EXHIBIT 10.41
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") dated AUGUST 6, 1996 for reference purposes
only, is entered into by and between ARRIS PHARMACEUTICAL CORPORATION, a
Delaware corporation (hereinafter "Sublessor") and FIBROGEN, INC., a Delaware
corporation (hereinafter "Sublessee"), and is subject to the terms and
conditions of that certain Lease ("Master Lease") dated June 22, 1993 (as
amended by that certain First Amendment to Lease dated October 25, 1993) entered
into by UTAH PARTNERS, LTD., a California limited partnership, as Lessor, and
KHEPRI PHARMACEUTICALS, INC., a Delaware corporation, as Lessee. A copy of the
Master Lease is attached hereto as Exhibit "A". Sublessor is the successor by
merger of KHEPRI PHARMACEUTICALS, INC.
1. PREMISES. Sublessor hereby leases to Sublessee, and Sublessee hereby hires
from Sublessor, on and subject to the terms and conditions hereinafter set
forth, the following premises (hereinafter referred to as "Premises"), situated
in the City of South San Francisco, County of San Mateo, State of California,
commonly known as 260 LITTLEFIELD AVENUE, SUITE A and described as consisting of
approximately 32,700 rentable square feet as more particularly described in the
Master Lease TOGETHER WITH the equipment listed on Exhibit "A" hereto which is
now present in or about the Premises. Sublessee shall have the right to use the
Common Areas of the property (as defined in the Master Lease). For purposes of
this Lease the Office/Unimproved Space consists of approximately 23,700 square
feet and the Laboratory Space consists of approximately 9,000 square feet.
2. SUBLEASE TERM; DELIVERY OF POSSESSION.
a. TERM. The term of this Sublease shall begin on October 15, 1996
("Commencement Date") and end on July 15, 2005 ("Expiration Date") unless sooner
terminated pursuant to any provision hereof or of the Master Lease.
b. DELIVERY OF POSSESSION.
(1) Notwithstanding said Commencement Date, if for any reason
Sublessor cannot deliver possession of the Premises to Sublessee on said date,
Sublessor shall not be subject to any liability therefore, 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 tendered to Sublessee;
provided, however, that if Sublessor shall not have delivered possession of the
Premises within ninety (90) days from said Commencement Date, Sublessee may, at
Sublessee's option, by notice in writing to Sublessor within ten (10) days
thereafter, cancel this Sublease, in which event the parties shall be discharged
from all obligations thereunder.
(2) The Premises will be delivered by Sublessor subject to all
applicable zoning, municipal, county and state laws, ordinances and regulations
governing and regulating the use of the sublease Premises, and Sublessee accepts
the Premises subject thereto. Except as set forth in the next sentence,
Sublessee shall accept the Premises in broom clean condition and otherwise "as
is". Landlord will cause the following work to be completed prior to the
Commencement Date: paint touched up as needed; carpets cleaned; building
systems in working condition.
(3) Sublessor and Sublessee shall conduct a walk-through inspection
of the Premises prior to the Commencement Date, and if the building systems in
the Premises are found not to be in working condition, a "punchlist" shall be
developed identifying those areas of repairs which are necessary to bring such
building systems into working condition. If such repairs are the obligation of
Sublessor as tenant under the Master Lease, Sublessor shall cause such repairs
to be made. If such repairs are the obligation of the Master Lessor as landlord
under the Master Lease, Sublessor shall use reasonable efforts to cause Master
Lessor to perform such obligations as provided in paragraph 10 below.
c. EARLY POSSESSION. In the event Sublessee, with Sublessor's consent,
takes possession prior to the Commencement Date, such occupancy shall be subject
to all the provisions of this Sublease, shall not advance the termination date
of this
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Sublease, and Sublessee shall pay rent for the period ending with the
Commencement Date at the same rental as prescribed for the initial month of the
Sublease term, prorated at the rate of 1/30th thereof per day. If Sublessor
consents to entry for the purpose of installing furniture, equipment, telephone
and computer systems, and the like and/or for temporary staging or storage of
Sublessee's property, such entry shall NOT trigger an obligation to pay rental
prior to the Commencement Date.
3. OPTION TO EXTEND MASTER LEASE TERM. Sublessor shall only be obligated to
exercise Sublessor's first extension option pursuant to the Master Lease if
Sublessee has not been in default under this Sublease more than two (2) times in
any lease year as of the latest date for Sublessor to exercise its extension
option provided for in the Master Lease. Sublessor shall have the right to
terminate this Sublease effective on July 15, 2000 if Sublessee has been in
default under this Sublease more than two (2) times in any lease year (a lease
year being the 12 month period commencing on the Commencement Date and ending on
the day prior to each anniversary of the Commencement Date) as of the latest
date for Sublessor to exercise its extension option provided for in the Master
Lease.
4. RENT. Sublessee shall pay to Sublessor without deduction, set off, prior
notice or demand, as rent for the Sublease Premises, monthly rent ("Base Rent")
as set forth in the rent schedule below. Sublessee shall pay Sublessor upon the
execution hereof the sum of Fifty Five Thousand Six Hundred Seventy Seven
Dollars ($55,677.00) as rent for the month of October 15, 1996 - November 14,
1996, assuming this Sublease Agreement commences on October 15, 1996.
RENT SCHEDULE - OFFICE/UNIMPROVED SPACE
---------------------------------------
TIME PERIOD BASE RENT PER MONTH
----------- -------------------
Months 1-24 $1.21 per sq. ft./mo.
Months 25-46 $1.27 per sq. ft./mo.
Months 47-106 $1.35 per sq. ft./mo.
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RENT SCHEDULE - LABORATORY SPACE
--------------------------------
TIME PERIOD BASE RENT PER MONTH
----------- -------------------
Months 1-24 $3.00 per sq. ft./mo.
Months 25-46 $3.00 per sq. ft./mo.
Months 47-106 $2.25 per sq. ft./mo.
5. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon execution
hereof the sum of Fifty Five Thousand Six Hundred Seventy Seven Dollars
($55,677.00) as security for Sublessee's faithful performance of Sublessee's
obligations hereunder. If Sublessee defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain all or any part of the
Security Deposit for the payment of any Rent or other sum in default, for the
payment of any amount which Sublessor may expend or become obligated to expend
by reason of Sublessee's default, or to compensate Sublessor for any loss or
damage which Sublessor may suffer by reason of Sublessee's default. If any
portion of the Security Deposit is used or applied, Sublessee shall deposit with
Landlord, within ten (10) days after written demand therefor, cash in an amount
sufficient to restore the Security Deposit to its original amount. Landlord
shall not be required to keep the Security Deposit separate from its general
funds. If Sublessee performs all of its obligations hereunder, said deposit
shall be returned, without interest, to Sublessee within thirty (30) days after
expiration of term hereof.
6. USE.
a. PERMITTED USE. The Premises shall be used and occupied only for
laboratory, research and development, wet chemistry, biological laboratories,
related offices and uses which are ancillary thereto (including warehouse and
distribution of cosmetic products) and for no other purpose without the prior
written consent of Sublessor and Master Lessor.
b. NO REPRESENTATIONS OR WARRANTIES. Sublessee acknowledges that neither
Sublessor nor Sublessor's agents have made any representation or warranty as to
the suitability of the Sublease Premises for the conduct of Sublessee's
business.
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7. MASTER LEASE.
a. SUBLEASE IS SUBORDINATE TO MASTER LEASE. This sublease is subject and
subordinate to the Master Lease. Sublessee shall not commit or permit to be
committed on the Sublease Premises any act or omission which shall violate any
term or condition of the Master Lease. If the Master Lease terminates, this
Sublease shall terminate. Sublessor shall have no liability to Sublessee, if
the Master Lease terminates without fault of Sublessor.
b. APPLICATION OF MASTER LEASE PROVISIONS. Except as otherwise expressly
provided in this Sublease, Sublessee shall assume and perform the obligations of
the Sublessor as Lessee under the Master Lease. Therefore, except as otherwise
provided, for the purpose of this Sublease, wherever in the Master Lease
"Landlord" is used, it shall be deemed to mean the Sublessor herein, and
wherever in the Master Lease "Tenant" is used, it shall be deemed to mean the
Sublessee herein, and wherever in the Master Lease "Lease" is used, it shall be
deemed to mean this Sublease.
c. INCORPORATION OF MASTER LEASE PROVISIONS.
(1) All of the terms and conditions in the Master Lease are incorporated
herein EXCEPT for: Basic Lease Provisions; 1 (Premises); 3 (Term); 5 (Base
Rent); 8 (Tenant Improvements); 9.a. and 9.e. (Use of Premises); 10.c.
(Ownership of Alterations); 11.b. (Landlord's Ongoing Obligations); 11.c.
(Landlord's Delivery Obligations); 12 (Damage or Destruction); 13 (Eminent
Domain); 14.c. (Casualty Insurance); 15.e. (Payment on Sublet); 18 (Security
Deposit); 19 (Acceptance of Premises); 20 (Holding Over); 36 (Notices); 39.h.
(Entire Agreement); and Schedule A.
(2) Except as otherwise provided herein, Sublessor is responsible for
all financial obligations under the Master Lease. Whenever any provision of the
Master Lease has NOT been incorporated herein, except as otherwise provided, any
provision of the Addendum which pertains to a provision of the Master Lease
which has not been incorporated herein, shall NOT be incorporated herein. In
addition, Master Lease Addendum paragraph 25 (stated
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to pertain to paragraph 14.b, but really pertaining to paragraph 14.c.), Master
Lease Addendum paragraph 42 (pertaining to Master Lease paragraph 34) and Master
Lease Addendum paragraph 46 (pertaining to options to extend) shall not be
incorporated into this Sublease.
d. INDEMNITY. Sublessee shall hold Sublessor harmless of and from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorney's fees, arising out of Sublessee's failure to comply with or perform
Sublessee's obligations under this Sublease.
f. MASTER LEASE IN EFFECT. Sublessor represents to Sublessee that the
Master Lease is in full force and effect and that, to Sublessor's knowledge, no
default exists on the part of any party to the Master Lease. Subject to the
terms and provisions of this Sublease, Sublessor agrees to keep the Master Lease
in full force and effect during the term of this Sublease, subject, however, to
any earlier termination of the Master Lease without the default of Sublessor.
8. OPERATING EXPENSES. Sublessee shall pay as additional rent the
amounts for which Sublessor is liable to Master Lessor pursuant to paragraph 6
(Operating Expenses) of the Master Lease. When incorporated into this Sublease,
references to "Landlord" in paragraphs 6.b. and 6.c. of the Master Lease shall
be deemed to include Master Lessor and/or Sublessor. With respect to paragraph
6.e. as incorporated into this Sublease, Sublessor shall have 15 days following
receipt of Master Lessor's annual reconciliation within which to provide
Sublessor's reconciliation to Sublessee. As between Sublessor and Sublessee,
Sublessee shall only be liable for those Operating Expenses due by Sublessor to
Master Lessor under the Master Lease for calendar year 1996 in the same
proportion as the number of days remaining in calendar year 1996 from and after
the Commencement Date bears to 365 days.
9. ALTERATIONS. Notwithstanding the provisions of paragraph 10.a. of
the Master Lease, any alteration which requires Master Lessor's approval
pursuant to the Master Lease shall not be commenced by Sublessee unless and
until such consent is obtained.
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Any alteration made by Sublessee shall become a part of the Sublease Premises,
and at Sublessor's election, shall be surrendered to Sublessor at the end of
the Sublease term. Any alteration made by Sublessee shall, at Sublessor's
election become Sublessor's property throughout the Sublease term. In the
event Sublessor is (or becomes) obligated under the Master Lease to remove any
of Sublessee's alterations, Sublessee shall be obligated to remove same at
Sublessee's sole cost and expense and to restore the Premises to its condition
prior to the alteration.
10. REPAIRS. Pursuant to paragraph 11.b. of the Master Lease Master
Lessor is responsible to repair and maintain the roof, exterior walls,
foundation and HVAC system (including distribution ducts) (provided that the
cost of maintaining, repairing and replacing the HVAC system shall be included
in Operating Expenses, pursuant to the terms of Section 6 of the Master Lease),
unexposed portions of the building plumbing and electrical systems (except to
the extent installed or modified by Sublessor or Sublessee), the Common Areas,
and structural portions of the Building. Master Lessor also has the obligation
to repair certain categories of items as provided in paragraph 17 of the
Addendum to the Master Lease. Sublessor's sole obligation to Sublessee shall be
to request performance of such obligations by Master Lessor. In the event
Master Lessor breaches its obligations, Sublessor will assign to Sublessee its
right to enforce such obligation and shall otherwise cooperate with Sublessee in
connection therewith, provided, however, Sublessee, at its sole cost and
expense, shall be responsible for enforcement thereof without reimbursement from
Sublessor. Sublessee, not Master Lessor, shall be responsible for the repair of
the roof and structural portions of the Building to the extent the need for
maintenance or repair is caused in whole or in part by the act, neglect, fault
or omission of any duty of Sublessee, its agents, servants, contractors,
subcontractors, employees or invitees, in which case Sublessee shall pay to
Sublessor the cost of the maintenance and repairs caused in whole or in part by
Sublessee (except (i) to the extent the damage is covered by any insurance
maintained by Master Lessor, or, (ii) if Master Lessor fails to maintain the
insurance required to be maintained by Master Lessor pursuant to the terms of
the Master Lease, to the extent the damage would have been covered by insurance,
if Master Lessor had maintained the required
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insurance). There shall be no abatement of Rent and no liability of Master
Lessor or Sublessor by reason of any injury to or interference with Sublessee's
business arising from the making of any repairs, alterations or improvements in
or to the fixtures, appurtenances and equipment therein, provided that Sublessor
shall request Master Lessor to use reasonable efforts to minimize the
interruption of Sublessee's use and occupancy of the Premises in connection with
its performance of the repairs and maintenance (although nothing contained
herein shall be deemed to obligate Master Lessor to pay any overtime costs in
order to minimize such interference, or otherwise to perform the repairs or
maintenance during hours other than normal business hours).
11. INSURANCE.
a. Sublessee shall, at its sole cost and expense, obtain and
maintain in force a policy or policies of fire and property damage insurance
providing protection against those perils included within the classification of
"all risk" insurance from an insurance company or companies reasonably
satisfactory to Sublessor and Master Lessor and in a form reasonably
satisfactory to Sublessor and Master Lessor insuring the Tenant Improvements (as
defined in the Master Lease) and all other improvements, in an amount equal to
the full replacement cost thereof (which amount shall be subject to Sublessor's
and Master Lessor's approval). The insurance policy or policies shall name
Master Lessor and Sublessor and the lender's of either of them, if any, as
additional insureds and shall provide that the policy or policies may not be
cancelled on less than thirty (30) days prior written notice to Master Lessor,
Sublessor and the lenders of either of them. If Sublessee fails to carry the
insurance or to furnish Sublessor with copies of all the policies after a
request to do so, Sublessor shall have the right to obtain the insurance and
collect the costs thereof from Sublessee as additional rent.
b. In addition to the above referenced insurance, Sublessee shall
maintain liability insurance coverage as required by paragraph 14. of the Master
Lease which has been incorporated into this Sublease by reference. Each policy
of insurance which Sublessee is required to maintain pursuant to this Lease
shall name both Sublessor and Master Lessor as additional insureds
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(including cross-liability endorsements). Sublessee's insurance coverage shall
be primary and non-contributory as respects any insurance maintained by
Sublessor and/or Master Lessor. Tenant shall deliver evidence of the coverage
required hereunder (i) within seven (7) days after execution and delivery of
this Sublease by Sublessor and Sublessee and (ii) within ten (10) days of the
renewal date for each policy of insurance required hereunder.
c. Pursuant to the terms of the Master Lease as provided in
paragraph 25 of the Addendum thereto, Master Lessor is obligated to maintain
certain insurance coverage with respect to certain perils and to maintain a
certain level of liability coverage. Sublessor's sole obligation to Sublessee
with respect to Master Lessor's obligations pursuant to said paragraph 25 shall
be to request performance of such obligations by Master Lessor. In the event
Master Lessor breaches its obligations, Sublessor will assign to Sublessee its
right to enforce such obligation and shall otherwise cooperate with Sublessee in
connection therewith, provided, however, Sublessee, at its sole cost and
expense, shall be responsible for enforcement thereof without reimbursement from
Sublessor.
12. DAMAGE OR DESTRUCTION.
a. MASTER LESSOR HAS OBLIGATION TO RESTORE. If the Sublease
Premises are damaged or destroyed, Master Lessor has the obligation pursuant to
paragraph 12 of the Master Lease to promptly and diligently repair the Premises
unless Master Lessor has the right to terminate. If Master Lessor fails to
perform its obligations pursuant to paragraph 12 of the Master Lease,
Sublessor's sole obligation to Sublessee shall be to request performance of such
obligations by Master Lessor. In the event Master Lessor breaches its
obligations, Sublessor will assign to Sublessee its right to enforce such
obligation, provided, however, Sublessee, at its sole cost and expense, shall be
responsible for enforcement thereof without reimbursement from Sublessor.
b. TERMINATION OF MASTER LEASE. If the Master Lease terminates
pursuant to paragraph 12 of the Master Lease, this
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Sublease shall terminate concurrently with the termination of the Master Lease.
c. SUBLESSEE NOTICE; RIGHT TO TERMINATE. Within twenty (20) days
following written request from Sublessor, Sublessee shall give notice to
Sublessor in writing whether Sublessee agrees to continue this Sublease in
effect if Master Lessor reasonably determines that the repair of the Premises or
the Building cannot be completed within two hundred seventy (270) days after the
casualty. If Sublessee does not so agree to continue this Sublease in effect,
then Sublessor may elect to terminate the Master Lease and this Sublease. If
Sublessee agrees to continue this Sublease in effect as aforesaid, then
Sublessor shall have no right to exercise its right to terminate the Master
Lease or this Sublease. If (i) Master Lessor reasonably determines that the
repair of the Premises or the Building cannot be completed within two hundred
seventy (270) days after the casualty, (ii) neither Master Lessor nor Sublessor
have elected to terminate the Master Lease, and (iii) Sublessee agrees to
continue this Sublease in effect notwithstanding the time to reconstruct, then
this Sublease shall continue in effect, and Sublessee shall fulfill all of the
obligations of Sublessor pursuant to the provisions of paragraph 12 of the
Master Lease.
d. LIMITED OBLIGATION TO REPAIR. Master Lessor's obligation, should
Master Lessor elect or be obligated to repair or rebuild, shall be limited to
replacing/restoring the building shell and Building systems so that the Building
shell and Building systems as repaired and restored are comparable (in scope of
improvements) to the Building shell and building systems which were in existence
on the Master Lease Commencement Date. Master Lessor shall have no obligation
to replace or restore the Tenant Improvements or any other alterations installed
by Sublessor or Sublessee. If this Sublease has not been terminated, Sublessee
shall be obligated to (i) with respect to those portions of the Premises which
are damaged and were built-out for office use as of the Master Lease
Commencement Date, either: (A) promptly buildout those portions with new tenant
improvements approved by Master Lessor and Sublessor in accordance with EXHIBIT
D to the Master Lease, and spend an amount equal to or greater than the Building
Standard Improvements Allowance (defined below) on the build-out;
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(B) promptly build-out those portions with new tenant improvements approved by
Master Lessor and Sublessor in accordance with EXHIBIT D and spend an amount
less than the Building Standard Improvement Allowance (in which case promptly
upon completion of the Tenant Improvements, Sublessee shall pay to Sublessor
the difference between the amount spent by Sublessee for new tenant improvements
and the Building Standard Improvements Allowance); or (C) pay to Sublessor an
amount equal to the Building Standard Improvements Allowance multiplied by the
rentable square footage of the office space so affected; and (ii) with respect
to those portions of the Premises which are damaged, but were not built out for
office use as of the Commencement Date, either: (A) promptly construct new
tenant improvements approved by Master Lessor and Sublessor in accordance with
EXHIBIT D in the space so affected (and expend no less than the Tenant
Improvement Allowance for the improvements); (B) promptly construct new tenant
improvements approved by Master Lessor and Sublessor in accordance with EXHIBIT
D, in the space so affected, expending less than the Tenant Improvement
Allowance (in which case Tenant shall pay to Sublessor the difference between
the amount expended and the Tenant Improvement Allowance promptly upon
completion of the construction); or (C) pay to Sublessor an amount equal to the
Tenant Improvement Allowance applicable to the affected space. Any payment by
Tenant to Sublessor in accordance with subsections (i) (C) or (ii) (C) of the
preceding sentence must be made upon the earlier of ten (10) days following
Sublessee's receipt of insurance proceeds thereof, or ninety (90) days after the
occurrence of the damage or destruction, or Sublessee shall be deemed to have
elected to restore and rebuild the portions of the Premises which were damaged.
As used herein, the term "Building Standard Improvements Allowance" shall have
the meaning set forth in paragraph 12.c. of the Master Lease. Sublessee shall
at its sole cost and expense restore all improvements made by Sublessee.
e. ABATEMENT OF RENT. Rent under this Sublease shall abate to the
same extent as the Rent owing by Sublessor under the Master Lease abates.
f. DAMAGE NEAR END OF TERM. In addition to the rights to terminate
specified in subparagraph 12.c. of this Sublease, either Sublessor or Sublessee
shall have the right to cancel and
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terminate this Sublease as of the date of the occurrence of destruction or
damage if the Premises or the Building is substantially destroyed or damaged
(i.e., there is damage or destruction which Landlord determines would require
more than four (4) months to repair) and made untenantable during the last
twelve (12) months of the term of the Master Lease. Sublessor and Sublessee
shall give notice of its election to terminate this Sublease under this
subsection f. within thirty (30) days after Master Lessor or Sublessor
determines that the damage or destruction would require more than four (4)
months to repair. If either Master Lessor or Sublessor elect to terminate the
Master Lease pursuant to paragraph 12.e. of the Master Lease, this Sublease
shall terminate concurrently with the termination of the Master Lease. If
neither Master Lessor nor Sublessor terminates the Master Lease and if either
Sublessor or Sublessee elects to terminate this Sublease, the repair of the
damage shall be governed by subsections 12.c. or 12.e., as the case may be.
g. INSURANCE PROCEEDS. If this Sublease is terminated, Master
Lessor and Sublessor may each keep all their respective insurance proceeds
resulting from the damage except for those proceeds, if any, which specifically
insured Sublessee's personal property and trade fixtures which Sublessee has a
right or obligation to remove upon the expiration of the Sublease term.
Sublessor shall be entitled to receive from Sublessee the proceeds of insurance
carried by Sublessee with respect to Tenant Improvements or other alterations
installed in the Sublease Premises by Sublessor or at Sublessor's expense. To
the extent that Sublessee has paid for any alterations regardless of whether the
alterations may become the property of Sublessor upon termination of this
Sublease, Sublessee shall receive any portion of the insurance proceeds payable
with respect to the then unamortized cost (based on an 8 year, straight line,
amortization schedule) for the applicable alterations, reduced by the amounts
necessary to pay off any Equipment Lease or other lien against the applicable
alteration, and the balance of the proceeds, if any, will be payable to
Sublessor. With respect to those Alterations which Sublessee is obligated to
remove at the end of the Sublease term which are the property of Sublessee, all
proceeds shall be paid to Sublessee.
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h. UNINSURED CASUALTY. If the Master Lease terminates pursuant to
the provisions of paragraph 12.g. of the Master Lease, this Sublease shall
terminate. Sublessor shall have no obligation to deposit funds with Master
Lessor pursuant to said paragraph 12.g.; provided, however, if Sublessor and
Sublessee have so agreed that Sublessee will provide the funds for deposit with
Master Lessor in that amount which Sublessor is permitted to contribute to
repairs in order to keep the Master Lease from terminating pursuant to paragraph
12.g., then upon Sublessee providing such funds, this Sublease shall continue in
effect.
13. EMINENT DOMAIN. If all or any part of the premises is taken for
public or quasi-public use by a governmental authority under the power of
eminent domain or is conveyed to a governmental authority in lieu of such
taking, and if the taking or conveyance causes the remaining part of the
Premises to be untenantable and inadequate for use by Sublessee for the purpose
for which they were leased, then Sublessee, at its option and by giving notice
within fifteen (15) days after the taking, may terminate this Sublease as of the
date Sublessee is required to surrender possession of the Premises. If a part
of the Premises is taken or conveyed but the remaining part is tenantable and
adequate for Sublessee's use, then this Sublease shall be terminated as to the
part taken or conveyed as of the date Sublessee surrenders possession; Master
Lessor is obligated, at no cost or expenses to Sublessor or Sublessee, to
restore the Premises (other than any Tenant Improvements) to a complete
architectural unit of a design comparable to the design of the Premises (other
than any Tenant Improvements or alterations) immediately prior to the
condemnation, and the Rent shall be reduced based on any decrease in use to
Sublessee of the Premises. All compensation awarded for the taking or
conveyance shall be the property of Master Lessor and Sublessor, as there
interests may appear, and Sublessee hereby assigns to Sublessor all its right,
title and interest in and to the award, unless the governmental authority makes
only one (1) award, and the award contains compensation for the value of moving
expenses, Sublessee's personal property, trade fixtures and alterations
(including the Tenant Improvements), in which case, subject to the rights of any
mortgagee or beneficiary of a deed of trust holding a lien on the Property,
Sublessee shall be entitled to the compensation paid for Sublessee's moving
expenses, trade
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fixtures, personal property and the portion of the award attributable to the
then unamortized cost of alterations and improvements constructed at Sublessee's
expense (which are to be amortized on a straight line basis over the initial
term of the Sublease). Sublessee shall have the right, however, to recover
from the governmental authority, but not from Sublessor or Master Lessor, except
as provided in the preceding sentence, such compensation as may be awarded to
Sublessee on account of the interruption of Sublessee's business, moving and
relocation expenses and removal of Sublessee's trade fixtures and personal
property.
14. ASSIGNMENT AND SUBLETTING. Notwithstanding any provision of this
Sublease to the contrary, if Sublessor consents to a sublet, Sublessee shall pay
to Sublessor on a monthly basis as additional Rent, on the date Base Rent is
due, an amount equal to fifty percent (50%) of the amount by which the rent
payable to Sublessee ("Subrent") under the sublease exceeds the rent due for the
applicable portion of the Premises after deducting from the Subrent (A) the
reasonable out-of pocket costs incurred by Sublessee for brokerage commissions
and tenant concessions (which concessions are not reflected in the reduced
Subrent) and (B) the costs of any additional improvements constructed by
Sublessee in connection with the sublease (amortized on a straight line basis
over the term of the sublease).
15. ACCESS TO PREMISES. Master Lessor shall have the same right of access
to the Premises as Sublessor.
16. SURRENDER AT END OF TERM. Sublessee shall surrender the Premises to
Sublessor in its condition as of the Commencement Date, except for any
alterations Sublessee is not required to remove, normal wear and tear, acts of
God, damage, destruction (except to the extent Sublessee is obligated to restore
the same under paragraph 12 of this Sublease) and eminent domain covered by the
provisions of this Sublease. Sublessee shall remove from the premises all of
Sublessee's personal property and trade fixtures and any alterations and
improvements Sublessee is required to remove, and shall repair all damage caused
by the removal. Sublessee shall indemnify Sublessor against all loss or
liability resulting from delay by Sublessee in so surrendering the Premises,
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including without limitation, any claims made by any succeeding tenant, losses
to Sublessor due to lost opportunities to lease to a succeeding tenant, and
attorneys' fees and costs. Sublessee shall have no obligation to remove any
fixtures, Alterations or personal property placed or installed in the Premises
prior to the Commencement Date hereof.
17. PHASE I ENVIRONMENTAL REPORT; SUBLESSOR INDEMNITY RE: HAZARDOUS
MATERIALS.
a. Sublessee may, at its own expense, obtain a Phase I environmental
investigation report with respect to the Premises. Sublessor will endeavor to
obtain and provide to Sublessee copies of environmental investigation reports
referred to in paragraph 9.e. of the Master Lease.
b. Sublessor shall indemnify, defend and hold Sublessee harmless
from and against any claim, damage, loss, liability, cost or expense (including
reasonable attorneys' fees) arising out of any spill or release of any Hazardous
Materials (as defined in paragraph 9.d. of the Master Lease which has been
incorporated by reference into this Sublease) on or about the Premises by
Sublessor, its employees, agents or contractors during the period of time
Sublessor or Khepri Pharmaceuticals, Inc. have occupied the Premises.
c. Sublessor is entitled to indemnification from the Master Lessor
as provided in paragraph 9.e. of the Master Lease. To the extent such
indemnification may redound to the benefit of Sublessee, Sublessor agrees to
cooperate with Sublessee to enforce such indemnity obligation against Master
Lessor; provided, however, Sublessee shall pay any and all costs incurred by
Sublessor or Sublessee in connection with the enforcement thereof for the
benefit of Sublessee.
18. SIGNS. Master Lessor shall have the same approval rights with respect
to signs as Sublessor.
19. HOLDING OVER. This Sublease shall terminate without further notice at
the expiration of the Sublease term. Any holding over by Sublessee after
expiration or sooner termination of this Lease
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without the consent of Sublessor shall be construed to be a tenancy at
sufferance. Rent for the Premises during any tenancy at sufferance, or if
Sublessor shall have consented to Sublessee's holding over, shall be at a rate
equal to 150% of the Base Rent for the last month of the term, and shall
otherwise be on the terms and conditions herein specified insofar as applicable,
including, without limitation, those providing for Additional Rent.
20. BROKERS. For purposes of paragraph 29 of the Master Lease as
incorporated into this Sublease, Cornish & Carry Commercial-Oncor International
is the only broker to whom a commission is owing, which commission shall be paid
by Sublessor.
21. NOTICES. All notices or demands of any kind required to be given by
Sublessor or Sublessee hereunder shall be in writing and shall be deemed
delivered forty-eight (48) hours after depositing the notice or demand in the
United States Mail, certified or registered, postage prepaid, addressed to the
Sublessor or Sublessee respectively at the addresses set forth after their
signatures at the end of this Sublease. All rent and other payments due under
this Sublease or the Master Lease shall be made by Sublessee to Sublessor at the
same address.
22. CONSENT OF MASTER LESSOR. This Sublease is contingent upon Sublessor
obtaining the consent of the Master Lessor.
IN WITNESS WHEREOF, the undersigned have executed this Sublease as of the
dates set forth below.
SUBLESSOR:
ARRIS PHARMACEUTICAL CORPORATION,
a Delaware corporation
By: /s/ Daniel H. Petree
----------------------------
Its: Exec. V.P. Date
---------------------------- ------------
385 Oyster Point Blvd., Suite 3
16
South San Francisco, CA 94080
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SUBLESSEE:
FIBROGEN, INC.,
a Delaware corporation
By: /s/ Thomas B. Neff Date 23 Aug 96
---------------------------- -----------------
Thomas B. Neff, President
260 Littlefield Avenue, Suite A
South San Francisco, CA 94080
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EXHIBIT "A"
THE FOLLOWING FIXTURES AND EQUIPMENT SHALL REMAIN WITH THE PREMISES AND SHALL BE
SURRENDERED BY SUBLESSEE AT THE EXPIRATION OR EARLIER TERMINATION OF THE
SUBLEASE:
Portable Class 100 Clean Rooms (2)
Chemilox Boiler
Chemical Fume Hoods (6)
Cold Room
DI Water System with R/O module
Generator
Casework
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