Fourth Amendment to Lease Agreement
EXHIBIT
10.26
Fourth Amendment to Lease Agreement
This Fourth Amendment to Lease Agreement (this “Amendment”) is entered into on March 11, 2010, but
made to be retroactively effective as of March 1, 2010 (the “Effective Date”), by and among ▇▇▇▇▇▇▇
ROAD HOLDINGS, LLC, a Delaware limited liability company, SFP CROSSROADS, LLC, a Delaware limited
liability company, and WOODSTOCK ▇▇▇▇▇▇, LLC, a Delaware limited liability company (collectively,
“Landlord”), and ABAXIS, INC., a California corporation (“Tenant”).
Recitals:
| A. | Principal Development Investors, LLC, a Delaware limited liability company (“Original Landlord”), and Tenant entered into that certain Lease Agreement dated as of June 21, 2000, that certain First Amendment to Lease dated as of August 28, 2000, and that certain Second Amendment to Lease dated as of November 20, 2000, and Crossroads Technology Park, a California limited liability company, and Nearon Crossroads, LLC, a California limited liability company (collectively, “Subsequent Landlord”), successors-in-interest to Original Landlord, and Tenant entered into that certain Third Amendment to Lease dated as of April 10, 2002 (as so amended, the “Lease”), for the leasing of certain premises consisting of approximately 91,124 rentable square feet located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the “Original Premises”) as such Premises are more fully described in the Lease. | |
| B. | Landlord is the successor-in-interest to Original Landlord and Successor Landlord and is the owner of the interest of the “Landlord” under the Lease. | |
| C. | Tenant desires to lease additional space in the Park and to renew and extend the Lease, and Landlord has agreed to such expansion and renewal and extension, all upon and subject to each of the terms, conditions and provisions set forth herein. |
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant agree as follows:
1. Recitals. Landlord and Tenant agree that the above recitals are true and correct
and are hereby incorporated herein as though set forth in full.
2. Extension Term. Upon the occurrence of the Effective Date, the Term shall be
extended until February 28, 2021 (the “Extension Term”). From and after the Effective Date, all
references in the Lease to “Expiration Date” shall mean and refer to February 28, 2021. Tenant has
no remaining renewal options under the Lease, and the Option to Extend the Lease Term under
Addendum 1 to the Lease is hereby deleted.
3. Expansion Premises.
(a) In addition to the Original Premises, as of the Expansion Premises Commencement Date (as
hereinafter defined), Landlord shall lease to Tenant, and Tenant shall lease from Landlord, a
portion of those certain premises located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and shown on
Exhibit A attached hereto and made a part hereof (the “Expansion Premises”). Landlord and Tenant
hereby agree that for purposes of this Amendment, as of the Expansion Premises Commencement Date,
the rentable square footage of the Expansion Premises shall be 35,239. From and after the
Expansion Premises Commencement Date, the term “Premises,” as used in the Lease, shall be and
include the Original Premises and the Expansion Premises, which shall, collectively, consist of
126,363 rentable square feet. From and after the Expansion Premises Commencement Date, (a)
Tenant’s Share of Operating Expenses shall be 100% of the building located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (“Building E”) and 39.6% of the building located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (“Building B”), (b) Tenant’s Share of Tax Expenses shall be 100% of Building E and
39.6% of Building B, (c) Tenant’s Share of Common Area Utility Costs shall be 100% of Building E
and 39.6% of Building B and (d) Tenant’s Share of Utility Expenses shall be 100% of Building E and
39.6% of Building B. The lease of the Expansion Premises shall be for
the same Term and on the same terms and conditions as set forth in the Lease, as modified by
this Amendment. The “Expansion Premises Commencement Date” shall mean the later of (A) the date of
satisfaction of the Expansion
1.
Premises Condition (as hereinafter defined) and (B) the date
possession of the Expansion Premises is tendered to Tenant. Landlord shall endeavor to give Tenant
notice of the date it expects to tender possession of the Expansion Premises to Tenant at least
fifteen (15) days prior to such anticipated delivery date. The parties estimate that the Expansion
Premises Commencement Date will be June 1, 2010; provided, however, that the foregoing is an
estimate only, and in all events if Landlord cannot tender possession of the Expansion Premises to
Tenant on or before the estimated Expansion Premises Commencement Date, such delay shall not render
this Amendment void or voidable, or impose any liability upon Landlord for any loss or damage
resulting therefrom. In addition, nothing in the preceding sentence shall prevent Landlord from
delivering the Expansion Premises to Tenant on or before the estimated Expansion Premises
Commencement Date.
(b) Landlord and Tenant hereby acknowledge that (i) the Expansion Premises is currently being
leased pursuant to a Lease Agreement dated July 6, 2000 (as amended from time-to-time, the “Telogy
Lease”) between Original Landlord and Telogy, LLC, a Delaware limited liability company (“Telogy”)
and (ii) Telogy filed a petition under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court, Northern District of California, Oakland Division (the “Bankruptcy
Proceeding”). Therefore, the lease of the Expansion Premises to Tenant pursuant to this Amendment
is contingent upon either (A) the rejection of the Telogy Lease as part of the Bankruptcy
Proceeding or (B) the assumption of the Telogy Lease as part of the Bankruptcy Proceeding and the
subsequent amendment of the Telogy Lease so as to cause it to terminate (the “Expansion Premises
Condition”).
(c) If Landlord has not tendered possession of the Expansion Premises to Tenant by October 31,
2010, then Tenant shall have the option to terminate this Lease as to all of the Premises (i.e. the
Original Premises and the Expansion Premises) by delivering written notice of the exercise of its
termination option (the “Termination Notice”) at any time prior to the earlier of (i) January 31,
2011 and (ii) the date possession of the Expansion Premises is tendered to Tenant. If Tenant
timely delivers the Termination Notice, then (A) as of the date that Tenant delivers the
Termination Notice to Tenant (the “Termination Notice Date”) Base Rent for the Original Premises
shall increase to $97,273.40 per month and (B) the Lease shall terminate as of that date which is
12 months after the Termination Notice Date (such 12 month period, the “Holdover Period”).
Notwithstanding the preceding, Tenant may elect to cause the Holdover Period to terminate before
that date which is 12 months after the Termination Notice Date by delivering at least 180 days
advance written notice to Landlord; provided, however, in no event may Tenant terminate the
Holdover Period prior to that date which is 6 months after the Termination Notice Date.
4. Base Rent.
(a) Original Premises Base Rent. As of March 1, 2010, Base Rent for the Original Premises
shall be as follows:
| Per Square | ||||||||
| Foot Monthly Base | Monthly | |||||||
| Period | Rental Rate | Base Rent | ||||||
March 1, 2010 —
February 28, 2011 |
$ | 0.800 | $ | 72,899.20 | ||||
March 1, 2011 —
February 29, 2012 |
$ | 0.824 | $ | 75,086.18 | ||||
March 1, 2012 —
February 28, 2013 |
$ | 0.849 | $ | 77,364.28 | ||||
March 1, 2013 —
February 28, 2014 |
$ | 0.874 | $ | 79,642.38 | ||||
March 1, 2014 —
February 28, 2015 |
$ | 0.900 | $ | 82,011.60 | ||||
March 1, 2015 —
February 29, 2016 |
$ | 0.927 | $ | 84,471.95 | ||||
March 1, 2016 —
February 28, 2017 |
$ | 0.955 | $ | 87,023.42 | ||||
2.
| Per Square | ||||||||
| Foot Monthly Base | Monthly | |||||||
| Period | Rental Rate | Base Rent | ||||||
March 1, 2017 —
February 28, 2018 |
$ | 0.984 | $ | 89,666.02 | ||||
March 1, 2018 —
February 28, 2019 |
$ | 1.014 | $ | 92,399.74 | ||||
March 1, 2019 —
February 29, 2020 |
$ | 1.044 | $ | 95,133.46 | ||||
March 1,
2020 — February 28, 2021 |
$ | 1.075 | $ | 97,958.30 | ||||
Tenant agrees to pay Base Rent for the Original Premises in equal monthly installments at the
place provided in the Lease on the first (1st) day of each month, in advance (subject to adjustment
in accordance with the other provisions of the Lease), plus all applicable taxes thereon, together
with all other amounts due under the terms of the Lease. Landlord acknowledges that Tenant paid
and Landlord received Base Rent in the amount of $97,273.40 for the month of March 2010. The
parties hereby agree that Tenant shall receive a credit in the amount of $24,374.20 against the
payment of Base Rent for April 2010.
(b) Expansion Premises Base Rent. As of the Expansion Premises Commencement Date, Base Rent
for the Expansion Premises shall be as follows:
| Per Square | ||||||||
| Foot Monthly Base | Monthly | |||||||
| Period | Rental Rate | Base Rent | ||||||
Expansion Premises
Commencement Date
February 28, 2011 |
$ | 0.800 | $ | 28,191.20 | ||||
March 1, 2011 —
February 29, 2012 |
$ | 0.824 | $ | 29,036.94 | ||||
March 1, 2012 —
February 28, 2013 |
$ | 0.849 | $ | 29,917.91 | ||||
March 1, 2013 —
February 28, 2014 |
$ | 0.874 | $ | 30,798.89 | ||||
March 1,
2014 — February 28, 2015 |
$ | 0.900 | $ | 31,715.10 | ||||
March 1, 2015 —
February 29, 2016 |
$ | 0.927 | $ | 32,666.55 | ||||
March 1, 2016 —
February 28, 2017 |
$ | 0.955 | $ | 33,653.25 | ||||
March 1, 2017 —
February 28, 2018 |
$ | 0.984 | $ | 34,675.18 | ||||
March 1, 2018 —
February 28, 2019 |
$ | 1.014 | $ | 35,732.35 | ||||
March 1, 2019 —
February 29, 2020 |
$ | 1.044 | $ | 36,789.52 | ||||
March 1,
2020 — February 28, 2021 |
$ | 1.075 | $ | 37,881.93 | ||||
Tenant agrees to pay Base Rent for the Expansion Premises in equal monthly installments at the
place provided in the Lease on the first (1st) day of each month, in advance (subject to adjustment
in accordance with the other provisions of the Lease), plus all applicable taxes thereon, together
with all other amounts due under the terms of the Lease.
(c) Expansion Premises Base Rent Abatement. Notwithstanding anything to the contrary
contained herein, Landlord hereby agrees to ▇▇▇▇▇ Base Rent for the Expansion Premises only for the
first three (3)
months after the Expansion Premises Commencement Date (the “Expansion Premises Abatement
Period”). The total value of the abatement granted to Tenant is $84,573.60 (the “Expansion
Premises Abatement Amount”).
3.
Except for the Expansion Premises Abatement Amount, Tenant shall,
throughout the Expansion Premises Abatement Period, be obligated to make all other payments which
Tenant is obligated to make pursuant to the terms of the Lease (including, without limitation, Base
Rent with respect to the Original Premises and Tenant’s Share of Operating Expenses, Tax Expenses,
Common Area Utility Costs and Utility Expenses) and shall be subject to all the covenants and
conditions of the Lease. Tenant agrees that if, at any time from and after the Expansion Premises
Commencement Date, there is a default by Tenant which is not cured within the applicable cure
period, the entire Expansion Premises Abatement Amount, with interest accrued from the date such
amounts would have originally been due had payment not been deferred pursuant to this Section,
shall be deemed an additional obligation payable by Tenant, and Tenant shall have no further right
hereunder to non-payment of monthly Base Rent during the remainder of the Expansion Premises
Abatement Period, if any.
5. Condition of Premises.
(a) Tenant has accepted the Original Premises and hereby acknowledges that they are suitable
for Tenant’s intended use and in good operating order, condition and repair. Except as otherwise
expressly set forth in the Lease, Tenant expressly acknowledges and agrees that neither Landlord
nor any of Landlord’s agents, representatives or employees has made any representations as to the
suitability, fitness or condition of the Original Premises for the conduct of Tenant’s business or
for any other purpose, including, without limitation, any storage incidental thereto.
(b) Tenant agrees to accept the Expansion Premises on the Expansion Premises Commencement Date
as then being suitable for Tenant’s intended use and in good operating order, condition and repair
in its then existing “AS IS” condition. By taking possession of the Expansion Premises, Tenant
shall be deemed to have accepted the Expansion Premises in good condition and repair. Tenant
expressly acknowledges and agrees that neither Landlord nor any of Landlord’s agents,
representatives or employees has made any representations as to the suitability, fitness or
condition of the Expansion Premises for the conduct of Tenant’s business or for any other purpose,
including, without limitation, any storage incidental thereto. Notwithstanding the foregoing or
anything else to the contrary in this Amendment or in the Lease, Landlord warrants to Tenant that
as of the Expansion Premises Commencement Date the Expansion Premises (including, without
limitation, the building systems (i.e., heating, ventilation and air conditioning, plumbing,
mechanical, electrical and life safety) serving the Expansion Premises) shall be (i) in good
working order and condition and (ii) in compliance with the requirements of the Americans with
Disabilities Act (“ADA”) (codified at 42 U.S.C. §§ 12101, et seq.) and all other applicable Laws.
If there is non-compliance with such warranty, Landlord shall, as Landlord’s sole obligation with
respect to such matter promptly after receipt of written notice from Tenant setting forth with
specificity the nature and extent of such non-compliance rectify the same at Landlord’s expense.
The warranty period shall be 6 months. If Tenant does not give Landlord the required notice within
such 6 month period, Landlord shall have no warranty obligation under this Section 5(b) and the
correction of such failure shall be made in accordance with the other terms of the Lease.
Notwithstanding anything in this Section 5(b) to the contrary, Tenant shall be responsible for
compliance with ADA and all other applicable Laws if the application of ADA or such other
applicable Laws arises from (A) the specific manner and nature of Tenant’s use or occupancy of the
Expansion Premises, as distinct from general office use, (B) alterations made by Tenant or (C) a
breach by Tenant of any provisions of this Amendment or the Lease.
6. Extension/Expansion Improvements. Any leasehold improvements to be constructed or
installed in connection with the commencement of the Extension Term or the lease of the Expansion
Premises (collectively, the “Extension/Expansion Improvements”) shall be at Tenant’s sole cost and
expense and shall be subject to all of the terms and conditions of the Lease including, without
limitation, those under Section 10.1 of the Lease. Notwithstanding the foregoing, Landlord hereby
approves the installation of a second floor (including, without limitation, offices, bathrooms,
kitchen, conference areas and other common areas) in either or both of the Original Premises and
Expansion Premises, provided such second floor installation (i) is made in accordance with the
terms and conditions of the Lease including, without limitation, Section 10.1 of the Lease and (ii)
shall remain subject to Landlord’s approval rights under Section 10.1 of the Lease. Installation
of such a second floor in either or both of the Original Premises and Expansion Premises shall not
cause, at the time of such second floor installation or at any other time during the Term of the
Lease (as extended by this Amendment and as may be extended in the
future), any of the following to be increased: (a) the rentable square footage of the
Premises, (b) the total Base Rent
4.
payable with respect to the Premises, (c) Tenant’s Share of
Operating Expenses, Tax Expenses, Common Area Utility Costs or Utility Expenses and (d) the number
of parking spaces allocated to Tenant.
7. Security Deposit. Landlord currently holds a letter of credit from Comerica Bank
in the amount of $97,273 (the “Existing Letter of Credit”) under the Lease. From and after the
Effective Date, Tenant shall have no further obligation to provide Landlord with a letter of credit
as collateral for Tenant’s performance of its obligations under the Lease, and within thirty (30)
days of the Effective Date, Landlord shall return the Existing Letter of Credit to Tenant.
8. Lease Modifications.
(a) Effective as of the Effective Date, Landlord’s addresses for notices under the Lease shall
be: (i) c/o Nearon Enterprises, ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇
▇▇▇▇▇▇▇▇ and (ii) c/o Woodstock Development & Investments, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
(b) Effective as of the Effective Date, the number of parking spaces allocated to Tenant shall
be changed from two hundred and twenty-four (224) non-exclusive and non-designated parking spaces
to three hundred and nineteen (319) non-exclusive and non-designated parking spaces.
(c) Effective as of the Expansion Premises Commencement Date, the number of parking spaces
allocated to Tenant shall be changed from three hundred and nineteen (319) non-exclusive and
non-designated parking spaces to four hundred and forty-two
(442) non-exclusive and non-designated
parking spaces.
9. Operating Expenses; Utilities and Services.
(a) The parties acknowledge that Building B and Building E are part of a multi-building
project and that the costs and expenses incurred in connection with the Park (i.e., Operating
Expenses, Tax Expenses and Common Area Utility Costs) are shared among the tenants of the buildings
in the Park. Accordingly, such costs and expenses are determined annually for the Park as a whole,
and a portion of such costs and expenses, which portion shall be determined by Landlord on an
equitable basis, shall be allocated to the buildings in the Park. Such portion of Operating
Expenses, Tax Expenses and Common Area Utility Costs allocated to a particular building shall
include all Operating Expenses, Tax Expenses and Common Area Utility Costs attributable solely to
the such building and an equitable portion of the Operating Expenses, Tax Expenses and Common Area
Utility Costs attributable to the Park as a whole. Landlord shall have the right, from time to
time, to equitably allocate some or all of the Operating Expenses, Tax Expenses and Common Area
Utility Costs for the Park among different portions or occupants of the Park (“Cost Pools”), in
Landlord’s reasonable discretion. The Operating Expenses, Tax Expenses and Common Area Utility
Costs allocable to each Cost Pool shall be allocated to such Cost Pool and charged to the tenants
within such Cost Pool in an equitable manner. The parties acknowledge that (i) Building B
comprises 27.6% of the Park, and (ii) Building E comprises 28.3% of the Park.
(b) The parties acknowledge that electricity charges for Building B are not billed or metered
separately to the tenants of Building B. To properly allocate electricity charges for Building B
to the tenants of Building B, Landlord has installed an instrument that measures electricity usage
by the individual tenants of Building B and allocates electricity charges for Building B in
accordance with such measurements. Therefore, notwithstanding anything in the Lease or this
Amendment to the contrary, Tenant’s share of electricity charges may be more or less than Tenant’s
Share of Utility Expenses depending on Tenant’s and any other tenant’s or tenants’ actual
electricity use.
10. Brokers. Tenant warrants that it has had no dealing with any broker or agent in
connection with the negotiation or execution of this Amendment other than Cornish & ▇▇▇▇▇
Commercial, and Tenant agrees to indemnify, defend and hold Landlord harmless from and against any
claims by any other broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing transaction.
Landlord warrants that it has had no dealing with any broker or agent in connection with the
negotiation or execution of this Amendment, and Landlord agrees to indemnify, defend and hold
Tenant harmless
5.
from and against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Landlord with regard to
this leasing transaction.
11. Effect of Amendment. Except as modified herein, the terms and conditions of the
Lease shall remain unmodified and continue in full force and effect. In the event of any conflict
between the terms and conditions of the Lease and this Amendment, the terms and conditions of this
Amendment shall prevail.
12. Definitions. Unless otherwise defined in this Amendment, all terms not defined in
this Amendment shall have the meaning set forth in the Lease.
13. Tenant’s Representations. Tenant hereby represents and warrants to Landlord that
(a) Tenant is in good standing under the laws of the State of California, (b) Tenant has full
corporate power and authority to enter into this Amendment and to perform all of Tenant’s
obligations under the Lease, as amended by this Amendment, and (c) each person (and all of the
persons if more than one signs) signing this Amendment on behalf of Tenant is duly and validly
authorized to do so.
14. Ratification. Except as modified by this Amendment, the Lease and all the terms,
covenants, conditions and agreements thereof are hereby in all respects ratified, confirmed and
approved. Tenant hereby affirms that on the date hereof, to Tenant’s actual knowledge, no breach
or default by either party has occurred and that the Lease, and all of its terms, conditions,
covenants, agreements and provisions, except as hereby modified, are in full force and effect with
no defenses or offsets thereto.
15. Full Force and Effect. This Amendment contains the entire understanding between
the parties with respect to the matters contained herein. Except as modified by this Amendment,
the Lease shall remain unchanged and shall continue in full force and effect. No representations,
warranties, covenants or agreements have been made concerning or affecting the subject matter of
this Amendment, except as are contained herein and in the Lease. This Amendment may not be changed
orally, but only by an agreement in writing signed by the party against whom enforcement of any
waiver, change or modification or discharge is sought.
16. Counterparts. This Amendment may be executed in any number of identical
counterparts each of which shall be deemed to be an original and all, when taken together, shall
constitute one and the same instrument.
17. No Offer. Submission of this instrument for examination and signature by Tenant
does not constitute an offer to lease or a reservation of or option for lease, and this instrument
is not effective as a lease amendment or otherwise until executed and delivered by both Landlord
and Tenant.
[Signature Page Follows]
6.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above
written.
| Tenant: | Landlord: | |||||||||||||
| ABAXIS, INC., a California corporation |
▇▇▇▇▇▇▇ ROAD HOLDINGS, LLC, a Delaware limited liability company |
|||||||||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ | |||||||||||
| Title: | CEO | Title: | Co-President & COO | |||||||||||
| By: | /s/ ▇▇▇▇▇▇▇ Santa ▇▇▇▇ | SFP CROSSROADS, LLC, | ||||||||||||
| Name: | ▇▇▇▇▇▇▇ Santa ▇▇▇▇ | a Delaware limited liability company | ||||||||||||
| Title: | CFO | |||||||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇ | |||||||||||||
| Title: | Manager | |||||||||||||
| WOODSTOCK ▇▇▇▇▇▇, LLC, a Delaware limited liability company |
||||||||||||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇ | |||||||||||||
| Title: | Manager | |||||||||||||
7.
EXHIBIT A
EXPANSION PREMISES
EXPANSION PREMISES
A-1