<PAGE>
EXHIBIT 2.10
REAL ESTATE MATTERS AGREEMENT
This Real Estate Matters Agreement (the "Agreement") is entered into as of
the 15/th/ day of December, 2000 by and between Catalytica, Inc., a Delaware
corporation ("Catalytica") and Catalytica Energy Systems, Inc., a Delaware
corporation, formerly known as Catalytica Combustion Systems, Inc., ("CESI").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Plan of Merger.
RECITALS
WHEREAS, Catalytica, Synotex Company, Inc., a Delaware corporation
("Synotex") and Synotex Acquisition Corporation, a Delaware corporation ("Merger
Sub"), have entered into that certain Agreement and Plan of Merger dated as of
August 2, 2000 pursuant to which, subject to the terms and conditions thereof,
Merger Sub will be merged with and into Catalytica, the separate existence of
Merger Sub shall cease and Catalytica shall continue as the surviving
corporation under the name DSM Catalytica Pharmaceuticals, Inc. (the "Plan of
Merger").
WHEREAS, as a part of the Plan of Merger, CESI shall be spun-out of
Catalytica and become a wholly separate public company.
WHEREAS, the parties desire to set forth certain agreements regarding the
real property located at 430 Ferguson Drive, Mountain View, California (the
"Demised Premises"); including that (i) the lease for the Demised Premises shall
be assigned to CESI by Catalytica; (ii) CESI shall enter into a space sharing
agreement with Catalytica; (iii) the necessary consents from the landlord under
the lease shall be obtained; and (iv) certain transfers of personal property
shall occur between CESI and Catalytica on the terms and conditions contained in
this Agreement.
NOW THEREFORE, in consideration of the mutual promises and agreements
herein set forth, Catalytica and CESI, intending to be legally bound, hereby
agree as follows:
ARTICLE I
1.1 Assignment. Catalytica has assigned to CESI and CESI has accepted all
----------
of Catalytica's interest in, and assumed certain liabilities of Catalytica under
that certain lease for the Demised Premises entered into as of January 1, 1993,
as amended by that certain First Addendum to Lease dated October 23, 1997 and
that certain Second Addendum to Lease dated June 29, 1998, by and between Jack
Dymond Associates as lessor and Catalytica as lessee (the "Assignment"). A copy
of the executed Assignment of Lease is attached hereto as Exhibit A.
---------
1.2 Consent to Assignment. Jack Dymond Associates has agreed and consented
---------------------
to the Assignment. A copy of Jack Dymond Associates' signed consent is attached
as Exhibit B.
---------
1.3 Space Sharing Agreement. CESI shall grant to Catalytica the right to
-----------------------
occupy a portion of the Demised Premises and Catalytica shall accept the same,
pursuant to that certain Space
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<PAGE>
Sharing Agreement by and between CESI and Catalytica, the form of which is
attached hereto as Exhibit C.
---------
1.4 Consent to Space Sharing. Jack Dymond Associates has agreed and
------------------------
consented to the Space Sharing Agreement. A copy of Jack Dymond Associates'
signed consent is attached as Exhibit D.
---------
1.5 Transfer of Assets. Catalytica and CESI agree to transfer the
------------------
personal property identified on Exhibit E attached on the terms and conditions
---------
of the Bill of Sale attached as Exhibit E.
---------
ARTICLE II
2.1 This Agreement shall constitute the entire Agreement between the
parties with respect to the subject matter hereof and supersede all previous
communications, representations, understandings and agreements, either written
or oral, among the parties.
2.2 If any provision of this Agreement shall be held to be invalid and
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby and each provision shall be valid and shall be enforced to the
highest extent permitted by law.
2.3 This Agreement shall be modified only by an instrument in writing
executed by duly authorized representatives of the parties thereto.
2.4 This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
agreement. A signature received by facsimile shall be deemed an original for
the purposes of this Agreement.
2.5 This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
[signatures appear on next page]
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year set forth above.
CATALYTICA, INC.
By: /s/ Lawrence W. Briscoe
----------------------------------
Name: Lawrence W. Briscoe
--------------------------------
Title: Chief Financial Officer
-------------------------------
CATALYTICA ENERGY SYSTEMS, INC.
By: /s/ Lawrence W. Briscoe
----------------------------------
Name: Lawrence W. Briscoe
--------------------------------
Title: Secrectary
-------------------------------
Signature Page to Real Estate Matters Agreement
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<PAGE>
BILL OF SALE
------------
For good and valuable consideration the receipt of which is hereby
acknowledged, Catalytica, Inc., a Delaware corporation ("Seller"), does hereby
sell, transfer, and convey to Catalytica Energy Systems, Inc., a Delaware
corporation, or its designated assignee ("Buyer"), all of Seller's rights,
title, interests and claims whatever in the personal property identified on
Schedule 1 attached hereto ("Personal Property").
----------
SELLER:
Catalytica, Inc.,
a Delaware corporation
By: /s/ Lawrence W. Briscoe
--------------------------------
Its: Chief Financial Officer
-------------------------------
DATED this 15th day of December, 2000.
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<PAGE>
EXHIBIT A
---------
ASSIGNMENT OF LEASE
<PAGE>
ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE shall be effective as of December 15, 2000 (the
"Effective Date") and is made by and between CATALYTICA, INC., a Delaware
corporation ("Assignor"), and CATALYTICA ENERGY SYSTEMS, INC., a Delaware
corporation ("Assignee").
This Assignment is made with reference to the following facts and
circumstances:
A. JACK DYMOND ASSOCIATES, a California general partnership, as lessor
("Lessor"), and Assignor, as Lessee, entered that certain Lease dated as of
January 1, 1993 as amended by that certain First Addendum to Lease dated October
23, 1997 and further amended by that certain Second Addendum to Lease dated as
of June 28, 1998 (collectively the "Lease"), whereby Lessor leased to Assignor
those certain premises (the "Demised Premises") described as 430 Ferguson Drive,
Mountain View, California.
B. Assignor desires to assign to Assignee all of Assignor's right, title
and interest in, under and to the Lease, and Assignee desires to accept such
assignment.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:
1. Assignment: Assignor hereby assigns, transfers and conveys to
----------
Assignee, and Assignee hereby accepts, as of the Effective Date, all of
Assignor's right, title and interest in, under and to the Lease and the Demised
Premises. Also effective as of the Effective Date, Assignee accepts this
assignment and assumes and agrees to keep, perform and fulfill, as a direct
obligation to Lessor and for the benefit of Assignor, all of the terms,
covenants, conditions and obligations required to be kept, performed and
fulfilled by the Lessee under the Lease from and after the Effective Date,
including, without limitation, the making of all payments due to, or payable on
behalf of, Lessor under the Lease which may become due and payable on or after
the Effective Date and the performance of all repair, maintenance and
restoration obligations of Lessee with respect to the Demised Premises from and
after the Effective Date.
2. Assignee's Indemnity: Assignee shall indemnify, defend, protect
--------------------
and hold harmless Assignor from and against any and all expenses, costs,
liabilities, and obligations of any nature, including reasonable attorneys'
fees, (whether accrued, absolute, contingent or otherwise) arising from or
relating to (i) the Demised Premises and/or the Lease that accrue on or after
the Effective Date, (ii) any event or condition that occurs or exists on or with
respect to the Lease and/or the Demised Premises on or after the Effective Date,
and (iii) Assignee's breach of any obligations on Assignee's part to be
performed under the Lease or this Assignment. The provisions of this paragraph
shall survive the expiration or termination of the Lease and this Assignment.
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<PAGE>
3. Miscellaneous: Assignor and Assignee shall execute and deliver
-------------
such additional documents and take such additional actions as either may
reasonably request to carry out the purposes of this Assignment. This Assignment
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, successors and assigns. If either party brings an action
or legal proceeding with respect to this Assignment, the prevailing party shall
be entitled to recover its reasonable attorneys' fees and costs. All captions
contained in this Assignment are for convenience of reference only and shall not
affect the construction of this Assignment. This Assignment may be executed in
one or more counterparts, each of which shall be an original, but all of which,
taken together, shall constitute one and the same Assignment. If any one or more
of the provisions of this Assignment shall be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
[Signatures on Next Page]
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<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
intending it to be effective as of the Effective Date.
ASSIGNOR:
CATALYTICA, INC.,
a Delaware corporation
By: /s/ Lawrence W. Briscoe
-----------------------------
Title: Chief Financial Officer
-------------------------
Date: December 15, 2000
---------------------------
ASSIGNEE:
CATALYTICA ENERGY SYSTEMS, INC.,
a Delaware corporation
By: /s/ Craig N. Kitchen
-----------------------------
Title: President and Chief Executive Officer
--------------------------------------
Date: December 15, 2000
---------------------------
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<PAGE>
EXHIBIT B
---------
CONSENT OF LANDLORD
<PAGE>
[LETTERHEAD OF CATALYTICA]
September 13, 2000
Mr. Ronald Meredith
Property Manager
Jack Dymond Associates
450 First St.
Los Altos, CA 94022
RE: Lease ("Lease") by and between Jack Dymond Associates ("Lessor") and
Catalytica, Inc. ("Catalytica") for Premises located at 430 Ferguson
Drive, Mountain View, CA ("Premises")
Dear Ron:
Catalytica is requesting to assign the existing Lease to its subsidiary,
Catalytica Combustion Systems, Inc. ("CCSI"), under the terms of the Assignment
Agreement attached to this letter. The assignment is occurring as part of a
transaction in which Catalytica may spin-off CCSI as a new entirely separate
public company (the assignment and potential spin-off collectively called the
"Assignment"). The use of the Premises by CCSI will remain unchanged after the
Assignment, and, as required by the Lease, Catalytica will continue to remain
secondarily liable for the obligations of "Lessee" under the Lease after the
Assignment.
Under Article 14 of the Lease, the consent to the Assignment may require
Lessor's consent. I am requesting by this letter that you review the attached
Assignment Agreement, agree that this notice is sufficient to satisfy all of the
requirements of Article 14 of the Lease regarding the Assignment, and consent to
the Assignment as proposed in this letter and the attached Assignment Agreement
by signing the acknowledgement below.
Thank you very much for your cooperation. If you have any questions
regarding this matter, please do not hesitate to call me.
Sincerely,
/s/ Bill Kerba
Bill Kerba
Facilities Director & E.H.&S.
Jack Dymond Associates hereby consents to the assignment of the Lease as set
forth above:
JACK DYMOND ASSOCIATES
By: /s/ Betty [Illegible]
---------------------------
Its: Partner
--------------------------
<PAGE>
EXHIBIT C
---------
SPACE SHARING AGREEMENT
<PAGE>
EXECUTION COPY
--------------
SPACE SHARING AGREEMENT
THIS SPACE SHARING AGREEMENT (this "Agreement") is dated as of December
15, 2000, and is made by and between Catalytica Energy Systems, Inc., a Delaware
corporation formerly known as Catalytica Combustion Systems, Inc. ("CESI"), and
Catalytica, Inc. a Delaware corporation ("Catalytica"). CESI and Catalytica
agree as follows:
RECITALS:
--------
A. Jack Dymond Associates, a California general partnership ("Master
Lessor") and Catalytica entered into a Lease dated January 1, 1993 ("Lease"),
respecting certain premises (the "Demised Premises") located at 430 Ferguson
Drive, Mountain View, California, as amended by that certain First Addendum to
Lease dated October 23, 1997 ("First Addendum"), that certain Second Addendum to
Lease dated June 29, 1998 ("Second Addendum") and, together with the Lease, the
First Addendum and the Second Addendum, the "Master Lease"), and that certain
consent letter by Master Lessor and Catalytica dated September 13, 200O. Terms
not otherwise defined herein shall have the same meaning as in the Master Lease.
B. Catalytica assigned its interest in the Master Lease to CESI pursuant
to that certain Assignment of Lease dated September 13, 200O (the "Assignment
Agreement"). A copy of all of the documents constituting the Master Lease and
the Assignment Agreement are attached hereto as Exhibit A. CESI agrees to
---------
sublease and demise to Catalytica and Catalytica agrees to sublease and demise
from CESI that portion of the Demised Premises depicted on Exhibit B to this
---------
Agreement ("Final Occupancy Premises").
C. The parties to this Agreement acknowledge that, as of the date of this
Agreement, they are affiliates and have each occupied a portion of the Demised
Premises. The purpose of this Agreement is to provide for a division of the
space currently occupied by the parties and to identify procedures that shall
apply between the parties regarding the Demised Premises when they are no longer
affiliates.
AGREEMENT:
---------
1. Occupancy Premises: Subject to the terms and conditions set forth
------------------
herein, CESI subleases and demises to Catalytica, and Catalytica hires and
subleases from CESI, the Final Occupancy Premises consisting of 10,910 square
feet of laboratory space ("Lab Space") and 10,310 square feet of office space
("Office Space") shown on Exhibit B. Catalytica shall also be permitted to use
---------
the parking areas associated with the Final Occupancy Premises on a non-
exclusive basis. Catalytica acknowledges that on the Commencement Date (defined
below), it shall occupy only a portion of the Final Occupancy Premises as
identified on Exhibit C (the "Initial Occupancy Premises"). From and including
---------
the Commencement Date to and excluding the date upon which CESI provides to
Catalytica the Remainder Space (as defined below), references to the Final
Occupancy Premises shall mean only the Initial Occupancy Premises for
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<PAGE>
purposes of this Agreement, including the calculation of Base Rent (as defined
in paragraph 6). CESI will provide to Catalytica the remainder of the Final
Occupancy Premises (the "Remainder Space") within six (6) months following the
Commencement Date. The parties acknowledge that CESI will use its reasonable
best efforts to deliver portions of the Remainder Space to Catalytica as rapidly
as reasonably practicable. Upon delivery of any of the Remainder Space by CESI
to Catalytica, such space shall be deemed a portion of the Final Occupancy
Premises for the purposes of this Agreement, including the calculation of Base
Rent (as defined in paragraph 6).
2. Use: The Final Occupancy Premises shall be used for the uses permitted
---
by applicable law and by Sections 5.01 and 5.02 of the Lease and for no other
purpose without Master Lessor's and CESI's prior written consent. CESI and
Catalytica expressly acknowledge that any use as a biological laboratory is
expressly subject to Catalytica obtaining all required permits and licenses
relative to the activities Catalytica proposes to conduct on the Demised
Premises.
3. Term: The initial term ("Term") of this Agreement shall commence on
----
December 15, 2000 ("Commencement Date"), and shall terminate on the earliest to
occur of: (a) December 31, 2003, (b) the date this Agreement is sooner
terminated pursuant to its terms, or (c) the date the Master Lease is sooner
terminated pursuant to its terms. This Agreement may be extended beyond the
Term, for such period as the parties shall agree, in accordance with Section 15
of this Agreement.
4. Condition of Premises: CESI makes no representations or warranties of
---------------------
any kind or nature, express or implied, with respect to the condition or fitness
for use of the Final Occupancy Premises and, except as expressly provided
elsewhere in this Agreement, Catalytica accepts the Final Occupancy Premises "as
is"; provided that CESI equipment, if any, will be removed from the Final
Occupancy Premises prior to delivery of the Remainder Space (pursuant to
Paragraph 1) in an orderly manner without damage to such Final Occupancy
Premises.
5. Separation and Delivery of Premises: Catalytica acknowledges that the
-----------------------------------
Final Occupancy Premises are not separated by a demising wall from the remainder
of the building of which the Final Occupancy Premises forms a part, and
equipment and other improvements will have to be moved in order to accommodate
Catalytica in the Final Occupancy Premises. Catalytica and CESI agree that CESI
shall perform the improvements and that the parties shall in good faith
determine the appropriate method for moving equipment in accordance with a plan
mutually agreed to by CESI and Catalytica. Such improvements shall be subject to
the consent of Master Lessor and CESI on the terms and conditions set forth in
this Agreement (and the Master Lease as incorporated into this Agreement). CESI
shall pay for the removal and relocation of CESI equipment from the Final
Occupancy Premises to another location. Catalytica shall pay all costs
associated with the demolition of improvements in, and restoration or other
improvement of the Final Occupancy Premises (including, for example, the
demolition of the analytical lab space in the Final Occupancy Premises, and any
removal or relocation of fume hoods in the Final Occupancy Premises) in
accordance with the terms and conditions for installation of Alterations as set
forth in Section 8 hereof. Except as otherwise set forth in the previous
sentence, the parties each party shall bear its own costs associated with the
moving of equipment and of related activities.
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<PAGE>
6. Rent:
----
(a) Base Rent. During the first year of the Term, Catalytica shall
---------
pay to CESI as base monthly rent ("Base Rent") $2.90 per square foot for the
Office Space (at a rate of $.88 per square foot for monthly rent under the
Master Lease (the "Monthly Rent Amount") and $2.02 per square foot for costs for
Included Services as defined in Paragraph 6(c) below) and $6.50 per square foot
for the Lab Space (at a rate of $.88 per square foot for monthly rent under the
Master Lease and $5.62 per square foot for costs for Included Services as
defined in Paragraph 6(c) below), for a total monthly Base Rent upon delivery by
CESI of full occupancy of the Final Occupancy Premises of ($100,292.00). The
parties acknowledge pursuant to Paragraph 1 above that until full occupancy of
Final Occupancy Premises is delivered, Catalytica shall only pay Base Rent on
those portions of the Final Occupancy Premises delivered by CESI for occupancy
by Catalytica. The details associated with the calculation of the foregoing
amounts, including the categories for particular charges paid by CESI, are
attached hereto as Exhibit E, which is incorporated herein by reference. On the
---------
first anniversary of the Term, CESI shall have the right to increase the
portions of the Base Rent representing the Included Services by up to ten
percent (10%) based on the increase in the cost to CESI of such Included
Services during the first year of the Term, as reasonably determined by CESI. On
the second anniversary of the Term, CESI shall have the right to increase the
portions of the Base Rent representing the Included Services by up to ten
percent (10%) over those costs charged during the second year of the Term based
on CESI's reasonable determination of the increase in the cost to CESI of such
Included Services during the second year of the Term. Catalytica shall have the
right to receive reasonable substantiation of such increased costs under this
Section 6(a) and Section 6(c).
Base Rent and Additional Rent (as defined in subparagraph 6(b) hereof),
except as otherwise set forth in subparagraph 6(b) hereof, shall be paid to CESI
on or before the first (1st) day of each month during the Term. Base Rent and
Additional Rent (as defined in subsection (c) below) (collectively, "Rent") for
any period during the Term hereof which is for less than one month of the Term
shall be a pro rata portion of the monthly installment based on the actual
number of days in such month and on the actual portion of the Final Occupancy
Premises actually delivered for each such day. Rent shall be payable without
notice or demand and without any deduction, offset, or abatement except as
expressly set forth herein, in lawful money of the United States of America.
Rent shall be paid directly to CESI at 430 Ferguson Drive, Mountain View,
California 94043, Attention: Accounts Receivable, or such other address as may
be designated in writing by CESI. At least thirty (30) days prior to the
applicable anniversary of the Term, CESI shall advise Catalytica in writing of
CESI's determination of the change in the Included Services (as defined in
Paragraph 6(c)) and the Base Rent. Unless Catalytica advises CESI within twenty
(20) days of Catalytica's receipt of such notice that Catalytica desires an
audit of such calculation, such determination shall be final. If Catalytica
requests an audit, the parties shall cooperate and shall expedite the completion
of such audit and shall in good faith reach agreement on the new Base Rent.
Until agreement is reached, Catalytica shall pay the new Base Rent determined by
CESI; after the mutually acceptable Base Rent is determined, the parties shall
make a retroactive adjustment, to account for the difference in the amount paid
by Catalytica and the amount of the new Base Rent.
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<PAGE>
(b) Additional Rent. All monies other than Base Rent required to be
---------------
paid by Catalytica under this Agreement with respect to the Final Occupancy
Premises shall be deemed additional rent ("Additional Rent"). Catalytica shall
pay such amounts of Additional Rent to CESI no later than ten (10) business days
after written demand therefor by CESI.
(c) Services. CESI agrees to provide and to include the costs of the
--------
following services as part of the Base Rent ("Included Services"), in the same
amount, type and quality as were provided to the Final Occupancy Premises prior
to the Commencement Date: (i) electricity, gas, sewer, janitorial and garbage
services; (ii) office supplies; (iii) photocopiers; (iv) hazardous waste
management services (excluding disposal costs which will be billed directly to
Catalytica); (v) shipping and receiving services; (vi) security (including
security badge issuance) and fire systems; (vii) repair and maintenance of the
Final Occupancy Premises (excluding, however, Catalytica's personal property in
the Final Occupancy Premises, the heating and cooling units used for
Catalytica's laboratory equipment located on the pad outside the building, and
any damage to the Final Occupancy Premises caused by Catalytica other than
ordinary wear and tear); "real property taxes" and payments to Master Lessor to
reimburse Master Lessor for Master Lessor's insurance obligations under the
Master Lease; (viii) telephone services (provided, however, CESI shall have the
right to charge Catalytica the costs for use of any T-l lines between the Final
Occupancy Premises and any other location); and (ix) reception services. CESI
shall not be obligated to provide the Included Services in an amount or type not
summarized on Exhibit E hereof. The parties acknowledge that the precise level
---------
of services to Catalytica hereunder will not be capable of final resolution
until Catalytica has fully occupied the Final Occupancy Premises. The level of
services shall reflect the allocations made pursuant to Exhibit E. CESI shall
---------
have the right to charge Catalytica separately for any services provided in
excess of the amounts allocated for each of such items as reflected in Exhibit E
---------
or the applicable revision thereof. The parties agree to evaluate from time to
time the levels of services provided to Catalytica and to adjust the charges for
Individual Services, and thus Base Rent, accordingly, notwithstanding section
6(a) or any other part of this section 6 (c).
7. CESI Obligations:
----------------
(a) CESI is receiving payments from Catalytica that CESI will in turn
pay to third parties, including the Master Lessor. CESI agrees to pay Master
Lessor and applicable third parties for the services covered by this Agreement
for which payments are made hereunder by Catalytica.
(b) Catalytica shall be entitled to receive all services and repairs
to be provided by Master Lessor under the Master Lease. Notwithstanding the
foregoing, if Master Lessor shall fail or refuse to perform the repairs and to
provide the services required by the Master Lease with respect to the Final
Occupancy Premises, Catalytica agrees to look solely to Master Lessor for its
remedies. CESI shall have no obligation or liability to Catalytica in respect of
any default by CESI under this Agreement which results from or corresponds to
any default by Master Lessor under the Master Lease (but CESI shall exercise
such efforts to cause Master Lessor to cure such default as CESI would exercise
on its own behalf with respect to space occupied by CESI, provided that CESI
--------
shall not be required to incur any unreimbursed expenses or perform any legal
services for which it is not appropriately compensated.)
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<PAGE>
(c) CESI represents that with respect to the period of time between
the date it was assigned the Master Lease and the date of this Agreement: (i) to
the best of CESI's knowledge, CESI is not in default with respect to any
obligation of CESI (as tenant) under the Master Lease, (ii) the Master Lease is
in full force and effect, and no notices of default under the Master Lease have
been sent or received by CESI, and (iii) the Master Lease has not been amended
or modified other than pursuant to the First Addendum and the Second Addendum.
8. Surrender and Alterations: Catalytica shall not be permitted to make
-------------------------
any leasehold improvements ("Alterations") to the Final Occupancy Premises
without the advance written consent of Master Lessor (pursuant to the terms of
the Master Lease) and CESI (which consent shall not be unreasonably withheld);
provided, that, at Catalytica's option and upon Catalytica's request, CESI shall
perform the Alterations for Catalytica at Catalytica's cost and expense plus an
additional ten percent (10%) administrative charge. Catalytica shall provide
CESI notice of its desire to install Alterations, and the parties shall
cooperate and use reasonable commercial efforts to complete the Alterations as
soon as reasonably practicable. CESI's consent to an Alteration shall not be
unreasonably withheld or delayed and as a condition to giving such consent, CESI
may require that such Alteration be removed at the end of the Agreement Term;
provided, however, that a failure to condition the performance of an Alteration
-------- -------
on a requirement that it be removed at the end of the Term shall not preclude
CESI from requiring such removal at the end of the Term, as may be extended,
unless CESI agrees in writing not to require such removal. If Master Lessor or
CESI does not consent to the surrender of such Alterations at the expiration or
earlier termination of the Term, then prior to expiration or earlier termination
of this Agreement, Catalytica shall remove from the Final Occupancy Premises, at
Catalytica's sole cost and expense, such Alterations, along with all of its
trade fixtures and personal property, and shall surrender the Final Occupancy
Premises to CESI in good condition and repair, free of Hazardous Materials
(defined below) brought on to the Final Occupancy Premises by Catalytica, its
agents, employees, subtenants or invitees or otherwise resulting from Catalytica
Contamination (defined below), reasonable wear and tear, casualties and
condemnation, excepted. In addition, Catalytica shall be required (if required
by the Master Lessor) to remove, at its sole cost and expense, those
improvements identified on Exhibit D. If the Final Occupancy Premises are not
---------
surrendered in accordance with the terms of this Paragraph 8, then Catalytica
shall be liable to CESI for all reasonable costs incurred by CESI (including any
charges by Master Lessor under the Master Lease) in returning the Final
Occupancy Premises to such required condition, plus interest thereon at the
lesser of ten percent (10%) per annum or the maximum rate allowable by law for
the period between surrender and payment.
9. Holdover: If Catalytica remains in possession of the Final Occupancy
--------
Premises after the expiration or earlier termination of this Agreement,
Catalytica's continued possession shall be a month to month tenancy. CESI and
Catalytica shall continue to comply with and perform all the terms and
obligations of this Agreement. Unless CESI consents in writing to such holdover,
Catalytica shall pay Base Rent equal to one hundred and fifty percent (150%) of
all Base Rent payable at the rate in effect immediately preceding the
termination of this Agreement and shall also pay all Additional Rent. Catalytica
shall also indemnify, protect, defend and hold harmless CESI, its officers,
directors, employees, agents and assigns, from and against all loss and
liability to CESI (and each of them) resulting from Catalytica's holding over.
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<PAGE>
Notwithstanding the foregoing, Catalytica shall have no obligation to CESI if
the holding over by Catalytica is a direct result of a breach by CESI of this
Agreement, or the Master Lease, and in such event CESI shall hold Catalytica
harmless from all costs and expenses associated with CESI's breach.
(a) Quiet Enjoyment. So long as Catalytica pays all of the Base Rent
---------------
and Additional Rent due hereunder and performs all of Catalytica's other
obligations hereunder, CESI shall do nothing to impair Catalytica's right to
peaceably and quietly have, hold and enjoy the Occupancy Premises. CESI warrants
that CESI has not entered into any agreements since the Master Lease was
assigned to CESI giving any other person or entity the right to lease the Final
Occupancy Premises.
10. Other Agreement Terms:
---------------------
(a) Incorporation By Reference. Except as inapplicable to, otherwise
--------------------------
provided in or modified by this Agreement, the terms, provisions and conditions
contained in the Master Lease are incorporated herein by reference, and are made
a part hereof as if set forth herein at length; provided, however, that to the
extent not inconsistent with the terms of this Agreement: (i) each reference in
such incorporated sections to "Lease" shall be deemed a reference to
"Agreement"; (ii) each reference to the "Demised Premises," shall be deemed a
reference to the "Final Occupancy Premises" as defined herein; (iii) each
reference to "Lessor" and "Lessee" shall be deemed a reference to "CESI" and
"Catalytica", respectively; (iv) with respect to the performance of any
obligation of Master Lessor under the Master Lease, the sole obligations of CESI
shall be as set forth in Section 7 hereof; (v) with respect to any obligations
of Catalytica the non-performance of which would constitute a default under
Section 18.01 (b) of the Master Lease as incorporated into this Agreement,
Catalytica shall have twelve (12) days to perform or commence performance of the
obligation; (vi) except as required pursuant to Section 7 hereof, CESI shall
have no liability to Catalytica with respect to (a) representations and
warranties made by Master Lessor under the Master Lease, (b) any indemnification
obligations of Master Lessor under the Master Lease or other obligations or
liabilities of Master Lessor with respect to compliance with laws or condition
of the Final Occupancy Premises, and (c) Master Lessor's repair, maintenance,
restoration, upkeep, insurance and similar obligations under the Master Lease,
regardless of whether the incorporation of one or more provisions of the Master
Lease into the Agreement might otherwise operate to make CESI liable therefor;
(vii) with respect to any approval or consent required to be obtained from the
"Lessor" under the Master Lease, Catalytica shall be required to obtain such
approval or consent from Master Lessor and CESI, and the approval or consent of
CESI may be withheld if Master Lessor's approval or consent is not obtained,
provided, however, CESI's consent may not be unreasonably withheld or delayed if
-------- -------
Master Lessor provides its consent; and (viii) the following provisions of the
Master Lease are expressly not incorporated herein by reference: Sections 1.0l,
---
Article 2, Article 3, 6.01, 7.01, the first sentence of 9.01, 10.01, 10.02, 24,
28, 29.01, 30, 31.08, Exhibit A, Exhibit B, all of the First Addendum and all of
--------- ---------
the Second Addendum.
(b) Assumption of Obligations. This Agreement is and at all times
-------------------------
shall be subject and subordinate to the Master Lease and the rights of Master
Lessor thereunder. CESI shall not commit or permit any of its employees or
agents to commit on the Final Occupancy
-6-
<PAGE>
Premises any act or omission which shall violate any term or condition of the
Master Lease. Catalytica hereby expressly assumes and agrees during the Term of
this Agreement to comply with all provisions of the Master Lease which are
required to be performed by Catalytica hereunder. In the event of termination of
CESI's interest as "Tenant" under the Master Lease for any reason, this
Agreement shall terminate simultaneously with such termination of CESI's
interest.
11. Notices: The address of each party shall be that address set forth
-------
below their signatures at the end of this Agreement. Any party hereto may change
its address for the purposes of this Section 11 by delivery of at least five (5)
days prior written notice of such change to the other party in the manner set
forth in this Section 11. All notices, demands or communications in connection
with this Agreement shall be (i) in writing, (ii) properly addressed, and (iii)
either (a) sent by prepaid, certified mail, return receipt requested, or (b)
sent by recognized overnight courier service. Notices mailed in accordance
herewith shall be deemed to have been given on the date such notice is actually
received. If a notice is received or deemed received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day. All notices
given to Master Lessor under the Master Lease shall be considered received only
when delivered in accordance with the Master Lease. CESI agrees to promptly
provide Catalytica copies of all notices received from, or provided by CESI to,
Master Lessor affecting the Occupancy Premises and Catalytica's occupancy
thereof.
12. Hazardous Materials:
-------------------
Catalytica shall advise CESI of any Hazardous Materials used or proposed for use
in, on, under or about the Final Occupancy Premises. Immediately following the
commencement of this Agreement, Catalytica shall make available at such time as
CESI shall designate, a listing of Hazardous Materials Catalytica is using on
the Initial Occupancy Premises. Catalytica shall update this listing as
requested by CESI. Promptly after the preparation thereof, CESI will provide
Catalytica with a copy of any Hazardous Materials Business Plan or similar
document prepared pursuant to applicable law. Catalytica shall indemnify, defend
with counsel reasonably acceptable to CESI, protect, and hold harmless CESI, its
employees, agents, contractors, stockholders, officers, directors, successors,
personal representatives, and assigns from and against all claims, actions,
suits, proceedings, judgments, losses, costs, personal injuries, damages,
liabilities, deficiencies, fines, penalties, damages, attorneys' fees,
consultants' fees, investigations, detoxifications, remediations, removals, and
expenses of every type and nature, to the extent caused by the use, release,
disposal, discharge or emission of Hazardous Materials on or about the Final
Occupancy Premises during the Term of this Agreement by Catalytica or
Catalytica's employees, subtenants, agents or invitees other than CESI, Master
Lessor or their agents or employees ("Catalytica Contamination"). Likewise to
the extent that CESI uses any Hazardous Materials on, under or about the Demised
Premises, CESI shall indemnify, defend with counsel reasonably acceptable to
Catalytica, protect, and hold harmless Catalytica, its employees, agents,
contractors, stockholders, officers, directors, successors, personal
representatives, and assigns from and against all claims, actions, suits,
proceedings, judgments, losses, costs, personal injuries, damages, liabilities,
deficiencies, tines, penalties, damages, attorneys' fees, consultants' fees,
investigations, detoxifications, remediations, removals, and expenses of every
type and nature, to the extent caused by the use, release, disposal, discharge
or
-7-
<PAGE>
emission of Hazardous Materials on or about the Demised Premises by CESI or
CESI's employees, subtenants, agents or invitees other than Catalytica, Master
Lessor or their agents or employees. The provisions of this Paragraph 11 shall
survive the termination of this Agreement.
(a) Each party shall be responsible for obtaining and maintaining any
and all governmental authorizations, clearances, consents, plans and permits
required for its operations, including, without limitation, any required air
permits, EPA identification numbers and Hazardous Materials business plans.
Neither party shall not release or discharge any Hazardous Materials into any
conduits to the sewer system on the Demised Premises (i.e. sinks, drains etc.).
(b) For the purposes of this Agreement: (i) "Hazardous Material"
------------------
shall mean any material or substance that is prohibited or regulated by any
Environmental Law or that has been designated by any governmental authority to
be radioactive, toxic, hazardous or otherwise a danger to health, reproduction
or the environment; (ii) "Environmental Laws" shall mean all applicable laws,
------------------
directives, guidance, rules, regulations, orders, treaties, statutes, and codes
promulgated by any governmental authority which prohibit, regulate or control
any Hazardous Material or any Hazardous Material Activity, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, the Resource Recovery and Conservation Act of 1976, the
Federal Water Pollution Control Act, the Clean Air Act, the Hazardous Materials
Transportation Act, the Clean Water Act, all as amended at any time; and (iii)
Hazardous Materials Activity shall mean the transportation, transfer, recycling,
----------------------------
storage, use, treatment, manufacture, removal, remediation, release, exposure of
others to, sale, or distribution of any Hazardous Material or any product or
waste containing a Hazardous Material, or product manufactured with ozone
depleting substances.
13. Conditions Precedent: It shall be an express condition precedent to
--------------------
CESI's and Catalytica's obligations hereunder that, and this Agreement shall not
be effective unless and until Master Lessor has consented in writing to this
Agreement. If Master Lessor does not consent in writing to this Agreement within
thirty (30) days after the full execution and delivery of this Agreement, then
either party may, at any time thereafter until such consent is obtained,
terminate this Agreement upon written notice to the other, whereupon any monies
previously paid by Catalytica to CESI shall be reimbursed to Catalytica.
14. Assignment and Space Sharing: Neither party shall assign this
----------------------------
Agreement, in whole or in part, to any other party without the express consent
of the other party hereto and the Master Lessor, which consent shall not be
unreasonably withheld or delayed if assignment is requested by CESI, and may be
approved or denied at the sole discretion of CESI in the event of a request for
assignment by Catalytica; provided, however, that either party may assign this
Agreement, without consent, to an affiliate or successor by merger or
consolidation.
15. CESI's Exercise of Option. No less than sixty (60) days prior to
-------------------------
the date by which CESI may exercise a renewal option under the Master Lease,
CESI shall advise Catalytica in writing of CESI's intention of whether CESI
intends to renew the Master Lease. If CESI indicates it will renew, Catalytica
shall within thirty (30) days of its receipt of such CESI notice notify CESI in
writing of whether Catalytica desires to extend this Agreement. In the event
that CESI exercises its option to renew the Master Lease, and Catalytica elects
to continue this
-8-
<PAGE>
Agreement, this Agreement shall continue through the term of such extension
except that: (i) the Monthly Rent Amount portion of the Base Rent shall reflect
the new Monthly Rent Amount (if any) agreed between CESI and the Master Lessor;
(ii) the portion of the Base Rent allocated to Included Services shall be
adjusted, if required, to reflect the actual costs of such Included Services
(calculated consistent with Exhibit E); and (iii) the charges for Included
---------
Services shall be subject to annual adjustment in the same manner as set forth
in Section 6(a) hereof.
16. Indemnity: Each party shall indemnify, defend, protect, and hold
---------
the other and its officers, agents, employees, successors and assigns
(collectively, "Agents") and Master Lessor harmless from and against all claims,
demands, actions, causes of action, losses and expenses (including reasonably
attorneys' fees) (collectively "Claims") which may be brought against such other
party and/or such other party's Agents or Master Lessor or which such other
party and/or such other party's Agents or Master Lessor may pay or incur by
reason of any breach or default of this Agreement by a party, an intentional
misrepresentation by a party of the matters set forth herein, or the negligence
or willful misconduct of a party or such party's employees, agents, contractors,
or invitees in or about the Demised Premises or the Parking Premises during the
Term to the extent that the Claims are not caused by the negligence or willful
misconduct of the other party or the other party's Agents. Without limiting the
generality of the foregoing, each party shall indemnify, defend, protect and
hold the other party, the other party's Agents and Master Lessor harmless from
and against any Claims which may be brought against the other party, the other
party's Agents or Master Lessor or which the other party, the other party's
Agents or Master Lessor may pay or incur by reason of any violation of any laws
by a party or such party's employees, agents or contractors.
17. Use of CESI Property: In connection with its occupancy of the
--------------------
Initial Occupancy Premises and the Final Occupancy Premises and its payment of
Base Rent pursuant to this Agreement, at no additional cost to Catalytica,
Catalytica shall have the right, throughout the Term, to use the furniture and
related equipment owned by CESI and located in the Final Occupancy Premises
("CESI Property"). Catalytica shall take delivery of the CESI Property in its
"as-is, where-is" condition. CESI shall have no obligation to repair or replace
any item of CESI Property, and CESI makes no representation or warranty of any
kind with respect to the CESI Property, including, without limitation, the
condition or fitness of the CESI Property for Catalytica's proposed or actual
use thereof. Catalytica shall indemnify, defend, protect and hold harmless CESI
from and against any and all liabilities, judgments, causes of action, damages,
costs and expenses (including, without limitation, reasonable attorneys' and
experts' fees), caused by or arising in connection with the condition or use by
Catalytica of the CESI Property from and after the commencement of the Term.
Upon the expiration or earlier termination of this Agreement, Catalytica shall
return the CESI Property to CESI in the condition received, ordinary wear and
tear excepted.
18. Successors: This Agreement shall be binding on and inure to the
----------
benefit of the parties hereto and their respective successors and permitted
assigns.
19. Broker: CESI and Catalytica represent, warrant and agree that they
------
have not dealt with any brokers with a right to a commission arising out of this
Agreement. Each party agrees to hold the other party harmless from and against
all claims for brokerage commissions, finder's
-9-
<PAGE>
fees or other compensation made by any agent, broker, salesman or finder as a
consequence of said party's actions or dealings with such agent, broker,
salesman, or finder.
20. Counterparts: This Agreement may be executed in one or more
------------
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. Signature copies may be detached
from the counterparts and attached to a single copy of this Agreement physically
to form one document. A facsimile counterpart signature delivered to each party
shall be deemed an original for the purpose of the execution of this Agreement.
21. Entire Agreement: This Agreement and the provisions of the Master
----------------
Lease incorporated herein by the express terms of this Agreement constitute the
complete and exclusive agreement among the parties with respect to the matters
contained herein and supersede all prior written or oral agreements or
statements by and among the parties hereto regarding the same, provided that
this Agreement shall be at all times subject to all of the terms and conditions
of the Master Lease.
(Intentionally Left Blank)
-10-
<PAGE>
fees or other compensation made by any agent, broker, salesman or finder as a
consequence of said party's actions or dealings with such agent, broker,
salesman, or finder.
20. Counterparts: This Agreement may be executed in one or more
------------
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. Signature copies may be detached
from the counterparts and attached to a single copy of this Agreement physically
to form one document. A facsimile counterpart signature delivered to each party
shall be deemed an original for the purpose of the execution of this Agreement.
21. Entire Agreement: This Agreement and the provisions of the Master
----------------
Lease incorporated herein by the express terms of this Agreement constitute the
complete and exclusive agreement among the parties with respect to the matters
contained herein and supersede all prior written or oral agreements or
statements by and among the parties hereto regarding the same, provided that
this Agreement shall be at all times subject to all of the terms and conditions
of the Master Lease.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
CATALYTICA: CESI:
CATALYTICA, INC. CATALYTICA ENERGY
SYSTEMS, INC.
By: /s/ Lawrence W. Briscoe By: /s/ Craig N. Kitchen
------------------------- ------------------------
Printed Printed
Name: Lawrence W. Briscoe Name: Craig N. Kitchen
------------------------ ----------------------
Its: Chief Financial Officer Its: President and Chief
------------------------- Executive Officer
-----------------------
Date: December 15, 2000 Date: December 15, 2000
----------------------- ----------------------
Address: Intersection US 13N Address: 430 Ferguson Drive
Highway 11 and 264 Bypass Mountain View, CA 94043
Greenville, NC 27835-1887
Attention: Mr. James Friederichsen Attention: Craig Kitchen, CEO
FAX: 252-707-2342 FAX: 650-968-7129
-11-
<PAGE>
EXHIBIT A
---------
Master Lease
<PAGE>
EXHIBIT B
---------
Final Occupancy Premises
<PAGE>
EXHIBIT C
---------
Initial Occupancy Premises
<PAGE>
EXHIBIT D
---------
Improvements to be Removed by Catalytica
1. Smart Lab Processing equipment, enclosure and related structures (including
without limitation, the heating and cooling equipment and pumps and electrical
control panels)
<PAGE>
EXHIBIT E
---------
Included Services
<PAGE>
EXHIBIT A
---------
Master Lease
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT, effective as of January 1, 1993, by and between
JACK DYMOND ASSOCIATES, a California general partnership ("Lessor") and
CATALYTICA, INC., a Delaware corporation ("Lessee"), is made with reference to
the following facts:
A. Lessor is the owner of certain industrial property located at 430
Ferguson Drive, in the City of Mountain View, County of Santa Clara, State of
California (the "Industrial Center").
B. Lessor and Lessee have previously entered into a written Lease
Agreement dated December 19, 1989 (the "Original Lease") covering a portion of
the Industrial Center, and Lessee has been and still is occupying such premises
pursuant to the terms and provisions of the Original Lease.
C. The parties desire to execute a new lease agreement having the
terms and conditions hereinafter set forth, such agreement to supersede and
replace the Original Lease.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1. DEMISED PREMISES AND COMMON AREAS
1.01 Lessor does hereby lease to Lessee, and Lessee does hereby rent from
Lessor, that portion of the Industrial Center comprising a total of 68,000
square feet, as shown on the drawing attached hereto as Exhibit "A" and made a
part hereof (the "Demised Premises"), consisting of the following areas:
18,000 square feet in Building Number 2;
35,000 square feet in Building Number 3; and
15,000 square feet out of the 38,600 square feet in Building Number 4.
1.02 Lessee shall have the non-exclusive right to use the Common Area of
the Industrial Center, subject to any reasonable rules and regulations
concerning such use as may be adopted from time to time by Lessor. The term
"Common Areas" shall mean those areas within the Industrial Center provided and
designated by Lessor for the general non-exclusive use by the occupants of the
Industrial Center and their respective employees, customers and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalk, walkways, driveways, and landscaped areas. Lessor reserves the right
of exclusive control and management of the Common Areas, including the right, in
Lessor's sole discretion:
(a) To make alterations or construct additional improvements within the
Common Areas;
-1-
<PAGE>
(b) To temporarily close any of the Common Areas for maintenance purposes,
so long as reasonable access to the Demised Premises remains
available; and
(c) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any
portion thereof.
ARTICLE 2. TERM
2.01 The initial term of this Lease shall be a period of six (6) years,
commencing as of January 1, 1993, and ending on December 31, 1998, unless sooner
terminated as provided herein.
2.03 Provided that Lessee is not then in default in the performance of any
of Lessee's obligations hereunder, Lessee shall have the option to extend the
term for an additional period of five (5) years. Such option can only be
exercised by Lessee giving written notice thereof to Lessor at least one
hundred twenty (120) days prior to expiration of the initial term of the lease.
ARTICLE 3. RENT
3.01 Lessee shall pay to Lessor as rent for the Demised Premises, in lawful
money of the United States, payable in advance on or before the first day of
each calendar month without any deduction, offset or demand, the sum of Fifty-
Five Thousand Seven Hundred Sixty Dollars ($55,760.00), representing a rental
rate of $0.82 per square foot.
3.02 In the event Lessee exercises the option to extend the lease term as
provided in Section 2.03, the rent payable during the extended term shall be the
fair market rental value of the Demised Premises, as mutually agreed upon by
Lessor and Lessee. In the event the parties are unable to agree upon the fair
market rental value within 90 days prior to the expiration of the initial term
of the lease, each party shall appoint an appraiser, who shall be a licensed
real estate broker or licensed appraiser familiar with industrial rental
property in the City of Mountain View. If such appraisers are unable to agree
upon the rental value within 60 days prior to the expiration of the initial term
of the lease, they shall jointly appoint a third appraiser and the decision of
any two of the three appraisers shall be binding upon the parties. Such
decision shall be rendered not less than 90 days prior to the expiration of the
initial term of the lease. Each party shall pay the cost of the appraiser such
party appoints, and the cost of the third appraiser, if needed, shall be divided
equally between the parties.
ARTICLE 5. USE
5.01 The Demised Premises shall be used and occupied by Lessee solely for
offices, chemical and biological laboratories and pilot plants, combustion
laboratories, light manufacturing and other related activities, and for no other
or additional purpose without the prior written consent of Lessor.
-2-
<PAGE>
5.02 Lessee shall not use the Demised Premises or permit anything to be
done in or about the Demised Premises which is prohibited by or will in any way
conflict with any law, statute, ordinance or governmental rule or regulation now
in force or which may hereafter be in force, or which is prohibited by the
standard form of fire insurance policy, or will in any way increase the existing
rate of any fire or other insurance covering the Industrial Center or any of its
contents, or cause any change or cancellation of such insurance. The judgment of
any court of competent jurisdiction or the admission of Lessee in any action
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact as between Lessor and Lessee.
Lessee shall not do or permit anything to be done in or about the Demised
Premises which will in any way obstruct or interfere with the rights of other
tenants in the Industrial Center, or injure or annoy them, or use or allow the
Demised Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Lessee cause, maintain or permit any nuisance in, on or about
the Demised Premises or commit or suffer to be committed any waste in, on or
about the Demised Premises.
5.03 Lessee shall, at its sole expense, secure and maintain in full force
and effect any and all licenses, permits, authorizations, and other approvals
required by any governmental agency for activities conducted and materials
stored or used by Lessee at the Demised Premises, including, but not limited to,
all licenses, permits and approvals relating to the storage and use of hazardous
or toxic materials, and Lessee shall at all times comply with the conditions and
requirements that may be contained in or imposed by any such licenses, permits
or approvals.
ARTICLE 6. LEASEHOLD IMPROVEMENTS
6.01 Lessor agrees to construct two unenclosed overhangs, approximately 35
feet in length, between Buildings 2 and 3, as generally shown on the drawing
attached hereto as Exhibit "A." Such improvements shall be constructed at the
sole expense of Lessor, provided such expense does not exceed the sum of Twenty
Thousand Dollars ($20,000.00). The design of the improvements shall be mutually
agreed upon by the parties and work thereon shall be completed by Lessor within
80 days following design approval.
6.03 Except as expressly provided herein, Lessor shall have no obligation
to make any alterations or improvements to the Demised Premises for the benefit
of Lessee. Lessee acknowledges that neither Lessor nor anyone acting on Lessor's
behalf has made any representation or warranty as to the suitability or fitness
of the Demised Premises for the continued conduct of Lessee's business or for
any other purpose.
ARTICLE 7. UTILITIES AND SERVICES
7.01 Lessee shall pay, as additional rent, the cost of all utility and
other services furnished to the Demised Premises, including, but not limited to,
electricity, gas, water, sewer, telephone, janitorial and garbage collection
service. Whenever possible, Lessee shall establish a separate account with the
utility or service provided so that all charges for
-3-
<PAGE>
service are billed directly to Lessee. However, in the event any of such charges
are billed to Lessor, Lessor shall submit a statement showing the amount thereof
payable by Lessee and Lessee shall pay such amount to Lessor within thirty (30)
days after receipt of the statement.
7.02 Lessor shall not be in default hereunder or be liable for any damages
directly or indirectly resulting from, nor shall the rent provided herein be
abated by reason of Lessor's failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by accident,
breakage, repairs, strikes, lockouts or other labor dispute, or by limitation,
curtailment, rationing or restrictions on use of electricity, gas, water or
other utility, or any other cause, similar or dissimilar, beyond the reasonable
control of Lessor.
ARTICLE 8. INDEMNITY AND INSURANCE
8.01 Lessee hereby waives any and all claims against Lessor for damage to
any property or injury to or death of any person in, upon or about the Demised
Premises, arising at any time and from any cause other than by reason of the
negligence or willful misconduct of Lessor. Lessee further expressly indemnities
and holds Lessor harmless from and against any and all claims, demands, causes
of action, liabilities, costs or expenses, including attorney's fees, occasioned
by or in any way connected with the use or misuse of the Demised Premises by
Lessee, or occasioned by or in any way connected with Lessee's use or storage of
any hazardous or toxic materials or wastes on the Demised Premises, or
occasioned by any act or omission of Lessee and Lessee's agents, servants,
employees or invitees who may come upon the Demised Premises, except for damage
to any property or injury to or death of any person caused by the negligence or
willful misconduct of Lessor. The indemnity obligations of Lessee set forth
herein shall survive and continue beyond the term of this Lease.
8.02 Lessee hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at Lessee's expense, a policy or policies
of comprehensive general liability insurance, insuring against all liability of
Lessee and Lessor for bodily injury and property damage arising out of or in
connection with Lessee's use and occupancy of the Demised Premises and also
insuring performance by Lessee of the indemnity provisions set forth in Section
8.01. The initial amount of such insurance shall be at least $1,000,000.00, and
shall be subject to periodic increase based upon inflation, recommendations by
Lessor's insurance advisors, and other relevant factors. However, the amount of
such general liability insurance shall not limit Lessee's liability nor relieve
Lessee of any obligations under this Lease. The general liability insurance
policy shall name Lessor as an insured party thereunder, and shall be endorsed
to provide that no cancellation or reduction in coverage will be made without
ten (10) days prior written notice to Lessor. A copy of the policy or a
certificate of insurance shall be furnished to Lessor.
8.03 Lessee Shall also maintain in full force and effect at all times
during the term of this Lease, at Lessee's expense, a policy or policies
covering loss or damage to the Demised Premises, to the extent of the
replacement value thereof as determined in good faith by Lessor or Lessor's
insurance agent or carrier, based upon standard insurance underwriting
practices. Such policy or policies shall provide protection against all perils
included within
-4-
<PAGE>
the classification of fire, extended coverage, vandalism, malicious mischief,
and any other perils (excluding flood and earthquake) which Lessor deems
necessary, and shall specifically name Lessor as an insured party thereunder, as
it's interest may appear. In addition to the foregoing, Lessee shall be
responsible for maintaining its own insurance covering the personal property,
trade fixtures and removable leasehold improvements owned by Lessee and located
upon the Demised Premises.
8.04 Lessor and Lessee each hereby waive any and all rights of recovery
against the other, or against the agents, employees or representatives of the
other, on account of loss or damage to the property of the waiving party to the
extent that such loss or damage is insured against under any insurance policies
which either Lessor or Lessee may have in force at the time of such loss or
damage. Lessee shall, upon obtaining the insurance required hereunder, give
notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease and Lessee shall cause each insurance policy obtained
by Lessee to provide that the insurance company waives all right of recovery by
way of subrogation against either Lessor or Lessee in connection with any damage
covered by such policy. Notwithstanding the foregoing, this Section 8.04 shall
not be operative and shall have no force or effect for so long as both Lessor
and Lessee maintain their respective liability and hazard insurance coverage
through the same insurance carrier.
ARTICLE 9. REPAIRS AND MAINTENANCE
9.01 Lessee acknowledges that the Demised Premises are in good order and
condition as of the time of executing this Lease Agreement. Lessee shall, at all
times during the term hereof and at Lessee's own expense, keep and maintain the
Demised Premises and every part thereof in good condition and repair, whether or
not the need for such repairs occurs as a result of Lessee's use, any prior use,
the elements, or the age of the Demised Premises or any portion thereof, and
including, without limiting the generality of the foregoing, all plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities, and
equipment within the Demised Premises, fixtures, interior surfaces of the
exterior walls, ceilings, floor coverings, windows, doors, plate glass, and
skylights located within the Demised Premises. Except as provided in Section
9.02 below, Lessee hereby waives all rights to make repairs at the expense of
Lessor or in lieu thereof to vacate the Demised Premises as provided by
California Civil Code Section 1942 or any other law, statute or ordinance now or
hereafter in effect.
9.02 The maintenance obligations of Lessee, as set forth in Section 9.01,
shall not include the exterior shell, roof and common areas of any building
comprising a part of the Demised Premises and such exterior shell, roof and
common areas shall be maintained by Lessor, at Lessor's own expense, but without
liability for failure to do so unless first notified by Lessee in writing of the
necessity for such repairs. In the event Lessor shall fail to commence and
complete the repairs within a reasonable time following receipt of such notice,
Lessee may notify Lessor of Lessee's intention to perform the repair work and
Lessee may proceed to do so at any time after the expiration of three days from
Lessor's receipt of such notice and Lessee may deduct the cost of the work from
the next installment(s) of rent payable to Lessor.
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ARTICLE 10. TAXES AND ASSESSMENTS
10.01 Lessee shall pay to Lessor, as additional rent, the proportionate share
of all real property taxes levied or assessed against the Industrial Center
during the Lease term which are attributable to the Demised Premises, as
reasonably determined by Lessor, except that:
(a) Lessee shall pay 100% of any increase in real property taxes
attributable to any alterations and improvements to the Demised
Premises constructed by or for the benefit of Lessee;
(b) Lessee shall not be charged for any increase in real property taxes
attributable to alterations or improvements constructed or installed
within the Industrial Center as leasehold improvements for the use and
benefit of other tenants;
10.02 Payment by Lessee of the real property taxes referred to herein shall
be made within thirty (30) days after Lessor furnishes to Lessee a copy of the
tax bill showing the total amount of property taxes levied or assessed against
the Industrial Center, the amount thereof payable by Lessee, and the calculation
utilized by Lessor to determine such amount. Lessee and its authorized agents
shall be entitled to review the tax records and any other documents utilized by
Lessor to calculate the amount of real estate taxes payable by Lessee. In the
event of any disagreement between the parties, the matter may be submitted to
arbitration, using the same procedure as described in Section 3.02, except that
the arbitrators shall be persons having expertise in the area of assessment of
real property taxes.
10.03 As used herein, the term "real property taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax imposed on the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal agency, or any
school, sanitary, fire, street, drainage, or other improvement district. The
term "real property taxes" does not include Lessor's federal or state income tax
or estate, inheritance, transfer, gift, or franchise taxes.
10.04 Lessee shall pay prior to delinquency all taxes levied or assessed
against the trade fixtures, equipment, furnishings, and other personal property
of Lessee located upon the Demised Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, equipment, furnishings, and other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within thirty
(30) days after Lessor furnishes to Lessee a written statement describing the
property in question and showing the amount of tax thereon payable by Lessee.
ARTICLE 11. ALTERATIONS AND IMPROVEMENTS
11.01 Lessee shall not, without the prior written consent of Lessor (which
consent shall not be unreasonably withheld), make any alterations, additions or
improvements in, on or about the Demised Premises, or construct, install or
paint any sign on the roof or
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exterior walls of the Demised Premises. As a condition to giving such consent,
Lessor may require Lessee to provide Lessor a surety bond or other security
satisfactory to Lessor to insure Lessor against mechanics' and materialmen's
liens and to insure completion of the work.
11.02 All alterations, additions and improvements, whether temporary or
permanent in character, made by Lessee in, or or about the Demised Premises,
except removable trade fixtures installed at the expense of Lessee and Lessee's
equipment which is not considered a fixture, shall, in the absence of a written
request by Lessor for their removal, become the property of Lessor and shall
remain upon and be surrendered with the Demised Premises at the termination of
this Lease by lapse of time or otherwise without compensation to Lessee.
ARTICLE 12. DAMAGE OR DESTRUCTION
12.01 If the Demised Premises, or other portion of the Industrial Center of
which the Demised Premises constitute a part, are damaged, by fire or other
casualty, Lessor shall forthwith repair the same, provided such repairs can, in
Lessor's opinion, be completed within ninety (90) days. In such event, this
Lease shall remain in full force and effect except that if there is damage to
the Demised Premises and such damage was not the result of negligence or willful
misconduct of Lessee or Lessee's employees or invitees, the rent payable by
Lessee shall be abated while the repairs are being may by the extent to which
the Demised Premises are unusable by Lessee in the normal conduct of Lessee's
business. If the repairs cannot, in Lessor's opinion, be completed within ninety
(90) days, Lessor may, at Lessor's option, make the repairs and this Lease shall
continue in full force and effect, subject to abatement of rental as hereinabove
in this Section provided. In the event Lessor does not elect to make the repairs
which cannot be completed within ninety (90) days, and provided the damage
affects the Demised Premises or common areas necessary to Lessee's occupancy,
Lessor shall give written notice of such fact to Lessee within thirty (30) days
after the date on which the damage occurred and either Lessor or Lessee may,
within thirty (30) days after the giving of such notice, terminate this Lease.
12.02 Notwithstanding the provisions of Section 12.01 above, Lessor and Lessee
shall each have the option of terminating this Lease in any of the following
circumstances:
(a) Where the damage or destruction arises from a casualty or cause not
covered by insurance then in force maintained by Lessee in accordance
with Section 8,03, or if, for any reason, the proceeds from such
insurance are not available or are inadequate to cover the entire cost
of the repair.
(b) Where the building in which the Demised Premises are located is
damaged or destroyed to the extent of one third or more of the
replacement coat thereof, whether the Demised Premises be injured or
not; provided, however, Lessee shall have no right to terminate unless
such damage or destruction materially impairs Lessee's normal and
customary use of the Demised Premises,
(c) Where the repairs cannot be made by reason of any statute, ordinance,
rule or regulation of any governmental authority.
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12.03 If Lessor is obligated or elects to repair any damage pursuant to this
Article, Lessor shall not be required to repair or replace any improvements
installed in the Demised Premises by or for Lessee, other than building standard
tenant improvements made by Lessor, and Lessee shall, at Lessee's own expense,
repair and restore Lessee's portion of such improvements.
12.04 In the event of a total destruction of an entire building in which any
portion of the Demised Premises is located, either party may elect to terminate
this Lease with respect to such portion and the monthly rent payable to Lessor,
including the expenses charged to Lessee which are based upon the square footage
of the Demised Premises, shall be reduced by same proportion that the floor area
of the Demised Premises so destroyed bears to the floor area of the entire
Demised Premises immediately prior to such destruction.
12.05 Lessor and Lessee each waive the provisions of any statute which relates
to termination of a lease when the leased property is destroyed and agree that
such event shall be governed by the terms of this Agreement.
ARTICLE 13. CONDEMNATION
13.01 If all of the Demised Premises or so much thereof is taken by right of
eminent domain, or purchase in lieu thereof, such that the Demised Premises are
no longer reasonably suitable for Lessee's use, this Lease shall terminate as
of the date that possession of the Demised Premises or part thereof is taken.
13.02 If any part of the Demised Premises is taken and the remaining part
thereof (after reconstruction of the then existing building) is reasonably
suitable for Lessee's use, this Lease shall, as to the part so taken, terminate
as of the date that possession of such part is taken and the rent payable
hereunder shall be reduced in the same proportion that the floor area of the
portion of the Demised Premises so taken (less any addition thereto by reason of
any reconstruction) bears to the original floor area of the Demised Premises
immediately prior to the taking, Lessor shall, at Lessor's expense, make all
necessary repairs or alterations to restore the remaining Demised Premises to a
complete architectural unit,
13.03 No award for any partial or entire taking shall be apportioned and Lessee
hereby assigns to Lessor all of Lessee's interest therein, except that Lessee
shall be entitled to any portion of the award specifically designated as
compensation for the taking of persona1 property belonging to Lessee, for the
interruption of Lessee's business, for Lessee's moving costs or loss of goodwill
suffered by Lessee. No temporary taking of the Demised Premises shall terminate
this Lease or give Lessee any right to abatement of rent hereunder; any award
recovered by Lessee for such temporary taking shall belong entirely to Lessee
and Lessor shall have no interest therein. Each party agrees to execute and
deliver to the other all instruments and documents that may be required to
implement the provisions of this Section.
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ARTICLE 14. ASSIGNMENT AND SUBLETTING
14.01 Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, pledge, hypothecate or encumber all or any part of Lessee's
interest in this Lease or in the Demised Premises or any part thereof, without
Lessor's prior written consent and any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a breach
of this Lease, by transfer of a controlling interest in the stock of Lessee
shall constitute an assignment hereunder.
14.02 If Lessee complies with the following conditions, Lessor shall not
unreasonably withhold Lessor's consent to the assignment of this Lease or the
subletting of the Demised Premises or any portion thereof. Lessee shall submit
in writing to Lessor:
(a) The name and legal composition of the proposed Assignee or Sublessee;
(b) The terms and provisions of the proposed Assignment or Sublease; and
(c) Such financial information as Lessor may reasonably request concerning
the proposed Assignee or Sublessee.
14.03 No consent by Lessor to any assignment or subletting by Lessee shall
relieve Lessee of any obligation to be performed by Lessee under this Lease,
whether occurring before or after such consent, assignment or subletting. The
consent by Lessor to any assignment or subletting shall not relieve Lessee from
the obligation to obtain Lessor's express written consent to any other
assignment or subletting. The acceptance of rent by Lessor from any other person
shall not be deemed to be a waiver by Lessor of any provisions of this Lease or
to be a consent to any assignment, subletting or other transfer. Consent to one
assignment, subletting or other transfer shall not be deemed to constitute
consent to any subsequent assignment, subletting or other transfer.
ARTICLE 15. TRANSFER OF LESSOR'S INTEREST
15.01 Lessor shall have the right at any time to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of Lessor's interest in the Demised
Premises and in this Lease. In the event of any such sale, transfer, assignment,
pledge, hypothecation or other disposition, all obligations of Lessor hereunder
shall devolve upon the transferee and Lessor shall be released and discharged
from all further obligation or liability hereunder; provided, that Lessor shall
be responsible for any funds in the hands of Lessor in which Lessee has an
interest until such funds have been delivered to the transferee. Lessee agrees
to attorn to the transferee provided all of Lessor's obligations hereunder are
assumed by the transferee in writing for the benefit of Lessee.
ARTICLE 16. MECHANICS' LIENS
16.01 Lessee shall keep the Demised Premises free and clear of all mechanics'
Liens resulting from any construction work done by or for Lessee. Lessee shall
have the right to contest the correctness or validity of any such lien if,
immediately on demand by Lessor,
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Lessee procures and records a lien release bond issued by a corporation
authorized to issue surety bonds in California in an amount equal to one and
one-half (1-1/2) times the amount of the claim of lien or other security
satisfactory to Lessor. If used, the bond shall meet the requirements of Section
8143 of the California Civil Code and shall provide for the payment of any sum
that the claimant may recover on the claim, together with costs of suit. Should
Lessee fail to discharge any such lien or cause the same to be released within
sixty (60) days from the date the lien is filed, Lessor may, without inquiring
into the validity thereof, cause the same to be discharged and all amounts so
expended by Lessor, together with reasonable attorney's fees and expenses, shall
be paid by Lessee to Lessor as additional rent hereunder, together with interest
thereon at the rate of twelve percent (12%) per annum. Lessee shall give ten
(10) days prior written notice to Lessor of the date on which any construction
work will be commenced so as to afford Lessor the opportunity to post a notice
of nonresponsibility.
ARTICLE 17. ENTRY BY LESSOR
17.01 Lessor and Lessor's authorized representatives shall have the right to
enter the Demised Premises at reasonable hours and upon reasonable notice
(except in case of emergency) for any of the following purposes:
(a) To examine and inspect the Demised Premises;
(b) To supply any service to be provided by Lessor to Lessee hereunder;
(c) To perform any necessary maintenance or repairs that Lessor is
required or permitted to perform hereunder;
(d) To serve, post or keep posted any notices required or allowed under
the provisions of this Lease;
(e) To post "for sale" signs at any tie during the term, to post "for
rent" or "for lease" signs during the last one hundred twenty (120)
days of the Lease term, or during any period while Lessee is in
default;
(f) To show the Demised Premises to prospective tenants, buyers, lenders
or other persons at any time during the Lease term;
(g) To do any other act or thing necessary for the safety or preservation
of the Demised Premises or the Industrial Center, or to comply with
the directives of any governmental authority having jurisdiction over
the Industrial Center.
17.02 Lessor shall at all times have and retain a key with which to unlock all
of the doors in, on or about the Demised Premises (excluding Lessee's vaults,
safes and other secured areas designated in writing by Lessee in advance); and
Lessor shall have the right to use any and all means which Lessor may deem
proper to open said doors in an emergency in order to obtain entry to the
Demised Premises, and any entry to the Demised Premises obtained by Lessor by
any of said means, or otherwise, shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into or a detainer
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of the Demised Premises, or an eviction, actual or constructive, of Lessee from
the Demised Premises, or any portion thereof. In the event of any such entry,
Lessor agrees to maintain in secrecy any and all business and technical
information concerning Lessee's business that Lessor may learn as a result of
such entry.
ARTICLE 18. DEFAULT BY LESSEE
18.01 The occurrence of any one or more of the following events ("Events of
Default") shall constitute a material default and breach of this Lease by
Lessee:
(a) Any failure by Lessee to pay any rental or any other sum required
to be paid by Lessee hereunder, as and when the same becomes due and
payable.
(b) Any failure by Lessee to observe and perform any other provision of
this Lease to be observed or performed by Lessee, where such failure
continues fifteen (15) days after written notice thereof by Lessor to
Lessee; provided, however, that if the nature of such default is such
that it cannot reasonably be cured within such fifteen (15) day
period, Lessee shall not be deemed to be in default if Lessee shall
within such period commence such cure and thereafter diligently
prosecute the same to completion.
(c) The making by Lessee of any general assignment or general arrangement
for the benefit of creditors; the fling by or against Lessee of a
petition to have Lessee adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Lessee, the same is
dismissed within ninety (90) days); the appointment of a trustee or
receiver to take possession of substantially all of Lessee's interest
in this Lease, where possession is not restored to Lessee within sixty
(60) days: or the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Demised Premises
or of Lessee's interest in this Lease, where such seizure is not
discharged within forty-five (45) days.
18.02 Any notice given under this Article shall specify the Event of Default
and the applicable lease provisions, and shall demand that Lessee perform the
provisions of this Lease or pay the rent that is in arrears, as the case may be,
within the applicable period of time. No such notice shall be deemed a
forfeiture or a termination of this Lease provided Lessee cures the default
within the applicable period of time.
ARTICLE 19. LESSOR'S REMEDIES UPON DEFAULT
19.01 Lessor shall have the following remedies upon the occurrence of an Event
of Default, such remedies being cumulative and not exclusive and in addition to
any other remedies available to Lessor as now or hereafter provided by law:
(a) Lessor can continue this Lease in full force and effect, and the Lease
will continue in effect as long as Lessor does not terminate Lessee's
right to possession, and Lessor shall have the right to collect rent
when due, irrespective
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of whether Lessee shall have abandoned the Demised Premises. During
the period Lessee is in default, Lessor can enter the Demised Premises
and relet them, or any part of them, to third parties for Lessee's
account. Lessee shall be liable immediately to Lessor for all costs
Lessor incurs in such reletting, including, without limitation,
broker's commissions, expenses of remodeling the Demised Premises
required by reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining term of this Lease. Lessee shall
pay to Lessor the rent specified in this Lease on the dates when the
same becomes due, less the rent Lessor receives from any reletting. No
act by Lessor allowed by this paragraph shall terminate this Lease
unless Lessor notifies Lessee that Lessor elects to terminate this
Lease. After Lessee's default and for as long as Lessor does not
terminate Lessee's right to possession of the Demised Premises, Lessee
shall have the right to assign or sublet Lessee's interest in this
Lease pursuant to Article 14, but Lessor's consent may be conditioned
upon all defaults by Lessee being fully cured at the time of
assignment or subletting.
(b) Lessor can terminate Lessee's right to possession of the Demised
Premises at any time during Lessee's default. No act by Lessor other
than giving written notice to Lessee shall terminate this Lease. Acts
of maintenance, efforts to relet the Demised Premises, or the
appointment of a receiver on Lessor's initiative to protect Lessor's
interest under this Lease shall not constitute a termination of
Lessee's right to possession. On termination, Lessor has the right to
recover from Lessee:
(1) The worth, at the time of the award, of the unpaid rent that has
been earned at the time of termination of this Lease; plus
(2) The worth, at the time of the award, of the amount by which the
unpaid rent that would have been earned after the date of
termination of this Lease until the time of award exceeds the
amount of the loss of rent that Lessee proves could have been
reasonably avoided; plus
(3) The worth, at the time of the award, of the amount by which the
unpaid rent for the balance of the term after the time of award
exceeds the amount of the loss of rent that Lessee proves could
have been reasonably avoided; and
(4) Any other amount, and court costs, necessary to compensate Lessor
for all detriment proximately caused by Lessee's default.
"The worth, at the time of the award" as used in (1) and (2) above,
is to be computed by allowing interest at the rate of ten percent (10%) per
annum from the date of default. "The worth, at the time of the award" as used
in (3) above is to be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). The term "rent," as used in this Article shall be deemed to
include all monetary sums required to be paid by Lessee pursuant to the terms of
this Lease.
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ARTICLE 20. LESSOR'S RIGHT TO CURE DEFAULTS
20.01 If Lessee shall fail to pay any sum of money, other than rental, required
to be paid by Lessee hereunder, or shall fail to perform any other act on
Lessee's part to be performed hereunder, and such failure shall continue for ten
(10) days after notice thereof by Lessor, Lessor may, but shall not be obligated
to do so, and without waiving or releasing Lessee horn any obligations of
Lessee, make such payment or perform any such other act on Lessee's part to be
made or performed hereunder. All sums expended by Lessor, including necessary
incidental costs, shall be deemed additional rent hereunder and shall be payable
to Lessor immediately upon demand, together with interest thereon at the rate of
twelve percent (12%) per annum from the date of expenditure to the date of
reimbursement.
ARTICLE 21. COSTS OF SUIT
21.01 In the event legal action between Lessor and Lessee shall become
necessary in order to enforce or interpret this Lease, or any provision
contained herein, the prevailing party shall be entitled to recover all costs
and expenses as may be incurred in connection therewith, including reasonable
attorney's fees.
21.02 Should Lessor, without fault on Lessor's part, be made a party to any
litigation instituted by Lessee or by any third party against Lessee, or by or
against any person holding under or using the Demised Premises by license of
Lessee, or for the foreclosure of any lien for labor or materials furnished to
or for Lessee or any such other person or otherwise arising out of or resulting
from any act or transaction of Lessee or of any such other person, Lessee
covenants to save, defend, and hold Lessor harmless from any judgment rendered
against Lessor or the Demised Premises or any part thereof, and all costs and
expenses, including reasonable attorney's fees, incurred by Lessor in connection
with such litigation.
ARTICLE 22. SUBORDINATION
22.01 In the event the holder of any deed of trust hereafter to be placed
against the Demised Premises requires that this Lease be subordinate to any such
encumbrance, this Lease shall be subordinate to that encumbrance if Lessor first
obtains from the holder of the deed of trust a written agreement providing that
for so long as Lessee shall perform all of Lessee's duties and obligations
hereunder, no foreclosure, deed given in lieu of foreclosure or sale under such
deed of trust shall affect Lessee's rights under this Lease. Lessee shall attorn
to any purchaser at any foreclosure sale, or to any grantee or transferee
designated in any deed given in lieu of foreclosure, Lessee shall execute the
written agreement and any other documents required by the holder of the deed of
trust to accomplish the purposes of this Article, and upon Lessee's failure or
refusal to do so within five (5) days after demand, Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to execute such agreement or other documents
for and on behalf of Lessee. The power of attorney granted herein shall be
deemed to be coupled with an interest and to be irrevocable.
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ARTICLE 23. ESTOPPEL CERTIFICATE
23.01 Each party, within ten (10) days after notice from the other, shall
execute and deliver to the other, in recordable form, a certificate stating that
this Lease is unmodified and in full force and effect, or in full force and
effect as modified stating the modifications. The certificate also shall state
the amount of monthly rent, the dates to which the rent has been paid in
advance, the amount of any security deposit or prepaid rent, and shall further
certify that there is no uncured default by the other party under the Lease, or
specify such default, if any is claimed. Failure to deliver the certificate
within the ten (10) days, shall be conclusive upon the party failing to deliver
the certificate for the benefit of the party requesting the certificate, and any
successor to the party requesting the certificate, that this Lease is in full
force and effect and has not been modified except as may be represented by the
party requesting the certificate, that there are no uncured defaults by the
party requesting the certificate and that not more than one (1) month's rent has
been paid in advance.
ARTICLE 24. HOLDING OVER
24.01 If Lessee remains in possession of all or any part of the Demised
Premises after the expiration of the term hereof, with the express or implied
consent of Lessor, such tenancy shall be from month to month only, and not a
renewal hereof or an extension for any further term and in such case rent and
other monetary sums due hereunder shall be the amount payable at the expiration
of the term of this Lease and such month to month tenancy shall be subject to
every other term, covenant and agreement contained herein.
ARTICLE 25. SURRENDER
25.01 Upon the expiration or earlier termination of this Lease, Lessee shall
surrender the Demised Premises in the same condition as received, ordinary wear
and tear and damage by fire, earthquake, act of God or the elements alone
excepted. Lessee shall remove all of Lessee's personal property and trade
fixtures and shall repair, at Lessee's expense, any damage to the Demised
Premises or the Industrial Center caused by such removal, including, without
limitation, repair of floors and patching and repainting of walls where
required, all to Lessor's reasonable satisfaction. Any personal property or
trade fixtures not removed at the expiration or earlier termination of this
Lease shall be deemed abandoned by Lessee. If Lessor so elects, Lessee shall
also remove any alterations or improvements installed by or for Lessee which
would otherwise remain as part of the Demised Premises and Lessee shall restore
the Demised Premises to their condition prior to such installation.
25.02 Should Lessee fail to remove any personal property or trade fixtures, or
fail to remove any alterations or improvements as requested by Lessor, Lessee
shall be liable to Lessor for any and all removal costs, transportation and
storage expenses, and the cost of restoring the Demised Premises as required
herein. Lessee shall indemnify Lessor against any loss, damage or liability
resulting from delay by Lessee in so surrendering the Demised Premises,
including, without limitation, any claims made by any succeeding tenants founded
on such delay.
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ARTICLE 26. WAIVER
26.01 No covenant, term or condition or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of any covenant, term or condition shall not be deemed
to be a waiver of any preceding or succeeding breach of the same or any other
covenant, term or condition. Acceptance by Lessor of any performance by Lessee
after the time the same shall have become due shall not constitute a waiver by
Lessor of the breach or default of any covenant, term or condition unless
otherwise expressly agreed to by Lessor in writing. The receipt and acceptance
by Lessor of delinquent rent shall constitute only a waiver of timely payment
for the particular rent payment involved.
ARTICLE 27. QUIET ENJOYMENT
27.01 Lessor hereby covenants with Lessee that upon payment by Lessee of the
rent as aforesaid and upon observance and performance of the terms of this Lease
by Lessee, Lessee shall peaceably hold and enjoy the Demised Premises for the
term hereby demised without hindrance or interruption by Lessor or any person or
persons lawfully or equitably claiming by, through or under Lessor.
ARTICLE 28. NOTICES
28.01 All notices or demands required or permitted to be given hereunder shall
be in writing and shall be either personally served or mailed by certified mail,
return receipt requested, to the other party at the following addresses:
To Lessor: JACK DYMOND ASSOCIATES
201 San Antonio Circle
Suite 180
Mountain View, CA 94040
To Lessee: CATALYTICA, INC.
430 Ferguson Drive
Building No. 3
Mountain View, CA 94043
28.02 Either party may change the foregoing address by giving notice to the
other in the manner provided herein. Any notice sent by mail shall be deemed
received on the third business day following deposit of the notice in the United
States Mail, with proper postage prepaid thereon.
ARTICLE 29. RIGHT TO LEASE ADDITIONAL SPACE
29.01 During the term of the Lease, Lessee shall have the right to lease
additional space within the Industrial Center, as and when any such space
becomes available for lease, but subject to the prior and superior rights of
other tenants in the Industrial Center
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to lease such space, as set forth in the "Right of First Refusal" list
attached hereto as Exhibit "B" and made a part hereof. At the time that any such
space becomes available, and provided that all of the other tenants having a
prior and superior right to lease the space have expressly declined to do so,
Lessor shall notify Lessee in writing of the availability of such space prior to
leasing the same to any other party. Within ten (10) business days following
Lessee's receipt of such notice, Lessee may deliver a written election to Lessor
to rent the space for the then fair market rental value, as mutually agreed upon
by the parties. The parties shall thereupon execute an amendment to this Lease
so as to include such additional space as part of the Demised Premises, subject
to all of the terms and conditions of this Agreement. In the event Lessee
exercises the option to lease the additional space but the parties are unable to
agree upon the fair market rental value, the matter shall be determined by
appraisal under the same procedure as set forth in Section 3.02 for
determination of rent payable during the extended term of this Lease.
ARTICLE 30. NOTICE OF INTENTION TO SELL
30.01 Lessor agrees to provide written notice to Lessee of Lessor's intention
to sell the Industrial Center, or any portion thereof that includes all or any
part of the Demised Premises. Such notice shall be given prior to Lessor
entering into any listing or sale agreement. Lessee shall be afforded a period
of ten (10) calendar days after receipt of such notice in which to advise Lessor
in writing of Lessee's interest in purchasing the property to be sold, in which
event, Lessor agrees to negotiate in good faith for sale of such property to
Lessee. Nothing herein shall be deemed to obligate or require Lessor to accept
any discounts, accommodations, concessions or other special arrangements with
respect to the purchase price and terms of sale. If the parties have not
executed a binding written agreement for purchase and sale of the property
within thirty (30) days after the date of Lessor's notice to Lessee, then Lessor
may proceed to list, negotiate, or sell the property to any other party without
further obligation hereunder to Lessee. After having once satisfied the
requirements of this Section, Lessor shall not again be obligated to do so.
ARTICLE 31. MISCELLANEOUS PROVISIONS
31.01 Captions. The captions used in this Lease are for convenience only and
--------
shall not be deemed to be relevant in resolving any question of interpretation
or construction of any provision contained herein.
31.02 Entire Agreement. This Agreement constitutes the entire agreement between
----------------
the parties and supersedes and cancels any prior agreements or understandings,
whether written or oral. It is expressly declared to be the intention of the
parties that this Agreement shall supersede and cancel the Original Lease, and
upon the execution hereof, the Original Lease shall be of no further force or
effect. This Agreement can only be modified by a written amendment hereto
executed by both parties.
31.03 Severability. If any term or provision of this Lease shall, to any
------------
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term end provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
-16-
<PAGE>
31.04 Time. Time is hereby declared to be of the essence of this Lease and each
----
and every provision hereof.
31.05 Corporate Authority. Each of the persons executing this Lease on behalf
-------------------
of Lessee does hereby represent and warrant that Lessee currently is in good
standing as a Delaware corporation, that the corporation is duly qualified to
transact business in the State of California as a foreign corporation, that the
corporation has full right and authority to enter into this Lease, and that each
person executing this Lease on behalf of the corporation is duly authorized and
empowered to do so.
31.06 Calendar Days. All references herein to any acts or obligations to be
-------------
performed within a certain number of days shall mean calendar days.
31.07 Choice of Law. This Lease shall be governed by and interpreted in
-------------
accordance with the laws of the State of California.
31.08 Memorandum of Lease. This Lease Agreement shall not be recorded but the
-------------------
parties may agree to execute and record a Memorandum of Lease, in form
satisfactory to Lessor and Lessee.
31.09 Successors and Assigns. Subject to the restrictions against assignment
----------------------
and subletting by Lessee, this Lease shall be binding upon and inure to the
benefit of the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the
day and year first above written.
LESSOR: LESSEE:
JACK DYMOND ASSOCIATES CATALYTICA, INC.
By /s/ [ILLEGIBLE]^^ By /s/ Ricardo B. Levy
----------------------------- -------------------------
PRESIDENT
-17-
<PAGE>
EXHIBIT "B"
-----------
Rights of First Refusal
430 Ferguson Drive
Buildings No. 1, 2, 3, and 4
Mountain View, California 94043
Priority Rank
First Refusal Leasing Rights
as Open Space Occurs
--------------------
<TABLE>
<CAPTION>
Period of Extension Upon
Current Lease Term Bldg. 1 Bldg. 4 Renewal of Existing Lease
------------------ ------- ------- -------------------------
<S> <C> <C> <C>
Catalytica 01/01/93 to 02/01/98 2 3 5 years
Litton 10/01/89 to 12/31/96 - - 3 years
</TABLE>
<PAGE>
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE dated October 23, 1997, is by and between JACK
DYMOND ASSOCIATES, a California general partnership ("LESSOR") and CATALYTICA,
INC., a Delaware corporation ("LESSEE").
IT IS HEREBY AGREED:
That certain Lease dated January 1, 1993, by and between Lessor and Lessee
concerning that certain industrial property known as 430 Ferguson Drive, in the
city of Mountain View, county of Santa Clara, state of California (the "LEASE"),
is hereby amended as follows:
1. PREMISES: For all purposes of the Lease, the Premises shall be deemed to be:
16,928 square feet of Building # One (1) (See Exhibit "A")
18,000 square feet of Building # Two (2)
35,000 square feet of Building # Three (3)
and 15,000 square feet of Building # Four (4)
The Basic Lease Information set forth in this First Lease Addendum shall fully
supersede and replace the Basic Lease Information which was part of the original
Lease.
2. TERM: The term shall be for six (6) years for Building #1 and for five (5)
years for Buildings #2, 3 and 4, all to be Coterminous. The Lease
commencement date will be January 16, 1998 for Building #1 and January 1,
1999 for Buildings #2, 3 and 4. The Lease ending date will be December 31,
2003.
3. OPTION TO RENEW: Lessor shall grant Lessee one (1) option to renew their
Lease for a period of five (5) years, under the same terms and conditions as are
set forth in their existing Lease, except that the rent shall be based on the
then fair market rate for similar properties in the immediate area. Lessee shall
give Lessor no less than ONE HUNDRED EIGHTY (180) days written notice of their
intent to exercise this option to renew.
4. RENT: Lessee shall pay to Lessor as Base Rent for the Premises, in lawful
money of the UNITED STATES, payable in advance on or before the first day of
each calendar month without any deductions, offsets or demands, the following
amounts:
Building #1 Month Rent
01 To 03 Free
04 To 36 .78/sq. ft./month NNN
37 To 72 .88/sq. ft./month NNN
Buildings #2, 3 and 4
01 To 60 .88/sq. ft./month NNN
Pg. 1 of 2
<PAGE>
FIRST ADDENDUM TO LEASE
OCTOBER 23, 1997
BETWEEN JACK DYMOND ASSOCIATES AND
CATALYTICA, INC.
5. USE OF PREMISES: General office, sales and marketing, R&D (chemical and
biological labs, pilot plants, combustion laboratories, light manufacturing, and
other related uses).
6. TENANT IMPROVEMENTS: (Building #1) Lessor, at Lessors sole cost and
expense, shall remove metal plates from windows and restore walls from such
removal. Carpets shall be shampooed.
7. All other terms and conditions of the Lease Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day and first
above written.
LESSOR:
JACK DYMOND ASSOCIATES, a
California General Partnership
By: /s/ [ILLEGIBLE]
----------------------------
Title: [ILLEGIBLE]
--------------------------
LESSEE:
CATALYTICA, INC. a
Delaware Corporation
By: /s/ Ricardo B. Levy
----------------------------
Title: CEO
--------------------------
Pg. 2 of 2
<PAGE>
EXHIBIT A
"EXHIBIT TO LEASE"
[FLOOR PLAN]
430 FERGUSON DRIVE - BUILDING #1
MOUNTAIN VIEW, CA 94043
<PAGE>
EXHIBIT A
Dymond Industrial Park
Ferguson Drive, Mountain View
Lands of Sylvania
[SITE PLAN]
<PAGE>
SECOND ADDENDUM TO LEASE
------------------------
This Second Addendum to Lease dated June 29, 1998, is by and between JACK DYMOND
ASSOCIATES, A California general partnership ("Lessor") and CATALYTICA, INC.,
a Delaware Corporation ("Lessee").
IT IS HEREBY AGREED:
That certain lease dated January 1, 1993 and First Addendum to Lease dated
October 23, 1997, by and between Lessor and Lessee concerning that certain
industrial property known as 430 Ferguson Drive, in the City of Mountain View,
County of Santa Clara, State of California (the "Lease"), is hereby amended as
follows:
1. PARAGRAPH 3: "Option to renew First Addendum to Lease", delete entire
paragraph and add: "Lessor shall grant Lessee one (1) option to renew their
Lease for a period of five (5) years, under the same terms and conditions as are
set forth in their existing Lease, except that the rent shall be based on the
percentage increase, if any, in the Consumer Price Index of the Bureau of Labor
and Statistics, U.S. Department of Labor, for Urban Wage Earners and Clerical
Workers, Oakland-San Francisco Area, All Items (C.P.I.). The amount of such
increase shall be calculated by multiplying the base rent provided in paragraph
4 - First Addendum to Lease- by a fraction, the numerator of which shall be the
C.P.I. for the month in which the adjustment is made, and the denominator of
which shall be the C.P.I. for the month in which the initial term of the First
Addendum of Lease commences. The sum so calculated shall be added to the rent
last paid (.88/ sq. ft./ month) provided in paragraph (4) of the First Addendum
to Lease. In no event shall the rent be reduced below the amount last paid."
Not withstanding the above, the rate at the end of the original term shall be
the existing rate plus 95% Of C.P.I.
2. PARAGRAPH 4: "Rent"; "First Addendum to Lease", Building #1, delete "Free
rent months 01 to 03". Add the following: Rent for Building #1 shall commence
effective July 1, 1998.
All other terms and conditions of the Lease Agreement and First Addendum to
Lease shall remain in full force and effect.
Pg. 1 of 2
<PAGE>
SECOND ADDENDUM TO LEASE
JUNE 29, 1998
BETWEEN JACK DYMOND ASSOCIATES AND
CATALYTICA, INC.
In Witness Whereof, Lessor and Lessee have executed this Lease the day and year
first above written.
Lessor:
Jack Dymond Associates, a
California General Partnership
By: /s/ Betty [Illegible]
----------------------------
Title: Partner
--------------------------
Lessee:
Catalytica, Inc. a
Delaware Corporation
By: /s/ Ricardo B. Levy
----------------------------
Title: PRESIDENT
--------------------------
Pg. 2 of 2
<PAGE>
EXHIBIT B
---------
Final Occupancy Premises
<PAGE>
EXHIBIT B
FINAL OCCUPANCY PREMISES
[FLOOR PLAN]
SIGNED: BILL KERBA JOHN GRATE
/s/ BILL KERBA /s/ JOHN GRATE
DATE: 12/6/00 12/6/00
[LOGO] building 3
Catalytica
<PAGE>
EXHIBIT C
---------
Initial Occupancy Premises
<PAGE>
EXHIBIT C
INITIAL OCCUPANCY PREMISES
[FLOOR PLAN]
SIGNED: BILL KERBA JOHN GRATE
/s/ BILL KERBA /s/ JOHN GRATE
DATE: 12/6/00 12/6/00
[LOGO] building 3
Catalytica
<PAGE>
EXHIBIT D
---------
Improvements to be Removed by Catalytica
1. Smart Lab Processing equipment, enclosure and related structures (including
without limitation the heating and cooling equipment and pumps and electrical
control panels)
<PAGE>
EXHIBIT D
---------
CONSENT OF LANDLORD
-2-
<PAGE>
[LOGO OF CATALYTICA]
December 6, 2000
Mr. Ronald Meredith
Jack Dymond Associates
450 First Street
Los Altos, CA 94022
RE: Lease ("Lease") by and between Jack Dymond Associates ("Lessor") and
Catalytica Combustion Systems, Inc. ("CCSI") for premises located at 430
Ferguson Drive, Mountain View, CA ("Premises")
Dear Ron:
By Lessor's signed acknowledgement of a letter that I sent you dated September
13, 2000, Jack Dymond Associates consented to the prospective assignment of the
Lease from Catalytica Inc. ("Catalytica") to CCSI (which has since changed its
name to Catalytica Energy Systems, Inc.) ("Assignment"). On and after the
Effective Date of the Assignment, Catalytica will remain in a portion of the
Premises under a Space Sharing Agreement to be completed with Catalytica Energy
Systems, Inc. ("CESI"). The use by Catalytica of the portion of the Premises
covered by the Space Sharing Agreement will remain unchanged after the Effective
Date of the Assignment. As you know, under the terms of the Lease, despite the
Assignment, Catalytica remains secondarily liable for the obligations of
"Lessee" under the Lease after the Assignment.
Under Article 14 of the Lease, entry by CESI and Catalytica into the Space
Sharing Agreement may require Lessor's consent. I am requesting by this letter
that you agree that this notice is sufficient to satisfy all of the requirements
of Article 14 of the Lease regarding the Space Sharing Agreement, and consent to
the entry by CESI and Catalytica into a Space Sharing Agreement by signing the
acknowledgement below.
430 Ferguson Drive
Mountain View, CA 94043-5272
650.960.3000 fax 650.960.0127
www.catalytica-inc.com
<PAGE>
Mr. Ronald Meredith
Jack Dymond Associates
December 6, 2000
Page 2 of 2
Thank you very much for your cooperation. If you have any questions regarding
this matter, please do not hesitate to call me.
Sincerely,
/s/ Bill Kerba
Bill Kerba
Director Facilities & E.H.&S.
Jack Dymond Associates hereby consents to the Space Sharing Agreement as set
forth above:
JACK DYMOND ASSOCIATES
By: /s/ Betty [Illegible]
----------------------
Its: Partner
---------------------
<PAGE>
EXHIBIT E
---------
BILL OF SALE AND PERSONAL PROPERTY LIST
-3-
<PAGE>
BILL OF SALE
------------
For good and valuable consideration the receipt of which is hereby
acknowledged, Catalytica, Inc., a Delaware corporation ("Seller"), does hereby
sell, transfer, and convey to Catalytica Energy Systems, Inc., a Delaware
corporation, or its designated assignee ("Buyer"), all of Seller's rights,
title, interests and claims whatever in the personal property identified on
Schedule 1 attached hereto ("Personal Property").
----------
SELLER:
Catalytica, Inc.,
a Delaware corporation
By: ______________________
Its: ______________________
DATED this ___________ day of ___________, 2000.
-4-
<PAGE>
Schedule 1
----------
Personal Property
-5-
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary
-------
Laboratory Equipment 701,683.77 637,903.35 63,780.42
Analytical Equipment 1,177,728.47 1,018,879.58 158,848.89
Office Equipment 231,336.37 158,879.92 72,456.45
Computer Equipment 851,467.13 614,822.69 236,644.44
Leasehold Improvements 5,942,295.26 4,101,912.86 1,840,382.40
Construction in Progress 1,300,000.00 0.00 1,300,000.00
-----------------------------------------------
10,204,511.00 6,532,398.40 3,672,112.60
===============================================
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Assets Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Laboratory Equipment
--------------------
10005 FAN MOTOR 7 1/2 HP 02/01/93 2,041.00 1,598.78 442.22
10010 LATHE 09/15/92 10,497.74 10,467.74 0.00
10011 NO DESCRIPTION 11/15/92 9,524.23 9,524.23 0.00
10014 MILLING DIGITAL DISPLAY 05/15/93 2,157.14 2,157.14 0.00
10021 Lab Benches 09/01/96 6,813.50 4,136.77 2,676.73
10032 Main Lab Hoods & Benches 02/01/97 63,905.66 48,994.33 14,911.33
10032 Lab Hoods, Benches and Installation 11/01/97 21,041.71 9,268.37 11,773.34
10032 Hood Installation 12/15/97 1,599.00 685.29 913.71
10038 Clark Forklift 03/01/98 22,750.63 12,512.85 10,237.78
10042 Lab Benches & Cabinets 05/01/98 4,917.56 2,540.74 2,376.82
1005 Storage Cabinet for Chemicals 07/15/82 1,504.37 1,504.37 0.00
10063 Lab Benches 02/01/99 10,730.83 3,934.64 6,796.19
1019 Steel Hood 06/01/83 2,600.00 2,600.00 0.00
1022 Complete Welding Outfit 08/24/83 1,848.95 1,848.95 0.00
1046 Milling Machine 02/28/85 3,595.28 3,595.28 0.00
1047 Lathe 03/26/85 3,500.00 3,500.00 0.00
1073 Exhaust System 04/30/86 3,385.00 3,385.00 0.00
1165 FUMED HOODS 02/20/87 1,511.91 1,511.91 0.00
1179 WILTON BAND SAW 11/11/87 1,889.62 1,889.62 0.00
1181 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1184 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1188 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1190 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1193 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1197 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1200 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1203 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1207 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1209 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1210 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1212 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1219 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1220 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1223 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1227 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1229 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1232 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1242 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1246 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1249 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
1266 Lab Hood 01/01/84 4,180.00 4,180.00 0.00
2136 WELDING KIT 03/22/88 1,892.19 1,892.19 0.00
2228 HOOD, BENCH & CABINETS 09/15/88 9,634.21 9,634.21 0.00
2229 HOOD, BENCH & CABINETS 09/15/88 9,634.21 9,634.21 0.00
2233 COMPRESSED AIR DRYER & CO2 REM 09/08/88 2,688.91 2,688.91 0.00
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2244 STORAGE BUILDING 09/08/88 6,892.37 6,892.37 0.00
2257 MILLER PLAZCUT 09/08/88 2,354.00 2,354.00 0.00
2270 HOOD, BENCH & CABINETS 11/15/88 9,662.18 9,662.18 0.00
2271 HOOD, BENCH & CABINETS 11/15/88 9,662.18 9,662.18 0.00
2398 CABLE SCANNER KIT 05/15/89 1,547.00 1,547.00 0.00
2483 FUME HOOD 08/15/89 4,258.61 4,258.61 0.00
3000 COMPRESSOR 10/17/88 9,145.82 9,145.82 0.00
3002 KAESER REGEN DRYER 10/17/88 4,614.38 4,614.38 0.00
3003 DEWPOINT MONITOR 10/17/88 2,814.64 2,814.64 0.00
3124 MORI-SEIKI ENGINE LATHE 02/15/89 11,385.00 11,385.00 0.00
10008 OXYGEN ANALYZER 03/15/92 5,101.54 5,101.54 0.00
10009 ZERO AIR GENERATOR 06/15/92 8,574.77 8,574.77 0.00
10012 OXYGEN ANALYZER MODEL 755R 03/15/93 6,271.33 6,271.33 0.00
10013 CO2 ANALYZER MODEL 880A 03/15/93 8,813.25 8,813.25 0.00
10015 TUBE FURNACE 03/15/94 3,339.51 3,220.22 119.29
10016 FURNACE BOX 03/15/94 1,759.06 1,696.26 62.80
10048 Ice Maker 08/01/98 2,326.29 1,085.60 1,240.69
10055 Solvent Purifier 12/01/98 20,382.54 8,153.02 12,229.52
1003 Ice Maker 04/14/82 1,732.94 1,732.94 0.00
1037 Autoclave Reactor 300CC 316SS 10/31/84 6,150.38 6,150.38 0.00
1065 Centrifuge 11/06/85 6,214.06 6,214.06 0.00
1094 HP 5880A Gas Chromatograph 05/24/85 24,727.96 24,727.96 0.00
1095 Used HP 5880A Gas Chromatoraph 06/04/85 12,000.00 12,000.00 0.00
1096 Used HP 5880A Gas Chromatoraph 06/21/85 12,000.00 12,000.00 0.00
1099 HP 5880A Gas Chromatograph 03/26/86 22,755.95 22,755.95 0.00
1100A PROBE QNP W/5MM VT INSERT 01/17/89 14,510.00 14,510.00 0.00
1155 MDS-81D DIGESTION SYSTEM 10/21/87 7,201.10 7,201.10 0.00
2138 AUTOCLAVE 1 LITER TITANIUM REACT 03/24/88 14,561.54 14,561.54 0.00
2153 300 CC MAGNEDRIVE 04/25/88 14,137.00 14,137.00 0.00
2249 STIRRED AUTOCLAVE 09/08/88 13,503.00 13,503.00 0.00
2275 WILD STEREOMICROSCOPE 10/17/88 5,395.40 5,395.40 0.00
2427 STIRRED AUTOCLAVE 06/15/89 22,790.39 22,790.39 0.00
2521 DRY LAB - GLOVE BOX 09/15/89 9,644.80 9,644.80 0.00
2543 BLOWER FOR GLOVE BOX 10/15/89 2,193.95 2,193.95 0.00
3016 GC MAINFRAME, INTEGRATOR 11/17/88 11,919.80 11,919.80 0.00
3016B GC MAINFRAME 12/17/88 3,060.20 3,060.20 0.00
3039 GC MAINFRAME 11/17/88 26,512.33 26,512.33 0.00
3050 TOP LOADING BALANCE 12/17/88 2,250.00 2,250.00 0.00
3053 COLLECTOR DIGILAB SER.#7865 12/17/88 3,957.64 3,957.64 0.00
3075 LAUDA REFRIDGERATED CIRCULATIN 01/17/89 3,621.95 3,621.95 0.00
3082 LABONCO GLOVE BOX MODEL 50350 01/17/89 2,568.00 2,568.00 0.00
3125 BC MAGNEDRIVE 02/15/89 17,210.73 17,210.73 0.00
3126 BC MAGNEDRIVE 02/15/89 17,210.73 17,210.73 0.00
3141 MAGNEDRIVE TITANIUM 03/15/89 5,963.95 5,963.95 0.00
3142 MODEL 6500 PORTABLE ELECTRO 03/15/89 2,903.20 2,903.20 0.00
3155 CIRCULATOR BATH 03/15/89 4,488.65 4,488.65 0.00
------------------------------------------------
701,683.77 637,903.35 63,780.42
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Analytical Equipment
--------------------
2259 MODEL 951A NO/NOX ANALYZER 09/08/88 10,091.04 10,091.04 0.00
2343 GA200 BALANCE 04/15/89 2,300.50 2,300.50 0.00
2529 X-RAY DEFFRACTOMETER 09/15/89 150,695.00 150,695.00 0.00
3094 CHEMI-SORB 2800 01/17/89 97,567.13 97,567.13 0.00
3094 Chemisorb Upgrade 03/15/95 11,679.79 11,679.79 0.00
30001 XRF/SEM-EDAX SCANNING ELECTRON 08/15/90 205,258.15 205,258.15 0.00
30003 HIGH TEMP AIR ATTACHMENT 10/15/90 30,963.00 30,963.00 0.00
30004 WATER TO AIR CHILLER 10/15/90 2,886.01 2,886.01 0.00
30006 MICROWAVE ASHER 11/15/90 7,783.82 7,783.82 0.00
30010 AUTOPORE 01/15/91 40,946.79 40,946.79 0.00
30012 CHILLER MODEL R050K 09/08/92 2,639.05 2,639.05 0.00
30014 ICP SPECTROMETER 07/15/91 132,573.00 132,573.00 0.00
30017 DIONEX ACI CHROMATOGRAPHY SYST 05/15/92 9,151.06 9,151.06 0.00
30019 MICROWAVE SAMPLE PREP SYSTEM 10/15/92 15,356.93 15,356.93 0.00
30022 CHROMATOGRAPHIC DATA SYSTEM 03/15/93 7,505.33 7,359.02 146.31
30023 CHROMATOGRAPHIC DATA SYSTEM 03/15/93 7,505.34 7,359.03 146.31
30025 NIKON OPTIPHOT M BRIGHTFIELD MIC 11/15/93 5,843.39 5,794.31 49.08
30026 ASAP 2000 MICROPORE APPLICATION 12/15/93 35,000.00 34,713.92 286.08
30027 ASAP 2000 MICROPORE APPLICATION 12/15/93 35,000.00 34,713.92 286.08
30028 IXRF System 07/15/95 6,000.00 6,000.00 0.00
30029 HP VECTRA Computer 10/01/96 4,175.84 3,479.87 695.97
30032 HP 6890 GC 10/01/96 29,033.23 24,194.37 4,838.86
30037 Fume Hood 11/01/97 3,000.00 1,850.00 1,150.00
30041 Mettler Thermal Analysis System 05/01/98 92,133.39 47,602.25 44,531.14
30043 MARS - Microwave Digestion System 06/01/98 23,169.43 11,584,72 11,584.71
30048 Ratio Controller 08/01/98 7,225.00 3,371.66 3,853.34
30052 isorption Analyzer 09/01/98 71,973.23 32,387.96 39,585.27
30053 LAMBA 10 PC Spectometer 12/01/98 11,548.72 4,619.48 6,929.24
30055 Cryo Cooler 02/01/99 2,883.63 1,057.33 1,826.30
30061 Interface for Mass Spec 06/01/99 3,961.51 1,188.45 2,773.06
30070 Mass Spec-2910 Chemisorp Analyzer 08/01/99 56,337.35 15,023.29 41,314.06
2529A K DRIVE & 8 LINE INTERFACE 07/15/90 3,335.55 3,335.55 0.00
2529B PELTIER DETECTOR 03/15/94 5,438.75 25,248.25 190.50
2529C ON SAMPLER CHANGER 03/15/94 11,907.50 11,818.33 89.17
30001A DESK II FOR XRF/SEM-EDAX 08/15/90 6,553.75 6,553.75 0.00
30016 VIDEO COPY PROCESSOR P68U 04/15/92 1,813.61 1,813.61 0.00
30026A Sales Tax for Asset #30026 (Micropore) 04/01/96 2,887.50 2,887.50 0.00
30027A Sales Tax for Asset #30027 (Micropore) 04/01/96 2,887.50 2,887.50 0.00
30077 IXRF Syste 12/01/99 10,716.75 2,143.34 8,573.41
Mettler Thermal Analysis System 12/01/00 (10,000.00) 0.00 (10,000.00)
1,177,728.47 1,018,879.58 158,848.89
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Office Equipment
1103 Transcriber & Recorder 06/04/82 1,556.90 1,556.90 0.00
1109 IBM Selectric II Typewriter 04/06/83 1,972.38 1,972.38 0.00
1115 Hole Punching Machine 10/15/84 1,730.35 1,730.35 0.00
1127 Merlin Lettering System 11/27/85 1,891.29 1,891.29 0.00
1128 Poly Pro Storage Cabinet 01/08/86 2,790.56 2,790.56 0.00
1129 D Module 02/12/86 1,556.85 1,556.85 0.00
1286 D Module 02/12/86 1,556.85 1,556.85 0.00
40272 LIFECYCLE 02/15/91 2,455.65 2,455.65 0.00
40273 LIFECYCLE 02/15/91 2,455.65 2,455.65 0.00
40309 FIRE PROOF LATERAL FILE 4 DRAWER 05/15/92 2,001.66 2,001.66 0.00
40310 FIRE PROOF LATERAL FILE 4 DRAWER 05/15/92 2,001.66 2,001.66 0.00
40311 FIRE PROOF LATERAL FILE 4 DRAWER 05/15/92 2,001.66 2,001.66 0.00
40312 FIRE PROOF FILE CABINET 4 DRAWER 05/15/92 2,001.66 2,001.66 0.00
40313 FIRE PROOF FILE CABINET 4 DRAWER 05/15/92 2,001.67 2,001.67 0.00
40314 FIRE PROOF FILE CABINET 4 DRAWER 05/15/92 2,001.67 2,001.67 0.00
40315 FIREPROOF LATERAL FILE 08/15/92 2,112.73 2,112.73 0.00
40316 FIREPROOF LATERAL FILE 08/15/92 2,112.74 2,112.74 0.00
40317 FIREPROOF LATERAL FILE 08/15/92 2,112.74 2,112.74 0.00
40319 RICOH FACSIMILE 10/15/92 3,564.68 3,564.68 0.00
40320 FIRE-PROOF FILE CABINET 03/15/93 1,698.36 1,698.36 0.00
40321 FIREPROOF LATERAL FILE 05/15/93 1,880.51 1,880.51 0.00
40322 MITA DC-7090 COPIER 05/15/93 12,448.75 12,448.75 0.00
40323 PAPER SHREDDER-HEAVY DUTY 07/15/93 1,853.80 1,853.80 0.00
40324 RICOH FACSIMILE 03/15/94 2,863.22 2,863.22 0.00
40325 Ricoh Facsimile 11/15/94 2,159.59 2,159.59 0.00
40326 Telephone System 11/15/94 12,990.00 12,990.00 0.00
40327 Receptionist Area Furniture 08/01/97 4,194.35 2,796.23 1,398.12
40328 Mail Boxes 01/15/98 5,251.80 3,063.55 2,188.25
40329 Phone System 03/15/98 122,774.96 67,526.22 55,248.74
40330 Stations 07/01/98 9,967.57 4,817.65 5,149.92
40331 Phone System (labor) 08/01/98 5,200.00 2,253.33 2,946.67
40332 Lateral File 10/01/98 2,535.63 1,098.77 1,436.86
40333 Fire Proof Cabinet 04/01/99 2,819.24 939.75 1,879.49
40334 Lateral File 11/01/99 2,819.24 610.84 2,208.40
231,336.37 158,879.92 72,456.45
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Computer Equipment
60089 Dell Pentium Computer 02/01/96 2,430.84 2430.84 0.00
60093 Dell Pentium Computer 03/01/96 2,297.23 2297.23 0.00
60094 Acma Pentium 133 Computer 04/01/96 2,138.06 2138.06 0.00
60106 Acma Pentium 133 Computer 09/01/96 1,959.20 1959.20 0.00
60110 HP OmniBook 800CS Laptop Computer 11/01/96 3,940.94 3940.94 0.00
60114 Power Center 132 Computer 12/01/96 2,594.06 2594.06 0.00
60117 Dell Pentium 200 Computer 02/01/97 3,144.20 3144.20 0.00
60131 Dell Pentium 200 Computer 04/01/97 2,615.14 2615.14 0.00
60133 Dell pentium 200 Computer 04/01/97 2,604.33 2604.33 0.00
60136 Powerbook 3400 05/01/97 6,316.90 6316.90 0.00
60138 Dell Pentium 200 Computer 05/01/97 2,363.32 2363.32 0.00
60145 Dell Pentium 200 Computer 07/01/97 2,538.48 2538.48 0.00
60146 Dell Pentium 200 Computer 07/01/97 2,538.48 2538.48 0.00
60151 Acma pentium Computer 08/01/97 2,472.69 2472.69 0.00
60152 Acma Pentium Computer 08/01/97 2,472.69 2472.69 0.00
60156 Coastline P200 Computer 11/01/97 2,428.23 2428.23 0.00
60159 Acma Pentium 200 Computer 11/01/97 2,454.29 2454.29 0.00
60161 Acma Pentium Pro 200 Computer 11/01/97 2,454.29 2454.29 0.00
60167 Power Center Pro 180 Computer 11/01/97 2,356.28 2356.28 0.00
60183 Dell Pentium II 266 Computer 02/15/98 2,563.36 2420.94 142.42
60186 Acme Pentium II 266 Computer 03/01/98 2,601.25 2384.47 216.78
60189 Acma Pentium II 266 Computer 03/01/98 2,393.10 1927.77 465.33
60199 Acma Pentium II 266 Computer 04/01/98 2,522.48 2242.21 280.27
60201 IBM Thinkpad 05/01/98 3,904.58 3362.28 542.30
60207 Pentium II-333 Computer 06/01/98 2,627.07 2189.22 437.85
60213 Pentium II-333 Computer 06/01/98 2,383.51 1986.25 397.26
60223 Pentium Computer System 08/01/98 2,368.51 1842.16 526.35
60224 Pentium computer system 08/01/98 2,056.75 1599.68 457.07
60225 Pentium Computer System 08/01/98 2,056.75 1599.68 457.07
60226 Pentium Computer System 08/01/98 2,056.75 1599.68 457.07
60246 Pentium II - D233ST system 10/01/98 3,441.27 2485.35 955.92
60247 Pentium II - D300XT system 10/01/98 3,746.54 2705.83 1040.71
60248 Latitude CPI 10/01/98 4,623.35 3339.09 1284.26
60249 Screamer Workstation 11/01/98 17,637.96 12284.58 5389.38
60250 Pentium II 350 Computer 11/01/98 1,950.51 1354.51 596.00
60254 Pentium II-450 System 12/01/98 4,045.56 2697.04 1348.52
60266 Toshiba Portage Notebook 03/01/99 2,647.80 1544.55 1103.25
60273 Toshiba Portage Computer 04/01/99 2,832.68 1479.28 1353.40
60279 HP Laser Printer 07/01/99 3,005.02 1419.03 1585.99
60280 Laptop PII / 366 07/01/99 4,826.96 2279.39 2547.57
60284 Pentium II 09/01/99 2,432.64 1013.59 1419.05
60289 Pentium II 09/01/99 1,771.23 738.00 1033.23
60298 Pentium II 11/01/99 1,770.95 639.51 1131.44
60300 Latitude C 11/01/99 3,075.37 1110.54 1964.83
60301 IBM Tinkpa 11/01/99 3,797.41 1371.28 2426.13
60308 Pentium II 01/01/00 1,671.64 510.77 1160.87
60309 Pentium II 01/01/00 1,409.67 430.73 978.94
60311 Pent II wi 04/01/99 2,852.65 1584.80 1267.85
60312 Latitude C 02/01/00 3,239.92 899.98 2339.94
60313 Latitude C 02/01/00 3,239.92 899.98 2339.94
60314 Latitude C 02/01/00 3,239.92 899.98 2339.94
60315 Pentium II 02/01/00 2,050.51 569.59 1480.92
60316 Pentium II 02/01/00 2,050.52 569.59 1480.93
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60319 IBM 600 Th 04/01/00 4,119.93 915.53 3204.40
60322 IBM 600 Th 05/01/00 4,894.27 951.66 3942.61
60326 IBM Thinkp 08/01/00 3,768.28 418.69 3349.59
60328 Pentinum III 700 System 10/01/00 2,127.63 118.20 2009.43
60332 IBM Thinkpad T20 10/01/00 3,641.12 202.28 3438.84
60084 Dell Pentium Computer 01/15/96 2,261.67 2261.67 0.00
60085 Dell Pentium Computer 01/15/96 2,178.70 2178.70 0.00
60086 Dell Pentium Computer 02/01/96 2,155.00 2155.00 0.00
60088 Dell Pentium Computer 02/01/96 2,185.34 2185.34 0.00
60097 Pentium 133 Computer 05/01/96 1,707.07 1707.07 0.00
60098 Pentium 133 Computer 05/01/96 1,707.06 1707.06 0.00
60099 Acma Pentium Computer 06/01/96 2,138.06 2138.06 0.00
60103 Acma Pentium 166 Computer 08/01/96 2,260.90 2260.90 0.00
60109 Acma Pentium 133 Computer 11/01/96 1,930.11 1930.11 0.00
60111 Acma Pentium 133 Computer 11/01/96 1,930.11 1919.00 11.11
60115 Acma Pentium 133 Computer 12/01/96 1,930.11 1930.11 0.00
60124 Dell pentium 200 Computer 04/01/97 2,632.34 2632.34 0.00
60154 Acma Pentium 200 Computer 09/01/97 2,472.69 2472.69 0.00
60169 DELL PENTIUM II 300 COMPUTER 12/15/97 3,235.62 3235.62 0.00
60202 Pentium II - 266 Computer 05/01/98 2,484.34 2139.29 345.05
60206 Pentium II - 333 Computer 06/01/98 2,627.07 2189.22 437.85
60264 Latitude Notebook 03/01/99 3,741.14 2182.33 1558.81
60293 Pentium II 11/01/99 1,573.95 568.37 1005.58
60292 Pentium II 11/01/99 1,573.95 568.36 1005.59
60294 Pentium II 11/01/99 1,573.95 568.36 1005.59
60295 Pentium II 11/01/99 1,573.95 568.36 1005.59
60291 Pentium II 11/01/99 1,573.97 568.36 1005.61
60297 Latitude C 11/01/99 3,075.37 1110.54 1964.83
60317 Pentium II 03/01/00 2,020.87 505.21 1515.66
60318 Latitude C 03/01/00 3,224.77 806.19 2418.58
60324 Latitude C 07/01/00 3,173.38 440.75 2732.63
60325 Latitude C 07/01/00 3,173.37 440.75 2732.62
60331 IBM Thinkpad T20 10/01/00 3,641.13 202.34 3438.79
60083 Toshiba Pentium 400CS 12/15/95 3,828.93 3828.93 0.00
60087 Dell Pentium Computer 02/01/96 4,526.58 4526.58 0.00
60101 Acma Pentium 133 Computer 07/01/96 2,047.55 2047.55 0.00
60107 Acma Pentium 133 Computer 11/01/96 1,930.11 1930.11 0.00
60113 Acma Pentium Computer 11/01/96 1,930.10 1930.10 0.00
60122 Dell Pentium 200 Computer 04/01/97 2,632.33 2632.33 0.00
60137 Powerbook 3400 05/01/97 7,083.90 7083.90 0.00
60141 Laptop Computer 06/01/97 5,647.44 5647.44 0.00
60142 Dell Pentium 200 Computer 07/01/97 2,681.91 2681.91 0.00
60166 Power Center Pro 180 Computer 11/01/97 2,356.29 2356.29 0.00
60173 Acma Pentium II 266 Computer 02/15/98 2,649.13 2501.95 147.18
60174 Acma Pentium II 266 Computer 02/15/98 2,649.13 2501.95 147.18
60175 Acma Pentium II 266 Computer 02/15/98 2,649.14 2501.97 147.17
60176 Acma Pentium II 266 Computer 02/15/98 2,649.14 2501.97 147.17
60190 Acma Pentium II Computer 04/01/98 2,605.84 2099.14 506.70
60191 Acma Pentium II Computer 04/01/98 2,605.83 2316.29 289.54
60205 Pentium II - 333 Computer 06/01/98 2,643.31 2202.75 440.56
60210 Pentium II - 333 Computer 06/01/98 2,643.31 2202.75 440.56
60245 PC Notebook - Pent II - D266 09/01/98 4,836.61 3627.45 1209.16
60268 Pentium II - 450 System 03/01/99 4,683.15 2731.84 1951.31
60320 Pentium II 04/01/00 12,080.13 2684.47 9395.66
60321 Tape Backu 05/01/00 4,710.14 951.86 3794.28
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60090 Acma Pentium 133 Computer 03/01/96 2,174.70 2174.70 0.00
60091 Acma Dual Pentium 133 Computer (Serve 03/01/96 6,409.27 6409.27 0.00
60092 Toshiba P90 Notebook 03/01/96 4,316.94 4316.94 0.00
60095 Data Link Equipment 04/01/96 5,404.04 5404.04 199.73
60096 Powermac 7200 05/01/96 2,770.20 2770.20 0.00
60100 Acma Pentium 166System 07/01/96 2,638.02 2638.02 0.00
60102 Share Data Stock Software 09/01/96 6,496.55 6496.55 0.00
60104 INKS-High Speed Network Connection to I 10/01/96 4,745.49 4745.49 0.00
60105 Internet Server 09/01/96 2,389.45 2389.45 0.00
60108 Acma Pentium 133 Computers 11/01/96 2,054.02 2054.02 0.00
60112 HP Laserjet 5 Printer 11/01/96 2,046.17 2046.17 0.00
60116 Acma Pentium 166 Computer 12/01/96 1,862.22 1862.22 0.00
60118 Dell Pentium 200 Computer 02/01/96 2,707.82 2707.82 0.00
60119 Computer Prpjector 02/01/97 5,446.44 5446.44 0.00
60120 Powerbook 1400c 117MHZ 02/01/97 5,145.38 5145.38 0.00
60121 Dell Pentium 200 Computer 02/01/97 2,632.33 2632.33 0.00
60123 Dell Pentium 200 Computer 04/01/97 2,632.33 2632.33 0.00
60125 Dell Pentium 200 Computer 04/01/97 2,740.10 2740.10 0.00
60126 Dell Pentium 200 Computer 04/01/97 2,740.10 2740.10 0.00
60127 HP Deskjet 1600CM Color Printer 04/01/97 2,250.90 2250.90 0.00
60128 Shiva LanRover (Remote Access Device) 04/01/97 3,370.88 3370.88 0.00
60129 Powerbase 603e Computer 04/01/97 2,239.61 2239.61 0.00
60130 HP Vectra P166 Computer 04/01/97 3,031.00 3031.00 0.00
60132 Dell Pentium 200 Computer 04/01/97 2,604.34 2604.34 0.00
60134 Dell Pentium 200 Computer 04/01/97 2,722.86 2722.86 0.00
60140 Dell Pentium Pro Network Server 05/01/97 7,513.89 7513.89 0.00
60139 Videoconferencing Computer 07/01/97 2,570.62 2570.62 0.00
60143 Dell Pentium 200 Computer 07/01/97 2,681.91 2681.91 0.00
60144 HP Laserjet 5M 07/01/97 1,730.92 1730.92 0.00
60147 Dell Latitude Notebook M166 Computer 07/01/97 4,312.68 4312.68 0.00
60148 Powerbase 603e Computer 07/01/97 2,199.61 2199.61 0.00
60149 Videoconferencing Equipment 08/01/97 10,318.59 10318.59 0.00
60150 Acma Pentium 200 Computer 08/01/97 2,769.29 2769.29 0.00
60153 Power Center Pro 180 Computer 08/01/97 2,209.59 2209.59 0.00
60155 Acma Pentium 200 Computer 11/01/97 2,454.29 2454.29 0.00
60157 Vectra P200 Computer 11/01/97 2,531.97 2531.97 0.00
60158 Videoconference Equipment 11/01/97 6,334.84 6334.84 0.00
60160 IBM Thinkpad Computer 11/01/97 4,137.32 4137.32 0.00
60162 Acma Pentium II 266 Computer 11/01/97 2,627.48 2627.48 0.00
60163 Acma Pentium II 266 Computer 11/01/97 2,627.49 2627.49 0.00
60164 HP Laserjet 5 Printer 11/01/97 1,586.95 1586.95 0.00
60168 CISCO PIX 12/15/97 18,394.20 18394.20 0.00
60170 Dell Laptop Inspiron Computer 01/15/98 3,899.15 3790.85 108.30
60171 Dell Pentium II 300 Computer 01/15/98 3,182.55 3094.14 88.41
60172 Dell Pentium II 233 Computer 01/15/98 2,263.52 2200.65 62.87
60177 Dell Laptop Inspiron Computer 02/15/98 3,541.94 3345.17 196.77
60178 HP Laserjet 400N Printer 02/15/98 1,586.94 1498.77 88.17
60180 Network Switchers, Hubs, & Cable Upgrad 03/15/98 40,682.70 37292.47 3,390.23
60181 Deskjet 1600CM Printer 02/15/98 2,052.42 1938.39 114.03
60182 IBM Thinkpad Computer 02/15/98 4,915.63 4642.53 273.10
60184 Acma Pentium II 266 02/15/98 2,400.16 2266.80 133.36
60185 Acma Pentium II 266 Computer 02/15/98 2,400.16 2266.80 133.36
60187 Acma Pentiumii 266 Computer 03/01/98 2,601.25 2384.47 216.78
60188 Acma Pentium II Computer 03/01/98 2,378.51 2180.31 198.20
60192 Acma Pentium II 266 Computer 04/01/98 2,346.03 2085.36 260.67
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60196 e 97 Software 04/01/98 1,558.80 1385.60 173.20
60198 HP LaserJet 400N 04/01/98 1,550.14 1377.90 172.24
60200 Acma Pentium II 266 Computer 04/01/98 2,522.48 2102.08 420.40
60203 Pentium II - 333 Computer 05/01/98 7,011.61 5648.24 1363.37
60204 Pentium II - 266 Computer 05/01/98 9,704.87 8356.98 1347.89
60208 Pentium II - 333 Computer 06/01/98 2,643.31 2202.75 440.56
60209 Pentium II - 400 Computer 06/01/98 2,821.92 2351.60 470.32
60211 IBM Thinkpad 06/01/98 5,651.73 4709.77 941.96
60212 Platinum System Manager 06/01/98 4,150.57 3458.80 691.77
60214 Dual Network Server- Finance 06/01/98 11,173.41 9311.17 1862.24
60215 IntraNet Server 06/01/98 11,173.41 9311.17 1862.24
60204 Software for Pent II system 06/01/98 1,090.08 908.40 181.68
60216 Pentium II - 333 System 07/01/98 2,112.89 1702.05 410.84
60218 Matrix 5000 MultiServer 07/01/98 4,118.91 3318.01 800.90
60219 SmartCell - Matrix 5000 07/01/98 1,357.46 1093.51 263.95
60220 Cable Rack 07/01/98 2,047.66 1649.50 398.16
60221 SuperStack Switches/Hub 07/01/98 7,069.81 5695.11 1374.70
60222 Desk Jet Printer 07/01/98 2,029.69 1635.02 394.67
60227 Dual Pentium Server 08/01/98 6,497.01 5053.22 1443.79
60229 HP Laser Jet Printer 09/01/98 1,536.07 1152.05 384.02
60230 Smart Ups 09/01/98 784.81 588.60 196.21
60231 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60232 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60233 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60234 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60235 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60236 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60237 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60238 Pentium II - 333 System 09/01/98 1,788.14 1341.10 447.04
60243 Pentium II - 333 System 09/01/98 2,057.68 1543.25 514.43
60244 Pentium II - 333 System 09/01/98 2,057.69 1543.27 514.42
60245 Pentium II - D266XT system 10/01/98 4,295.36 3102.21 1193.15
60251 Pentium II 350 Computer 11/01/98 1,950.51 1354.21 596.30
60253 Think Pad PII300 12/01/98 5,183.01 3455.33 1727.68
60255 NT Server 02/01/99 11,755.46 7183.89 4571.57
60256 HP LaserJet 02/01/99 1,220.87 746.08 474.79
60257 CompuSwitch & mount 02/01/99 1,462.57 893.79 568.78
60258 Amplifier/Wireless 02/01/99 2,055.23 1255.98 799.25
60259 Voice & Data Cabling 02/01/99 7,074.00 4323.00 2751.00
60261 Pentium II - 450 system 02/01/99 2,376.35 1452.22 924.13
60262 Pentium II - 450 system 02/01/99 2,592.85 1584.51 1008.34
60263 Dual Pentium Server 03/01/99 11,417.39 6660.15 4757.24
60265 Latitude Notebook 03/01/99 4,033.42 2352.83 1680.59
60267 Network Hub & Switches 03/01/99 4,005.89 2336.77 1669.12
60271 HP LaserJet Printer 04/01/99 1,521.37 507.12 1014.25
60272 Disk Drive for IIPO 04/01/99 1,623.75 541.24 1082.51
60274 Pentium II - 450 Computer System 05/01/99 2,197.95 1160.02 1037.93
60276 HP 8500DN Printer 05/01/99 8,747.68 4616.82 4130.86
60277 Pentium II Computer 06/01/99 1,882.31 941.16 941.15
60278 IBM ThinkPad & accessories 06/01/99 3,930.56 1965.28 1965.28
60282 Internet M 09/01/99 7,898.18 3290.91 4607.27
60283 Laptop - I 09/01/99 4,358.98 1816.23 2542.75
60285 Pentium II 09/01/99 1,771.23 738.00 1033.23
60286 Pentium II 09/01/99 1,771.23 738.00 1033.23
60290 Pentium II 09/01/99 1,771.22 738.00 1033.23
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
60288 Pentium II 09/0l/99 2,113.30 880.53 1232.77
60302 NT Server 11/01/99 1,932.52 697.84 1234.68
60303 Team Stati 12/0l/99 16,408.93 5469.63 10939.30
60304 Dell Pent 12/01/99 1,552.30 517.43 1034.87
60305 Dell Pent 12/01/99 1,552.30 517.43 1034.87
60306 Dell Pent 12/01/99 1,552.30 517.43 1034.87
60307 Dell Pent 12/01/99 1,552.30 517.43 1034.87
60323 IBM Thinkp 07/01/00 3,579.35 497.13 3082.22
60327 Bldg 3 Net 04/01/00 31,567.28 7014.95 24552.33
60329 Quantum Snap Server 10/01/00 4,029.45 223.86 3805.59
60330 Quantum Snap Server 10/01/00 4,029.45 223.86 3805.59
60333 Pentinum III - 700 System 10/01/00 1,940.77 107.82 1832.95
November Adds 11/01/00 13,517.64 13517.64
851,467.13 614,822.69 236,644.44
</TABLE>
<PAGE>
Catalytica Energy Systems, Inc.
Fixed Asset Transfers from Catalytica, Inc.
<TABLE>
<CAPTION>
Asset Date Accum. Book
ID Description in Service Cost Depr. Value
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Leasehold Improvements
1998-9805 Building 1 09/01/98 730,867.02 164,445.07 566,421.95
1998-9805 Bldg 1 Ren 09/01/98 7,035.89 1,583.07 5,452.82
1998-9809 Main Lab E 10/01/98 329,933.08 71,485.50 258,447.58
1999-9821 Bldg 4 Ren 04/01/99 330,014.03 13,750.58 316,263.45
2000-9904 Bldg 3 Off 04/01/00 743,353.49 49,556.89 693,796.60
LH1985 LHI 1985 07/01/85 806,736.50 806,736.50 0.00
LH1986 LHI 1986 07/01/86 935.00 935.00 0.00
LH1988 LHI 1988 07/01/86 192,662.79 192,662.79 0.00
LH1989 LHI 1989 07/01/86 84,021.88 84,021.88 0.00
LH1990 LHI 1990 06/l5/90 364,972.41 364,972.41 0.00
LH1991 LHI 1990 07/01/91 1,063,103.09 1,063,103.09 0.00
LH1992 LHI 1992 07/01/92 1,221,653.84 1,221,653.84 0.00
LH1993 LHI 1993 07/01/93 47,862.73 47,862.73 0.00
LH1994 LHI 1994 07/01/94 6,462.10 6,462.10 0.00
LH1995 LHI 1995 07/01/95 12,681.41 12,681.41 0.00
5,942,295.26 4,101,912.86 1,840,382.40
</TABLE>
<PAGE>
Construction in Progress Book Value
------------------------ ----------
Smart Lab (Scale-up lab for Pharmaceuticals) $ 600,000.00
Building 2 Leasehold Improvements 550,000.00 (1)
NovoTech Laboratory Improvements 150,000.00 (2)
-------------
1,300,000.00
-------------
(1) Of this amount $300,000.00 was spent after August 1, 2000 and to the
extent paid by Catalytica, Inc. or a Non-Energy Subsidiary will be
considered a contribution to CESI included in the Capitalization
Amount in the calculation of the `Cash Amount'.
(2) To the extent paid by Catalytica, Inc. or a Non-Energy Subsidiary,
this amount will be considered a contribution to CESI included in the
Capitalization Amount in the calculation of the `Cash Amount'.
