sublease (with each reference therein to
Lessor and Lessee to be deemed to refer to Sublessor and Sublessee and each
reference therein to Commencement Date shall mean the Commencement Date as used
in this Sublease), and along with all of the following paragraphs set up in this
Sublease shall be the complete terms and conditions of this Sublease. With
respect to obligations or services to be performed or provided by Master Lessor
under the Master Lease including without limitation those set forth in Articles
IX, X, XII and XIII, Sublessee agrees Sublessor's sole obligation shall be to
exercise reasonable efforts to require Master Lessor to comply with such
obligations as provided in Section 18 hereof.
3. PREMISES. Sublessor leases to Sublessee, and Sublessee hires from said
Sublessor, subject to the terms and conditions contained herein, approximately
13,395 rentable square foot of space, located at 0000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx of Santa Clara, California, (the "Premises"), as more particularly shown
on Exhibit B attached hereto. Sublessor and Sublessee hereby agree that the
above statement of rentable square footage, is an approximation which both
parties agree is reasonable and Sublessee's obligations herein are not subject
to revision whether or not the actual square footage is more or less.
4. TERM.
4.1 TERM. The term of this Sublease shall commence on the later to occur of
(i) August 1, 1999 or (ii) the consent of the Master Lessor to this Sublease
(the "Commencement Date"), and shall expire on December 31, 2001 or such earlier
date as the Master Lease may be terminated pursuant to the terms thereof.
Sublessee shall be obligated to accept possession of the Premises on the
Commencement Date whether or not the Tenant Improvements (as defined herein)
have been substantially completed.
4.2 DELAY IN COMMENCEMENT. Notwithstanding said Commencement Date, if for
any reason Sublessor cannot delivery possession of the Premises to Sublessee on
such date, Sublessor shall not be subject to any liability therefor, nor shall
such failure affect the validity of this Sublease or the obligations of
Sublessee hereunder or extend the term hereof, but in such case Sublessee shall
not be obligated to pay rent until possession of the Premises is delivered to
Sublessee; provided, however, that if Sublessor shall not have delivered
possession of the Premises by November 1, 1999, Sublessee may, at Sublessee's
option, by notice in writing to Sublessor, cancel this Sublease by providing
written notice thereof to Sublessor within ten (10) days after the expiration of
the aforesaid thirty (30) day period. Effective immediately, if this Sublease is
canceled as herein provided, Sublessor shall return any monies previously
deposited by Sublessee and the parties shall be discharged from all obligations
hereunder.
4.3 EARLY POSSESSION. Subject to full execution of this Sublease and
delivery of all required insurance and the security deposit in accordance with
Section 8, Sublessor shall use good faith effort to allow Sublessee to occupy
the Premises for the purpose of constructing the Tenant Improvements prior to
the Commencement Date subject to all of the provisions of this
2.
Sublease except the obligation to pay rent. Such early possession shall not
advance the termination date of this Sublease.
5. RIGHT OF FIRST OFFER TO EXTEND: If Sublessor does not need of the Premises
for its own business purposes, which need shall be determined in Sublessor's
sole and absolute discretion (i.e. if the space becomes available to lease to
any third party), then Sublessee will have a one-time right of first offer to
extend the term of this Sublease for a period of one (1) year. If Sublessor will
not need the Premises beyond the initial term hereof, Sublessor will notify
Sublessee on or prior to May 30, 2001 that the space will become available, and
on what terms Sublessor would be willing to sublease the space. Except as
modified by any terms specifically addressed in Sublessor's Notice, the terms of
the Sublease will apply to the space. Sublessee will have 30 calendar days to
notify Sublessor of Sublessee's election to extend the Sublease. If Sublessee
exercises its right to sublease the space, Sublessor and Sublessee will amend
the Sublease, modify the rent and other Sublease terms affected by the extension
of the Sublease. If, however, Sublessee elects not to lease the space or
Sublessee fails to notify Sublessor of Sublessee's election to lease the space
within a 30 calendar-day period, Sublessor will have the right to sublease the
space to a third party without further notice to Sublessee. In the event that
Sublessor does not notify Sublessee on or prior to May 30, 2001 that the space
will become available, then Sublessee shall have no further rights hereunder.
6. TENANT IMPROVEMENTS: Subject to Sublessee's satisfaction of the condition set
forth in Section 8 B. and this Section 6, Sublessor agrees to fund $75,000 (the
"Allowance") of the cost of the Tenant Improvements. Notwithstanding the
foregoing or anything contained herein to the contrary, Sublessor's obligation
to fund the Allowance or any portion thereof shall be subject to the condition
precedent that Sublessor receives the Allowance from Master Lessor in accordance
with the Master Lease. Provided Sublessor has received such funds from Master
Lessor, Sublessor agrees to reimburse Sublessee for costs incurred by Sublessee
to construct the Tenant Improvements (collectively, the "Tenant Improvements")
in an amount not to exceed $75,000, provided further that (a) prior to
commencing construction of the Tenant Improvements, Sublessee has obtained
Sublessor's and Master Lessor's approval of the Tenant Improvements and the
plans and specifications therefor in writing; (b) if requested by Master Lessor,
Sublessee has furnished Master Lessor with a lien and completion bond in form
and amount reasonably satisfactory to Sublessor and Master Lessor (provided
Sublessor may not withhold its approval if Master Lessor approves); (c)
Sublessee has entered into a contract with a general contractor, approved by the
Master Lessor for the construction of the Tenant Improvements; (d) Sublessee's
architect shall have delivered a written certificate to Sublessor that the
Tenant Improvements identified in the Request for Payment have been
substantially completed in accordance with the approved plans and
specifications; (e) Sublessor has received fully executed unconditional lien
waivers as to work which was subject of prior Request for Payments and
conditional lien waivers as to current work in the form prescribed by law from
Sublessee's contractor, all subcontractors and suppliers furnishing labor or
materials with respect to the Tenant Improvements; (f) Sublessee has constructed
the Tenant Improvements in accordance with the requirements of the Master Lease
and this Sublease, and with all applicable laws, codes, permits, and the
Americans with Disabilities Act; (g) Sublessee has furnished its Request for
Payment no later than eleven (11) months following the Commencement Date; and
(h) Sublessee has complied with the terms of the Master Lease respecting the
Tenant Improvements. All work to be performed by Sublessee pursuant hereto shall
be performed in
3.
good and workmanlike manner using new materials. In addition to the
Allowance, Sublessor shall make available to Sublessee the additional sum of
$50,000 if requested by Sublessee (the "Additional Allowance"). Such amount
shall be paid back to Sublessor over the term hereof as additional rent
amortized at a rate of ten percent (10%) per annum.
7. RENT. Rent shall commence thirty (30) days following the Commencement Date
(as defined herein). The monthly rent shall be payable in advance on the first
day of each calendar month as follows:
Base Rent:
Months 01-12 $21,432.00 per month ($1.60/foot/month NNN)
Months 13-24 $22,289.00 per month ($1.66/foot/month NNN)
Months 25-expiration $23,181.00 per month ($1.73/foot/month NNN)
Sublessee shall pay Sublessor upon the execution hereof the sum of
Twenty One Thousand Four Hundred Thirty Two Dollars ($21,432.00) as rent for the
first month of the Term. Rent for any period during the term hereof which is
less than one month shall be a pro-rata portion of the monthly installment. In
addition to base rent, Sublessee shall pay as additional rent ("Additional
Rent") within three (3) days after demand all other amounts payable by Sublessor
under the Master Lease (other than the Monthly Rent referred to in paragraph 1.9
of the Lease) which are incurred at the request of Sublessee or which are
applicable to the Premises. It is the intent of the parties that Sublessee shall
pay all costs and expenses relating to the Premises which arise under the Master
Lease, whether or not such costs and expenses are specifically referred to
herein.
Rent shall be payable to Sublessor in lawful money of the United
States, without prior notice, demands, or offset.
In the event of any casualty or condemnation affecting the Premises,
rent payable by Sublessee shall be abated hereunder, but only to the extent that
rent under the Master Lease is abated with respect to the Premises. Sublessee
waives any right to terminate the Sublease in connection with such casualty or
condemnation except that to the extent such right is granted Sublessor under the
Master Lease, Sublessee shall have the same right with respect to the
termination of this Sublease.
8. SECURITY DEPOSIT PROVISIONS. Upon the execution of this Sublease, Sublessee
shall deposit with Sublessor a cash security deposit in the amount of Twenty
Thousand Ninety Two and 50/100 dollars ($20,092.50) (the "Security Deposit").
Sublessor may apply all or part of the Security deposit to any unpaid rent or
other charges due from Sublessee or to cure any other defaults of Sublessee. If
Sublessor uses any part of the Security Deposit, Sublessee shall restore the
Security Deposit to its full amount within thirty (30) days after Sublessor's
written request. No interest shall be paid on the Security Deposit. Sublessor
shall not be required to keep the Security Deposit separate from its other
accounts and no trust relationship is created with respect to the Security
Deposit. Sublessor shall refund the unused portion of the Security Deposit to
Sublessee within thirty (30) days after the expiration or earlier termination of
this Sublease.
4.
9. SIGNAGE: Sublessee has the right to monument signage in appropriate locations
(subject to city and Master Lessor approval).
10. USE. The Premises shall be used and occupied only for the purposes allowed
pursuant to the Master Lease, including: manufacturing and assembly, research
and development, storage and distribution, and office.
11. BROKERS. Sublessor and Sublessee each represent and warrant to the other
that it has dealt with no brokers ("Brokers") in connection with this Sublease
transaction. Each of the Sublessor and Sublessee shall indemnify and hold
harmless the other from and against any and all claims, liabilities, losses,
damages, costs and expenses (including, without limitation, attorneys fees)
arising out of or related to any breach of such party's representation and
warranty set forth in this Paragraph 11.
12. CONDITION OF PREMISES. Sublessee hereby accepts the Premises in their
"as-is" condition existing as of the date hereof, subject to all applicable
zoning, municipal, county and state laws, ordinances and regulations governing
and relating to the use of the Premises, and accepts this Sublease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto.
13. PARKING. Sublessee shall be entitled to its proportionate share of all such
parking rights as Sublessor may have pursuant to the Master Lease.
14. REPRESENTATIONS AND WARRANTIES. Sublessor hereby represents and warrants to
Sublessee as follows: the Master Lease, including amendments, constitutes the
entire agreement between Master Lessor and Sublessor with respect to the
Premises; there are no defaults under the Master Lease, and to the best of
Sublessor's knowledge, no event has occurred which, with the passage of time,
the give of notice, or both, would constitute a default under the Master Lease;
and Sublessor has not assigned or sublet the Premises to any other party, nor
has Sublessor encumbered the Premises or its leasehold estate pursuant to the
Master Lease.
15. COUNTERPARTS. This Sublease may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding agreement.
16. ATTORNEY'S FEES. In any action between the parties arising out of this
Sublease, the prevailing party in the action shall be entitled, in addition to
damages, injunctive relief or other relief; to its reasonable costs and expenses
including, without limitation, costs and reasonable attorneys' fees fixed by the
court.
17. OBTAINING MASTER LESSOR'S CONSENT. Sublessor shall use commercially
reasonable efforts to obtain Master Lessor's consent to this Sublease pursuant
to the Master Lease.
18. SUBLESSOR'S OBLIGATIONS. To the extent that the provision of any services or
the performance of any maintenance or any other act (singly and/or collectively,
"Master Lessor Obligations") is the responsibility of Master Lessor, Sublessor,
upon Sublessee's request, shall make reasonable efforts to cause Master Lessor
to perform such Master Lessor Obligations; provided, however, that in no event
shall Sublessor be liable to Sublessee for any liability, loss or
5.
damage whatsoever in the event that Master Lessor shall fail to perform the
same, nor shall Sublessee be entitled to withhold rent or terminate this
Sublease.
Except as provided in this paragraph 18, Sublessee acknowledges that
Sublessor is not in a position to furnish the services set forth in the Master
Lease, obtain a nondisturbance agreement, or to perform certain other
obligations which are not within Sublessor's control, including without
limitation, maintenance, repairs and replacements, compliance with laws, and
restoration of the Premises or Buildings after casualty or condemnation.
Notwithstanding anything to the contrary contained therein, Sublessee agrees to
look solely to the Master Lessor to furnish and perform all services and
obligations of Master Lessor under the Master Lease.
19. SURRENDER OF PREMISES. Notwithstanding anything in the Sublease or Master
Lease to the contrary, at or upon the expiration or earlier termination of this
Sublease, Sublessee agrees to surrender (i) any lab/manufacturing area of the
Premises in shell condition with all Tenant Improvements demolished and free of
debris if so requested by Sublessor, and otherwise in its as-improved condition
less lab cabinets, and (ii) the office portion of the Premises in its
as-improved condition.
20. CROSS DEFAULT. Any default hereunder shall also be deemed to be a default
under that certain sublease by and between Sublessor and Sublessee for those
certain premises located at 0000 Xxxxxxx Xxxxx, dated as of April 3, 1997.
21. RIGHT OF FIRST REFUSAL. In the event that the premises currently subleased
by Control Data Systems, Inc. which is adjacent to the Premises becomes
available for sublease to the general public during the term of this Sublease,
Sublessor shall notify Sublessee of such availability and the terms and
conditions on which Sublessor will lease the space. Sublessee shall have thirty
(30) calendar days in which to notify Sublessor of Sublessee's decision to lease
the space under the terms and conditions contained in Sublessor's notice. In the
event that Sublessee does not give such notice to Sublessor, then Sublessee
shall have no further right to lease the space and Sublessor shall be free to
lease the space to any other person or entity on any terms and conditions as
Sublessor in its sole discretion deems appropriate.
22. UTILITIES. Notwithstanding anything to the contrary contained in section 7.7
of the Master Lease as incorporated herein, Sublessor shall contract for
electrical, water and sewage service for the building located at 1306 Orleans of
which the Premises are a part. Sublessee shall be responsible for and shall pay
promptly for its pro-rata share of all such utilities. Sublessee may, with the
approval of the Master Lessor, arrange to split utilities among subtenants, if
any, if practicable.
23. ASSIGNMENT AND SUBLETTING. Any assignment or subletting shall be subject to
the terms and conditions of the Master Lease, and Subtenant shall not take any
such action until it obtains the consent of the Master Lessor, as may be
required.
6.
SUBLESSOR: MICROBAR, INC. SUBLESSEE: AEROGEN, INC.
By: /s/ Xxxxx X. Juhdlo By: /s/ Xxxx X. Xxxx
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Title: C.E.O Title: C.E.O
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Date: 8/6/99 Date: 8/9/99
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Exhibit A - Third Amendment to Master Lease
Exhibit B - Premises
Exhibit C - Consent of Master Lessor
7.
