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EXHIBIT 10.63
LEASEHOLD CONTRACT
BETWEEN
THE LESSOR: BASLER KANTONALBANK
POSTFACH
CH-4002 BASEL
SWITZERLAND
AND
THE LESSEE: DISCOVERY TECHNOLOGIES AG
GEWERBESTRASSE 14
CH-4123 ALLSCHWIL
SWITZERLAND
CONCERNING: OFFICE/LABORATORY PREMISES IN THE
REAL-ESTATE PROPERTY ON 2ND FLOOR OF
GEWERBESTRASSE 14
CH-4123 ALLSCHWIL
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Leasehold contract BKB/Discovery Technologies AG, Gewerbestrasse 14 - 2nd floor,
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1. Preamble
The parties agree on the rent for premises at Gewerbestrasse 14 in
Allschwil. The basic rent forms payment for the assignment of these
premises in their (present) "rough state" (gross rent). For her(1)
requirements the Lessee needs the installation of additional technical
appointments (energy, ventilation, possibly laboratory installations
etc.). At the present point in time, how and when the premises are to be
extended remains open (only laboratories, only offices or mixed
laboratories and offices).
The Lessee shall reimburse this extension investment on the part of the
Lessor by means of additional rent (extension rent). At the proper time
a corresponding agreement will be made to this effect in a rider to this
leasehold contract.
2. Leased property
2.1 The Lessor shall assign to the Lessee the following premises in the
previously mentioned property for use on a leased basis:
- Laboratory and office premises on the 4th floor, approx. 754 sq.m
(incl. toilet facilities, lift landing place) currently usable in its
shell state as a storeroom.
2.2 The Lessee is entitled in building no. 14 to joint use of the following
communal and collective parts, premises, rooms and appointments under
the terms of the house rules:
- Staircase
- Passenger lifts and goods lift
2.3 The rented premises (without subdivisions) according to subitem 2.1 are
set out in the floor plan enclosed.
The plan shall be signed by both parties and shall form part of this
contract.
3. Term of tenancy
3.11 Start of tenancy
Tenancy of the rough premises shall commence on 1 July 2000.
3.12 Term of tenancy, extension of contract
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(1) Translator's note: The use of the feminine form here may indicate either a
female lessee or simply a corporate lessee in the form of a company.
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The tenancy shall be concluded for an initial fixed contractual duration
of 7 years and 6 months until 31 January 2008.
On expiry of the first contractual period the contract shall be extended
by an additional fixed contractual term of five years each time, unless
terminated by registered letter at least 12 months prior to expiry.
3.13 Notice
On expiry of a fixed contractual period the tenancy can be terminated at
12 months' notice to the end of January, the first time being
end-January 2008.
3.2 End of lease
3.21 Termination shall be deemed to have taken place promptly if deposited
with the recipient or in his jurisdiction (notice of collection in
letterbox or post-office box) no later than the last day prior to the
beginning of the period of notice.
The Lessor shall use the official form to serve notice.
3.22 The rent may be adjusted to prevailing market conditions with a
notification period of 15 months to the end of the fixed contractual
period or above-mentioned extension period.
3.3 Unscheduled termination of the leasehold contract
3.31 If the Lessee wishes to end the leasehold contract without observing the
agreed time limits or deadlines, he shall advise the Lessor of this by
registered letter.
3.32 The Lessee is at liberty to propose to the Lessor a reasonable and
solvent substitute tenant to enter into the contractual relationship.
3.33 Unless otherwise agreed, the Lessor shall also take whatever measures
are necessary and appropriate to enable him to re-let the rented
premises as soon as possible.
3.34 The Lessee shall be liable for the rent as well as incidental and
subsidiary costs and for any other duties incumbent upon him as Lessee
until such time as the rented premises have been re-let, and at longest
until the next contractual term of notice, and for this purpose shall
furnish sureties in addition to those in subitem 14.1. below.
4. Rent
4.1 The rent is agreed as follows:
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Gross rent (shell) in accordance with subitem 2.4 a) for the bare
premises (without lessee-specific extensions), graduated:
- During 1st and 2nd lease years CHF/m2/yr 75.00
- During 3rd lease year CHF/m2/yr 85.00
- During 4th lease year CHF/m2/yr 100.00
- From 5th lease year CHF/m2/yr 125.00
The extension rent for lessee-specific extensions will be fixed once the
project is made available in a supplement to this contract.
4.2 Accordingly, upon commencement of the lease, the annual rent will total:
- Gross rent: 754 sq.m. @ CHF/m2/yr 75.00 CHF 56,550.00
- Total CHF 56,550.00
payable in quarterly instalments of CHF 14,137.50
excluding: subsidiary costs, quarterly (754 sq.m. x CHF 10/m2/yr),
on account CHF 1,885.00
Total payable in advance quarterly CHF 16,022.50
4.3 The rent is payable in advance, no later than the first day of the
rental quarter (as due date).
5. Rent adjustments
5.1 The gross rent for laboratories is based on the [Swiss] national
consumer price index. As of August 1999 this stood at 105.1 points. If
the national consumer price index is subject to any change after the
commencement of the lease or since the last adjustment, then
irrespective of the fixed contractual duration the gross rent can be
adjusted to the change in this index once a year on 1 April, the first
time being in the fifth year of the lease. However, the amount may not
fall short of the gross rent in subitem 4.1.
The Lessee shall be notified of the change in rent in writing and on the
official form, giving one month's notice.
5.2 Where value-enhancing applications or investments are undertaken during
the fixed contractual period, these shall be added to the basic rent in
accordance with subitem 4 in keeping with trade custom. Notification of
rent adjustments effected on the grounds of value-enhancing applications
shall be given on the official form, observing a time limit of one
month.
6. Heating and subsidiary costs
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6.1 The Lessee shall be charged the following heating and subsidiary costs
on top of the rent:
- Heating and hot water
- Operation and maintenance of ventilation plant
- Water consumption, charges and wastewater treatment systems
- Operating and maintenance costs incl. service subscription for
passenger and goods lifts
- General lighting
- Caretaker's services (salary, social security payments,
janitorial materials)
- Refuse disposal/refuse container
- Any security and surveillance services or alarm system operations
- 3% of the total subsidiary costs by way of administration fee.
6.2 The heating and subsidiary costs are broken down as follows
(unoccupancies shall be chargeable to the Lessor):
6.21 Energy processing costs (especially heating and hot water costs):
- Basic and hot water costs to be divided up according to the size
of the business premises (square metres).
- Heating costs, conversely, to be allocated according to
individual meters.
6.22 Neutral costs (such as caretaker, general power, security services,
alarm systems etc.) are to be divided up according to the size of the
premises rented (square metres).
6.23 Costs dependent on consumption (e.g. water rate, wastewater and refuse
charges, lift operation costs etc.) are to be allocated according to the
size of the rented premises (square metres).
6.3 The Lessee shall remit half-yearly on-account payments towards the
above-mentioned subsidiary costs, with the Lessor drawing up and
providing the Lessee with a subsidiary cost sheet on 30 June of every
year. The subsidiary cost sheet shall be deemed to have been approved if
not queried in writing within 30 days of delivery (as postmarked). Upon
expiry of the above 30-day deadline for queries all subsequent claims or
repayments shall fall due.
If the tenancy is ended during the accounting period, the Lessee shall
have no claim to a subsidiary cost sheet ahead of the scheduled time.
6.4 The total power consumption for the leased property shall be chargeable
to the Lessee. Charges and dues generated exclusively by the Lessee's
business operations shall be borne by the Lessee even if levied from the
Lessor.
7. Handing-over of the leased property
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7.1 The Lessor shall hand over the leased property in a clean state as
contractually stipulated, issuing the necessary keys no later than the
date mentioned in subitem 3 in accordance with local practice. Where the
aforementioned date falls on a Saturday, Sunday or bank holiday,
hand-over shall take place on the following working day at the latest.
7.2 The Lessee shall report all defects ascertained to the Lessor within 30
days of commencement of the lease by registered letter. If he fails to
do so, the leased property shall be assumed to have been transferred to
him in the contractual state.
8. Utilization of the leased property / duty of care
8.1 The rented space is at the Lessee's disposal for use as
offices/laboratory. Until the extension work, the rented space is at the
Lessee's disposal for use as storage space.
8.2 The Lessee undertakes not to use the leased property for any purpose
other than that contractually provided for. Any change in ordinary use
shall require the prior consent of the Lessor in writing.
8.3 Where machinery and heavy furniture are installed, the static data of
the building shall be taken into consideration. The Lessee shall satisfy
himself in advance of the permissible floor load.
8.4 The operating instructions stipulated by the manufacturers shall be
observed when using the lift.
8.5 The Lessee may have extra keys made only with the written consent of the
Lessor.
In the event of keys being lost, the Lessee shall bear the costs of
replacing them and any closure systems that require replacing.
8.6 In making use of the leased property the Lessee undertakes to employ
care and consideration, particularly with regard to neighbours. The
house rules shall form an integral part of this contract.
8.7 In very general terms the Lessee is obliged to take all appropriate
measures to avoid or reduce noise, vibrations, smells and other
immissions. The Lessee is liable to the Lessor for any damage (incl.
claims by third parties) incurred by him from immissions exceeding
customary and authorized use.
8.8 The Lessee shall be fully liable to pay damages for violating his duty
of care. If, despite written admonition on the part of the Lessor, the
Lessee continues to
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violate his duty of care or consideration, the Lessor is further at
liberty to annul the present leasehold contract in accordance with Art.
257f of OR(2).
9. Upkeep
9.1 Lessor's duty of upkeep / improvements
9.11 Maintenance work on the leased property shall be incumbent on the
Lessor.
9.12 Bearing in mind the interests of the Lessee, the Lessor shall at all
times be entitled to carry out repairs and renovations to the leased
property and appurtenant appointments, unimpeded, provided that notice
on the tenancy has not been given. The Lessee shall be given prompt
notification in writing of major rebuilding work and new installations.
Any claims on the part of the Lessee shall conform to Art. 260 of OR.
9.2 Lessee's duty of upkeep
9.21 Any improvement and repair work made necessary by normal use and not
exceeding CHF 500 in any one instance shall be chargeable to the Lessee.
In particular, this shall include the replacement of electrical fuses as
well as shattered panes of glass, maintenance of electrical switches and
sockets, gas and water taps, drains and door locks etc.
9.22 The Lessee shall be responsible for the upkeep of all structural
modifications effected by him and appliances.
9.23 Defects which the Lessee is not responsible for remedying shall be shown
to the Lessor immediately. Failure to point these out shall render the
Lessee liable for any damage arising therefrom.
10. Structural modifications
10.1 Modifications and renovations to and in the rented premises, the
mounting of shutters, company signs or advertising devices etc. are
permitted only with the Lessor's prior consent in writing. The Lessee is
obliged to execute such work professionally. The fitting of devices to
the facade (advertising signs and hoardings, shutters, display cases,
aerials etc.) shall be in keeping with the leased property and the
surroundings.
10.2 The Lessee's appointments shall remain his property. The plans and
designs as well as the costing estimates shall be presented to the
Lessor for his written permission.
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(2) OR stands for the Swiss Code of Obligations, the 5th Part of the Act of 30
March 1911 to Amend the Swiss Statute Book.
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10.3 It shall be incumbent on the Lessee to secure any official
authorizations needed. The Lessee further undertakes to take out the
customary building insurance policies and to bear the costs thereof and
defray any extra premium on property and non-life insurance.
10.4 The Lessor is entitled to demand from the Lessee security or a financing
statement for the foreseeable structural costs entered into by the
Lessee, particularly with a view to promptly averting any builders' and
tradesmen's right of lien.
If third-party claims are made on the Lessor for immissions arising as a
result of the Lessee's structural modifications or appointments, the
Lessee shall be liable to compensate the Lessor for the damage
sustained.
10.5 Upon conclusion of the lease the Lessee shall restore the premises to
their original condition at his own cost or by mutual arrangement assign
his appointments to the Lessor free of charge in accordance with subitem
2.4c.
11. Subletting / cession of the leasehold contract.
Partial or full subletting of the rented premises (or cession of the
leasehold contract) shall require the consent of the Lessor in writing.
12. Lessor's right of access
12.1 The Lessor or his representative shall be entitled to enter the leased
property with a view to protecting his rights (re-letting, sale,
repairs, renovations etc.) during the customary hours of business after
giving 48 hours' notification in advance.
12.2 In the absence of the Lessee the keys shall be kept available.
13. Insurance
13.1 The Lessor shall take out the compulsory fire insurance,
property-owner's liability insurance and property water-damage
insurance.
13.2 The Lessee shall bear the risk of damage to or loss of his appointments,
his furniture or his goods, particularly as a result of fire, explosion,
water, burglary or theft. He undertakes to take out an employer's
liability insurance policy.
13.3 The Lessor assumes no liability for any display windows, showcases,
panes, glass panelling, company signs, luminous signs etc. Adequate
insurance against such damage shall be the concern of the Lessee;
moreover, it is his duty to take out employer's liability insurance.
14. Furnishing of security
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14.1 Within 14 days of signing the contract the Lessee shall furnish for the
entire duration of the lease + 6 months security for the amount of CHF.
30,000.00 Once the extension project has been made available, security
will be raised to half a year's rent for the extension rent. In the
event of the Lessor asserting legal claims against the Lessee arising
from the tenancy, the bank guarantee must remain valid until the
settlement of the legal dispute. In this case the Lessor must advise the
bank.
14.2 The Lessor is entitled to demand from the Lessee an adjustment in
security proportional to any increase in the rent.
15. Return of the leased property.
15.1 The Lessee shall hand over the rented premises, complete with all keys,
no later than the last day of the lease term, by 12 noon. Any additional
keys made shall be handed over to the Lessor without compensation. Where
the deadline for return falls on a Saturday, Sunday or bank holiday, the
premises shall be returned on the following working day (by 12 noon).
15.2 When surrendering the leased property, the Lessee shall again remove the
completed extensions executed by the Lessee without compensation. The
additional extensions provided by the Lessor (subitem 2.4b) shall remain
part of the leased property. Where installations made by the Lessee are
able to remain in the leased property with the consent of the Lessor,
the Lessor shall pay no compensation for such.
15.3 Refurbishment and cleaning work to be undertaken by the Lessee shall be
commenced on time so as to be completed by the end of the tenancy.
Where, for reasons to be supported by the Lessee, the leased property
cannot be handed over to the successor on time, the Lessee shall be
liable to the Lessor for any damages arising as a result.
15.4 When surrendering the property, the Lessor--preferably in the presence
of the Lessee--shall provide a restitution log, recording the state of
the leased property and, in particular, defects and damage for which the
Lessee is to pay. The log shall be signed by the Lessee or delivered to
him without delay by registered letter. If it is not possible for the
Lessee to sign the log, the Lessor can also have a record drawn up by an
official expert at the Lessee's expense. Again, this is to be brought to
the attention of the Lessee by registered letter. If the Lessee raises
no objection within 30 days of delivery of the log, it shall be deemed
to have been approved by him.
Hidden defects can be asserted by the Lessor subsequently. However, he
must inform the Lessee thereof by registered letter immediately after
ascertaining such.
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16. Final provisions
16.1 Contractual amendments
Any amendment to the contract shall be made in writing.
16.2 Postal domicile
Until revoked by registered letter to the other party, the following
addresses shall be valid as the effective postal domiciles of the
parties to the contract within the meaning of this contract:
Lessee's postal domicile: Gewerbestrasse 16, CH-4123 Allschwil
Lessor's postal domicile: Postfach (post-office box), CH-4002 Basel
16.3 Legal venue
For all disputes arising from this leasehold contract the location of
the rented property shall be held to be the legal venue.
16.4 Entry in the land register
The Lessee has the right to have this leasehold contract entered in the
register at his own expense for the duration of the contract.
16.5 Residential property
In the event of the property being divided up into freehold flats, the
Lessor is prepared to guarantee the Lessee a purchase option for the
duration of the tenancy.
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The above leasehold contract to be drafted and signed in triplicate.
Basel, 31 January 2000
The Lessor: The Lessee:
Basler Kantonalbank Discovery Technologies AG
/s/ illegible /s/ illegible
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/s/ illegible
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17. Appendix:
- Floor plan recording rented premises.
